Finished Report

Finished Report

Executive Summary

This report was carried out to investigate Dolce and Gabbana looking into how sustainable they are, their current brand market positioning and what could be proposed to improve the brand. To investigate this brand, we carried out methods including doing an online survey to receive answers on how people view Dolce and Gabbana, carrying out observational trials on Instagram and reading through articles and blog posts. This was to ensure strong information about D&G finding out in depth details of the brand and if they are currently standing strongly in the market. 
The main findings reached were how little knowledge people have of the brand as most of their actions have not been made public to prevent consumers boycotting the brand. It has proved how minimal their target market is, mainly because of the pricing of their products. Their actions affect their customer loyalty by them making publicly offensive comments leaving them to be perceived in a negative way. 
There are many ways D&G could improve to become a more successful brand. To ensure the changes made are noticed and appreciated they could speak openly on social media revealing how they plan to succeed, creating an interaction with their market, making them feel appreciated and involved in the brand. They do regularly post on social media sites, but don’t show personality or interact with their consumers, interacting with their consumers will create a bond ensuring strong customer loyalty which they need.

Introduction
Dolce and Gabbana was founded in 1985 in Legnano by Domenico Dolce and Stefano Gabbana. They worked for the same fashion house leading them to then create the brand D&G. This marketing report will identify the strengths and weaknesses of Dolce and Gabbana, where they stand currently in the market and where they could be if they developed some of their strategies. With Dolce and Gabbana there is a lot of problems that hopefully could be overcome including their brand sustainability and interaction with their current target market. The report will investigate Dolce and Gabbana’s ethics and how they continue to live in the past when other brands are continuing to move forward and develop. D&G have been accused of being racist, homophobic and sexist which affects their target market as it influences consumers to boycott the brand and go to a competitor. This creates a negative perception of the brand which impacts their reputation in the fashion industry especially when comparing them to their competitors that are growing with open minded strategies.

Macro-economic Analysis
3.1 As Dolce and Gabbana is a designer brand they gain a lot of profit from their products. Their net worth is $1.4 billion which proves the success they have gained from their brand, however this is predicted to decrease because of their actions that took place in China. Aitken, R. (2018). The ad campaign that was released in China was said to be ‘disrespectful and racist’, resulting in losing respect from customers in China as well as celebrities boycotting the brand. The ad that Weiner-Bronner, D. (2018) was reporting about involved a Chinese woman struggling to eat pasta and pizza with chopsticks which caused offense to people. Tulin Erdem, a professor of marketing at NYU’s Stern business school states “this is a big crisis sometimes brands do recover… but on a scale of 1-10 (this is) really high up.” 

3.2 Political: The first political issue that could impact or affect the brand is Brexit. As D&G are an Italian based brand but operating globally, this could affect their trade with the United Kingdom should the Brexit deal come into effect. Issues such as tax laws, labour laws under the European Union might create problems once the UK begin to operate under different rules and regulations. 

3.3 Economical: D&G in previous years were accused of tax evasion in 2010 but the case was dropped in 2014. BBC NEWS. (2014). Failing to pay tax to the Italian government could have potentially impacted on the local economy and revenue. Such practices may have encouraged some consumers to resist purchasing their products, impacting not just on the company profit but revenue in general due to consumers spending less. Some consumers in addition would perceive this company as a big international brand which does not adhere to rules and regulations due to their global presence again impacting on consumer spending.

3.4 Social: D&G are known for their strong brand image and creating unique images to showcase their latest collections. They tend to post images on their Instagram stories especially of celebrities wearing their clothes to influence their target market to shop at their brand. D&G have made insensitive comments about LGBT including making negative comments on IVF causing issues with Elton John who chose to boycott the brand. The Guardian. (2015). They have been accused of being racist because of their recent ad campaign in China. Lim, S. (2018). As well as sexist in some of their other campaigns which present women to be weaker than men. Even reflecting that D&G support gang rape. Duncan, A. (2015). D&G carry on using fur for items of their collections when competitors such as Gucci stopped using fur in 2018 and are well known for testing on animals which again will push away their consumers and encourage them to go to their competitors’ brands.  Reid. D. (2017).

3.5 Technological: D&G have previously used drones at their fashion shows to add that technology aspect as well as adding a unique way of presenting their products at their fashion shows. This idea of the drone is very original and is not very common with other brands giving them an edge and make their fashion shows to watch online a lot more appealing and interesting; drawing consumers in. Ma, A. (2018). More brands are, moving onto improving their websites because of the issues that can occur from social media. This means they need to ensure their websites are easily accessible for their consumers.

3.6 Legal: D&G are threatening to take legal action after the show was cancelled after the ad deemed racist was released in China The Fashion Law. (2018). D&G have been in a legal battle with Puma as Puma said their fur sliders were too similar. Munich, O. (2018). They have also been accused of plagiarism by Armani for copying their designs of their trousers, this could lead to consumers to be less interested in one of these brands as it comes across as they are selling such similar items. Hooper, J. (2009).

3.7 Environment: D&G have been given the E label which is the lowest score for sustainability. This is because of their labour conditions and because they aren't very environmentally friendly. They don't reveal much on their website about their ethics where as their competitors do which leads consumers to be confused about where they stand with the brand. Rank a Brand. (2018). For luxury brands they tend to waste a lot of their products as they don’t like to put items on sale as it lessens the worth of the product meaning they just get rid of them. 

Brand Market Position

4.1 As D&G is a well-known brand especially for the elite which makes quite a narrow target market as the pricing of the brand makes it hard for people to afford it. Primary research carried out on survey monkey showed; 58% of the people who answered the survey were women, leaving 41% as male. Majority of the people taking the survey have part time jobs whereas only 13% have full time jobs. When asking if they could currently afford to shop at D&G 93% said no. When asking if D&G’s ethics effected their decision when shopping at the brand 75% said no. This could be because they are unaware of their ethics or whether it is not something they consider when buying products. The next question was to rank the designer brands for preference; Gucci was put first with D&G second. Quality was the most voted for what they want in a product which is something that D&G have within their pieces. This questionnaire has made clear what people consider when buying from brands and if they are more about the brand name or just the look of the product. In conclusion their price reduces their target market to that of mostly elite people.

4.2. For more primary research another survey was created. The second survey asked if people preferred shopping online or in store, resulting in 58.82% saying in store. The follow up question was when buying luxury items from designer brands do you prefer in-store or online. 82.35% said in store. The third question was, D&G have previously been accused of animal cruelty. Does this influence your opinion on them. 88.24% said yes showing that if they do currently shop at the brand they might now turn to competitors. Question 4 stated D&G have been accused of being racist, sexist and homophobic. Would this stop you from shopping there. 88.24% said yes like the previous question. The last question was, Stefano Gabbana stated "I don't want a Japanese designer to design for D&G". Does this make you have a negative opinion of D&G. 82.35% said yes. In conclusion the results were successful as it shows people are concerned with the ethics of brands and would potentially want D&G to change their ways.

4.3 Strengths- D&G has a strong brand image with loyal customers. They create unique and luxury products. They also create non-traditional ads with large portfolios of brands.

4.4 Weaknesses- D&G’s weaknesses are how highly priced their products are which limits them to wealthier consumers and are highly affected by the economic fluctuations. They also have strong competition from luxury brands.

4.5 Opportunity- D&G could take on growing luxury markets with growth in economics like India, product expansions throughout the world and innovation products.

4.6 Threats- Strong competitors threaten D&G in terms of style and elegance. It can be difficult to break loyalty of customers towards other brands as well as other brands interacting more on social media with their consumers.

Competitors
The competition is very high for D&G. With Gucci, Armani, Guess and others selling similar high-end products targeted at similar consumer audience (e.g. celebrities, rich and famous and career women who have high disposable income). When looking at the brand positioning map although the brands are competitors, they do have some variation between them. D&G is very high up for luxury and exclusivity which is clear how narrow their market is which could reduce their popularity. Most of their competitors have a similar price bracket but are more inclusive encouraging customers to be loyal to those brands with more variation of products making them more suitable for a variety of people. Guess and Armani are both more inexpensive compared to D&G, Gucci, Valentino etc which would draw more people in because of their affordability. The current brand positioning mood board presents images of recent campaigns D&G have created which show off their unique selling point as well as competitors’ logo’s and images of their stores. They do have a very strong, unique brand image making them stand out. D&G’s competitors offer cheaper pricing or have more pieces for a wider variety of people putting Dolce and Gabbana at a disadvantage.

Consumer Demographic
6.1 It’s well known that D&G’s audience are mostly elite people including celebrities. However, their consumer demographic does create a stereotype. D&G’s supposed target market is said to be 15-25 year old who are trend-setters Dolgab. (2016). Although it is very rare that 15-year-olds could afford the prices of D&G however, there’s a stereotype of spoilt children who may have parents that can afford luxury designer pieces. Because of the pricing, the brands target market is elite or has the money to buy designer items at that price, with a stereotype of people who go on luxury holidays, drink champagne and with a lot of disposable income. These would be consumers who are loyal to the brand and often visit the stores whereas some consumers may not have such a disposable income making D&G products something they don’t buy as often. As the number of D&G stores around the world are very limited compared to some other brands this can prevent people from shopping at the brand as they don’t live close to one of the stores. On their Instagram they share pictures of celebrities wearing their clothes which would be typical people who would wear the brand as their pieces are statements. 

6.2 Dolce and Gabbana don’t have one set segmentation strategy. Both Demographic and Geographic strategies apply to D&G the best. As demographic segmentation is based on race, age and education this applies to D&G as they have a set target market and age range that their brand is aimed at; who they expect will buy their products which would typically be someone with a good education and come from a wealthy background or have a strong career. Geographic segmentation is aimed at people in certain areas. This is something D&G also do as they don’t have stores everywhere which limits the amount of people that can go visit them. Their stores are more based in places such as London where some of the competitors are and more people are elite and would consider shopping at the brand. 

Product Selection

6.2 Dolce and Gabbana don’t have one set segmentation strategy. Both Demographic and Geographic strategies apply to D&G the best. As demographic segmentation is based on race, age and education this applies to D&G as they have a set target market and age range that their brand is aimed at; who they expect will buy their products which would typically be someone with a good education and come from a wealthy background or have a strong career. Geographic segmentation is aimed at people in certain areas. This is something D&G also do as they don’t have stores everywhere which limits the amount of people that can go visit them. Their stores are more based in places such as London where some of the competitors are and more people are elite and would consider shopping at the brand. 

Social Media and Influencer Marketing

Dolce and Gabbana are quite active on social media such as Instagram, Twitter and Facebook. They do post many times a day that feature images from their latest fashion shows and collections. There isn’t a theme to their social media platforms. They don’t post at certain times or have set colour schemes. They do post images from the same collection or fashion show within the same few days keeping images that are relevant to each other together. When carrying out Instagram analysis it proved they had no set theme to their page as they could post images from 1 to around 8 a day. They also do posts with more than one image so you can scroll through and look at the different looks. They do save their Instagram stories onto their feed one being called #DGCelebs which consists of celebrities such as Robbie Williams, Ashley Graham, Hugh Jackman, The Rock wearing their pieces. These are celebrity influencers as fans of these celebrities will then want to buy the same clothing to be like them. All these celebrities have very different audiences which could be D&G trying to create a wider target market. Looking at their Facebook they promote their products a lot better as there are links to where people can buy their products from, including the pricing. This is more useful than their Instagram as its more of a promoting platform. They also have different photo albums one being #DGCelebs like their Instagram. Again, on their Twitter they are very active like Instagram and Facebook. They post more than one time a day. The posts are very similar to their Instagram by displaying their pieces, whether it’s just the products or runway shots etc. They don’t promote their products like they do on Facebook it is more of a display for consumers rather than a place to buy. 

Marketing Mix

9.1 Price-The average pricing for D&G is from around $100-$8000, but sometimes including pieces from the runway which are one offs making them a lot higher in pricing. The pricing of the pieces even includes phone cases for $100.

9.2 Product-The quality of the products they sell is very high which is expected from such a highly priced brand. They do a lot of pieces that have the same pattern or prints which gives consumers many different options in a print they like however, can get repetitive. The prints on these designs are original and unique making all their products interesting and eye catching.

9.3 Place-There are 222 D&G stores across 41 different countries, making them less accessible for consumers as there might not be one close to people to visit. Especially as people would rather go to stores and try things on before buying with luxury items as they are so highly priced. 

9.4 Promotion-The outside of their stores have a very elegant look to them which suits their brand image. The designs of their shop windows are very simplistic some with no displays in them with just clear glass. In some they have mannequins. By them making their stores look luxurious just being in the store can make customers feel elegant and classy and want to shop there.

Conclusion

To conclude; Dolce and Gabbana’s biggest issue is the negative representation they have given themselves, turning away many consumers resulting in affecting their brand image and losing profit. They can resolve this by going through a rebrand by using more celebrity influencers; building better bonds with not just their target market but also other brands they could potentially colab with and ensuring customer loyalty with their celeb influencers. This would make them regain popularity and become more of a strong competition to their competitors.

Proposed Strategy

11.1 Firstly, because they aren’t very open on their website about being sustainable or environmentally friendly people can create assumptions about this. By being more open about where they stand and becoming more sustainable this could change who their competitors are such as brands like Kitx, Reformation, Nak etc. More consumers are concerned with the impact clothing brands can have on the environment. Which is why the demand for brands to become environmentally friendly is very high. D&G are known for testing on animals. An article wrote by Peta, Animals Are Not Ours. Describes the cruel way D&G treat rabbits using their fur for their phone cases and their sliders. Peta. (2019). Causing consumers to go to other brands that do not encourage animal cruelty such as Gucci.

11.2 They are known for making comments in the media for example Stefano Gabbana called Selena Gomez ugly.  Causing Selena’s fans to defend her tweeting the hashtag #BoycottDolceandGabbana. TNN. (2018). They have been known to be sexist, racist and homophobic which turns away consumers as they don’t want to support a brand that gives out such a negative message. A tweet was made stating “ngl these Dolce and Gabbana crowns are gorgeous, however I’m not willing to spend money or support a brand that’s run by racists.” Proving that because of their actions people turn against the brand and choose their competitors. In the past some of their ads were sexist as presenting women to be powerless; also suggesting they support gang rape. Duncan, A. (2015). They have made comments about being against IVF for gay couples which Elton John took offence to, leading him then to create the #BoycottDolceandGabbana which is now to this day still used. Most recently used because of the Chinese Ad. The Guardian. (2015). Because of these actions it has resulted in them losing consumers, making their competitors more popular. To improve their brand, they should support equality and present this on their social media platforms.

11.3 Creating a plus size range would bring in more people as more clothes would appeal to a wider range of people. This would also present clearly to their audience that they are improving and supporting equality.

11.3 Although they are active on social media and do present celebrities wearing their clothes, using set influencers to promote their brand would bring in a wider range of consumers. Fans of celebrities would want to follow the trends their ‘idols’ are setting. They could also create polls for their stories to interact better with their followers and showing more of behind the scenes whether it’s at fashion shows or snippets of them making products. This would create a positive interaction between the brand and their consumers making consumers feel connected. 

11.4 Creating more stores around the world would increase access to the stores and allow more people to have contact with the brand, bringing in more consumers from a variety of places.

11.5 Designer clothing brands don’t often have TV adverts to promote their clothing however, they do for their perfumes and accessories. By beginning this trend more potential consumers would be interested in D&G as they would be seeing more of the brand on a different platform.

11.6 Creating a collection like Versus Versace, i.e. clothing with cheaper pricing. Would attract more consumers as the products would be more affordable, encouraging more people to shop at their brand.

11.7 Although designer brands don’t collaborate that much. This could be a unique step for Dolce and Gabbana to take and bring in consumers from the other brand that they would collaborate with. 

11.8  To improve their reputation, becoming more sustainable and environmentally friendly, creating more stores, having influencers and speaking openly on their social media platforms, would inform current consumers of the positive changes they are making. It would give consumers a better understanding of the brand, encouraging them to support D&G through the positive developments.