Hermès: Case Study: Hermes Of Paris

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 Introduction of ‘’Hermès”
Hermès International S.A., Hermes of Paris, or simply Hermès is a French manufacturer established in 1837. As of 2008, Hermès has 14 product divisions encompassing leather, scarves, ties, men's wear, women's fashion, perfume, watches, stationery, footwear, gloves, enamel, decorative arts, tableware, and jewelry. Hermès sales are composed of about 30% leather goods, 15% clothes, 12% scarves, and 43% other wares. The company licenses no products and keeps tight control over the design and manufacture of its vast inventory.

Positioning the brand:
According to Millward Brown Optimor, Hermes was ranked at number two in the top three most powerful luxury brands in the world in 2010 also including Louis Vuitton which ranked on the top and Gucci.

Brand image:
Elegant,
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2) Premium brand image of Hermes in Chinese consumer’s mind.
3) Good geographic choice of Beijing and Shanghai and uniqueness of know how.
4) The unique design inspired by Chinese characteristics sold in Shang Xia note only adapts into Chinese customers’ cultural preference, but also attracts western people who are interested in Chinese stylish designs.

Opportunities:
5) Hermes’s international strategy indicates its desires to explore and expand Chinese market. They realizes that as more and more Chinese enter the middle class, move to cities and get rich enough to indulge themselves in what he calls “elegant products”.
6) Chinese strong appetite for luxury goods, its large market scale and consumers’ high purchasing power for luxury goods fostered by the current social value and atmosphere of showing off status and wealth will significantly make Hermes increase its oversea sales revenue.

However, Hermes Shang Xia has to face some challenges and problems that are raised in current Chinese luxury market

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