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To what extent did Tom Ford and his marketing technique imposed at Gucci affect

the turnaround of the company?

Subject: Business and Management

Alexia Kalfopoulos

Candidate Number: 002905-002

Word Count: 3,941

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Abstract This essay reviews the extent of the marketing techniques employed by American fashion designer Tom Ford at the House of Gucci and the causes of the turnaround in the company’s then present and future. This Essay reviews: - the brief history and downfall of Gucci and the background of Tom Ford - the change in product, price, and advertising pre- and post-Tom Ford - the ideas behind Tom Ford’s vision - the financial situation of Gucci pre- and post-Tom Ford

This Essay argues that during a time when the House of Gucci was nearing bankruptcy, the ideas that new designer Tom Ford brought with him were vital and pivotal to the survival of Gucci. It also looks at the changes Ford introduced to the marketing sector of the company including product, price, and advertising. Other additional financial evidence helps determine the extent to which Ford helped the company or if it was the economy that caused Gucci to recover. In terms of methodology, efforts were made to examine the topic through a comparison of the two different era’s Gucci faced; first, when the Gucci family served as head of the empire and second, when Tom Ford took over as the sole head of the empire. Due to the challenges of reaching a man as famous as Tom Ford and availability of living Gucci members, much of the information drawn upon comes from secondary sources. In terms of secondary sources, the majority of my information comes from direct accounts from Tom Ford and the Gucci family through autobiographies, life stories, and documentaries. These were published accounts on the history and downfall of the House of Gucci, the life and ideas of Tom Ford, and the change in marketing style between the two figures. Other various secondary sources aided me to find information not easily available and appear in the Footnotes throughout the essay.

Abstract Word Count: 312

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Acknowledgements

• To Ms. Thomas, who acted as a supervisor upon my behalf for guidance and support

• To Mrs. Williams, who provided deadline support and guidance in the IB diploma

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Table of Contents

Abstract

Acknowledgements

Essay

1. Introduction………………………………………………………………………..5

2. Gucci Background…………………………………………………………………6

3. Tom Ford Background………………………………………………………….....8

4. Gucci Finance …………………………………………………………………….8

5. Place (distribution)……………………………………………………………….10

6. Product……………………………………………………………………………10

7. Price………………………………………………………………………………11

8. Promotion (Advertising) …………………………………………………………12

9. Conclusion………………………………………………………………………..14

Appendix I…………………………………………………………………………..16

Appendix II………………………………………………………………………….17

Appendix III…………………………………………………………………………18

Appendix IV…………………………………………………………………………19

Appendix V………………………………………………………………………….20

Appendix VI…………………………………………………………………………21

Appendix VII………………………………………………………………………...22

Bibliography…………………………………………………………………………23

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Introduction

In the 1990’s the House of Gucci faced economic hardships for the first time since the

company’s start up in 1922. By 2005, the House of Gucci was able to re-establish its

dominance in the luxury goods market. Many believe the turnaround started when a

single man walked through the Gucci doors. His name was Tom Ford.

This essay looks at and considers a number of factors leading up to Tom Ford’s arrival

and subsequent changes to Gucci. These include changes in advertising, price point,

product, as well as the change in financial standing of the company and management.

This Essay will provide evidence to support the argument that the marketing techniques

imposed by Tom Ford were the primary reason for Gucci’s turnaround.

This topic was chosen due to Gucci’s dominance in the luxury market today and my

interest in the fashion industry. In 2009, Forbes Magazine ranked the House of Gucci

third on the list of the 10 Most Powerful Brands with its value estimated at $7.47B

(Sherman. 2009). In the same year, Interbrand, the world’s leading brand consultancy,

named Gucci the biggest selling Italian brand of the year (Interbrand. 2009). Tom Ford’s

impact to Gucci is highly acclaimed to have been one of the most remarkable company

turnarounds in the history of fashion.

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The Start of an Empire: A Brief History of Gucci

Sometimes the most powerful inspirations come from the most unexpected places. In the

late 1890’s for Guccio Gucci, his inspiration came from a lowly job inside the elite Savoy

Hotel in London. Amazed by the lifestyle and luxury of guests, Guccio surmised that the

secret to their wealth must have been in all the piles of baggage they took with them. He

had been so impressed with the beautiful workmanship and leatherwork of their luggage

that when Gucci returned home to Florence, Italy in 1922, he opened up a luggage shop

on via del Parione. Gucci made two commitments: his luggage would be made of the

finest quality and his company would always be family-owned and run.

It only took a couple a years for people to realize the great quality of Guccio’s work. As a

result Guccio started making small and expensive accessories such as belts and wallets

that would begin to develop the Gucci brand image. As part of the Gucci image, Guccio

created the famous “GG” logo, a logo known by many around the world. In 1938, Gucci

opened its second store in Rome (McKnight. 1987). By this time, three of Guccio’s sons,

Aldo, Vasco and Rodolfo, were involved in the family business. Guccio’s eldest and

illegitimate son, Ugo would be expelled out of the family business due to a way of life

Guccio felt partisan about.

On January 2, 1953 Guccio Gucci died peacefully of natural causes (McKnight. 1987).

Despite devastation felt by the family, it was also seen as a chance to expand the

company. Throughout his life Guccio was extremely conservative about how fast his

brand should expand and where stores should open (McKnight. 1987). Guccio never

believed in setting up a shop anywhere else besides Europe. However, when Aldo and his

brothers began expanding the Gucci brand, they set up the first transatlantic Gucci store

in New York City’s 5th Avenue later that year. Something they believed would vitally

help the company. After Guccio’s death, the company gained substantial publicity from

stars and celebrities such as Jackie O, Elizabeth Taylor, Grace Kelly, Peter Sellers, and

Samuel Beckett by increasing the amount of stores in the US. These celebrities grew as

some of Gucci’s most loyal customers. In particular, Jackie O’s loyalty to the brand

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caused the Gucci designers to name a bag after her- the iconic Jackie O bag (McKnight.

1987).

As the Gucci brand started successfully expanding, family tensions also escalated. By the

1960’s Aldo and his three sons, Giorgio, Paolo, and Roberto, were working in the family

business with Rodolfo’s only son, Maurizio. In 1974, Vasco died leaving Gucci under the

control of Aldo and Rodolfo (McKnight. 1987). Heavier tensions between Aldo and

Rodolfo began to arise because of Rodolfo’s jealousy for Aldo’s massive amounts of

power, despite a fifty-fifty agreement they had. In 1983, when Rodolfo died, his half the

company shares went to his son, Maurizio (McKnight. 1987). This caused a bitter rivalry

between Maurizio and Paolo, who felt that Maurizio didn’t deserve such a high share.

During this, current president Aldo was starting to be questioned by authorities for tax

evasion. Aldo was eventually found guilty and faced jail time. Maurizio used this to his

advantage as he began to acquire more than 61% of the company’s shares, he had the

power to take control of the business and move Aldo out of power (McKnight. 1987).

Maurizio was elected the new president by unanimous vote. Once Maurizio took over,

Aldo was left as an honorary chairman of Gucci, Giorgio held the role as Vice President,

and Roberto held the role as Administrative Director. Paolo did not hold a position, but

had with just a smallholding of the company.

In 1989, Maurizio had no choice but to cut costs by closing 600 outlet stores. This

decision cut the company’s sales to roughly $200M in revenue (Fabrikant.1992).

Nevertheless, by the early 1990‘s Gucci was now facing bankruptcy due to poor business

management and reduced brand recognition. One of the most notable weaknesses

Maurizio encountered was the separation between business and personal life. Most

famously in 1988, Maurizio was briefly suspended from his presidency for forging his

father’s signature on share transfers to avoid paying for inheritance taxes and the

company was left to a board of directors (McKnight. 1987). Maurizio’s desire for his own

personal wealth came to him as a greater importance than the company itself. Gucci was

desperate for someone to restore its profitability and brand name to its once previous

strength.

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A Star is Born: Tom Ford

The beginnings of Tom Ford were as unique as the man himself. On August 27, 1961 in

Austin, Texas, two real estate agents welcomed their first and only child into the world,

Thomas Carlyle Ford (Ford. 2002). The Fords moved from Austin to Santa Fe, New

Mexico where he would spend his childhood, a place in which he notably reflects as an

inspiration for him. By his teenage years, after graduating from Santa Fe Prep High

School in 1979, Ford left Santa Fe at 16 years of age, and enrolled in Bard’s College at

Simon’s Rock. He quickly dropped out after one year. Ford then packed up and headed to

New York where he enrolled in New York University, majoring in art history (Tom Ford.

2012). Similarly to Bard’s, Ford stayed only one year before dropping out to pursue an

acting career in TV commercials. Eventually Ford would receive an architecture degree,

although he still studied fashion, at The New School’s Parsons School of Design in New

York (Ford. 2002).

Ford’s first foothold in the fashion world began as a public relations intern for the

designer house Chloe. After graduating, Ford got his first real job at Cindy Hardwick’s

mid-priced Sportswear Company. Two years later, Ford moved to Perry Ellis where he

stayed for another two years. However he decided to move on due to his lack of interest

in working in American fashion. In 1990, he moved to Milan to join Gucci as the

company’s women’s wear designer. By 1994, Ford was appointed the Creative Director

of the House of Gucci (Ford. 2002). Creative Director is responsible for the design of all

product lines from clothing to perfumes, the management of the group’s corporate image,

and the creation of advertising campaigns and store designs. By this time Ford’s growing

role had caused creative tensions between him and Maurizio Gucci to the point where

Gucci wanted to fire Ford. But 1995-appointed CEO Dominico de Sole insisted on

keeping Ford (Ford. 2002). The Tom Ford era had begun.

Another Look at The Financial World of Gucci

In reviewing Gucci’s financial history, it is possible to justify that it was Ford’s

marketing techniques that saved Gucci as opposed to its new financial direction. The

origins of Gucci’s financial downfall started in the 1970’s within the Gucci family. Too

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much fighting within the family kept the Gucci’s preoccupied using money for lawyers

rather than to benefit the company. In addition the Gucci family began involving

themselves in illegal affairs in order to save money. In 1987, during Maurizio’s

presidency, he was given no choice but to sell the company to Investcorp for $140M

(McKnight. 1987). This marked the first time in history that someone other than a Gucci

family member owned Gucci.

When Tom Ford named creative director of Gucci, the company was worth 4.3B dollars

despite bankruptcy (Hughes. 2011). In addition to a new creative director, Gucci also

appointed a new CEO, Domenico de Sole. Together, Ford and de Sole made a number of

acquisitions to regain financial ground. This consisted of strengthening the “Gucci Group

by buying out smaller fashion brands. Gucci acquired other fashion houses to raise its

financial position. That same year, Gucci acquired Yves Saint Laurent, Sanofi Beauty,

and Sergio Rossi. In 2000 it acquired Bouchern and 51% of Alexander McQueen and

Bétat and Co. In 2001, it acquired Bottega Venetta, Balenciaga, and 50% of Stella

McCartney (Ford. 2002) By acquiring more brands, Gucci was able to use their profits to

help drive Gucci out of bankruptcy. However, it still was not enough to improve Gucci’s

financial situation and in order to avoid bankruptcy Gucci created an alliance with PPR

(Pinault-Printemps-Redoute), a multinational holding company in 1999 (PPR. 2012).

Gucci created this alliance in order to stop another, multinational holding company,

LVMH, from taking over Gucci.

Another idea that poses challenges to Tom Ford’s legacy at Gucci is the failing of the

world economy during the time. The period right before Ford came to Gucci, the world

economy had faced a global recession. In 1990, when Gucci was at an all-time low, the

world GDP was at an estimation of $22B (World Bank. 1990). In 1993 when Ford

became creative director of Gucci, the world GDP was estimated to be $25B (World

Bank. 1994). When Ford left Gucci in 2004, the world GDP was at an estimated $44B

(World Bank. 2004). With the growth of the GDP, it can be speculated that growth of

disposable income was a direct consequence. More people were willing to spend the

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money on luxury goods. This could suggest that Ford’s turn around of Gucci was luck of

the economy coming out of a recession, rather than his own hard work and skill.

Place: Rebuilding Relationships and Making New Friends

When Ford entered Gucci, there was more to Gucci’s problem than the product being

sold. Their relationships with producers and suppliers had been badly marred from the

Maurizio era and Ford was determined to fix them. Together he and de Sole rebuilt the

company’s relationships with suppliers that had been damaged due to Gucci’s inability to

pay them. The first decision Ford made was to move the company’s suppliers Tuscany as

the main supplier of their company. (Journal of International Management. 2011). Ford

picked this site because of the high artistic capability and small independent factories as

well as returning Gucci to its home country. In addition, new programs were set up to

provide select supplies with technical and financial support as well as “royal factories” to

increase manufacturing (Journal of International Management. 2011). Gucci now shared

its risks and mistakes with the manufacturing factories as well as flexible manufacturing

capabilities (See Appendix III). As a result seasonal and shorter production of goods were

introduced (See Appendix III). Finally Gucci started buying all of the leather used in its

products, but did 50% of the cutting, so that the quality of the products would stay in

Gucci’s control (Journal of International Management. 2011). As a result Gucci’s

production volume increased by 277% under Ford (Journal of International Management.

2011) to accommodate the increase of sales.

Product: The Gucci Girl

Gucci prided itself on being a company that always utilized classic style. The Gucci

icons, icons that still exist on Gucci’s store shelves today, included the horsebit detail on

bags, the bamboo handled bag, the green-red-green stripe, and the flora scarf, a scarf

introduced originally for Grace Kelly. Maurizio’s Gucci Girl would be seen wearing GG

printed shirts and GG buttoned fur trim coats (See Appendix II). But, although Gucci’s

products were durable and high quality, majority of the selection was still not in touch

with the modern shopper.

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One of Gucci’s biggest struggles throughout history was finding the right time to

introduce change. Tom Ford felt that Gucci’s product were too ‘classic’ and needed to

appeal to a more contemporary woman. In Ford’s mind this meant sexier looking

clothing, “not necessarily [by] thinking she looks sexy this way or not sexy that way…

but… working with the body to make the girl as beautiful as possible” (Foley. 2004).

Ford found inspiration for new Gucci products from celebrities. He thought of the

celebrities of that age and what they wanted to wear. Based on marketing information

Ford created a whole new, more colorful Gucci line, combining with the existing iconic

elements of Gucci. Ford’s philosophy was to take both men’s and women’s clothing,

change the shape, change the cut, and add different color schemes. He believed in mixing

softer materials and silhouettes with tough structured pieces for this effect. Most of all

Ford believed in either a long and lean or a really short and tight look (Nellis. 2012). To

Ford, the new Gucci girl (and even boy) was confident and sexy, which he achieved by

combining hard and soft element such as sheer baby-dolls and leather with zippers

(Foley. 2004). The reception to his clothing was unfathomable and extremely popular.

Soon again everyone wanted to shower himself or herself in Gucci. On December 4,

2003, Gucci’s US store hit an all-time high, selling $4M worth of merchandise in a day

(Ford. 2002). Ford’s visions had been spot on.

Price: The New Customer’s Needs

The Gucci’s had always seen themselves as an elite luxury brand. This meant placing

Gucci on the market equivalent to its competitors: Chanel and Hermes (Appendix I)

(McKnight. 1987). Therefore, Maurizio raised the prices of Gucci goods as soon as he

became president - a costly business error. At the time, customers did not view the Gucci

brand similar to Chanel and Hermes. Buyers did not see Gucci as an elite brand and

began to value its products to a lesser degree. Maurizio, lacking adequate business and

analytical skill, ignored the customer’s complaints and continued to raise prices

(Appendix I). Maurizio also believed that Gucci’s goal should be to focus on a line of

costlier products (McKnight. 1987). Customers did not respond well since they were

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being hurt by a recession, therefore spending was decreased. As a result, Gucci began to

lose many of its customers and started turning over smaller amounts of money each year.

When Tom Ford arrived in Gucci, he did not just bring great creativity, but also business

savvy. Ford not only labeled himself as a commercial designer: a designer that thinks of

his customer’s needs rather than desires, but he also saw himself as a good businessman.

He noted “If one doesn’t inspire people because of your clothes, they don’t buy your

clothes, and if they don’t buy your clothes, you can’t be a good businessman, because

you are not making money” (Foley. 2004). When Ford became creative director he

lowered prices by 30% on average on every item (Foley. 2004). Gucci was being

repositioned on a marketing perception map equivalent to Prada and Louis Vuitton

(Appendix IV). Lowering the price not only broadened the customer base, but it also

represented good value to customers. As a result Gucci’s profits rose by 90% within a

year of Ford’s launch of the new collection with sales totaling $500M in 1995. In 1996,

group sales reached $880M. Growth rates of leather goods were up 116%, shoes were up

128%, clothes were up 46%, and scarfs and ties were up 51% (Krebs. 2003). Finally Ford

placed Gucci products at the proper price point that was appropriate to its quality and

current customer perception. They should not have been competing with the luxurious

skins, embellishments, and embroidery as in Chanel and Hermes, when the products they

offered didn’t contain the same kind of flare.

Advertising: The New Contemporary

Advertising strategies had never come easy to the Gucci family. Ads featured models

dressed in Gucci clothing posed in elegant locations, focusing too much of the

surroundings and too little on the actual product (Appendix II). Under Maurizio, Gucci

promoted its product to shoppers between the ages of 16 and 60 (Fabrikant.1992). With a

larger frame of people to appeal to, Gucci would also need to market their product in

more places such as magazines and billboard ads. This large range of shoppers was not

realistic to Gucci’s advertising budget. In 1990, Gucci only had $10M budget to spend on

international marketing and advertising (Fabrikant.1992). In 1993, the advertising budget

had decreased to $6M (Fabrikant.1992). With this relatively little budget, it could not

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complete with larger rival like Louis Vuitton, who spent an estimated $30M on

worldwide advertising (Fabrikant.1992).

As a commercial designer, Tom Ford knew how to display his ideas. If there was one

image Ford knew best, it was sex appeal. To Ford, Gucci was the “beacon of sleek, sexy,

modern design” (Carroll. Hurley. Treacy). Much of Ford’s advertising at Gucci was

characterized as sexy, risqué advertisements that caused much controversy (Appendix

III). UK Vogue once noted “from his velvet and satin touches at Gucci- accentuated by

the steamy photography of Mario Testino for his ad campaigns… both nudity and

sexuality seep from his presence” (Craven. 2011). With the increased budget in

advertising, he began using a controversial advertising campaign to gain media coverage

for the campaigns and boost awareness. In one instance, in order to promote a new

perfume ‘Opium’, Ford had nude images taken of model Sophie Dahl. This caused much

controversy in Britain and was banned by the advertising standards (Nguyen). However,

it also won many advertising awards though-out Europe, praising Gucci and Ford

(Nguyen), which resulted in increased sales. Ford also used fashion shows to promote his

new designs. Runways shows are very useful in providing exposure to a certain designer

and making certain style familiar to consumer without having to look in the store first.

(Franco. 2012) If a designer puts on a successful and memorable show, then consumers

were more likely to buy from that designer.

By creating a sexy image, Ford ensured that Gucci made itself distinctive with a feeling

of exclusiveness among its target audience. Ford created a new Gucci audience of

“women in their 20’s and 30’s, with high quality, fashionable products... who aspire to be

part of the jet set life” (Appendix IV) (Carroll. Hurley. Treacy). The idea was attractive

and desirable. Ford wanted the Gucci customer to desire and be attracted to this lifestyle,

whether they were already a part of it or aspiring to be a part of it.

Ford also believed the store itself was part of the advertising mix. He believed that they

“helped the world of Gucci stand for something” (Carroll. Hurley. Treacy) and by going

into a Gucci store, the customer should leave with an experience, thereby adding more

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meaning and value to the actual product. Stores were created only on expensive streets,

attracting wealthy customers (Appendix IV). Window displays were more provocative

and the interior was made free flowing so that the customer did not feel congested in the

store. Even the salespeople began to serve as models for the company being smartly

dressed in black and ready to assist customers.

By increasing the budget, focusing on specific demographics, using a different, more

controversial sexy and vibrant image advertising campaign and modifying its stores, he

successfully increased Gucci sales and become a formidable luxury player in the

industry.

Conclusion To One Man’s Legacy

Never has anything been done in the fashion world like what Tom Ford did to Gucci. He

not only changed Gucci forever, but also left a mark on the entire fashion world. In 2004,

Ford took his final bow on the Gucci runway with his fall-winter 2004-2005 collection.

On April 30, 2004, Ford and de Sole were officially separated from Gucci due to

disagreements. When Ford left, Alessandra Facchinetti was promoted to creative director,

but was unable to create the excitement Ford had previously done. Succeeding her two

years later would be current creative director Frida Giannini. Although Giannini has been

able to produce successful collections, Ford’s sexiness would still be an aspect that many

women associate Gucci with. One of Ford’s implementations still in existence, is his

price point. The prices Ford implemented when he first became creative director of

Gucci, still stand as the prices the company works off of. Today Gucci still competes to

be one of the best brands in luxury sportswear against those of Prada, Louis Vuitton, and

recently Burberry. Another one of Ford’s implementations that has continued is the

location of its stores and their advertising campaigns.

In 2009, Forbes ranked Gucci third in their annual Top 10 Most Powerful Brands list with

a value of $7.47B (Sherman. 2009). Currently Gucci is the biggest Italian selling brand

with 278 directly operated stores worldwide and revenues of $5.3B (Gucci. 2012). Last

year in 2011, Interbrand named Gucci the 39th most powerful brand with a value of

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8,763 - it’s highest to date (Interbrand. 2011). Ford’s legacy does not end with Gucci.

Ford pioneered the ‘return of the sexy model’. In a time that ‘heroin chic’ characterized

the fashion world and sexual glamour was masked by the epidemic of AIDS, Ford

brought back a period of debauchery. The career’s of supermodels such as worlds-

richest-supermodel, Gisele Bundchen, would have never happened if it wasn’t for this

movement. Ford did not only change the trends of Gucci, but also for the rest of the

fashion world. Designers today look at his creations for inspiration for their own

collections. High quality department stores such as Neiman Marcus and Saks Fifth

Avenue benefit off of Ford’s vision because he focused on commercialism (Patner.

2004).

In conclusion, the marketing techniques imposed by Tom Ford at Gucci immensely

affected the turnaround of the company’s future. Whether it was his product change,

price change, or controversial advertising, Ford successfully changed Gucci, improving

its sales and right-sizing its cost, which was vital for its survival. Although it may be

argued that all Gucci needed was new management to thrive, Ford’s legacy within the

fashion world proves that he was more than a designer trying to turn around a failing

company. He was considered the leader of a major fashion revolution. Finally Ford once

told Time magazine that, “People are buying into your dream… To create that world

sucks the soul and personality out of the designer. The Gucci stores look like my house.

My sofas are in all the Gucci stores all over the world” (Craven. 2011). This statement

shows the heart and soul that Tom Ford put in to rebuild the company to not make

products that he would personally wear himself, but to show that he wanted to make

Gucci part of everyone else’s household too. With having done so much, it is almost

impossible to think what Gucci and the rest of the fashion world look be like if Tom Ford

had indeed been fired.

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Appendix I: Ansoff’s matrix Gucci under Maurizio Market Penetration: • Gucci’s markets were reducing because

customers started to perceive their products as “old fashioned”

• Poor advertising did not help Gucci increase its customer base

Product Development: • Gucci was suffering over resilience on

product and did not keep up with the changing behaviors of the consumer.

• Gucci did not design new products at a lower price point.

• The classic Gucci look consisted of Gucci printed apparel only and did not experiment with many types of fabrics.

Market Development: • Advertising budget was low compared to

competitors to adequately penetrate

Diversification: • Gucci had built itself on ‘classic’ styles • Gucci had a hard time reaching the

contemporary customer. • Any new products Gucci was making had

astronomical prices that many couldn’t afford.

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Appendix II: SWOT Analysis of Gucci under Maurizio Gucci Strengths:

- Excellent brand name - Customer loyalty - Family company - Well-trained management

Weaknesses: - Out of date advertising methods - Declining profit margins - Quantity control problems - Price control problems - Internal conflicts - Not expanding into new markets - Relationship with producers/suppliers - Did not focus on clothes in

advertisements - Poor management

Opportunities: - New management brings in changes - Although its brand name slightly

declined, they could still capitalizing on existing brand name

-­‐ Untapped markets  

Threats: - Competition - Customer satisfaction declining - Recession

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Appendix III: SWOT Analysis of Gucci under Tom Ford Strengths:

- New relationships with producers and suppliers

- Shared risks with its manufacturing companies

- More flexible manufacturing capabilities

- New contemporary image - Strong product portfolio - Controversial ads gave Gucci

publicly - Create a new ‘Gucci’ image

Weaknesses: - Gucci customers were losing interest

in the company they did not feel Gucci was worth it’s price

- Gucci was in bankruptcy at that time

Opportunities: - With an expanding budget, Ford

could experiment on different types of fabrics and styles and still have financial assurance if a collection was not well received.

- With lower price points, had the opportunities to branch to a lower luxury market and attract the middle class.

Threats: - New competition - Public reaction to controversial ads - Tom Ford coming off too strong

towards the public

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Appendix IV: Ansoff’s matrix Gucci post Ford Market Penetration: • Ford used the trendy jet set lifestyle to

attract customers to the brand in the luxury market.

• He wanted to expand the luxury market so that middle class customers would feel the need to buy Gucci in order to make the customer feel like he or she was part of the luxury lifestyle

Product Development: • New products with more colorful Gucci

line • Changed the shape and cut for both

men’s and women’s clothing • Began mixing softer materials and

silhouettes • He made all new products that contained

sex appeal, however remained a classic look it was known for.

Market Development: • Ford was able to build customer a new

customer brand that included celebrities. • Ford made buying Gucci clothes an

experience rather than a job.

Diversification: • Gucci Group acquired Yves Saint

Laurent, Alexander McQueen, Stella McCartney, and many others.

 

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Appendix V: Image of Tom Ford

(taken from http://www.tomford.com/#/en/thebrand/tomford)

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Appendix VI: Gucci Equity Holdings

Italy (Guccio

Gucci S.p.A)

U.S.A (Gucci

Shops, Inc)

London (Gucci

Ltd.)

Aldo (Honorary

chairman)

Lifetime use of

voting rights,

dividends, and

benefits, of 40%

His company

Vanguard Ltd

controls, 16.7%

Via Vanguard, 40%

Maurizio

(Suspended

president)

Via his Gucci

Finanziaria

company, 50%

Via his Anglo-

American

Manufacturing

Researches Ltd.

Company, 50%

Via Anglo-

American, 45%

Giorgio (Vice

president)

From Aldo 20%,

Via his company

Gika Ltd., 3.3%

Via Gika, 11% Via Gika, 3.3%

Roberto

(Administrative

director)

From Aldo 20%,

Via his company

Anfars Ltd., 3.3%

Via Anfers, 11% Via Anfers, 11%

Paolo Via his company

Retailing

Wholesalers

Promotions Ltd.,

3.3%

Via retailing, 11% Via retailing, 3.3%

(taken from: McKnight, Gerald. Gucci: A House Divided. New York: D.I. Fine, 1987. Print.)

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Appendix VII: The Gucci Empire

Gucci Companies- dates of Incorporation

Guccio Gucci 1923

(became 1. Societa Anomia Guccio Gucci 1939

2. Guccio Gucci srl. 1945

3. Guccio Gucci spa. 1982)

Gucci Shops, Inc. (U.S.) 1953

Gucci Ltd. (U.K) 1961

Gucci et cie (France) 1963

Gucci Boutique 1963

Gucci (Hong Kong) Ltd. 1974

Gucci Parfums (Italy) 1975

(became Gucci Parfums spa. 1982)

Gucci Stores- opening dates

Florence 1923

Rome 1938

Milan 1951

New York 1953

London 1961

Paris 1963

Palm Beach N/A

Bal Harbour N/A

Beverly Hills N/A

Chicago N/A

Hong Kong 1975

(Buy out of six I. Magnin Gucci Boutiques in U.S.) 1985 (taken from: McKnight, Gerald. Gucci: A House Divided. New York: D.I. Fine, 1987. Print.)

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References “Best Global Brands 2009” Interbrand. 2009. Web. 18 June 2012 http://www.interbrand.com/en/best-global-brands/previous-years/best-global-brands-2009.aspx “Best Global Brands 2011” Interbrand. 2011. Web. 18 June 2012 http://www.interbrand.com/en/best-global-brands/previous-years/best-global-brands-2011.aspx Carroll, Conor, Kate Hurley, and Ann Treacy. Gucci, Louis Vuitton, & Vertu – Marketing Lessons from Some of the World’s Most Exclusive Brands. Rep. University of Limerick, n.d. Web. Craven, Jo. "Tom Ford." Vogue UK. Vogue UK, 11 May 2011. Web. 15 Oct. 2012. http://www.vogue.co.uk/spy/biographies/tom-ford-biography Fabrikant, Geraldine. "THE MEDIA BUSINESS: ADVERTISING; Gucci's Current Campaign: Recovering Its Elite Image." The New York Times. The New York Times, 15 June 1992. Web. 19 Aug. 2012. http://www.nytimes.com/1992/06/15/business/media-business-advertising-gucci-s-current-campaign-recovering-its-elite-image.html Foley, Bridget. "Interview." Tom Ford. New York: Rizzoli International Publications, 2004. 19-33. Print. Ford, Tom. "Biography." Tom Ford. New York: Rizzoli International Publications, 2002. 404-05. Print. May 15, 2012 Franco. "Importance of Fashion Show's Catwalk - GownsExpress." GownsExpress Importance of Fashion Shows Catwalk Comments. N.p., 19 Aug. 2012. Web. 11 Oct. 2012. http://www.gownsexpress.com/blog/importance-of-fashion-shows-catwalk.html "Gucci." History of Gucci. Gucci, 2012. Web. 19 June 2012. http://www.gucci.com/us/worldofgucci/mosaic/the_house_of_gucci/gucci_history Hughes, Carole. "Gucci: The Key Facts About This Fashion Brand." Suite101.com. 24 Jan. 2011. Web. 15 May 2012. http://suite101.com/article/gucci--the-key-facts-about-this-fashion-brand-a337306 Krebs, Josh. “Gucci: The Past and the Present.” 25 Nov. 2003. Print. McKnight, Gerald. Gucci: A House Divided. New York: D.I. Fine, 1987. Print. Nellis, Cynthia. "Tom Ford." About.com Women's Fashion. N.p., 2012. Web. 15 Oct. 2012.

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http://fashion.about.com/cs/designerprofiles/a/tomford.htm News, Bloomberg Business. "INTERNATIONAL BRIEFS; Investcorp Planning to Sell Its Remaining Stake in Gucci." The New York Times. The New York Times, 13 Mar. 1996. Web. 11 Nov. 2012. http://www.nytimes.com/1996/03/13/business/international-briefs-investcorp-planning-to-sell-its-remaining-stake-in-gucci.html Nguyen, Vi. Analysis of the Luxury Goods & Apparel and Footwear Industries. Rep. Dr. Stephen Brokaw, n.d. 30. Oct. 2012. Web. Patner, Josh. "Why Tom Ford's Departure Is Good for Fashion." Stale.com. N.p., 15 Mar. 2004. Web. 16 Oct. 2012. "PPR Group History." PPR.COM. N.p., n.d. Web. 31 June 2012. http://www.ppr.com/en/group/history Sherman, Lauren. "In Depth: World's Most Powerful Luxury Brands." Forbes. Forbes Magazine, 1 May 2009. Web. 16 May 2012   http://www.forbes.com/2009/05/01/powerful-­‐luxury-­‐brands-­‐lifestyle-­‐style-­‐luxury-­‐brands_slide_9.html?thisSpeed=undefined    "Tom Ford." Tom Ford. Tom Ford, n.d. Web. 29 July 2012. http://www.tomford.com/#/en/thebrand/tomford "World GDP 1990." The World Bank. The World Bank, n.d. Web. 29 July 2012. http://search.worldbank.org/data?qterm=world+gdp+1990&language=EN&format= "World GDP 1994." The World Bank. The World Bank, n.d. Web. 29 July 2012. http://search.worldbank.org/data?qterm=world+gdp+1994&language=EN&format= "World GDP 2004." The World Bank. The World Bank, n.d. Web. 29 July 2012. http://search.worldbank.org/data?qterm=world+gdp+2004&language=EN&format= "Journal of International Management." Journal of International Management. N.p., 11 May 2011. Web. 29 June 2012. http://journalofinternationalmanagement.wordpress.com/2011/05/15/star-designer-strategy-rebuilding-gucci-with-tom-ford/