Chapter 7: Business Marketing

       Chanel is known to be a very exclusive brand when it comes to business. Even inside the fashion industry, very few have heard of Chanel’s only shareholders, the Wertheimer family, grandchildren of Pierre Wertheimer, Coco Chanel’s early business partner. Privately held Chanel is different, from other luxury brands. Chanel doesn’t announce their business strategies, appear in industry conferences, or report their performance figures publicly. Nobody outside the company knows exactly how big the Chanel business is. The fragrance and beauty business single-handedly has been estimated to turn over more than $1 billion a year, powered by the world’s first and most famous modern fragrance, Chanel No. 5. In terms of business marketing, which is the marketing of good and services to individuals and organizations for purposes other than personal consumption. Chanel is clearly for personal consumption, the company is not a business market, making the brand a consumer market. As being a consumer market the company's buying and  purchasing is approached in a more professional and personal manner. 

      Chanel may have joint ventures with other brands, but the company does interact with other department stores, where Chanel products are sold. There is a level of "trust" and "relationship commitment" involved in this interaction, that Chanel shares with allowing certain places to carry product items. In most department stores, such as Macy's, Bloomingdales,  Harrods, etc. Chanel markets to those who can afford the brand but preferably to women ages 16-80 years old.

 

    In terms of business purchase decisions, Chanel takes great pride in their customer service and goods and services.  As being said since the company is a consumer's market they are very personal when it comes to all aspects of buying behavior and purchase decisions. Chanel builds strong relationships with consumers, and are extremly accommodating to the needs of customer's by keeping up with their personal requests. This may be another factor in why the company has been so successful for over a century with, a estimated amount of $3 billion yearly.

Chapter 8 - Segmenting and Targeting Markets

       When Chanel first arrived into the fashion world in 1909, the small brand was targeted towards the new age woman who wanted to be dressed in style and class. Which started off mostly in hats and simple clothing. As for today, I have stated previously in other chapters, the House of Chanel caters to a target market of mostly women from as young as 16 years old to 80 years old. Chanel does also target to men, mostly mid twenties to middle aged. Chanel is a high quality brand, meaning that those who can afford it, purchase it. Customer's can choose from an array of products. There is something available for everyone.  Chanel offers, haute Couture Line, ready to wear, resort line, men's and children's collection, fragrances, accessories, footwear, skin care, and cosmetics.

   Chanel's geographic segmentation is expansive with a large market in Asia and Europe. Chanel has over 200 stores world wide, mainly in metropolitan cities such as, New York, Miami, Paris, Moscow, etc.  In terms of psychographic segmentation Chanel, holds much value to those who can’t afford the brand. Lower class and middle class working people crave the brand because of its high status and features all over magazines, and billboards. Chanel presents advertisements with infamous supermodels and actors, which reaches out to the this target market. Chanel is not just a luxury brand it is an iconic brand.

    
 

Chapter 11 - Developing and Managing Products

        

    
          Chanel is a established luxury fashion brand and beauty company, which is well known to the world and the fashion industry. Chanel is most famous for revolutionizing fashion for women and presenting a timeless style of elegance for all ages. Apart from founder Coco Chanel, the company's success in developing products remains on Karl Lagerfeld. Karl Lagerfeld has never failed in giving the consumer's what they desire in a luxury brand. Chanel is able to strike a strong balance between the past and the present which something that eludes many luxury competitors. The House of Chanel works with punky, of-the-moment models like Cara Delevingne while always upholding a timeless, prim and proper image.

       In recent years Chanel has undergone an industrial revolution. The old-fashioned fabrication has been replaced with state of the art production methods carried out in factories in Compiegne, Pantin, and Saint- Chamant. All manufacturers’ procedures are regulated down to the smallest detail. Chanel offers the classic product items in their boutiques throughout the year while, introducing new products with each fashion season. Chanel is most famous for The suit, The Cameilia, The Little Black Dress, jewelry, and fragrance & beauty.  

        For Chanel the development of new products and clothing is all about creativity. The foundation of creativity is the codes of the brand. These codes are iconic because eight times a year, for two haute couture and six ready-to-wear collections , Karl Lagerfeld and his studio to come up with new interpretations. The team of innovators create, collection after collection, inventing the Chanel story again. The company's strong to devotion to fine materials, technology, and to the brand's philosophy have contributed to number of product lines that have excelled. Currently, Chanel is one of the most successful business models founded on creativity.

Chapter 16 -Integrated Marketing Communications

       Chanel is a world wide iconic brand, that has been around for a century.  Chanel itself is fashion, and the brand represents everything fashion stands for. Chanel continues to reinforce the concept of ageless clothing that has inspired many contemporary designer's for their ready-to-wear collections today. The house of Chanel has numerous successes that have changed the fashion industry especially through the company's promotional strategy and competitive advantage's.
          In terms of attention and promotion, Chanel has a very strong advertising campaign that draws a target market of ages between 16- 80 years old. In most of Chanel's advertisements in magazines or billboards the brand usually has one or double pages with very simple design.  Chanel pushes product articles in magazines for consumer's to desire the products compared to the competitor's other options. Chanel encourages fashion magazines to publicize about their products, whether it be about a recent fashion show or a description about a new fragrance. In most fashion magazines such as Vogue, Chanel products are often featured on models. This is another form of Chanel's marketing concept without being featured as a typical advertisement. Chanel has t.v advertisements and other variations of videos on YouTube, Chanel.com, and the Chanel blog. Mostly the advertisements shown on television or on the internet is for Chanel's fragrance and cosmetics line. These short films express what Chanel is conveying to the buyer about the product and why they must need it. Chanel's advertisements for sample products are another factor in their sales promotion. Chanel offers samples to consumers for cosmetics and fragrances, which can be offered in department stores or Chanel boutiques. This strategy is offered to communicate to a different target which is referred to as masstige, for those who cannot afford Chanel products.

       Chanel's communication department is very important to the company as a whole. They use communications to perform as a tool to the public audience and to fashion industry. Chanel corresponds to the public through fashion shows. These fashions show are usually highly anticipated and draw much attention. Many famous celebrities, fashionistas, bloggers, magazine editors, and other prestigious people of the fashion world attend the Chanel fashion shows. Head fashion designer, Karl Lagerfeld has always had strong public relations with media and famous clients which draws more and more interest to the brand. Karl Lagerfeld has influenced much of the fashion industry today and has effectively transformed the entire marketing strategy for the greater of Chanel. As Coco Chanel was once famously quoted "Fashion is not something that exists in dresses only. Fashion is in the sky, in the streets, fashion has to do with ideas, the way we live, and what is happening."

Chapter 10: Product Concepts

 

         Today, Chanel stands out in just about every category of fashion including, couture, ready-to-wear, accessories, jewelry, shoes, and fragrances. Chanel has their own specific way of marketing according to strategy, advertising, retailing, and products. In general, there is no one specific product concept for Chanel because the company sells a variety of products from different categories.  What began in the early 19^th century, Chanel was designed to let women be comfortable while looking fashionably dignified, has evolved into classic, tailored style. In ready-to-wear clothing there are many signature Chanel product designs, such as the traditional tweed Chanel suit, quilted two-chain purse, and little black dress. These items remain fashion icons for designers and labels today.                             
         Chanel designs many clothing lines such as, ready to wear, haute couture and cruise wear.  Ready-to-wear clothing means that these items are mass produced in standardized sizes and sold at Chanel retail stores in finished condition. Ready-to-wear clothing is in contrast to clothing that is made-to-order, custom designed, personally fitted or one-of-a-kind, which is sometimes referred to as haute couture. Haute couture is custom fitted, limited amount, expensive fabrics, and hand-sewn by seamstresses The price of a haute couture gown cost ranges from $25,000 to $10,000,000.  Chanel also offers, cruise wear which is clothing made for mostly comfort and a vacation feel look. Chanel produces many clothing lines each year for ready-t0-wear items for each incoming fashion season. 

     

       An example of product modification is Chanel’s reinvention of the sister perfume to No.5 named, No.19.  This perfume is named after Gabrielle Coco Chanel’s birthday, which is August 19th. Created in 1970 by Chanel’s in house perfumer Henri Robert, the perfume is one of Chanel’s most stimulating iris fragrance. The bottle used to look identical to Chanel No. 5 but now newly reinvented fragrance has a light green color too it and a slightly different bottle. Chanel provides new product items for there product line of fragrances which are carried world wide in department stores and Chanel boutiques.

           Chanel's product concept is much like the company's mission statement and global vision as a whole. The brand has stayed true to the early vision of Chanel, to be timeless and sophisticated. The products that Chanel sells are a reflection of Coco Chanel herself, and what the brand has impacted on the world today. Chanel items tend to have underlining sex appeal and appear in lavish fabrics with many embellishments. Which always applies to one of Coco Chanel’s famous quotes “ A girl should be two things: classy and fabulous.”  Consequently is very appropriate seeing that is the total quintessence of the label today even a century later.

Chapter 18: Sales Promotion and Personal Selling

         

           Chanel is a very expensive and exclusive brand, in which doesn’t offer many sales for the public. They don’t offer many sales for clothing because of the high quality material in most of the products. Mostly all the products are consumed by buyers who can afford Chanel so, sales are not frequent. Ready-to-wear clothing from previous seasons may have higher or sometimes lower prices. The article of clothing maybe valued at more money because of its exclusivity or lower because it is 'out' of season.  The price of clothing usually is lowered after one or two seasons later. Since Chanel products are also sold in certain department stores, there are also promotional sales for cosmetics and skin care items. Many advertisements for department stores and Chanel may be shown to try and new product, sample, or test new makeup. The four different types of Chanel cosmetic sales promotion are 1.) adding value (gift set)  2.) makeup  3.)new product samples  4.)complimentary shipping.   

        
      

            Another way of sales promotion is privates sales in certain boutiques which are held occasionally for certain collections. One of the most recent promotional sales in New York City was when the Chanel boutique in Soho had first opened in 2010 on Fashion's Night Out. Chanel has many events when they launch their line or open a new store, they give the guests Chanel product. This allows the guests to test the products and take samples home.  At the opening celebrities attended as well as Karl Lagerfeld, which always brings in a crowd.                  

          In terms of personal selling, Chanel products are often sold on the internet. Usually previous owner's will sell their used products on websites such as amazon, ebay, etc. Buyers are usually more cautious when purchasing items online because buying a counterfeit product is always at risk. Buyers who do purchase previously owned Chanel products, fall in the target market who aren't wealthy and can't easily afford Chanel products.

Chapter 17: Advertising and Public Relations

        

             Chanel has a wide variety of advertising campaigns that are featured in fashion magazines, billboards, department stores, and occasionally on television commercials that can be seen all over the world, as well in different languages. Chanel spends millions each year on advertising, using various famous models and celebrities for these advertisements. For example, Chanel has used Kate Moss and Keira Knightley to be its spokespeople for the fragrance Coco Mademoiselle, and Marilyn Monroe for Chanel No.5. Today, Karl Lagerfeld hand picks the models used for the newest Chanel campaigns and takes the photographs for the Ready-to-Wear national ad campaigns. Much thought and detail go into making advertisements for Chanel, which goes hand in hand with the clothing. Chanel offers advertisements for all areas of productions which they sell. The most common advertisements seen would be clothing, cosmetics, and fragrances. These advertisements aren't as frequent or pushy as other brands because Chanel is already a well-known exclusive brand. These advertisements usually target towards people who can afford the brand from as young as a teenager to a stylish senior citizen.                                      
         Chanel is a global leader in the fragrance industry and a top innovator in fragrance advertising and marketing. Chanel continued to spend more on advertising than almost any other perfume company and, as a result, was earning the richest profit margins in the industry. In addition, the company had continued to expand into new product lines, including Chanel watches retailing for as much as $7,000, additions to its popular shoe line, and other high-priced clothes, cosmetics, and accessories. Chanel uses advertising appeal mostly when it comes to cosmetics and skin care line, showing the consumer with buying certain products it will improve their skin or denounce flaws in facial features. 

 

     In terms of Public Relations Chanel has many different techniques. Chanel has regular merchandise demonstrations for publishing new products that invite media to report. These kind of meetings can also function as a means of product placement. Chanel often has dinner parties for celebrities like movie stars or top models who are invited to join as to enhance Chanel’s popularity. Cooperating with websites is another way of promotion, such as style.com, or vogue. Chanel also has their own website with an FAQ and also a fashion blog. Chanel also offers exhibitions for media and the public. One of the most recent exhibitions was titled "The Little Black Dress" clearly after Chanel's iconic little black dress which has influenced today's fashion. This exhibition was seen all over the world, including New York Paris, Berlin, Dubai, and Milan.

 

Chapter 15: Retailing

          For Chapter 15, I had recently visited the Chanel store in Manhattan located on Spring street in Soho. The boutique is quite new, which opened in 2010. It is the third Chanel store located in Manhattan. The store was located in a very swanky area along side many other luxury brands neighboring around the corner like Louie Vuitton. The atmosphere of the store even before I had entered the store had a very high end, chic/modern vibe. The Soho store seems to have a bit of everything, including clothes, cosmetics, shoes, accessories and bijoux. I must say that the ready to wear clothing seemed to be fairly limited, as there were only two, at most three articles of the same clothing but only in one size. Even a simple plain white tee with tweed embroidery on the collar is $820. That usually goes with out saying because it is Chanel. The boutique is beautifully designed, with a black and white theme in true Chanel fashion, full of mirrors,  bright lights and the Chanel logo. Completed with white tiles and high black ceilings. The store is spread out into little sections for an intimate feel, which also allows for display of hand bags, shoes, and mannequins. In the rear of the boutique there is a sitting area too, complete with a black leather couch and two tv screens attached to the wall where Chanel fashion shows are being shown. When I asked the security guard/doorman if  I could take a picture of inside the store I was declined, so unfortunately there are absolutely no pictures allowed to be taken inside the store. The store was not like any normal crowded store in Soho, it had a hand full of customer's who were being helped by a consultant.The consultants seemed very calm and professional. The employees were not overbearing in the sense of constantly asking shoppers if they need help with anything. In each section the employees seemed to be specialized in each area whether it be from shoes to cosmetics.
             
          Chanel is a franchise with 200 stores world wide, which includes specialty stores, along with products sold in select department stores. Chanel fragrance and beauté can be purchased online. In terms of online shopping,Chanel is one of the few luxury brands that doesn’t sell clothing online. According to Bruno Palovsky, Chanel's president of fashion states "Our clothes are quite sophisticated and one of our strengths is alterations. To be able to wear Chanel clothes, you need to try them on. You need to be in the fitting room. You need to have a tailor who alters the clothes to fit exactly to your body. I think it’s part of Chanel. It’s more than just our service. It’s part of our differentiation to have ready-to-wear that is perfect for our customers." Chanel wants the customer to visit the store, to touch and feel the product before purchasing but also to try the product, which is an important factor in Chanel's retailing division. 

 

Chapter 6 : Consumer Decision Making

       What is it about luxury items that make people want to buy them? Is the quality of the item, material, or style? There are many key factors that go through a consumer's mind before purchasing an item. For Chanel, consumer's buy for style, class and quality of the item. Chanel products are easily recognized because they are so well known. Media is a huge factor in buying Chanel products. Whether it is your favorite celebrity or advertisement in a fashion magazine, there are many reasons for consumer's to desire a Chanel product. The company offers an array of products that cater to men and woman, although Chanel is often viewed a feminine brand. Chanel products aren't always affordable for the work class, this is another factor in consumer decision making for the buyer to consider. With expenses comes sacrifices, but some individuals value style and quality more than price. The company does not aim to be affordable, Chanel provides for luxury, not cost efficiency.  Consumer's continue to buy products based on the innovation of the product lines, which continue to grow and expand. With the innovation of the products, Chanel has adapted to current times and the digital evolution. Consumer's can stay connected through the Chanel website, Chanel app, Chanel News blog, the new Coco Chanel website,  and with over one million followers on Twitter, 7 million fans on Facebook. As being a global brand all these features can be seen in select languages according to the viewer.

   

 

 

          Chanel is a trustworthy brand, the consumer's trust that with buying these products whether it is makeup or a handbag that it is of the utmost quality. Consumer's buy Chanel's products to be stylish and wear what is in season. There are six collections of clothing made each year, consumer's want to buy pieces from these collections because they are the most up to date fashion. Chanel is a very creative brand that sets high standards and influences the fashion world and other designers. The consumer purchases Chanel products because they are made to last. They last for generations to wear because of the timeless effect that Chanel has.

Chapter 5: Developing a Global Vision

         Of all the luxury fashion brands in the world, Chanel is possibly the most famous, as well as the most private. Chanel S.A is an independent and unlisted company, which was found in 1909 in Paris, by Gabrielle Chanel. Chanel is a world leader and innovator in high fashion that includes clothing, accessories, skincare, jewelry, and fragrances.  There are over 200 Chanel stores located worldwide. Chanel skin care, cosmetics, and fragrance products can as well be found in some department stores, and airports. 

       Currently, Chanel operates its business in five regions, each of which is led by regional heads. Each regional head directly report to the Global CEO. The Japanese division, Chanel K.K. has eight company-owned retail boutiques, five of which are in central Tokyo, such as the flagship store in Ginza. There are 30 shop-in boutiques, and 13 that specialize in Chanel watches and jewelry. President Richard Collasse head of Chanel K.K. is in charge of the Asian region.  President Collasse is the key figure in Asian market because he manages the operations in the growing markets in China and India on top of the already flourishing Japanese market. In Paris, where Chanel was founded, there are five company-owned retail boutiques; one of which specializes in shoes. There seven shop-in-shop boutiques that, three of which specialize in shoes and four boutiques specializing in Chanel watches and jewelry. 

      

      

         Chanel employees all share Chanel’s global vision accordingly to the company. From research given, Chanel presents a vision on the occasion that the company aspires for a change. The vision stated at the start of 2008 was to be “The Ultimate House of Luxury, defining style and creating desire, now and forever.” This statement suggests that Chanel aspires to be the fundamental model of what a luxury brand should look like as well show Chanel’s dedication to producing luxurious and high-quality products. To define style, thus fashion is said to fade but style is eternal according to Coco Chanel. Lastly stating “now and forever” suggesting the constancy, endurance and the agelessness of Chanel. At the basis of Chanel’s global vision is Coco Chanel’s philosophy and attitude. The vision compels employees to constantly change with the times and environment. Chanel itself is the world’s highest form of total luxury. The first-class market is and will always be the market in which Chanel strives to be number one. Although it belongs to the category of luxury brands, such as  Prada and Louis Vuitton, Chanel did not emerge as a result of the desires of royals and aristocrats.  Chanel will continue to promote and expand globally since it has for the past decades. 

Chapter 4: The Marketing Enviroment

       The House of Chanel is globally established company that has been around for over a century, resulting in an extensive range of target markets. Chanel products are an assortment of clothing, accessories, perfumes, and cosmetics that attract people from around the around the world of all ages. Chanel isn't the most affordable brand when it comes to retail, consequently the preferable audience is for people of higher income and celebrities. 

       The ready to wear clothing depending on the collection, mostly targets men and woman of today's generation (generation x). Some not all collections are targeted towards the younger generation because Chanel is a ageless brand which, a woman of any generation would appreciate wearing. The accessories, and handbags are also the alike depending on the style of the product can be wearable for any generation. As for cosmetics and skin care depending on the product, may be used for woman ages 16 and above.  The skin care line offers many different products for the type of skin a woman may have. For example the ultra correction line repair cream is a product developed for anti-wrinkle maybe be used for woman in their mid 30's and older.  For younger woman, the mousse exfoliante pureté is a rinse-off exfoliating cleansing foam purity cleanser may seem more appealing to use. 

       In terms of perfume there are also directed target markets for woman. The most well known perfume and best seller, Chanel No. 5 is said to represent a mature strong woman of elegance and sophistication. The scent is captured to be very distinct and classy. The perfume is distinguished to be worn for mature chic, refined woman. The commercial used for Chanel No. 5 is represented by the very elegant Nicole Kidman. In the commercial Nicole is portrayed as the most famous woman in the world, with whom an anonymous writer becomes infatuated with. Afterwards, a fragrant memory is all he has of her, "her kiss, her smile, her perfume."  The newest Chanel No. 5 commercial has made recent history because for the first time a male actor, Brad Pitt is the spokesperson. The commercial had received many mixed reviews, but as news reports have said numbers don't lie, resulting in another hit ad for the reinvention of Chanel No. 5. 

 

       In terms of targeting towards a younger market, the perfume Coco Mademoiselle is indicated for young woman. The most recent commercial for Coco Mademoiselle stars Keira Knightley.Three years after the first commercial film, Knightley reprises her role as Coco Mademoiselle, a modern day Coco Chanel whose mysterious, daring and rebellious. The commercial takes on a urban feel, with Knightley appearing on the streets of Paris in a chic, beige motorcycle jumpsuit. The commercial shows the relationship between the photographer and the model, reflecting of sense independence.The fragrance represents the spirit of Coco Chanel in this feminine, sexy, young and exciting fragrance.

  

Chapter 3: Ethics and Social Responsibility

      In terms of ethics and social responsibility fashion has never had the best reputation.  Regarding issues about eating disorders, body image, and also the use of animal fur. Though luxury goods that Chanel sell may be see to be extravagant, lavishness, or even wasteful, this might appear to be a contradiction. Head designer Karl Lagerfeld has caused much positive and negative controversy through the Chanel brand. 
     Recently Chanel has "gone green" reported using eco-friendly materials and craftsmanship in many of the newer clothing pieces. Chanel's spring/summer 2013 show at Paris' Grand Palais had gave fashion a whole new meaning to the idea of eco-friendly clothing. Showcasing the new designs, models strutted the catwalk along with giant wind turbines and titled solar panels.  

   Chanel has paved the way for many other brands to not use real fur. Chanel deputed their faux fur look in 2010 as alternative for real fur used in many luxury brand's looks. Karl has stated “I can hardly eat meat because it has to look like something what it was not when it was alive.” In terms of the perfume and cosmetics field,Chanel does not test against animals or use any type of animal in the products.

Karl Lagerfeld has sparked much attention when it comes to fashion models, whether the models he has used in any of his campaigns/shows have been too thin.  In one interview when he was asked if he feels responsible for the the health of the models he works with, he responded with "I can tell you all kinds of moral tales, but fashion and reality are vaguely different." Controversy had struck when plus size model Crystal Renn was used for a Chanel campaign. Crystal was shot from the neck up not showing her figure in the photograph. Many critics had their opinions whether Chanel, or rather Karl Lagerfeld was discriminating against plus size model figure. I beg to differ because Crystal Renn was then used Chanel's 2010 resort show. Having a plus size model walk in a Chanel show was declared as "groundbreaking" for the fashion world. 

Chanel has reported to have saved a number of Parisian haute couture ateliers, from going bankrupt thanks to morally concerned head designer Karl Lagerfeld. Chanel also has many charity events, and fashion shows that support a cause each year,which the proceeds go to. The Chanel Pour le Temps Charity Fashion Show is one of the most anticipated events of the year. Chanel is more than just a luxury name, and more than a fashionable handbag. 

http://nymag.com/thecut/2010/05/andr_leon_talley_on_calls_crys.html , http://chanelpourletemps.weebly.com/home.html, newyorktimes.com, chanel.com,