Luxury Products

Defining The Characteristics of Luxury Products

Branding a luxury product and creating an effective marketing strategy for a luxury brand, involves a unique type of strategy; one that begins with an in-depth understanding of the characteristics of luxury products. The luxury goods industry is significant and not only has substantial market value, but is also an industry that has experienced significant growth over the last 10 years. Typically, there are four main categories within the luxury market: fashion, perfumes and cosmetics, wines and spirits and watches and jewelry; however, other categories, such as automobiles, have also recently found their way into this industry.

 

Characterizing Luxury Products

Defining what makes a product a ‘luxury product’ can sometimes be difficult, but there are a few key characteristics that can help give a brand or product a luxury label. When it comes to the physical, or functional, components of luxury products, typically these items or brands, can be identified by certain associations tied to the product’s characteristics. The average luxury brand is associated with three characteristics: high price tag, high quality and aesthetics. Typically, luxury brands or products will attempt to associate their brand name with these three associations and to show their target consumers that their brand encompasses these three features. The average luxury brand also has a clear brand identity and signature, places emphasis on product integrity, and offers their products at a premium price.

 

Criteria and Specifications of Luxury Brands

When it comes to defining a line or a brand as a ‘luxury brand,’ it needs to meet certain specifications. Typically a brand can only be defined as ‘luxury,’ within the market, if it evokes the three aforementioned associations within the mind of consumers. Most experts will also define a luxury brand as one that is not distorted by other external influences. This includes the marketing efforts of competitors. When a brand is truly a luxury brand, its image cannot be tarnished by others.

When a brand has emerged as a true luxury brand, it will be a true master of influencing the perceptions of consumers. For example, a Rolex watch will not suddenly stop being defined as a luxury watch brand, because of a marketing effort by Citizen, as Rolex is a true luxury brand. This is why no other luxury watch brands even attempt to discredit the quality of Rolex watches in their marketing campaigns.

 

Building The Luxury Brand Image

It is important to remember that not all luxury products are created equal, there are different levels of luxury brands, ranging from entry level to elite level niche brands. Different types or levels of luxury brand items need to be communicated in different manners. Typically, well crafted marketing communications are considered to be the key to building the image of a luxury brand. When it comes to creating communications for luxury brands, as opposed to standard or premium brands, different types of communications are needed. This typically includes celebrity endorsements, positive public relations and promotional events. By highlighting the main defining characteristics of the luxury brand during these promotional communications, a positive luxury image can be crafted and a strong brand identity can be promoted.

 


Types of luxury products

What Type Of Luxury Products Are You Offering

The concept of luxury is difficult to define, especially since it is an ever-changing and ever-evolving one. Although a Lamborghini may be considered as a symbol of class and luxury to a layman, the same Lamborghini might seem like an ordinary car to a wealthy heir.

Despite the confusions in defining luxury, there seems to be some consensus among industry members that luxury is anything that is desirable but is more than just an ordinary necessity.

Luxury products are, thus, branded, exclusive and desirable products that bring status to the possessor; that is rare and available for a select few. However, if we are to define luxury using these terms and attributes, we would fall short of arriving at the right meaning of luxury products that does justice to the present and evolving market conditions. For example, if we assume a luxury product to be rare, we would be able to find only a few brands within each category of goods. It might not be possible to go beyond Rolls Royce for cars and Hermes for leather goods. Therefore, luxury products should not only be represented by their exclusiveness and uniqueness, but also by its creativity and the emotional value it provides its customers.

If we are to understand the type of luxury products that are offered, we have to first understand the various categories the luxury sector could be divided into. Some of the categories are:

  • Ready-to-Wear
  • Watches and Jewelry
  • Cosmetics and Perfumes
  • Gifts and Wine and other selective products
  • Fashion Accessories sector
  • Hotels and Tourism
  • Automobiles sector
  • Superyachts

While these sectors define the luxury market; it is important to also understand people’s perceptions towards luxury products. Luxury market can be divided into three different levels: Accessible Luxury, Intermediary Luxury and Inaccessible Luxury.

As the name suggests, Accessible Luxury, the first level of the luxury market, is a reachable luxury product that can be accessed by a wide range of customers. These luxury products are produced in large quantities in workshops or factories. The distribution of these mass-produced products is also done on a large scale. Although these products are made on a large scale, they manage to provide the customers satisfaction and experience at the time of purchase. Some of the most common examples of Accessible Luxury products are Chanel perfumes, Swarovski crystals, and Armani sunglasses.

The next level of the luxury market is the Intermediary Luxury. This level corresponds to luxury products that are marked by their exclusivity and limited availability. These products are slightly rare, a little expensive, and are distributed through select channels. Some of the most commonly known Intermediary Luxury products are Prada, Fendi and Versace.

The final and the highest level is the Inaccessible Luxury. This level is the most exclusive form of luxury. It is highly rare, very expensive, and accessible only by a handful of people. These products, mostly, are hand-crafted or tailored products. They make use of some of the most expensive and premium materials. These Inaccessible Luxury products are distributed through a few carefully selected channels. An Inaccessible Luxury product is all about exclusivity, heritage, craftsmanship, creativity and prestige. A few of the most popular Inaccessible Luxury products are Dior, Ferrari and Hermes.

The word ‘Luxury’ means different things to different people, and this relative term could refer to almost anything, depending on the person you address the question to. So after reading this post, what type of luxury products are you offering?

 

 


THe future of Luxury Marketing

The Future Of Luxury Marketing

If we agree with various reports presented by leading luxury research firms on the future of luxury marketing, luxury consumption is slated to grow exponentially over the next decade, as the number of luxury consumers is said to see a remarkable increase from 380 million in 2014 to 440 million in 2020. Moreover, consumers will remain to be the main driving force behind this extraordinary growth of the luxury brand market as the overall spending of consumers, according to various reports, might see a huge spike from $985.5 billion today to nearly $1.2 trillion by 2020.

The statistics, according to several new reports, presents a golden opportunity to marketers of luxury brands to market their brand to both core luxury customers as well as to new luxury customers.

 

The Luxury Market is going the ‘China’ Way

The China market seems to have, finally, shoved aside America and Japan, by slowly taking over as the world’s largest luxury market. With heftier paychecks, desire to show off new found wealth, the appetite for designer clothes, handbags, watches and shoes in the Chinese consumer, the Chinese luxury market is poised to take over as the leader of luxury world.

 

Better Brand Visibility

These days more and more shopping is done online, making it important for brands to create better brand visibility, enhanced communication, and exchange of information. Luxury brands must adapt their offering by providing a digital experience that is tailored to suit the discerning needs of various customers. While some customers use the internet to access information about the price or features of luxury products, most of them, especially the younger generation, use digital media to interact with the brand and its followers on social media, to access brand content from various sources, and to follow  upcoming trends.

 

Mobile will lead

In addition, mobile platforms and brand applications are also having a huge impact on the luxury buying preferences of customers. These applications are making it easier for luxury customers to closely associate themselves with brands. Moreover, there are also reports to suggest that traditional forms of marketing have made a comeback, as word-of-mouth and advocacy seem to have a major impact on the buying decisions of customers, more than advertising and magazine ads.

 

The success of luxury marketing will lie in having a great marketing-mix merging traditional, digital and social marketing techniques, reaching old markets and new markets, but above all, luxury brands will need to create remarkable experience by reinforcing their relationships in the digital space.

 

Source: ReutersJingDailyThe Wall Street Journal, and Luxury Daily


Basic-vs-luxury-goods

The Difference Between Basic And Luxury Goods

Creating an effective branding strategy for luxury items presents a unique challenge. There is an inherent difference between the way experts promote a basic item and the way they promote luxury goods, and understanding this basic difference is essential to the success of any branding effort. The average luxury brand is timeless, offers selective ownership opportunities, and comes with high price, which can be difficult in terms of branding. No matter what the specific product may be, promoting a luxury brand over a basic brand typically involves a completely different approach to creating a strong brand reputation or personality.

 

Branding Towards the Right Target Audience

One of the first and most significant differences between basic and luxury goods in terms of branding, lies in the target audience the effort is being directed at. With basic goods, the target audience of consumers tends to be broad and the goods can be marketed to a larger array of potential buyers. Many times, with basic goods, a key branding approach lies in convincing audiences that anyone and everyone can and should be able to buy the product. However, with luxury brands, the approach is quite different, as exclusivity comes into play when establishing the target market of consumers. Instead of focusing on a broad group of potential buyers, luxury brands focus on marketing to the narrow percentage on individuals that can actually afford the product.

 

A Focus on Price

No matter what the item or the cost, price is an important defining feature when it comes to branding a product. With basic goods, typically lower prices are emphasized while higher price tags are justified with added features and benefits. However, with luxury brands, price takes on a different meaning, as it typically acts as a tool that once agains adds exclusivity to the product, or limits the access to the brand. A high price tag on a luxury item is seen as a positive instead of a potential deterrer, and many times is used when it comes to developing a memorable brand personality.

 

Product Communication and Distribution

The way in which messages are distributed and communicated differ when it comes to branding basic goods rather than promoting luxury goods. When branding a basic item, mass communication is often used to inform the public about the brand. A variety of channels are used to distribute the message as well, as the goal is to create widespread appeal. Typically messages that promote basic brands appeal both to the rational side of consumers as well as their emotions. However, with luxury brands, more selective communication methods are typically used.

Ultimately, the goal with communicating the benefits of a luxury brand lies in the desire to educate consumers, instead of informing them about the existence of the brand. The distribution of these messages is also more selective, as they are typically only sent out through exclusive channels.

Those who in charge of brand management for a luxury brand know that while every brand is different, branding a luxury product is all about creating the right story and capturing the essence of the product in a way that appeals to today’s luxury shopper.


Affluential.com

Meet Affluential.com - Infulential Affluent Customer Research

The cornerstone of any successful marketing strategy lies in the ability to reach a large customer base. One of the most powerful and influential classes of market that both the marketers and the brands cannot afford to overlook is the affluent group. This upper class has been growing exponentially over the past few years and has come to occupy a large portion of the market share – representing more than 25% of any country's top income levels. They demand attention, they are influential, and their purchasing power makes them the crème de la crème of the market.

The United States of America has the largest pool of affluent customers, followed closely by Europe. Moreover, reports suggest that, within the next decade, Asia will be home to over a billion affluent customers. This kind of market share cannot be ignored by brands and marketers. Understanding these Affluent customers - their capacity for influence and their decision-making power - is going to help in staying competitive and relevant in this changing global scenario.

Reaching out and connecting with this elite group has become a must for marketers and brands worldwide. Existing market solutions such as offline surveys are not going to be helpful, as they are lengthy, expensive and inaccurate. That is where Affluential.com comes to your aid. With a platform built by one of Asia's leading research firms - Agility Research and Strategy - the processes of research and market survey are made easier, simpler and far more accurate than ever before. The Affluential tools give brands an accurate insight into the decision-making minds of the ‘Influential Affluent’ spread across the globe. This customer group influences the market and the buying decisions of others, and defines the way a brand is going to be received in any market. Regardless of whether you are planning to sell a handbag or a sports car, Affluential gives you access to Influential Affluent customers who form a major segment for brands and markets to target.

Affluential lets you create powerful surveys and reach out to global panels of affluent customers easily. Affluential recruits these customers using various innovative methods – CEO referral campaigns, luxury publisher tie-ups, frequent flyer programs, clubs and financial services. These members then undergo a rigorous verification process to make sure that you get the right respondent profile to get accurate and quality results. This database is refreshed, updated and verified regularly so that you get high quality results from the Influential Affluent.

With access to more than 25% of any global market, every marketing manager, owner, business planner, or a consultant sitting anywhere in the world, can fine-tune their marketing strategy and approach it in a better manner. With a fast lead time, diverse global reach and efficient research methods, Affluential takes away the most cumbersome and complex market research process and provides luxury brands with fast and accurate results for better strategy-making.

With a huge database of more than 38 million affluent respondents from around the world, access to the global consumer’s mind is at your fingertips. This mammoth-sized database can easily be filtered by country and income levels. With rich charts, custom-made questionnaires, expert opinions of consultants, multi-language capabilities and easy payment modes, reaching out to Affluent customers is made easy. Affluential.com makes sure that the world is an open playing field for all businesses and brands allowing you to make sure your products reach their target customers without any hassles. Affluential brings its expertise, experience and global market insight to your fingertips.

Don't hesitate to browse Affluential 's website to learn more about their luxury consumer research services, or if you need an introduction, simply reach out to us.