starbrands // built to shine: luxury marketing
Post on 17-Oct-2014
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Nasz pogląd czyli The Brand Marriage Company na marketing marek i produktów luksusowych a w szczególności ich strategię i budowę pod kątem segmentacji konsumentów dóbr luksusowych. Our (The Brand Marriage Company) view on luxury marketing.especially luxury brand strategy and brand building in regards to luxury consumers segmentation.TRANSCRIPT
Luxury Brand Marketing
What is luxury?
Origins of Luxury
Traditional luxury is a strictly European concept – French, British and Italian.
It is associated with certain specific categories:
—Apparel & Watches
—Jewellery
—Fashion
—Beauty (fragrance & cosmetics)
—Automobile
These categories have two things in common:
—Their products are hard goods
—They concern the dressing and decoration of the person
They are the goods that give you the feeling of being on top of things.
Conception of Luxury:
Luxury Products are Branded
Luxury Products are Expensive
Luxury Products are for Luxury Consumers
Definitions
If everyone owns particular brand…it is by definition not luxury.
Luxury is
about the quantity or a vast array of expensive goods
partly derived from technical superiority
…and unique craftsmanship
TO PROJECT CERTAIN SOCIAL STATUS OR WEALTH
SATISFY CERTAIN ROLE PLAYING ASPECTS
SATISFY EMOTIONAL DESIRE WITH INTANGIBLE, SUBJECTIVE
BENEFITS
Definitions
According to a dictionary:
Definitions
Luxury is „the state of great comfort and
extravagant living” or „an inessential, desirable good
that is expensive or difficult to obtain”.
However, most interesting is the antonym of luxury,
which is necessity. From this perspective luxury is
something that appeals to and feeds our lust.
According to Serge Dive (CEO of Beyond Luxury):
Luxury is an urge, an absolute desire to sin with the view to break
our daily routine and give us the illusion of happiness at least for an instant.
Definitions
What is luxury brand marketing?
Does it simply mean creating desire for things
that no one really needs?
And charging a lot of money for
them?
What is luxury brand marketing?
In economic terms, luxury products are those
who can consistently command and justify
higher price than products with comparable
functions and similar quality.
Definitions
In marketing terms, luxury products are those
who can deliver emotional benefits hard to
match by comparable products.
Luxury doesn't have to be the most expensive or exclusive
brand. Luxury is not how much something cost but how
much it means to me or you.
What is luxury brand marketing?
Ultimately
luxury marketing is about transformation of people's
experience, self perception and feeling - from ordinary into
extraordinary!
What is luxury brand marketing?
Luxury Consumers
Luxury consumers
Source: Ad Week Sept`04
Luxury consumers are
everywhere and are very
diverse.
Consumer Segmentation
Source: Marketing Luxury to the Masses, Pamela N. Danzinger
Consumer Segmentation
Source: Marketing Luxury to the Masses, Pamela N. Danzinger
Butterflies and X-Fluents seem to be 2 most promising targets (penetration+spending).
Luxury Cocooners
Want involving storiesbehind brands, like eco stories, like vintage style, go for authenticity and ethics, what they buy is
a part of their self-identity, they buy luxury products to
fill up their emotional emptiness
Source: Marketing Luxury to the Masses, Pamela N. Danzinger
Butterflies
Respect icons of luxury,
seek contemporary themes, value unique craftsmanship here is
where couture thrives,
status symbols are
meaningless, feel responsible
for sharing their wealthwith others, not motivated by
status or exclusivity
Source: Marketing Luxury to the Masses, Pamela N. Danzinger
Luxury Aspires
Materialistic, luxury
perceived as products they
buy not as a feeling or
experience, look for goods
endorsed by artists,
designers or celebrities,
value elegance and
uniqueness
Source: Marketing Luxury to the Masses, Pamela N. Danzinger
X-Fluents
The last bastion of
conspicuous consumption, buy chic, super premium brands,
what they buy and have is
what they are – status and
recognition is what drives
them
Source: Marketing Luxury to the Masses, Pamela N. Danzinger
Luxury Consumers: summary
They are rooted in values
rather than badges.
They are more enlightened,
less materialistic luxury
consumers.
Source: Ad Week Sept`04
Luxury Consumers: summary
Purchases reflect their personal style
Source: Ad Week Sept`04
For many, luxury conjures up
images of just the type of
behavior they want to avoid:�Elitism�Stuffiness�Snobbery
Instead they feel money
affords:�Independence�Security�Comfort
Source: San Diego Union-Tribune, Nov`03
Luxury Consumers: summary
Luxury Consumers: summary
They look for:—Superior quality, craftsmanship and customer service are the top, general needs.
—Yet, more than over 30% of consumers say luxury brands are worse than in the recent years
—Over 60% of consumers believe luxury goods prices are too high relative to the value they deliver
—Over 60% of wealthy consumers say that the current state of the economy haschanged their view of the luxury industry and they cut down on buying luxury products.
Source: The State of the Luxury Industry Study, Luxury Institute, 2008
Luxury Brands Are Failing to Deliver on Luxury Fundamentals!
What is causing the shift in
consumer behavior towards
luxury brands?
Development of New Luxury
Luxury is about satisfying consumers pleasures.
What are today's indulgences?
They are associated with:
—Time
—Space
—Home
—Modernity
What gives you a feeling of being on top of things?
—Service
—Being Different / Self Identification in the mass, plastic, digital world
New luxury builds upon modern, extended view of the person and helps to highlight its individuality.
Development of New Luxury
So,…___ luxury is no longer about rampant materialism or getting a new gadget.
___ instead it is the enjoyment and experience that money can buy.
Source: Chain Store Age, Feb`04
Luxury = Freedom
Freedom = Comfort + Confidence
Drivers of change
It is driven by a need for diversity & individualism.
Current call for individuality comes out as a result of globalization processes, often symbolized by
McDonalization and Wal-Martization, as well as collapse of political systems that highly valued
conformism and uniformity at the cost of the individualism i.e. communism in EE countries.
People are fed up with the sameness, efficiency and social control.
It is driven by a hedonism and need for showing one`s status.
There is a growing consumer perception that mass-market food, drinks and personal care products are bland and lacking hedonic benefits.
Premiumness and luxury are now about personal
enjoyment and tasting. Sensual moments of pleasure are worth paying more: well-being, health,
youth, indulgement.
Drivers of change
It is driven by a need for security, real values, authenticity.
The need for everyday performance in professional and personal lives, financial crisis, wars, erosion of family values, climate changes -they all bring lot of stress and make people feel less secure.
Luxury products bring authenticity into the
`plastic world` of today. They stand for quality
and real values.
Drivers of change
It is driven by a need for simplicity and convenience.
Middle-aged yuppies living a hectic life and bombarded by too much information, increased time pressure hamper for making a life simpler and more convenient..
Drivers of change
It is driven by a need for a democratized luxury.
All people think they have the right to the best
and the most beautiful. Consumers
increasingly feel they should have access to
the same quality as the social elite or
celebrities.
Affected by recession and financial crisis, people now search a rationale to buy, mix low
with high, reject the ordinary and expensivee.g. Massimo Dutti, Habitat
Drivers of change
IMPACT: Massification of
luxury brands vs luxurification
of mass brands
Massclusivity
We have a surplus of similar companies, employing
similar people, with similar educational
backgrounds, working in similar jobs, coming up with
similar ideas, producing similar things, with
similar prices and similar quality.
- Kjell Nordstrom and Jonas Ridderstale „Funky Business”
Massclusivity
We also have a surplus of similar brands, with
similar brand attributes, similar marketing
messages, making similar bran claims, with
similar quality, selling at similar prices.
Welcome to the Surplus Economy!
Examples of mass luxury brands
Luxury ladder
Upmarket
Premium
Luxury
Super Luxury
Super Premium
Affordable Luxury
Near Luxury
ENLARGED
LUXURY(value & mass brands aspiring to premium)
UBER PREMIUM
LUXURY(masstige and premium brands aspiring to luxury)
CHIC
LUXURY(classical luxury)
Massification of luxury
ENLARGED
LUXURY(value & mass brands aspiring to premium)
UBER PREMIUM
LUXURY(masstige and premium brands aspiring to luxury)
CHIC
LUXURY(classical luxury)
Thanks to its price attractiveness Internet
heavily contributed to proliferation of luxury
lifestyle and consumption.
What is the risk of massification
of luxury?
In a rush to grow profits many luxury brands try to
increase their sales, they come out of their niche and
try to appeal to a wider mass-consumer group.
So, how far you can:
• stretch your brand without destroying it?• go before your brand become mass?
Challenge: massclusivity
Massclusivity: examples
How serious is their luxury diluted?
Is there a winning formula?
Massclusivity
LVMH CEO Bernard Arnault:”Sharply define the brand identity by mining the brand's history and finding the right designer to express it”.
„Tightly control quality and distribution”.
„Create a masterful marketing buzz”.
Massclusivity
Massclusivity
Massclusivity is a fact. Massification is happening across a broad set of categories.
Every marketer needs to have a Luxury Marketing Strategy in place to be able to answer a question:
Who can effectively capture this segment in your category?
How to build new luxury
brands?
Luxury Brand
Leading Brand
Quality Brand
Better Brand
`Just Another Brand`
Pure Artist, Creator and Unique
Creation.
Exclusive, Prestige Image, Highest
Quality and Service, Professional
Management
Mass Produced, Good Overall
Price-Value-Image Brand
Proposition
Mass Produced, Best Quality in
Category, Enjoy Market Share
Leadership
Constantly Under Cost Pressure,
Unable to Build Brand Equity,
Usually Out of Top3 in Market
Share Leadership
Massification ofLuxury Brands
Luxurification of Mass Brands
Luxury Brand Building: define your current and future position on the luxury ladder
Luxury Brand Building: define your luxury position
Purchase Frequency
Pri
ce
&
Exc
lus
ivit
y
Low High
Lo
wH
igh
Core of Mass
Luxury
Distinctive Luxury
Essential Luxury
Affordable Luxury
Experience Luxury
Luxury Brand Building: define origins of your luxury
Luxury-by-Birth
Luxury brands remain true to
their heritage and stay
expensive and exclusive e.g.
Chanel
Luxury brands broaden markets
and develop multiple brand
extensions e.g. Emporio Armani
State of the art
technologies position as
a form of luxury e.g.
Apple
Popular brands
develop/acquire up-
market brands e.g. Ford & Jaguar
Popular brands using
`luxury` as a form of
differentiation e.g. Avon by Ungaro
Niche market players
position themselves as
luxury brands e.g. Bang
& Olufsen
Value-at-Heart
Luxury Brand Building: reenergize your brand
Purchase Frequency
Pri
ce
&
Exc
lus
ivit
y
Low High
Lo
wH
igh
Core of Mass
Luxury
Special Limited Editions
Extended Product
Range
Emerging Luxury Trends
Trends
Traditional luxury brands dramatically accelerate their internet activities
Trends
Luxury enters new categories to embrace digitally empowered X…Y generations
Trends
Socially Responsible Luxury
The global crisis of confidence in governmental, financial and other institutions will drive luxury consumers to demand that luxury brands serve not just them, but society as a whole.
Trends
Green Luxury
That will rise a need for eco-friendly luxury products in ways that can be documented.
Trends
Ethical Luxury
Consumers will require luxury brands to be ethical with all constituents, charitable in ways that make a difference to their beneficiaries.
Overconsumption won't be longer a sign of success especially when so many people are starving or unemployed.
In the era of and post financial crisis philanthropy will help luxury brands to build their reputation and `culture of sharing`.
Trends
Return to Classic Luxury
In the midst of this financial crisis, and the populist backlash on unearned financial services, many wealthy consumers are confused about luxury, even if they have money to spend.
Thus, many wealthy consumers will opt for classic luxury of well-known and trusted brands, luxury that is unique and exclusive, with exquisite artistic design, craftsmanship, and quality, delivered with impeccable service.
Trends
Experiential Luxury
Luxury becomes less tangible, less visible, less about material possession and more private, personal and more elusive for the most elite confident consumers.
Thank you
www.starbrandsagency.com