Licensing methods and results

The major retail strategy adopted by Pierre Cardin is licensing of the brand name to third parties in multiple product categories. The company currently has more than 900 licensing agreements in several product groups like fashion and accessories, wines and spirits, confectionary, toiletries, home decorations, furniture, restaurants and hotels, among several others. These licensing agreements span more than 140 countries. In addition to these, there are several Pierre Cardin stores which retail the designer's own fashion creations at premium prices, in different fashion cities, including his Paris home base. Pierre Cardin also owns a publishing business and the Maxim's sub-brand, which includes a restaurant and hotel chain, boat services and other goods such as champagne, confectionaries, sweets, chocolates, cigars, fruits and florists. He also has a US$20 million private museum 'Espace Cardin', in Paris. These ventures paint an unclear picture of the complete product and services portfolio of the brand and what Pierre Cardin owns and controls and what he doesn't. It also makes it difficult to position the brand and its offerings.

The products of Pierre Cardin are retailed at different price points from low pricing, discount pricing to premium pricing. They can also be found at different retail channels, ranging from exclusive stores to supermarkets, online stores and auction websites like amazon.com. These broad pricing and retailing strategies contribute to an unclear image and positioning of the brand, which has led to the depreciation of the brand's equity.

Pierre Cardin's venture into licensing deals arose from his vision of 'dressing the man and woman on the street with creative and affordable fashion goods'. He has famously said that he wants to work for ordinary people and not only for wealthy people. He also had the vision of creating a mass global luxury fashion market and influencing the lifestyle of this market through his offerings. He could also have embarked on licensing agreements as a result of dissatisfaction with the aristocratic nature of the luxury goods sector. Pierre Cardin justified the rampant licensing of his name with statements relating to his interest in bringing high fashion into the sphere of consumer goods. He also indicated that he would continue to license his name to different products, including toilet paper, because he could dress himself and his house and his lifestyle all in Pierre Cardin-branded goods. This implies that the level of consumer adoption of the brand would follow the path of the following scenario:

A consumer wakes up in a Pierre Cardin branded bed, takes a shower with Pierre Cardin toiletries, shaves with Pierre Cardin razors, uses Pierre Cardin aftershave or perfume, dresses in Pierre Cardin from the tie to the shirt and trousers or from a dress to shoes, handbags, jewellery and wrist watches. Then he/she has breakfast of Pierre Cardin branded tea and coffee with confectionary served in Pierre Cardin tableware, while also drinking the Pierre Cardin branded bottled water. For lunch, he/she could go to the Pierre Cardin restaurant, Maxim's de Paris, and the evening could be ended with a concert at the Pierre Cardin theatre or a visit to the Pierre Cardin museum.

The reality, however, is that the luxury consumers of the twenty-first century are neither inclined to nor interested in this level of interactivity with one single luxury brand. This disposition is even heightened when it involves a brand that has ill-defined brand characteristics and parameters. Consumers are moving beyond the supposed obsession with logo-embossed products and services towards the accommodation of suitable luxury brands that have substance, to be a part of their lifestyles.

The Pierre Cardin brand image is currently more negative than positive among the luxury consumer population. The extensive licensing, brand extension and product diversification have contributed significantly to the devaluation of the brand's image. These have overshadowed the creative work of Pierre Cardin in haute couture and prêt-à-porter and relegated his innovative fashion revolutions to the background.

Among the several disadvantages that have impacted the brand image and perception of the Pierre Cardin brand are the following:

Loss of brand positioning. This is as a result of an unclear brand identity, increased by a lack of brand control.

Loss of quality control of the products, leading to low product quality, which has diminished the brand's image.

Multiple and uncontrolled product and services range, which has led to an unclear market positioning and confused consumer expectation of the brand.

Undefined pricing strategy from premium pricing for certain products to low-cost pricing and discounting for others. This has led to an unclear brand positioning.

Loss of retail channel control. The licensing agreements of Pierre Cardin gave way to multiple retail channels ranging from exclusive stores to supermarkets, airports, newsstands and departmental stores. This has led to the loss of the 'exclusivity' and 'prestigious' attributes that form a part of the core competences of a luxury brand.

Pierre Cardin has focused more on licensing and less on developing the brand and maintaining its luxury aura. Brand building is a long-term investment while licensing provides short-term benefits. The brand seems to have chosen the short-term option. Pierre Cardin earns approximately €6 million annually from licences, but this figure is paltry compared to the financial intangible brand asset value the brand would have accrued had it protected its brand equity in the market.

Although the brand paved the way for several modern business practices of the luxury goods sector, it has exhibited a lack of control of its penchant for licensing, which has badly damaged the intangible asset aspect of the brand. Other brands that have been through periods of rampant licensing, which destroyed their luxury image and positioning, include Gucci and Burberry. These brands, however, regained their 'luxury' status through a carefully managed process of licence buy-backs and brand re-positioning. Pierre Cardin still stands a chance to recover its once glorious 'luxury and prestige' status.

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