luxury: an overview to its strategies

Luxury: an overview to its strategies

© 2014 Tatiana Valoira.

¿How can we define it?

• great comfort, especially as provided by expensive and beautiful things ...

• something expensive which is pleasant to have but is not necessary


but is not necessary

• something which gives you a lot of pleasure but which you cannot often do

¿How can we define it?• Recession is the time of moral and physical

cleanliness. There is no creative evolution without moments like this:Bling is over.

Karl Lagerfeld

• "In a world which seems to get ever more


• "In a world which seems to get ever more congested and ever more frenetic, luxury for me is space and time

James Ogilvy Publisher, Luxury Briefing

• A product is a luxury product when it is eternal.

• Luxury brands have often been associated with the core competences of creativity, exclusivity, craftsmanship,

precision, high quality, innovation and premium

pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but


the satisfaction of not only owning expensive items but the extra-added psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these pricey items.

Samit Khanna

The consumer

• Evolution of the neo consumer:– Shopping as a hobbie and now? No

consumption?– Mix and match � cheap and

expensive– The luxury as an emotion� desire

of eternity


of eternity

– The luxury is focused beyond the search for gratification of the senses, and, paradoxically, against the ephemeral nature of many objects, there is a sixth sense, spiritual and transcendent, which basically is a certain longing for permanence and memorable joy

Lipovetsky

Classical Luxury

• Predominates the object.

• Appears in several European countries including France, during the nineteenth century.

• Is the time when the "home“ (la maison)


• Is the time when the "home“ (la maison) ensures a high production level without necessarily revolutionize fashion and launches a creation after another.

• What counts is the beauty of the object and the reputation of the "home. "

Modern Luxury

• From the decade of the 20’s always in Europe and especially in France, appears the modern luxury dominated by the creator.

– In that moment the capacity for innovation is being deified and the fact of producing something new is a


deified and the fact of producing something new is a value in itself, the most wanted of all.

• The luxury item can be "poor ", but always have to be signed by a creator

Contemporary luxury

• From the mid-seventies in the U.S., comes a contemporary luxury dominated by the media.– Ralph Lauren y Calvin Klein are the first

representatives, followed by Dona Karan


representatives, followed by Dona Karan

– And the “americanized italian” Armani y Versace, and then for the relaunch of Gucci and Prada.

• The luxury item becomes an operational support of mass communication: what matters is the global universe

The griffe

The luxury brand

Pure creation, unique word, materialized perfection

Small series, workshop, handmade work, very

fine craftsmanship

Attributes

The pyramid brand and business model in the luxury marketAdaptado de Kapferer

Creator’s signature

engraved on a unique work

Relations

Money

Aura


Upper-range brand

The brand

Series, factory, highest quality in the category

Mass series, cost pressure, the spiral of

quality

Mass prestige

Brand’s fame generates an aura of intangible added values for expensive and prime quality products, which nonetheless gradually tend to look more and more like the rest of the market.

Hence its name equals mass prestige.

French approach to luxury

• The priority is on the object, perfect, regardless of material used.

– Cachemir

– Steel � Puifocart

• The treatment of the raw material.


• The treatment of the raw material.

• The accent is on the process before the final object � The artisan

• On the time � in the history, en el savoir fair, in the tradition

American approach to luxury

• Priority is on the stage � the product and what is surrounding it.

• The product and the media context, the advertising claim.

• The product is key for communication


• The product is key for communication– Luxury houses have resorted to mass communication.

– A daring flirtation:• Tom Ford (from 1990 to 1999 Gucci from bankruptcy to more than

$4000 millions)

• Before and after pornochic

• The important is the product and the place where you buy it.

American approach

• The galaxy business model


Cult of the product

French approach to luxury

Two different approaches to luxury brand building

© 2014 Tatiana Valoira. Distribution

History StoriesAmerican approach

to luxury

The luxury codes ©Tatiana Valoira

Exclusivity/style proposition

Rarity

Art

Technology

History/Tradition

Códigosde


RarityUse of

materials

CraftmanshipKnow how

Technology

Limited editionCustomization of

objects

Padagogical function

de Lujo

The retail role

• The shop as the stage box of the house “la maison”

• Store decoration keeps the brand values and personality

• Point of sale is the container of the house


• Point of sale is the container of the house (maison) treasures.– It is the stage were the brand can show its “History

or Stories”

• Point of sale is the first communication element

Integratedcommunication

PressSocial media

emails

Search

Mobile

RRPP

Blogs


web

MultimediaSocial Share

Other online media

Video

Communication

• Watch and Jewelry brands, do not use mass advertising on TV

• They do select specialized print publications,


• They do select specialized print publications, and sometimes fashion magazines.

• Celebrities.

Communication

• Online presence:

– For years there has been discussion about whether the luxury "maisons" should have online presence.

• What happened?

– The consumer and the potential consumer of these brands


– The consumer and the potential consumer of these brands gets a 80% of information of the brands on the internet.

– How can the brands transmit the history/stories through the net?

– How can they transmit the sensorial experience of the brands?

Communication

• Internet is accessible to a huge number of potential consumers

• We can keep on creating "the dream", the


• We can keep on creating "the dream", the aspirational part of the brand for all consumers and potential consumers…

Communication

• How do the brands interact:

– Kind of actions:• Constantly update of the FB page:

– Events, Pictures, Product presentation, Videos.

– Interactions with fans and request for participation


– Interactions with fans and request for participation

• Transmit the brand experience through the web

– Interaction with the content, game play ... videos, brand history and product information � consumer engagement

• Social media enhancing the brand image:

– NYC fashion week

Communication

• Besides explaining the history of the maison ... We can explain media stories based on anarchetype or not ...


• Emphasizing a product…

Communication• Align actions and projects with the brand

values

• Echo important actions for the humankind and and support them– Rolex awards:

• Recognize pioneering projects and innovative.


• Recognize pioneering projects and innovative.

– Gucci:• Different projects:

– Unicef

Communication

• And why not to become a trusted guide of lifestyle?

• To emphasize the educational role through theweb.


web.

• Creating special content for exclusive costumers � consumer engagement for theregular costumers

The anti marketing luxury rulesAdapted from Kapferer & Bastien

• Forget about positioning– You can not compare luxury brands

– Each brand is unique, is the expression of the creator.

• Daoes the product have enough flaws?


• Daoes the product have enough flaws?– Tiene algún punto débil?

• Don’t pander to your costumer’s wishes

• Keep non-enthusiast out

• Do not respond to raising demand – Ferrari is not selling more than 6000 units/year

• Dominate the client– Maintain certain distance to maintain the aura of mystery



– Maintain certain distance to maintain the aura of mystery

• Make it difficult for clients to buy.– Luxury brand is something that has to be earned.

• Protect the clients from non-clients, the big from the small

• Role of advertising is not for selling

– Has to make dream

• Communicate to those whom you are not



• Communicate to those whom you are not targeting.

– Brand awareness is important

• The presumed price should be always higher than the actual price

• Luxury sets the price, price does not set luxury.

• Raise prices as time goes on in order to increase demand



increase demand

• Do not sell

• Watch out with celebrities

• Closeness to art

– Luxury as a promoter of taste.

• Do not relocate the factories

luxury: an overview to its strategies

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