The Specificity of Luxury Management
Kapferer, J.N., and Bastien, V. (2008). The specificity of luxury management: Turning marketing upside down. Brand Management. Vol 16, 311-322.
The authors create a conceptual thought-piece article for marketing luxury brands. Within the paper, the authors differentiate the traditional marketing of mass brands from luxury brands. The paper highlights the importance of unique prescriptive approaches to marketing luxury brands to retain or regain profitability, given the timing of the article's release (post 2007-8 global recession).
There are several strengths of the article; first, the authors attempt to define luxury and luxury brands. Useful conceptual definitions are a necessary condition for building theories and valid empirical tests. Second, the article highlights areas for future marketing research for luxury goods. Finally, the piece provides prescriptive insights for luxury brand managers and premium brands (to up their position). The following points provide highlights from the article.
Introduction
Mass brands, using traditional marketing techniques (e.g., segmentation, positioning, pre-testing, consumer preference surveys, benchmarking, etc.), do not apply to luxury brands.
Luxury brands will offer extensions (termed 'trading-down') to mass markets at approachable price-points by leveraging the brand name.
What is Luxury?
Historically in Western Europe, decreed by royal rules it was a means to identify social stratification (i.e., a social distance) between aristocrats and others (i.e., masses, wealthy Bourgeois, etc.)
18th century Enlightenment led to the end of the traditional aristocratic perspective and a new view towards meritocracy
In the modern age, authors highlight a psychological need for people to form social stratifications (e.g., Veblen, 1899)
Luxury brands then serve to recreate social stratification and signal a person's place in a hierarchy
Luxury as a signal
A social marker and a symbolic desire to belong to a superior class based upon a person's aspirations and fantasies
Driven by cultural codes and doesn't merely reflect a buyer's wealth but their tastes
Luxury for the self
A strong personal and hedonistic (i.e., self-indulgent or pleasure-seeking) component
Luxury for self leads to a market for symbols (i.e., brand symbols); however, this is not a long-term strategy for a brand. A luxury brand should be grounded in product substance
Characteristics of Luxury:
Qualitative, not quantitative
Hedonism over functionality
Aligns with Art
Multi-sensory and experiential (i.e., based on experience and observation) – an example is a Porsche (1. Appearance, 2. Sound)
Must be of human origin
Must be handmade
Includes exclusive services a part of luxury management
Luxury & Fashion
Fashion reflects trends of the times
Luxury aims for timelessness
Fashion luxury brands have higher sales for their classics
Luxury streets are typically not co-located with fashion districts
Recommendations for Managing a Luxury Business
Not Brand Positioning Focus on Luxury Brand Identity
Traditional marketing focuses on brand positioning (i.e., unique selling proposition, value proposition, competitive advantage) - differences create a preference for the brand
Luxury – uniqueness matters not a comparison with competitors, it's an expression of taste and creative identity
Luxury image is "born of itself" – not customer preference surveys
Luxury brands tell their own story (whether real or not)
2. Luxury is Exceptional never Comparative
Competitors are irrelevant to luxury brands (think artists)
Traditional marketing attempts to draw customers from competitors and beat the competition (maybe an example of a premium brand)
3. Flaws are Charming: Perfection is not Luxury
Premium products (on the traditional marketing spectrum) seek perfection (vs. luxury)
Luxury watches add complexity in the quest of art for art's sake
4. Luxury Customers are not First
In traditional marketing and products sold through mass distribution, customers are king
Luxury products come from the mind and vision of their creator
An example is BMW – resist client demands for changes to their cars and instead driven by their philosophies of performance and aesthetics
Given that people seek to elevate themselves, luxury brands are a reward and signal of gradual elevation – thus, the brand should dominate its clients
The brand should maintain a social distance to maintain an aura of mystery
Co-development of a brand with customers is alien to luxury brands
Premium brands represent trading-up while Luxury is the domain of culture and taste – Marketing-wise, this implies that luxury brands need to advise, educate and guide (sociologically) the wealthy
5. Luxury is Difficult to Attain
People earn the right the acquire a Luxury
The higher the difficulty, the higher the desire. Obstacles such as cultural (when to wear), logistical (limited locations), and waiting (i.e., a time factor) which increases longing and straining desire
Luxury exceeds at distributing scarcity
6. Luxury Advertising
In traditional marketing, managers study the before and after the influence of a campaign
In Luxury, advertising attempts to recreate or reinforce the consumer's dream
An immediate effect on sales is not an effective measure (it does not measure the dream)
7. Advertise to Non-targeted Consumers
Traditional marketing measures advertising effectiveness, therefore a campaign focuses ideally only on the target consumers
Luxury – the campaign communicates the value (e.g., the price) to everyone (if no one recognizes the price then the value is lost
There are two aspects to luxury value, (1) luxury for oneself and (2) luxury for others
8. Raise Prices
"A reasonable price is a price that appeals to reason, and therefore comparison."
Increasing prices are more attractive to people that previously would not consider the product
Raising prices attracts luxury buyers for whom Luxury implies a display of wealth
Status brands have a range of products that are financially out-of-reach of many people
High prices influence the mentality (i.e., mindset, culture, etc.) of an organization. Everyone wants to deliver the value to live up to the price
