Diesel for Successful Living - Branding Strategies for an Up-Market Line Extension in the Fashion Industry

Diesel for Successful Living

Branding Strategies for an Up-Market Line Extension in the Fashion Industry

Introduction

In 1978, Rosso founded a company called Diesel with Adriano Goldschmied, the pioneer of Italian casual wear. In 1985, Rosso bought out Goldschmied. In 1994, Diesel built The Pelican Hotel in South Beach, Miami. This hotel became a manifestation of Diesel philosophy. In 1995, Diesel opened www.diesel.com, one of the first online clothing web sites. In 1997, Diesel generated 260 million euros consolidated annual turnover. In 1998, Diesel won “Advertiser of the Year” award at Cannes Film Festival and “Fashion Brand of the Year” award by FHM and MensWear. In 2001, Diesel received “Grand Prix” award, which is the advertising’s top prize in Cannes.

Diesel advertising campaigns were different by their themes, complexity and irony. They were confusing, intriguing and highly exclusive. Diesel soon became a counterpoint to established norms and institutions. Diesel used excellent quality fabrics and denim. The garments featured in popular movies and Diesel participated in the production of popular video games. As a result, many wealthy teenagers felt emotionally attached to Diesel.

In late 1990s, Renzo identified a new and very attractive market opportunity in high casual wear. However, trendy young people over the age 25 considered D-Diesel too young and too hip-hop. Therefore, Renzo decided to launch a new brand: StyleLab. It would be more exclusive, more refined, more expensive and more innovative than D-Diesel. It would also give Diesel designers an opportunity to experiment with new fabrics and cuts.

Situation Analysis

Renzo Rosso was confident that the right decisions were made about the name, design, production, advertising, pricing and distribution of StyleLab. But he was still debating what the appropriate branding strategy and logo should be for StyleLab. There are 3 alternative branding strategies:

1. Sub-branding (DieselStyleLab – very close link to Diesel)
2. Endorsement (StyleLab by Diesel)
3. Independence (StyleLab – no reference to Diesel)

Recommendations

Diesel, during its growth, could not remain completely true to its original identity. It started to suffer from its success. Because, in Germany for example, there were concerns that D-Diesel had started to lose its edgy, rebellious appeal because of its success with older customers. 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. Therefore, building a new brand, namely StyleLab, to serve 25+ aged and conservative young professionals, will help D-Diesel to preserve its original identity.

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