Today I am starting a series of articles on marketing a luxury brand.
It’s sometimes hard to believe there are brands for which the words “Sale” or “Limited Time Offer” are not part of the vocabulary. In fact, the higher price tag only adds to the myths these brand managed to create over time.
I am referring of course about luxury brands.
The word “luxury” is used very loosely these days. We’all seen ads promoting a product as “an affordable luxury”, “your everyday luxury”, and so on.
This article will try to define the true luxury brand. What are the characteristics that make it “luxury”? Are expensive products automatically “luxury” products?
Marketing a luxury brand is not (only) about setting a price that makes it beyond the reach of most people. Here are some key ingredients, common to brands in the luxury market:
Desired by Many, Owned by Very Few
Luxury products are valued possessions of the selected few.
The CEO of Porsche once said “When I see two Porsche on the same street I begin to worry.”
Being exclusive does not mean targeting only the narrow customer base that can afford to own the brand. Marketing a luxury brand requires attracting brand enthusiasts that will never afford it, but are very passionate about it.
Exclusivity requires instant recognition.
Luxury brands have to make their story widely known. Their logos act as badges that establish social hierarchies and speak to the owner’s taste in the eyes of ordinary people.
In order to create the social distinction, the brand has to be known and appreciated by everybody, and owned only by few.
Luxury brands evolve with the modern times, rather that drastically change. The “secret recipe”, distinctive design, and all symbolism associated with luxury brands transcend time, rather than follow the modern day trends.
Every BMW model, no matter the production year, has a specific, distinctive and consistent look. Not the same can be said about Lexus, a brand that chances the design of its vehicles every few years. This is one reason why Lexus is a premium, not a luxury brand.
The timeless character is what brings value to the luxury brand, and assures the owner that his possession will always be relevant. That also explains the high resale value of luxury products.
It’s All About Emotions
According to Jean-Noel Kapferer, the author of the excellent book “The Luxury Strategy”, brand positioning concept does not apply to luxury brands:
“When it comes to luxury, being unique is what counts, not any comparison with a competitor. Luxury is the expression of a taste, of a creative identity, of the intrinsic passion of the creator; luxury makes the bold statement “this is what I am” not “that depends”-which is what positioning implies.”
There is nothing rational in the desire to own a luxury brand. In the rational, consumer goods market, immediate availability is key. When it comes to luxury, having to wait two years to have your Ferrari built only adds to the excitement of owning one.
A brand that uses rational arguments to build loyalty is not competing in the luxury segment. That’s what separates luxury from ordinary: high price tags, scarce availability, acknowledged design flaws,and other things that are red flags in any rational purchase decision.
In the world of luxury, these are ingredients that contribute the creation of exclusivity.
A Unique, Almost Mythical Brand Story
Luxury brands were built on a compelling story that cannot be reproduced or replicate. Often, it all started with the owner’s distinctive personality and skills.
Brands such as Porsche, Ferrari or Mercedes-Benz were built on the mechanical ingenuity of their founders. Rolls-Royce is a brand strongly associated with the royals.
This is the story of the famous Dom Pérignon champagne, as presented on their website:
“Dom Pérignon is a vibrant, living, perpetually renewed homage that evokes Dom Pierre Pérignon, the spiritual father of champagne”.
Price Greatly Exceeds the Functional Value of the Product
What functional attributes can justify the $400,000 USD price tag on the Richard Mille watch?
Price in the luxury market acts as a selection tool, that separate brand enthusiasts from the small group of owners. Its role is not to justify the functional features of the brands-another distinction between luxury and premium brands.
Premium brands provide the extra features that explains the price premium to be paid for it. In the luxury world, the higher the price tag, the more exclusive and valued the brand becomes.
Most of us know the Ferrari brand from the Formula 1 races that these cars are involved in. We love the brand for its unique, distinctive design, heritage, achievements, and technical performance. We all have the desire to own one in the future. There is only one obstacle that stands in our way: the high price tag.
The word “sale” is not part of the communication vocabulary of a luxury brand. Lowering the price will cheapen the luxury brand, bringing it from the stratosphere down to earth.
Highly Personalized Accompanying Services
In the luxury world, each member of the selective owners club benefits from royal services. A highly personalized product and service is a key ingredient that makes the client feel special and contributes to the hedonistic pleasure owning a luxury item generates.
Kapferer introduces the concept of community recognition management, the equivalent of customer relationship management in the luxury world: recognizing and honoring the community of believers, the followers.
“…at Ferrari the community of 38,000 owners of old Ferraris are honoured and cajoled. They are encouraged to send their jewel for an in-depth maintenance check, at the holy of holies, at Maranello.”
Next article in this series will address why the luxury brand strategy does not follow the traditional brand management model.