Ch. 12-Services and Nonprofit Organization Marketing

Chanel, it is not only well know for the goods they sell in stores but also for an amazing service they offer to the clients. Services involve a deed, a performance, or an effort that cannot be physically possessed. Chanel is on the top of their game with providing best quality experience. Customers love to feel special and unique and that’s how they feel shopping at Chanel stores. All sales people are well trained to provide the best experience for customers. For example in Purseblog.com in the post “Chanel Customer Service Did Not Disappoint: My Chanel Bag is Fixed” you can read a story of great customer service.

“I can happily report that my bag is completely fixed. In fact, I experienced the best customer service I’ve ever received. Chanel’s customer service team read my story and reached out to me via email. The representative emailed to let me know they’d like to help me fix my bag and asked for my number to talk it over with me.  I explained my predicament and he told me he would take my bag to the back to see if they had the screws and they would try to fix it on the spot. He came back out about two minutes later and let me know that they didn’t have the exact screws that my bag originally had, but they had similar ones that they could put in now as placeholders while they ordered the right screws for me. I loved this solution because it meant I didn’t need to send my bag out; I got to take my bag home, and the store fixed it so I could use it right away.

I was so thankful that the sales associate came up with a plan for me that let me use my bag and eventually still correct the screws as well. I thought it would take a while, but last night, I got a call letting me know that the boutique had the proper screws. Chanel then asked if I’d like to have them schedule a pickup with FedEx so I didn’t need to go down to the store–talk about going above and beyond.” (http://www.purseblog.com/chanel/chanel-customer-service-disappoint-chanel-bag-fixed/)

That’s only one of the stories about how great services are provided by Chanel all around the world. They build and maintain relationships with customers, by taking really good care of them and providing with the best customer service.

Ch. 11- Developing and Managing Products

A lot of companies spend a considerable amount of money developing new products. They are important for the growth of the company and their profits. Chanel offers the classic product items in their boutiques throughout the year while introducing new products with each fashion season. There are six categories of new products; Chanel established their products in some of them.

-New Product Lines- Chanel was known for the little black dress and the perfume No. 5, later expanded with watches, jewellery, eyewear, cosmetic products and luxury handbags.

-Addition to Existing Product Lines- Every season there is a new addition to a ready-to-wear established line. Also, a big addition to the bag line was the boyfriend bag.

-Improvements Or Revisions of Existing Products- the improvement of the packaging of the lipstick released in 2006. A lipstick is usually opened with two hands. With the Rouge Allures, the lipstick pops up by just one click.

-Repositioned Products- I think the best example is the famous Chanel suits and the Chanel No.5. They were both target to attract older women. However, the way of the advertising in last years, it targets also much younger customers, who want to be not only classy but also sexy.

After Coco Chanel, Karl Lagerfeld is the one responsible for the success of developing new products. He has never disappointed Chanel customers. The long history of the company is something that gives a big advantage in developing new products over new established competitive companies. Karl also uses his models, to create something special and original, which each customer will desire. The company uses the finest materials and manufactures. Chanel is one of the most successful fashion brands in the world.

Ch. 8 - Segmenting and Targeting Markets

A market segment is a subgroup of people or organization sharing one or more characteristics that cause them to purchase similar products. Market segmentation is a process of dividing a market into similar groups or segments. In the world we live in, everyone has different needs. Most of the companies do their best to meet needs of one or more specific segments. In 1909, Chanel was targeted towards a woman who wanted be classy and fabulous. It started with little black dress and characteristic Chanel suits. 

Chanel’s products are targeted to different markets because of the diversity of their products. There is something available for everyone Chanel offers different product lines which are the target to different markets: Haute Couture Line, Resort line, Ready to wear line, Children’s and men’s collection. Skin care, make-up, Accessories, Jewellery, Footwear, and Fragrances. There are three important reasons why marketers segment markets. First is to identify those groups, analyse them and their buying behaviors. Second, segmentation provides them with information to help them design products specifically matched with their desires. Third, segmentation is consistent with marketing concept of satisfying customers while meeting organizations objectives.

 The article for From the CNN Wire Staff on November 8, 2012, states:

“Chanel has opened just three boutiques in Shanghai -- one of the world's most populous cities. Pavlovsky told CNN: ‘We try to get the best three boutiques in Shanghai instead of having 10 boutiques.’

That, he said, is the "number one" priority. ‘We try to bring through the boutiques the best value of the brand... our idea is not to open lots of boutiques but be able to give, through the existing one, the best value and the best service to our customers.’

China -- with a population of approximately 1.3 billion people -- is a focus for luxury brands due to its expanding middle classes. Its growth comes as consumer spending in Europe and the U.S. dwindles.

Pavlovsky said customers in China are ‘experts of the fashion world, they know everything, every detail and at the end of the day what they want is the same product that we are selling here in Paris or London.’”

Geographic segmentation: Chanel has over 200 stores around the world. In those stores, you will be able to find different products, specifically in different countries. People in Russia like a lot of crystals, and shiny products, while people in Asia keep simpler and prefer black or nothing abstract.

Demographic Segmentation- Chanel targets both genders in age between 20 and 80 years of age, who are wealthy and are able to afford their products. However, there are more products targeting women.

Psychographic Segmentation- Chanel identifies its target market by target’s lifestyle and motives. Most of Chanel’s customers purchase its products because they are symbols of luxury, elegance, and class. Chanel uses a lot of famous models to appeals to their customers with image relatives motives. In countries like Russia or China wearing Chanel is important for people to show their social status.

Ch. 15- Marketing Communications

Chanel uses advertising, public relations, personal selling and social media as a promotional strategy. Over hundred years they are able to convince target customers that the goods and services offered provide a competitive advantage over the competition. The products have unique futures like the timeless designs, excellent customer service, and high products quality. Because of the history of the brand, they have earned prestige on the world level, where almost everybody desires their products.

Promotional strategy is closely related to the process of communication. In this process meanings are exchanged or shared through a common set of symbols. For example, when Chanel develops a new product or changes an old one they have to communicate with their clients. They use both: Interpersonal communication and mass communication. The first one is more direct, for example when a sells person communicates with a specific customer at the store, they are able to see they reaction immediately, they also can send them an email or give a call when products they looking for arrived in the store. The mass communication involves a large audience. Chanel uses, in that case, social media, fashion shows, and advertising.

They are several goals of promotion Chanel uses all of them. Informative promotion, stimulate interest in new products. Persuasive promotion, stimulate customers to purchase products. Reminder promotion is used to keep their products and their brand in the public’s mind. Connecting promotion helps forms relationships with customers; in that case, social media platforms are the best for it.  A classic model for reaching promotional goals is called AIDA concept. It is important to first gain attention, after that to build interest; next step is to focus on building desire. That is, you want the potential customers thinking, “ I really want and need this product.” You conclude with a specific call to action that potential customer can take to purchase the product.

I think a great way Chanel uses advertising is for example through those little short movies with famous actors and models. They really build the desire to be one like one of them and to wear the same perfume like did Nicole Kidman in “Her kiss, her smile, her perfume” She represents luxury, beauty, feminist and is well known by all woman.

Ch. 10 - Product Concepts

Chanel has been a part of the fashion industry for approximately 107 years. The company started in Paris and is now recognized around the world. The product offering, is an important element of an organization’s marketing program, is generally the foundation when constructing a marketing mix. The product consists of everything, favorable and unfavorable, that a person receives in an exchange. Chanel products are consumer products that are bought to satisfy an individual’s personal wants. Depending on how much effort customer used to shop, we can classify for different types of products: convenience products, shopping products, specialty products, and unsought products. Chanel perfumes, cosmetic products and glasses are part of Shopping Products, which requires comparison-shopping. Those products are more expensive than the convenience products and customer can only find them in Chanel retail store or big department stores.

All ready to wear, shoes, watches, handbags, perfumes are Speciality Products because customers have to search for them extensively as well as those products are a symbol of their identity. Chanel’s new products fall into the category of unsought products until Chanel advertise and promote them.

Over time, firm change product items, lines and mixes to take advantage of new technical or products developments. Chanel was originally designed to for the comfort of women, so they'd feel comfortable and fashionable in classic tailored style. Chanel has various signature looks in their ready to wear line, such as tweed suits, the classic quilted two-chain bag, and also well known the little black dress. Chanel designs many clothing lines such as, ready to wear, haute couture and cruise wear.  And using a different variation of fabrics and colors using the original shapes. Chanel product mix is broad, as I mention they offer numbers of product lines, clothing, shoes, jewellery, watches, fragrances, cosmetic products, handbags and glasses.

Chanel has deep product line; for example, the fragrance: No.5, No.19, Eau Premiere, Cristalle, Allure Eau Sensuelle, Chance, Coco, Coco Mademoiselle, Poudre and etc. 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 bottle used to look identical to Chanel No. 5 but the reinvented fragrance has a light green color and a slightly different bottle.

Ch. 17 - Personal Selling and Sales Management

Personal selling offers several advantages over other forms of promotion. However is more expensive than other tools of promotion. Chanel provides customers with excellently trained customer service. Their stuff sells assistants provide all kind of help and information for each customer. To help them choose the right products for them.  Most of the Chanel ready to wear products as well as leather goods and watches are only available at the boutiques. Other beauty products, perfumes and sunglasses customers can purchase through online or big departments stores like Macy's, Saks at Fifth Ave, Bloomingdales, and others.

Relationship selling is a sale practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnership. A Chanel personnel takes really good care of their customers. They listen and provide all information that customers is looking for, most of the time they create the relationship which will last for a long time. After every purchase client will receive a “thank you” via email, and become a member of Chanel. They will also remember of their customer’s birthdays. They make sure to make every single customer experience special.

Chanel is one of the most recognizable luxury brands in the world. Customers feel privileged to be able to be a part of “Chanel family.” Usually, it is never one-time purchase, because of the good quality of the luxury products most of the customers created those long-term relationships and are loyal to the brand. They come back every season to look for something “ what they have to have”- the new trend.

Customer relationship management is the ultimate goal of a new trend in marketing that focuses on understanding customers as individuals instead of as part of a group. Chanel does not offer sales. In contrast to a lot of other designers, it is impossible to get Chanel products on sales. A lot of their products are timeless and have been around for decades. However, Chanel is also making sure to not disappoint the new generation customers and to create a variation of products to satisfy the wider group of fashion lovers. Customers are able to try new perfumes of cosmetic by receiving little samples of those products.

Ch. 16 - Advertising, Public Relations and Sales Promotion

Chanel is world known company. The brand is exclusive and has strong equity and loyalty. To advertise their products, they take advantage of the most of the multimedia platforms like Internet, magazines, billboards, department stores, social media, and commercials. Chanel’s history is a big point of the advertising, they do not produce a new product every two days like a lot of other brands. Chanel spends millions on advertising media. They use a lot of celebrities and models for these advertising such as Marilyn Monroe, Suzy Parker, Ali McGraw, Catherine Deneuve, Carole Bouquet, Kate Moss,

Brad Pitt, Nicole Kidman, Gisele Bundchen, and many others. In the article by Alle Connell for Style Caster we can read:

“2012: Brad Pitt is Inevitable. The needle swung back to simple, minimalist ads as Brad Pitt became the first man to front a No. 5 campaign. Stark in black and white, with the bottle in color, the perfume—and, therefore, the woman who wears it—is positioned as the star here, with Brad as the gorgeous accessory. This is underlined further in the oft-joked about television commercial; the story is about the Chanel No. 5 woman and the romantic, adventurous feelings she inspires in the object of her affection, rather than about Brad Pitt himself.”

“2014: Gisele. Supermodel Gisele became the face of No. 5 in this simple, yet utterly iconic ad. Reclining in a lit-up number 5 wearing a simple black dress and lots of diamonds, Gisele is naturally beautiful, confident and glamorous—the perfect No. 5 woman for the decade. Mademoiselle Chanel would no doubt approve.”

The public relations is the element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern and executes programs to gain public understanding and acceptance. Chanel has done many donations and has been sponsors frequently. Chanel was created by a most remarkable woman, Coco Chanel. Through her own philanthropic endeavours founded a heritage of charitable interest at the company that continues today. The support of The Society of Memorial Sloan-Kettering's Cancer Center continues the tradition, a tradition that forms the foundation of good corporate citizenship. Also, they are part of a lot of different charities and help to raise money for good causes.

Chanel is exclusive brand and expensive and its does not offer many sales for the public. Sometimes there are private sales for certain collection and it is only for VIP guests. However, Chanel’s fragrances and makeup usually are sold by big departments stores, and depending on those stores as well as the time of the year, customers might be an offer, for example, some Christmas sales. Chanel also produces some limited edition products, which will motivate the customers to buy their favourite products immediately. Like The Monsieur de Chanel: Chanel's First Dedicated Men's Watch, which will be available this June. It will be limited edition of 300 pieces, $34,500- $36,000.