Saturday, May 11, 2013

Chapter 7. Business Marketing

Tiffany & Co. is a holding company that operates through its supporting companies. The company's main subsidiary is Tiffany and Company. Through Tiffany and Company and other subsidiaries, the company is involved in product design, manufacturing and retailing activities.
Besides consumer marketing, Tiffany & Co. is heavily included in business marketing. Tiffany & Co. is actively involved in selling its products through Internet, business-to-business and wholesale operations. It sells its merchandise on the wholesale basis to independent distributors for resale in emerging markets such as the Middle East and Russia. Additionally, the company sells diamonds that are obtained as a wholesale purchase and then resold not being suitable for the company's needs. 

There are subsidiaries of the company that process, cut, and polish diamonds at facilities outside the U.S. The company created diamond processing operations that purchase, sort, cut, and polish rough diamonds. The businesses that are involved in these operations are located in countries such as Belgium, Botswana, Mauritius, Namibia, South Africa and Vietnam. For example, Namibia is well-known for its gem-quality diamonds, which explains Tiffany's interest in this country for stones. In 2010, Laurelton Diamonds, a division of Tiffany & Co., connected with Namibia Reigh Investments to open a new cutting and polishing plant, which allowed the company to increase its workforce in Namibia. This kind of strategic alliance gives Tiffany & Co. opportunities to access rough diamonds locations reserved for local manufactures. 

Despite the fact that the patnership between Tiffany & Co. and the Swatch Group was ended, it is a good example of a strategic partnership. In 2009, Tiffany & Co. signed a 20-year license and distribution agreement with the Swatch Group. According to the agreement, the Swatch Group started a new watchmaking company in Switzerland to design, engineer, manufacture, market, distribute and serve Tiffany & Co. brand watches. The new company was completely owned and controlled by the Swatch Group but was given the right by Tiffany & Co. to use its certain trademarks. Plus, it operated under the Tiffany & Co. name as Tiffany Watch Co., Ltd.

Monday, May 6, 2013

Chapter 8. Segmenting and Targeting Markets

There are a few bases for segmenting consumer markets. They are geography, demographics, psychographics, benefits sought, and usage rate. 
Analyzing Tiffany & Co. market segmentation, I would like to look first at demographic segmentation since there are several bases such as age, gender, income, ethnic background, and family life cycle. First of all, Tiffany's main market target is women, who buy and receive as gifts these beautiful jewelry. So, even though men are involved in the purchasing of Tiffany's products, women remain to be the main influencers. With its various design collections and price range, the company meets wants and needs of consumers of different age and income. Tiffany services generations X, Y and baby boomers. While generation X, who are working women, earn enough money to pay for high-quality goods, baby boomers buy the luxurious items even despite insufficient funds. But, generation Y consumes the product because they enjoy to follow the celebrity trends.

Despite the fact that originally Tiffany's jewelry were created for high-class women, now its product becomes more affordable as the company always looks for the way to expand its market. Now even lower income women can buy Tiffany's product because of the addition of collections such as made from sterling silver.
Since Tiffany & Co. is a specialty company that sells mainly jewelry, customers turn to its product for celebration of some significant events such as engagement, wedding , anniversary or birthday. In this case, this kind of purchase may include people of different family life cycles such as young single, young married with/without children, middle-aged married with/without children etc. 
People buy Tiffany's product basing their purchasing decisions on motives and lifestyle.

Besides that women are the primary users, Tiffany services other businesses also. The company sells its products to businesses to promote some program or give gifts to dignified employees. The company regularly designs trophies for some special events. Plus, Tiffany & Co. are deeply involved in charitable activities giving generous donations for the support of arts, education, health and environment.

Monday, April 29, 2013

Chapter 11. Developing and Managing Products

To sustain growth and increase revenues, Tiffany, as any other company, constantly works on creation of new products. Just last year, for Tiffany's 175 year celebration, the company released a new metal called Rubedo, which means "red" in Latin. According to Tiffany's website, it is among the most beautiful metals in the world. "This unique alloy is lightweight yet strong, polishes to a smooth luster and is exceptionally flattering to the skin," these are the words describing this new metal. Rubedo represents a mixture of gold, silver and copper, where the last component gives to the metal a nice pinkish color. The metal has been fashioned into jewelry pieces priced from $200 to $7,500 and the new collection has been announced to be made of a "new jeweler's metal." Since this new product line is Tiffany's innovation and has been introduced to the market just last year, it is still in the growth stage and does not have many competitors yet. 

Being a responsible company, Tiffany is always aware of its customers' wants and needs.  As Carson Glover, the director of worldwide media relations at Tiffany, reports "When Tiffany began planning our 175th anniversary, we felt the development and introduction of a new metal would be a fantastic way to mark this momentous milestone while at the same time responding to our customers' desire for more blush-colored metals." 

However, there are some disagreements on Tiffany's claim that Rubedo is a new metal since it is an alloy of already existing metals plus the combination is not new either. As reported by Forbes, Rubedo contains only 31% gold, which is mush less than a 14K gold piece would have. Though it is not an issue. Rubedo was very well received by customers. As Forbes states, it has a lot to do with Tiffany's name. Customers love Rubedo because they love Tiffany especially if it is stamped with Charles Lewis Tiffany's ageless signature.

Monday, April 22, 2013

Chapter 16. Promotional Planning for Competitive Advantage

Talking about Tiffany & Co. competitive advantage, we can surely include high product quality and excellent service. Since Tiffany is already a well-known company it does not have to work so hard to promote its product, but nevertheless it always works on promotional programs to remind its audience about its great values and qualities.
Tiffany's mass communication happens through television, newspapers, magazines. 
Tiffany is regularly participating in various PR programs to let its customers know about the company's operation, its goals and values. For example, in the past Tiffany opposed creating pebble mine in Bristol Bay, Alaska, advocating that it would destroy the nature's richest site. Also, the company showed its concern about corals' disappearance, subsequently stopping to use this vital eco-element in its  jewelry designs. This way Tiffany & Co. showed to the public that it cares about the environment where it operates. In addition, customers can see that on top of great product the company is ethically and morally very responsible.

I am sure that the upcoming movie "The Great Gatsby," based on the novel by F. S. Fitzgerald, intrigues many people; moreover it became known that the movie's all jewelry pieces were designed by Tiffany & Co. This cooperation is mutually advantageous as it greatly promotes both sides. On May 10, when the movie will come to theaters, audience will have a great opportunity to observe Tiffany's new jewelry masterpieces, which is another strategic move to promote its product.

Monday, April 15, 2013

Chapter 10. Product Concept

Focusing on jewelry pieces mainly, Tiffany & Co. expanded its product mix over the years of presence. Now, its stores offer us not only stunning rings and necklaces, but high-quality leather goods, beautiful silk scarves, writing instruments, watches, china, fragrances and even sunglasses; this way various market audience's needs and wants can be satisfied. Based on customers' intentions, Tiffany's product falls under the consumer product category as it  is purchased exactly for consumers' personal wants' satisfaction. Tiffany's different product lines, which are mentioned above, are categorized by collections ( Tiffany 1837, Atlas, Ziegfeld Collection, Tiffany Enchant, Tiffany metro etc.) and designers ( Elsa Peretti, Paloma Picasso and Jean Schlumberger). 

One of the greatest Tiffany designers is  Elsa Peretti. Elsa Peretti is an italian designer who worked for the company since 1974. Possibly not all of us know who she is, but her simple and sleek designs are admired almost by every female. The designer said, "Style is to be simple." Her simple and elegant shapes are inspired by nature. Apples, beans, bones, shells, hearts, teardrops are the shapes presented in various Tiffany's jewelry forms that are still the company's bestsellers up to these days. Peretti's jewelry sales bring up to 10% to Tiffany's Net Sales. 
When she moved to New York as a model in 1968 she already held a degree in interior design. Starting her career at Tiffany's, she brought a modern, fresh jewelry design in contrast to conservative jewels of that period. Her jewelry pieces are designed not only in gold but also in silver, so they become affordable to those customers who are not among the elite. As she once said in the interview for People magazine, "I design for the working girl... My objective is to design according to one's financial possibilities." Just in 2012, when her contract with Tiffany was about to expire, both sides decided to continue their relationship for the next 20 years.

Thanks to its great designers and craftsmen, who have diligently worked for 175 years, Tiffany & Co. built its brand name and value, which are its greatest assets. Another Tiffany's distinguished trademark is its unique hue called Tiffany Blue or forget-me-not blue that was originally picked for the company's catalog by its founder, Charles Lewis Tiffany. Now, this color is used for shopping bags and advertising, and recognized as a symbol of Tiffany's craftsmanship excellence and exclusivity. At the sight of the famous Tiffany Blue Box every woman holds her breath in excitement. 

Also, it is worth to mention that Tiffany is concentrated on sourcing all its packaging materials from responsible sources. The company's management ensures that its iconic Blue Boxes and blue bags are made with sustainable materials. All Tiffany's packaging is Forest Stewardship Council-certified. The FSC certification reassures that wood and paper products come from renewable and well-handled resources. In 2011, about 90% of the materials used to produce the packaging came from post-consumer recycled sources.

Monday, April 8, 2013

Chapter 18. Sales Promotion and Personal Selling

Tiffany & Co. is probably the only company which does not have any sales and discounts on its products. Tiffany keeps its image and reputation by showing that its price and value are not negotiable.

This policy got its roots from Tiffany's founder, Charles Tiffany, who made some changes in the store's rules that helped to form Tiffany & Young's reputation. As Michael John Burlingham, who wrote a book about the founder's family, tells, "He marked every object in his store with a price tag, ending the undignified, widely practiced custom of bargaining over goods."(Behind Glass: A Biography of Dorothy Tiffany Burlingham, p. 18)

Since Tiffany customers' purchases are more emotional, they require a short-term decision. Thus, there is a traditional personal selling applied. Sales assistants focus on giving to customers information about product and closing sales.

Tuesday, April 2, 2013

Chapter 17. Advertising & Public Relations

Since the company's creation, Tiffany's initial advertising form was its "Blue Book" catalog, which was first published in 1845. The catalog still exists and is available for its subscribers.

However, now Tiffany focuses on various other media types to advertise its product. Nowadays, we can observe Tiffany's ads in the bus stops, recognizable newspapers, popular magazines and, of course, online. Analyzing Tiffany's choice of where to place its advertisement, we can clearly see that the company is targeting certain market segments.

For example, The New York Times, where Tiffany's ads always run on p. 3, is the newspaper that mainly addresses business people of age 35 - 65. Talking about print ads,  Tiffany's ads mainly appear in business and fashion magazines. Some of them are Architectural Digest, The New York Times Magazine, Money, Conde Nast Traveler, Black Enterprise and Vanity Fair.

Tiffany uses both institutional and product advertising. Though in my opinion, it focuses on the institutional advertising more to maintain the corporation's identity. Having strong advertising attributes such as brand name and Tiffany's unique color makes the company recognizable by everyone and everywhere. 

The styles in which Tiffany's ad campaigns are executed are lifestyle and mood/image. Wathching its recent video, "The Dream Maker," that commemorates Tiffany's 175 year existence, we are enchanted by its romantic mood which is associated with beauty and love.


And, it is a great example of the institutional advertising as it celebrates its founder, history and the excellent craftmenship.