Chanel’s Successful Pricing Strategy for Maintaining Appeal in an Unfavourable Economic Environment

Abstract

The outbreak of Covid 19 in the world has serious impacts in different countries with most economic sectors suffering a lot. Nonetheless, some sectors like the luxury goods industry demonstrated great recovery and even growth, especially for the big brands such as Chanel. By several correct market positioning and pricing strategies Chane not only sustains and preserves the brand during the period of crisis but also becomes the leader of the high-price segment. Thus, this research explores pricing strategies employed by Chanel in an unsuccessful economic outlook, to assess how the strategies above have assisted the brand in sustaining its luxury positioning while sustaining customers’ interest during the economic crisis. The fact-finding shows a detailed examination of the development of the Chanel brand, the pricing policies of the brand, as well as the market position of the brand to show how Chanel has sustained the competitiveness of the luxury brand through the application of systematically high prices, the principle of scarcity, and brand culture. In addition, the study analyses Chanel’s unique strategy and market leadership by comparing it with other luxury brands such as Hermes. The findings suggest that Chanel’s sustained price increases and effective use of its brand heritage have enabled it to maintain its leading position in a highly competitive market, while also providing a valuable strategic reference for other luxury brands.