INTRODUCTION

The said company, Burberry, faces the key issues of how prominently should the company uses
its famous checked pattern and also how should it cater to the different customer bases; its core
customers and the non-target customers.
BACKGROUND
Burberrys was started in 1856 and by 1920 The Burberry check pattern became a registered
trademark. The brand in the next few years came to be increasingly known as a brand
symbolizing both luxury and durability .In 1970 Burberry was bought by Great Universal Stores
Plc. (GUS) and agreed to license the brand in Japan through Mitsui and Sanyo. Over the next
decade, Burberry continued to grow worldwide through additional licensing and distribution
agreements. But, as the brand became licensed across a range of categories, the price, design and
quality of the products began to vary across local markets. In addition, a parallel trading also
started taking root wherein, the wholesalers would sell to unauthorized distributors who in turn
sold it to locations without any empathy towards the price, channels and the locations. Also, in
addition to these, the other problems faced by Burberry were a concentrated customer base and
over reliance on a narrow base of core products. Owing to these problems, the senior
management of Burberry was revamped, and Rose Maria Bravo was brought in as the CEO, who
in turn reinvented the brand in 1997. The immediate changes brought in by Bravo were cosmetic
i.e. the companys name was changed from Burberrys to Burberry and a new logo and
packaging was introduced. Subsequently, the brand was repositioned to attract younger
customers whilst maintaining its core customer base. Therefore they positioned itself right in
between lifestyle and fashion. Next she cut down the SKUs from 100000 to 24000 eliminating
the outdated designs. Also these gave way to new product lines that could be consistent in
presenting its image. Next, Burberry exercised control over everything from designing to
distribution for the non-licensed products and anywhere expertise was required, it worked with
licensees who had the right to design, manufacture and distribute products under the Burberry
name. She also reined in the older agreements to curb the inconsistencies in price, design and
quality across products.
Now, the key issues that Burberry is facing in light of the changing environment are manifold.
The pertinent questions being,

What new product categories should it enter?

Should they continue with the famous Check? If so, to what extent?
Should they focus on the brands affiliation with the non-target customers?
How do they continue growing without falling prey to its own success?

Burberry in time having diversified to include not just womenswear, but also menswear and
accessories under two different product lines:

Continuity products having a life cycle of a number of years

Fashion oriented products- introduced on a collection by collection basis

Had the options to have extended its product into perfumes, childrenswear, footwear etc. Now,
the issue that it faced was to move into those product extensions that would be in line with the
companys vision.
The next problem that Burberry faced was the ubiquity of its famous check. Burberry was always
known for its check and in time the checks could be seen everywhere, from the trench coat to
underwear. For a luxury brand ubiquity could kill you. If you were ubiquitous it would mean
you are no longer luxury.1 Therefore this scenario raised the question for Burberry, How should
it use its check to not lose its soul? Should it go for a more restrained use, or not use the checks
at all. On one hand it had hard facts to support its use of checks:

25% of company revenue came directly from prominent check products

10% of all apparel sales featured check
10% of all apparel sales featured check in a seasonal color variation
40% of all apparel sales used the check subtly

While on the other hand it had the primary concern of losing the value of the checks if it was so
ubiquitous, the problem of counterfeiting and also of losing its customer base with the dilution of
the unique proposition of the brand.
Next, Burberry also realized that it had become amazingly popular with a young and hip crowd,
the kind that would consist of football hooligans, D-list soap stars and the reality TV stars who
were not its targeted market.2 This raised the issue of losing its core customer base if these
affiliations hinted a different view than intended to the core customers.
All these issues led Burberry to finally analyze its next move, how prominently should it use its
checks in advertisements as well as products to be able to cater to the consumer bases in light of
staying true to its positioning of being an accessible luxury, of being not just aspirational but
also functional.
PROPOSED SOLUTION
The way forward for Burberry suggested by us, to tackle the issues above are:
1. Use checks subtly in ads and products This would ease the way for Burberry to
transition in the long run into a brand that had far greater value than the association of
Burberry with checks. Right now, one of the issue that Burberry is facing is that the
1 Source: http://www.kornferryinstitute.com/briefings-magazine/summer-2011/beyond-burberry-check
2 Source: http://www.theguardian.com/media/2004/nov/01/marketingandpr

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checks are synonymous with Burberry, which can act as a restraint for Burberry to move
further into products or product lines which does not have checks. Customers might not
be able to associate with the brand Burberry, sans checks. Hence it becomes pertinent for
Burberry to start transitioning slowly by using the checks subtly in ads and its products to
help ease the customers transition.
The use of checks should be in accordance to the different product segments The
products and ads differ in different segments. For example in the lifestyle product
segment, it becomes pertinent that the checks are prominent, because the customer base
associates the brand with the checks. Whereas, for Burberrys fashion products, the ads
and products can have subtle checks or no checks in lieu of prominent checks, as these
customer bases do not associate the brand just with the checks.
Different product lines for different customer base As Burberry is wedged in between,
and it wants to portray itself as an accessible luxury, Burberry should come up with
different product lines that cater to both these customer bases. For example- it can have a
luxury product line like the PORSUM for the elite and also have a different product line,
which, caters to the young and the hip crowd.
Then slowly move away from check patterned products In time we believe, that
Burberry should move away from its checks, as the brand should be of far greater value
than the checks and the checks should not be able to superimpose itself on the brand. But,
for this the way forward we believe should not be drastic and as mentioned above should
be carried out subtly.
Reduce licensing further so as to have a better control over the value of the brand and
to keep a check on counterfeiting
Cohesiveness amongst different lines Once they come up with different lines, Burberry
should be able to maintain cohesiveness amongst them in terms of the message that is put
across to the different customer bases.