ASSIGNMENT OF

STRATEGIC BRAND MANAGEMENT

Submitted to: Submitted by:

Prof. TRILOK NATH SINDHWANI CHINMAYA KUMAR
PARIJA

Giorgio Armani - the ultimate fashion brand

The Giorgio Armani brand owned and run by the founder designer Giorgio Armani has
earned the much hallowed space in the fashion industry through its superior design, relevant
themes and trends. It maintains the aura of a real luxury brand. Not only has Giorgio Armani
become one of the most respected and known brand names in the fashion and luxury brand
industry, it is also one of the most highly valued fashion companies in the world with a value
of nearly 3 billion Euros.

The Giorgio Armani brand strategy

The mention of the Annual Academy Awards ceremony brings to mind the glittering ritual,
the red carpet, and the galaxy of Hollywood stars. The Academy awards have become as
much an event about films and awards as it has about the celebrities and their fashion
statements. One of the regulars at the Annual Academy Awards event along with the stars and
the glamour has been the ultra premium and exclusive fashion wear from the Giorgio Armani
stable - the Armani suits donned by the leading Hollywood men and the Armani evening
gowns and other haute couture dresses worn by the celestial Hollywood beauties.

The Giorgio Armani company owned and run by the founder designer Giorgio Armani has
earned the much hallowed space in the fashion industry through its superior design, relevant
themes and trends appealing to the current crop of customers and by maintaining the aura of a
real luxury brand.

Introduction

Giorgio Armani started the company of his namesake back in 1975. Being a designer himself,
he made apparel with his sense of aesthetics, beauty and luxury, a sense that appealed to the
elite of the society that today includes the royalty of Belgium, the royal families of many
Asian countries and even the opulent women from the Middle East and the high and mighty
stars from Hollywood among many other prominent customers. For almost 30 years now,
Armani has been a privately held company with the founder Giorgio Armani being the sole
shareholder.

With many sub-brands designed under the parent umbrella brand of Giorgio Armani to cater
to the specific needs of different market segments, it has become one of the strongest fashion
and luxury brands in the world. Not only has Giorgio Armani become one of the most
respected and known brand names in the fashion industry, it is also one of the most highly
valued fashion companies in the world with a value of nearly 3 billion Euros.

Giorgio Armani is also very expansive in Asia Pacific with its multiple future growth markets
for luxury brands. For example, China is embracing premium fashion and luxury goods at an
increasing pace, and Giorgio Armani has been one of the forerunners to exploit the market
potential. There are approximately around 10-13 million Chinese luxury brand customers.
Giorgio Armani opened its Emporio Armani store next to Shanghai's historic "The Bund" in
2004 and plans on opening nearly 30 stores by the end of 2008.

The Brand Philosophy

Unlike the usual practices of branding that are normally seen in the consumer goods industry,
the branding philosophy in the fashion and luxury goods industry is quite unique and
personality based. Most of the famous fashion houses like Christian Dior, Yves Saint-Laurent,
Gucci, Versace, Giorgio Armani and many others were built on the personality of the
founders. As design is the most important ingredient of fashion and luxury apparel, the
individual style of these designers becomes crucial to creating and sustaining the fashion
brand strategy. It is these unique designs and patterns that reflect the personality of their
creator that gives an identity to the brand and helps to differentiate it from the crowd.

The Giorgio Armani fashion house, like many other fashion houses, has been built primarily
on the unique personality and identity of Giorgio Armani himself. The brand takes on the
identity of the founder through the designs created.

Though this aspect of the fashion industry provides fashion houses with a strong sense of
differentiation that can be conveyed in a tangible and visual form, it also poses a serious
threat. When an entire brand and fashion house are built on the basis of the founders'
personality and identity, it becomes a major challenge to keep the brand going after the
demise of the founder, something many of the fashion houses have realized in the recent past.

The Giorgio Armani Brand Architecture

Whenever a brand gains popularity and acceptance from its target customers in its core
business, the next obvious step for the brand is to charter a new course by venturing into
different product lines, different segments, and ever different markets. This phenomenon
seems common across industry sectors.

Giorgio Armani with its iconic popularity amongst the elite of the society and the fashion
literate segment of the market has followed similar steps by extending the brand. Today the
Armani brand architecture encompasses one corporate brand and five sub-brands, each
catering to different sets of target customers and at different price levels.

The signature Giorgio Armani line: This is the main collection of apparel that consists of
the signature Armani suits, Oscar gowns and so on, which are of the ultra-premium price
points and essentially targeting consumers in the 35-50 year old age group.

Armani Collezioni: This is Armani's venture into a slightly lower market segment. This
basically caters to the segment of people who aspire to wear Armani apparel but cannot
afford the ultimate signature line, or to those who crave to add extra products to their existing
portfolios. The Armani Collezioni brand, with a price point of almost 20% lower than the
main line, provides an excellent line of affordable fashion.

Emporio Armani: Targeted especially at the young professional segment in the 25-35 year
old age group, the Emporio Armani brand provides contemporary designs that are relevant to
the target customers.

Armani Jeans: This is the lowest range of Armani apparel. This is to the value segment what
the signature line is to the premium segment. Catering necessarily to the young adults in the
18 to 30 year old age group, the Armani Jeans collection provides a trendy yet fashionable
and luxurious line of apparel.

A/X Armani Exchange: This is the licensed brand of chain of retail outlets of Armani
fashion house. This serves as the ultimate testimony to the power of the brand. By providing
the entire range of its apparels and accessories, Armani Exchange provides customers with
the complete feel of the luxurious fashion of Giorgio Armani.

However, the Giorgio Armani brand architecture can be misinterpreted by the prospect. For
instance, the differences between Emporio Armani and Armani Collezioni are often quite
insignificant. Furthermore, in January 2005 the Armani group launched Armani Prive to
stands for its haute couture collection. Giorgio Armani and Armani Prive can cross borders
creating confusion in the mind of the buyer.

These sub-brands help Giorgio Armani to operate in many segments of the fashion apparel
market. But this is not all. Not only does Armani straddle many segments of the same product
category, but also many different product categories.

Leveraging its strong brand equity in the fashion apparel market, Giorgio Armani has
ventured into other related categories like eye wear, watches and cosmetics. These are made
available in each of the above-mentioned brand categories to ensure that it is available to the
different segments of the market. It is usually argued that eye wear, perfumes, watches and
cosmetics are strongly related to fashion and luxury and thus it is natural for fashion houses
to extend their brands into these categories. Giorgio Armani is a very strong example for this
argument. By leveraging its expert knowledge of the fashion and luxury industry, Armani has
been able to come up with winning concepts in the other product lines of cosmetics, watches,
jewelry and eye wear.

But Armani has not stopped at just these product categories: Armani has extended the brand
into multiple other categories such as Armani Casa (up-market furniture), Armani-branded
Dolci (confectionary), and Armani-branded Fiori (Flowers). And to add to this wide portfolio
of brands, Armani very recently struck a deal with a Dubai-based property group Emaar to
come up with a chain of 14 Armani branded hotels and resorts by 2011.
As is the trend in the fashion industry to operate in the entire spectrum from apparel,
jewellery, cosmetics, watches, perfumes and luxury hotels, Armani has been able to leverage
its brand equity to be present in most of these lucrative sectors.

Today, Armani group has a retail network of 60 Giorgio Armani boutiques, 11 Collezioni, 122
Emporio Armani, 94 A/X Armani exchange, 13 Armani Junior , 1 Giorgio Armani Accessori
and 16 Armani casa spread over 37 different countries.

With so many things going on in the Armani stable, it might seem a pretty picture at the
outset. But this huge portfolio of brands and product lines creates a much bigger set of
challenges to the Giorgio Armani brand strategy in the future.