Chanel is a privately owned fashion company that is based in Paris, France. The
enterprise was established in 1909 by Gabrielle Bonheur Chanel, who is popularly known as
Coco Chanel. Currently, Alain Wertheimer and Gerard Wertheimer are co-owners of the
company. Correspondingly, Virginie Viard is the creative director, and Philippe Blondiaux is the
chief executive officer. The phenomenal leadership of the organization has enabled it to operate
successfully for approximately 110 years (Chanel, 2019) . In effect, the fashion house has
managed to establish physical stores in approximately 310 locations worldwide as well as
employ nearly 20,000 employees. The mobilization of those resources facilitated the commercial
entity to realize revenues of roughly $11 billion during the financial year ending 2018. In this
light, the fundamental intent of this particular paper is to examine the operations of Chanel S.A.
from a marketing perspective. The implementation of a top-notch marketing plan has enabled the
organization to operate competitively despite the comparatively high levels of competition that
characterize the fashion sector.
Audit of Brand Performance
In 2018, the total sales generated by Chanel rose by 10.5% to $11.5 billion (Chanel,
2019) . Similarly, the net profits of the fashion house also increased by 16.4% to $2.17 billion
during the same year. Notably, the highest fraction of the growth realized by Chanel is
attributable to the Asia-pacific market because its sales increased by 19.9%. In contrast, the
Americas and Europe rose by 7.4% and 7.8%, respectively.
Mass Market Exclusivity
The perceptual map displayed above reveals that Chanel’s management team has
positioned its brand as prestigious and exclusive. In effect, all the products offered by the fashion
house retail at premium prices (Bendixen & Abratt, 2018) . The implementation of that particular
pricing strategy gears towards minimizing the number of people who can afford the items it
offers. Similarly, Chanel’s physical stores ooze luxury and sophistication. Most importantly,
Chanel's physical stores are usually situated in some of the most prestigious addresses in
different cities throughout the globe (Chanel, 2019) . As a result, all the individuals who visit
Chanel stores appreciate that the company is selling luxurious items. Thus, a substantive number
of people end up buying Chanel products because they are Veblen goods (Ferrell & Pride, 2016) .
Correspondingly, Chanel’s marketing team has positioned its brand in a manner that ensures the
general public believes that the organization offers top-notch products. The perceived quality of
Chanel’s products is one of the primary factors that justifies the premium prices that they
command (Gbadamosi, 2013) . In particular, a huge portion of the individuals who procure
Chanel products to do so because they are not only acquiring luxurious items but also high-
quality ones (Fowler & Burrow, 2016) . Due to that aspect, the customers believe they receive
good value for their money when they acquire Chanel products because they are trendy,
exclusive, and durable.
Audit of External Environment
Indeed, the United States, China, and France account for a third of the total sales
generated by Chanel (Chanel, 2019) . Unfortunately, the governments of the three countries are
involved in negotiations pertaining to protectionist market policies. The diplomatic row between
the United States and China has resulted in a scenario whereby the governments of the two
countries have imposed tariffs against each other. Similarly, Britain has decided to exit the
European Union, and that means the country might put in place tariffs against products imported
from France. Fortunately, the operations of Chanel have not yet been adversely affected by the
geopolitics above described. However, its management team needs to monitor those two
situations closely in order to ensure that they respond effectively to any geopolitical changes
which are likely to have adverse implications on the performance of Chanel (Godfrey, 2016) .
For the past few years, the global economy has been comparatively stable. In effect, the
prevalence of that particular scenario has made the population of the middle class in many
countries throughout the world to increase. Indeed, the products offered by Chanel are usually
targeted at the rich and wealthy (Chanel, 2019) . However, the middle class and members of the
Higher Earners, Not Yet Rich category, are the primary buyers of Chanel’s products. Perhaps,
those products appeal to those two segments because they are symbols of success. In this light, it
is critical for Chanel to enhance their proficiency at catering to the needs of the members of
those two categories because it is highly likely that their population will continue increasing over
the foreseeable future if the global economy remains stable (Fowler & Burrow, 2016) . The
implementation of that particular strategy is likely to boost the overall sales of the fashion house
as well as enable it to diversify its customer base (Bendixen & Abratt, 2018) . Besides, the move
will also help the commercial entity to minimize its vulnerability to geopolitical risk.
In addition, Chanel needs to increase the range of products that it offers to Asians
because a substantive fraction of them value luxury brands. In effect, the fashion house should
develop products that will be specifically offered to the Japanese, Malaysian, Chinese,
Singaporean, and Indian markets (Chanel, 2019) . By so doing, the company is likely to improve
its market share in those respective countries, considering that most of the fashion houses hardly
develop specialized products for each one of them (Bendixen & Abratt, 2018) . The
competitiveness of the new products will be highly influenced by the standard of sociocultural
research that the fashion house conducts (Thompson, 2017) . Thus, it is in the best interest of the
enterprise to ensure that they conduct top-notch research that will enable the product
development team to design items that are in line with the preferences and tastes of those target
Technological advancements are taking place at a relatively high rate, and they are
affecting the manner in which businesses operate (Ward & Peppard, 2016) . As a result, Chanel’s
management team needs to ensure that the fashion house is able to effectively adapt to the
technological changes in order for it to operate competitively (Thompson, 2017) . Notably, the
general rate of internet penetration has been rising throughout the world. In effect, the popularity
of online shopping has been rising steadily throughout the world. Due to this aspect, it is critical
for Chanel’s management team to formulate and implement strategies that will facilitate it to
enhance the competitiveness of its online stores. Arguably, failure to develop and implement
such a strategy is likely to have adverse ramifications on the overall competitiveness of the
fashion over the long term considering that electronic commerce is democratizing markets
At the moment, the world is experiencing relatively high rates of global warming. Thus,
governments across the globe have invested heavily in programs that sensitize communities on
matters pertaining to environmental sustainability (Fowler & Burrow, 2016) . Due to that aspect,
there has been a substantive increase in the number of people who are examining the
performance of commercial entities from the vantage point of environmental sustainability as
they make their purchase decisions (Thompson, et al., 2017) . Accordingly, it is critical for the
management team of Chanel to review its operations with the aim of ensuring that it is being run
in a sustainable fashion in order to boost the competitiveness of the organization. Similarly, the
organization needs to ensure that it maintains a diverse workforce in order to develop a positive
brand image globally, especially amongst the millennials and Generation Z (Soundaian, 2012) .
Currently, Chanel has a physical presence in approximately 310 locations across the
world. In consequence, it is vital for the management team to develop a legal team that will
advise it on the legal aspects pertaining to the decisions they make on behalf of the organization
on a day to day basis. Countries such as China and Saudi Arabia tend to be extremely harsh
when punishing international companies that contravene their laws. As a result, the management
team needs to ensure that the marketing strategies employed by the organization are in line with
the laws of every country where Chanel has a physical presence.
Chanel is a fashion house that has strong brand equities, a factor that enables it to operate
competitively in a highly competitive sector. In particular, the brand is approximately 110 years
old, and it is ranked amongst the top a hundred luxury brands throughout the world. As a result,
the company can leverage its brand equities in order to popularize as well as introduce new
products effectively (Levinson & Lautenslager, 2014) . Similarly, the brand equities of the
enterprise enable it to venture into new markets effectively. In effect, the fashion house can
gradually grow its customer base, thereby diversifying its sources of revenue as well as boosting
its total sales. Indeed, diversification will play a vital role in terms of facilitating the fashion
house to continue operating profitably in the long term despite the changes that are taking place
in the geopolitical front of the advanced economies.
Karl Lagerfeld was one of the primary designers for Chanel, and his death means that the
fashion house needs to reorganize its operations because he was an iconic figure. Indeed, it will
be next to impossible for the organization to replace Karl Lagerfeld. Thus, it is advisable for
Chanel to identify another great designer who can develop world-class products for the
organization. (Ward & Peppard, 2016) The process of choosing the main designer is risk and
challenging, given that errors will have direct adverse implications on the overall
competitiveness of the fashion house. Besides, the competitiveness of Chanel is adversely
affected by the ever-increasing costs of production (Lancaste & Reynolds, 2011) . Due to that
aspect, the company realizes a lower profit margin per unit of sale. As a result, it is critical for
the organization to revise its pricing strategy in order to ensure that its products are affordable to
the highest portion of its target market.
The general demand for Chanel products has been rising throughout the world due to the
increase in the number of people who can be categorized as High Earners, Not Rich Yet. Due to
this aspect, Chanel’s marketing team should concentrate on catering to the needs of this
particular segment of the market (Thompson, 2017) . Arguably, it is because the largest fraction
of the members of that category have large amounts of disposable income even though they are
not yet rich. As a result, they are capable of acquiring the various products rendered by the
organization. Perhaps, one of the ways that the fashion house can achieve that objective is by
increasing the number of advertisements aired on the most popular television channels
throughout the world (Gbadamosi, 2013) . By so doing, the organization is likely to make Chanel
to be amongst the luxury brands that are first in the minds of the individuals who are part of its
target market. In consequence, the fashion is likely to boost its sales over the foreseeable future.
Additionally, Chanel should also introduce new products because the move is likely to
facilitate the fashion house to increase its customer base. Indeed, the preferences and tastes of
customers change on a periodic basis because fashion tends to be highly perishable. Thus, it is
essential for Chanel’s marketing team to conduct extensive market research that gears towards
understanding the preferences and tastes of contemporary customers. In particular, marketing
research ought to focus on understanding the needs of Generation Z and Millennials (Arora &
Sanni, 2019) . Arguably, it is because such individuals are likely to join the High Earners, Not
Rich Yet category in approximately a decade’s time. As a result, the in-depth understanding of
their preferences and tastes in likely to facilitate Chanel to develop products that can introduce
them to the brand (Tesar, 2013) . Consequently, the marketing team should devise strategies that
will facilitate the organization to retain those customers in order for the fashion house to reap big
returns once they join the High Earners, Not Rich Yet category.
The rising popularity of luxury brands such as Chanel has resulted in a scenario whereby
the number of counterfeit products has also increased. As a result, it has become increasingly
challenging for customers to discern counterfeit and original products effectively. In this light, it
is critical for Chanel’s marketing team to create infomercials that gear towards equipping the
general public with skills that will facilitate them to identify the original products effectively
(Sweezey, 2014) . By so doing, the organization will minimize the overall amount of revenues
that it loses due to counterfeiting. Most importantly, the fashion house will safeguard its brand
image, which is likely to be tarnished by counterfeit products because they tend to be of inferior
Moreover, the luxury fashion sector is characterized by a comparatively high degree of
competition, which means that Chanel’s marketing team has to develop innovative techniques
for promoting the various products offered by the fashion house. Accordingly, it is advisable for
Chanel’s marketing to encourage the management team to increase its investment in content
marketing. Perhaps, one of the through which the organization can realize that objective is by
increasing the number of films it sponsors (Molenaar, 2012) . Product placement in film
facilitates fashion houses to position their products and brands effectively. As a result, the
fashion house can leverage the brand equities of different influencers in order to enhance its
competitiveness in the sector. Content marketing is highly recommended because it will enable
the fashion house to subtlety market its products (Simakova, 2013) . In effect, the customers are
likely to enjoy the marketing, which is a factor that often results in a situation whereby the
individuals who watched the film will have a positive image of the brand.
The population of the middle class has been growing the developing economies such as
India, China, Singapore, and the Middle Eastern countries. As a result, it is critical for Chanel to
employ a marketing strategy that will facilitate it to grow its market share by approximately 8%
percent in those countries. By so doing, Chanel’s revenues will increase, considering that the
United States, China, and France generate nearly a third of its total revenue (Chanel, 2019) .
Besides, the growth in market share will facilitate Chanel to effectively diversify its revenue
base, which is highly essential, considering the geopolitics of the contemporary world (Fill &
Baines, 2012) . The economic growth of the developing countries is expected to be positive over
the foreseeable future, which means they can facilitate Channel to cushion itself from the adverse
implications of the protectionist market policies being employed in the United States and the
Social media marketing is the most suitable Chanel for promoting the different products
offered by Chanel (Kurtz & Boone, 2015) . Arguably, it is because social media facilitates
companies to target a particular fraction of society specifically. In effect, social media marketing
offers a comparatively high return on investment. Due to this aspect, it is critical to appreciate
that the effectiveness of the advertising campaigns which run of social media will be influenced
by the quality of content presented. As a result, Chanel should hire models that hail from the
countries that constitute its target market. The implementation of this particular strategy will
make the target audience to effectively relate to the products that are being advertised because
they identify with the models. All the advertisements should issue calls to action that direct
customers to the websites and stores where they can procure Chanel products (Arora & Sanni,
2019) . The effectiveness of the advertisements should be measured based on the number of likes,
comments, views, and impressions generated by each post. Above all, the company should
commission a market survey at the end of the year in order to ascertain whether its market share
Currently, the prevailing degree of internet penetration has been rising throughout the
world. In effect, fashions houses need to employ an Omni-channel strategic in order for them to
operate competitively. As a result, it is advisable for Chanel’s marketing team to invest in search
engine optimization for the fashion house to enhance the competitiveness of its electronic
commerce platform (Sweezey, 2014) . The move will ensure that Chanel’s online store pop-ups
in the first page of most search engines whenever people search for some of the products offered
by the fashion house. Arguably, the individuals who decide to shop from their online stores
should receive discounts on the cost of delivery as opposed to the price of the products they
purchase. The application of that particular strategy strives to ensure the organization does not
comprise the perceived quality of the products its offers. The provision of luxury products at
discounted prices might have adverse implications on their appeal (Ansoff, 2016) . Perhaps, it is
because luxury products are supposed to be exclusive in order for people to aspire to own them.
The issuance of discounts on delivery gears towards reassuring the online shoppers that the
products displayed on Chanel’s e-commerce store are top-notch, and the competitive prices stem
from the reduced operational costs courtesy of the savings made rent.
In conclusion, the use of a world-class marketing plan has been pivotal in ensuring that
Chanel operates successfully. The audit of the brand performance reveals that the enterprise has
strong brand equities, which it leverages in order to realize a competitive edge in the market.
Similarly, the audit of the external environment reveals that political, economic, technological,
and environmental factors primarily influence the competitiveness of the enterprise. The
directors need to realign the operations of the company according to the variations that are taking
place in the critical markets. Similarly, the SWOT analysis reveals that the enterprise should also
focus on improving marketing, especially in developing economies. Arguably, it is because those
markets are less competitive, and their middle is growing at comparatively high rates that the
demand for the wide variety of products rendered by the organization is highly likely to increase
over time gradually. To that effect, the marketing plan employed by the organization should
leverage the power of digital media in order to enhance its brand equities, especially in the
developing world. Most importantly, the marketing plan should focus on parents and young
people between 25 and 40 years old. It is because the company sells its products at a premium,
and a substantive fraction of the people in the age bracket indicated above have jobs, which
means they can choose to buy some of the items it offers because they are perceived as symbols
of success. Similarly, advertisements that are geared towards encouraging parents to procure the
products offered by the fashion house are likely to be effective because most of them want the
best for their children.
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Marketing Research 540,200,000
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Digital Media 306,600,000