Magazine article Marketing

Mark Ritson on Branding: Repairing the Flaw in a Diamond Brand

Magazine article Marketing

Mark Ritson on Branding: Repairing the Flaw in a Diamond Brand

Article excerpt

Tiffany launched the 'Return to Tiffany' collection in 1997.

The accessibly priced silver jewellery was so named because every piece carried the 'return' message alongside a prominent Tiffany & Co logo. The collection, headlined by a large silver charm bracelet priced dollars 110, sold fantastically well.

Over the next five years, thanks in no small part to this collection, sales at Tiffany rose by two-thirds. The financial markets were impressed and the company's share price rocketed. By 2002, however, a flaw was growing deep in the heart of the Tiffany brand. The company was selling too much of the wrong product to the wrong people.

At this point that the Tiffany story could go in one of two directions. If the firm was being run by the average British chief executive, with no training, experience or appreciation for brand equity, the likely response would be to open a few more stores, set some aggressive sales targets and gradually drive the brand towards disaster. But Tiffany was led by Mike Kowalski, the kind of chief executive we rarely encounter in the UK. Prior to assuming the role in 1999, Kowalski spent five years heading Tiffany's marketing. So he was experienced enough to recognise that Tiffany's explosive sales success masked bigger, long-term problems. His diagnosis: the large number of silver customers represented a fundamental threat - not just to the business, but to the core franchise.

Kowalski looked beyond the sales figures and examined brand equity. Using extensive customer research, his team began to identity the precarious position Tiffany was now in. High-end customers were turning away from a brand that a growing number of them now perceived as targeting younger, less exclusive customers. The research also revealed that Tiffany's brand associations were switching from high-end luxury to affordable silver accessories. It was also being deluged with young female customers at weekends and its small, private boutiques and attentive staff struggled to cope with this bigger but less valuable clientele. It became standard practice to issue customers with a beeper on entry to page them when a sales associate became available. Tiffany's traditional customer base began to defect and brand equity was eroding.

In 2002, armed with the results of his research, Kowalski raised the prices on all of its most accessible collections, including 'Return to Tiffany'. …

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