Prada_Marketing

[pic] Company History Mario Prada started the Prada label in 1913. He designed and sold leather goods such as handbags, shoes, trunks, and suitcases though two boutiques in Milan, and had clients across Europe and the US. When the signature Prada suitcase, made from heavy, cumbersome walrus skin, proved to be suited for air travel, Prada concentrated on designing the finest leather accessories and waterproof handbags. After Mario’s death in the mid-50’s his daughter in law ran the store for about 20 years before passing the ownership to Miuccia Prada. Mario Prada's son Alberto was not interested in the business so in the late 70’s Miuccia Prada, Mario’s grand daughter completely took over the company. Miuccia was a former mime who studied at Teatro Piccolo in Milan, and had a PhD in political science. Although her qualifications didn't seem appropriate, her sense of fashion was unmistakable. The label was still mainly a leather goods manufacturer at that point, and had been struggling financially for several years. Competition from other fashion houses like Gucci had taken its toll. Miuccia turned things around and steered the House of Prada towards the world of haute couture. About the same time as she took the helm of the Prada label, Miuccia married Patrizio Bertelli. Bertelli took on the role of business manager, allowing Miuccia to focus on designing and perfecting the new Prada look. Bertelli was already in the leather goods business; in fact he was the founder of I Pellettieri D’Italia S.p.A. a company that is today part of the Prada Holding B.V. Miuccia wanted to introduce black waterproof backpacks into Prada’s made out of a nylon fabric called "Pocone". She unveiled the classic Prada handbag which was simple, sleek, black nylon tote and in 1985 it became an overnight sensation. The bag was functional and sturdy, practical and fashionable. The high price tag that accompanied the handbags caused an onslaught of designer knock-offs, which only helped to make the genuine Prada articles more in demand. In the 1980's, other labels were creating designs that played on sexuality. Prada hit the runway in 1989 with its prêt-a-porter collection, with elegant, simple pieces featuring clean lines, luxurious fabrics, and basic colors. The fashion world took notice, and Prada's popularity skyrocketed. By the 1990's, Prada was a leading force in fashion. The garments and accessories were smart, sophisticated, and extremely high quality. Luxurious fabrics and simple styles, mostly in blacks, browns, grays, greens, and creams, became the signature Prada look. The apparel was targeting a working professional woman, sexy and confident without revealing too much skin. Accessories included skinny leather belts, elegant high heeled shoes, and of course, the classic handbag. In 1992, Miuccia presented the more affordable and rebel Miu Miu line, which targeted a younger consumer. More flowing shapes and earthy colors and prints set this collection apart, although the simple designs and classic appearance continued the quality of the Prada label. Soon after, the Prada Sport label was created, followed by a line of men's wear and a lingerie collection. The following year, in 1993, Prada received the Council of Fashion Designers of America award for accessories. The Prada look has certainly evolved over the years, and Miuccia is credited with many innovations in fabric and design. She has added everything from mirror fragments to beaded latex to her garments, and experimented with new and unique fabric blends. Even with all of this experimentation however, the quality of her products was always superior. Since then, Prada started opening boutiques in dozens of cities and countries all around the world. Their shoes for men and women have become a staple for fashion enthusiasts and celebrities, and those extraordinary handbags are still very popular. The distinct silver Prada triangle logo is a status symbol all over the world. American financial newspaper, The Wall Street Journal, has named Miuccia one of the thirty most powerful women in Europe. From fabulous runway shows to gracing the bodies of actresses like Uma Thurman and Cameron Diaz, Miuccia Prada has taken her grandfather's struggling leather goods business and created a true empire. In 1999, Prada decided to expand their business trough acquisition of new companies. At the same time Bertelli, an avid sailor, and Prada were also spending $50 million to sponsor an entrant in the 2000 America's Cup yacht race. In March 1999, the firm bought 51 percent of Austrian designer Helmut Lang's New York-based company, which had annual revenues of about $100 million. A few months later, Prada paid $105 million to acquire control of Jil Sander A.G., a German fashion house that had sales of about $100 million a year. The purchase was to give Prada a toehold in Germany. Although Jil Sander was to remain in creative control of her namesake company, she resigned as chairwoman a few months later. In September 1999, Prada announced an agreement to buy 83 percent of Church & Company, a British maker of conservatively styled shoes established in 1873, for $170 million. During the year, a joint venture also was formed with the De Rigo Group to manufacture Prada sunglasses. An alliance between Prada and LVMH acquired a 51 percent stake in Fendi S.p.A. in October 1999 for a reported $520 million, outbidding rival Gucci. Fendi, which had been owned by the five sisters whose parents had founded the company in 1925, was expected to benefit from international distribution in LVMH's global network of shops as well as Prada's production capacity in Italy. Prada paid L 525 billion ($241.5 million) for its 25.5 percent stake in Fendi, which had $321 million in sales in 1998. The acquisitions set Prada to the top ranks of European luxury goods groups. Sales, which exceeded L 2 trillion in 1999, were three times those of 1996. Net income doubled in the year to L 321 billion. The group also had large debt, however. Prada stepped away from the mergers and acquisitions business in 2000 to digest its purchases, but did sign a loose patronage agreement with maverick designer Azzedine Alaia. A line of skin care products, all packaged in individual foil-wrapped doses, was introduced in the United States in October 2000. The products included creams, face masks, and lip balms. A 30-day supply of cleansing lotion cost $100. Prada Holding B.V. planned to float 30 percent of the company to help pay off debts of $830 million and expand distribution. Prada seemed to have succeeded in turning around the troubled Jil Sanders line, though new store openings were consuming the profits. A slowdown in luxury spending, however, particularly in Japan and the United States, prompted Prada to delay the offering. Prada also had big plans for four new megastores, or "epicenters" of the "Prada universe," to be located in Beverly Hills, New York, San Francisco, and Tokyo. The company hoped to change the shopping experience into one of community involvement, transforming shoppers into "researchers, students, patients, museum goers." Dutch architect Rem Koolhaas and the Swiss team of Jacques Herzog and Pierre de Meuron were commissioned to design the stores. According to Fortune, Bertelli planned to increase sales to $5 billion by 2010. Under pressure from his bankers, in November 2001 Bertelli sold Prada's 25.5 percent share in Fendi to LVMH, its equal partner in the venture, raising $295 million to help pay their debt. Marketing Strategies New store concept. The store opened on Dec. 15, 2001, and immediately had extensive media coverage for its bold redesign of the retail space and the use of technology throughout the store. The company spent a reported $40 million on it. They hired Dutch architect Rem Koolhaas to reinvent the retail environment in an effort to reinvigorate the Prada brand. Some architectural critics liked the bold, two level store, which featured a sloping wood floor, which Koolhaas called "the wave," a large staircase for displaying shoes, and cages and shelving that slide on tracks, so the space can be changed easily. Bruce Eckfeldt, Icon's engagement manager on the project, describes the Epicenter store as a cross between a concept store and a laboratory. "Prada wanted to test some concepts in the real world," he says. "They will see what works and then deploy it in other stores, as is or in some modified way. It gives them the opportunity to learn based on feedback and to build a better and more successful retailing environment in the future." Technology plays a big role in the store. There are video monitors that hang from racks or are embedded in tables. An alcove at the back of the basement level is lined with small video monitors playing a steady stream of random clips. A large round, glass enclosed elevator that shuttles customers between the ground floor and basement level. The dressing rooms, which feature clear glass that turns opaque when you step on a round black button on the floor. Inside are two boxes made of thick, semi-transparent Lucite. Both have thick, flat bronze ribbons embedded in them – the rfid (radio-frequency identification) antennas. One is small and square and is used for shoes and purses; the other is long and narrow, for hanging clothes. If you want to try on your suit, you enter the high-tech dressing room and hang it in the smart closet. The closet reads the rfid tag and displays information about the suit on a liquid crystal screen with a touch-screen overlay. You can flick through accessories or see the same item in different colors. The content displayed is all related to the item in the closet, part of the same line or "look" in Prada's parlance. The sales associate can use the screen to up-sell by showing you items that might go well with your suit. The splashy technology and expensive architecture at the Prada store have, at least in the media, overshadowed some creative retailing concepts. The store is about the customer experience. What Prada is trying to do is provide, in part through the use of technology, a level of service that has never been possible before. Let's say you shop at Prada regularly. The store presents you with a customer card. You can shop anonymously, or you can present your card to a sales associate, who scans the rfid chip in it. You are identified, and your preferences are immediately called up. If you have a favorite sales associate, he or she can be alerted that you have arrived. If not, any sales associate in the store can quickly review your personal preferences. If you have purchased several pairs of dress shoes recently, the associate might ask if you would like to see a few new designs that have just come in. The idea is to give a level of service that is superior to anything except the by-appointment-service of upscale boutiques. (Prada offers that, too, of course. If you're a celebrity you can make an appointment, go in a separate back entrance and have clothes brought to you in a comfortable lounge.) "There's a lot of technology in the store, but we didn't want it to be obtrusive," says Icon's Eckfeldt. "It's about facilitating the customer's relationship with the salesperson. That's the primary tenet of the store." Another concept Prada was experimenting with is merging the online and offline channel. Once the sales associate has helped you pick out a few items you want to try on, they are brought to the dressing room and placed in a smart closet. Prada plans to offer a system where the sales associate creates a session for you and everything you hang in the closet is identified. If you want, you can save the information in your personal database. The idea is the next day, when you have time at work; you can go online to a special Web site created for top customers and see the items in your "digital closet." You will be able to get more information about the items or see related products. You can't actually order anything and pay with your credit card, since Prada wants the relationship to be personal. But there is a tool that lets you message sales associates. You can tell them that you'd like to come in and try on a few related items you found on the Web, or arrange for you to pick up the handbag you picked out for your wife at the store. This lets Prada maintain the customer relationship even when you aren't in the store. "There will be a series of tools that will be on the Web that will give customers access in different ways, and these will change over time," says Eckfeldt. "As Prada develops new ideas, there will be new things that will let people experience the collection in new ways." The premises were amazing, but unfortunately the Prada new store concept didn’t work out, and definitely wasn’t worth the price. There are several reasons. First, the staff wasn’t trained appropriately to use such technology and the same was for customers. In retail the staff turnover rate is really high so it must be a constant training to use technology. Customers, mainly tourists invaded the store for months just for curiosity to check out the new technologic installations. The sales associates never used their pda’s appropriately to check stock room for inventory. A lag between sales and inventory systems makes the wireless network nearly irrelevant. The fitting rooms turned out to be confusing because of the doors that turn from clear to opaque confused shoppers and frequently fail to open on cue. Many people never understood pedals to change doors, and started changing in full-view. However, it’s not so much a problem anymore, employees keep fitting rooms opaque all the time. They also failed with rfid tags, touch screens were meant to spring to life when items are placed on RFID “closets” but are often left blank. However, even after this failed attempt to use technology, Prada in partnership with LG created a luxury business phone. After the technology store, in 2009 Prada called in four of the world's leading fashion editors to take over the visual identity of Prada stores in four fashion capitals for the autumn/winter 2009 collections. W magazine's Alex White will start the project with the New York Broadway store. Love's Katie Grand will then apply her vision to London's Old Bond Street. Olivier Rizzo who works independently with V, Another, Arena Hommes Plus and Love will focus on Milan's via Monte Napoleone store. Finally French Vogue's Carine Roitfeld will bring her powerful point of view to the Avenue Montaigne boutique in Paris. Each of these highly original image-makers will apply their distinctive styling and editorial vision to the presentation of the Prada Collections. These exceptional fashion visionaries have created some of the most memorable images of the last decade and have influenced popular culture globally with their distinctive fashion point of view. In a contemporary world of collaborations between different fields Prada marked the importance of interacting within the world of fashion at the highest a most creative level. Personal Conclusions: I have always been fascinated by Prada. By its handbags and by the label itself. It stands for high quality and solid reputation to me. I always thought they were a very fast forward brand, always experimenting with new technologies and fabrics in the production of their garments. Although I didn’t know about the technologic store opened in 2001 I am not surprised of that choice. That was a challenging move and can be related to CEO Bertelli’s fervid personality. I believe that Prada established their brand on two premises: quality and technology. Quality because since the beginning they have always used the best leather materials, designs are often simple, it’s the quality of the leather and the colors that stand out. Technology because of the nylon totes and backpacks their experimentation on materials and the stores ultimately. Quality + Technology = a solid reputation and durable items. My mother owns a couple of Prada nylon totes that are about 25 years old and passed them to me that means outstanding quality and durability to me. I consider Prada as a brand that I will always trust and I am always curious to check out their new collections because even if they are an always classic, they also add that touch of innovation and creativity that makes me want to own more and more pieces every season. References: • Cnn, Retrieved Jan, 13th 2011 from: http://articles.cnn.com/keyword/prada • Fashion and Runway, Retrieved Jan 13th 2011 from: http://www.fashionandrunway.com/fashion/article.cfm'id_articolo=12673 • Marketing Mag, Retrieved Jan, 13th 2011 from: http://www.marketingmag.com.au/case_studies/view/in-the-spotlight-prada-100#scan_0 • Wikipedia, The free encyclopedia, Retrieved Jan, 16th 2011 from: http://en.wikipedia.org/wiki/Prada • Fashion forum, Retrieved Jan 16th 2011 from http://www.fashion-forum.org/fashion-brands/prada.html • Funding Universe, Retrieved Jan 16th from http://www.fundinguniverse.com/company-histories/Prada-Holding-BV-Company-History.html • Rfid Journal, Retrieved Jan 16th from http://www.rfidjournal.com/article/view/272/3 Video References o Prada Retail Experience, http://www.youtube.com/watch'v=3pXNYciHCLc o Prada, LG phone o http://www.youtube.com/watch'v=WAAxXIEAOsY&feature=related o Miuccia Prada Interview by CNN o http://www.youtube.com/watch'v=6Y0Gde7zKYk o http://www.youtube.com/watch'v=2My3e1ffMuc o http://www.youtube.com/watch'v=exyGRkYq1xM ----------------------- PRADA Caterina Canaletti