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Dr Wioleta Dryl Dr Robert Bęben Katedra Marketingu Wydział Zarządzania Uniwersytet Gdański Luxury brand management Summary Luxury is a very ambiguous term. An attempt to define the concept of luxury, poses in front of theorists in this area a major challenge. The problem is an indication of a clear and distinct boundary between what is necessary and what is already a luxury. Luxury is being discussed by economists, sociologists, psychologists, as well as sciences such as management. Definitions created on the canvas of these considerations stress the different criteria of luxurious nature of goods important in the point of view these sciences. Therefore, it is very difficult to create a clear, comprehensive instrumentation of luxury brand management from the point of view of theoretical considerations. The only possible solution becomes therefore a combination of scientific achievements and practical experience in this field and on this basis to create an effective set of tools to manage a luxury brand. Marketing management of luxury brands requires specific tools, different from those used on the mass market. The basic principles of traditional marketing do not apply in this area. D. Dubois describes the marketing of luxury brands as paradoxical. Author recognizes the fact that its basic principles stand in complete contradiction with the principles of mass products marketing. This considerations, however, oscillate around a basic set of tools of the marketing mix, such as: product, price, distribution and promotion. Practical experiences in marketing of luxury goods result in increasingly look at this problem in the literature. According to R. Aurora efficient management of the luxury brand requires the involvment of 8Ps, including tools such as performance, pedigree, paucity, persona, public figures, placement, PR and pricing. Luxury brand management requires therefore broadening the scope of marketing tools to 8Ps, as well as outside the box, almost paradoxical approach to them. *** 1. Introduction The success of the product in today's highly competitive, at the same time turbulent conditions, depends on many factors. Enterprises face a difficult challenge concerning what to produce and how to meet the intensively changing needs of a consumer. This problem occurs on a mass market, but the luxury goods manufacturers have in this area even more 1

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Dr Wioleta Dryl Dr Robert BębenKatedra Marketingu Wydział ZarządzaniaUniwersytet Gdański

Luxury brand management

SummaryLuxury is a very ambiguous term. An attempt to define the concept of luxury, poses in

front of theorists in this area a major challenge. The problem is an indication of a clear anddistinct boundary between what is necessary and what is already a luxury. Luxury is beingdiscussed by economists, sociologists, psychologists, as well as sciences such as management.Definitions created on the canvas of these considerations stress the different criteria of luxuriousnature of goods important in the point of view these sciences. Therefore, it is very difficult to create aclear, comprehensive instrumentation of luxury brand management from the point of view oftheoretical considerations. The only possible solution becomes therefore a combination of scientificachievements and practical experience in this field and on this basis to create an effective set of toolsto manage a luxury brand. Marketing management of luxury brands requires specific tools, differentfrom those used on the mass market. The basic principles of traditional marketing do not apply in thisarea. D. Dubois describes the marketing of luxury brands as paradoxical. Author recognizes the factthat its basic principles stand in complete contradiction with the principles of mass productsmarketing. This considerations, however, oscillate around a basic set of tools of the marketing mix,such as: product, price, distribution and promotion. Practical experiences in marketing of luxurygoods result in increasingly look at this problem in the literature. According to R. Aurora efficientmanagement of the luxury brand requires the involvment of 8Ps, including tools such as performance,pedigree, paucity, persona, public figures, placement, PR and pricing. Luxury brand managementrequires therefore broadening the scope of marketing tools to 8Ps, as well as outside the box, almostparadoxical approach to them.

***

1. Introduction

The success of the product in today's highly competitive,

at the same time turbulent conditions, depends on many

factors. Enterprises face a difficult challenge concerning

what to produce and how to meet the intensively changing needs

of a consumer. This problem occurs on a mass market, but the

luxury goods manufacturers have in this area even more

1

difficult task. Consumers of their products, have in fact very

specific characteristics, and therefore, their needs are much

different from consumers of mass goods. In order to succeed,

it is not enough only to create a product that meets those

needs, but also to use the certain marketing tools that will

make the consumer desire a particular brand of product.

It is therefore necessary to consider how to manage a

luxury brand to make it gained a faithful following of buyers.

Is the use of traditional tools of mass brand management

sufficient for luxury brands? Taking into account the specific

needs of the consumer of luxury goods, it can be assumed in

advance that this solution might not work. Worth thinking,

however, is not only how the luxury brand management tools are

different from those used in mass markets, but also whether

their scope is sufficient in this case.

Even an attempt to define the concept of luxury, poses in

front of theorists in this area a major challenge. Although in

the literature can be found many concepts of this problem. It

turns out that in most of the definitions, this concepts is

not treated comprehensively, focusing only on particular

aspects relevant for the specific area of science.

Therefore, it is very difficult to create a clear,

comprehensive instrumentation of luxury brand management from

the point of view of theoretical considerations. Taking into

account the fact that on the market are functioning many

luxury brands whose pedigree goes back a few centuries back,

it can be said that there are luxury brand management tools

that guarantee its success. The only possible solution becomes

2

therefore a combination of scientific achievements in the

field of brand management and practical experience in this

field and on this basis to create an effective set of tools to

manage a luxury brand. The main aim of this article is to

compare the existing theoretical considerations about the

luxury brand management with practical experience in this

field and to identify the appropriate set of tools for

managing luxury brand.

2. The essence of luxury

Luxury is a very ambiguous term. The difficulty of defining

the concept lies in its relativity. The main problem is to

identify the point at which luxury begins, when the product is

no longer average, mass good and takes luxury character.

Luxury is in fact one of the ends of the product continuum,

where beginning are the indispensable products, satisfying

basic needs, and at the opposite extreme are the products,

often described simply unnecessary, or luxury goods1.

The problem is an indication of a clear and distinct

boundary between what is necessary and what is already a

luxury. This boundary is exceptionally smooth. Is determined

by the subjective consumers evaluation, the social environment

in which the consumer lives, economic, culture conditions,

etc2.

Luxury is being discussed by economists, sociologists,

psychologists, as well as sciences such as management.

1 J. Sekora, Luxury. The Concept in Western Thought, Eden to Smollett, John Hopkins University Press, London 1977, p. 232 C. Berry, The idea of luxury: A conceptual and historical investigation, Cambridge University Press, New York 1994, p.41

3

Definitions created on the canvas of these considerations

stress the different criteria of luxurious nature of goods

important in the point of view these sciences.

Definition based on basic economic laws, forms an exception

to these rights, According to economics considerations of this

term luxury goods are the products for which demand increases

with the increase of in their prices. This approach is based

on the relations existing between price and demand3. The

economic approach may also be based on the relationship

between the changes taking place in consumer incomes and

demand for the products. The determinant of a luxurious nature

of the product, in this case is the high income elasticity of

demand, which in this case should exceed one4.

The indication of the reasons why the consumers of luxury

products behave irrationally appears to be significant at this

point. The reasons for the paradox of luxury goods should be

sought in the specific needs of consumers.

In this area, considering the psychological determinants of

consumer's behavior in the luxury goods market turns to be

particularly important. Among the others Berry and Twitchell

have identified a strong influence of consumer's desire for

luxury goods on their purchasing decisions5. The conclusions of

the Kemp's experiment (1998) stated, Barry's and Twitchell's

considerations.3 H. Leibenstein, Bandwagon, Snob, and Veblen Effects in the Theory of Consumers’ Demand, “The Quarterly Journal of Economics”, 1950, p. 199 -202.4 K. Lancaster, Consumer demand: A new approach, „Columbia Studies in Economics”,No5, New york & London, Columbia University Press, 1977, p . 685 C. Berry, 1994, The idea of luxury: A conceptual and historical investigation.,Cambridge, Cambridge University Press, London, New York, 1994, p. 41 ; J. B. Twitchell, Living it up: Our love affair with luxury. Columbia University Press, New York, 2002, p. 43

4

According to Kemp, product becomes luxurious when the need

for it is more the result of desire, than willingness to

eliminate discomfort6. Functionality of luxury products is not

the most important factor to their consumers. Very often

pleasure resulting from their possessing is essential, and

premises that the consumers are guided when deciding to

purchase a product are purely hedonistic. Therefore, luxury

goods are defined as products for which the proportion between

functional utility and the price is extremely low7.

The mere fact that a product is purchased for the

hedonistic or symbolic motives, does not prejudge yet about

its affiliation to the group of luxury goods. There are

categories of products which, although they are not luxurious,

also are being purchased of hedonistic motives based on

emotions. It shows, for example, that the main motives for the

decisions of individual stock investors largely stem from

emotional needs8. From a study conducted by R. Bęben, it

follows that, in the decisions of individual stock investors,

dominates symbolic motives9. These factors most significantly

6 S. Kemp, Perceiving luxury and necessity, “Journal of Economic Psychology”, 19(5),1998, p. 591-6067 J. Pietrzak, Luksusowe marki, 2006, http://www.bankier.pl/wiadomosc/Luksusowe-marki-1517387.html., dostęp dnia 03.11.20138 R. Bęben, Marketing inwestorski jako proces zaspokajania potrzeb na rynku kapitałowym, Difin, Warszawa 2013, s. 1349 In order to identify the motives of investment decisions, was planned and conducted a survey, during which information was collected from 389 individual investors gathered around the Association of Individual Investors As a method of collecting information was used Computer-Assisted Web Interview (CAWI), ran for a period of more than two months. In the course of the study, was used a questionnaire of investor motives, developed for this purpose. The questionnaire has been previously verified for accuracy and consistency by competent judges.

5

influence the decisions of the study group of individual

investors. The study results are shown in figure 1.

Figure 1: The main factors influencing the decisions of the

studied group of investors

Source: own study, based on author’s own research

In some subsegments are also important hedonistic factors,

such as the "opportunity to succed, being wealthy" and "the

thrill of risk-taking"10. Can we conclude that the shares of

listed companies are luxury goods? Probably not. Way of

defining the luxury product relies not only on the

characteristics of the product, but also on the most important

values offered its consumers, its uniqueness and limited

availability.

In case of consumers with low or average income, most

desires are verified by their purchasing power. Usually

satisfaction of the need is realized through the purchase of

mass products . Wealthy consumers satisfy their needs while

reaching for luxury goods, for which the average consumer can

10 R. Bęben, op. cit., s. 132

6

not afford. The fact that luxury products are available for

limited, selected group of consumers is another important

feature. According to M. Van der Veen everyone desires luxury

products, but only a few can have them11.

Having a luxury products therefore gives consumers the

opportunity to stand out. Veblen's theory, though primarily

associated with the relationship that occurs between the

demand and price for luxury products, also draws attention to

the psychological and sociological determinants of consumer

behavior. The phenomenon, described by Veblen snob effect has

its grounding in the theory of the leisure class. According to

this theory, consumers of luxury goods are under the strong

influence of the desire to stand out from the masses,

exhibiting a higher social status.

Veblen noted the huge disparities in income of individual

classes. The result of significant differences in the incomes

of consumers have become differences in their needs, and thus

the ways of satisfying them12. Luxury products are an

expression of belonging to a higher social class, according to

Veblen's to a leisure class. The desire to have luxury

products means, in accordance with the above considerations,

the desire to belong to a group of unique consumers,

characterized by a sophisticated taste, sense of style.

It is important to consider what products meet such

specific needs and also at which point mass product acquires a

luxury character. A particular challenge is therefore against

11 M. van der Veen, When is food a luxury? “World Archaeology”, 34(3), 2003, p. 40612 T. Veblen, The Teory of the Leasure Class, Release Date: August 6, 2008 [EBook #833]

7

the people responsible for developing the marketing strategies

of companies operating in the luxury goods market. The

specific needs of consumers of luxury products, require

different marketing tools than on the mass market. Since the

value of the product does not result from its functionality,

it is necessary to identify the other of its features, so that

the consumer feels the desire to have it.

Definitions of luxury products presented in the marketing

literature describe them  as high-quality, exclusive, rare,

prestigious and original but also unnecessary products and

services with high symbolic and emotional / hedonistic value.

This way of defining the luxury product relies not only on the

characteristics of the product, but also on the most important

values offered its consumers.

3. Luxury brand management in the context of its core values

Marketing management of luxury brands requires specific

tools, different from those used on the mass market. The basic

principles of traditional marketing do not apply in this area.

The essence of luxury products as mentioned above is based on

a paradoxical relationship between price and demand for this

goods. This paradox also affects the tools used in luxury

brand marketing. D. Dubois describes the marketing of luxury

brands as paradoxical. Author recognizes the fact that its

basic principles stand in complete contradiction with the

principles of mass products marketing. By the main objectives

of the marketing strategy of luxury D. Dubois recognizes:

craftmanship, high cost, high price and limited distribution,

8

low promotional activity and advertising with no sophisticated

copy strategy13.

In accordance with the D. Dubois considerations, luxury

product does not have to, and indeed can not be cheap. Its

production must take place at a very high standard, this

applies to both materials and quality craftsmanship.

Production of luxury products is very common in nature with

craftmenship. Already this shows huge differences in the

development of product strategy of mass and luxury goods.

Another element of the marketing mix of luxury goods

standing at odds with the assumptions of the mass market is

undeniably price. In the case of mass products market, it must

first of all respond to the functionality of the product and

reflect its value to the customer. The paradox of marketing of

luxury goods manifests itself most strongly at this site,

namely the strategy of price, which in this case is to simply

be the highest possible price that the consumer is willing to

pay for the product.

D. Dubois also points to the limited distribution, as

another part of the paradox of luxury goods. This aspect

should be seen both from the point of view of the company's

strategy and future prospects of consumer expectations. It

should be noted that the essence of luxury goods is just in

their unavailability to the average consumer. Aura of a

luxurious nature of the product is due to its inaccessibility,

and hence the uniqueness of individuals who own it. Intensive

distribution of the product not only negate the idea of

13 M. Chevalier, G. Mazzalovo, Luxury Brand Management. A World of Privilege, John Wiley & Sons (Asia) Pte. Ltd., 2008, p. 14

9

luxury, but also would conflict with the expectations of

consumers. Price is a practical barrier to unwanted consumers

of luxury goods, and the distribution is transparent

expression of their unavailability.

The approach to the management of luxury brand presented

by D. Dubois is very niche. High prices, low promotional

activity, or even a limited distribution make the product

become less available. Getting the product requires the

consumer to take a lot of effort. That consumers want to take

the effort, luxury brand must somehow attract him. The brand

must have a very strong personality. Requires the use of

specific aesthetic concept. In accordance with the

considerations D. Dubois and Duquesne Partick brand strength

lies in14:

- a mythical value - wyjaśnienie powodu jej istnienia,

explanation of the reason for its existence and its

position in time

- an exhange value - combines mythical components with

other elements of the brand value, it’s the best value

for money

- an emotional value - includes the emotional values and

impressions

- an ethical value - refers to social responsibility and

brands relationship with the environment

- an identity value - refers to the discretion brands to

create a way for consumers to communicate their identity.

14 M. Chevalier, G. Mazzalovo, Luxury Brand Management. A World of Privilege, John Wiley & Sons (Asia) Pte. Ltd., 2008, p. 14

10

Selection of luxury brand management tools requires

emphasizing its key values. Luxury brand strength lies in its

identity. It turns out that the ethical and emotional values

are the fundamental factor affecting the value of the brand.

This approach is also emphasized by J. M. Floch. Floch

indicated levels of definition and analysis of brand universe

that are presented in Figure 2.

Figure 2: Levels of definitione and analysis of a brand

universe.

Sourece: Floch, Petites mythologies de L’oeit et de

l’esprit, 1985, Hades – Benjamins: in: M. Chevalier, G.

11

Invariable: The brand aesthetic, the approach to the sensory, colors, shapes

SENSORY DIMENSION(the expression, the signifier)

variable: Tehniques and materials

Creations: products, advertisin, signs, logos, etc

INTELLIGIBLE DIMENSION(the content, the

signified)

Variable: The different universe, industrial sectors

Invariable: The values, the world view, the brand ethic, the approach to the business, the founding myth

Mazzalovo, Luxury Brand Management. A World of Privilege, John Wiley &

Sons (Asia) Pte. Ltd., 2008, p. 192

From the theoretical point of view, particularly important

in the management of luxury brand is its identity. It should

be recalled that the concept of luxury is very relative. While

the company communicates a unified message, the same for all

markets, its reception may be different, even for different

geographic markets. Characteristics of a luxury brand in the

opinion of Polish consumers are subject to an annual survey

conducted by KPMG. A recent study of 2012 year show, the most

important features of luxury brands according to Polish

consumers are high quality, prestige and tradition / history

of the brand. The overall results of the study in terms of the

characteristics of luxury brands are shown in Figure 3 The

study was conducted on a nationwide sample of consumers. As an

important criterion for the selection of the sample was

treated the income. The largest group (60%) were respondents

with monthly income, 7 128 zł - 20 000 PLN gross, the groups

earning between 3 701 zł - 7 127zł and 20 001 - 50 000 PLN,

accounted for 20%. Only 1% of respondents declared earnings

above 50 000 PLN. In the absence of a clear definition of

luxury, and hence the lack of consumer awareness in this

regard, the respondents were asked to mention the spontaneous

features associated with the luxury brand. Then the task of

the respondents was to assess the significance of these

characteristics on a scale of 1 to 7 (where: 1-negligible, 7 -

the most important).

12

Figure 3. Characteristics of luxury brand from the point of

view of polish consumers

N:499; response by the scale of 1-7, where 7 is the highest

Source: Raport KPMG: Rynek dóbr luksusowych w Polsce,

Edycja 2012, p. 17

The vast majority of the features indicated as significant

from the point of view of Polish consumers are based on

emotions. Undeniably the highest value for Polish consumers is

high quality of luxury products. It should be noted, however,

that apart from the high price, brand ambassadors or opinions

of close environment other features relate primarily to the

emotional values.

13

It seems important to identify marketing tools that will

allow the effective management of such specific brand as

luxury one.

One of the proposals shown above, is the concept of

marketing paradox of luxury goods presented by D. Dubois. The

authors considerations, however, oscillate around a basic set

of tools of the marketing mix, such as: product, price,

distribution and promotion. Practical experiences in marketing

of luxury goods result in increasingly look at this problem in

the literature. According to R. Aurora efficient management of

the luxury brand requires the involvment of 8Ps, including

tools such as performance, pedigree, paucity, persona, public

figures, placement, PR and pricing15. R. Aurora represents a

practical look at the management of the luxury brand, by

virtue of the cooperation in the field of strategic

communication projects of De Beers, Ford-Lincoln, Al Tayer

Group, Omega watches, luxury real-estate projects, luxury

healthcareprojects, etc.

Although the scope of these tools is much wider than the

traditional 4P, it should be noted that they have common

points. Performance is an element of the product. Pedigree

results from a particular product management, but also becomes

an important element of the promotion. Persona, public

figures, and PR are part of the traditional approach of

promotion. In contrast, price and placement can be uniquely

identified with the price and place in the traditional sense

of the marketing mix 4P of mass products. The relationships

15 R. Aurora, 8 P’s of Luxury Brand Marketing, http://www.brandchannel.com/images/papers/533_8ps_of_luxury_branding.pdf

14

between the scope of marketing tools of luxury and mass brands

are shown in Figure 4.

Figure 4: Relations between between the scope of marketing tools of luxury and mass brands

Source: own study

Although the policy shaping marketing tools of luxury

brands is in complete contradiction with the principles

applied to the mass market, it should be noted that their

scope is similar.

15

PLACE PRICE

Persona

Pedigree

Paucity

Public Figure

PROMOTION PRODUCT

Public Relations

Performance

PricingPlacement

4. 8P’s of luxury brand management

R. Aurora as important elements of performance indicate

functional and physical characteristics such as craftsmanship,

precision, materials, high quality, unique design,

extraordinary product capabilities, technology & innovation.

Craftmenship is indicated as an important element in the

strategy of luxury goods also by D. Dubois. It should be

noted, however, that not only craftmenship is sufficient

feature of luxury product. As rightly pointed R. Aurora also

other features are important. This approach is also popular

among the associations incorporating luxury goods producers

such as Comite Colbert, or Altagamma. French Comite Colbert

association was founded in 1954 and is the oldest organization

of this type. It incorporates the most important French luxury

brands and promotes these brands in global markets16. From

luxury products Comite Colbert requires, among the others:

strong brand associated with exclusive lifestyle, a very high

quality and design at the highest level. In the case of the

Italian organization Altagamma greater emphasis is placed on

innovation. Although even in this case the quality, design and

prestige are important criteria.

A perfect example of luxury brands that meet the criteria,

set out in this place by R. Aurora are the finest in its

category brand watches, such as Patek Philippe, and Omega.

These are not only watches with a long history in the market,

but also the art equipment for not only measuring time. One of

the Omega watches is the only watch cerified by NASA and is

being sent on the most important space missions. But16 http://www.comitecolbert.com/histoire.html, dsotęp dnia 02.08.2013

16

innovation and new technologies can be found even in such

traditional products, like Louis Vuitton suitcases. Brand in

response to changing consumer demand has launched ultra-light

luggage, well-proven in the aircraft.

Performance, however, is not limited only to the

functional value of a luxury product. It also includes a very

important factor, namely the emotional value that luxury

product provide. Experiental and symbolic dimension of luxury

noticed also C. Tynan, Mckechine and C. Chhuon17. Luxury

product should communicate specific values, such as Chanel

brand is a symbol of beauty, classic.

Another P in the marketing of luxury goods is pedigree.

Luxury brands are often accompanied by a very rich history,

legendary founder character. They are an integral part of the

personality of the brand. Buyers of Louis Vouiton suitcases

appreciate them not only for their excellent quality, but also

for their remarkable history, dating back to the mid-

nineteenth century. A perfect example of the brand's history

is also a Gucci museum in Florence, or biographical book

written by a family member, Jenny Gucci titled "Gucci Wars",

describing not only the family intrigues but also presenting

the rich history of the brand.

The counterparts of distribution in the traditional

approach of marketing mix in the luxury goods are paucity and

placement. Luxury products are supposed to be hardly

accesable, their consumers expectes that. Paucity may,

however, result from three factors. It may result from natural

17 C. Tynan, S. Mckechine, C. Chhuon, Co-creating value for luxury brands, “Journal of Business Research”, 63(11), 2010, pp. 1156-1163

17

paucity (the actual scarcity), the technology-led paucity and

the tactical-driven paucity.

The natural paucity applies to such products as diamonds

and platinum. The undisputed leader in the diamond market is

Van Beers. Tehnology-led paucity refers to products where

changes in technology, innovation, result in very high costs

and are time consuming. Emphasis on innovation, technology is

essential for the production of luxury cars, watches,

electronics and appliances. Craftmentship is the element of

product strategy, which causes paucity of products. No mass

production causes that even for such prosaic products as

handbag, the customer must wait six years, as is the case with

Hermes Birkin model.

It turns out that even in the luxury cosmetics market

innovative technologies are an essential part of product

policy. They do not limit the availability of the product

directly. Of course, it extends the time of placing the

product on the market. But they are significant in terms of

the promotional part of product strategy. A perfect example is

the Polish cosmetics company Dr Irena Eris. Brand intensely

highlights the fact of highly advanced product research,

involvement in production of cosmetics best experts and

technology. The undeniable success of the company, confirming

adjusting the company to the canons of luxury brand management

is the fact of enrollment of Irena Eris brand, to the group of

companies associated in the Comite Colbert. Confirmation of

this success is the fact that in addition to the brand Irena

Eris in Comite Colbert are associated only three European

18

companies, other members are only French luxury goods

manufacturers.

The last form of paucity is tactical - driven paucity.

This paucity is the result of strategies used to promote the

brand. Companies realize the paucity of their product, by

releasing to the market limited editions of their products.

These types of strategies are used by the majority of luxury

companies.

The fourth P of marketing mix of luxury brands is a

persona. Persona of the brand is an important factor in

developing the strategy of any brand, not only a luxury one.

In the case of luxury goods is particularly important to

maintain a consistent persona of the brand, clearly

communicating luxurious nature of the product. Persona of the

luxury brand is associated with the brand values , its

consumers personality and character of marketing

communication. The tool which allows for integration of all

these elements is a visual brand identity. It communicates the

brand personality, aura and its emotional values, which it

offers for consumers. Logo, brand colors are important tools

to communicate the nature of luxury products. Brown and gold

colors, accompanying both products and advertising messages of

the company, are uniquely associated with the brand Louis

Vuitton. It should be noted that the form of advertising of

luxury brands, is significantly different from the concept of

advertising used in mass markets. Advertisement of luxury

product should clearly communicate the uniqueness climate,

unavailability of the product, focus on emotions, rather than

19

the product's functionality. The purpose of advertising is to

build a desire for luxury brand, but not in the seasonal

dimension as it is often in case of mass goods, but to create

a permanent desire for product.

Often used by the luxury brands tool of communication is

an engagement of the public - figures. Luxury brands involve

movie stars, athletes, musicians, and even members of

aristocratic families or brands designers. Until now, luxury

brands were often accompanied by the faces of celebrities. In

view of the fact that the image of the celebrities was too

often used by producers of mass products there was a risk of

loss of the aura of luxury significant from the point of view

of luxury products.

Giving brand products, for people desirable from the point

of view of the image of the brand is a popular procedure used

by luxury brands. Not only "product placement" in movies is a

tool used in this area by the luxury brand. Luxury brands

appear in the company of desired by the brand customers on

important media events. It is important here is that the

personality of a public-figure was compatible with the

personality of the brand and the values it represents.

Very transparent tool of luxury brand management is

placement. The branded retail environment in luxury branding

is giving an opportunity to communicate effectively and

intensely to the environment, luxury personality of the brand.

Luxury brands ensure both an appropriate location of shops,

usually on the most expensive streets in the world, the

appearance of shops and staff. The consumers of brands retails

20

are supposed to experience exceptional emotions, feel

prestigious charater of brand.

Positive emotions should also be shaped by the highest

level of service. Luxury brands with great attention design

the look of their retails. A perfect example is the brand

Louis Vuitton, which showcases and interior of shops look like

works of art. The highest quality of service of this brand is

the result of excellent training for sales staff. All

employees undergo mandatory training at the company's

headquarters in Paris.

While many theorists see diametric differences in both the

extent and nature of promotion tools used in the luxury goods

market still in publications in this area dominates pointing

promotion as one of the elements of the marketing mix. It

should be noted, however, that the promotion of luxury goods

is so specific that it seems reasonable to identify specific

tools, showing the highest efficiency in this area. Undeniably

tool both effective and highly corresponding to the luxurious

character of the brand is Public Relations.

Public Relations is a tool that allows to communicate

brand identity in a manner both clear and subtle. It also

provides the ability to communicate the brand attributes that

can not be passed on to the advertising message. It is a tool

for two-way communication between the consumer and a brand.

Participation in trade fairs, fashion shows, sporting events,

is a place where the company enters into dialogue not only

with consumers but also with other interested recipients. It

21

also allows to gain media attention and create a proper

publicity for the brand.

In terms of PR, an extremely important tool is the

patronage of arts, culture and even science. Comite Colbert as

an association of the finest producers of luxury goods, as one

of the strategic objectives of its activity indicates

precisely the support and promotion of art and culture.

The last luxury brand management tool is the price. It is

a tool clearly communicating the fact that product belongs to

a group of luxury goods. Price of luxury product should be the

highest possible price that the consumer wants to pay. It

should be high enough to strengthen the desire of owning the

product but at the same time to create a barrier to unwanted

consumers18. It should be noted, however, that the high price

must be justified in an appropriate shaping of the remaining

7P.

The approach to sales promotion is also different in the

case of luxury brands and mass products. Price reductions are

not a tool corresponding to the luxury. This does not mean,

however, that the luxury brands completely forgo this tool in

the process of pricing policy management. Their goal is not to

induce the customer to make a one-off transaction. By offering

customers shopping vouchers, bonus products, gift cards,

loyality points, luxury brands are trying to create a closer

relationship with the customer, prompt to make additional

purchases.

18 J. N. Kapferer, V. Bastien, „The Luxury Strategy. Break the Rules of Marketing to Build Luxury Brands”, Kogan Page Limited, London, Philadelphia, 2012, p. 177 - 183

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Luxury brand management requires broadening the scope of

marketing tools to 8P, as well as outside the box, almost

paradoxical approach to them.

5. Conclusion

Specificity of luxury goods is reflected in the brand

management strategy. The aim of the luxury brand management is

to create a product that everyone desire, but only a few can

possess. It is a difficult task, even paradoxical. The use of

traditional tools used in the management of mass brands, makes

no sense in this case. Theoretical considerations and

practical experience in this field show that not only the

range of tools but also way of their use require changes.

An important aspect of managing a luxury brand is its

emotional-value. An important aspect of managing a luxury

brand is its emotional-values. The main aim of the management

of a luxury product is to create an aura of unavailability of

luxury. Unavailability of the product is achieved through

limited distribution, high prices. Often these assumptions are

grounded in the specifics of the product. Luxury product has

the highest quality, craftmenship, unique design and style.

Luxury brand management can not therefore be based on the

assumptions used in the marketing of mass markets. Requires

the involvement of tools, standing in contradiction with the

tools used for mass markets.

Marketing of luxury brands is known as paradoxical. This

is due to its principles, contrary to the principles of

traditional marketing. Practice shows that not only the nature

but also the range of management tools of luxury brands are

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different from management tools of mass markets. Some tools

like mass advertising or sales promotion, turn out to be

ineffective. While especially important for luxury brands is

for example Public Relations.

Isolation of the traditional tools of brand management, the

most effective tools in terms of luxury, resulting in such

concepts as 8P's. The analysis of these tools shows that most

of them are reflected in the marketing mix of mass goods, but

also indicates the diametric differences in the rules for the

use of these tools.

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5. J. N. Kapferer, V. Bastien, „The Luxury Strategy. Break the Rules ofMarketing to Build Luxury Brands”, Kogan Page Limited, London,Philadelphia, 2012.

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