According to Vincent Bastien, Professor of Marketing, HEC Paris – the first step is to understand that in the so-called luxury market, there are three possible strategies which are luxury, fashion and premium.
The difference between these three strategies is huge. It does not change much in the eyes of most basic consumers, at least in the short-term. But when one has to manage a brand, the difference is pivotal. In fact, if you decide to implement a fashion or a premium strategy, the classical marketing styles works pretty well. But if you decide to implement a luxury strategy, you need to reconsider all the aspects of your marketing management.
A. The luxury strategy aims at creating the highest brand value and pricing power by leveraging all intangible elements of singularity- i.e. time, heritage, country of origin, craftsmanship, man-made, small series, prestigious clients, etc.
B. The fashion strategy is a totally different business model: here, heritage, time, are not important; fashion sells by being fashionable, which is to say, a very perishable value.
C. The premium strategy can be summarized as “pay more, get more.” Here the goal is to prove -through comparisons and benchmarking- that this is the best value within its category. Quality/price ratio is the motto. This strategy is, by essence, comparative.
Here are some laws in the marketing using the luxury strategy:
1. Forget about positioning, because luxury is not comparative
In consumer marketing, at the heart of every brand strategy, you will find the concept of positioning. Positioning is the difference that creates the preference for a given brand, over the one that it has decided to target as a source of new business and whose clients it is going to try to win over.
Nothing is more foreign to this approach than luxury. 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; luxury makes the bold statement “this is what I am,” not “that depends”– which is what positioning implies. It is identity that gives a brand that particularly powerful feeling of uniqueness, timelessness, and the necessary authenticity that helps give an impression of permanence. Chanel has an identity, but not a positioning. Identity is not divisible, it is not negotiable– it simply is. Luxury is superlative, and not comparative. It prefers to be faithful to an identity rather than be always worrying about where it stands in relation to a competitor.
2. Do not pander to your customers’ wishes
This does not mean being deaf, of course, but the function of luxury brands is to create dreams, not to answer to problems and needs. Luxury is a non-necessity made desirable: it sells promotion emotions (self elevation, pleasure, recognition), not prevention emotions (risk reduction, absence of problem and discomfort). Promotion emotions lead to thrill, excitement and delight. Prevention emotions lead to security, confidence, and satisfaction.
There is another structural reason why traditional marketing is prohibited in the luxury strategy: Luxury brands are cultural forces. Luxury is about taste education. This is why it flirts so much with art, avant-garde art. Luxury brands do not aim at being popular (that is to say, liked by everybody today), but instead aim at setting the long lasting standards of taste for tomorrow. Luxury must surprise the customer, bringing something he or she was not expecting. What luxury sells is excitement, new territories; not security, not problem reduction. Think about the first iPhone.
3. Communicate to those whom you are not targeting.
Luxury has two value facets– luxury for oneself and luxury for others. To sustain the latter facet, it’s essential that there should be many more people that are familiar with the brand than those who could possibly afford to buy it for themselves. In traditional marketing, the keyword is return on investment. In advertising for example, the media plan must concentrate on the target consumers and nothing but the target consumers– every person reached beyond the target is a waste of investment money. In luxury, if somebody is looking at somebody else and fails to recognize the brand, part of its value is lost. It is essential to spread brand awareness beyond the target group, but in a very positive way– brand awareness is not enough in luxury; it has to be prestigious.
Source: http://entrepreneur.com
Images: Phillyvoice.com, Paul Tait, Sotheby’s