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IJQSS
9,3/4 Luxury branding: the case
of Chanel
Kana Sugimoto
Waseda University, Tokyo, Japan, and
292
Shin’ya Nagasawa
Received 24 April 2017 Waseda Business School, Waseda University, Tokyo, Japan
Accepted 23 May 2017

Abstract
Purpose – This study answers the research question “How can businesses apply a luxury brand strategy to
achieve innovation in their businesses or brands?” It aims to investigate the possibility of applying a luxury
brand strategy to a wide range of business areas.
Design/methodology/approach – This study presents a literature review and case studies, analyzing
16 products from a selection of 8 iconic luxury brands. A survey conducted in Japan and Europe identified
which of the 8 selected luxury brands had established the strongest brand image. Principal component
analysis and SPSS were used to analyze the results. Scatter diagrams are used to depict the relationship
between factors and product positioning. Brands and products were selected for case study analysis, and the
features were generalized to show how companies in business segments other than luxury goods could apply
this model.
Findings – The results showed that most of the strategy’s features apply to companies in different business
areas. While luxury brand strategies are unique, their features can be generalized to stimulate innovation in
other businesses or brands.
Research limitations/implications – This study analyzed only two products under one luxury brand.
Thus, the number of products is limited.
Originality/value – This study is unique because it examines how different business areas can apply the
advantages of business strategy models. It illustrates the advantages of successful business strategies of
luxury companies and how different companies can harness that success for future development.
Keywords Brand management, Brand value, Luxury brand, Chanel, Product management
Paper type Case study

1. Introduction
In the current market scenario, commoditization, intense price competition and quick
imitation of design and technology are the major issues faced by companies. Companies are
struggling to develop a brand or business model that will deliver sustained profits. Even if a
strong brand is established, companies may find themselves dealing with a sudden change
in their designers or creators. Thus, companies should be ready for strategic changes to
sustain brand value over time. The brand’s DNA, or its core value, could be strengthened or
weakened by change (Nagasawa, 2014). According to Nobuyuki Ota, the former president of
the Japanese fashion brand ISSEI MIYAKE (Nagasawa, 2014), a fiercely competitive
environment places added emphasis on the need for a strong brand image that clearly and
boldly represents the brand. Ota also insisted that successfully inheriting a brand with a
International Journal of Quality
and Service Sciences
strong DNA is not easy. If the impact of the brand’s founder (i.e. designer) on the world
Vol. 9 No. 3/4, 2017
pp. 292-301
(industry/market) is incalculable, the company faces several daunting risks, namely, the loss
© Emerald Publishing Limited
1756-669X
or weakening of the brand’s DNA. Thus, it is difficult for successors to successfully inherit
DOI 10.1108/IJQSS-04-2017-0039 the brand’s legacy (Nagasawa, 2014). Nagasawa (2014) explained that a successful brand
retains its core DNA or brand identity even when the product changes its models several Luxury
times as in the case of European automobiles such as Renault, Mercedes-Benz, Volvo, Audi branding
and Rolls-Royce, which are recognizable even without their brand logos (Nagasawa, 2014).
This is the essence of brand value. The author noted that the brand’s DNA should be
reflected in its products and that companies should fully comprehend these features and
values. Therefore, the products should facilitate company or brand recognition even in the
absence of a brand name or logo.
In such an environment, this study examines the strategies used by luxury brands as 293
ideal business models. These strategies – which had long been a secret – have been
illustrated by many academics and business practitioners, particularly over the past 20
years. According to them, these strategies – when used as business models – have
significant advantages in terms of sustainability (longevity) and profitability. However, it is
not clear how other companies in different market segments or industries can apply these
strategies to increase their brand value. In other words, can the luxury brand model be
applied to different market segments? Would a successful luxury brand strategy be too
unique for other companies to emulate?

2. Research subject
This paper examines products of luxury brands that have persisted since the brands’
creation. The brands are highly reputed, recognized and retain timeless value. This study
describes the features of these products, how they reflect the brand DNA and how the value
and features have been changed or retained. Implications are derived to illustrate how other
companies with brands in different businesses can apply luxury brand strategies to their
businesses.
One of the significant advantages of a luxury strategy is its uniqueness. Indeed, most
conventional studies of luxury brands illustrate how and why a luxury strategy differs from
those of non-luxury brands. However, the focus of this study is to discover the ideations of a
luxury strategy that can be applied by companies in different areas. It is true that many
specific aspects are unique to luxury companies, and it would be difficult for companies in
different businesses to apply luxury strategies. However, this is not the case with Chanel.
The two products analyzed in this case study were developed by the brand founder
Gabrielle Chanel, and their current popularity and value are greater than they were in her
era. Moreover, Chanel is a luxury brand, but unlike other top luxury brands such as Louis
Vuitton, Hermès and Gucci, its origin is not based on lifestyle goods for aristocratic needs
(Berghaus et al., 2014; Nagasawa and Sugimoto, 2010). This implies that these products can
be used as ideal examples of brand succession from which other companies can learn how
brand DNA is inherited and increased after a charismatic founder’s death. In other words,
illustrating the features of these products indicates the factors that other companies could or
should consider when developing products with high value and profitability and how they
should maintain their innovative streak long after the creator’s death, as in the case of
Apple’s Steve Jobs.

3. Method
This research was conducted by means of a literature review and an analysis of case studies.
The brand and products were selected based on previous research (Sugimoto and
Nagasawa, 2015) involving 16 products from 8 top luxury brands, which were determined
by the ranking devised by the research and consulting company Millward Brown. The
selection of the 16 products was based on information from major fashion magazines as well
as personal information.
IJQSS In previous research by the authors, preliminary studies were conducted and companies
9,3/4 with high luxury brand value were identified. The luxury brands that had created the
strongest brand image were identified by first conducting quantitative analyses using a
questionnaire designed to assess Italian and Japanese consumer perceptions of an iconic
product. Principal component analysis and SPSS were used to analyze the results. Moreover,
the relationship between the relevant factors and product positioning was presented using
294 scatter diagrams to determine whether the brands are perceived as “iconic” luxury brands.
The figures indicate that Hermès, Chanel and Burberry are highly valued as brands with
iconic products. Because the purpose of this study is to illustrate how other companies in
different businesses can apply luxury brand strategies, we selected Chanel for the reasons
mentioned in the previous section.

4. Details of previous research (literature review)

Chevalier and Gutsatz (2012) showed that the value of a luxury object lies in its quality and
superior appearance. Barthes (1972) argued that people wish to buy both the product and the
signals the product sends to others. This rationale indicates that it is essential to manage
product design strategically by including aspects such as symbols rather than focusing only
on aesthetic design elements such as color, shape and materials. Thus, the features of high
profit luxury products are shown. Kapferer and Bastien (2009) stated that luxury brands
have one or two iconic products that symbolize and predetermine their values and
emphasized the venerability of the icons. Icons are not necessarily the brand’s best-selling
product, but they have a definite value: one example is the perfume Chanel No. 5. Pinkhasov
and Nair (2014) exemplified the Gucci loafer, the Eames armchair, the Apple computer and
Dieter Rams’ toaster designed for Braun as design objects and also as luxury objects in the
context of conception, design, materials and execution. The authors argued that the
combination of these aspects makes these objectives iconic.
Corbellini and Saviolo (2012) maintained that iconic products are important because they
can provide substantial profits to the companies that produce them, remain fashionable over
time (thereby reducing the production risk for companies), develop customer loyalty and
communicate the brand’s philosophy. This product category, therefore, is primarily
responsible for the continued financial success of these businesses. Girón (2010, p. 48) also
emphasized the financial merit of iconic products stating, “An iconic product means you can
charge higher prices since the value of the product rises if, by rising above the seasonal
factor, it doesn’t go out of date”.
Several studies have identified the importance of establishing a strong brand identity
and maintaining its source, namely, “coherence”. Kapferer and Bastien (2009) noted that a
brand can only be established through coherence, and codifying the brand identity enables
longevity. Corbellini and Saviolo (2012, p. 26) defined a luxury brand as a “coherent system
of excellence”. The authors also stated that in a traditional luxury market, “products lasted
over time (they did not go out of fashion) and needed time to earn a solid reputation and
build relationships with their customers” (pp. 28-29). These studies indicate that brands
should create and maintain their value in a certain way and communicate it effectively to
customers. Hoffmann and Coste-Manière (2012) emphasized the importance of consistency
and coherence for products and brands mentioning that iconic products with recognizable
style are central to the luxury product offering. More precisely, Patrizio di Marco, ex-
president and CEO of Gucci, insisted that an iconic product cannot be created. He
emphasized that, “Rather, a beautiful product is created and, over time, as customer
appreciation for that product grows, that item grows to iconic status and, thus, an icon is
born. An icon is a timeless product that stays relevant no matter what the fashion trends” Luxury
(Nagasawa et al., 2014, p. 348). branding
These studies illustrate the significance of icons and iconic products to luxury brands in
sustaining brand value over time but also their durable quality. Prior studies have defined
and demonstrated the value of icons. However, a systematic value analysis of luxury brand
icons and iconic products has not yet been conducted.
295
5. Case study on Chanel
This study examined two iconic products of Chanel: the chain shoulder bag and the suit.
The features of these products, the manner of expression and reflection of the brand
philosophies in the products, and the innovations of these features and philosophies applied
by the successor are illustrated.

5.1 History of Chanel

First, this study describes a brief history of Chanel focusing on Gabrielle Chanel’s product
accomplishments. Many articles and analyses have explained her life and her
accomplishments by focusing on her personality. This study, in contrast, examines the
characteristics of the products created by her and how the company inherited and honed
these characteristics to benefit the business. Therefore, it is essential to understand the
history of the creator (Gabrielle Chanel), the products and the company.
Gabrielle Chanel, later called “Coco Chanel”, was a designer and entrepreneur born in 1883
to a poor family in rural France. After her mother’s death, she was sent to an orphanage where
she lived for seven years. When she was 20, she came to Paris where she struggled to be
financially independent. In 1920, she opened a hat shop in Rue Cambon, Paris. She designed
and sold her simple tailored clothes for women and that sensational style became popular in
Paris. According to a definition by Karl Lagerfeld, she was considered “the first stylist to give
women a modern attitude that didn’t exist before” (Lagerfeld, 2016a). Her work brought about a
whole new conception of how to clothe the female body (Charles-Roux, 2005).
Table I shows a summary of Gabrielle Chanel’s accomplishments. It indicates her strong
focus on three aspects (the brand’s DNA) of creation. She never developed products only for
design. Rather, product design always paid heed to “functionality, comfort, and elegance”.

Year Product Innovations Explanation

1921 Perfume No. 5 Used aldehyde, a chemical

component for the fragrance.
Simply named the perfume as a
number
1926 Little black Used the color black for women’s Black is a color associated with mourning,
dress (LBD) clothing. Used woolen jersey and jersey material was used only in men’s
material for women’s clothing underwear before the creation of the LBD
1954 Suit See the section titled “Case
Study”
1955 Chain strap See the section titled “Case
bag (2.55) Study” Table I.
1957 Two-tone Designed to make legs appear Major
Slingback Shoe longer and avoid the toes accomplishments of
becoming dirty Gabrielle Chanel
IJQSS After her death in 1971, the Wertheimer family bought the company. Gabrielle Chanel died
9,3/4 unmarried and had no children. The Wertheimer family had been her business partner since
1924 (Berman and Sawaya, 1989). Chanel is a privately owned company that defines itself as
“a leading luxury goods brand supporting three key businesses: fashion; watches and fine
jewelry; fragrance and beauty”. The headquarters are in New York.
In terms of brand creation, the brand was renewed under the leadership of German
296 designer Karl Lagerfeld in 1983, 12 years after Gabriel Chanel’s death. Lagerfeld adopted
Goethe’s famous motto: “Build a better future by expanding on elements of the past”. At
Chanel, he has changed nothing and everything, interpreting Chanel in his own way with
elegance and wit. He relaunched the “Chanel look” by “upsetting Chanel’s principles,
juggling sometimes outrageously with her laws, practicing like no one else in fashion design
the art of not pleasing everyone [. . .]. The company, now acknowledged as one of the
outstanding luxury brands, is unanimously acclaimed as a model of continuity [. . .] He
would have certainly met Mademoiselle’s approval since her ideas also often created mini-
revolutions before becoming the industry standard” (Baudot, 2003, pp. 16-17).
A large part of the philosophy of Gabrielle Chanel could be explained by her famous
words, “Fashion changes, but style remains” (Baudot, 2003, p. 16) and “Enabling women to
move easily, to not feel like they’re in costume. Not changing attitude or manner depending
on their dress. It’s very difficult” (Lagerfeld, 2016b). She insisted as early as 1918 on the right
for women to experience comfort and ease of movement (Charles-Roux, 2005). Gabrielle
Chanel initiated revolutionary ideas (innovations) in three dimensions: style, color and
materials. These became the standard of modern fashion but were controversial in her era.
She was the first fashion designer to focus simultaneously on functionality, comfort and
elegance with simplicity. These are the most important codes (rules) that were understood
and reflected in the products by all Chanel employees. Thus, the brand’s DNA was part of
the organization, not just part of the leading designer. Consequently, according to the
company website, the company set high standards and recruited employees with a high
level of education and experience, as well as a strong, creative, and entrepreneurial spirit
(CHANEL Official Website, 2016a).
One of the successful examples of expression and a reflection of brand product
philosophies including the innovations and philosophies applied by successors can be found
in the watch business.
After the death of Gabrielle Chanel, the successors added product categories in
accordance with the brand DNA. In 1987, the first line of Chanel watches featuring the shape
of the Place Vendome, the historical place of Gabrielle Chanel and the stopper of the No. 5
(perfume) bottle. In 2000, the J12, the first sport watch for both men and women, was
launched, with a seamless strap made of high-tech white ceramic. This was followed by a
black version, as black and white are the brand’s iconic colors. The features of the J12
reflected Gabrielle Chanel’s philosophies: functionality, comfort and elegance. In the watch
industry, high-tech ceramic was not a popular material before the J12. However, the
company devoted about seven years to develop the iconic watch as a collection of the brand
DNA, and the style of the J12 has now become the industry standard.

5.2 The Chanel suit

In the 1920s, Gabrielle Chanel discovered tweed, a traditionally masculine fabric, which was
the inspiration for her iconic women’s suits. Chanel’s clothes feature quilted fabric and
leather trimmings; the quilted construction reinforces the fabric, design and finish
producing a garment that maintains its form and function when worn. A notable example of
using such haute couture techniques is the woolen Chanel suit – a knee-length skirt and a
collarless button-up wool jacket. People can recognize a Chanel suit from its design and Luxury
fabric even in the absence of the double-C brand logo. Certain details of the Chanel suit – branding
such as the outer and lining fabrics, stitching, pockets, jewel-like buttons on the jackets and
a gilt chain stitched around the inside hem – are instantly recognizable. The Chanel suit was
designed primarily to enhance the comfort and mobility of women and, in fact, gave women
greater independence in their lifestyles.
After Gabrielle Chanel’s death, Karl Lagerfeld exaggerated these iconic features with 297
additions such as chains entwined with a leather strap (developed for the shoulder bag) and
the double-C brand logo. Additionally, Lagerfeld lengthened the skirt to that of a maxi,
cropping it to match a bolero-style jacket and rendering the suit in fabrics ranging from
nubby tweeds to radiant Lurex-laced chiffons. “There are things that I drew out” and “made
people believe had always existed”, he admitted (Lagerfeld, 2016a).
These renewed styles by the successor were widely accepted. Although the style is new,
it retains its timelessness. This was possible because “Chanel is a vocabulary, a set of
canons, a discipline, and a grammar” (CHANEL Official Website, 2016b). As Karl Lagerfeld
comprehended, the Chanel style is not just a physical design; it is also an idea. Therefore, if
the idea is understood correctly, the outcomes retain the recognizable iconic features. “There
are things in fashion that never go out of style: jeans, a white shirt, and the Chanel jacket”,
said Karl Lagerfeld (Lagerfeld, 2016b).
In addition, the iconic elements of the Chanel suit have been applied to different
categories of Chanel products from cosmetics and eyewear to scarves, accessories, leather
goods and even boutique sofas. Moreover, texts, images and movies on the history of the
Chanel suit have been created and utilized as effective marketing tools in the digital arena.

5.3 The chain shoulder bag

In February of 1955, Chanel’s first shoulder bag, called the 2.55 after its month and year of
birth, was launched. Originally designed in 1929, the quilted bag was launched with a
shoulder chain. Iconic products are a collection of several symbolic features (Table III).
Chanel 2.55 has four features: the chain strap, quilting, inside pocket and turnover flap.
Women’s bags did not have a shoulder chain before the Chanel 2.55. The preceding
clutch bags were neither functional nor convenient because women could only use one hand
as they held the bag with the other. The chain shoulder strap developed by Coco Chanel
changed this both in terms of hardware and software. The chain strap also has an aesthetic
meaning; inspired by the straps found on soldiers’ bags, Chanel added thin straps and
introduced the new design in 1929. In addition to the double-chain shoulder strap, the unique
features of this bag include a quilted diamond or herringbone pattern made using a running
stitch called the “Matelassé”, giving the bag volume and a rectangular shape.
The bag’s features became icons of the Chanel brand and have been applied to several
product lines such as small leather goods, clothes, eyewear, watches, accessories and
jewelry. As seen in the case of the Chanel suit, text, images and movies on the history behind
the bag have been utilized as digital marketing tools. Moreover, exhibitions titled “Mobile
Art Chanel” featuring this iconic bag, were held in Tokyo, Hong Kong, New York, and Paris
from 2008 to 2010.

6. Results
Table II presents a summary of the symbolic features of the Chanel suit.
Table III presents a summary of the symbolic features of the chain shoulder bag.
IJQSS Brand
9,3/4 philosophy Innovation by the
Characteristic Classification Purpose expressed successors

Tweed Materials (fabrics) Encouraging Functionality Used for a wide range of

movement Comfort products such as coats,
dresses, bags, shoes,
298 cosmetics (with the tweed-
like fabric pattern serving
as the motif) and
accessories
Silk lining Materials (fabrics) Bearing brand Elegance Utilized as a marketing
sign (identity) tool
and elegance
Gilt chain Technologies Ensuring the Elegance
shape of the
jacket (to let the
jacket fall
perfectly)
Jewel-like Parts Practical purpose Functionality
buttons (not ornamental) Elegance
Real pockets Parts For practical use Functionality
(not ornamental)
Cardigan-style Shapes Providing Functionality Varieties of lengths,
jacket freedom of responding to changes in
movement the market trend and
The wrap-over Shapes Providing Elegance social situation
skirt that stops at freedom of
the knee movement and
Table II. highlighting the
Symbolic features of elegant shape of
the Chanel suit the female body

7. Discussion and conclusions

This study analyzed product features from brand inheritance. The results present three
significant findings.
The goal of this study was to investigate the possibility of applying a luxury brand
strategy to a wide range of business areas. The literature review regarding luxury iconic
products showed the significance of iconic products in terms of financial value and brand
identity. Additionally, the results of this study on luxury iconic products indicate the
following.

7.1 Simple, timeless and universal design with a durable link to the brand’s DNA
Chanel products show strong links to their brand core and origins. Chanel products adhere
to iconic core features and the brand’s DNA, illustrating the importance of maintaining this
coherence between physical features and the brand’s DNA.
A brand’s DNA should be reflected in its products, and companies should firmly
comprehend these features and values concretely. To do this, there should be an
unmistakable link between the product features and the brand’s DNA. Products should
facilitate company or brand recognition even in the absence of a brand name or logo.
 Brand
Luxury
philosophy Innovation by the branding
Characteristic Classification Purpose expressed successors

Chain entwined Parts Encouraging Functionality Used for a wide range of

with a leather movement Comfort products such as coats,
strap dresses, bags, sunglasses,
shoes, cosmetics (chain 299
strap-like pattern serves
as the motif), and
accessories
Utilized as a marketing
tool
Turnover flap Shapes Avoiding Functionality Utilized as a marketing
unexpected tool
opening
Wide gusset Shapes Enhancing Functionality
storage capacity
Pockets inside Parts Enhancing the Functionality
and outside convenience of
storage
Quilted diamond Technologies Retaining shape Elegance Utilized as a marketing
pattern and strength tool
(matelassé) Used for wide range of
products such as bags,
sunglasses, shoes,
cosmetics (quilted
diamond-like pattern
serves as a motif), Table III.
accessories, small leather Symbolic features of
goods, and watches the chain shoulder
bag

Tables II and III show that the designs of both iconic products presented here are composed of
parts and materials designed to showcase the creator’s philosophy through the products. In other
words, the iconic product is a physical expression of a brand’s DNA. Iconic products are a
collection of several symbolic features. A brand can only be established through coherence, and
codifying the brand’s identity enables longevity as Kapferer and Bastien (2009) explained.
Additionally, Corbellini and Saviolo (2012) defined a luxury brand as a “coherent system of
excellence”. Therefore, a luxury brand should be timeless with universal appeal, which affords it
the possibility of application and remolding by successors, as well as easy brand recall by
consumers.

7.2 Features based on technologies and serving practical purposes

When products are made to accomplish particular purposes, based on certain technologies
(as seen in the coherence of Chanel philosophies and her creations (products)), those
products are “timeless” and “also in style” (Lagerfeld, 2016a). Lagerfeld explained that
Gabrielle Chanel’s style is instantly identifiable.
If the features of the products existed only to serve the purpose of physical design or
market trends, they would not retain timelessness. As a result, it would be difficult for the
successor to innovate them without weakening the brand’s DNA. On the other hand,
IJQSS products with a style that is consistent the brand’s DNA can be recognized by the public
9,3/4 despite any changes. The brand or company creating these products is acknowledged as a
model of continuity (Baudot, 2003) as shown by Chanel.

7.3 Thorough understanding of the brand’s DNA

Notably, the successors (Karl Lagerfeld and other employees) who recreated Chanel’s
300 products did not copy the iconic features originally designed by Gabrielle Chanel. Instead,
they innovated and continued, “creating pastiches or repeatedly issuing models” in the
manner of Gabrielle Chanel. These changes are essentially innovations (Charles-Roux, 2005,
p. 378). “I don’t sit down and say, “We”re going to do some Chanel” (Lagerfeld, 2016a).
In conclusion, the luxury brand model, namely, the iconic product model, would not be
too unique for non-luxury companies to emulate. The results suggest that companies can
gain and sustain brand value by reevaluating their core products and focusing on promoting
their brand’s DNA in the long run. Even if a brand’s designer or founder leaves, its iconic
products can be utilized as tangible assets to sustain brand value. The results of the analysis
suggest that, to achieve success in retaining the value of that brand, the new designer or
founder who takes over a popular brand must consider brand icons as sources of sustainable
brand value. Moreover, this study recommends that companies consider consciously
creating and utilizing iconic products because they could greatly contribute to brand value
retention over time.

8. Limitations and future research

While the findings of this study are significant, they are subject to several limitations. This
study analyzed only two products under one luxury brand. Thus, the number of products is
limited. Future studies may analyze a greater number of products and a wider variety of
brands and segments, which may strengthen the validity of the findings.

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Corresponding author
Kana Sugimoto can be contacted at: kanas@fuji.waseda.jp

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