Hugo Boss Company’s Marketing Strategy

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Table of Contents

Introduction
Literature Review
Objectives Of The Study
Methodology
Results
Conclusion And Recommendation
References
Appendix

Introduction

Businesses use marketing to draw potential customers to their products and services. Marketing is not a modern practice, as it started many years ago through the word of mouth advertisement. Since then, marketing has grown intensively to a point where brand extension and coattail strategies, among others, have been adopted to increase the market share of a number of products. The luxury fashion industries have also adopted brand extension marketing strategies in an effort to increase the market share of their products.

In the past, luxury market was only considered as a niche market for the world’s celebrities and royals. But owing to the change in economic, social, as well as technological advancements, the market for luxurious goods has changed significantly, making the brands to take the advantage of mass market. This paper will evaluate the image of Hugo Boss fashion designers by critically analysing the literatures on the brand extension marketing strategy in order to supply answers as to what extent the brand extension has on the brand image of the original luxurious product.

Problem Statement

Given that luxurious products are supposed to maintain their exclusivity and scarcity (Phau & Prendergast, 2000), adopting brand extension for luxurious goods has elicited debate on whether it could bring positive or adverse effects on the brand image. With the expansion of designers’ clothes industry, a number of marketers tend to think that brand extension poses a threat to the brand image, as it is not in a position of maintaining the exclusive status of the original brand. More so, an increased availability of the commodity in question lowers the admiration of the luxurious commodity, hence affecting the brand image in a negative manner.

Literature Review

In the recent past, profits of luxurious commodities have significantly increased owing to public’s desire to buy designer brands. This has facilitated a change of marketing strategy, with many opting to increase their market share through the brand extension strategy. Hence, brand extension has been adopted in a bid to cater for other market segments that lack the capacity of buying the original product. However, it is imperative to note that the positive brand image of a luxurious product is attributed to five qualities: perceived uniqueness, conspicuousness, perceived hedonic value, perceived social value, and perceived quality value (Phau & Prendergast, 2000). Hence, the luxury products are meant to provide satisfaction for not only the functional needs but also the psychological needs of the customers.

Hugo Boss is one of the companies that have adopted brand extension strategy in a bid to increase its market share. This global fashion company started in 1923 in Germany, and it is famous for its premium quality and stylish European design. The company makes its clothing from authentic Italian fabrics. The brand extension adopted by the Hugo Boss takes into consideration the rhyming of brand names: “BOSS Hugo Boss and HUGO Hugo Boss” (Matthiesen & Phau, 2005).

In addition, the company is in a position of supporting several products in different markets, where each brand comes up with its unique advertising and generic name. More so, each company is responsible for establishing a communications style that best suits its market segment. As a result, the Hugo Boss has managed to divide its products into three main labels, namely, Boss Orange, Boss Green, and Boss Black Label. These labels supply their products to different clients around the globe. However, the brand image of Hugo Boss leaves a gap in the literature, and hence calls for a study.

Objectives Of The Study

The main objectives of this study is to carry out a market research that aims at examining the brand image of the luxurious product and the effects of the image after adopting brand extension strategy. Thus, the main objectives of this study will include the following:

To meticulously evaluate and assess the academic literature on luxurious products and the factors that affect their brand image
To achieve a higher level of understanding on brand image of the Hugo Boss products
To analyse whether the academic research conducted on brand extension themes is relevant to Hugo Boss brand extension with regard to its brand image.

Methodology

Purpose of the Study

By using supported inferences and substantiated claims, this study will aim at finding out how the brand image of the luxurious product is affected by brand extension. Despite the controversies emanating from the effects of brand image from brand extension, this study will evaluate different views of brand image. In turn, this will provide the marketers with a suitable avenue for becoming skillful in increasing their market share without affecting the brand image in a negative manner. Thus, the study will answer the following questions:

Is there a statistical difference between gender and their overall image on luxurious products?
Does the Perception on the unique value of European and American luxury differ, leading to more than one brand image for the Hugo Boss fashion designers?
Does the perception of unique value differ amongst the high-income earners and the low-income earners with regard to luxurious products?

Research Design

The study will use both quantitative and qualitative designs, with a set of dependent and independent variables. The dependent variable will include participants’ attitude on the brand. This will be assessed through a measuring scales prepared for this study, where a high score will indicate a positive brand image, while a low score will indicate a negative brand image. The independent variables, on the other hand, will include gender, economic status, and nationality of the participants. The validity and the reliability of this design will be established in order to make sure that the study holds a clear objective in answering the research questions.

Sampling

The sample for the qualitative study will necessitate the need for selecting high quality primary and secondary sources that focus on factors affecting the brand image of luxurious products. These sources will provide the study with information regarding the effects of brand extension on the brand image of a luxurious product. More so, the sources will evaluate the definitions of the word “luxury,” and whether it is associated with attraction, prestige, and extravagance. Thus, the selection of the sources will be done in a manner that interconnects all theories relating to luxury, brand extension, and brand image. More so, the academic sources will serve the role of examining the models that portray a relationship between the original brand and the extended brand, as well as the extent to which this relationship affects the brand image of the parent brand. All these knowledge will form the base of questionnaire in the ethnographic study.

The required sample size for this research will be arrived at after determining the participants’ level of interest, the confidence level, and the expected margin of error (Bradley, 2007). More so, the sample size will be based on probability sampling in order to ensure that participants from various parts of Europe and the United States are equally represented. However, the study will eliminate participants aged above 45 years, since this study will be based on luxurious products meant for people below this age.

Development of Data Collection Tools

Data will be collected through questionnaire, which will be specially prepared for the study of brand image of Hugo Boss before and after it adopted a brand extension marketing strategy. The tools will be developed in such a way that they will be in a position of measuring the participants’ attitudes towards brand image of the luxurious clothing manufactured by the Hugo Boss company.

The questionnaire will consists of 10 statements, with six being positive and four being negative. A Likert 5-level scale will be used in this part of the questionnaire, and the respondents will be expected to choose either of the following answers: strongly agree, agree, do not know, disagree, and strongly disagree. This scale will play a crucial role in establishing the overall image of the participants with respect to the brand, as it will provide the researcher with very accurate measurement of the participants’ opinions and attitudes (Bradley, 2007).

Data Collection Method

In an effort to carry out an ethical marketing research, the researcher described in details to the participants on the kind of study they will undergo. The participants were subsequently ensured of their anonymity rights before being engaged in the study. All the 1,800 participants were contented with the measures taken by the researchers from the onset of the study; hence, this study was characterised by content validity (Churchill & Brown, 2003).

The questionnaire consisted of two parts. The first part aimed at collecting quantitative data concerning the participants. This part included three fixed-response items, where the participants could choose between two possible answers. It was relevant to focus on collecting the participants’ information in order to verify their eligibility for assessing the brand image of the Hugo Boss designers. Therefore, the participants’ background information, which included their gender, economic status, and nationality, was collected.

The second part collected both quantitative and qualitative information, which was measured by the Likert 5-level scale. The word “why” was used after every question to facilitate acquisition of qualitative data that backed up the quantitative data of the study (Bradley, 2007). Therefore, the questionnaire served a critical role in helping the researchers obtain both quantitative and qualitative information concerning the customers’ overall image towards Hugo Boss brand.

Validity and Reliability

To achieve the validity in the study, the researchers ascertained that the sources used were extracted from the university library and reliable online sources. More so, the researchers considered a number of threats to internal validity, which include instruments and testing procedures. More so, the study ensured that it was not faced with external validity threats by taking the approach of probability sampling of participants (Churchill & Brown, 2003).

The reliability, on the other hand, was ascertained by examination whether all the items that make up the scale were measuring the same underlying attribute (Bradley, 2007). The evaluators endeavored to increase the internal consistency of the study by deleting items that did not seem to enhance the outcome of measurement. The criterion used for eliminating the vague questions was achieved by carrying out a pilot study, and the standard deviation was subsequently evaluated. The items that portrayed a significant difference in value from the rest within the scale were deleted from the study.

Results

After collecting the questionnaires, the quantitative data was subsequently analysed using the Statistical Package for the Social Sciences (SPSS), which is a well-known software program used by many researchers for data management purposes. There were many reasons for choosing this statistical package to analyse the data. One of the greatest advantages of using SPSS is that it is time saving since it provides the data analysts with divers ways of analysing complex quantitative data within a very short time (Pallant, 2010).

The relationship between customers’ gender and their attitude towards Hugo Boss was investigated using Pearson product-moment correlation coefficient, and it turned out that there was a strong and positive correlation between the two variables. More so, the Pearson test was used to measure the relationship between the high-income earners and the low-income earners in respect to the brand image, and it turned out that there was a positive correlation between the two variables. This was also evidenced by a cross tabulation analysis indicating that 76% of high-income earners attribute brand image to premium pricing as compared to 73% of low-income earners.

While assessing the brand image with respect to nationality, a t-test was used to compare the mean score of the two variables, that is, the independent variable [nationality] and the dependent variable [brand’s attitude/image]. And it turned out that there was a statistically significant difference between European customers and American customers in their attitude towards the Hugo Boss brand. This was also evidenced through a cross tabulation analysis indicating that 89% of European customers attribute brand image of fashion designers to exclusivity as opposed to 13% from the United States.

Discussion of the Results

The statistical results generally reflect the customers’ attitudes towards the Hugo Boss brand before and after adopting the brand extension strategy aimed at increasing the market share. In the first research question, the results show that there was no statistical difference between the high and low-income earners in respect to pricing the luxurious clothing. This result is unsurprising, and it was expected for one main reason: brand image of a luxurious product degrades due to a fall in its price (Phau & Prendergast, 2000).

In the second research question, the results show that there was a statistically significant difference between the European customers and the American customers in their attitude towards Hugo Boss brand. This difference in the attitude stems from the rarity principle. This principle indicates that a luxurious brand can loose its image due to an increase in market share (Phau & Prendergast, 2000). However, it is apparent that there is a contradiction in global management of luxurious brand, leading to a challenge while increasing the market share of a luxurious commodity.

While the European customers tend to think that exclusivity is critical in maintaining a brand image of a luxurious product, the American tend to think exclusivity is not critical in the management of brand image, stating that it does not make a luxury less luxurious if many customers purchase it. This belief is contrary to the European perspective, which claims that a luxurious product must be characterised by scarcity (Phau & Prendergast, 2000). Hence, this necessitates a different business models in managing the brand image of the Hugo Boss for the American and the European customers.

Conclusion And Recommendation

The results of the study can be generalised because they were based on a large sample size. According to the findings, it is imperative to note that a number of factors influence brand image of a luxurious product. Therefore, a clear evaluation of brand image can only be achieved by highlighting the cultural views that affect the brand image of the product within different countries across the globe. However, even though the findings have a great impact on understanding the difference between the Europeans and the Americans with respect to brand image, the study should be replicated in order to address on how marketers should find a balance between brand exposure and factors that maintain the brand image while increasing the market share of the brand in question.

More so, the marketing managers should also carry out a brand image study that explores the brand image of the old fashions versus the brand image of the new fashions. And as the brand image is compounded with controversies, it is paramount for the marketers to evaluate a number of models while evaluating it, as marketers are entitled to balance global availability of a product against the sufficient scale while maintaining a positive brand image of the product (Bradley, 2007).

Limitation

Given that this research study was conducted in the U.S, the budget was unable to accommodate all the countries from Europe, and therefore chose participants from the UK and Sweden to represent the entire European nationality. More so, there is little literature on brand image of luxurious products that have adopted brand extension marketing strategy, making it hard to evaluate factors that affect brand image for the American consumers.

References

Bradley, N. (2007). Marketing research: Tools & techniques. Oxford: Oxford University Press.

Churchill, G. A., & Brown, T. J. (2003). Basic marketing research. Chicago: Dryden Press.

Matthiesen, I., & Phau, I. (2005). The ‘HUGO BOSS’ connection: Achieving global brand consistency across countries. The Journal of Brand Management, 12 (5), 325-338.

Pallant, J. (2010). SPSS survival manual. Maidenhead: McGraw Hill.

Phau, I., & Prendergast, G. (2000). Consuming luxury brands: The relevance of the ‘Rarity Principle’. Journal of Brand Management, 8 (2), 122-138

Appendix

The first part of the interview process involved collecting participants’ data concerning their demographic variables:

Gender:

( ) Male
( ) Female

Nationality:

( ) European
( ) American

Income level:

( ) above $ 5,000
( ) below $ 5,000

The second and the third part of the questionnaire involved collecting participants’ data concerning their attitude towards brand image with respect to Hugo Boss designer clothes

What image do you think you would present to the community while buying a Hugo Boss designer cloth?
Would you buy a product that is associated with certain emotions or a product that has no emotional connotation?
For what duration of time would you like a fashionable cloth to maintain in the market?
Do you agree with the allegation that brand extension weakens the image of luxurious products?
Do you agree with the fact that price fluctuation weakens the image of luxurious products?
Do you think making a luxurious product readily available in the market weakens its brand image?
Do you think price penetration strategy weakens the brand image of a luxurious commodity?
Do you suppose that the demand of Hugo Boss brands meets the supply even without brand extension marketing strategy?
To what extent do you think the Hugo Boss clothing depict power and wealth?
Do you experience a different feeling while purchasing products from the Hugo Boss designers when compared to other brands?

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