Diesel Brand

REPORT ON

“DIESEL BRAND”

ANAMIKA PANGHAL NEHA KESHAB SONIKA DEVI

RETAIL MANAGEMENT AND TECHNOLOGY

BATCH (2013-2015) MASTERS IN FASHION TECHNOLOGY SEMESTER 2

DEPARTMENT OF FASHION TECHNOLOGY NATIONAL INSTITUTE OF FASHION TECHNOLOGY, CHENNAI 1

STUDENT DECLARATION

We AnamikaPanghal, NehaKeshab and Sonika Devi hereby declare that the report titled ―Diesel Brand‖ for the subject Retail Management and Technology submitted towards fulfillment of assignment of Masters of Fashion Technology is our original document and no part of the document has been copied from any other report or any other work carried by someone else which has been submitted for any other assignment. However any material taken from any other published source has been suitably referred and acknowledged at various places.

ANAMIKA PANGAL(CHE13MT02)

NEHA KESHAB(CHE13MT08)

SONIKA DEVI(CHE13MT18) BATCH: 2013-2015 CENTER: NIFT, CHENNAI

DATE: 29 January 29, 2014 PLACE: NIFT, CHENNAI

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CERTIFICATE FROM FACULTY REGARDING COMPLETION OF WORK

This is to certify that the report titled ―Diesel Brand‖ for the subject Retail Management and Technology submitted towards fulfillment of assignment of Masters of Fashion Technology by Anamika Panghal, Neha Keshab and Sonika Devi is their original work under my guidance and the results are based on the research conducted by them.

Name of the faculty and Designation

DATE: 29 January 29, 2014 PLACE: NIFT, CHENNAI

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ACKNOWLEDGEMENT

We are extremely grateful to NIFT, Chennai for providing me an opportunity to work on the assignment ―Diesel Brand‖. We express our wholehearted thanks to our C.C. and faculty Mrs. Malar Selvi for her encouragement and moral support in organizing our work and making it and giving us valuable tips for making it presentable. We are thankful to the store manager of Diesel brand of Phoenix Mall, Chennai for their store information.

NAME: AnamikaPanghal, NehaKeshab, Sonika Devi Masters in Fashion Technology NIFT, Chennai Date of Submission: 29 January, 2014

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EXECUTIVE SUMMARY The report is based upon the knowledge that is gathered about the ―Diesel Brand‖ at Phoenix Mall, Chennai. We did our report at NIFT, Chennai under the guidance of Mrs. Malar Selvi (Faculty of Department of Fashion Management Studies). REPORT TITLE: ―DIESEL BRAND‖ OBJECTIVE: 1. To do the brand research and to study the value and vision of the Diesel Brand. 2. To know the target customers, forms of retailing and types of ownership of the brand. METHODOLOGY: The methodology adopted for the report consist of: 1. 2. 3. 4.

Guidance from our subject faculty Mrs. Malar Selvi. Questionnaire conducted in the Phoenix mall as well in our class. Secondary Data Collection, i.e. through internet, magazine and journal. Implementing the same

ABOUT THE BRAND: Diesel, an Italian company was started by Renzo Rosso and his former boss Adriano Goldschmied (of the AG Jeans company). The brand was founded on the concepts of ―rejected the slavish trend following typical of the fashion industry.‖ And "views the world as a single, border-less macro-culture." The company rapidly caught on, and in 1985, Rosso gained full control of the company. By 1991, the company began it‘s international marketing campaign and in 1996, the New York City Flagship store opened. In 1988, Wilbert Das joined as the creative director and the brand began to take off. Das served as the creative director for all of the brand‘s divisions. Many products are covered under Diesel. They are garments, foot-wears, shades, undergarments, watches etc. FUTURE VISION OF BRAND: The future vision of the Diesel brand is to use the recycled material from the Textiles machine in the brave material collection. It will also go for ongoing search to new innovative brand materials.

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TABLE OF CONTENT S.NO. 1. 2. 3. 4. 5. 6. 7.

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TITLE Student Declaration Certificate from faculty regarding completion of work Acknowledgement Executive Summary List of tables Introduction to Diesel SWOT Analysis  Strengths  Weaknesses  Opportunities  Threats Diesel Brand Portfolio  D-Diesel  D-Diesel Licenses  Diesel Kids  55-DSL Goals Target Group(Customers) Retail formats of Diesel  E-Retail  EBO Types of Ownership  Licensing Store  Chain Store  Factory Outlets Marketing Mix of Diesel  Product  Promotion  Place  Price Diesel Brave Material Collection Advertising  Brave Material Logo  Natural Dyed Jeans  Hemp Campaign  Introducing Sustainability In The Diesel Lifestyle By Pesticide Advertising  Nettles Campaign  Rinsing Discount System  Brave Loyalty Card Worldwide Brave Material Expansion Extending –Up Market  Style Lab Vs D-Diesel  Target consumer 6

PAGE NO. 2 3 4 5 8 9 10

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28 29-36

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 Brand Identity  Positioning and Pricing  Distribution  Media Strategy  Style Lab Advertising Campaign  POP Materials  Branding Strategy for Style Lab Future Values 5- Year Plan Methods of Research

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Questionnaire Results References

37 38-39 40 41 42

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LIST OF TABLES

S.NO 1. 2. 3.

TABLE DESCRIPTION Stores of Diesel Brand worldwide Five year plan Questionnaire result

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PAGE NO 15-16 36-37 39

INTRODUCTION TO DIESEL Brand Value: Only the Brave Vision. Mission. History. Ethics

Diesel was founded in 1978 by Renzo Rosso who chose the name Diesel because ‗diesel‘ was considered to be the ‗alternative fuel‘ in the current oil crisis. Rosso‘s vision was that the global fashion market is not divided by countries and borders but by people‘s lifestyle. Today the principal lines of Diesel are the main line: Diesel and Diesel Black Gold. Currently the head designer of Diesel, since October 2011, is HeikkiSalonen. Diesel also has collaboration collections for footwear, underwear (US company Mast Industries Inc), bags, eyewear (Sa!lo), jewellery and watches (Fossil) and fragrances (L‘Oréal). Diesel‘ s headquarter is in Breganze, Italy where it manages 18 subsidiaries in Europe, Asia and America. Diesel is now present in more than 80 countries including more than 400 company owned stores. Diesel‘s price range is considered to be a little higher than middle range. This means that a pair of Diesel jeans cost from 110 EUR to 240 EUR. Diesel‘s revenue is estimated in a €1.3 Billion.## Renzo Rosso is also the founder of OTB (Only the Brave), which is the holding group for other brands besides Diesel, such as Maison Martin Margiela,#Viktor & Rolf, and Sta$ International (who manufactures and distributes DSquared2,#Just Cavalli,#Vivienne Westwood, and Marc Jacobs Men)#and a nonpro!torganisation Only The Brave Foundation. Diesel‘s claims not to only sell clothes for commercial gain but they also want to concentrate on broadening the young, fresh Diesel lifestyle to make ordinary people feel great about themselves. The company‘s mission: ―To create an apparel line perfect for individual people who follow their own unique path in life and for those style-makers who express their individuality by the way they dress.‖! Diesel‘ s casual everyday wear for men and women is known for it‘ s original, sexy, trendy, rebellious and creative style. Diesel‘s ―Be Stupid ― advertisement campaign from fall/winter 2010 has created ambivalent emotions among the customers. The main goal of the campaign is to give people the feeling of freedom to express themselves without fear and to do something out of the extraordinary. It´s all about testing the limits. Diesel‘s ironical ―Be Stupid ― campaign draws a parallel with one of the Cradle-toCradle design philosophist William McDonough quotes: ―Waste is stupid! ―. Resently Diesel has already started producing jeans from organic cotton but hasn‘t really put any e$ort into advertising it or communicating sustainability to the consumer. Group 6 chose Diesel as a brand to be working with because within the next !ve years Diesel should start implementing sustainability and Cradle-to-Cradle thinking into the Diesel lifestyle. 9

SWOT ANALYSIS Why is Diesel a good brand for sustainable approach? Using SWOT analysis scheme group 6has explored the possible strengths and weaknesses, opportunities and threats of this brand. STRENGHTS Diesel is a lifestyle not just a brand De!ned and open target group Good communication skills Brand awareness (customer loyalty) Known for high-quality products Strong design that is not associated only to one season Part of a bigger holding (OTB) WEAKNESSES Sustainability is not desirable Manufacturing processes, such as sandblasting Lack of transparency for manufacturing, production and transport methods Exclusive target market group OPPORTUNITIES Introduce the sustainable lifestyle into the luxurious fashion line production Introduce a Cradle-to-Cradle jeans and garment production Future development in the textile industry THREATS Other competitive brands are more aware of sustainability Loosing customers due to ‗eco-fashion‘ The quality and the comfort of the brave materials are unknown Changing too much of the brand image

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DIESEL BRAND PORTFOLIO

Before the introduction of StyleLab in 1998, the brand portfolio of Diesel SpA consisted of three main product lines: D-Diesel (including licenses), Diesel Kids and 55DSL (The brands and some of their logos are shown in Exhibit 6). Most of its production was outsourced to small and medium-sized companies, whereas design and marketing remained in-house.

D-Diesel D-Diesel was the core business line and an original master brand of Diesel SpA. It focused mainly on denim ―5 pockets‖ (traditional jeans), ―bottoms‖ (denim pants and skirts) and ―tops‖ (jackets and shirts) for men and women. Still, denim items represented only about 30% of the D-Diesel collection. The brand offered its customers an innovative and wide range of denim and leisure clothes which expressed the unconditioned creativity of the brand (see Exhibit 8). The products were characterized by very high quality and durability. In 1998 the D-Diesel line replaced the initial slogan ―Diesel Jeans and Workwear‖ with the ―Diesel for Successful Living‖ and the ―D‖ logos.

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D-Diesel Licenses Pursuing the idea of offering its customers a total look, the D-Diesel brand was extended to a large number of fashion products beyond clothing: Diesel Shades for eyewear, Diesel Spare Parts for luggage and leather goods, Diesel Fragrances (featuring two different scents, Diesel Plus Plus and Zero Plus), Diesel Footwear, Diesel Underwear, Diesel Time Frames for watches and Diesel Writing Tools.

Diesel Kids The Diesel Kids line was targeted at kids who did not want to be treated like kids. It offered ‗gutsy‘ clothing with bright colors and modern lines for young people of a ‗gutsy‘ generation.

55DSL The 55DSL line represented ―a strong and independent sportswear collection inspired by a sense of adventure and freedom‖. The clothing was aimed at extreme action sports fanatics. The collection was full of surprisingly fresh color combinations and prints in innovative and contemporary styles.

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GOALS OF DIESEL 1. Gradually switch to using sustainable materials (Brave Materials) in the production line by 2% every year a) Invest first year‘s profit to second and the second into the third etc. 2. Make the brand more sustainable a) Make sustainability as part of the Diesel lifestyle b) Create awareness about Brave Materials c) Use controversial communication d) Educate the current stakeholders about sustainable fabrics, usage and manufacturing process. e) Advertise, show and use great designs for a range from the new sustainable fabrics (eg. by using their natural colour characteristics to show the wear) by the tenth year 45% from the whole collection will be made from sustainable fabrics f) Collaborations with people from other fields (textile engineers, scientists, designers and communities) g) Expanding the consumer group to people who buy for the sustainable quality of a brand 3. Change the mindset of the current target group a) Sustainability should be integrated into the mindset of Diesel lifestylesustainability is a risky business, so be brave b) Analyse current mindset and new mindset towards ‗sustainable fashion‘

The main concept of this plan is to make sustainability part of the Diesel lifestyle, quietly introducing it into the consumer‘s everyday choices as to not frighten them with the idea that ‗sustainable fashion‘ is ugly and can never look or feel good.

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TARGET GROUP (CUSTOMERS) The target group Diesel wants to reach with their collections, advertisements and all other expressions, is the hyper aware generation, named ‗Generation Y‘. Journalist for the Guardian Newspaper, AnushkaAsthana said; ―They care less about salaries, and more about %exible working, time to travel and a better work-life balance.‖ This new generation is both male and female between 16 and 35 years old. They study or work in urban environments, but go on adventures whenever they‘re able to. Backpack trips through rough nature, endless parties on the beach and silly nights out ending up naked in someone else‘s pool. The target group is higher educated and they want to stay up to date with the current news. Generation Y has grown up in the age of computers, mobile phones and television. Smartphones and Facebook are a part of their daily life, and Diesel uses this to communicate with the target group. When the target group goes shopping their main criteria is good quality and comfort. They have quite a bit money to spend so they expect garments to last for over a year. The target group !ts into the Diesel lifestyle because they are hedonistic, independent and adventurous. They like the way Diesel approaches them in a controversial way inviting them to adapt their lifestyle to be like Diesel‘s. Given its rejection of traditional ―Procterian‖ marketing and even of market research, it was not surprising that Diesel had no precise definition of the target segment for StyleLab. In Rosso‘s view, lifestyle mattered more than age. D-Diesel targeted people with a teenagespirited lifestyle. Anybody interested in this lifestyle could become a target customer. In reality, 18 to 25-year-olds clearly outnumbered 35 to 50-year-olds in the D-Diesel customer base. Trendy young people over 25 often considered D-Diesel ―too young‖ or ―too hip-hop‖ for them. StyleLab could be targeted at two types of people. Firstly, it could appeal to past buyers of DDiesel who still liked the brand and its values but who felt that they had outgrown it. Young professionals, in particular, might fear that wearing D-Diesel clothes to work would make them look too young, even on casual days. StyleLab could appeal to the most trendy D-Diesel customers concerned that it had become too mainstream and lost its underground cachet. Secondly, StyleLab could also appeal to people who were looking for cutting-edge style which they could not find in the D-Diesel line. Such people valued the possibility of creating their own style and were not brand or fashion victims. They could be attracted by StyleLab‘s independent and innovative approach to clothing. In general, StyleLab consumers would be more design-conscious than the typical D-Diesel buyers.

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RETAILS FORMATS OF DIESEL 1. E- Retailing: E-tailing (less frequently: e-retailing) is the selling of retail goods on the Internet. Diesel is following e- retail format from last 15 years and is getting huge profits out of it. Sites which offers all ranges of diesel products are- Diesel.com, Amazon.com, Majorbrands.com, etc Diesel Online Store is currently available in the following countries: AUSTRIA BELGIUM BULGARIA CROATIA CZECH REPUBLIC DENMARK ESTONIA FINLAND FRANCE GERMANY GREECE HUNGARY IRELAND ITALY JAPAN LATVIA LITHUANIA LUXEMBOURG NETHERLANDS NORWAY POLAND PORTUGAL ROMANIA RUSSIAN FEDERATION SLOVAKIA SLOVENIA SPAIN SWEDEN SWITZERLAND TURKEY U.S.A. UKRAINE UNITED KINGDOM 2. EXCLUSIVE BRAND OUTLETS (EBO’S) An EXCLUSIVE BRAND STORE is a brick and mortar in which RETAILERS sell their PRODUCTS directly to the public. EBO‘S are typically branded stores like Gap or Bon 15

Worth grouped together in malls OR HAVE THEIR SEPARATE OUTLETS. They have deep assortments of products. Diesel have its EBO‘S in various countries as follows:

Country

Number of Stores

Italy

67

USA

56

UK

37

China

31

France

30

Israel - South Korea

22

Spain

21

Colombia

17

India

25

Germany

20

Turkey

12

Mexico – Greece

9

Netherlands - Saudi Arabia - Switzerland – Taiwan

8

Hong Kong - India - South Africa – Venezuela

8

16

Australia - Philippines – Portugal

6

Belgium - Brazil - Denmark – Poland

5

Austria - Canada - Croatia - Panama - Sweden – Thailand

4

Chile - Malta – Singapore

3

Argentina - Bahrein - Dominican Republic - Ecuador Iran - Kuwait - Macau - Mauritius - Morocco - Norway Russia – Serbia

2

Aruba - Azerbaijian - Costa Rica - Czech Republic Estonia - Finland - Guatemala - Jordan - Lebanon - Egypt - Peru - Paraguay - Qatar – Romania

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Table 1: Stores of Diesel Brand Worldwide

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TYPES OF OWNERSHIP 1. LICENSING For over 20 years all Diesel collections, including licensed products collections are eyewear (made with Marcolin), jewellery and watches (Fossil), and fragrances (L'Oréal). L'Oreal and Diesel launched Fuel for Life (for him and for her) in the fall of 2007. A mini-collection for Adidas was launched in 2008 called Adidas Originals Denim by Diesel.

2. CHAIN STORES Diesel have type of ownership in chain stores. It has its stores spread across the world in more than 36 countries.

3. FACTORY OUTLETS Diesel have their own factory outlets across the world in different countries.

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MARKETING MIX OF DIESEL 1. Product

Diesel sells nice jeans. Close, but no ―A‖. Actually, it‖s not that close. The reason Diesel has grown is because it knows it is about a lot more than selling nice jeans. Diesel is a lifestyle: if that lifestyle appeals to you, you might like to buy the products. Renzo describes this as an end of the ―violence‖ towards the customer forcing them to buy and rather an involvement in the lifestyle. The brand It might be useful to ask a question what actually is a brand? The answer could take a variety of routes and go on for pages but a useful way to think of a brand is as a set of promises. Those promises form the basis of the customer‖s relationship with that company. In the case of Diesel those promises are very personal, very passionate. The Diesel brand promises to entertain and to introduce customers to new, experimental experiences. Its product line now goes far beyond premium jeans and includes fragrances, 19

sunglasses and even bike helmets. These products complement, convey and support the promises of passion and experience made by the Diesel brand. Being such a crucial element of its work you might imagine the product design team at Diesel to ―plot‖ in something akin to a war room, pushing little squadrons of well-dressed soldiers around with long sticks. Actually, this is where that elemental passion which created Diesel sets them apart from many others. The whole team at Diesel lives the brand. They are all incredibly passionate about their creations. So when it comes to expressing that passion, ideas come naturally. Living and breathing the set of promises the Diesel brand communicates means employees can listen to their instincts, creating products straight from within.

2. Promotion 'Be stupid' With the launch of the recent marketing campaign around the phrase “Be Stupid” , Diesel took a look at what brought its current pipeline: it was Renzo Rosso, all those years ago, taking the ―stupid‖ move to make jeans he wanted to wear. Then he took the even more stupid move of trying to sell those jeans to others, believing he might not be the only fool in Molvena! As it turned out, there were quite a few more to be found and Renzo's ―stupid‖ move ended up creating something which millions of people around the world now enjoy.

Promotion and marketing at Diesel takes a very different route to many other companies. It is always about engaging with the customer as opposed to selling at them: creating an enjoyable two-way dialogue as opposed to a hollow one-way monologue. All elements of Diesel's promotion aim to engage the customer with the lifestyle. If they like the lifestyle, they might like the products. For example, the Diesel team saw music as an inseparable part of that lifestyle and realised that exploring new music and new artists was all part of trying something different and experimenting with the unusual. 10 years later, Diesel:U:Music is a global music support collaborative, giving unsigned bands a place where they can be heard and an opportunity to have their talent recognised. It's not about selling, it's about giving people something they will enjoy and interact with.

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Tied to Diesel:U:Music is an online radio station. It is another example of where Diesel unconventionality has created something which pushes conceptions and the usual ways of doing things. The radio station takes a rather unusual approach of not having a traditional play list but rather gives the choice to the resident DJ. This freedom is reflected in the eccentric mix of music which is played on the station. Above- and below-the-line In promotion and marketing, we often talk about ―above-the-line‖ and ―below-the-line‖ methods of reaching consumers. Above-the-line marketing is aimed at a mass audience through media such as television or radio. Below-the-line marketing takes a more individual, targeted approach using incentives to purchase via various promotions. In this case passion again acts to blur and gel the boundaries between the two approaches. If we had to define this approach in terms of theory, we would call it ―through-the-line‖, i.e. a blend of the two. The passion and energy embodied by the Diesel lifestyle is communicated through a mix of above-the-line and below-the-line approaches. The balance and composition of that mix is what the Diesel team hands over to their passion and feel for the company and brand. That energy guides the way this abstract theory is realised in projects such as Diesel:U:Music and the ―Be Stupid‖ campaign, which entertain and interact with their potential customers. 3. Place

Another, drier, way of describing ―place‖ in the marketing mix is ―channel‖ or distribution channel. The way a business chooses to offer its products to its customers has a huge impact on its success.

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Only around 300 of the 5,000 global outlets which sell Diesel products are owned and managed by the company itself. The majority are large department stores offering many other brands or boutiques with a very specific style of their own. How do you maintain the quality of a product and its communication when dealing with so many different partners and distribution channels? Culture The strong culture within Diesel again holds the answer. Every employee is able to communicate the brand appropriately in their given role within the company. As such, the managers of the Diesel-branded stores know that their function is to act as a flagship. They focus on the core campaigns like ―Be Stupid‖ giving a solid focus and image for the brand. Employees in each of the stores all know the campaigns intimately and are very aware of the image they should put across to customers entering the stores. Their retail partners such as the department stores are a crucial link in the chain. Diesel works closely with these partners to ensure they express the same level of passion when offering their products. This is done through separate and individual campaigns. These provide visitors with a unique experience which again encourages them to get involved with the Diesel lifestyle as opposed to forcing products on them. Distribution This approach to distribution can be seen as a mix of exclusive and selective distribution over intensive distribution. Exclusive distribution involves limiting distribution to single outlets such as the Diesel flagship stores. Selective distribution involves using a small number of retail outlets and partners to maintain the quality of presentation and communication to the customer. Intensive distribution, on the other hand, is commonly used to distribute low price or impulse goods such as sweets.

4. Price The price of a product is so much more than a little, or rather big, number on a tag. The price of a product is the most direct and immediate tool a business can use to convey the quality of its product at the point of sale. If done right, the price reinforces the rest of the marketing, drawing in the target customers by conveying the appropriate quality. Pricing strategies Diesel uses a model based on premium pricing. As we have discussed, Diesel is far more a lifestyle than a clothing brand. Through the vision and passion of Renzo Rosso, the company has created a whole new approach to engaging with its customers. The price of Diesel‖s products needs to reflect the substance and value of that experience. A strategy such as penetration pricing used by businesses making high-volume, relatively low-margin products would be inappropriate as it would undermine the quality association thus devaluing the brand and experience.

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We do not pay a premium price for Diesel jeans because they are a premium quality, that is taken for granted. We pay a premium price because the jeans and the brand fit in with and even encourage a premium, dynamic lifestyle built ―for successful living‖, as Diesel would say. The team at Diesel must be intimately in tune with that lifestyle so they can see how their diverse range of products from jeans to fragrances and even bike helmets fits within that lifestyle. That feel for what Diesel is and how we, the potential customers, interact with it allows the company to price those products in a way which complements and neatly fits into that lifestyle.

5. People

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Besides the fact Renzo has, let's say, done alright for himself, he has inspired thousands of people who proudly work to build the brand through a shared passion and contagious ambition. Looking at the structure within which all those people work can help us to understand just why they are so happy to be there. Renzo realised people and their ideas form the heart of the company. So that everyone's voice can be heard and each person working for Diesel has an equal say, the company adopts a flat hierarchy. This means there are very few layers of management and everyone is encouraged to communicate with each other: sharing ideas, solving problems and trying to communicate that energy with people outside the company the customers. Teamwork When decisions are made in this flat hierarchy they are made as a team. The team as a whole can then track the progress of that idea and monitor the results. Feedback is important because if everything has gone to plan, the achievement has to be acknowledged so that everyone can take pride in what they have done. If something has not gone to plan, group feedback allows an evaluation of why and the ability to learn for the future. Motivation Importantly, this acknowledgment or learning happens equally across the company so everyone is kept up to speed on the ups and downs of business. This sense of belonging both to a team but also to a particular responsibility is very important for employee motivation. The better you understand your work and your environment, the happier you are likely to be with your job. The happier you are, the less likely you are to want to leave and so this open approach has the very positive company-wide effect of high employee satisfaction and a low staff turnover. Specifically in the fashion industry this means that the people working for Diesel have a stronger sense of identity and a deeper understanding of the brand making them even better at what they do.

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DIESEL BRAVE MATERIAL COLLECTION Brave Materials. What and why?

Diesel‘s Brave Materials introduced in the upcoming collections will be the !rst of all textiles made from hemp and nettle. Using new, unusual and innovative fabrics in trendy everyday wear is a rising trend and Diesel will be one of the !rst worldwide mainstream brands to implement sustainable fabrics into their designs. Presently there are a few styles of hemp jeans available from brands like Armani, Rawganique, Hemper Jeans and Patagonia High Wire Hemp Jeans. There are many good reasons why hemp !bre should be more intensively applied in the textile and fashion industry. It is known that hemp is one of the most durable natural !bres available, with a warm, breathable and absorbent quality. Furthermore, hemp is grown without using chemicals, this makes it more sustainable than growing cotton. Several countries in the world have found a way to utilize and grow industrial hemp. Austria, Germany, India, Italy, Romania and Russia have a wide hemp industry where from Diesel could source the material needed. Compared to the recent progression among hemp fabrics, growing industrial nettle is still quite a rare phenomenon in the textile manufacturing industry. Growing nettle is much more environmentally friendly because there is no need to reseed the plant each year and nettle is naturally resistant to diseases and pests. Nettle !bre is long and hollow which makes it a good natural temperature adjuster and it grows well in wet cool countries, besides all that, nettle is claimed to be even softer and !ner than cotton or hemp. At present there is a small selection of nettle fabrics available; grown and weaved in the Himalayas, Nepal and a company called Octan Fabrics from South Korea, which produces very !ne nettle fabrics. Only this season a Dutch brand Netl has started producing knitwear collections from mixes of nettle and organic cotton !bre within the price range from 50 EUR to 250 EUR. G-Star Raw has also made a revolutionary project to convert nettles into fabric, developing a few styles of jeans composed of 40% nettle and 60% cotton for approximately 280 EUR. So far Diesel has already added organic cotton jeans to their ready-to-wear collections, but has not been produced for this season‘s collection. This is something Diesel will continue to be broadening among the whole collection due to an emerging consumer demand for luxury jeanswear. Currently organic cotton jeans are being produced by competing brands such as Levi, Kuyichi, Bread Denim, Aoki Jeans, Rawganique Organic Jeans and Loomstate. Diesel brand will also start developing implementation for natural dyes and air-dying both for Brave Materials and organic cotton fabrics. Furthermore jeans and other garments made of Brave Materials should be produced only in environmentally friendly methods, not damaging the health of factory workers (natural dying, sandblasting with a machine, or bleaching). Additionally, Diesel‘s future vision within !ve years includes the purchase of Textile for Textile machine which would be used to up-cycle Diesel‘s garments from the previous collections to produce new fabrics.

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ADVERTISING

Brave materials logo

In the !rst year Diesel has a new logo for the Brave Material range. It will be recognizable for the target group because the Brave Material sign will be on the hang tags of every brave material garment. It also will be shown in the campaigns and online at the Diesel website and social media pages. In the !rst few years it‘s important that Diesel does not mention the word sustainable, because that would not !t with the current lifestyle mission of Diesel. This is the reason why the serious sustainability promotion has been covered by the more provocative Brave Material. Now it resembles the familiarity of the game ―truth or dare‖ where only the brave and the stupid will dare to wear the Diesel jeans, this is the focus the target group is looking for. Natural dyed jeans This campaign will be about the lifecycle of the natural dyed colours of the Brave Material jeans. The way your jeans will fade says a lot about your lifestyle. To be a part of the Diesel lifestyle you can share your personal lifecycle with your friends by uploading pictures on yourown account on the Diesel website, the consumer can link the pictures to their Facebook account. Interesting fading details could be due to of washing, using marks from your wallet or phone in a pocket and customised details by the user itself. Hemp campaign

Hemp fabrics might have had a bad reputation because of the connection with Marihuana, but this connotation can be used by Diesel to promote a risky brave lifestyle. Are you stupid enough the smoke it, or brave enough to wear it? Introducing sustainability in the Diesel lifestyle by pesticide advertising

The idea of using environmentally friendly pesticides requires more volume than the toxic concentrations used today, playing on the stupid idea Diesel can advertise with irony that they use more pesticides to make better quality clothes. Nettles campaign

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The nettles‘ sting is what makes us weary and keep a distance from these plants, which makes the nettle !bre a perfect candidate for Diesel‘s Brave Materials and complements the brands adverts well. By directly ‗wrapping‘ the nettles around the most sensitive part of the body the captions makes space for a witty quote ‗Will it sting?‘ Rinsing Discount system Launch of the Rinsing Diesel (discount system) in the second year and which the consumer can start using in the forth year. This is where any item from the Diesel collection that is kept for longer than 4 seasons (2 years) can get a discount on any item from the Brave Material collection. This will in turn encourage the customer to wear their garments longer and care for them better as well as promote the Brave Materials collection. After four seasons consumers can bring any Diesel garments back, depending on a more re!ned scheme to di$erentiate the longer lasting garments with the ones that wouldn‘t last as long, to receive a discount on the Brave Material collection. One season is half a year. This will be measured by a code on the label in the garments. Brave Loyalty Card Diesel will introduce an online Brave Loyalty Card as an access key to Diesel Island. Consumers who have bought items from the Brave Materials collection will receive a personal key to activate their Brave Loyalty Card on the Diesel website. On this online island they can keep up with the Rinsing Discount system, special events, give-aways and they can upload their pictures from their personal natural dyed colour faded jeans to share the progress with friends. The layout of the account will be designed like an actual Diesel Island, inspired by the Home of the Stupid, Land of the Brave Campaign.

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WORLDWIDE BRAVE MATERIALS EXPANSION Throughout the 5 year plan we hope to create a global awareness regarding sustainability and textiles, starting by introducing our Brave Materials into cities where sustainability is already being questioned and explored. In the second year of the Brave Materials campaign the range, basic clothes made from hemp and nettle !bers, will be introduced into the %agship stores of 5 of the most sustainable cities in the world: Vancouver, San Francisco, Oslo, Copenhagen and Curitiba. Presently Curitiba doesn‘t have a %agship store yet, but there is a plan in the 3rd year to create a pop-up store (if Diesel does not get round to it earlier as stated on their website). In the third year the collection will be introduced into 11 more European countries, by then replacing the previous ‗basic‘ line made from unbrave (unsustainable) materials. By doing this we hope to minimize the need to add more to a clothing collection and rather phase out the unbrave materials. The cities have been chosen due to their involvement with sustainability based lifestyles as well as the consumer culture in each. By the forth year 10 more world wide cities will be selling the Brave Materials in their stores and by the 5th year expand further out towards Asia and the Middle East. By the eighth year all Diesel stores and outlets will stock the Brave Materials collection.

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Extending Up-market The clothing industry in the mid and late 1990s experienced increasing market segmentation. In particular, some consumers were now willing to spend large amounts of money not only on smart clothes but also on casual wear. Being a good trend spotter, Renzo Rosso quickly identified a new market opportunity in high casual wear. He observed the increasing appeal of casual clothing, both in the workplace and during leisure time. Even bastions of formal business attire such as investment banks and consulting companies were starting to allow their employees to relax in khakis and polo shirts on ―casual Fridays‖. To be trendy started to mean to be dynamic, lively, mobile and casual. Renzo Rosso decided to seize the opportunities in high casual wear with a new line, StyleLab. His decision was almost entirely based on gut feeling as he simply did not believe in market research for predicting future fashion trends. Nevertheless, he knew that the prospects for a profitable market in high casual wear were unsure. Diesel would have to go a long way to convince enough consumers to spend $150 on a pair of casual pants. Another objective assigned to StyleLab was to counterbalance the increased diffusion of the D-Diesel denim products and to prevent any possible commoditization of the brand. This concern was particularly strong because the advertising campaign for Diesel in 1998 emphasized denim and product attributes such as the availability of different fits, the softness and strength of the fabric, etc.). Of course, these functional qualities were communicated the Diesel way (see Exhibit 7 for the advertising campaign and Exhibit 8 for examples of the Spring/Summer 1998 collection). There was also a concern that the multiple horizontal extensions of D-Diesel could dilute its identity. More importantly, the management team was concerned that Diesel would suffer from its success. In particular, that too high a diffusion would erode the exclusive and unconventional image of the brand. In Germany, for example, there were concerns that D-Diesel had started to loose its edgy, rebellious appeal because of its success with older consumers. There was indeed a growing gap between the irreverent image communicated by its advertising and the image reflected by the somewhat conservative, 35-year old, BMW-driving professionals wearing Diesel jeans. Renzo Rosso also thought that StyleLab would help manage Diesel‘s most important asset: its designers. Diesel viewed creativity as a critical investment and paid a lot of attention to its designers. Unlike other fashion houses, Diesel‘s designers seldom attended the catwalks of competitors. Instead, the company financed ―research trips‖ lasting up to six months per year, during which designers photographed and bought everything that could inspire a new collection. If they felt that their creativity was being constrained by the relatively mainstream positioning of the D-Diesel line, StyleLab‘s narrower targeting would allow them to unleash their creativity and experiment with new styles and fabrics. Indeed, the StyleLab name originated from the idea of creating a laboratory in which designers could freely test new ideas. Diesel was hoping that some of these new ideas would eventually find their way into the main D-Diesel line. 29

Robert Lunardon, StyleLab category manager, summarized the three main reasons for launching the StyleLab brand: 1. To enter the new and attractive market of high casual wear. 2. To create an aura of prestige and fashion around the D-Diesel brand. 3. To give Diesel designers an opportunity to experiment with new fabrics and cuts.

StyleLab vs. D-Diesel With the planned introduction of the StyleLab collection, Diesel was effectively moving upmarket. The fashion industry was loaded with examples of downward brand extensions: Giorgio Armani and Emporio Armani, Dolce &Gabbana and D&G, Donna Karan and DKNY. Upward brand extensions were rare but nevertheless existed. For example, during the 1980s the Ralph Lauren brand was vertically extended into the premium end of the women‘s fashion market with the creation of the Ralph Lauren Collection brand. Diesel‘s upward extension was a bold move. In particular, it was critical to delicately balance the relationship between the D-Diesel master brand and the StyleLab brand. In order to achieve the objectives set for StyleLab both lines had to be clearly differentiated while retaining a common link with Diesel‘s core identity.

Product StyleLab offered wearable clothing from ―a laboratory of surprising styles‖ for customers attracted more by innovation itself than by the diktats of fashion. Compared with D-Diesel it was more exclusive, more refined, more expensive and, above all, more innovative in its use 30

of design and materials (see Exhibits 9 and 10). For example, it experimented with innovative materials such as a fabric interwoven with a thin metal mesh. Overall, StyleLab offered less of a ―street‖ look than D-Diesel. Target Consumer Given its rejection of traditional ―Procterian‖ marketing and even of market research, it was not surprising that Diesel had no precise definition of the target segment for StyleLab. In Rosso‘s view, lifestyle mattered more than age. D-Diesel targeted people with a teenagespirited lifestyle. Anybody interested in this lifestyle could become a target customer. In reality, 18 to 25-year-olds clearly outnumbered 35 to 50-year-olds in the D-Diesel customer base. Trendy young people over 25 often considered D-Diesel ―too young‖ or ―too hip-hop‖ for them. StyleLab could be targeted at two types of people. Firstly, it could appeal to past buyers of DDiesel who still liked the brand and its values but who felt that they had outgrown it. Young professionals, in particular, might fear that wearing D-Diesel clothes to work would make them look too young, even on casual days. StyleLab could appeal to the most trendy D-Diesel customers concerned that it had become too mainstream and lost its underground cachet. Secondly, StyleLab could also appeal to people who were looking for cutting-edge style which they could not find in the D-Diesel line. Such people valued the possibility of creating their own style and were not brand or fashion victims. They could be attracted by StyleLab‘s independent and innovative approach to clothing. In general, StyleLab consumers would be more design-conscious than the typical D-Diesel buyers. Brand Identity Diesel‘s management team emphasized that D-Diesel and StyleLab should have distinct brand identities but with some common roots. Both brands shared values such as freedom, global outlook, creativity and thoughtfulness. Nevertheless, whereas D-Diesel stood for irony and irreverence, StyleLab stood for sophistication and mystery. Of course, the products themselves were quite different: Diesel focusing on denim while StyleLab experimented with a variety of innovative fabrics. Positioning and Pricing The D-Diesel brand was positioned at the upper end of the ―denim and leisure clothes‖ segment. It competed with Armani Jeans, Levi‘s, Mustang, and Calvin Klein Jeans. StyleLab was positioned at the lower end of the ―high casual wear‖ segment, competing with the likes of MiuMiu, Prada Sport, CP Company and D&G (see Exhibit 12). In 1998, a pair of D-Diesel staple blue jeans cost on average €67 and a jacket €72 in Europe ($100 and $139 respectively in the USA). Diesel sold casual wear garments in the same range as GAP but at a much higher price. Fashion industry experts often criticized Diesel‘s high pricing policy, but Diesel executives argued that ―it was not unreasonable to pay three figures for a pair of jeans likely to last forever‖.4 They contended that their manufacturing process 31

was more rigorous. To illustrate the point, the Lexington Avenue flagship store in New York featured a washing machine in which a pair of Diesels turned endlessly. In Europe, StyleLab pants sold for €125 and jackets for €335 ($150 and $415 respectively in the USA). The following figure shows the price levels of StyleLab and D-Diesel in comparison to their competitors in a fashion store in Italy in the spring of 1998.

Distribution Initially, D-Diesel products were distributed only through multi-brand teen-oriented stores and corners in department stores. In the early 1990s, Diesel opened flagship stores in New York, Chicago, London, San Francisco and Rome and single-brand stores in many large cities around the world. It used the flagship stores as vehicles to bring the D-Diesel brand identity to life in its entirety. For example, visitors to the D-Diesel store near Chicago‘s Magnificent Mile were offered bottles of trendy soda whilst listening to alternative music. They could also buy cutting-edge CDs of a current ―trip-hop‖ album. D-Diesel products were also distributed by mail-order or through the internet. StyleLab products were to be distributed only through specialized fashion stores, boutiques and high-end department stores, such as Joyce in Hong Kong, Barneys in New York, and Selfridges and Harrods in London. The customer service guidelines for StyleLab retailers indicated that staff should be, or look, more mature than those of a typical D-Diesel store. Media Strategy 32

The media strategy was different for each product line. Print advertisements for D-Diesel were published in magazines such as Face, Elle, FHM and Loaded in the UK; Marie Claire, Rolling Stone and Wired in the USA; Sesame, Fine Boys and Warp in Japan. Media vehicles for StyleLab were the more exclusive magazines aimed at an advanced fashion-oriented audience such as Flaunt, Vogue, Wallpaper, Dutch, ID, Mixte and MAX. The media plan thus avoided the juxtaposition of advertisements for both brands in the same magazine. Unlike StyleLab, D-Diesel was also advertised on television and in cinemas. Usually the same creative idea was used for print adverts, store catalogues and TV commercials. Different teams were made responsible for developing creative ideas for the advertising campaigns of D-Diesel and StyleLab. Following an initial image-oriented phase, D-Diesel advertisements supported the brand and the products in a fairly equal proportion. StyleLab campaigns, in contrast, were mainly oriented towards building the image of the brand. StyleLab Advertising Campaigns The first StyleLab catalogue and print campaign, dubbed ―Stranded‖ (see Exhibit 13 and 14), was developed for the Spring/Summer 1999 collection. The creative team tried to communicate the difference between D-Diesel and StyleLab in terms of refinement and exclusivity. The campaign was based on a story about people who look stranded because the old world does not exist anymore. They emerge from different places (the sea, the splitting earth, a cave, a rock) and walk through desolate lands experiencing strange, surreal situations, not knowing how to start a new life. Some objects from the old world still exist (a clock, ladder, fridge), but civilization no longer exists. At the end of the catalogue the four people meet and walk together into the sea. Some of the images were intended to be used as print advertisements in magazines. The theme of the planned StyleLab Spring/Summer 2000 campaign was a mysterious spy story. It was shot in a nuclear bunker of the 70s in the former East Germany—creating a strong sense of mystery. Presented as a secret dossier, the catalogue contained 12 StyleLab images and seemingly confidential information: a mysterious English letter, the postcard of an unknown man, pages of an undated Russian newspaper with a strange English slogan on the back, an incomprehensible map of electronic equipment and a copy of a real German invoice dating from World War II. With these elements readers were invited to make up their own intriguing story.

Point-of-Purchase Material Point-of-purchase (POP) materials played differing roles for D-Diesel and StyleLab. For the latter, the goal was to develop the brand‘s image and they were almost always based on the creative idea from the corresponding advertising campaign. D-Diesel‘s POP materials, in contrast, were used tactically to boost sales and were not always derived from D-Diesel‘s advertising because of its complexity. As Alessandra Pesavento, retail marketing manager of Diesel, said: ―For D-Diesel, POP materials are based on simple themes, mainly featuring 33

products and cute models. Such POP material is up to 50% more effective than POP material based on D-Diesel media advertising.‖ Branding Strategy for StyleLab Almost all of the major issues related to the launch of the StyleLab line were settled: design, production, advertising, pricing and distribution decisions had been made. The only major issue still being debated was the branding strategy, in particular the need to clarify the nature of the relationship between D-Diesel and StyleLab. StyleLab‘s logo was also awaiting the final decision on the branding strategy. Three main branding strategies were being considered: ‗sub-branding‘, ‗endorsement‘ and ‗independence‘ (see Exhibit 15). These three, each having several variants, reflected different degrees of association between StyleLab and D-Diesel. Maximum separation between the two brands was offered by the ‗independence‘ strategy. At the other extreme, the ‗subbranding‘ strategy ensured a very close link between the two brands and a prominent position for the Diesel brand name in the new line. Renzo Rosso and his team had only a couple of weeks to address these important questions: 6. Has Diesel remained true to its original identity despite its growth? If yes, how did it do so? If no, what has changed? 2. On what criteria would you judge the success of the new line: StyleLab‘s awareness, image, or revenues? Diesel‘s awareness, image, or revenues? 3. How closely should D-Diesel and StyleLab be associated in the mind of the consumer? What branding strategy should they choose for StyleLab? What should be the StyleLab logo? 4. On what basis should the branding decision be made? Would market research be useful? Would it help to talk to consumers? 5. Can Diesel continue to remain at the cutting-edge of fashion? How long will the brand last? What can they do now?

Diesel spa

Diesel kids Division

Style Lab (from1998)

D- Diesel

55 DSL 34

Garments

Footwear Spare parts Undergarments Fragrances Shades Watches

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FUTURE VALUES

Diesel´s already existing values are sexy, rebel, irreverent, surprising, ironic and brave. With this new approach, sustainability can be the new value of the brand, making it seen as super-stylish and conscious at the same time. In addition, recycled fabrics would be one part of the Brave Materials. By the end of the 5th year Diesel would be the !rst brand to buy the Textiles for Textiles machine. The automatic sorting installation will be able to sort the materials on !bre composition. Being the !rst brand to use the machine, the Cradle-to-Cradle principle would be added to the brand‘s value. In the future the entire collection would be part of the Brave Material production line.

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FIVE YEARS PLAN 5 YEAR PLAN DIESEL Main goal: Make sustainability a part of the DIESEL lifestyle

Table 2: Five year plan COLLECTION

STORES

ADVERTISING

- First Brave Material (organic cotton) jeans - Natural coloured jeans - Research to innovative new Brave Materials and - Barcode in every Brave Material garment

- 100% organic cotton jeans are sold in every store

2nd year

- Two new brave innovative materials in jeans collection (hemp and nettles)

- Sell the Brave Material collection in the !agship stores situated in the "ve most sustainable cities of the world. - Vancouver, San Francisco, Oslo, Curitiba and Copenhagen

- Two new campaigns, one for each material - Are you already involved in the natural dye-fading race? Upload pictures on Diesel website

- Launch rinsing Diesel (discount system). - Introducing online Brave Loyalty Card as an access key to Diesel Island

3rd year

- The three Brave Materials are used in 5% (jeans and basic garments) of the entire Diesel collection.

- Create a 3 months popup store in Curitiba - Brave Material collection sold in the !agship stores of 12 EU countries - Helsinki, Stockholm, Paris, London, Amsterdam, Milan, Berlin, Barcelona, Lisbon, Geneva, Antwerp and Vienna

- What is in this season? With every year it goes lighter, how many times do you have to wash it, what colour? - Repeat Brave Material advertising

- Advertising discount system: keep your clothes as long as possible minimal of four system

4th year

- Brave Materials = sustainable - New shapes and colours in streamline Brave Materials collection

- Sell the Brave Material collection in 10 more cities - Frankfurt, Hamburg, Munich, Rome, Hong Kong,

- Introducing sustainability in the Diesel lifestyle by pesticide advertising - Award ceremony on

-Consumers can start to bring any Diesel garments back and get

1st year

Communication

Rinsing Discount system

- Advertisement campaign for the 100% organic cotton jeans and introducing the Brave Materials logo - Introducing the natural dyed jeans, colour will fade (re!ection of your personal Diesel lifestyle)

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Johannesburg, Moscow and New York

online Diesel Island (website and Youtube)

5th year

- 10% of all the items in the entire Diesel collection are made out of Brave Materials

- Expand the collection to Sydney, Seoul, Tokyo, Bangkok and Dubai

- Sell the Brave Material collection in every Diesel store over the world

Future vision

- Use recycled materials from the Textiles 4 Textiles machine in the Brave Material collection - Ongoing search to new innovative Brave Materials

- Sell the Brave Material collection in every Diesel store over the world

- Advertise recycled Brave Materials

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discount on Brave Material streamline collection - Starting to get the discount awarding (invitation to the party) - Use the Textiles 4 Textiles machine to recycle all brought in garments - Advertise the cradle to cradle cycle of the Diesel Brave Materials

METHODS OF RESEARCH Questionnaire and Ethnoraid As part of our research and to understand the target group better we took to the Diesel stores in Copenhagen, were we spent some time browsing the store, looking at the garments and observed the customers. We found that the average Copenhagen brand supporter only shops at Diesel around 3 times a year and owns their jeans for about 4 years. Most do read the labels on their garments but only to see the washing and care instructions but not because they wish to know where it comes from. A speci!c choice in fabrics only plays a roll in how the cloth may !t or the quality from a hands on feel. As the customer doesn‘t care too much about what material their garment is made from they won‘t even notice that it has been made from a material other then they are used to. It seemed that some had a general idea of what sustainability was, but were either too uncon!dent or unsure of what it had to do with fashion.

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QUESTIONNAIRE RESULTS

Table 3: Questionnaire result

extra info

no

f: 25yrs

1

yes, always

f: 27yrs (employee)

2

2-3 yrs everyday

yes

m (employee)

3

3 years

yes

f: 23yrs

4

1.5 years

no

m: 40yrs

5

Do you shop at DIESEL?

4 yrs or longer

never

How long do you have your jeans for?

12 yrs, still use them Sometimes

2 a month

Does the fabric play a roll when you buy garments?

Do you read the labels on you clothes?

Why do you choose DIESEL? (3 most import factors)

What do you rate the quality vs. price of your jeans?

yes, maybe

fabric, not my jeans

no

mainstream, good quality

excellent

don’t know

need to know how to wash it

no

Since i was a child: raw, style

excellent

no

sometime s

yes

good quality, nice collection, jeans

excellent

no

no

yes

fit, style, quality

excellent

yes

yes

yes

expensive

-

How often do you shop at DIESEL?

once a week

every 3 months

once every half a year

Do you understand the meaning of sustainability?

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REFERENCES

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