Introduction A luxury good is something that, as ones income increases; the demand for an item or service also increases at a higher than proportional level, in contrast to necessity goods, in which demand increases proportionally with a decrease in income (Varian, 1992). Generally, luxury goods are seen as those at the highest end of the market, in terms of price and quality. Haute Couture clothing, accessories and luggage are considered to be classic luxury goods, although many markets have a luxury sector, for example Automobile, Bottled Water, Coffee, Foods, Jewellery, Sound Systems (HiFi), Tea, Watches, Wine and Yacht. Kotler’s (1997) definition of branding is that: “A name, term, sign, symbol or design, or combination of them, intended …show more content…
Brand equity is crucial as it implies that the brand itself is an important (financial) asset and can be calculated in financial terms (Barwise, 1993). This is particularly important in the luxury sector as from a behavioural viewpoint, brand equity can differentiate a company or product from other competitors, adding to their competitive advantages based on non-profit competition (Aaker, 2004). The model created by Aaker (1992) states that there are four categories of brand equity; Loyalty, Awareness, Perceived Quality and Associations. Luxury branding relies on a high level of perceived quality, loyalty and associations, although potentially less so for awareness, as it is thought that consumers choose luxury brands based on their exclusivity and as such the more the awareness that surrounds the brand, there is potential for it to become less valuable (Phau and Prendergast, …show more content…
However, when looking to create a luxury brand, one must go beyond what is required of an ordinary brand, to create something of high value and therefore high prices. So instead of just having brand values, it should have brand beliefs, as this will create a stronger emotional connection with its customers. It should aim to go beyond having a logo, but rather a set of distinguishable icons and the brand’s points of sale needs to be somewhere that connects with its customers and becomes something of a pantheon among other retail outlets. Similarly the customer segmentation should have role reversal, so the customers want to buy their products. Luxury brands should instead of actively promoting their advantages over their competitors, never push the customers into buying their products, thereby offering mystique and letting the customers make the value creation. Lastly, a true luxury brand not only offers products but rather a way of life, allowing them to branch out over several product categories, into every aspect of their customer’s
Brand; - brand is known as uniqueness in term of what products or service the company provides. Brand is also set of insight or image that represents seller. Brand defines symbol, name, term or feature of company’s service or goods. Example of popular brand is apple, Amazon and Samsung.
By 2002, Moet Hennessy Louis Vuitton was the world’s largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.
Since 1967 Polo Ralph Lauren the brand is impeccable example for how a company must develop strong brand equity through the years. Indeed, the brand has established its image across a diversity of products and markets using a perfect lifestyle marketing approach. To understand how the brand has achieved strong brand equity, and resonance with its customers, analy...
-Status symbols: Sophisticated customers who value the distinctive, exclusive collection seem to value the corporate-branded version of luxury. –Philip Martiz, chairman of the board
“Despite worldwide softness in the sale of luxury goods, LVMH has cemented its position as the world’s largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide” (Hazlett C. 2004). That is why in its mission they state to represent the most refined qualities of Western “ art de vivre” all around the world. Their objective is to be the leader in the luxury market, continuing to transmit elegance and creativity. This poses some major challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to achieve it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why.
Kevin Keller’s brand equity model is known as the Customer Based Brand Equity Model (CBBE). This model was first introduced in his book, Strategic Brand Management. According to the model, a company must shape how customers think, feel, and act towards a product in order to build a strong brand. A consumer must have the right type of experience around the brand, which foster positive thoughts, opinions, perceptions, beliefs and feelings. By building strong brand equity, customers will recommend company products and will buy more of them. Moreover, this increases brand loyalty and decreases brand switching to competitors. One’s memory consists of a network of associations and connecting links, and any association ever processed about a brand
A brand audit is a detailed assessment of a brand’s current ranking in the market compared to other competitors. It provides information on how the business is performing in the market. A brand audit also aims at examining the image and reputation of the brand as perceived by customers. The two key elements of brand audit are brand inventory and brand exploratory. Brand inventory provides up to date itinerary of how a company markets and brands its products. On the other hand, a brand exploratory is an examination undertaken so as to comprehend what consumers feel about the brand. It seeks to conduct a consumer insight research in order to acquire consumers’ feelings and perceptions. This paper looks into the brand exploratory aspect of auditing under the customer-based brand equity (CBBE) model.
...of brand equity in an organizational-buying context. Journal of Product & Brand Management, Vol. 6(6), pp. 428-437.
Kapferer, J., & Bastien, V 2009, The luxury strategy: break the rules of marketing to build luxury brands. London: Kogan Page.
The high pressure luxury brand industry has evolved over the last few decades from a small and selective to a multibillion dollar arena offering significant potential and growth opportunity for the luxury brands that compete within its realm. With many luxury brands competing for over $225 billion (The Economist, 2009) in revenue each year it is easy to see how strategy plays an important role.
In conclusion, the customer- based brand equity model is an important platform that may help in building a strong brand. It could assist a company in assessing its progress as well as providing a blueprint for marketing research activities. If properly planned and implemented, it could help the company in achieving its marketing strategies and in the realization of an increased profit margin
Dubois and Czellar (2002) refer to luxury brands as those goods that can offer comfort, beauty and refinement. On the other hand, a prestige brand is referred to as a brand that has achieved a definitive level of accomplishment, either in the quality or performance. O’Cass a...
Simon, C.J., & Sullivan, M. W. (1993). “The measurement and determinants of brand equity: A financial approach”. Marketing Science, 12(1), 28-52.
Designer collaborations have become the popular tend for retailers and consumers. The designers are able to use the partner’s procedures of business to its benefits such as their merchants, funds and advertising plans. They are able to influence a different demographic and broader customer based through the store’s marketing operations. This is the impeccable opportunity for the designer to form a devoted fan base who cannot afford the real thing to become aware and fall in love with the brand. Customers are conveyed into believe that they need to buy pieces from designer collaboration now because of the popularity for limited time. For instance, H&M is able to draw labels like Balmain because of its winning record of accomplishment. The profits go both ways. Nonetheless, a collaboration with H&M can offer a quick cash for a steadily growing luxury label like Balmain, with yearly sales of just over $34 million. Balmain x H&M pieces are not Balmain pieces, which can often sell for thousands of dollars. However, for a luxury brand like Balmain, the secret to built-up needs occurs in the pressure between being observable and highly limited at the same time. The designer’s objective was to give the H&M customer spending $300 the same feeling and familiarity of a Balmain customer spending
For one, luxury can be defined through good health. For another, luxury can be defined through comfort. To many, luxury is defined through lavish possessions such as cars or jewelry. Regardless of how we perceive luxury, there is a journey behind how we achieve it. Cartier produced an exquisite commercial to celebrate the brand’s history. With the worldwide icon, the leopard, we went through the odyssey of Cartier’s history. The commercial started with a leopard statue of diamonds and jewels coming alive which symbolized the birth of the legacy of Cartier, the start of the odyssey. Then we start watching the leopard visit significant places of Cartier’s history: China, India, and France. All these places are important to the luxury industry. After the journey across different continents, we finally arrive in Paris where Cartier was founded, where