MKT3063 AS1 E-PORTFOLIO
An effective marketing plan requires research into the strengths, weaknesses, and strategic direction of industry competitors (Hooley et al, 2020; Lyons, 2022; Kotler et al, 2019) in order to identify new market trends (White, 2022) and sustain a competitive advantage (Barbieri, 2022).
A brand perceptual map (Figure 1.1) illustrates existing consumer perceptions of Balenciaga in relation to other competitors within the global fashion market, whilst visually re-enforcing Balenciaga’s brand positioning as a modern, futuristic, and premium fashion house (Mui, 2022; Einstein, 2022; Lyst, 2023).
The ‘hyper-competitive’ luxury fashion sector (PR Smith, 2022, p. 88) reflects a high market concentration, with the top 10 global luxury organisations ‘accounting for over 50% of all sales in 2021’ (Euromonitor, 2023, p.11) and the top 5 luxury brands ‘capturing 57% of affluent consumers attention online’ (Beauloye, 2023, p.2).
A direct competitor to Balenciaga is the Italian luxury apparel brand, Prada (Similarweb, 2023). Although both iconic and historic brands provide similar products to a target audience of digitally savvy, luxury enthusiasts, Prada Group ‘cements its status as a fashion powerhouse’ (Lyst, 2023, p.2), whilst Balenciaga strives to recover, following controversial advertising scandals in Q4 2022 (Kostov, 2023; Rascouet, 2023). Prada and Miu Miu topped Lyst’s Q1 2023 Hottest Brand Index, whereas Balenciaga dropped out of the Top 10 (Wei, 2023) to 18th place, after previously reigning as the top hottest brand in Q1 2022 (Li, 2022; Hughes, 2022). Therefore, it is recommended that Balenciaga capitalises on technological opportunities and develops the strength of innovative and quality design, in order to increase market share, restore brand equity (Veloutsou et al, 2020) and facilitate effective brand revitalisation (Yao et al, 2019).
An indirect competitor to Balenciaga is Dior. Although Balenciaga and Dior both design and produce exquisite quality haute couture collections (FIT Museum, 2022), Dior additionally offers a product portfolio including luxury fragrance and beauty (DePino, 2023), whereas Balenciaga provides a more contemporary streetwear product line. Both luxury brands also rely on high-status celebrity endorsements (Kim, 2023; DuPont, 2021) to build key brand associations (Jun et al, 2023). However, Dior also excels in innovative digital strategy, rating 1st for Luxe Digital’s most popular luxury brand online in 2023. Therefore, it is suggested that Balenciaga increases digital marketing efforts to connect authentically with Gen Z and millennials (Blanch-Bennett et al, 2022).
A competitor matrix (Appendix 2) further analyses the strengths, weaknesses, marketing strategies and attributes of Balenciaga’s top indirect, direct and replacement competition.
