Marketing Essay

Title: Location

The aim of this paper is to discuss aspects of distribution in relation to the Chanel Brand. The paper also highlights aspects of the brand’s availability, distribution strategies, the views of retailers, adequacy of the current distribution channels, and effects of location on consumer behavior. The Chanel brand is widely distributed in different parts of the world. Since the establishment of the brand over a century ago, its popularity has spread across the world. Today, the company’s products are available in over 200 boutiques worldwide (Fionda & Moore, 2009). Coco Chanel, the French designer behind the Chanel brand is widely considered the most successful female designer of the 20th century (Fionda & Moore, 2009). She led a glamorous life and went on to reflect it in the elegant fashion products she created. This tremendous success of her efforts is reflected in the global reach of the Chanel brand.

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            As the developing world continues to experience growth in terms of purchasing power, the reach of the Chanel brand continues to expand. For instance, it has reached China, where the emerging middle class is keen to assert its newfound economic strength by purchasing high-fashion products. On the overall, Asians attach a lot of value to prestige brands such as Chanel (Fionda & Moore, 2009). The same trend is slowly unfolding in Africa, Latin America, and the Middle East. Therefore, the brand’s distribution network extends not just to the developed world but also in many developing countries.

Chanel products are available only through direct distribution channels. Chanel customers have an opportunity to receive samples of the brand’s fragrances on a seasonal basis. This gives them an opportunity to try the newest additions to the Chanel fashion stable. To access these samples, customers are only required to visit their nearest Chanel counters. To find the nearest store, customers are encouraged to use the store locator found on the company’s website.

Chanel seeks to maintain a tradition of direct interactions with its customers. This explains why it has not yet established an online distribution system. This gives the brand a more conservative look compared to its competitors. The company remains very discreet and secretive in matters of fashion, hence the need to interact directly with its VIP (very important person) customers. This sense of exclusivity tends to be amplified through invitation-only parties.

            The Chanel brand is marketed through the exclusive use of a vertical marketing system (VMS) (Wuyts, Stremersch, Van Den & Franses, 2004). In VMS, all the main members of a specific distribution channel are required to work together as a team or group with a view to meet the specific needs of consumers. These members always avoid a scenario where retailers, wholesalers, and producers are in separate businesses whose core object is profit maximization. VMS fits well into Chanel’s marketing strategy because of the need by the brand to meet the specific needs of a clearly defined group of customers in a manner that preserves discreteness, secretiveness, and exclusivity.

            Many retailers involved in the sale of Chanel products feel that it is a major advantage to them because they gain a competitive advantage over their competitors by virtue of being associated with a prestigious fashion brand. However, a major disadvantage is that this association tends to tie them to certain distributors and suppliers. This is unlike in the case of competitors, who have all the freedom to form relationships with many different suppliers and distributors. Retailers who sell Chanel products must always maintain strong relationships with these distributors and suppliers to be able to see the whole picture, make changes whenever the need arises, anticipate problems, and come up with viable solutions, thereby increasing efficiency. The retailers also tend to be unhappy with the tendency by Chanel to maintain strict control mechanisms over the production, distribution, and sale of its fashion products. The objective is to ensure that Chanel’s culture of exclusivity and discreteness is maintained at all times.

            For a brand that is not keen to experiment on new channels of distribution, this distribution method is adequate. However, when viewed in the context of today’s information age where most reputable companies have activated online distribution channels, Chanel’s distribution method may seem inadequate. It may be appropriate for the company’s marketing strategists to look for a way through which leading-edge, VIP, and celebrity consumers can gain exclusive access to an online distribution system. This is an excellent way of ensuring that efforts to disseminate products more widely through new channels do not dilute the exclusive appeal of Chanel products.

Decisions on the location of distribution channels will greatly affect consumer behavior. If Chanel sets up a store on every street corner and makes the product accessible to everyone via an open online distribution system, it will definitely lose its exclusive appeal to its VIP consumers (Fionda & Moore, 2009). Consumers will put the brand in the same category as all other mass-market fashion products being sold in stores all over town and across the country. In other words, consumers will start perceiving the Chanel brand as much less prestigious.

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            Consumers understand that luxury is about uniqueness, exclusivity, and individuality (Okonkwo, 2007). It is worthwhile to note that Chanel has for the past century established its brand as a representation of “the Lover” – characterized by a sense of intimacy and secretiveness (Fionda & Moore, 2009). To maintain this image among consumers, the brand has had to limit its brand accessibility. Therefore, the Chanel brand may have to sacrifice its luxury brand essence if it starts increasing its brand presence and awareness.

References

Fionda, A. & Moore, C. (2009). The anatomy of the luxury fashion brand. Journal of Brand Management 16(1), 347–363.

Okonkwo, U. (2007). Luxury Fashion Branding: Trends, Tactics, Techniques. New York, NY: Palgrave Macmillan.

Wuyts, S., Stremersch, S., Van Den, C. & Franses, P. (2004). Vertical Marketing Systems for Complex Products: A Triadic Perspective. Journal of Marketing Research, 41(4), 479-487.

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