Picture of Product

Chanel No.5

Photo of Entrepreneur

Gabrielle Bonheur "Coco" Chanel

Brief description of the product

Chanel No. 5 is the first perfume launched by Parisian couturier Gabrielle "Coco" Chanel.  It was developed by Russian-French chemist and perfumer “Ernest Beaux”. It is often considered the world's most famous perfume.

No.5 owes its originality to a blend of Aldehydes which sit at its core. These ingredients make all the others shimmer and sparkle, suddenly Jasmine, Ylang Ylang, Rose, and Neroli no longer smelt like a bunch of flowers.

A profile of the Entrepreneur and the business

Gabrielle Bonheur "Coco" Chanel

August 19, 1883 – January 10, 1971

Life:

• Born in Saumur, France
• Learned the seamstress trade at a monastery
• Chanel left her first seamstress job to become a cabaret singer, which is where she got the nickname "Coco"
• Chanel's first shop was a millinery boutique
• Chanel was the first designer to develop a synthetic perfume. Named after herself, Chanel No.5 is the best selling perfume of all time

Important Designs:

• A belted oversized sweater worn over trousers or a skirt
• The Chanel Suit - a wool boucle suit with a boxy, collarless jacket and knee length skirt
• Costume jewelry was popularized and became a staple in women's fashion thanks to Chanel
• The Chanel quilted handbag - an often copied leather handbag with a quilted pattern and gold chain strap interlaced with leather
• The Little Black Dress - the original little black dress was strapless and backless, which was very risqué at the time. It was featured in the 3rd issue of Playboy magazine.
• The first designer to use jersey knit as a serious, fashionable material.

A brief introduction of how the business started

Coco Chanel didn’t have much money but many of her friends were rich and successful. She borrowed money from a rich friend and started her first hat shop in Paris

in 1910. Women were happy to buy her stylish hats and asked her to design clothes for them.

In 1913, Coco borrowed money to open a second shop in the French seaside town of Deauville. Women from all over Europe were soon buying her clothes.

 With the arrival of the First World War in 1914, women were doing various jobs and Coco designed clothes for them.

In 1915, Coco opened another shop in Biarritz in the south of France. Rich people went there to escape from the worries of war and women were looking for beautiful clothes that allowed them to enjoy themselves.

In the 1920s, Coco expanded her clothing business around the world. She also began dealing with jewellery and cosmetics. Coco’s Chanel No. 5 became the most successful perfume of the past hundred years.

How the business gained success

Each 30-milliliter bottle of Chanel No. 5 is packed with the essence of a thousand jasmine flowers, the fragrance of a dozen May roses from Grasse and a heaping dose of aldehydes, the molecules that early on gave the scent its modern edge. Beside the magical ingredients, many celebrities wore it, among which Marilyn Monroe. Chanel N°5 is often connected to her name because during an interview in 1954 she said that in bed she wore only ‘some drops of Chanel N°5'. That statement became a superb advertising slogan and a reason for millions of women around the world to choose this perfume. The current Chanel N°5 face is Nicole Kidman.

It is often considered the world's most famous perfume.

Business Philosophy & Business Strategies used

The key to Chanel business philosophy was construction and producing traditional classics outliving each season's new fashion trends and apparel.

Chanel, as a brand, has proved its consistency and ability to remain at the top of the fashion market.  In order to do so, the company implements a business strategy to keep its products and name on top.  Chanel focuses on promoting new products instead of dwelling on past products.  They in essence employ a push strategy.  Let’s take a look at Chanel perfume for an example of how the brand does this.
Chanel’s push strategy is carried out in four separate business to consumer promotions.  First, Chanel consistently and quickly updates its official website to include the most up-to-date information about new products and promotions. The website also contains a direct channel and information for customers to contact the company as well as a place for customers to subscribe to get information or updates about Chanel products and areas of interest.  It is this direct contact opportunity that improves Chanel’s relationship with its customers.
Furthermore, Chanel advertises in the most famous fashion magazines around the world.  Although most other high end fashion brands are also in these publications, these magazines are the best place for Chanel to spread its latest fashion message to the correct customers. It is Chanel’s continued presence in these publications that confirms its continued presence on top of the fashion world.
Likewise, Chanel also promotes its products through television commercials starring famous figures.  For example, Chanel No5 perfume was promoted in a commercial with Nicole Kidman.  Using celebrities and famous figures to promote its products, causes consumers to view the products as having the same status as those celebrities who promote the product.  These commercials have a great impact on consumers worldwide and thus push the product on consumers.
Lastly, Chanel attracts audiences and potential customers by holding fashion shows in the most modern and fashion-forward cities throughout the world.  Chanel always has  a place at the most important fashion week shows around the world, and the company never fails to deliver an outstanding and professional show.  The elite status of these shows and those invited to them further reminds consumers about the status of the brand which translates from old to new products.
Through its use of a push strategy, Chanel takes the consistency of its brand image and translates that to its new products. The continual reminder of Chanel’s high status in the fashion industry keeps its brand at the top of the market. This helps the company compete with other high-fashion designers and acts as a barrier of entry to other brands trying to enter the market.