PESTEL analysis - Hermes Paris

Résumé du document

The luxury industry and especially the French luxury world is quite interesting when it comes to international marketing because the marketer has to take into account the fact that it is a market with its own rules and success factors. Throughout this analysi,s the idea will be to look at the main focuses the international marketer must keep in mind in general with an emphasis on how things are done in the luxury world. To make the study simpler the reference company chosen is Hermès. This old French 'Maison de luxe' has been quite successful since the 1830s and is interesting because it is one of the last Maisons to not be part of a strong group like PPR1 Gucci, LVMH2, or Richemont. Hermès started out selling saddles and harnesses and grew to become famous for its leather bags especially the 'Birkin Bag' as well as their silk scarves or 'carrés de Hermès'. They also sell perfumes and accessories as well as jewelry and have diversified quite successfully throughout the years. In terms of price, the least expensive items are the perfumes which are usually around 60 euros. The bags, however, are much more expensive. The famous Birkin bag, for example, has a price set at 3,500 euros.

Extraits

[...] They are indeed consumed globally but are bought for different reasons. The silk “carré de Hermès” will be worn around the neck in Western countries whereas it will be worn as a stylish veil in a country like Dubai. It seems as though there is one strategy that works quite well when doing global marketing: globalization, thinking global but acting local. The concept is simple but quite hard to implement. Thinking global means understanding there is always a foreign market to penetrate. [...]

[...] It is key to understand the external environment of a company is just as important as the internal environment. There are things in the external environment which can put the company success at stake, especially marketing plans. Also, the main paradoxes are paramount in the analysis. They are what characterize the luxury industry and somehow, as counter intuitive as they are, they are the engine that keeps these brands moving. It might even be what saved them through the crisis. [...]

[...] They could also see an impact on their sales of accessories made of crocodile skin. Sales could plummet and lead to disaster for the company. The political objectives of a government are also a key factor. A country where there is strong nationalism may not welcome foreign companies exporting their products on its territory. The same could be said about countries practicing a strong policy of protectionism to protect their domestic economy. Considering Hermès is known for its “French touch” if a country were to boycott anything French-made this could potentially destroy the market. [...]

[...] But technology also refers to how products are manufactured. For example, Hermès products are made by talented craftsmen and women in the French manufactures. However, with globalization the temptation will first be to outsource but also to make the whole process go faster and be more precise with machines. It takes a considerable amount of time to find and train qualified craftspeople whereas a machine only needs maintenance. Machines are expensive but they require fewer personnel and may reduce costs in the long run. [...]

[...] This strategy makes much sense because the brand is known for its impeccable craftsmanship. The French style of the products sold is actually a proof of authenticity for the foreign consumer. However, again, when it comes to the promotion part of the marketing mix Hermès of course needs to look at the local trends to reach their target market. Focusing on the French touch is crucial but finding the right slogan to catch the consumer's attention and the right concept is important. [...]