Branding strategy – iLook

by Raphaël Marsan 2013592027 Group 4

I will briefly explain how I will proceed commenting this case. I believe this case is not a ‘classic’ case in the sense that there is no real managerial problem or strategical issue to be identified since the strategic change has already been operated. We are only told about the events and reasons that led up to that change. I will thus restrict myself on giving my opinion on this strategic change and make some predictions about the future. I will consider that we are currently November 9th 2006.

I believe that there are three main reasons as to why the new layout for the magazine will be a great success. The first obvious reason is that the market for luxury is still growing at a double digit rate in China. As is pointed out in the case, in 2004 China was the third biggest market for luxury goods in the world and from 2005 until 2008 the yearly growth rate for this industry is predicted to reach 20%. Moreover, government policies are becoming less and less restrictive which gives more freedom to advertisers. Additionally, disposable income as well as expenditure on consumption are going up yearly, which further proves that there is a demand for high luxury with a strong purchasing power to sustain it. These consumers consist of the wealthiest people in China, which include enterprise owners and employees working for foreign companies, as well as what is generally referred to as ‘white collars’. 70% of white collars are prepared to buy high luxury and high quality service. The reason behind this is that their lifestyle matches this buying behaviour quite well : they are independent, single, well-educated, well-paid, and have a very libertarian and almost ‘careless’ approach to consumption.

The second reason is less obvious, it relates to the changing needs of consumers with respect to their buying behaviour within this luxury market. Indeed, the case underlines that as this specific Chinese population is becoming more individualistic, it now also seeking cultural meaning behind brands. People don’t buy luxury anymore just out of materialistic need, but they attach some kind of new meaning to it and they seek a particular and unique meaning in brands. More specifically, this can relate to the history of the brand, its origin, its mission, and the values it portrays. In this sense, we could say that consumers are becoming more demanding, as the case states they have developed a ‘spiritual need’ on top of the basic materialistic need. By radically reducing the number of ad pages, and by putting more focus on the culture behind specific brands, which in the case of iLook’s new layout is achieved through accompanying photos of brands with brief introductions of the brand’s history.

The third reason is the fact that iLook, with its new layout, has differentiated itself from competition in two essential ways. First of all, the company is taking advantage out of a social phenomenon which is developing more and more in China which is women’s emancipation. Although Cosmopolitan has been focusing for very long on women’s liberation as well, the latter chose to use sexuality to convey this message and to address its female readers. On the contrary, iLook has been able to find another method to convey the same message : columns with psychological consultation for women, articles about feelings, careers, lifestyle, and other sorts of methods for promoting self-image of women. Additionally, as indicated by the success of Hong’s blog, a large number of women in China feel a strong connection with her personality and (probably) recognize themselves through her. She has become an icon because her history, personality, and her life choices inspire many women in China. Hong has taken advantage of this by using her blog as a promotion platform for her magazine. This