The Armani fashion empire currently employs 4,800 people worldwide, owns 13 factories and has 300 outlets in several countries. This feat was not achieved by accident but through carefully developed business strategies and models that have been effectively implemented. The following is a summary of the main elements of the Armani marketing strategy:
• Product The Armani product range is developed under different subbrand categories to fit with the market requirements and to address different segments of the luxury consumer market. The products however have a single unifying factor in the elements of its development. The same high level of skill, precision, craftsmanship and quality materials is applied in the development of each product, whether it is denim-based, a lamp or a pair of shoes.
Pricing Armani's pricing strategy is the premium-pricing strategy. Some of the sub-brands have products in lower priced categories such as denim but the brand applies the same premium-pricing principle to all product categories in varying degrees.
Distribution Armani goods are retailed through directly owned stores and selected distributors. The company's online boutique also retails selected products in the US market only. Armani also has stores at outlet shopping centers such as the company's own outlet shopping center located in Vertemate, near Como in Italy and Gucci Group-owned 'The Mall' located in Florence, Italy. In addition, Armani products can also be found at several of the Value Retail Outlet Villages such as La Vallée Village, Paris and Wertheim Village, Frankfurt. The brand might need to tighten up its product distribution to generate a higher level of brand equity.
Promotion Giorgio Armani had an early recognition of the relationship between the cinema and luxury goods. He was the pioneer designer to skillfully use film to promote luxury products. The international recognition and subsequent global expansion of Armani began after the brand 'dressed' movie stars in several films. The most notable of these are the characters played by Richard Gere and Lauren Hutton in the famous Hollywood movie American Gigolo. This has been cited as the movie that propelled Armani to 'star' status in the fashion world. Armani has also designed clothes for more than 100 films, including The Untouchables, Goodfellas, Father of the Bride and Arriverdeci Grazia.
Another entertainment related strategy of Armani is his use of celebrities and movie stars as artists and ambassadors of the brand. Armani hardly features paid celebrities in its print or other mass media advertisements but the brand's creations are often worn by the most talented and notable celebrities at important ceremonies such as the American Oscar Awards. Giorgio Armani also frequently collaborates with celebrities in the creation of special pieces such as apparel and leathergoods. An example is his cooperation with the actress Ziyi Zang, to create a dress for her for the 2006 Academy Awards ceremony.
Armani's relationship with celebrities and the cinema has resulted in a wonderful chemistry with international stars and has also contributed to creating a fashion empire and turning the designer into an icon. As a pointer, in 2002 and 2003, the New York Guggenheim and the British Royal Academy of Arts put up retrospectives of Armani's work, recognizing him not only as a fashion designer and businessman, but also as an artist.
However, the long-term strategic challenge of the company is the possibility of retaining its profitable status as a one-man business in a sector that is propelled by acquisition and consolidation. Armani is one of a few luxury brands that is neither owned by a larger group nor traded publicly. This is an enormous achievement but at the same time a challenge. The brand also has the challenge of finding the right successor(s) to the 72-year-old Giorgio Armani, when he eventually retires. Giorgio Armani is a master of his craft and has created both a brand power-name and a power persona. His successors) will require not only an equal level of talent but also a double dose of personality to sustain the Armani aura.
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