Business Marketing

Raw Material
When it comes to the world of marketing, it is important to know the demand of your product prior to launching the product. The demand for crocodile leather bags of Hermes is in very high demand. On average, Hermes is able to produce approximately 3,000 crocodile leather bags while it takes the skin of 3-4 crocodile to make one bag.  Currently Hermes is breeding their own crocodile in a farm in Australia. In order to prevent the expensive exotic skin from bites, these animals need to be kept separate from one another. The skin is a raw material which will be then go through several processes before becoming a component part.

Evaluation  Criteria includes  quality, service, and price.
Quality has always been a priority for Hermes and that is what stands out from the rest of other luxury brands. For example, in order to put together a bag, it takes a craftsman aka an artisan to do so as details are need to be extremely neat and accurate. Each stitches are done by hand. When it comes to service, every Hermes stores, have a specialist for certain product such as a silk specialist for their scarve line. Also you can your Hermes bag in any color possible because you can order i tot be made for you. You can also drop your bag off for a repair for discoloration or to fix other issues. That is what takes their service to the next level as other brands haven't able to do. On the other hand, the price point can perceive as expensive, but it depends on ones perception. The price is definitely well worth the quality that will last a very long time.

Developing and Managing Products

 Product stage of Hermes

When it comes to product life cycle of Hermes, it is difficult to determine unlike other high end luxury brands or products. Hermes products are known to be timeless with the quality that last forever.  That is why it worth every penny spent. For example, Birkin bags which first introduced to the market in 1982 after several decades later, the same leather bag is still in high demand. There are many factors that help determine where and which direction the product is heading. I have chosen to use Birkin bag as an example. The name Birkin is the last name of a British actress Jane Birkin

whom the bag was originally made to in the name of Hermes after he mentions about having to find a quality bag that could take care all of her needs to Jean Louise Dumas, Hermes Chief executive. During the introductory stage, the bag became famous because it was name after Jane Birkin as well as the fact that she would always walk around with it.  The growth stage is astonishing because they weren't able to keep up with the demand since the bag needs to be handmade one step at the time. Now the bag is in maturity stage as sales still increase at a decreasing rate because of the slow growth of our economy. 

Segmenting and Targeting Markets

Hermes has been known of it heritage for over 100 years. The main market of the company is focused on women' collections including bags, accessories, scarves, perfumes, shoes and jewelry. It has also creates collections for men and kids which have also been successful because people believe in its quality and how Hermes could give you a social status. The main target is women because women are majority of consumers. women make up more than 80% of consumer purchases. That when gender segmentation comes to play especially in a luxury market. Women always find ways to make themselves look better. After successfully conquered loyal women customer.

Hermes launches their men collections that includes suits, ties, shoes, belt, and perfumes to create a new market segmentation of its brand. The most recognizable products or best seller are ties, wallet, shoes, and belt. The Items mostly have Hermes logo on it and that gives away the price of the product when people see them. The upcoming Men's Fall collection 2015 will focus on polished mood with refined yet relaxed outfits mood. Their product are always made with the most extravagant materials such as; double faced cashmere, Scottish plaid madras, baby lamb glossy skin. This is what unique about Hermes besides everything is made by hands. Men customers do not only buy for themselves, but for their women as well. That is why they play a big role in Hermes marketing.
Geographic Segmentation
Hermes have 150 stores worldwide and 2 main stores in Manhattan which are located on Madison Ave and Broad St. in Financial district. Hermes chooses locations where high income individuals and families reside. Yet, these  stores are also nearby tourist attractions. With the high buying power, Hermes will able to sustain their expenses.

Marketing Communications

Competitive advantage of Hermes is the incredibly timeless products that are made with highest quality which also meant to use a lifetime. The right marketing channel is very important to the overall image of the brand. It takes decades to build reputation yet it takes tremendous effort to keep it. The way the brand communicate with its old and new customers is crucial when it comes to customer relationship as well as acquiring new customers. Most high end brands do not promote itself as their reputation comes from its true value of the products and services it's offering.
Hermes uses intergrated marketing communication by establishing a page on Facebook to connects with their younger customers. Customers can also view all of the products online. However, very few customer will make a purchase online because of its exclusiveness of the products. When the products are expensive, there are many decision making involve before making a purchase. For example, women would like to see how their purse would look when they handle it and how would the real material would feel in their hands. It is very important to physically touch and smell the products. Another example would be purchasing a perfume. the bottle might look attractive and give consumers temptation to buy. However, people would need to go into a store to smell because there is no other way for them to deliver the smell. For that reason, a store is an important channel to many brands to use a showroom for their customers to come, see, and touch the products.

Product Concepts

The goal of any brand is the differentiate their product from the rest of the market and that is when a unique product concepts comes in to play for Hermes in a luxury good world. Hermes has amazing done product line extension. From producing saddles from the beginning of the brand, now it has a variety of product lines from leather goods, perfumes,  accessories, bedding, decorative objects, clothing, and etc. 

Luxury goods are common known as specialty goods because they are not widely available and expensive. Hermes products are known to be made by hand with the highest quality, so there is no doubt that their goods will come with a hefty price tag. The most highly demanded product item is the Birkin bag with often comes in a variety of color and exotic materials. Here are a few examples; 

Besides all the fancy bags, Hermes also have a product mix that serve their Hermes loyalty in everyway.  For a few, luxury is a lifestyle and some like to show their brand loyalty by using different kind of products their favorite brands have to offer. Luxury defines social status. It provides a reference of a good taste. These following products are custom made and not available in store as there is not enough demand in the market. 

Porceline

It is going to be an expensive game.

While I think Hermes also has a very selection of shopping products that include watches, jewelry, perfumes, and scarves. They are still expensive compare to other brands, but affordable compare to other product on their product mix.

The logo of Hermes was first designed and introduced in 1950's. It compromises of a Duc carriage which is attached to the horse to symbolize the origin of the company of a horse saddles manufacturer. The orange color gives its unique and edgy style to the brand.  Their advertisements are often display in French to highlight the origin of the company and its authenticity.  

Personal Selling and Sales Management

Hermes is highly respected luxury brand and has a rich heritage which lives up to their mission statements. They always strive to excellence and perfection to exceed customer satisfaction.
Personal selling is very important to Hermes because the brand and the product have a high value as well as custom made and hand made. It is a neigh market compares to other commodities. For that reason, the brand isn't highly advertised or ever consider sales because it will decrease the value of the brand. Customers have guarantee of quality, caftmanship,  timeless design, and rarity.

Inside an Hermes, there are personal shoppers or stylists who will guide and help you find the right product for you though the store. They will walk right beside you and answer any questions you may have regarding the products. These sale associates are highly trained to be knowledgeable of all the products in the store, so they are not hesitant to answer any questions.  They are close to brand consultant. However, to keep their customers engage and involve, they post latest campaign on their social media such as Facebook and instragram. Many celebrities post their photos wearing Hermes clothes as well as handling their famous Birkin bags. It although doesn't sell the product but helps expose the products to wider group of people regardless of age, sex or race.

Her's sale philosophy is beyond making the highest sales unit, but making sure that customers satisfaction is their priority in order to maintain a priceless relationship with them. In addition, to every purchases, Hermes packs their goods in a delicate high quality dust bag which is put inside an iconic orange Hermes box again. Then lastly tied with an Hermes printed ribbon. Although I do not see that it adds value to the good but it well compliments the product itself. It reminds customers that they treat their products with care as well as their customers.

Advertising, Public Relations and Sales Promotion

Hermes is known for every luxury goods they make from handbags, scarves, clothes, accessories, shoes, and etc. When it comes to advertising, it is very important to them to to close the medium and accurately go through media planning in order to accomplish a successful ad campaign that deliver the message. There is a ad campaign of Hermes back in 2008 that could still remember till today because of its extravagant. In my opinion, the elephant is a sign of power. The colors are miraculous beautiful on the pain black skin of the animal. It also show feminism because of the tone of the color and the designs on the elephant. 

Hermes Ads are targeted current consumers and new consumers. Advertisting can be found in high ends fashion magazine that only target toward consumers who have more purchasing power. Ads are on the site as well as their Facebook page. Sales promotion, rebate,and coupon have never been a strategy for Hermes to reach out for their customers because its value is beyond the number of units being sold. In addition, they also have video of different ads  to reach out their customers. When it comes to royalty marketing program, Hermes does it by never lower their band products quality and that's what keep their customers coming back through generation. It is also easier to acquire customers when the satisfaction is proven through generation