Building a legacy: Chanel's Luxury Marketing Strategy (2022)

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No matter where you are in the world, if you’re reading this article, you’ve probably heard of Chanel. There are strategies at play to ensure it, after all.

Fun fact: In the 50s, Megastar Marilyn Monroe was asked what she wore to bed and she replied, “Chanel No. 5”.

Funnily enough, when I received my first paycheck, I bought a small bottle of Chanel. Having only seen its films before, in my head, Chanel represented freedom. Now, that’s really something as far as marketing goes.

In many ways, Chanel defined the parameters of luxury today, starting with early adoption, taste-making, and innovations. It is no surprise that even after 100 years of its invention, Chanel No. 5 is the world’s most popular perfume. Chanel is still one of the most successful standalone brands, raking in a revenue of €10 billion in 2019 and armed with the largest social media presence for any luxury brand.

But first, a little history. Most women consider black to be the safe color for chic. They have Chanel to thank for it.

Despite humble beginnings as an underprivileged orphan with no formal schooling whatsoever, Coco Chanel built aristocratic connections while working odd jobs and founded the legendary fashion house in 1910 in Paris. The Maison, or rather Coco herself is known for being a pioneer. Many of today’s definitions of good taste date back to the house.

Chanel is credited with product innovations that deeply affect modern life and fashion to this day:

  • Popularizing wearing black for occasions other than funerals – Before Chanel incorporated it into her hat and apparel designs, black was reserved for servants and funerals. It is speculated that she was inspired by the nuns’ attire from her orphanage.
  • Removing the corset from western women’s attire – Just a hundred years ago, women would suffocate themselves to cinch their waists. Although couturier Jean Patou first made a dress without corsets, Chanel popularized it. For this reason, in fashion, it’s often stated that ‘Chanel liberated women.’
  • Invention of the Little Black Dress – Wearing a fitting black dress might be a go-to for all western-clothing-clad women today. But it was Coco who invented it, removing uncomfortable frills, corsets, and laces from women’s clothing.
  • Using jersey fabric for comfortable clothes – Often considered her single biggest innovation, Chanel brought jersey fabric from men’s athletic wear to modern high fashion.
  • Invention of the hands-free bag – Coco invented the hand-free sling bag to further free women from the hassles of being tied down physically. The iconic 2.55 bag was the first of its kind to allow women to go about their day without worrying about holding their bags.
Building a legacy: Chanel's Luxury Marketing Strategy (1)

Now that we’ve broken down what products established the brand in the 20th century let’s see strategies behind the brand’s continued success. Balenciaga, also a brand from that era, turned to memes and streetwear to survive. However, Chanel has continued to innovate, incorporating newer styles while keeping its sleek, elegant identity intact.

Today, Chanel has a diverse portfolio of haute couture, ready-to-wear womenswear,accessories, watches, cosmetics, and perfumes.

Balanced exposure and scarcity marketing strategy of Chanel

Much like Chanel, Pierre Cardin was a legendary couturier, known for high fashion. However, fast overexposure and expansion to unrelated categories such as stationery diluted his brand quickly. This resulted in reducing his brand equity from luxury to premium permanently.Chanel on the other hand, went to great lengths to ensure exclusivity.

When back in 1974, Chanel No. 5 was not selling well, CEO Alain Wertheimer reduced its retailing from 18,000 to 12,000 stores in the US and heavily invested in advertising for the products. Scarcity marketing protects brand exposure by instigating the fear of losing choice in the customer. The brand has since made this strategy integral to its business across products and advertising.

(Video) Digital Marketing For Luxury Brands

We introduce a new fragrance every 10 years, not every three minutes like many competitors. We don’t confuse the consumer. With Chanel, people know what to expect. And they keep coming back to us, at all ages, as they enter and leave the market.

Jean Hoehn, Chanel Marketer, 1980s

Values-based marketing strategy of Chanelthrough content

The house boasts a whopping 43.6 million followers on Instagram (the highest for any luxury brand). On YouTube, which it primarily uses to connect with customers, it has 1.79 million followers. The main storyline reinforced throughout the brand’s marketing is that of a liberated young woman, in line with its history.

In addition to building trust, Chanel’s content is never about hard selling its products, but always about the stories. Among its competitors, Dior, Hermes and Louis Vuitton, Chanel probably has the most engaging content, with innovative video shorts featuring the likes of Pharrell Williams and Keira Knightley.

One of its ongoing projects is, ‘Inside Chanel’, about the life of Coco Chanel and her world – everything from her beginnings to the colours she loved to her musical influences.

Another wonderful example is the ‘The Tale of a Fairy’ short film, in which there is no mention of products. But instead, a story is told about three affluent but unhappy sisters during a family reunion. It is set against the beautiful backdrop of a mansion in the south of France, with the best Chanel costumes, of course.

Marketing the most for its stars – the BCG Matrix

Chanel clearly recognizes its ‘stars’ as its perfume and watch divisions. Therefore, it invests the most in advertising for these in fashion magazines such as Vogue and Elle which cater to its target audience.

Invented by Boston Consulting Group, the growth share matrix is used to make decisions in companies that have a diverse offering of products. Lines are divided into stars, cash cows, question marks and dogs, based on relative market shares and growth rates.

Building a legacy: Chanel's Luxury Marketing Strategy (2)

Innovation in technology for its more ‘mass’ products

It is a well-known fact that the money makers of luxury are always cosmetics and perfumes. Pay attention the next time you come across a luxury brand ad. Whether in magazines, on YouTube, billboards, or Google Display ads, it’s most likely advertising perfume.

Building a legacy brand for a century, and enforcing its values through content ensures a consistent stream of revenue from young earners. After all, you may not be able to afford a Chanel suit at $5000, but the $27 lipstick is well within reach.

In addition to placing its cosmetics in accessible department stores frequented by young buyers, Chanel recently launched a free virtual lipscanner app. The app lets you choose a colour from your surrounding, find a match from the Chanel catalogue and try it on virtually. This step is one of many taken by the brand to engage its newly independent Gen Z customer base.

(Video) History and Success of Chanel [How did Chanel become Chanel?]

Building a legacy: Chanel's Luxury Marketing Strategy (3)

The legacy continues

Despite being 100 years old, Chanel manages to keep cementing its positioning as elegant and modern. Its logo’s crossing C’s are instantly recognizable. Its choice of celebrities continues to embody classic style with a unique personality; counting Penelope Cruz and Margot Robbie among its brand ambassadors.

Its runway shows are a spectacle at the Grand Palais in Paris, with sets ranging from a giant supermarket to sandy beaches. Chanel’s brand stays true to its French roots. Most of all, it continues to inspire women through style, just as Coco herself did in her lifetime. Remarkably, it has succeeded in achieving synergy between the old and the new with its marketing.

Fashion changes, but style endures

Coco Chanel

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FAQs

How do Chanel promote their products? ›

Chanel distributes its products through many channels, such as exclusive stores, e-commerce websites, multi-brand stores and high-end supermarkets, so that the products are sold worldwide.

What is a Chanel strategy? ›

A channel strategy is a vendor's plan for moving a product or a service through the chain of commerce to the end customer.

What is the marketing strategy of luxury brands? ›

A luxury brand marketing strategy aims to create the highest brand value and pricing power by leveraging multiple brand elements, such as heritage, country of origin, craftsmanship, scarcity, and prestigious clients.

What type of promotion does Chanel use? ›

For promotions, it usually places ads for its products in high-end fashion magazines like Marie Claire, Harper's Bazaar, Vogue, Elle etc. Chanel also does point of sale marketing by employing classy store layouts and creative use of mannequins to lure the customers into their boutiques.

What is Chanel competitive advantage? ›

Even though the market of luxury goods is characterised by homogeneity, which imposes difficulties on product differentiation, Chanel has a definite competitive advantage in strong customer base, well-established brand identity and unique brand positioning.

Why is the Chanel brand successful? ›

One of the reasons why Chanel remains so popular with fashionable young women is the simple designs they arrive at for every category of product they have, such as the cute earrings which are constantly sold out, and Chanel handbags which often adorn the arms of movie stars.

How can I improve my channel strategy? ›

There are three high-level ways to increase channel efficiency: Increasing or carefully picking the channel intermediaries. Increasing the focus on supply chain management. Consolidating all channels into a single, strong channel.

What are the 4 Ps of the channel strategy? ›

The four Ps are a “marketing mix” comprised of four key elements—product, price, place, and promotion—used when marketing a product or service. Typically, businesses consider the four Ps when creating marketing plans and strategies to effectively market to their target audience.

What is Chanel brand positioning? ›

Chanel's brand strategy revolves around the highest quality, luxury, French origin and heritage dating back to 1909 – themes which also constitute the DNA of another French luxury fashion brand, Dior. Both brands are widely believed to have reinvented fashion and both focus on “feminine elegance”.

What is Chanel's mission statement? ›

The Chanel mission statement aims to maintain the legacy of the Chanel brand while successfully moving it into the future: "To be the Ultimate House of Luxury, defining style and creating desire, now and forever."

What is Chanel's brand identity? ›

This is a design made by herself with an overlap of two letters C on their backs that are intertwined. They say that its meaning is easy to understand, but it can have several. It´s her initials, how Coco Chanel was linked to the simplicity and sophistication, but also the strength of her brand.

What makes a luxury brand successful? ›

The ten luxury brand values as defined by Danziger are superior performance, craftsmanship, exclusivity, innovation, sense of place & time, sophistication & design aesthetic, creative expression, relevance, heritage, and responsibility.

How do luxury brands engage their customers? ›

EXCLUSIVITY. One of the key components to successful luxury brand strategy is creating desire via exclusivity. Exclusivity can be accomplished in several ways such as developing limited edition products, making select products only available at certain stores, or developing a waiting list for a newly released item.

Is Chanel the best luxury brand? ›

Chanel is the third most popular luxury brand online in 2022. Luxury French fashion house Chanel drops one position on our list of the most popular luxury brands online in 2022, landing in third place.

What according to you are the critical factors contributing to the success of Chanel's products? ›

Never give up:last but not least, the key factor of Chanel's product is that Chanelnever gives up even during the World War II. She had shut down her businessduring those days, but she still has confidence and faith in her.

How does Chanel use social media? ›

Social Media unites their long-time and new patrons with the brand essence. They keep their private energy by only following only their beauty account, Chanel Beauty. They do not comment or engage in posts. The sensibility of the brand is intact even on social media, a widely public platform by nature.

What makes Chanel brand unique? ›

Her items are meant to last and meant to be worn through many decades. For this reason, Chanel's products are made with the highest quality materials and by the best craftsmen in the industry based Europe only.

How is Chanel a luxury brand? ›

Chanel (/ʃəˈnɛl/ shə-NEL, French: [ʃanɛl] ( listen)) is a French luxury fashion house founded in 1910 by Coco Chanel in Paris. Chanel specializes in women's ready-to-wear, luxury goods, and accessories and licenses its name and branding to Luxottica for eyewear.

Is Chanel a market leader? ›

From its humble beginnings, set in an early 20th Century Parisian street, the House of Chanel has evolved into one of the world's leading luxury brands. Born Gabrielle Bonheur Chanel and orphaned at an early […]

What is the IT channel strategy and why is it important in it? ›

What is a channel strategy? A channel strategy refers to a vendor's plan to move a product or service through a chain of commerce to the end customer. Channels serve two primary functions. The first is to sell a product or service to a customer, and the second is to deliver a customer experience.

What is marketing channel in marketing strategy and how is it determined? ›

A marketing channel is an online or offline, free or paid medium or platform that helps businesses connect with their target audience. Ultimately, a marketing channel's goal is to help a business get its offering (products/services) in front of its ideal buyers to sell to them.

What is channel strategy in advertising? ›

A marketing channel strategy is a plan for how a company will reach its customers through various marketing channels. This strategy includes selecting which channels to use, allocating resources to each channel, and setting goals.

Which of the following is a step in designing an effective marketing channel? ›

A channel design starts with analysing the market requirements. Basis the customer, product category, and marketing environment, the organisation has to follow the matching channel strategy – Exclusive distribution, Intensive distribution and Selective distribution.

Why is it necessary to consider the marketing strategies in the distribution process? ›

It helps in fixing the right price for organization's goods and services based on information collected by market research. Strategy ensures effective departmental co-ordination. It helps an organization to make optimum utilization of its resources so as to provide a sales message to it's target market.

Why distribution is important in the marketing? ›

Distribution management leads to decreased shipping charges and faster delivery to customers, and it also makes things easier for buyers as it enables “one stop shopping” and other conveniences and rewards, such as customer loyalty rewards programs.

What is a good marketing strategy? ›

What makes a good marketing strategy? Knowing your target customer, taking an integrated approach to your campaigns, knowing and communicating your USP, focusing on your customer's problems and above all, committing.

What is a marketing strategy example? ›

Marketing strategies

For example, if your marketing plan is to promote a new product or service, you might have a strategy dedicated to how you're going to use email marketing to support these broader goals. Every marketing plan will most likely produce several marketing strategies as part of the broader plan.

What is the most important P in marketing mix? ›

Price: The Most Important P in the Marketing Mix.

What is Chanel marketing? ›

Chanel utilizes a mix of demographic and psychographic segmentation to make its products available to the Chanel target market. The company uses a selective targeting strategy to promote its products by focusing on a select customer group.

How does Chanel use social media? ›

Social Media unites their long-time and new patrons with the brand essence. They keep their private energy by only following only their beauty account, Chanel Beauty. They do not comment or engage in posts. The sensibility of the brand is intact even on social media, a widely public platform by nature.

What is a channel marketing program? ›

Channel marketing is the practice of working with a third party to take your products or services to market. It's a faster and more effective method than more traditional growth models, and it can be productive for businesses—large and small—across multiple industries.

What is Chanel's slogan? ›

Let's begin with Chanel's slogan, “To be irreplaceable, one must be different.” It's no wonder that even half a century after the passing of the founder of the House of Chanel, this powerhouse keeps getting better and better. Chanel is a timeless brand for its commitment to producing “one of a kind” fashion pieces.

Is Chanel the best luxury brand? ›

Chanel is the third most popular luxury brand online in 2022. Luxury French fashion house Chanel drops one position on our list of the most popular luxury brands online in 2022, landing in third place.

What is Chanel brand message? ›

Chanel's brand strategy revolves around the highest quality, luxury, French origin and heritage dating back to 1909 – themes which also constitute the DNA of another French luxury fashion brand, Dior.

Who is the target market for Chanel perfume? ›

Since 2002, with the launch of Chance perfume, Chanel is targeting women between the ages 18-39.

How is Chanel a luxury brand? ›

Chanel (/ʃəˈnɛl/ shə-NEL, French: [ʃanɛl] ( listen)) is a French luxury fashion house founded in 1910 by Coco Chanel in Paris. Chanel specializes in women's ready-to-wear, luxury goods, and accessories and licenses its name and branding to Luxottica for eyewear.

How do you become a luxury brand influencer? ›

Give genuine recommendations, tips, and pieces of advice about the destinations you visited. Engage or collaborate with other luxury travel influencers on their social media accounts or websites. Post at least one article per week with 400 to 700 words. Take your own photos as much as possible.

Do luxury brands work with influencers? ›

Benefits of influencer marketing for luxury brands. All luxury brands can benefit from working with influencers. Luxury lifestyle influencers, when they align with your brand aesthetic and understand your voice, can inspire their followers to dream and buy big.

What are the 3 keys to success for multichannel marketing? ›

Jackie Brown
  • #1 Be Consistent. Your campaign needs to look, sound, and act the same across all of your different marketing and advertising channels. ...
  • #2 Be Flexible. Can a campaign be both consistent AND flexible? ...
  • #3 Target the Right Audience in the Right Channel.
20 Feb 2019

How can I improve my channel strategy? ›

There are three high-level ways to increase channel efficiency: Increasing or carefully picking the channel intermediaries. Increasing the focus on supply chain management. Consolidating all channels into a single, strong channel.

How do you develop a channel strategy? ›

Six Keys to an Effective Channel Strategy
  1. 1 - Have a plan. ...
  2. 2 - Recruit the right partners - and impress them. ...
  3. 3 - Simplify the on-boarding process. ...
  4. 4 - Provide the right sales and marketing material. ...
  5. 5 - Start priming your sales lead pipeline. ...
  6. 6 - Measure and report progress. ...
  7. Early Standardization Makes For Smooth Growth.
6 Jul 2016

What is Coco Chanel's most famous quote? ›

Coco Chanel's quips encapsulated love, fashion, beauty and wealth, and remain as meaningful today as they did a century ago. We take a look at her most famous, enduring words of wisdom... "Fashion fades, only style remains."

What does Chanel logo represent? ›

Simplicity is the keynote of all true elegance.” The Chanel logo was designed by Coco Chanel in 1925. It's composed of two bold interlaced “C”s that mirror each other. The simple, strong shapes of the letters evoke the authoritative elegance of simplicity based on Coco's philosophy of “less is more.”

What is Chanel best known for? ›

What is Coco Chanel known for? Coco Chanel was a fashion designer known for such now-classic innovations as the woman's suit, the quilted purse, costume jewelry, and the “little black dress.” She also introduced the phenomenally successful perfume Chanel No. 5.

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