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Luxury Strategy > III. Luxury Marketing Mix > Flashcards

III. Luxury Marketing Mix Flashcards

1
Q

Classical Marketing triangle

A
  • Fashion = Based on Seduction/ Social tribal/ Imitation/ Short-circle/ Frivolous (Unseriös)
  • Premium = Based on Realism/ Comparative/ Performance/ Price/ Seriousness
  • Luxury = Based on Dream/ Social elevation/ Timeless/ Distinction/ Priceless/ Hedonism/ Superlative
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2
Q

Luxury Marketing

A
  • Marketing Anti-laws

- Luxury = Social elevation (Aufstieg)/ Timeless/ Self distinction/ Priceless/ Hedonism

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3
Q

Marketing Anti Laws

A
    1. No positioning/ Think identity only
    1. Don’t seduce too many people
    1. Make product difficult to buy
    1. Do not pander (Folgen) customers wishes
    1. Luxury sets the price/ Price does not set luxury
    1. Increase price to grow demand
    1. Communicate to dream not to sell
    1. Communicate well beyond the target
    1. Beware of celebrities
    1. Do not manage consensus
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4
Q

Anti Law Nr.1

A
  • Luxury is superlative/ not comparative/ unique
  • It is an expression of taste/ creative identity/ intrinsic passion of creator
  • Opposite is premium which justifies/ compares
  • Example = Lexus vs. Rolls Royce
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5
Q

Anti Law Nr. 2, 3, 8

A
  • Basic luxury equation
  • Manage distance & rarity
  • Nurture the dream
  • Manage the gap to maximize desirability
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6
Q

Anti Law Nr. 4, 10

A
  • Luxury is king of the clients not vice versa
  • Ignore clients demands if they don’t match brands vision
  • No actions allowed that harm brands identity
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7
Q

Luxury Marketing Mix

A
  • Product = Substance/ Always deliver excellence/ Indivisible (Unzerteilbar)/ E.G. Ring
  • Brand = Symbol/ Differentiate from competition/ Promise that can be understood as a contract/ Uses intrinsic & symbolic values/ E.G. Tiffany
  • Communication = Encoding & Decoding/ E.G. Packaging & Advertisement
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8
Q

Managing the Luxury Marketing Mix

A
  • Definition and essence of luxury = How to create the gap
  • Dual nature of luxury = Intrinsic and symbolic value
  • Specificities of the luxury business model
  • Strategy elements to keep dream alive
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9
Q

The dual nature of luxury- Intrinsic

A
  • Tangible and always first step
  • Product attributes = Performance/ Durability/ Craftmanship/ Quality
  • Functional value
  • Substance of brand identity
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10
Q

The dual nature of luxury- Symbolic

A
  • Intangible and always second step
  • Emotional values = Brand story/ Heritage/ Memories
  • Emotional values are integrated into product or service
  • Lead to social distinction/ Enable luxury as social marker
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11
Q

Strategy elements to keep dream alive

A
  • Inspiration/ Elevation
  • Creation
  • Communication
  • Pricing
  • Distribution
  • Digital
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12
Q

Strategy and art

A
  • Luxury = Artistry Creation + Reality & Functionality
  • Art is a source of inspiration
  • Price (Y), Functional value (X) = 1. Religion/ 2. Art/ 3. Luxury/ 4. Mass Prestige/ 5. Mass/ 6. Commodities
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13
Q

Strategy elements to implement from arts

A
  • Legends
  • Heroes/ Myths
  • Icons/ Symbols
  • Rituals
  • Mystery
  • Temples
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14
Q

Creation and Communication

A
  • Luxury product is a creation from the brand
  • Product expresses brand’s story/ DNA/ Heritage
  • Creative mission = Nurturing dream of the brand with products
  • Creation itself is communication and vice versa (Advertisement is designed with utmost attention to detail)
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15
Q

Luxury communication general

A
  • Communication only to create the dream
  • Recharging brands value = Raising awareness > access (Basic equation)
  • No promotion = No price/ No discounts/ No financial results
  • Communication thinks brand first and second client
  • Don’t judge effect of communication by impact on sales
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16
Q

Communicating the dream

A
    1. Sufficiently vague = Many people can identify/ Everyone can encode dream himself
    1. Artistic & Coded
    1. Luxury tempo = Keep up with time but not losing its style
    1. Never be direct
    1. Highly allusive
    1. Reactivate legends/ Launch new icons
17
Q

Luxury communication codes

A
  • Experiental first (Erlebnisorientiert)
  • Mostly non-verbal language
  • Primarily visual & sensory
  • Based on = Identity/ Emotions/ Desire
18
Q

Nurturing the dream

A
  • No luxury brand without storytelling
  • Always feeding the myth
  • Authentic = E.G. Rolls Royse/ Fabricated = E.G. Ralle
  • Every image is coherent with brands universe = Semantic constants/ System of codes/ Strategic & aesthetic stability
19
Q

Seamless Journey of luxury communication

A
  • From Broad awareness to Access restricted (Basic equation)
    1. Mass media advertising/ 2. In store/ 3. Targeted advertising in selective media/ 4. Editorial content = Brand ambassadors, PR, Bloggers/ 5. Exclusive events
  • From 1. to 3. Instrumental to manage distance & rarity
  • From 4. To 5. Fundamental to nurture the dream
20
Q

The absolute A-list

A
  • Use news/ stories/ events/ people to constantly generate new content
  • Luxury brands are expensive and expansive
21
Q

PR and Patronage (Schirmherrschaft)

A
  • Build strong universe
  • Develop strong image closely linked to ID
  • Focus on events not on competitors (E.G. LV Cup boat travels)
  • Top prestigious events
22
Q

Brand Ambassadors

A
  • Follow concept luxury brand > celebrity star
  • Convey the status & power of the brand
  • Best = Testimonials (Erfahrungsberichte von Stars)/ E.G. LV
  • Second best = Brand ambassadors/ E.G. Chanel
  • Avoid = Celebrity star > luxury brand/ Targets mass market & premium segment
23
Q

Pricing luxury general

A
  • Subjectivity = Luxury for oneself can be priceless (E.G. Art, Beauty, Happiness)/ Hedonistic experience or durable product
  • Price is proof that product is part of the dream = Symbolic value/ Quality of distribution/ Legitimacy
  • Psychological perception vs. rational decision = Price exceeds functional value/ Legitimacy through heritage and culture
  • Price should be within legitimate price zone = Perceived value WTP
24
Q

Elasticity coefficient

A
  • Dropping price will not generate more demand!
  • Mostly positive coefficient = Price goes up & demand goes up
  • Increase price to = Increase demand/ Increase distance/ Nurturing the dream
25
Q

Discounts in luxury pricing

A
  • No sales in luxury
  • Price & value should increase over time (Unlike fashion)
  • Price reductions only for selected customer base
  • Rather stock destruction then selling at discount
26
Q

Price Communication

A
  • Price should not be highlighted or advertised
  • Level should be known broadly in order to enable social stratification
  • In best case people should overestimate it
  • Price must retain mystery
  • Only person who pays know the exact price
27
Q

Digital general

A
  • Digital is key media and mandatory to be market leader
  • Influencer have rising direct and indirect impact on sales
  • Mandatory channel to maintain strategy
  • Offers space for creativity and new possibilities
  • Helps to reach customers at all stages of their purchasing journey
  • Multi-channel story telling results in much higher ROI
28
Q

Digital Strategy Challenges

A
  • Respecting Brand ID
  • Making the max of storytelling
  • Applying virtual scarcity concepts to digital and respecting basic equation (restricted access)
  • Managing price
  • Excelling on service and enhancing the experience
29
Q

Luxury vs. Digital

A
  • Cultural shock = selective vs. open
  • Speed = long-term vs. immediate
  • Space = Temples/ Rituals vs. Online content
  • Generations = X/ Y/ Z
30
Q

Conflicts between Luxury and Digital

A
  • Values
  • Generations
  • Experiences
31
Q

What winners are doing

A
  • Combining digital communication & distribution touch points & moments of truth…
  • Communication & brand experience challenge = ..to maximize paid and earned media to create reach, luxury targeting, cultural advocacy
  • Distribution challenge= ..to enhance customer experience while applying the basic luxury equation and maximizing the gap by restricting access/ Respecting the luxury business model
32
Q

Luxury distribution guidelines

A
  • Multisensory experience
  • Excellence
  • Aesthetics
  • Innovation
  • Design
  • Awareness > Access balance
33
Q

Luxury cathedrals and luxury mecas

A
  • Fundamental multisensory touchpoint
  • Brand universe execution
  • Source of value creation
  • Evidence for symbolic value
  • Requirements = Excelled execution/ Coherence
  • Challenges = Location/ Globalization/ Service excellence (Salespeople, relationships, human content)
34
Q

Luxury distribution challenges

A
  • High costs
  • Demanding everyday strategy implementation & execution = Cultural differences/ People management
  • Location = Negotiation power/ Real estate access and management
35
Q

Modes of distribution

A
  • Own brand stores
  • Exclusive distribution
  • Selective distribution
  • At home
  • Internet/ online
  • Omnichannel

Luxury Strategy (7 decks)

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