Rafael Gil Ospino
November 4, 2016
“Elie Saab: Growth of a global luxury brand”
The fashion business has faced several changes over the time. The era, weather, culture, religion and a couple more of difficulties are faced by designers every year to amaze their customers and the media. ES, an important haute couture company under the name of its owner, chairman, and head of the creation team, Elie Saab, is in front of one of their biggest decision, how to expand their markets and at the same time maintain the exclusivity.
ES core business is to provide high quality and high design fashion to its High-net-worth individuals (HNWI), which as mentioned by Shuayto & kayyal (2013) they buy not only the product but also its associated values in terms of image, quality, fashion, store atmosphere and patron status. To see all the benefits of every one of the products offered by ES its recommended to check the total product view strategy. The total product view “can be conceptualized at three different level: the core product, which is the fundamental benefit, or problem-solution, sought by consumers; the expected or actual product, which is the basic physical product which delivers those benefits: and the augmented product, which is the addition of extra or unsolicited services or benefits to the customer in order to prompt purchase” (as cited in Crane, 2001, p. 363). With this in mind, the core product for Elie Saab is the design of cloth for the HNWIs. The expected product is to “attract, select and maintain customers who place significance on high-end, one-of-a-kind designs made from the finest fabrics and materials” (as mentioned in Shuayto & kayyal, 2013, p.1). And the Augmented Product is best described by Zena Chedid who says “The Haute Couture is a lifetime experience. Our clientele receives personalized service from ES. Our customers bring in their hair stylist to ensure that the entire look meets everyone's expectations. The experience does not stop there; once you have purchased an ES Haute Couture dress, and years after the purchase, we guarantee the repair of ripped hems and alterations” (as cited in Shuayto & kayyal, 2013, p.9).
In order to determine the advantages of Elie Saab in the competitive market its necessary to make a SWOT analysis to see the benefits and risks faced by the company.
Taking into account the SWOT analysis its now possible to determine the competitive advantage of Elie Saab. During all its year on the market ES has distinguished for being a company with a huge success specially with their line RTW; their remarkable help service towards the customers and Saab's personalized service added a high value to his customers; the guarantee and all the services earned when the client purchased a dress, like the advice with the color, the designs, the hair style, the jewelry and much more, created a bond with his customers that ensure a minimum of loyal clients for the haute couture line. Now, to know in which product life cycle is every product of the company right now it's necessary to review the data concerning to the amount of sales during the years, the fashion trends, the competitors and other variables that can give an accurate answer to this. Elie Saab is focused on two principal products, the haute couture and the RTW, the first one is in a stage of maturity, where the product is already established and have a recognized target customer which are the HNWIs all over the world; ES reduce their cost and improve their efficiency by “reducing the constraints of fittings with pictures of their regular customers and making of every dress a master piece, even if the attention required for this details took days or even months” (as cited in Shuayto & kayyal, 2013, p.6). The second principal product in ES is the RTW line, which took advantage of the already well-known brand name to increase the sales and the fact that this line did not require any customized piece, the purpose of this line was to create pieces more affordable, but still focused on the super wealthy people, with a fashion trend more relaxed that could fulfil the requirements of the new generation of billionaires; due to his high participation in the market, and in the company sales, this product can be placed in the growth stage, which is characterized by high sales and profits. The company's position and strategy has remained the same over the years, they are still focused on the wealthier people, focusing more on the RTW line which generates more profit to the company and fill the requirements of the community, without leaving aside their main product which is the haute couture.
To entry in a new market the company has used different methods, in Paris and Beirut with the creation of the stores from zero, so it was a direct investment which provides the total control over the stores, in other places like Dubai, the market entry had been done due a joint venture with a well-known company in order to succeed in the market with a company that already knows how to attract customers based on their culture, religion, customs, and so on.
After analyzing all the data provided and the analysis made before, my recommendation to Elie Saab would be to continue with the expansion strategy that they have without changing the target market. The reason on why they should not change their target market is because the numbers of millionaires is rapidly increasing in places they have not explore before like China with an increase of 31%, Australia with an amazing raise of 34.4% of millionaires between 2009-2009, Japan (20.8%), United Kingdom (23.8%) and more countries with a rapidly growth rate of wealthy people who can afford the haute couture offered by ES. With this data on hand, it's easier to recommend Saab to expand its business without leaving aside the RTW line which can leverage the expenses related with the haute couture and have an increasing number of customers willing to pay the price in order to access to exclusive cloth and all the benefits related with it like exclusivity, glamour and more. To enter in this markets, I would recommend doing a marketing mix, “the term marketing mix is referred to the mixture of elements useful in pursuing a certain market response and its related to 4Ps (Product, Price, Place, and Promotion)” (Waterschoot & Bulte, 1992). Applying the 4Ps to this company we can get:
Product Continue with the two major products that are the haute couture and the Ready-to-wear line.
Price ES is a company focused on the super wealthy people, to maintain that “status” they should continue with their services and prices.
Place From the places that are considering right now they should focus on those countries with the greater number of millionaires and with a high growth rate.
Promotion Use the joint venture in this countries in order to impact the greater number of people available, do fashion shows to let the people know about the brand and the exclusivity related with these ones.
My recommendation in overall for Elie Saab is that they should focus more on the RTW line which is going to help the firm to leverage the haute couture line, expand in the countries with the wealthiest people and doing it by joint venturing with another company already established there with wealthiest customers and with plenty knowledge about the market, culture and suppliers. The high opportunity in this “unexplored” countries should be taken by Elie Saab and his company if he wants to take his firm to a next level, with more possibilities, more customers, and why not, more ideas and creations.
Crane, A. (2001). Unpacking the ethical product. Journal of Business Ethics, 30(4), 361-373.
Shuayto, N., Kayyal, H. (2013). Elie Saab: Growth of a global luxury brand. Richard Ivey School of Business Foundation.
Van Waterschoot, W., & Van den Bulte, C. (1992). The 4P classification of the marketing mix revisited. The Journal of Marketing, 83-93.
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