Executive Summary

A brand allows customers to express their individuality and identity, social status, and
preferences. A brand community forms from shared brand preferences. Muniz and OGuinn
(2001) describe brand communities as specialised, non-geographically bound communities
that operate on a structured set of social relationship among followers of a brand. Brand
communities have the ability to positively influence customer attitudes and increase brand
loyalty (McAlexander, Schouten & Koenig, 2002) when members exchange information and
opinions, and form a sense of responsibility to the brand (Muniz & OGuinn, 2001; Schau &
Muniz, 2002). There are brand community practices that encourage member engagement
(Schau et al., 2009) but these practices do no significantly impact brand loyalty (Laroche,
Richard, & Sankaranarayanan, 2012).
Recent studies have shown that brand communities are effective and can leverage high
sustainable growth. For effective brand community strategies to benefit the brand it must be
well integrated into the corporate strategy as opposed to being a function of the marketing
strategy, it must be enabled by brand values and culture, and supported by the systems,
processes, and architecture of the company. The Harley-Davidson Motor Company was able
to develop a strong brand community with their business model and competitive positioning
to reap long term benefits. With the concept of a community placed at the core of the
corporation since inception in 1985, management identified the community-based
phenomenon had evolved organically from outlaw biker groups to other motorcycling
enthusiasts.
This current paper examines the external and internal aspects of the luxury fashion brand,
Hermes, and provides recommendations to best engage its brand community to increase
social capital, thereby increasing brand equity.
Introduction
Fournier and Lee (2008) categorise peoples engagement in communal activities into three
forms of affiliations known as webs, pools, and hubs. The pool phenomenon is one that
supports a brand community that is based on a pool of shared understanding and value that
surrounds and is created by the brand. The main concern of the pool concept is that the
community is founded on asymmetry and abstract relationships between the customer and the
brand. Effective community strategies utilise all forms of affiliation for the benefit of the
brand, the company, and the consumer in which there is a value co-creation process (Brodie
et al., 2011).
Brogi and his colleagues (2013) found that brand dynamicsthat include; brand community
participant, community member generated content, perceived brand qualitypositively
impact brand equity. Marketing and brand managers should consider brand equity as a
strategic asset in the luxury fashion industry and exploit the opportunities presented through
brand community development.
Brand Overview
Hermes is a renowned Parisian premium, luxury brand founded by Thierry Hermes in 1837.
It offers products that range from leather goods, watches, silk, jewellery, and dcor in over 20
countries worldwide. The brand has captured worldwide demand and leadership through its
annual marketing campaigns, which include A sporting life! (2013), The Gift of Time
(2012), and Contemporary Artisan (2011). Hermes global presence is recognised by being
named Best Global Brands (Interbrand, 2012), The World Luxury Index Handbags (DLG
Society, 2012), Top 100 French Brands (MPP Consulting, 2011), and The worlds most
powerful brands (Forbes, 2012).
External Environment Considerations
The external aspects of the Hermes brand provide a framework for decisions made for
building and strengthening the brand community. Brand managers must understand that
brand communities can play a role in altering public awareness of the firms social
commitment. The externalities that derive from the brands activities in the local environment,
with respect to local communities interests and regional economic growth (Campisi,
Mancuso & Nastasi, 1997) have a significant affect on company relational capital. This
capital consists of the quality and quantity of the company relationship has with their
customers and also includes the company image (Biondi et al., 2013).
Competitive aspects
Assessing the competitive aspects of Hermes current economic context relative to major
players in the industry allows insight into its brand position, its competitors, product category,
and market characteristics.
Brand Positioning
Manhas (2010) defines a brand position as the consumers interpretation of the brands
characteristic attributes. Emile-Maurice, the current owner of Hermes, describes the brand as
luxury, sport, leather, and a tradition of refined elegance, thereby portraying to its target
market that is an elitist and sophisticated brand. This places the brand in the high-end luxury
market with competitors such as Bottega Veneta and Louis Vuitton.
Hermes brand image remains as a premium product due to the use of the traditional Hermes
designs and leather materials, as well as their continued traditional processes for bag
productions. This preserves the brands heritage to propagate their premium pricing strategy
to ensure that their consumers perceive they are purchasing an innovative and high quality
product (Li, 2012). As such, these elements of the Hermes brand image offers a strategic
competitive advantage for the brand (Ghodeswar, 2008).
Competitors
Hermes is in a saturated market with strong competitors such as Louis Vuitton, Gucci,
Burberry and Prada, where differentiation is important to gain a strategic advantage to retain
brand equity. In order to do so, perceived uniqueness (Miremadi et al., 2011) is a strategy
used by promoting the Hermes superior customer experience, and reaffirms its value in
heritage, sophistication and exclusivity.
It is for this reason that Hermes customers are interested in the social links that result from
brand affiliations than the affiliations that come from social links. Thus, they join
communities to attain new social connections in a significant way. For instance, Facebook
provides a community that engages these social links. Mark Rosenbaums (2005) research
finds that people who form interpersonal connections are more brand-loyal and engaged in
helpful consumer behaviour to keep that community intact. It must be noted that brand loyalty
occurs as a consequence not a cause and it results from the personal connections through
brand affiliations.
Recommendations
Marketing communication and promotions are components of the marketing mix of
increasing consumer engagement (Posner, 2010). Hermes must foster integrated marketing
campaigns that incorporate digital and traditional channels to form links between customers.
Luxury brands have become increasingly conversational via social media. One such outlet is
Twitter, which allows access to designers through the use of Q&A sessions and retweets.
This medium will offer Hermes the opportunity to speak directly to product owners and
amplify their feedback through replies. Twitter allows their customer base to access the same
people and events to see live updates of these activities and reinforce the exclusivity that the
customers lifestyles are accustomed to. This can also be used as an invite-only platform
during runway shows and allow access to backstage accounts of their products. Conversations
can also be conducted between its designers and existing VIP customers with #HermesTalks
to form open dialogue between customers, and between customers and designers. The brand
should join into social networks such as Instagram that uses media-rich content as a source of
consumer insight and engagement.
Places also serve as a function for community building activities within the brand pool.
Harley-Davidson used its new museum venue to cultivate connections amongst their
members. These members would engage in conversation and make new connections within
the brand pool as a way to incubate community networks. Similarly, Hermes hold VIP events
at a designers workshop to provide knowledge to their customers of its rich, French heritage
whilst providing exclusive access into the designers workshop. This privilege to access the
Hermes workshop impels Hermes customers to reassess their self-impression integration
process that forms part of their self identity.
The Harley-Davidson embedded its point of competitive differentiation in its community
value and ultimately transformed into its operating philosophy and strategic imperative. A
key factor in the success of the Brotherhood brand stemmed from staffing company
employees rather than hired hands at all outreach events. The direct and regular contact
between staff and customers served as strategic importance to Harleys close-to-customer
brand community. Hermes should implement this initiative for gathering insight, feedback
and recommendations via personal selling assistants that also partake in post purchase
services such as handbag maintenance and refurbishment. More engaged, and knowledgeable
staff will be able to provide the brand experience and allow conversation between customer
and the brand. Hermes is also required to implement a follow-up process for customers on the
waiting list for their next limited edition handbag.
Conclusion
In response to the above analysis, Hermes marketers and brand managers are required to
implement and coordinate a repertoire of brand management practices including brand
content, community members, and their engagement within the network, to build brand equity.
This can be reinforced via the use of social networks and must be supported by the
organisations corporate and marketing strategy in order to reap the benefits of a self-thriving
brand community.

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