Contemporary Business 14th Edition by Louis Boone, David Kurtz

تمرين 12

Case 12.1 Luxury Brands Market to Millennials: Chanel. Armani. BMW. Cartier. These long-established, high-end brands are very interested in Generation Y, also known as the Millennials-those born during the 1980s and who are now between 18 and 28 years old. The new- est challenge these once-exclusive brands face is marketing to this age group. According to a recent marketing survey, Millennials are the "largest consumer group in U.S. history," even bigger than the baby-boom generation, the previous record hold- ers. At 70 to 85 million, Millennials make up 25 percent of the American population. They are the most ethnically diverse group ever, as well as the least bound by gender stereotypes. They spend over $200 billion a year on pur- chases. As they enter the workforce and set up their own households, they will overtake the soon-to-retire baby boomers in spending power. Even more important is how Millennials get informa- tion and communicate. Unlike any previous generation, they have grown up with digital technology and take cell phones, video games, and other high-speed electronic devices and media for granted. They are used to instantly available information and communication. A recent sur- vey by the Pew Research Center notes that 75 percent of Generation Y uses social networking, in contrast to 50 percent of Generation X (30 to 45 years old) and 30 percent of baby boomers (46 to 64 years old). Millennials are very aware of the value of what they buy. The marketing survey found that 65 percent of female Millennials and 61 percent of males describe themselves as brand conscious. But heritage and exclusivity, formerly effective marketing tools for prestige brands, mean little to Millennials, who instead value quality, authenticity, and image. They shun anything that resembles self-promotion in either brands or people, including prominently displayed corporate logos. Burberry, a maker of high-end clothing and acces- sories established in 1836, recently began an ambitious multimedia effort to reach Millennials in the digital universe. One of the company's first moves was to hire the actress Emma Watson, world famous for playing Hermione Granger in the Harry Potter movies. A Millennial born in 1990, she was the new face of Burberry's spring-summer campaign. In addition to traditional print advertising and, of course, its home Web site, Burberry has employed live streaming and 3D filming of its fashion shows. With the photo blog- ger Scott Schuman, known as the Sartorialist, the company also launched a special Web site, Art of the Trench, to promote its classic trench coat. Burberry's Facebook page calls Art of the Trench "a living celebration of the trench coat and the people who wear it." The Web site, essentially a social networking blog, invites owners to submit photos of themselves wearing their trench coats-or to submit videos to its YouTube channel. Links allow visitors to "view details," "like," "share," and "leave comments" on the photos. They can also sort the photos by popularity, gender, styling, trench color, and weather. The site features music by the Maccabees, White Lies, and other groups, with links to their Web sites. Burberry's CEO, Angela Ahrendts, said, "Attracting the Millennial customer to luxury started two years ago-I said that we can either get crushed or ride the greatest wave of our life." Scott Galloway of New York University's School of Business says, "Gen Y goodwill is arguably the closest thing to a crystal ball for predicting a brand's long-term prospects. Just as Boomers drove the luxury sector for the last 20 years, brands that resonate with Gen Y, whose purchasing power will surpass that of Boomers by 2017, will be the new icons of prestige."
-Burberry is basing its product strategy on how Millennials use the Internet and social media, as opposed to how their elders do. Do you think this difference in use will continue as the Millennials mature? If so, how might Burberry change its product strategy?