Gucci Case

Topics: Gucci, LVMH, Luxury good Pages: 2 (514 words) Published: November 1, 2010
Problem Statement
With current economic downturn, should Robert Polet concentrate solely on strengthening the Gucci brand further, or should he expand the multi-brand strategy to the next level? Situation Analysis
As the economy began to deteriorate near the end of 2008, luxury brands like Gucci, Prada, and Louis Vuitton all began to feel the effects. Consumers were beginning to spend less and save money through the times of economic uncertainty. One of the hardest hit industries what that of luxury goods. Robert Polet was faced with an extremely daunting challenge of determining how to leverage the Gucci Group brands to remain profitable during the economic downturn. Major Alternative Actions

Two alternative actions that I believe Robert Polet can take during the tough economic times are to leave the Gucci Group brands intact and change the branding messages to consumers to reflect the state of the economic environment, and to sell the unprofitable YSL brand that has been hurting the Gucci Group for years. Adjusting the brand messaging of the Gucci Group brands could prove very beneficial due to the economic crisis present. Looking back at the Great Depression, as described in Thomas O’Guinn’s Ad Age article With Populism’s Rise, Prada’s Falls, the smart luxury brands were branded as something other than wealth. Gucci could act in a similar fashion and transform the messaging of the Gucci brands to communicate the products’ functional benefits and high level of quality. This would detract from the status of the Gucci brands and make consumers feel as though they are buying high quality leather goods rather than a status symbol that would be frowned upon during the current economic environment. It is important to note that this change in brand positioning to functional benefits could possibly detract from the high fashion appeal of the Gucci Brands, alienating a large portion of Gucci’s consumer base. Another action Gucci could take in the tough economic...
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