Dior Company’s Market Analysis in the UK

Executive Summary

Dior is one of the leading apparel stores in the United Kingdom. The firm operates in various other markets within Europe. This paper focused on conducting a market analysis of this firm in the United Kingdom. The analysis shows that the country offers several opportunities for growth and development, but this company must be ready to deal with various challenges such as stiff competition in the market. The analysis showed that Dior has identified a specific segment of the market, and develop products, which meet its needs.

We will write a
custom essay
specifically for you

for only $16.05 $11/page
308 certified writers online
Learn More

Background of the Brand

Christian Dior SE, popularly known as Dior, is a luxury goods company that has its headquarters in Paris, France. Founded on December 16, 1946, the firm has expanded rapidly and it is currently having stores in 210 locations all over the world (Goetzinger & Johnson 2015). It mainly offers apparel, footwear, jewelry, perfumes, and related products. According to Goetzinger and Johnson (2015), the management of this company has developed a strong brand that targets a given segment of the global market. Despite having a strong brand in the global market, Dior faces numerous challenges such as stiff competition and the availability of alternative products. In this study, the researcher seeks to conduct a market analysis of this firm in the United Kingdom.

Current Performance

Dior’s current market performance can help determine its growth and ability to overcome different challenges in the market. Goetzinger and Johnson (2015) note that one of the best ways of determining the current performance of a firm is to analyze its books of accounting. The operating income, net income, total assets, and total equity of this firm increased in the financial year that ended in 2011. The books of accounting show that the firm’s profit that financial year was €1.279 billion (Goetzinger & Johnson 2015). In 2018, the firm’s revenue increased by 7% to €46.8 (Christian Dior SE para. 1). The company owns 42.36% of LVMH, which is one of the largest luxury groups in the world. In the United Kingdom, this company has registered impressive performance over the past decade despite the stiff market competition.

Target Market

The market segment that a firm targets define the product quality and pricing strategy that it has to employ. Dior targets high-end customers who are always willing to pay high prices as long as they are assured of high-quality products. Most of its products meet the specific needs of these customers. Donzé and Fujioka (2018) explain that the brand is associated with a class within society. As such, it does not compromise the quality of these products.

Competitor’s POD and POP

Dior faces stiff competition in the market from firms such as Gucci, Prada, Chanel, Coach, and LVMH among others. Table 1 below identifies the point of difference (POD) and point of parity (POP) between Dior and Gucci, which is one of its main market rivals.

Table 1: Dior and Gucci’s POP and POD.

Company Point of differences Point of parity
Dior
  1. The market focus in Europe
  2. Mainly offers apparel, footwear, and perfumes
  • High-end products
  • High prices
  • Customer-centric
Gucci
  1. The market focus in Europe and North America
  2. Offer a wide range of products from apparel to automobile

Macro-Environment Analysis Using PESTEL

Conducting an analysis of the macro-environment helps to understand issues that this company has to deal with in the country. Using the PESTEL model, one can understand external forces within the United Kingdom, which may have a direct impact on the development of Dior. The political environment of the United Kingdom is stable. The country has enjoyed a long period of political stability over the past seven decades. The political class often avoids any direct interference with the business community. The economic environment is ideal for a firm that offers luxury goods such as Dior. The United Kingdom has one of the strongest economies in the world (Goetzinger & Johnson 2015). It means that locals have the financial capacity to purchase products offered by this company.

Get your
100% original paper
on any topic

done in as little as
3 hours
Learn More

The social environment has evolved over the years. Riebe (2014) argues that an individual’s social standing is defined by what he or she wears at the place of residence, and cars are driven. People who want to demonstrate their social class would be regular clients of Dior because of the quality of the products it offers. The diversity in the country makes it an attractive destination for tourists, which is a major boost to the local business environment. Technology is another critical factor that defines the ability of a firm to achieve desired success. The country is one of the technologically advanced nations in the world (Schaffmeister, 2015). This company can afford to increase its sales in the online platform as a way of cutting operational costs and expanding its market share.

The management of this company should not ignore the need to protect the environment. The United Kingdom has strict policies that regulate the number of greenhouse gases a firm can emit within a given period (Schaffmeister, 2015). These policies also define how organizations are expected to manage their waste. Dior’s operational activities should not pose a threat to the environment. The final factor in this model is the legal environment. The country has laws and regulations that define how a firm should relate with its customers, suppliers, government, the public, shareholders, and any other stakeholder. These laws and regulations protect would protect this firm and all other players in the market from unfair trade practices. The firm’s operations should be conducted within the legal stipulations.

SWOT

When analyzing a firm within a given market, Riebe (2014) believes a SWOT model is often useful. This tool makes it possible to understand the strengths, weaknesses, opportunities, and threats that a firm faces. Table 2 below summarizes these factors:

Table 2: SWOT Analysis.

Strength
  • Strong brand in the market
  • An online presence which helps to increase sales
  • Strategically-located retail outlets
  • Strong financial capacity
Weaknesses
  • Inability to develop products that target the middle class and the poor
  • Strong focus on quality over price
Opportunities
  • Emerging marketing tools
  • Improving living standards
  • Increasing population in the country
  • Safe business environment
Threats
  • Strong competition in the market
  • Availability of alternative products

Marketing Mix 7 Ps

When conducting a marketing analysis of a firm, Schaffmeister (2015) emphasizes the need to look at the seven mixed elements of the product, price, place, people, process, physical evidence, and promotion. Each of these elements defines the ability of a firm to achieve success in the market, as discussed below.

Product

Dior offers luxury goods such as apparel, footwear, and perfumes among other products. Riebe (2014) argues that products offered by this company stand out from the rest because of their quality. The company targets the rich, and as such, it is keen on offering them the best quality that meets their needs. The designer perfumes offered by this company are popular among top celebrities and rich business people in the United Kingdom and abroad.

Price

The price of the product is often based on its quality and the customers that it targets. As explained above, Dior offers high-end customers that target the rich in the market. These customers are more concerned about the quality of the product they purchase than the price tag (Mosca & Gallo 2016). As such, the firm puts emphasis on providing the high quality needed. In return, they set high prices for these products. In most cases, only the rich can afford to purchase these products on a regular basis.

We will write a custom
essays
specifically
for you!
Get your first paper with
15% OFF
Learn More

Place

Place is another integral element of the marketing mix that defines a firm’s success. Schaffmeister (2015) explains that after developing a quality product and setting a reasonable price, a firm should ensure that the product is made available in the market. Dior has several specialty shops across the United Kingdom where its customers can visit and make the necessary purchase of different products. The company has also moved beyond the brick-and-mortar business model and now offers online sales in the country. Once a customer pays for the product, the firm will arrange for delivery to an agreed location.

People

The team of employees assigned to undertake various customer-engagement activities also has a major role to play in enhancing a firm’s success in the market. According to Goetzinger and Johnson (2015), customers often want to visit retail stores where they feel respected and appreciated. The way in which sales representatives handle customers, and address their needs define their willingness to make future visits. Dior has trained its employees on how to handle the varying needs of customers in the market. They are respectful and engaging, always keen on creating a memorable experience with every client that visits the retail outlets.

Process

The process that a firm uses to achieve its goals in a given market is also critical. Dior uses customer focus as its main approach of operation in the market. The company is always keen on identifying changing trends and practices in the market. Although its products are expensive, they meet customers’ needs in the best way possible. The firm also invests in research and development as a way of designing new products in the market. Creativity and innovativeness are some of the concepts that have helped this firm to achieve a competitive advantage over most of its market rivals.

Physical Evidence

Physical evidence is another critical element. Goetzinger and Johnson (2015) say that it is not enough to provide a quality product in the market. Packaging is equally important because it defines customers’ perceptions. The first sight of the product (how the product is packaged) defines the first impression that customers have towards it. The staff should also look presentable because they reflect the image of the product. Their dress code, ability to communicate effectively, and other physical attributes should be taken seriously. Dior insists on a certain manner of dressing among all employees who are always in contact with customers.

Promotion

The last element is promotion. The product and a firm’s brand must be made popular in the market. A firm can use the line (ATL) or below the line (BTL) mix (Riebe, 2014). Dior uses above a line model that targets a wider target audience. Mass and social media are often used in this model. The firm also uses different marketing tools to achieve its goals. Target audience research and social media management are some of the common strategies that are used by Dior. The creative strategy, especially the concept of developing unique products in the market has helped it develop a competitive edge over its market rivals. AIDA (attention, interest, desire, and action) model is used by Dior to understand and meet customers’ needs. On the other hand, the firm uses the DRIP model to develop promotional messages for the firm’s brand. The 3 Ps of marketing communication (practice, planning, and positive thinking) have also helped in sharpening the promotional messages the firm uses in the market. Dior uses both a unique selling proposition (USP) where it convinces its clients that the quality of its products is superior to that of competitors and an emotional selling proposition (ESP) as a way of promoting impulse buying.

Recommendations

Dior is operating in a highly competitive business environment. Its success depends on its ability to meet the expectations of various stakeholders, especially customers, in the best way possible. It should consider the following recommendations:

  • The marketing team should maintain regular market research to understand the emerging needs of its customers.
  • The management of the company should stick to its current marketing proposition that emphasizes quality over price.
  • It may be necessary for the firm to increase its online sales as a way of cutting down on the cost of operation while increasing profits.

Conclusion

Dior is one of the leading retailers of luxury goods in Europe. The firm has achieved success in the United Kingdom market by targeting a specific market segment, the rich. It provides high-end products that meet customers’ needs in this segment. The company has achieved a competitive edge by consistently providing trendy and high-quality products in the market. However, the management should be ready to deal with the increasing competition in the market.

Reference List

Christian Dior SE, 2019, Christian Dior: financial release 2018 results, Web.

Need a
100% original paper
written from scratch

by professional
specifically for you?
308 certified writers online
Learn More

Donzé, PY, & Fujioka, R (eds) 2018, Global luxury: organizational change and emerging markets since the 1970s, Palgrave Macmillan, Singapore.

Goetzinger, A & Johnson, EJ 2015, Girl in Dior, NB M Publishing, New York, NY.

Mosca, F & Gallo, R. (eds) 2016, Global marketing strategies for the promotion of luxury goods, Pennsylvania IGI Global, Hershey.

Riebe, M 2014, Retail market study Europe 2014, Location Group, Basel.

Schaffmeister, N 2015, Brand building and marketing in key emerging markets: a practitioner’s guide to successful brand growth in China, India, Russia and Brazil, Springer, Cham.

Print Сite this

Cite this paper

Select style

Reference

StudyCorgi. (2021, July 8). Dior Company's Market Analysis in the UK. Retrieved from https://studycorgi.com/dior-companys-market-analysis-in-the-uk/

Work Cited

"Dior Company's Market Analysis in the UK." StudyCorgi, 8 July 2021, studycorgi.com/dior-companys-market-analysis-in-the-uk/.

1. StudyCorgi. "Dior Company's Market Analysis in the UK." July 8, 2021. https://studycorgi.com/dior-companys-market-analysis-in-the-uk/.


Bibliography


StudyCorgi. "Dior Company's Market Analysis in the UK." July 8, 2021. https://studycorgi.com/dior-companys-market-analysis-in-the-uk/.

References

StudyCorgi. 2021. "Dior Company's Market Analysis in the UK." July 8, 2021. https://studycorgi.com/dior-companys-market-analysis-in-the-uk/.

References

StudyCorgi. (2021) 'Dior Company's Market Analysis in the UK'. 8 July.

Copy to clipboard

This paper was written and submitted to our database by a student to assist your with your own studies. You are free to use it to write your own assignment, however you must reference it properly.

If you are the original creator of this paper and no longer wish to have it published on StudyCorgi, request the removal.

Psst... Stuck with your
assignment? 😱
Susan
Online
Psst... Stuck with your assignment? 😱
Do you need an essay to be done?
Yes
What type of assignment 📝 do you need?
Yes
How many pages (words) do you need? Let's see if we can help you!
Yes