Hermes is an international fashion brand, was established in the year 1937. It is also called Hermes of Paris as the originating country is France; and the headquarters of Hermes is in Paris, France. It is a luxury goods manufacturer.
Hermes isn’t a brand for the mass market, rather it has a very specific target market; it provides high-fashion clothing and accessories.
Brief History of Hermes
Thierry Hermes established a Hermes in a workshop introducing horse saddle in the year 1937. The son of Hermes, Charles-Émile Hermès, took over the business from Thierry. Later, he moved the shop to 24 Rue-du-Faubourg in the year 1880. The business place still exists here today. In the year 1900, Hermes introduced a large bag which was purposed to carry saddles. For the first time, it introduced leather handbag in the year 1922. One of the major divisions, perfume, was introduced in the year 1950. One of its most popular handbag brands, the Birkin Bag, was introduced in the year 1984, named after British actress Jane Birkin.
It is a high fashion luxury brand. It has specific niche market where the company provides expensive products to the upper-class people in the society.
Marketing Mix of Hermes or 4 Ps
The marketing mix will explore the four points such as the product, price, place, and promotion strategy of Hermes. These can be called the Hermes 4Ps Analysis too.
Hermes Product Strategy – a large product portfolio
For any company, the product line is very important. Companies organize their product line according to their capabilities and marketing strategies. Some companies have a small product line and some have large product line. A large product line helps a company to diversify its product portfolio and increase sales. Hermes has a diversified portfolio of products which allow them to have a balanced sales among the high class.
Hermes has 19 types of products in its product lines.
Those include Handbags, Scarves, Ties, Men’s wear, Women’s fashion, Perfume, Watches, Stationery, Footwear, Gloves, Enamel, Decorative arts, Tableware, Jewelry, Saddle, Belts, Scarves, Hats, and Furniture.
The product of Hermes is a world-recognized luxurious fashion brand. The product strategy is they only provide goods for upper-class people in the world. That is their target market. Hermes provide high-quality products to their niche markets. It has been maintaining its unique standard from the inception of the company.
The two most famous leather handbags of Hermes are Kelly Handbags and Birkin Handbags.
Hermes Price Strategy – Expensive & Lucrative
Every company has its product pricing strategies. Some company follow the market supply and demand strategy and some set the price according to the brand value. The product price of Hermes follows the brand value and high quality.
The product price of Hermes is very high. It has created an inaccessible value. In other words, everyone cannot own these products.
It is not accessible to the general public and it is exclusively made for a target group of people. The prices of the products are perceived.
To set the value of the product, Hermes applies the limited edition product strategy. They offer a limited number of product editions for their market. By this, they establish a sense of exclusivity.
The price of leather handbags ranges from US$7,550 to US$150,000. Hermes products are never offered on discounts, so the price always remains the same. The price strategy they use is a psychological pricing strategy. Also, they use geographical pricing strategy which means you can purchase the same product from different places at different prices.
Hermes Place or Distribution Strategy – Only Hermes Shops
Hermes has a worldwide distribution channel. It has fully functional markets in France, Europe, USA, and Europe. The products are sold from their own traditional shops.
According to a study by Löken, Hermes has 267 distributing shops all around the world. These shops help the company to improve its brand image and to sell its product worldwide.
Hermes Promotion Strategy – a very unique competitive advantages
The company does not promote its brand through traditional promoting strategy. It is vastly different form others. They do not have any brand ambassadors to promote their products. The promotion of the product takes place from the persons who use the products. These persons are well-known celebrities, ultra-rich people, and royal families. The strategy is unique and helps the company to build a competitive strategy over other companies.
References
Sheikh Faizul Haque is an internet entrepreneur and the founder of The Strategy Watch; Graduated from North South University with a double major in Accounting & Finance in Bangladesh.
With a strong interest in developing and improving Business Strategy and to Conduct Business Analysis.