The Art of Communication

Nowadays clients become more and more demanding in terms of brand profile, craftsmanship and service. It is crucial for brands to connect with customers and to build loyalty to their brand. 

Let’s have a look at ways how Bvlgari and Chopard use different communication strategies in order to interact with people.

Advertising Strategy: 

• Advertising campaigns

Bvlgari:

Chopard:

• Presentation of collections
• Sponsorship events 

Flagship store windows:

In this type of strategy the main goals are:

• To enhance the shopping experience
• To attract attention by using unique elements and design 

Bvlgari flagship stores:

Location: Italy, Rome

Location: China, Hong Kong

Chopard flagship store:

Location: Switzerland, Geneva

Location: Italy, Milan

Location: Switzerland, St. Moritz

Soft Sales Strategy

Chopard: 

• 4 years of the main high jewelry collection premier on the red carpet
• Showcasing of jewelry
• Sales are secured at any time of the day or night
• Sales force take high-end clients to the film festival

Digital Strategies

Applications

Bvlgari applications:

• Celebrating The B.Zero1 Collection
• Bvlgari Retroperspective (Based on the Bvlgari exhibition in Shanghai, February 17 to April 17, 2012 about Bvlgari and its design development)

You can see the design of applications below. The apps represent the history and collections of the brand. As Bvlgari has high interaction in digital media with its potential and real consumers, mentioned apps are popular among people.

Chopard applications:

• Happy Moments

The main goal of application is connection with customers and promotion of its Happy Diamonds collection. First, people watch video about Happy Diamonds collection. After, they can take or download a photo, use filters similar to Instagram. Then, consumers have to choose a ‘moment of happiness’ caption and send photo via social media or mobile network. Thus, it is a way to share emotions and to build emotional connection with consumers. However, this application was criticized for the lack of functionality.

Social Media

Bvlgari in social media: 

Chopard in social media: 

Social media has a great impact on the performance of the companies. A lot of social networks were observed and I came out with the result that Bvlgari has higher interaction with social media users. On the example of Instagram it can be seen that bigger amount of posts doesn't mean higher amount of followers as pictures posted by Bvlgari represent not only products, but also events and share of emotions.

Finally, I would like to mention that marketing communication strategies influence on the relationship between company and its consumers and helps to increase brand awareness. With the help of mentioned strategies, it is possible to reach as many potential customers as possible and build brand image. 

Alina Bieglova

Sources:

http://www.luxurydaily.com/chopard-goes-for-brand-retention-with-happy-moments-app/

http://www.ft.com/cms/s/0/a8167b94-91fe-11e0-b8c1-00144feab49a.html

http://www.jetgala.com/story_201108_04-Luxe-The-House-of-Bulgari.html

http://www.europastar.com/news/1004086025-bulgari-assets-totalling-eur46-million-seized-in.html#.Up4ovtKsim4

http://www.globalblue.com/destinations/switzerland/geneva/chopard-updates-flagship-boutique/

http://diary.chopard.com/a-new-face-for-chopard-boutique-in-geneva

http://www.ft.com/cms/s/0/a8167b94-91fe-11e0-b8c1-00144feab49a.html

https://www.facebook.com/Bulgari?fref=ts

https://www.facebook.com/Chopard?fref=ts

http://files.investis.com/bulgarigroup/presentations/2010/2010-07-21/db-conf-june10.pdf

http://www.thegloss.com/2013/05/18/fashion/chopard-jewelry-stolen-at-cannes/

http://megafilmfactory.com/advertising/chopard/peter-lindbergh---gwineth-paltrow.html
http://www.luxury-insider.com/luxury-news/2011/05/star-spotting-chopard-on-the-cannes-red-carpet

Dilemma of luxury distribution channels...

Living in Paris, we are surrounded by high-end retailers all the time. There are plenty of luxury department stores, boutiques and branded stores trying to catch our attention. In general we take it as given that we can find brands everywhere. If we want to buy a specific brand, there will always be a store selling it close to us.

Should the same strategy be used for the distribution of high-end jewelry?

In this post I will analyze the route to market for luxury jewelry and how priorities have changed during the past years.

Traditionally, high-end brands 
such as Chopard and Bulgari have very much relied on their relationship with luxury retail partners in the distribution channels to get their jewelry to consumers. It involved some financial advantages for the companies as retailers provided cost for the marketing, real estate and costs associated with store fronts or the retailer’s e-commerce platform.[1]

Another way of traditional jewelry distribution is that major brands opened their own retail stores, focusing on flagship stores in affluent areas or boutiques in high-end hotels. Why are they doing that? Having customers’ focus just on their one brand, companies can create a unique environment that communicates the brand image and offers a better customer experience.

Recently though a new challenge has emerged that might cause conflict within the traditional distribution channels. While exclusivity helps to maintain a luxury brand image and high price points, the market is changing and new ways to generate sales have to be explored: In order to expand the customer base retailer activities are leveraged and companies' own online presences are developed.[2]

Having said this, I want to highlight two challenges that high-end jewelry brands face nowadays: how to avoid channel conflicts and how to create a balanced distribution network?

                                                                                                                                                                    SG

Sources:
1. http://www.business2community.com/fashion-beauty/the-one-major-question-facing-every-luxury-watch-jewelry-brand-0383048

2. http://www.wisekey.com/en/Press/2011/Documents/Euromonitor_Report_for_FT_Business_of_Luxury_Summit_2011.pdf

Bvlgari - That Way to Victory

To understand the external exposures and the internal features a company faces it can be very useful to construct a SWOT analysis. The SWOT analysis is a tool to evaluate the strengths, weaknesses, opportunities and threats of a company. This is important to understand when planning how to reach the set goals, to know which features needs reassessment and which are working.

Bvlgari is an immensely successful company. Their strengths are as follows

Bvlgari has a very strong brand name, which is hugely popular and well known worldwide.

They have a high brand presence in the media and social media’s.

Good marketing and advertising worldwide which ads brand value.

The company’s product portfolio is largely diversified. This allows a higher retention rate among the consumers. 

The strongest internal weaknesses Bvlgari faces are

Bvlgari has built the brand name on exclusivity. 

The products are however quite easily copied, which can make the brand lose its exclusivity.

Bvlgari is a world known brand; however, they have had limited penetration of the emerging markets.They have recently started to focus on these markeds, but the market coverage is not optimal.

Their store count is limited world wide

The biggest opportunities imposed by the external market is

The emerging economies, e.g. both generations Asian tigers, are great opportunities for Bvlgari.

Diversify the product lines further to complete the market penetration in their current markets.

Increase promotions and advertisements to raise brand awareness.

Further develop web based stores to make a bigger appearance in the growing online market

The most serious external threats to Bvlgari are

Bvlgari was negatively impacted by the economic downturn of 2008-2009. 

The consumer’s loss of purchasing powers, a weakening dollar and inflation are all threats to sales. 

The Italian challenging economy also has a negative effect on this.

Constant increase in counterfeit products.

Fluctuations in raw materials and the precious metal prices; volatile gold and silver prices. 

To summarize; Bvlgai has a great opportunity to strengthen their market coverage by focusing on emerging markets. Because of their limited store count it can be profitable to further develop their online appearance. Even though their product portfolio is largely diversified it is possible to strengthen their portfolio by further diversify. These aspects can also lead to a higher market share. Bvlgari’s brand value and market presence can also be strengthened by increased advertisement and promotions.

Bvlgai’s toughest threats have to do with the economical cycles during the latest years. These threats are difficult for a single company to do something with, beside wait until the cycles turn and the prices stabilize. 

MK

[This is the first out of two articles in the SWOT analysis series]

Sources:
http://en.bulgari.com/
http://luxpresso.com/news-couture/why-you-should-invest-in-gold/6613
http://luxpresso.com/news-time-n-style/the-legend-of-bulgari/7864
http://articles.economictimes.indiatimes.com/2013-09-04/news/41765725_1_dinaz-madhukar-luxury-brands-exclusive-retail-stores
http://www.mbaskool.com/brandguide/lifestyle-and-retail/3405-bulgari.html

Pictures:

1: http://1001envies.over-blog.com/article-mon-jasmin-noir-de-bvlgari-83587888.html

2: http://www.replica-rolex.co/bvlgari-replica-watch-bv18_29893.html

3,1: http://www.lookfantastic.com/bvlgari-aqva-pour-homme-gift-set-3-products/10565009.html

3,2: http://luxpresso.com/photogallery-time-n-style/accessorise-products-we-loved/14077/2

3,3: http://global.rakuten.com/en/store/brandneo/item/bv32541canvasblk/

3,4: http://www.prlog.org/10135856-wwwb2bvoguecom-wholesale-juicy-couture-teddy-bear-necklacesteel-bvlgari-jewelrytiffany-jewelry.html

3,5: http://www.worldwatchreview.com/2008/05/27/bvlgari-diagono-calibro-303-fashion-chronograph-watch/

4: http://online.wsj.com/news/articles/SB10001424052748704041504576185684121819382

5: http://www.globalblue.com/destinations/france/paris/the-bold-and-bright-world-of-bulgari/

Chopard - The Way to Victory

Chopard and Bvlgari have many similarities as they both are in the same industry. However, while looking at the SWOT analysis for both companies it is apparent that there also are many differences. (See also Bvlgari – The way to victory)

Chopard’s most dominant strengths are

The Chopard name is a strong and popular brand. It is well known and they have high global presence.

They have strong partnerships with well respected organizations. Both their partnership with the Cannes film festival and the partnership with Mille Miglia is furthering Chopard’s luxurious image.

The product is fully manufactured in house which takes away the risk of outsourcing. The product is therefore ensured to have high standards of quality. 

The most important weaknesses are

Chopard is both an expert watch maker company which is also a jeweller. This weakens their position of being experts in watch making, which is negative for the exclusivity image and perception of quality.

Chopard’s most promising opportunities are as follows

Chopard still have a lot of unexplored territory in emerging and developing economies.

They can explore more opportunities provided by their partnership experience, in order to heighten awareness and visibility. To keep consistency with their current operations they can partner with other film festivals in different parts of the world. They can also go further into the film scene by sponsoring and partnering with film awards.

Increase other promotions and advertisement to raise brand awareness. 

And their biggest threats are

Watches are becoming less and less a necessity because of alternative time telling devices such as cell phones.

Pirate copying of the watches is a large problem concerning the whole watch industry.

Competitors with higher brand awareness pose a threat in terms of brand switching.

To Summarize; Chopard's most dominant strengths are their strong brand name, their partnerships and the fact that they have been able to continue as a family business with in-house production. Their most promising opportunities are to explore the emergent markets and to go further into the opportunities provided by their partnerships. 

Their biggest weakness is that the consumers can get the impression of lower quality due to diversification. The threats imposed on the company are the large production of fake watches, the threat of brand switching and alternative devices for time telling purposes.

MK

[This is the second out of two articles in the SWOT analysis series]

Sources
http://www.chopard.com/
http://luxpresso.com/news-couture/in-pursuit-of-a-legacy-a-visit-to-the-chopard-factory/13564
http://luxpresso.com/interviews-itime-n-style/caroline-gruosischeufele-shares-chopards-inspirations/14093
http://luxpresso.com/news-style/the-worlds-most-expensive-pair-of-sunglasses-are-by-chopard/21217
http://www.mbaskool.com/brandguide/lifestyle-and-retail/3446-chopard.html

Pictures

http://moorishharem.com/Lifestyle-detail/l-u-c-tourbillon-by-chopard/

http://www.luxguru.typepad.com/lorre_white_the_luxury_gu/page/176/
http://www.imageamplified.com/2013/05/cannes-film-festival-coverage-chopard-lunch-at-the-66th-cannes-film-festival-wwwimageamplifiedcom-image-amplified.html

The rich also cry

What's the luxury jewelry industry for you? Shine, gloss and glamour?

For us it's something beyond it! We can see through the brand. Let me tell you a secret, that was discovered by Michael Poter. It's called Poter's 5 forces and it's a tool that shapes strategies of every company in every industry.

Porters model of competitive forces assumes that there are five competitive forces that identify the competitive power in a business situation can be used as a tool to assess a company’s position in its industry. These five competitive forces are:

1. Threat of substitute products
2. Threat of new entrants
3. Competitive rivalry within the industry
4. Bargaining power of suppliers
5. Bargaining power of buyers

So let's look in details how these forces influence the activity of Bvlgari and Chopard (and their competitors-check out previous posts).

Rivalry among existing firms is extremely HIGH in this type of industry:

1. Economy of scale: a few large groups dominate.
2. Strong brands: image of every brand was thought over (ex. Carla Bruni in the advertising campaign of Bvlgari) in accordance with brand heritage (Chopard's magic was embodied in Disney collection).

Threat of new entrants should be considered as LOW, because of the following barriers:

1.  Brand loyalty: luxury brands as Bvlgari and Chopard have extremely loyal customers, that are obsessed with specific brand and don't want to change their preferences.
2. Capital requirements: investments to build a new luxury jewelry brand are huge and unrecoverable in case of failure.
3. Suppliers and distributors databases: it is hard to get in touch with suppliers that protect competitive advantage of brands they supply to. Top level distributors will not deal with new unknown companies in order not to damage their reputation.
4. Brands concentration in few groups: almost all luxury brands are own by big groups. Bvlgari is a part of LVMH and Chopard represents a giant group itself. Small new companies will not be able to compete with such luxury monsters. 

Threat of substitutes is at the MODERATE level too. 

1. Mid range brands that pretend to be premium. For example, everybody knows Place Vendôme in Paris where are almost all luxury brands located. A bit further from this place there is a shop of Maty jewelry that is not high end brand, but due to the location could be considered by people as part of Place Vendôme community.  
2. Counterfeit: could be a serious threat to Bvlgari and Chopard (not only in terms of watchmaking, people also buy fake wedding bands with Bvlgari logo on them).
3. Other luxury brands, that gives the same feeling of belonging to the nobility (Hermes bags or Louboutin shoes).

Power of suppliers is from MODERATE to HIGH due to the following reasons:

1. Exclusive skills suppliers: Both Bvlgari and Chopard have strong commitment to quality and propose unique style of their jewelry. It could be hard to make big list of suppliers, that can support them in their engagements.
2. Exclusive materials (b.zero collection of Bvlgari and Happy diamonds of Chopard). 
3. Competitive advantage: suppliers are acquired to protect it outright.

Buyers don't have a strong bargainig power, that's why this force is LOW. 

1. Loyalty: customers emotionally attached to the brand.
2. Exclusivity: unique products that are considered as masterpieces (collection of Bvlgari jewelry that belonged to Elizabeth Taylor).
3. Increasing number of buyers: wealthy people from China and other asian countries.

So "may the force be with you".

Kristina Voskivarova

Sources:

1. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/

2. http://www.notesdesk.com/notes/strategy/porters-five-forces-model-porters-model/
3, http://s3images.coroflot.com/user_files/individual_files/500267_H_jxIO2eTaViTyLAB_HuQdS8I.pdf
4. http://prezi.com/ms7_bvysprei/corporate-strategy-luxury-industry/
5. http://fr.slideshare.net/vy1230/luxury-goods-industry-analysis-2013
6. http://fr.slideshare.net/mraldang/louis-vuttion-moet-henness
7. http://www.blog-bisontin.fr/?2012/01/01/34-maty-bijoux
8. http://diary.chopard.com/the-enchanting-disney-princess-collection

Jewelers' competitors

“The jeweler allows me to wear the sapphire blue lake on my finger, the emerald green leaves around my neck, and take the citrine sunset with me wherever I go. Jewelry has become my daytime link to nature in an office with no windows. And if I have to work late, there’s nothing like diamonds stars and pearl full moon against an onyx night sky. “  Astrid Alauda, “Office with no windows”

The global crisis and the change in the world’s economy, especially the increase of luxury goods sales in countries like China and India, as well as the transformations we expect from this industry ( consolidation of core players, changes in the channels)  have and will  create a very competitive and potentially even more profitable market in the future.

Bulgari and Chopard, being in the Top Ten best jewelry brands in the world face a fierce competition, in the face of each other, but of course from other companies as well. Searching to discover which over companies will better suit as their closest competitors we uncovered the following names:

• Tiffany & Co
• Cartier SA
• Piaget
• Chaumet

Tiffany is an American multinational luxury jewelry and specialty retail, sells jewelry, sterling silver,china, crystal, stationery, fragrance, personal accessories. The company is particularly known for its diamond jewelry and of course its trademark blue box, which contain the purchased articles. Today the company has 167 stores in 22 countries.

Cartier is a French multinational which designs, manufactures and sells jewelries and watches. The company is known as the “jeweler to kings” and currently operates more than 200 stores in 125 counties.

Piaget is a Swiss manufacturer of jewelry and watches and is one of the most prestigious jewellry brands in the world with shops all around the globe.

Chaumet is a French manufacturer of jewelries and watches. The company has more than 70 boutiques in the biggest cities: Paris, Moscow, Tokyo, Hong Kong, etc.

The competition is very vivious in the jewelry market, therefore the companies have to be present in various countries, close to their competitors in order to fight for their consumers' share, like in the case of Paris, where most of the jewelry brands can be found either on Champs Elysées or Place Verdôme. The competition goes not only by presence all around the world, but of course in terms of new collections,  new ideas, consumers' satisfaction of their hedonic and materialistic values, communication and brand perception.

TP

Sources:

1. http://www.quotegarden.com/jewelry.html

2. http://en.wikipedia.org/wiki/Jewellery#Modern

3. http://www.jckonline.com/blogs/chain/2013/05/13/jewelry-industry-in-2020

4. http://topbrandsandproducts.com/2013/09/05/top-10-luxury-jewelry-brands/

5. http://en.wikipedia.org/wiki/Tiffany_&_Co.#Stores

6. http://en.wikipedia.org/wiki/Cartier_(jeweler)#Accessories

7. http://www.cartier.com/maison/history-and-stories/cartier-jeweler-kings

8. http://www.montblanc.com/fr-fr/flash/default.aspx/#/corporate

9. http://en.wikipedia.org/wiki/Piaget_SA
10. http://en.wikipedia.org/wiki/Chaumet

11. http://www.chaumet.fr/

12. http://en.piaget.com/