Victorias Secret Brand Value And Equity Marketing Essay

The purpose of this report is to study the current state of Victoria’s Secret Brand and to briefly discuss the brand strategy, performance, background, and predicted advancements in the field. By examining a range of recently published journal articles, magazine articles, and internet sites about the brand, this report describes how the company operates and the company overall marketing strategy as well as its branding strategies and the Victoria’s Secret brand as a whole.

Victoria’s Secret made buying lingerie not only a pleasure but a must in the late 1980s and 1990s. The upscale lingerie and apparel firm took shopping for lingerie from the neglected corners of department stores and put it front and centre in thousands of boutiques throughout the United States. Both men and women happily flocked to the sensuous, sumptuously decorated shops and buying sexy innerwear was no longer a chore or embarrassing for either sex.

The trade name, perhaps more than any other brand, attracts attention to the lingerie industry. Their advertising campaigns, including the Victoria’s Secret Lingerie, Catalogue and Victoria’s Secret Fashion Show are visually appealing and controversial. The attention received by Victoria’s Secret for their aggressive advertising campaigns has generated priceless word-of-mouth and media bytes to further enhance the Victoria’s Secret brand. Everything could become true with three distribution channels; stores, catalogue, e-shop and marketing communication to match. Victoria’s Secret has consistently delivered its brand message at each contact point with the customer. In particular, a visit to the brand web site shows attention on details that has been hitting the right balance between branding and usability for years.

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Today, Victoria’s Secret lingerie is the top performer for the conglomerate. Victoria’s Secret, under limited brands has a history of being sexy, youthful and romantic. Men and women have come to recognize Victoria’s Secret as the place to buy a lingerie gift.  Men could browse for styles for women and sales staff would help estimate the appropriate size, pulling from inventory in the back rooms. (www.victoriassecretreviews.com).

Victoria’s Secret Brand Value and Equity

This report will first review these differing perspectives and then formulate its own working definition. The different perspectives can be grouped into six categories: Visual and verbal approaches, positioning approaches, brand image approaches, added value approaches, perceptual appeal approaches, personality approaches . Brands are valuable strategic assets representing substantial investment that can yield significant income. Branding aims at building long-term relationship with customers and is associated with consumer goods and services. Blois, Hankinson and Graham (2000) agree that, a brand franchise consists of markets in which it is sold. The way in which a brand is managed is important to the continuing growth in the brands franchise and its value as an asset (Blois, Hankinson & Graham 2000).

Brands have become a major focus not only for a company marketing strategy but also for financial strategy; trade name is recognized as part of the key assets. The process of brand building has, therefore, become a feature of marketing activities not only in the consumer goods and services sector but in non-consumer areas as well. Many of the best-known brands go back a long time.

According to Bibb and Kourdi (2006), brands such as Coca-Cola, Mercedes, Colgate, Heinz, and American Express have been household names since the beginning of the twentieth century, despite significant changes to the products and a considerable widening in the product mix. But there are also well-known and well-established brands in non-consumer markets as well such as IBM, Rank Xerox, and ICI have also been around for over half a century. (Bibb & Kourdi. 2006). However, it was not until the 1950s that branding became a major marketing activity and the concept of brand management became established. First we must define our terms. Kourdi (2008) stated that, brands are key intangible resources which need to be carefully developed and maintained. Their features include reputation, trust, loyalty, and understanding among customers.  

Kapferers (2001) claimed that, the idea of brand value is monetary and includes intangible assets also that, brands fail to achieve their value-creating potential where managers pursue strategies that are not orientated to maximizing the shareholder value (Doyle. P.2001). Four factors combine in the mind of the consumer to determine the perceived value of the brand, brand awareness; the level of perceived quality compared to competitors; the level of confidence, of significance, of empathy, of liking; and the richness and attractiveness of the images conjured up by the brand. The diagram below explains the relationships between the different concepts of brand analysis.

Figure 1 Brand awareness

Brand Awareness

+ Image

+ Perceived quality

+ Evocations

+ Familiarity, liking

___________________

= Brand Assets →→→→ Brand added value

Perceived by customers

– Costs of branding

– Costs of invested capital

_______________________

Brand financial value

(Source: Kapferer. 1997)

The world today is much more diverse and interconnected than ever before, Victoria’s Secrets Company has been performing well in the market place over the last decade, and hence it is fair to say that Victoria’s Secret brand and products are well recognised worldwide. Brand recognition and loyalty are the key of success for any firm that is performing in a highly volatile market place that is why one can argue that brands are a means of differentiation with its competitors.

A decade ago, the market demographic of a firm reacted to the changes that occurred in a very different way, in contrast to today. For instance BT, one of the largest telecommunication service providers in the UK used to be the only source of people communication as there were no other company who provided the service. Nowadays people are free to choose and generate a position for the brand that best address their needs and enhance a brand relationship. For a firm, customer loyalty and brand loyalty are the key to retain and attract potential customers. Victoria’s secrets as a brand have done well over the past years, despite the recent recession.

The Main Global Factors that needs to be considered by Victoria’s Secret

To have a clear concept of globalization and other global forces which can have an impact on companies is a vital aspect for managers, as it will allow them to capitalize an opportunity. For instance, in the first two quarters of 2008 the inflation figure of Britain has risen to 3.8% (www.statistics.gov.uk), which is the highest figure ever recorded in 11 years. Also the economic growth in two quarters has only been 0.2% hinting that UK is heading towards slow recovery (www.statistics.gov.uk).

This is where you should look at situations in countries like China, India and Sri Lanka where a person can operate a business with a fraction of the cost. In countries such as China the economic growth for the first two quarters has been 10.4% making it one of the fastest growing economies in the world. A company should always have the ability to know all the numbers and to make a move when it really matters. Having a good brand itself might not be sufficient to succeed most the time, it is all the other added values factors such as customer loyalty, good customer service, new product development along with the right kind of team and having good workplace communication skills would help companies in times of turbulent economy. 

For Victoria Secret’s the best way to cope with global changes is to revise strategies when necessary based on the market conditions. For any firm building up a brand image is not an easy task which cannot be achieved overnight, it needs to go through a process of change both internally and externally to get more out of the existing resources and assets both in the form of tangible and intangible. Implying change in a company is not an easy, whether functioning as a team or individually, people act in different ways when it comes to this matter. Kurt Lewin’s in the theory of change explain the process one must go in order to achieve real change in the work place, which involves three stages breakdown as unfreeze, make the changes and refreeze.

Victoria Secret’s Brand in the Global Market

As explained above, markets have become very competitive and the main objective of any company is to make profit, but the competitive nature of organizations is getting hard for companies to survive in the market place and make profit. Because of this, many go for majors and acquisitions, which will help companies to expand their share of the market and to come up with new products which will appeal to a larger population, with the phenomenon of globalization companies tend to go towards mergers and acquisitions. Mergers can be of different types, horizontal and vertical, this is when companies merge they tend to have similar characteristics and with similar work cultures, hence the merger becomes successful most the time, as an example for a good merger is “Sony and Ericsson”, when two companies with very different products and work cultures come together and become successful. (Brand of “LG” from Abans).

Mainichi Daily News (2007) stated that, the key strength of Victoria’s Secret is brand recognition and brand loyalty (Mainichi Daily News. 2007). Its massive advertising campaigns have been successful due to the brand equity of the product. Moreover, Victoria’s Secret products make their customers feel sexy and good about themselves. Launching the new swimsuit line will mark the entrance of Victoria’s Secret into a new field.

The key to this success was due to the already established customer loyalty. According to the NDP Group, while women were spending more than ever on bras, price was still driving the category with brand loyalty flagging. Most consumers had a favourite brand, but aggressively sought out deals (38%). Other influences included comfort, fit, style, reputation and quality, while Playtex had the most brand loyalty among consumers influenced by fit, and best form between consumers who are influenced by price, Victoria’s Secret had the greatest brand loyalty among consumers who purchased for style.

Victoria’s Secret was an inspirational brand with sexy supermodels, top-notch photographers and bold advertising, combined mass-market access with prestige products. An average Victoria’s Secret bra priced in the $20-$30 range, which was significantly higher than the high single digit range for bras sold at other retailers. According to annual report (2007), far the most recognized intimate apparel brand, it held 15% of a $12 billion lingerie market, and 20% of the $4.5 billion retail bra market. (Limited Brands 2006 Annual Report).

In building brand loyalty and brand relationship is vital to have a good understanding of the consumer needs and expectations. The diagram below illustrates the process that involves the brand and its followers.

Figure 2 Interaction of brand promise with customer experience

(Source: Goodman. 2009 p (193)).

From the point that a customer walk into a store until they leave he or she should be utterly satisfied by the services that they receive, the brand itself is not enough for a firm to make it on its own, the supporting factors that add value are the key to gain a much needed advantage over its current and future industry rivals.

Generic Marketing strategies that Victoria’s Secret needs to pursue in the international environment

In order to succeed in business it is important to understand your demographic target and all the other elements that can have an effect on your business. That is the key for all the strategy of the company which is based on efficient and organised work that can be recognised as an important asset. Keith Sisson, editor of the book “Personal Management” expressed, how organisations recruit, train, reward, motivate and discipline their employees is of central importance to business success (Sisson 1994).

It must also be mentioned that the concepts of globalization, if the cost of production or any other factor of production is high what companies do is relocate, design in one made in other (DIO MIO), Victoria’s Secrets is a clear example of this as it has been practising the DIO MIO system for a considerable period of time and benefited from it handsomely. While the product design and all the strategic and tactical level decisions are made in USA, the operational work is carried out in regions where the manufacturing cost is much less compared to the situation in USA and Europe, which is a huge financial and a tactical advantage for the brand and for the firm which maintains it.

Strengths, weaknesses and also opportunities, identified and using them brilliantly but at the same time any company who does business should look out for the threats that could harm the company in short and long run. Mchamon and Tschetter (1986) stated that, the credit crunch that started off in USA had a major effect in the UK, blowing the country into a downturn, as a result many banks had to be nationalised, such as Northern Rock, also hit the mortgage market hardly. To a larger extend the government and the companies did not have the foresight to see the crisis in advance, therefore lost millions of public and private sector money. (Mcmahon & Tschetter 1986).

Primary Data

Primary data can be collected by doing various types of surveys such as face to face interviews, online questioners, focus groups, etc. An issue could be time consuming in order to get reliable results and often considered expensive and difficult to analyse. On the other hand, gives exclusive information about a product and the data gathered can be consistent.

Data analysis

The graph above shows that women were majority in answering the survey with 64%, while men only had 25%. Eventhough most people perceive Victoria’s Secret as a female brand, they also provide male products such as perfumes, but because the brand is well known for the female target market, some men are not aware of their products or not like to be seen as using a female brand.

The brand is defined as sexy and young brand, and we can see this statement reflected on the results of this question. Young people reached 26% the second highest after early age adult with 40%. These are the age target market of Victoria’s Secret brand.

This question refers to the occupation and this will tell us roughly the financial situation of the person, the better, more likely are to spend on branding products.

Marital status also play a very important role, because apart from the economical support that a wife will get from his husband, is also the possibility that a single women will feel more feminine by using Victoria’s Secret brand, it will make her feel good and attractive. The graph is showing that there is only a difference of 3% between the two status, showing a highly balance.

Despite the origin of the brand based in the United States where has gain an amazing popularity, we looked at the development of the brand in the U.K. where is also well recognised. But we mainly focus on the capital, London where the majority of people where based on and is consider one of the capitals of fashion and this could have a bigger impact on Victoria’s Secret brand. The accessibility for the customer is essential, but Victoria’s Secret provides average access to their products which means is an exclusive brand, not popular.

Despite the percentage of people that do not wear Victoria Secret at all 37%, the fraction of the people who actually wear it, remains high reaching 63% of customers that actually wear the brand.

Despite the large number of people that does not wear the brand 38%, looking at the total of people who actually wear it on a regular basis double the number reaching 62%.

Victoria’s Secret provide a wide range of products, we chose the most popular ones, covering all the fields that the brand face in the market place such as shoes under the brand of Colin Stuart and Two Lips, as the name refers bikinis under the brand Beach Sexy also includes the Miracle Bra. One of the most popular products is the underwear, which is launch under Sexy Little Things brand only including panties, while the Body By Victoria provide the bra. In spite of the majority of people answering none of these products, which mean they used Victoria’s Secret brand but the products that they used were not optional in this survey. This confirms that the Victoria Secret portfolio is very wide, but within their preferences underwear is one of the options following by the Magic Bra.

As we previously mentioned for business location is everything, but is not the case for Victoria’s Secret brand, which only has three department stores in Heathrow Terminal five, Fenwick and Selfridges both based in Bond Street. Selfridges appears to be the most popular shop visited by customers, because it is accessible being place in the heart of the city. Fenwick which is located in the same area shows 17% less visited costumers, most of them might not be aware of the shop. Furthermore, Victoria’s Secret has a marketing campaign of direct mail, where they send catalogues to all the customers who are interesting on their products and they can order online, the price might increase but is more comfortable and secure for customers who do not have an easy access to the shop.

Most people identify themselves with the brand and that is why they buy, but the graph illustrate that almost half of the public with 43% buy a branding product due to its high quality, despite the expensive cost. Furthermore, 26% of the customers choose the product because is fashionable, for example women tend to feel more attractive and wearing Victoria’s Secret. Social value does not have a big impact on the people who answered.

Most people perceive the brand as a too expensive reaching 38%, while 30% of the public considered as daily used product, which is a balance, because despite some considered as an expensive, others might think that is worth paying high price for a high quality product and so they considered buying on a regular basis. The other 23% thinks that is not for them and they are more likely to be men, because they do not want to use a brand that is consider for women.

We are currently living on an unstable economy and most people started to feel the pressure of saving rather than spending, and this includes replacing a branding product for another one, but the graph demonstrates that 51% of the customers have not been affected on their shopping habits while 49% have been. The two options are strongly balance and this will all depend on the personality of the person or the financial condition.

Secondary Data

Secondary data is information already exists and has been published. Secondary data can be obtained from almost anywhere, internet (company websites, search engines, etc), books, reports, etc. The advantages on this type of data are the following:

Easy to access

Cheap in price

Easy to analyse

Mainly contains figures and percentages

Provides background information about products

On the other hand, data is wide and it will not give you exclusive feedbacks. In general, to obtain market intelligence you can use both primary and secondary data in order to make a decision about a product. It is wise to maintain a balance of primary and secondary data. In this case the results for the secondary date were as expected and brand image and recognition was the same.

To sum up, Victoria’s Secrets bottom line look positive, the firm is in good shape and well prepared for the tough years ahead and the risks that the brand may face with competitors and not to lose the global and domestic market share. It is vital for Victoria’s Secrets that the economic situation improves and people start spending more on luxury brands. In order to make the business grow one should focus its recourses on how global factors such as SWOT/ PEST can be managed for the benefit of the firm and how it can affect the brand in the present, and it should try to bring attention to these issues that are occurring from such incidents to top level managers attention and in addition, how these factors affect the Brand in general.

Conclusion

The process of brand building has become a feature of marketing activities not only in the consumer goods and services sector but on the non-consumer areas as well. The capability of the firm to produce and develop high standard marketing activities has been the clue of the success. Then the firm is located on the top of an industry and can develop a huge competitive advantage over competitors like Victoria’s Secret does.

As previously mentioned, there have been many brands which have kept their original names even if they have completely changed their products, it is the case of Victoria’s Secret which is constantly adding and changing products of their portfolio, and despite those changes customers remain loyal to the brand and are willing to try new lines and products. A clear explanation for this phenomenon is the exclusive and recognition gained for quality and innovation. The brand create power is then well defined and it can be assured that the firm’s objective has been achieved after a solid marketing and branding strategy. Not just the loyalty has been the matter, the brand reputation and recognition has been a clear success for the organization.

Brands have existed since forever, David stated ( 1991) that , on the Industrial age, fences were used in ranching to keep one cattle separate from others , ranch owners branded or marked their cattle so they could later identify their herd as their own (Aaker (1991)).   The value of branding in the age of information is much more than just creating a way to identify a product or company. Brands today spell reliability, quality and trust. It is this value that explains why all companies need to brand themselves or their products. It is the clear case of Victoria’s Secret, where after a deep research it can be noticed that trust and reputation is one of the strongest strengths of the company.

Recommendations

What Victoria’s Secrets should do is keep a track of the changes and use it as an opportunity or strength to take the company forward in consultancy as well as in giving business training. This part of the organization has not been that successful and therefore the branding process has decrease at some periods, and the only way a marketer can differentiate its product from its competitor is by branding it, by giving it a distinct identity, so the firms should work harder in creating strategies to optimize the environment reaction in order to increase their branding capability.

In this age of merging markets, falling barriers and increased connectivity, the visibility and use of different products and services in different local and international markets have become common phenomena. Competition is a vital part for the industry and therefore a company can never rest, because since the globalization competition are becoming harder and harder every day. Victoria’s secret has to keep increasingly fiddling with concept of GLOBAL BRANDING; a way to have a distinct identity among the consumers in the countries where they are not that strong yet.

Even if the organization has been working extremely hard on innovation and development, they cannot forget about fulfil customer needs and address them as good as possible. Kunde (2002) claimed that, the goals and objectives behind the topic branding strategies and management is to know the importance of branding strategies, management and all secrets about branding (Kunde, J. (2002)). Moreover, the firm would like to know exactly how can they build, implement, manage, and become professional in branding strategies where they have been successful but can still improve it.