INTRODUCTION TO THE STUDY

A report on 4Ps of Chanel

Report submitted in partial fulfillment of the requirement
For the award of the degree of BBA Batch (2015-18)

Submitted By: sahil baliyan

BBA Semester III

Under the Guidance of:

Mukta katyal
Faculty, DSPSR

Delhi School of Professional Studies and Research

(Affiliated to Guru Gobind Singh Indraprastha University, New Delhi)

Enroll. No. 43821701715

November 2016

ACKNOWLEDGEMENT

I take this opportunity to express my profound gratitude and deep regards to my guide (mukta
katyal) for his exemplary guidance, monitoring and constant encouragement throughout the
course of this project. The blessing, help and guidance given by ( her) time to time shall carry me
a long way in the journey of life on which I am about to embark.
Last but not least, my sincere thanks to my parents and friends for their wholehearted support
and encouragement.

Sahil baliyan
BBA-3 (d)

DECLARATION

This is to certify that the PDCS-III minor project titled (A report on 4Ps of Chanel) is an
academic work done by (Mr.Sahil Baliyam) submitted in the partial fulfillment of the
requirements for the award of degree of Bachelor of Business Administration at Delhi School of
Professional Studies and Research, New Delhi under my guidance and direction.

(Mr. Sahil Baliyan) has given an undertaking that the information presented in the project has
not been submitted earlier.

Mukta Katyal
Faculty, DSPSR

OBJECTIVE OF THE STUDY:

1)
2)
3)
4)

To study different kind of products manufacterd by chanel

Pricing technique used by chanel for their products
Geographical distribution of their products in differrnt part of the world
Attractive techniques used by chanel to advertise its product

Literature review
A lot of research work has been done before on the company chanel being such a big and luxury
brand chanel has always been in the limlights . it is a very popular brand across the world .
different people have different outcome on their research project . based on marketing strategies

to promotion , price and place different outcome show different result. It is not only about the
brand but also about the founder coco chanel

1) Gabrielle Bonheur Chanel (aka Coco Chanel) was born in 1883 in France and died there at
the age of 87 in 1972. During her time on earth, she turned the fashion world on its heal,
breaking rules and creating new ones that left millions clamoring for her fashions and
fragrances. To the world and fashion industry, she is remembered as the premier diva of
fashion of the twentieth century. She was bold, brave, extremely intelligent and possessed
the savvy and know-how to get exactly what she wanted at a time when women were
expected to be timid and mild.

2) SALES CHANNEL IN CHINA :

Asia has now emerged as a priority for the French luxury brands. The team did not trush
to open eight or ten shopes as some luxury groups did. The idea of Channel is to develop
abroad. The group has a project in Bejing city which has experienced considerable
development. Channel also opened a store in Shanghal five year ago and is on track to
open one in Macau. Currently there are two stores in Bejing, two in Shanghal, one in
Hangzhou but 81 points of sales in perfumes and cosmetics.
3) SALES CHANNEL IN ASIA :

Although Chanel owns laboratories in research and development in japan, its perfume are made in
France

4) SALES DITRIBUTION IN USA :

(20 points of sales in NY for example)Perfumes are sold in Chanel boutiques, In Sephora store
and Macys store which are luxury distributers but also in some Canadian distributors.6.

SALES DISTRIBUTION IN CANADA (20 points of sales in Toronto) Perfumes are sold in Chanel
boutique, but in some Canadian distributers such as TheBay, Luwinna Fashion & cosmetics, Sears.
(Which are all fragrance, makeup and skincare distributors)

5) Advertising :
Local: The economic crisis resulted in the decline in the purchasing power of the consumers. As
a result the purchase of luxurious product decreased. But at the same time we found some
customers who always buy luxury items in order to overcome this gloomy period. This trend
compensates the decline of purchase of the other customers. National: French market of the
luxury knows for certain fame all over the world. The French market possesses the third part of
luxury market and engendered a great deal of jobs .Global: Chanel is a brand recognized all over
the world. We can wonder if the communication strategy is the same in all the countries and
especially on the range of fragrances.

6) GLOBAL ADVERSTISING :
Global Advantages of Campaigns
Global advantage of the international campaigns of Chanel in relation to these
Fragnances is that its easy to convince customers to buy. Chanel sells
quality and the communication reflects of it: purity , lightness , sexuality, and French style dandy
spirit

7) Distribution Channels :
The network involved in delivering a business's product or service to market is called the
distribution channel. A channel is a route used by a business to market and distribute its products
or services (e.g., wholesalers, retailers, mail order, Internet). The simplest channel, of course,
involves only the organization itself selling directly to the consumer. However, many other
channels are available. Direct marketing is a customer relationship management strategy to help

the organization identify prospective customers, acquire data concerning these prospective and
current customers, build relationships with customers, and influence their perceptions of the
organization and its products or services.

CONCEPTUALIZATION

MARKETING MIX
The marketing mix definition is simple. It is about putting the right product or a combination
thereof in the place, at the right time, and at the right price. The difficult part is doing this well,
as you need to know every aspect of your business plan
Marketing Mix 4Ps

MARKETING MIX-PRODUCT

A product is an item that is built or produced to satisfy the needs of a certain group of people.
The product can be intangible or tangible as it can be in the form of services or goods.
You must ensure to have the right type of product that is in demand for your market. So during
the product development phase, the marketer must do an extensive research on the life cycle of
the product that they are creating.
A product has a certain life cycle that includes the growth phase, the maturity phase, and the
sales decline phase. It is important for marketers to reinvent their products to stimulate more
demand once it reaches the sales decline phase.
Marketers must also create the right product mix. It may be wise to expand your current product
mix by diversifying and increasing the depth of your product line.
All in all, marketers must ask themselves the question what can I do to offer a better product to
this group of people than my competitors.

In developing the right product, you have to answer the following questions:

What does the client want from the service or product?

How will the customer use it?

Where will the client use it?

What features must the product have to meet the clients needs?

Are there any necessary features that you missed out?

Are you creating features that are not needed by the client?

Whats the name of the product?

Does it have a catchy name?

What are the sizes or colors available?

How is the product different from the products of your competitors?

What does the product look like?

Marketing Mix PRICE

The price of the product is basically the amount that a customer pays for to enjoy it. Price is a
very important component of the marketing mix definition.
It is also a very important component of a marketing plan as it determines your firms profit and
survival. Adjusting the price of the product has a big impact on the entire marketing strategy as
well as greatly affecting the sales and demand of the product.
This is inherently a touchy area though. If a company is new to the market and has not made a
name for themselves yet, it is unlikely that your target market will be willing to pay a high price.
Although they may be willing in the future to hand over large sums of money, it is inevitably
harder to get them to do so during the birth of a business.
Pricing always help shape the perception of your product in consumers eyes. Always remember
that a low price usually means an inferior good in the consumers eyes as they compare your good
to a competitor.

Consequently, prices too high will make the costs outweigh the benefits in customers eyes, and
they will therefore value their money over your product. Be sure to examine competitors pricing
and price accordingly.
When setting the product price, marketers should consider the perceived value that the product
offers. There are three major pricing strategies, and these are:

Market penetration pricing

Market skimming pricing

Neutral pricing

Here are some of the important questions that you should ask yourself when you are setting the
product price:
1) How much did it cost you to produce the product?
2) What is the customers perceived product value?
3) Do you think that the slight price decrease could significantly increase your market
share?

4) Can the current price of the product keep up with the price of the products competitors?

Marketing Mix Place

Placement or distribution is a very important part of the product mix definition. You have to
position and distribute the product in a place that is accessible to potential buyers.

This comes with a deep understanding of your target market. Understand them inside out and
you will discover the most efficient positioning and distribution channels that directly speak with
your market.
There are many distribution strategies, including:

Intensive distribution

Exclusive distribution

Selective distribution

Franchising

Here are some of the questions that you should answer in developing your distribution strategy:

Where do your clients look for your service or product?

What kind of stores do potential clients go to? Do they shop in a mall, in a regular brick
and mortar store, in the supermarket, or online?

How do you access the different distribution channels?

How is your distribution strategy different from your competitors?

Do you need a strong sales force?

Do you need to attend trade fairs?

Do you need to sell in an online store?

Marketing Mix Promotion

Promotion is a very important component of marketing as it can boost brand recognition

and sales. Promotion is comprised of various elements like:

Sales Organization

Public Relations

Advertising

Sales Promotion

Advertising typically covers communication methods that are paid for like television
advertisements, radio commercials, print media, and internet advertisements. In contemporary
times, there seems to be a shift in focus offline to the online world.
Public relations, on the other hand, are communications that are typically not paid for. This
includes press releases, exhibitions, sponsorship deals, seminars, conferences, and events.
Word of mouth is also a type of product promotion. Word of mouth is an informal
communication about the benefits of the product by satisfied customers and ordinary individuals.
The sales staff plays a very important role in public relations and word of mouth.
It is important to not take this literally. Word of mouth can also circulate on the internet.
Harnessed effectively and it has the potential to be one of the most valuable assets you have in
boosting your profits online. An extremely good example of this is online social media and
managing a firms online social media presence.
In creating an effective product promotion strategy, you need to answer the following questions:

How can you send marketing messages to your potential buyers?

When is the best time to promote your product?

Will you reach your potential audience and buyers through television ads?

Is it best to use the social media in promoting the product?

What is the promotion strategy of your competitors?

RESEARCH
METHODOLOGY

Research design

The research will be descriptive and exploratory in nature. In exploratory research design the
past records are obtained from the companys data and documents and help of these is taken to
make the study more precise. In descriptive research design, the original data is collected with
the help of the responses obtained from the questionnaire.

Sample Size:

The total strength of the employee in the organization is 1000.The sample size taken was 75. All
the employees belong to Executive level ranging from Executive level 1 to Executive level 6,
(E1 to E6).

Data Collection

The questionnaire formulated on a sample of 75 employees at all executive Levels (E1-E6).

Investigator herself asked question for more information and Clarification. The purpose of the
study was explained to all respondents in Order to get good response.

The methodology used is balance of primary and secondary sources.

1. For primary data: Questionnaires.
2. For secondary data: Business Magazines, Books, Journals, and Periodicals, Internet.

Data Preparation and Analysis

Data preparation includes coding of responses. Each questionnaire form was inspected and
edited and the responses from the employee were recorded for qualitative information. In order
to express complex data into concise and logical form, the collected was transformed into the
form of tables and graph.

COMPANY
PROFILE

INTRODUCTION CHANEL

HISTORY
Fashion designer Coco Chanel, born August 19, 1883, in Saumur, France, is famous for her
timeless designs, trademark suits and little black dresses. Chanel was raised in an orphanage and
taught to sew. She had a brief career as a singer before opening her first clothes shop in 1910. In
the 1920s, she launched her first perfume and eventually introduced the Chanel suit and the little
black dress, with an emphasis on ma amed fashion designer Coco Chanel was born Gabrielle
Bonheur Chanel on August 19, 1883, in Saumur, France. With her trademark suits and little black
dresses, Coco Chanel created timeless designs that are still popular today. She herself became a
much revered style icon known for her simple yet sophisticated outfits paired with great
accessories, such as several strands of pearls. As Chanel once said, luxury must be comfortable,
otherwise it is not luxury.
Her early years, however, were anything but glamorous. After her mothers death, Chanel was
put in an orphanage by her father, who worked as a peddler. She was raised by nuns who taught
her how to sewa skill that would lead to her lifes work. Her nickname came from another
occupation entirely. During her brief career as a singer, Chanel performed in clubs in Vichy and
Moulins where she was called Coco. Some say that the name comes from one of the songs she
used to sing, and Chanel herself said that it was a shortened version of cocotte, the French word
for 'kept woman,' according to an article in The Atlantic.

Fashion and Fragrance Pioneer Around the age of 20, Chanel became involved with Etienne
Balsan, who offered to help her start a millinery business in Paris. She soon left him for one of
his even wealthier friends, Arthur Boy Capel . Both men were instrumental in Chanels first
fashion venture.
Opening her first shop on Pariss Rue Cambon in 1910, Chanel started out selling hats. She later
added stores in Deauville and Biarritz and began making clothes. Her first taste of clothing
success came from a dress she fashioned out of an old jersey on a chilly day. In response to the
many people who asked about where she got the dress, she offered to make one for them. My
fortune is built on that old jersey that Id put on because it was cold in Deauville, she once told
author Paul Morand.
In the 1920s, Chanel took her thriving business to new heights. She launched her first perfume,
Chanel No. 5, which was the first to feature a designers name. Perfume is the unseen,
unforgettable, ultimate accessory of fashion. that heralds your arrival and prolongs your
departure, Chanel once explained. The fragrance was in fact also backed by department store
owner Theophile Bader and businessmen Pierre and Paul Wertheimer, with Chanel developing a
close friendship with Pierre. A deal was ultimately negotiated where the Wertheimer business
would take in 70 percent of Chanel No. 5 profits for producing the perfume at their factories,
with Bader receiving 20 percent and Chanel herself only receiving 10 percent. Over the year with
No. 5 being a massive source of revenue, she repeatedly sued to have the terms of the deal
renegotiated .king clothes that were more comfortable for women. She died on January 10, 1971
1971

Chanel is a premium French fashion label that is recognized in the international market as a
brand that specializes in fashionable accessories, luxury goods and expensive ready-to-wear
clothes. It caters to the rich and famous elite class that can afford it easily. Gabrielle Chanel
founded this private company Chanel in the year 1909. Her aim was to make something special
with rare materials and with creativity for a woman and today the brand name is associated with
very high quality.
The clothesline is easily distinguishable by the feel, the touch and the smoothness of the
exquisite material. The attention given to the minute details is amazing and awe-inspiring. People
buy Chanel products because of the distinctive personality of the brand. Individuals who have
genuine appreciation for something exclusive can go no further than the desirable and excellent
products of Chanel.

Product in the Marketing mix of Chanel

Chanel is a classy brand with products that are made keeping in mind the upper wealthy class
people. Its high standard finished products are for sophisticated people who can afford expensive
products. The detailed and precise skill, intricate and unique designs, superb use of technology,
its innovative qualities, and best quality materials have helped it retain its position at the top. The
house of Chanel offers various products that include

Daywear and evening clothing for both men and women The elegant day wear and
the sophisticated chic evening wear is completed with exquisite proficiency and style to make it
fashionable. The dresses add value to the brands reputation of offering its customers clothing
that dictates class and a color pallete of sophisticated colors like pastels, neutrals, greys and
black.

The woolen Chanel suit includes a skirt that is of knee length and a jacket that is cardigan
styled with golden buttons and black embroidery. The accessories are complimentary and include
pump shoes, a leather purse and a pearl necklace.

Exquisite jewellery All the products are prepared from beautiful and sparkling
diamonds and white gold of 18 carat. The products include Comete, Camelia, Baroque, Ultra and
Bridal Watches. The luxurious and stylish jewellery has to be seen to be believed. And although
it was introduced in the year 1932, it is still a hit in international market even today.

Exclusive bags for male and females which are high class, elite and fashionable.

Designer Watches division was established in the year 1987. In 2000 the wristwatches,
with ceramic material and unisex style, was launched and became a part of the exclusive club of
Chanel.

Make up products are available in most of the elegant stores around the world like
Harrods.

Heavenly Fragrances like No. 5 de Chanel, Cristalle, Coco Mademoiselle, No. 19 and Les
Exclusifs.

Comfortable and designer shoes for both the the sexes male and female

Pricing in the Marketing mix of Chanel

Not compromising with quality is the aim of the brand, and providing exquisite products is its
purpose. The pricing policy of Chanel is based on a number of factors. The strategy is of
premium pricing as it is centered on the fine quality of the products as well as the time it takes to
make the particular product. It takes an astonishing long time to complete a Chanel product,
because it goes through various processes, such that the end result is of exceptionally high
standard.
Skilled individuals who are an expert in textiles and design, are involved in making the clothes.
Thus, Chanel is a brand that is eagerly waited on by the clients. Hence, the high price of clothes,

as the customers are rich enough to pay extraordinary prices for this sought out brand.

Place in the Marketing mix of Chanel

Chanel stores are operating in nearly three hundred and ten boutiques worldwide with six in
Oceania, two in South America, one hundred and twenty eight in North America, ninety-four in
Asia, ten in the Middle East and seventy in Europe. Thus, the exclusivity plays a major part in its
premium price. As the buyers belong to the wealthy class, the location of the stores is very
important and special affluent areas are chosen for its boutiques. In England, the Chanel store is
located in Manchester and London. In Japan, the location is in the high-class area of Ginza
District. Some of the stores are located in famous airports to tap the holiday travelers who would
be interested in spending money while travelling and subsequently shopping. As the frequent
travelers are the wealthy business class, the stores have been a huge hit amongst them.
Each of the stores reflects the expensive and chic image of the brand . As the Chanel boutiques
are very far and few and many towns and cities lack the stores, the company has come up with a
full proof plan. It has websites for online shopping and professionals who are efficiently trained
to handle the distribution of the goods. This scheme has resulted in maximum sales and has
helped in advertising the products. Chanel products are displayed in various department stores
that are situated in up market worldwide locations like Galeries Lafayette, Harrods, Bergdorf

Goodman, David Jones, Hudsons Bay and its own boutiques.

Promotions in the Marketing mix of Chanel

As the products are premium, so is its promotional policy pricey. Chanel advertises in only the
most expensive fashion magazines that cater to influential buyers. Magazines like Marie
Claire that are glossy, stylish and polished have a lot of influence with its readership base who
constitute of professionals earning a huge amount of money or are genuinely rich and aristocratic
women and men. Publishing advertisements in these magazines is strategically very profitable as
the viewers can easily check the new and upcoming trends over here. In a recent advertisement,

the model was dressed in intricate and expensive material with a black and white background.
The image came out as classy and sophisticated with a universal appeal.
The driving force behind its products has always been exclusivity and so its advertisements
reflect its own inner thoughts. Some of its famous brand ambassadors and models and actors are
Carole Bouquet, Marilyn Monroe, Lucia Hiriart, Keira Knightley, Anna Moughlalis, Vanessa
Paradis and Nicole Kidman who have immortalized the brand name that symbolizes the heritage,
lineage and the mastery in providing A-One products.

LIMITATION OF THE STUDY

After the successful completion of this project, we admit that despite of the best of our efforts:
there had been some limitations of the project as such a vast topic needs more investment in
terms of time, money and much more consideration and expertise. Some of the limitations are
given below:

The sample size is too small to reflect the opinions of the whole organization.

The answers given by the respondent have to be believed and have to be taken for granted as
truly reflecting their ideas.

Employee satisfaction survey was conducted among executive level i.e.at the corporate center.