At the end of year 2009 Dolce and Gabbana launched a brand new mobile phone on the market. With his unique applications and features (e.g. voice recognition or finger print for unlocking) makes this phone the best on the existent market.
Dolce and Gabbana as a brand
"Dolce&Gabbana is the new luxury, authentic and unconventional. A style that expresses new forms of elegance, presenting itself as a modern classicism, based on superior sartorial content and creativity.
The strong identity of the Dolce&Gabbana brand has evolved over the years without ever forgetting its roots. An unmistakable style, which, season after season, combines strong innovation with the Mediterranean flavor of its origins. A brand whose essence lies in its contrasting features."
(Dolce&Gabbana corporate brand)
That's how D&G characterized itself to reach its target and to penetrate with a new product in an existent market. Dolce and Gabbana as a brand already existed and you can easily recognized by its goldish color and its signature on every product. When you see those characteristics the first thing that comes in your mind is richness.
"A name, term, sign, symbol, design or a combination of these, which is used to identify the goods or services of one seller or group of sellers and to differentiate them from those of their competitors."
(Kotler et al. 2001: 469)
Dolce and Gabbana corporate already exists on the market with a branded name and symbol (D&G) which can be easily identified and differentiated by its competitors.
Dolce & Gabbana competitors:
When D&G lunched his new product (D&G G-razor E2150) in the mobile phones market that already existed, they knew that it will face lots of competitors, and they targeted rich population first by doing personalized phones and after that phones for entire market. His biggest competitors are iPhone, the leader on the market, Samsung, Motorola, Siemens, LG etc.
- The threat of new entrants
Nowadays, because of the constant evolution of technology, there is a continuous threat for the existing firms coming from the entrants on the industry. In this case, it is hard to enter the Mobile Phones market as there are lots of companies that have a strong influence on the market. Also, the equipment necessary to manufacture and develop the products is very expensive.
- The bargaining power of buyers
The power of buyers is the impact that customers have on the products of the companies.
- The bargaining power of suppliers
All producing industries require raw materials - employment, components, and other supplies. Suppliers, if powerful, can exploit an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry's profits.
- Threat of substitutes
Substitute products refer to products targeted on other industries. The elasticity of a product is influenced by the range of substitutes available on the market.
- The threat of industry competitors
The main competitors for Dolce & Gabbana are iPhone, Nokia and Motorola. These companies have a high influence in price, which small companies need to follow, so that they do not lose clients.
Economic- consumers are more price sensitive in the past 18 months because of the economic crisis.
Social- nowadays children have more influence on the adults decision, demanding different kinds of features. More, the UK population is ageing, and the old population are buying based on their basic needs, they are not keen on buying new technology as it is harder for them to understand it.
Technological- it is the most important factor for the mobile phone market because it can dramatically change the customer behavior and the buying decision. Technology develops extremely fast these days, in comparison to the other factors. For example 3G calls will be used on a daily basis.
- It is an experienced company with more than 25 years of existence, which knows all the changing trends in the market
- There is a growing demand for the products the company manufactures
- It has its own manufacturing unit
- It has a low market share compared to its competitors in mobile phones segment
- It has strong competitors with more access to resources
- The opportunity to target a different market segment, such as the ageing population.
- The decrease in demand of second-hand mobile phone, now days everyone can afford a new phone and they are looking to buy the best on the market.
- All kind of new smart phones which become more and more popular and multifunctional, especially for the internet use on a daily basis
- The leader companies can take the monopole in the market
- The increase in the prices of raw materials, because there is a going concern for the intensive use of natural resources.
Core and Competitive Strategies
- Target market - the main customer target is the population between 18-50 years old. Also, the young population is adopting very quickly the new technology, to keep up with the trend, compared to the older population
- Competitor targets - The main competitors for D&G are iPhone, Nokia and Motorola
Apple iPhone - will become the market leader of mobile phones segment with a 30% market share, closely challenged by Nokia.
- Was launched and has grown in US
- The iPhone has been crowned Britain's "coolest brand", knocking Aston Martin
- It mainly advertises its features, not the main function of it, which is the communication purpose
- it is the most desired mobile phone, by attracting its customers with unique features
- Is in a partnership with Microsoft
- Supplies the internal system with high specialized chip
- It also has strong associations with all major retailers in the world
- It co-funded a new music programme on Channel 4, which had run for 15 weeks
- It launched its N81 by placing seven giant posters, and LED screens showing live content in all major cities across UK
- It used advertainment by having a three years sponsorship of X Factor
- It has sponsorship contract with MTV
- It promotes its mobile phones through product placement, for example in Rihanna's music videos
- Competitive advantage - the main competitive advantage is the new innovation, the experience gained along the years with the other brands that gives them an insight into the competitors' minds. The company also offers a personalized design created by some of the most famous artists.
- Dolce and Gabbana wants to differentiate itself by launching luxurious series of mobile phones
- One of its advantages is adding photography and video clips from Dolce&Gabbana's women's Autumn/Winter 2010 runway show will be pre-loaded on the handset.
- It has the unique features of voice recognition and finger print security unlock
The role of advertising in determining consumer behaviour has been under the microscope for several years. The customer behavior is influenced by many factors.
Towards a theoretical explanation
In the academic literature on the effects of advertising on consumer behaviour there are broadly two visions:
- Advertising as a strongly persuasive force (Barry 1987, Shankar 1999)
Proponents of this view are invariably critical of advertising. They contend that accurate knowledge about consumers - how they buy, why they buy and where they buy - is unnecessary as it is possible to manipulate buyers into parting with their money in return for products that they do not want.
- Advertising as a tool of competition
For almost thirty years, a considerable number of academics have asserted that the 'strong force' theory does not apply in all market sectors. These academics suggest that when it comes to marketing of frequently purchased goods (such as food) in mature markets volumes of advertising merely reflect an attempt to maintain a market share in highly competitive but fragmented markets, the total volume of advertising does not affect total market size.
The simple, yet highly complex reality is that advertising works in different ways and to different effects depending on many intrinsic and extrinsic variables.
Why do companies advertise?
Primarily to develop consumer value in their brands. The overwhelming majority of ads are for brands, with the obvious exceptions of political, public service and charity advertising. Brands deliver choice, innovation, confidence and consumer value. The value of most businesses does not reflect their tangible assets, but their brand assets and therefore leads to business success being very largely driven by the ability of a company's brands delivering a higher level of consumer satisfaction than competing brands.
Advertising is principally a tool of brand competition and it is brand competition that puts consumers in charge and renders businesses entirely vulnerable to the consumer - in effect a continuous, real time election.
The role of advertising
Advertising fulfils a number of tasks usually in the context of brands.
- creates awareness
- communicates attributes and benefits (rational and emotional)
- reminds and refreshes to ensure top of mind awareness
- repeat purchase therefore generates
- over time contributes to loyalty and the franchise of a brand
A study in the Journal of Consumer Research shows that quick exposure to well-known brands can cause people to behave in a way that mirrors the brand's values.
Researchers measured the effects of the creative-minded Apple logo versus the IBM logo, which is associated with tradition and responsibility. The study practitioners exposed 341 students to either the Apple or IBM logo then asked them to think of uses for a standard brick. The students that had seen the Apple logo came up with more unusual and creative uses for the brick than IBM viewers. Interestingly, the exposure was so brief that none of the participants could surely identify the brand. In a follow-up experiment, participants exposed to a Disney Channel logo behaved more honestly than those who saw a logo for E! Channel.
The Apple iPhone's impact on the consumer market puts the device in a class of its own, according to a Compete study based on the web browsing and shopping behavior of a panel of millions of consumers. Measured by consumer interest, the iPhone was the biggest handset launch ever. Compete found the iPhone drew 20 times more interest than the average phone launch, and drew higher volumes of shoppers than the Xbox 360 or Nintendo Wii at the height of their launches.
Key findings on iPhone and smartphone shoppers include:
- Consumers evaluating iPhone are only one-half as likely as the average wireless consumer to cross shop other phones.
- More than 50 percent of Palm and Windows Mobile smartphones users rely on their devices primarily for personal use.
- Consumers of advanced wireless devices find Web or Internet access (68 percent) the most important feature on smartphones, and are least interested in mobile TV (17 percent).
Implementation, Organization and Control
To verify if the marketing plan was successful, the company should set up some control measures, such as questionnaires/surveys for the customers, to determine if they like the products and the new features. Also, the market values and sales level should be analyzed in order to see if they match the company's objectives.