Hermes Marketing Strategy: Case Study on Luxury Watchmaker

About Hermes

Hermes International S.A. was founded by Thierry Hermes in 1837 as a harness shop in Paris, France. His son, Charles-Emile Hermes shifted the company to the address, “24, Rue Du Faubourg, Saint-Honore” in Paris back then. To this date, Hermes being a multinational brand continues to operate its business activities from there and is also the headquarters of the company today.

Headquarters of Hermes 

Hermes is engaged in manufacturing leather goods, textiles, tanneries precious leathers, perfumes, etc. The brand is also engaged in producing many accessories, ranging from handbags, and shoes to small leather goods. 

This company has focused on making luxury products of exceptional quality for a long time now. It has a combination of various things such as rich heritage, exquisite craftsmanship, eye for detail, high level of quality, professionalism, etc

Hermes has been globally the most valuable luxury brand consistently. Today, Hermes ranks 28th among the Best Global Brands 2020 with a brand valuation of 18 billion dollars.

Current news about the brand

• The maker of leather goods, silk scarves, and jewelry said net profit reached 2.2 billion euros($2.4 billion) between January and June, over 36 percent from the same last period.
• Hermes performed better than rivals LVMH and Richemont in the United States with deals in the Americas region growing 20.7 percent to 1.2 billion euros in the world’s biggest economy.
• It noted that alternate-quarter figures advantaged from a” favorable comparison base” from last time as China executed strict epidemic restrictions that have agone been removed.
• Hermes reported” strong instigation” across all business lines and all regions, but growth was” exceptional” in Asia.

Targeting Audience

• High-net-worth individuals: People with significant disposable income who are willing to invest in luxury items.
• Fashion enthusiasts: Those who follow the latest fashion trends and are interested in premium designer products.
• Professionals: Executives, celebrities, and individuals in affluent professions who seek high-quality, stylish products.
• Gift buyers: People looking for special, luxury gifts for occasions like birthdays, anniversaries, and holidays.
• Collectors: Those who value limited edition or iconic Hermes items and are willing to pay a premium for them.

Now that we have a little information about the company,  let us understand more about Hermes by going through its 4Ps of the marketing mix.

Marketing Strategy of Hermes

The marketing strategy of Hermes can be defined as a comprehensive approach designed to help establish a sustainable competitive advantage enjoyed by the brand. This is also an addition to its offerings that enhances its corporate image, builds loyalty among consumers, and advances financial performance.

Being an old brand, it has also become a reliable brand in the field of leather products and the fashion industry. Due to its popularity for making different kinds of luxury, wealthy individuals are attracted to it. It uses many measures to promote its products all across the world. 

Pop-Up Store Strategy of Hermes

The marketing strategy of Hermes is mainly promotional activity to increase brand awareness. Hermes uses pop-up stores for product promotion. Pop-up stores are temporary retail stores that are mostly used by luxury brands to promote their products. 

This includes designing and opening a pop-up store for the customers and potential customers. This marketing strategy is mainly implemented in new locations or new markets so that the company can evaluate market demand as well as consider the existing competition in the market.

Sponsorships Activity of Hermes

Many people are familiar with Hermes as a company that makes leather products. What you might not know is just how active the brand is with sponsorships across a wide variety of fields and events. 

The company uses these platforms to promote its brand awareness and to reach out to its targeted audience more effectively. Hermes had been sponsoring this event for many years now. 

Advertising & Marketing Campaigns of Hermes

A proper advertising campaign strategy gives customers a chance to know and experience more about the company or the product. These are events or activities that a company does to influence the customers. So let us go through one of Hermes’ advertising campaigns in the coming section.

Le Temps, un Object Hermes (Time, An Hermes Object) – A Marketing Campaign of Hermes

Le Temps, un Objet Hermes, roughly translates to “Time, An Hermes Object” is a campaign that showcases a fresh approach to create its distinctive style of watchmaking philosophy. 

The creative strategy behind the marketing campaign employs a blend of social, cultural, and economic intentions along with technological capabilities to enhance the market success.

Hermes | Objects for Interior Life – A Marketing Campaign of Hermes

Hermes has launched the ‘Objects for Interior Life’ marketing campaign exhibiting the contemporary series of tableware that brings to life various interior spaces, giving place to a more refined and beautiful approach to interior design.

It focuses on showcasing a line of home accessories that focus on simplicity, warmth, and artistry. The product line consists of sleek lounge chairs and tables with a touch of modern flair. The cubes, curved shapes, and squares made of different materials give off a sophisticated and clean aesthetic that complements the beauty of minimalist interiors.

The major objective behind this campaign was to showcase and inspire people around the globe to give shape to their desires through symmetry, form, depth, and space.

Digital Marketing Strategy of Hermes

Hermes is one of the best examples of a brand embracing digital marketing. Hermes focuses a lot on digital marketing. 

It has its Podcasts and documentaries. This proves that it pays off hugely for a company to embrace the power of digital media. It also has a newsletter that keeps its customers informed about the company and happening around the fashion world.

Hermes Documentaries

Hermes Podcasts

Hermes Podcasts

Top 5 Competitors of Hermes

1. Louis Vuitton: It is another iconic luxury brand known for its leather goods, accessories, and fashion products. Louis Vuitton has a strong global presence and is often associated with high-quality craftsmanship and luxury.
2. Chanel: It is renowned for its elegance, classic designs, and luxury fashion items. Chanel offers a wide range of products including clothing, accessories, and fragrances.
3. Gucci: It is recognized for its bold and innovative designs, often incorporating iconic motifs and patterns. Gucci has a strong presence in both fashion and accessories, appealing to a wide range of luxury consumers.
4. Prada: It is known for its modern and minimalist designs that often blend classic elements with contemporary aesthetics. Prada is associated with high-quality materials and craftsmanship.
5. Dior: Christian Dior, often referred to as Dior, is famous for its sophisticated and elegant fashion items. The brand covers a variety of luxury products, including haute couture, ready-to-wear clothing, accessories, and cosmetics.

Example of a Failed Campaign Or Backlash from Users

What was the issue: The biggest challenge that Hermès has faced in its independent existence is the continued interest of rival luxury fashion house LVMH in its fortunes.

What backlash did the brand face: LVMH quietly built up a stake of 17 percent in Hermès between 2002 and 2010. This led to a highly acrimonious and long legal dispute between the conglomerate and Hermès. As a result, LVMH had to pay a fine of USD 11 million and sell down its 23% stake to 8.5% for flouting public disclosure requirements.

What did Brand do in this situation: The company has successfully kept alive and strengthened a brand differentiated through strong history, exquisite craftsmanship and superior quality. 

Suggestions for a better campaign

One of the most successful Hermes campaigns is the “Leather Forever” campaign. The campaign celebrated the brand’s leather goods heritage and craftsmanship, highlighting the brand’s commitment to quality and timeless design.

With this we have come to the conclusion of this case study, let us summarize everything in the coming section.

Conclusion

Hermes is one of the oldest and most prestigious brands, which has a market franchise with an experience of more than 150 years. With time, it has been using different marketing strategies to gain brand connection among customers. 

They have been having showrooms for centuries now launching digital stores and pop-up stores to make their brand more accessible. In recent years, it has also extensively focused on its digital marketing strategy for better brand visibility.

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