Keywords

1 Brands and Positioning

Originally, a brand was merely a name or a design created to identify and distinguish between the goods and services of one seller and another. According to the American Marketing Association, a brand can be defined as a name, term, design, symbol or any other feature that identifies one seller’s goods and services as distinct from those of other sellers (American Marketing Association, 2017).

Numerous companies use a brand as a symbol. Others develop a whole series of branding strategies in order to endow the brand with a much more profound and complex meaning, using it to create, maintain, protect and improve [1]. We can define a brand as a representation of a series of characteristics that are perceived by consumers. These characteristics constitute the product or service, the purchasing experience as well as values and other characteristics perceived by consumers and associated with the brand by consumers [2]. According to Kotler [1], brands can be perceived by their consumers or their target group through six dimensions. Companies seek to implant a positive brand perception in the minds of consumers. When designing a branding strategy, companies tend to consider the following aspects to be the six key dimensions: the brand’s attributes (the indicators that the brand is associated with), the benefits it provides, its values, the brand culture (whether it conveys or represents a specific culture), the brand’s personality and the user (which is to say, the segment it targets). Brands go beyond the name, concentrating on offering an extra dimension to the customer [3]. Consumers purchase products or services that enable them to express themselves through the product or service. In this sense, brand does not only set products or services apart from those of competitors but also attracts customers with preferences associated with the brand’s personality [4,5,6].Thus, brand constitutes an asset at companies, given that the perception that consumers have of a particular brand ends up becoming the most valued attribute of the product or service being offered. Brand effectively simplifies the purchasing decision, and this enables companies to set themselves apart from competitors and generate consumer loyalty [7]. Within the highly competitive environment that exists today, it is fundamental for companies to turn their brand into an asset.Keller [7] has analysed the importance of building and nourishing a brand from two perspectives: that of the consumer and that of the businessman. From the consumer’s point of view, one key factor is being able to identify the source of a product. If consumers are able to recognize and get to know a brand, then the decision-making process becomes much simpler. In terms of risk reduction, brands limit the risk that a purchase might not bring any benefits, thanks to prior experience. Within the realm of electronic commerce, which requires a large flow of contents, or cloud journalism [8] within the context of the Broadband Society [9], the consumer seeks to minimize risk in business to consumer (B2C) or business to business (B2B). Delivery errors reduce the user’s experience rating and place the reputation of the company and its financial resources at risk.

Another factor that consumers value is the reduction in the cost of searching for products or services. Brands enable consumers to reduce internal costs (they facilitate the process whereby a product is chosen) and external costs (they are required to devote less time to searching for an appropriate product). This depends on the information that the brand places at its customers’ disposal, enabling consumers to generate expectations regarding the product or services that they wish to acquire.

With regard to the promise, bond or pact that is established with the brand, this is an especially sensitive indicator in the case of innovations such as HbbTV (hybrid broadcast broadband TV) [10].

Another factor is the brand symbolic value, according to which consumers can develop a strong devotion to certain brands that make them feel better about themselves because they provide the characteristics that the consumers desire, such as a high social status within the upper reaches of Maslow’s pyramid.

Finally, consumers focus on quality indications. Thus, consumers will choose to purchase products or services depending on the level of quality they are looking for, which will depend on other factors such as price and reliability; thus market segmentation and product differentiation are both decisive aspects for brands [11], especially for those that are looking for financing via crowdfunding [12].Positioning is based on the product, although it goes beyond the product and analyses the question of positioning in the minds of potential customers [13]. In order to create an appropriate positioning, a product must be designed that occupies a distinct place in the mind in order to maximize profit [14]. This will guide the marketing strategy, identify the objectives and clarify the brand’s essence. The strategy will highlight certain product qualities that differentiate it from competitors based on certain attributes or benefits, these being important and beneficial to the customer, whilst also being delivered in a more effective manner than in the case of competitors. Certain elements exist that favour an association in the minds of consumers and can generate a favourable positioning [15]: degree of association (strength of the link between the brand and its attributes, which is determined by experience); degree of attractiveness (importance that consumers attach to certain attributes of the product or brand); and degree of differentiation (brand-attribute differences perceived by consumers in comparison with other brands).

Positioning strategies depend on the company. Each company presents different goals and different needs. Depending on these, it will emphasize different characteristics that are liable to distinguish it from its competitors, so that the company can boost its appeal on the market. Positioning corresponds to an analytical process founded on four questions [2]: what for? (the tacit benefit that our product or brand offers the consumer; for whom? (a clear and defined target group); why? (elements that make the product essential); and against whom? (direct competitors that might enter the mind of the consumer). A positioning strategy seeks to attract the attention of the market and occupy the consumer’s ‘top of mind’ [16]. An effective positioning is one that cannot be imitated in the short term [17] thanks to characteristics such as attribute, benefit (rational and psychological) and relative quality and price.

For the purposes of positioning, various strategies exist regarding use and application (focusing on the specific or particular use of the product), regarding users (the brand is associated with a specific user profile, such as when an influencer or celebrity is used to link a brand or product with a segment) [18] and regarding competitors (competitive advantages compared with those of competitors).

2 The Millennial Generation and Consumption

The generation that grew up in the 1980s and reached adulthood after the year 2000 is known as the ‘millennial generation’ or ‘generation Y’ [19, 20]. This is the generation that succeeded the ‘baby boomers’ (born at the end of the Second World War) and what is known as ‘generation X’ (born between the 1960s and 1980s). Generation Y emerged at the end of the twentieth century, after two World Wars and numerous economic crises. The members of this generation were born in a period of apparent economic stability, but precisely when the new century started they began to witness a somewhat turbulent period: in less than 10 years they have suffered a global economic crisis and the consequences of terrorism, wars and viral pandemics such as the coronavirus. In 2020 they represented 75% of the world’s workforce, and this is what makes us want to target them as future consumers and users. They make up a growing segment featuring new characteristics, new needs and new demands within a digital environment [21].

The three generations mentioned before (baby boomers, generation Y and generation X) have different ways of regarding and living life, which means that their expectations, goals and ways of thinking and acting (and even purchasing) are also different. It is for this reason that it is so important to carefully consider their characteristics and perspective, so that we might understand them and predict their behaviour. Although some authors are sceptical about the ‘myth’ of studying target groups as generations, we consider this approach based on previous scientific studies mentioned in the references and along the study [22].

The factor that millennials identify with the most is technology, thanks to the leap from an analogue to a digital environment. Although this generation does not consider technology to be a defining factor, they accept that it enables them to forge their identity [23]. Technology is perceived as being essential when it comes to widening one’s horizons, communicating and establishing interpersonal relationships, from the very beginning [24]. Millennials admit that technology has given them the power to change the world in a positive sense by using their mobile devices, generating social movements and trends [25]. They are the first generation to grow up surrounded by digital media, and they are accustomed to purchasing goods and socializing online [26, 27].

In this respect, millennials experience a reality that combines both analogue and digital communication messages. This means that companies create omni-channel communication strategies, which means that they operate on various different channels at the same time and can switch channels.

The availability of terminals explains the consumer’s shift towards the Consumer 2.0, an expert in purchasing in a mobile manner, featuring a capacity to find offers, opinions and information regarding a product before proceeding to the actual purchase, with the corresponding skills based on triple play and quintuple play [28].

The millennial target can be defined as being highly critical and demanding [24]. In fact, a high percentage of consumers would cease to purchase products from a particular brand as the result of a negative purchasing experience. For millennials, the purchasing experience and personalization can assume greater value than the product itself. It is for this reason that companies should focus on the customer as the strategic hub, employing tools such as Customer Relationship Management (CRM) and Social CRM, effectively getting to know the customer better, thus satisfying their needs and generating satisfaction, as well as a predisposition to repeat the purchase of a particular brand. This is where engagement and loyalty strategies come in.

Curiously, in relation to intangible indicators, millennials are satisfied and consider themselves to be happy, feelings that are reinforced by ideas of freedom and a capacity to express themselves. This generation is proud of its nationality (83%), but at the same time it is curious about the world (88%), which explains why the product that is most widely searched for and purchased online by millennials consists of airplane tickets, featuring growth of 15 percentage points compared to the previous year (Observatorio Cetelem España, 2017).

Millennials have become a key target group for fashion companies [29] and constitute an essential ingredient with regard to the development of electronic commerce [30]. Within the realm of retail fashion, sales are highly competitive due to consumer behaviour, which is characterized by its uncertainty and volatility. The situation is exacerbated by the increased range of products available, a result of the build-up witnessed during the recovery from economic recession.

Various studies have analysed the purchase of fashion products amongst millennials [18], including both fast-fashion brands and luxury brands [31, 32], whilst also analysing how they consume information regarding fashion [33, 34]. When it comes to consuming fashion, these studies concluded that millennials gave priority to searching for products in brick-and-mortar shops and on web pages [34], although this trend has changed during the pandemic, given that priority has now switched to generating fashion product needs and purchase demand through the social media [35].

As declared by the report entitled ‘The State of Fashion 2021’ [36]: ‘Digital adoption has soared during the pandemic, with many brands finally going online and enthusiasts embracing digital innovations like livestreaming, customer service video chat and social shopping. As online penetration accelerates and shoppers demand ever-more sophisticated digital interactions, fashion players must optimize the online experience and channel mix while finding persuasive ways to integrate the human touch’.In this new worldwide outlook, fashion companies interact with consumers through digital channels, this being the place where the attributes, values and proposals of each brand are presented. In this respect, branding and positioning strategies have reached millennials mainly through web sites and social media, Instagram and TikTok [34].

3 Methodology

The general objective of this research consisted of discovering the positioning of the main brands marketed in Spain in the minds of Spanish millennials, namely, Zara, H&M, Louis Vuitton and Gucci. The specific objectives consisted of the following: determining what attributes are associated the most with each brand; determining the attributes that are considered fundamental; determining the loyalty of millennials towards the brands; determining general brand perception; identifying the reasons behind these brand evaluations; determining the brands that possessed the highest levels of awareness (‘top of mind’); and determining customer satisfaction with the different brands.

The criteria used to select the brands consisted of overall turnover in the financial year in which the information was compiled for the research, as well as their ranking in the Best Global Brands index. These companies are characterized by their adaptability and flexibility [36].

The hypotheses that were posed for this research consisted of the following:

  • H1. Millennials situate the brands Zara, H&M, Louis Vuitton and Gucci at their top of mind.

  • H2. Recognition of the brands Zara, H&M, Louis Vuitton and Gucci is high.

  • H3. An association exists between brand recognition and possession of clothing made by the brands.

  • H4. Customers of fashion brands reveal a high degree of loyalty.

With regard to fieldwork, the research method was quantitative. We used a questionnaire, a primary information source. When it came to choosing the brands, Interbrand is a consulting company that offers services linked to brand creation, with a view to endowing companies with an identity, purpose and role that may lead to a brand that enhances the company’s profitability (Interbrand, 2019).

In order to select brands for our positioning analysis, we used Interbrand’s Best Global Brands ranking, the first brand evaluation methodology to receive ISO certification. Four brands were chosen from the clothing industry that feature in this ranking (Louis Vuitton, H&M, Zara and Gucci), given that this is a key and growing industrial sector in the GDP of every country. Furthermore, these four clothing brands effectively target millennials, the segment being analysed.

In this sense, the fieldwork sample consisted entirely of this group, given that this is a relatively new target and one that features a series of unique characteristics, as described in the theoretical framework. Another factor when choosing these brands was that they are all direct competitors in their respective categories, whether this be within the realm of low-cost clothing or luxury clothing.

With regard to the method for compiling primary information for the fieldwork and the method of analysis used to process the data that was compiled, we employed a series of secondary sources, both internal and external with regard to the brands, in order to discover what attributes and characteristics they seek to communicate to consumers. However, in order to discover what attributes and other characteristics millennials resident in Spain associate with the different brands, we employed a primary information source: the questionnaire.

In this case, the questionnaire was made up of 13 closed questions, including both questions relating to socio-demographics and positioning. The questions were formulated in order to fulfil the goal of either accepting or rejecting the initial hypotheses and discovering the positioning of the four brands (Zara, H&M, Louis Vuitton and Gucci) in the minds of millennials. For this reason, the responses of any individuals not between the ages of 17 and 37 years were eliminated from the survey. We achieved an n = 950.

4 Results

In relation to the demographic analysis, the sociodemographic characteristics of the sample interviewed were presented. In the univariate and bivariate analysis, the data relating to the positioning of the brand in the survey were presented. Finally, the hypotheses were accepted or rejected depending on a series of statistical results.

Demographically, it can be observed that, with regard to gender, the sample was correctly distributed in proportional terms, given that 47.2% were women and 52.8% were men. The average age was 22.4 years, featuring a typical deviation of ±4.39 years. The majority of the respondents were students (34.9%), followed by working individuals (31.6%). A significant number of the respondents also studied and worked at the same time (24.1%).

The working respondents mainly presented Vocational Training (FP) (35.8%) and University Studies (33.6%). Furthermore, the unemployed respondents presented Vocational Training (FP) (62.5%) and Basic Studies (25%). Finally, a large proportion of the students were pursuing University Studies (51.4%) and Vocational Training (FP) (26.5%).

It can be observed that three of the bands analysed by the study are amongst the top seven in the top-of-mind analysis for the brands most mentioned by the respondents (Graph 1). The leading position is occupied by Zara, with nearly 31% of the responses. Gucci is located in third place (with 6.49% of the responses), and Louis Vuitton achieves a meagre 2.88% of the responses. These figures are statistically significant. They mean that Zara, Gucci and Louis Vuitton enjoy a certain awareness. Conversely, the company that does not appear in the top seven for the sample is H&M, achieving a somewhat modest fifteenth place. These results partially validate H1 (Millennials situate the brands Zara, H&M, Louis Vuitton and Gucci at their top of mind).

Graph 1
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Top of mind for fashion brands. Source: Own elaboration in collaboration with Anna Martorell and Alejandro Garrido

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In relation to brand recognition (Graph 2), it can be observed that all four brands chosen for this research present a high level of recognition, given that at least 95% of the sample identified them. Of course, given that we are dealing with a sector that is naturally attractive to young people, and in view of the intensive marketing that is carried out in both analogue and digital formats, it is quite understandable that brand recognition should be high. In other less popular or more specialized sectors, the figures would probably be lower, in which respect we can state that the wider context helps to boost brand recognition. Nevertheless, these results confirm H2 (recognition of the brands Zara, H&M, Louis Vuitton and Gucci is high).

Graph 2
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Recognition of fashion brands. Source: Own elaboration

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One of the indicators of attachment to a brand consists of consumption, which is to say, possession of products or services made by that brand. In this respect, we can observe (Graph 3) that the majority of the clothing items that the sample respondents declared they had purchased corresponded to H&M (in 85.61% of cases), followed by Zara (74.05%). These results are not especially surprising, given that these brands make the respondents their principal target, effectively focusing a large part of their marketing strategies on these consumers. Furthermore, 17.45% of the sample possessed some item made by Louis Vuitton and 15.8% owned a product made by Gucci. These results reflect the respondents who made up the sample, given that both brands form part of an older market, although their strategies are currently undergoing a change. Thus, H3 must be rejected (an association exists between brand recognition and possession of clothing made by the brands).

Graph 3
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Possession of clothing made by the fashion brands. Source: Own elaboration

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Members of the sample who declared that they owned clothing items made by the different brands were asked whether they would purchase clothing from these brands again. This question sought to determine whether the brands demanded a certain loyalty from their consumers or not. Zara obtained the best results in terms of loyalty, given that 94.9% of consumers would place their trust in the brand again, whilst only 5.1% would cease to do so (Graph 4).

Graph 4
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Degree of loyalty to the fashion brands. Source: Own elaboration

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In the case of H&M, we can also state that its customers are loyal, since 87.9% would once again purchase its products, compared to 12.1% who would not do so. Gucci occupies third place, with a loyalty rate of 84.8% of the respondents. Consumers of Louis Vuitton’s products are the least loyal, although the figure of 79.9% loyal customers is high. These results confirm H4 (customers of fashion brands reveal a high degree of loyalty).

5 Conclusions

In general terms, we can observe a high level of recognition of the brands Zara, H&M, Louis Vuitton and Gucci amongst millennials when it comes to top of mind and brand awareness, notwithstanding the odd qualification of this statement.

The marketing activities (especially digital) carried out by these brands, especially on social media and even through innovative interactive channels such as HbbTV, constitute one of the reasons for these high levels of awareness [22].

Furthermore, we can observe a certain feedback between the positioning that exists in the minds of potential customers [13] and the loyalty of the brands’ consumers. However, the same is not true if we attempt to make an association between brand recognition and possession of clothing by these brands.

Overall, we can highlight three factors that favour an association in the minds of consumers when it comes to generating an appropriate positioning. These consist of the degree of association (strength of the link to certain attributes that the brand wants the public to associate it with, and the real association generated in the mind of consumers), the degree of attractiveness (importance that consumers grant to certain attributes or specific attributes of a product or brand) and the level of differentiation (differences that consumers perceive in comparison with other brands). We can observe that the attributes of the brands are attractive, which explains the high levels of awareness, recognition and satisfaction, the positive evaluation and the high levels of possession and loyalty. We can infer that, for a brand to be perceived as being different, it must present a series of characteristics that endow it with a high degree of importance, distinction or priority, elements that it can use to set itself apart from the rest of the competing brands.This brand awareness amongst the millennial generation is mainly created through digital channels. What is more, in the case of luxury brands, brand awareness is even higher in the digital environment, in view of the purchasing power of millennials and the exclusive positioning of these brands within offline and online environments.