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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
22
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.
Literature:
1. R. Aurora, 8 P’s of Luxury Brand Marketing, http://www.brandchannel.com/images/papers/533_8ps_of_luxury_branding.pdf
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4. M. Chevalier, G. Mazzalovo, Luxury Brand Management. A World ofPrivilege, John Wiley & Sons (Asia) Pte. Ltd., 2008.
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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8. H. Leibenstein, Bandwagon, Snob, and Veblen Effects in the Theory ofConsumers’ Demand, “The Quarterly Journal of Economics”,1950.
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10. Raport KPMG, Rynek dóbr luksusowych w Polsce, Edycja 2012
11. J, Y. Roy, Chua Xi Zou, The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making, Working Paper 10-034.
12. J. Sekora, Luxury. The Concept in Western Thought, Eden toSmollett, John Hopkins University Press, London 1977.
13. J. B. Twitchell, Living it up: Our love affair with luxury. Columbia University Press, New York, 2002.
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