The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands

337 Pages·2009·1.35 MB·English

by  Jean-Noel Kapferer

i
LTHEUXURY
STRATEGY
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THIS PAGE IS INTENTIONALLY LEFT BLANK
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LTHEUXURY
STRATEGY
BREAK THE RULES OF MARKETING
TO BUILD LUXURY BRANDS
J.N. KAPFERER AND V. BASTIEN
London and Philadelphia
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Publisher’s note
Every possible effort has been made to ensure that the information contained in this
book is accurate at the time of going to press, and the publishers and authors cannot
accept responsibility for any errors or omissions, however caused. No responsibility for
loss or damage occasioned to any person acting, or refraining from action, as a result of
the material in this publication can be accepted by the editor, the publisher or any of
the authors.
First published in Great Britain and the United States in 2009 by Kogan Page Limited
Apart from any fair dealing for the purposes of research or private study, or criticism or
review, as permitted under the Copyright, Designs and Patents Act 1988, this publica-
tion may only be reproduced, stored or transmitted, in any form or by any means, with
the prior permission in writing of the publishers, or in the case of reprographic repro-
duction in accordance with the terms and licences issued by the CLA. Enquiries
concerning reproduction outside these terms should be sent to the publishers at the
undermentioned addresses:
120 Pentonville Road 525 South 4th Street, #241
London N1 9JN Philadelphia PA 19147
United Kingdom USA
www.koganpage.com
© Jean-Noël Kapferer and Vincent Bastien, 2009
The right of Jean-Noël Kapferer and Vincent Bastien to be identified as the authors of
this work has been asserted by them in accordance with the Copyright, Designs and
Patents Act 1988.
ISBN 978 0 7494 5477 7
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Kapferer, Jean-Noël.
The luxury strategy : break the rules of marketing to build luxury brands / Jean-
Noël Kapferer and Vincent Bastien.
p. cm
ISBN978-0-7494-5477-7
1. Luxuries--Marketing. 2. Luxury goods industry. 3. Product management.
I. Bastien, Vincent. II. Title.
HD9999.L852K37 2009
658.8--dc22
2008034402
Typeset by Saxon Graphics Ltd, Derby
Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
v
Contents
About the authors xi
Introduction: To be or not to be luxury 1
PART 1: Back to luxury fundamentals 3
1. In the beginning there was luxury 5
A brief history of luxury 6
The 20th century and the democratization of luxury 10
Luxury, the individual and society 18
Positioning of luxury in our present-day society 24
Money, fashion, art and luxury: boundaries and ambiguities 26
2. The end of a confusion: premium is not luxury 38
The multiple approaches to the concept of luxury 39
Denying the specificity of luxury? 40
There is no continuous movement from premium to luxury 41
It is not easy to exit luxury through a ‘downwards’ strategy 42
From where has the current confusion arisen? 43
Exiting the confusion: the case of the car 45
Relativity of luxury in cars 46
Is automobile luxury the pursuit of perfection? 47
Top-of-the-range, upper-premium and luxury cars 47
The luxury car: creation, mythical models and social prestige 50
vi Contents
What link does luxury have with technology? 53
The constituents of the myth of the luxury car 55
Luxury and expressions of national identity 56
Beyond the product: services and privileges 59
The cult objects: licences and boutiques 60
3. Anti-laws of marketing 61
1. Forget about ‘positioning’, luxury is not comparative 62
2. Does your product have enough flaws? 63
3. Don’t pander to your customers’ wishes 64
4. Keep non-enthusiasts out 65
5. Don’t respond to rising demand 66
6. Dominate the client 66
7. Make it difficult for clients to buy 67
8. Protect clients from non-clients, the big from the small 67
9. The role of advertising is not to sell 68
10. Communicate to those whom you are not targeting 69
11. The presumed price should always seem higher than the
actual price 70
12. Luxury sets the price, price does not set luxury 70
13. Raise your prices as time goes on in order to increase demand 71
14. Keep raising the average price of the product range 72
15. Do not sell 73
16. Keep stars out of your advertising 73
17. Cultivate closeness to the arts for initiates 74
18. Don’t relocate your factories 75
4. Facets of luxury today 76
On the importance of the ‘label’ 77
Luxury: the product and the brand 79
The ingredients of the luxury product: complexity and work 80
Superlative, never comparative 82
Luxury and cultural mediation 83
Luxury and history 84
Luxury and time 87
Tradition is not passéisme 89
Luxury is made by hand 90
Real or virtual rarity? 91
Luxury and exclusivity 95
Luxury and fashion: an essential difference 98
Luxury and art 98
Luxury and charity 100
Contents vii
PART 2: Luxury brands need specific management 101
5. Customer attitudes vis-à-vis luxury 103
What is the size of the market? 103
To be rich or to be modern? 104
Heavy users and day trippers (also called excursionists) 106
The four luxury clienteles 107
A strong axis of segmentation: relationship with the product or
with the logo? 108
A second axis of segmentation: authentic does not always
mean historical 109
A third axis of segmentation: individualization or integration? 110
Luxury by country 110
6. Developing brand equity 116
There is no luxury without brands 116
A luxury brand is a real and living person 118
A luxury brand has roots 118
The luxury brand must radiate 118
No life cycle for the luxury brand 119
A legitimacy created from authority, class and creation, more than
from expertise 120
The financial value of luxury brands 120
The core of the luxury brand: its identity 121
Building coherence: central and peripheral identity traits 126
Two modes of luxury brand building 127
Building and preserving the dream 127
Product roles and luxury brand architecture 130
Managing the dream through communication 133
Defending the brand against counterfeiting 133
Counterfeiting as a way to diagnose the health of the strategy
of the brand 135
Always defend your rights and communicate frequently 136
7. Luxury brand stretching 137
The origins of stretching 138
Luxury stretching: a practice that has changed the sector 139
Two models for extension: vertical or horizontal? 140
The pyramid 141
The galaxy 142
Typology of brand stretchings 144
Leading a brand stretch 146
An example of stretching: Mont Blanc 147
viii Contents
Stretching: brand coherence, but also the creative and unexpected 149
Should extensions have a name? 152
The risk factors of brand stretching 153
Controlling the boomerang effect of extension 156
8. Qualifying a product as luxury 158
No product without service 158
The luxury product and the dream 159
Functionality and dreams do not follow the same economic
models 161
The luxury product is not a perfect product, but an
affecting product 162
Luxury product and competitive universe 163
Luxury product and time 164
Occasion of use and perception of value 164
Lasting a lifetime… and beyond 164
Prolonging the ecstasy of a privileged moment 165
Adapting to its time 166
Structuring the luxury range: how is the range of a luxury
brand organized? 167
Innovating through a new product range 169
Don’t sacrifice the past to the future 172
A mode of production as a lever of the imaginary 173
The opposition between luxury and relocation 175
Licences signal the departure from luxury 176
9. Pricing luxury 177
What about price elasticity? 178
Increase the price to increase demand and recreate the distance 180
What price premium? 183
Fixing the price in luxury 184
Managing the price over time 185
No sales in luxury 189
Price reductions? 189
The price and its communication 190
The price is not publicly advertised 191
The price must be sold 191
10. Distribution and the internet dilemma 193
Luxury is in the distribution 193
You sell to someone before you sell something 194
It is the price, not the product, that is sold to the client 195
The sales personnel should never earn direct sales commission 196
Contents ix
Distribution shows that the brand dominates the client…
but respects them 196
Distributing is first of all about communicating 198
Distribution should not only show off, but enhance the
product image 199
It is distribution’s job to communicate the brand’s price level 199
A luxury purchase is a lengthy act 200
Distribution is luxury’s weak link 201
The choice of a new sales point is not delegable 202
Distribution must manage rarity 203
Distribution protects you from competition 203
Luxury and mode of distribution 204
Luxury and internet distribution (the internet dilemma) 207
11. Communicating luxury 210
You don’t talk about money 211
You communicate because you sell 212
You communicate, you don’t advertise 212
No personalities in the advertising 215
The role of ‘brand ambassadors’ 216
Tightening the social driver of desire 217
Permanently encourage word of mouth 219
What balance should there be between local and global
communication? 219
The internet and communication in luxury 220
The codes of luxury communication 220
Making the brand’s visual language denser: the nine signatures
of the brand 220
Making the brand denser through tales, stories and rumours 221
Adapting the communication register to the type of luxury 222
The dialectic of the local and the universal 223
12. Financial and HR management of a luxury company 225
Financial specificities of luxury companies 225
Luxury and profitability 227
Globalizing 229
Luxury, volume and profitability 229
Managing the human capital in luxury 233
PART 3: Strategic perspectives 239
13. Luxury business models 241
Luxury products with a profitable core trade 242