UNIT 1: BRANDS

READING 1: BUILDING LUXURY BRANDS

Activity 1: Discussion

Which of these are luxury brands?

Chanel, Louis Vuitton and Dior are luxury brands.

Activity 2: Useful Vocabulary

Part
Word / of
Definition and Example
Phrase Speec
h

Restless adj unwilling or unable to stay still or to be quiet and calm, because you

/ˈrest.ləs/ are worried or bored

verb to follow someone or something, usually to try to catch him, her, or

Pursue
it:
/pəˈsjuː/

Noun someone in a high position, especially in business, who

Executive makes decisions and puts them into action - Ủy viên ban chấp
/ɪɡˈzek.jə.tɪv/ hành/ban quản trị…
Adj
relating to making decisions and managing businesses,
or suitable for people with important jobs in business

Exclusive
 Adj limited to only one person or group of people - Độc quyền
Noun a story that is published in one magazine, website, etc., and
 /ɪkˈskluː.sɪv/
no others

Shareholder Noun a person who owns shares in a company and therefore gets part of

 /ˈʃeə the company's profits and the right to vote on how
ˌhəʊl.dər/ the company is controlled

Prime
Adj main or most important
/praɪm/

Couture Noun the designing, making,

 /kuːˈtjʊər/ and selling of expensive fashionable clothing, or
the clothes themselves

Anticipate Verb to imagine or expect that something will happen - lường trước

 /ænˈtɪs.ɪ.peɪt/

Territory Noun (an area of) land, or sometimes sea, that

is considered as belonging to or connected with
 /ˈter.ɪ.tər.i/ a particular country or person - vùng, miền, lãnh thổ

Bankrupt unable to pay what you owe, and having

had control of your financial matters given, by a law court, to
 /ˈbæŋ.krʌpt/ Adj
a person who sells your property to pay your debts

Activity 3:
What is the brand image of Dior?
Activity 4:
Skim the article quickly and say which of the following points are mentioned:
1. The high profit margins on bags
2. Investing in markets that may take some time to grow
3. People are ready to pay a lot of money for very high-qualty things because they are beautiful.
4. Building customer loyalty through ready-to-wear

Activity 5: Read the following article:

Restless pursuer of luxury’s future

by Vanessa Friedman
Sydney Toledano (Dior’s Chief Executive) is one of the longest serving chief executives in the
luxury industry. As the industry goes global, he must balance the demands of shareholders and
the values of a historic label, the need for exclusivity and the need for expansion.
He routinely communicates with his demanding boss, Bernard Arnault, main shareholder of
Christian Dior, and a number of creative types, including Dior’s clothes designer John Galliano
and jewellery designer Vicwire de Castellane.
‘The best advice I ever got was that, when times are bad, you need to get out of the office; when
things are good, you can spend time on the organisation,' says Mr Toledano, who travels almost
every week to one of Dior’s 224 stores round the world. ‘You have to look for newness, look for
what is happening next. Forget the calculator. Understand the people from different countries
and what they want.’
It was by spending time in China the 1980s, for example, when he worked at the French leather-
goods house Lancel, that Mr Toledano first realised China would one day be prime territory for
luxury.
‘I met some factory owners, and they were working so hard, but then they would bring you to a
restaurant and it was clear they wanted to enjoy life,' he says. ‘And I thought: one day these
people are going to have money and they are going to spend it.’
A few years later, Bernard Arnault contacted him. 'The interview took 15 minutes. He knew
exactly what he wanted.' says Mr Toledano: to take a small couture house he had bought out of
bankruptcy and build it into the biggest luxury group in the world. Mr Arnault has used Dior to
create LVMH (Louis Vuitton Moet Hennessy, the world’s largest luxury group).
‘Christian Dior can double in five years,’ he says. ‘There may be difficult times coming, but if
you look at the Middle East, China, even Europe, I believe there is growth coming and we have
to develop our network and perfect our supply chain.’
The next wave of luxury buyers is now in the new territories: the Middle East, Russia, Hong
Kong and South Korea.

Mr Toledano believes not only that a brand should go to its customers but that it should
anticipate their needs and invest early in markets that may not show real growth for up to six
years.

Activity 6: Complete the notes in the maps below. Then correct the ten mistakes.
1. label

2. The demands

3. exclusivity

4. Look for

5. Understand

6. forget

7. For up

8. luxury

Activity 7: Choose the correct answer A, B or C

1. …………… is the world’s largest luxury group.
A. Christian Dior
B. LVMH (Louis Vuitton Moet Hennessy)
C. Gucci
2. …………… is not a new territory for luxury.
A. Japan
B. Russia
C. South Korea
3. Sydney Toledano realized China would be prime territory for luxury when working in China
in …………….
A. the 1970s
B. the 1980s
C. the 1990s

Activity 8: True/False/Not Given

Decide whether these statements are True, False or Not Given.
1. Sydney Toledano is the main shareholder of Christian Dior. F
2. Dior has 224 stores all over the world. T
3. Sydney Toledano was very successful when he worked at the French leather-goods house
Lancel. NG
4. Louis Vuitton Moet Hennessy was created by John Galliano. F
5. There are now more luxury buyers in the Middle East, Russia, Hong Kong and China. T

Activity 9: Words in Phrases

Go back to the article. Find prepositions to complete the following phrases and write them
in the blanks.
1. Sydnedy Toledano routinely communicates with his demanding boss and a number for
creative types.
2. A brand should anticipate customers’ needs and invest early to markets that may not show real
growth for up to six years.
3. The new wave of luxury buyers is now in the new territories: the Middle East, Russia, Hong
Kong and China.
4. You have to look for newness, understand people the different countries and what they want.
5. It was by spending time in China in the 1980s that Mr Toledano first realized China would one
day be prime territory for luxury.

Activity 10: Pronoun Reference

What does the underlined pronoun refer to?
1. “… when he worked at the French leather-goods house Lancel …”
A. Bernard Arnault
B. John Galliano
C. Sydney Toledano

2. “… it should anticipate their needs…” (line 69).

A. Markets
B. Customers
C. Factory owners
Activity 11: Word Form
Complete the following sentences with the correct form of the word.
1. anticipate
After months of anticipation, the holiday was a bit of a disappointment.
2. exclusivity
The company has an exclusivity focus on success and making money. Its products are
exclusively produced for independent retailers.
3. creative
He has been working creatively in papermaking and prints since the 1970s. Everyone is deeply
impressed with his creation.
4. demand
She has a busy and demanding job. Her boss demand asks for an increase in sales every month.
5. develop
These green industries can not only create more jobs, but also promote sustainable development
of the land.
6. routinely
As a matter of routine, a report is sent to the director at the end of the month.

Activity 12: Focusing on Words

Fill in each blank in the sentences below with one suitable word. When you finish, turn
back to the article and check your answers.

Sydney Toledano is Dior’s Chief (1) executive As the luxury industry goes global, he must (2)
balance the demands of shareholders and the values of a historic label. He has regular
communication with his (3) demanding boss and some creative designers. He believes it is
important to (4) anticipate needs and there is growth coming to new (5) terriories such as the
Middle East, Russia, Hong Kong and South Korea.

Activity 13: Discussion

What should be done to

develop a brand name?
There are 11 steps to develop a brand name:
1. Identify the target audience.
2. Brand mission statement.
3. Market research.
4. Find the difference.
5. Build logos and slogans.
6. Build a brand voice.
7. Build messages.
8. Brand personalization.
9. Brand integration in every aspect of your business
10. Maintain brand consistency
11. Be the strongest brand advocate
Discuss these questions.
1. What are the advantages and disadvantages for companies of product endorsements?
- Advantages:
1. Product endorsements help your brand be able to stand out.
A product endorsement gives you a chance to differentiate your company and brand message
from what your competitors are doing. Including someone who is well-known in an
advertisement may also improve consumer ad recall, which allows you to stay at the top of their
mind more often. That trait means your product becomes the first choice if a consumer feels like
they need it.
2. It may open up new markets for your business.
A celebrity endorsement gives you the opportunity to reach out to a different set of
demographics and new markets with the products that you offer.
3. A solid product endorsement can build brand credibility.
People feel an attachment to their favorite celebrities. When they see people to whom they can
relate, it makes them feel like the business or brand message understands their needs. Even if the
product isn’t used, there is a trust built with the endorsement which means the consumer would
purchase it if they have the need. Endorsements also reassure customers that the quality of a
product will meet their expectations.
4. It speeds up the time required to establish a market footprint.
When there is a recognizable celebrity, someone who would be considered an A-List person,
then you can speed up the process of bringing a new product to the market. It’s like having a
friend recommend a new restaurant for you. Because they enjoyed it, you have confidence that
your experience will be the same.
5. It creates a higher retention rate for future customers.
When you have a proper endorsement pitching your goods or services, the customers that do
convert for you come at a 40% higher retention rate compared to a standard advertisement. If
your endorsement is through an influencer, then the rates are even higher. You get to piggyback
onto the loyalty that consumers have with the endorsement with your brand, which encourages
repeat buys in a way that is difficult to generate with other forms of marketing.
- Disadvantages:
1. Endorsements become associated with the brand image.
When a celebrity, who endorses your brand, has inappropriate actions or words, your product
will also be boycotted along with them.
2. It is expensive to hire people to endorse products.
PepsiCo once signed Beyonce to a 10-year endorsement contract that was worth $50 million.
Under Armour signed Stephen Curry to an endorsement deal that is worth about $4 million per
year through 2024. Derrick Rose once signed a 13-year contract with Adidas for $185 million,
which was the largest endorsement deal in sports history in 2012. If you want to put a famous
face with your product to pitch it, there is going to be a cost associated with it that some
businesses may not be able to afford.
3. It may create overexposure opportunities for the brand.
Celebrities don’t support just one business or brand. Multiple companies pay for this type of
marketing service, often within the same industry. Signing the same celebrity to offer a similar
pitch may cause the credibility of the endorser to suffer. Instead of paying attention to the
advertisement, the viewer is focused on the what and why behind the actions of the endorsement.
4. A good endorsement can’t fix a bad product.
Endorsements are based on the idea that the product being pitched is a good one. If your product
quality is lacking, then even the best endorsement won’t be able to save your business from the
fallout which will occur. The same could be said about poor customer service. If your brand is
not helpful or fails to help troubleshoot issues that consumers may have, then you’ll be out the
cost of the endorsement and still be dealing with negative reviews.
2. How can companies create brand loyalty?
1. Engage with their customers
2. Understand what makes their customers tick
3. Make sure their brand is consistent
4. Invest in an eye-catching logo design
5. Focus on what their brand does best
6. Make their customers come back
7. Turn to influencers to promote their brand

3. Can you give any examples of successful or unsuccessful brand stretching?

An example of successful brand stretching is Apple. Apple started by making personal
computers (Mac), and then jumped into personal audio (iPod) and then jumped again into
smartphones (iPhone). Those were all good moves because now 62.21% of Apple’s sales come
from iPhone.
4. Think of a cheap or expensive idea for a product launch.
5. What other market segments can you identify (e.g. young singles).
The geographic market segments (e.g. metro areas, DMAs, states, regions, countries)
6. What action can companies take if they start to lose market share?
- Lower prices to compete
- Innovate a new or existing product
- Diversify into another market
- Merge/acquire a competitor or a company with some form of relevant integration
- Advertise more
- Expand current customer base
- Create a strong advertising campaign about the company to grow market share