Lecture 7 Flashcards
What are the 5 possible persisting soruces of brand equity?
- Story
- Authenticity
- Ritual
- Icons
- Community
What is Hofstede’s Cultural Dimensions?
Structure tool to understand cultural differences between various countries. Most countries in the world are moving from authoritarianism to power sharing.
Includes dimensions such as:
* Masculinity/Femininity
* Indulgence vs Restraint
What is the PEST analysis?
To analyze a new market
Political
Economic
Social
Technological
How good is it going to the luxury industry?
It is always quite resilient and growing.
- Luxury is a necessity that starts where necessity ends * Luxury is a multisensoryexperience * Luxury is a promise of happiness * Luxury makes me feel special Luxury is experience and emotion
Associated with a dream element. Not a need.
How are consumers expectations met?
Dreams are met by: Luxury
Desires are met by: Marketing
Needs are met by : efficient production and distribution
What are the marketing differences for classical marketing vs luxury marketing?
In classical marketing you first identify a market segment, then you define the product and the best suited marketing-mix
➢In luxury, you look to attract customer with your existing product or service-Ideas and creation before figures. Product comes first then you look for customers.
Do the 4 P’s for Oreo vs Louis Vuitton!
4 P’s for Oreo vs Louis Vuitton
Oreo
Product: Adapt a lot to cultures, china more sweet
Price: differs because of the competitors.
Place: as local as possible, where it makes sense
Promotion:
LV
Product: Not a lot of differentiation with culture etc, mostly personalization parts.
Price: Apart from the import tax, stays the same
Place: Produced centrally, in France. Won’t change where they sell their products to ensure quality of sale and experience.
Promotion:
What is key in luxury management?
Rarity
What 2 types of rarity are there?
Real physical rarity: Difficult to manage
-Qualified labour (artist, artisan)
-Materials (gems, caviar, Champagne)
Artificial rarity: Easier to manage
-Limited editions
-Limited distribution
-Informational rarity
-Connoisseurs , Initiates, “Happy few”
What is the difference between luxury and premium product?
Premium product:
‒Many sku (stock keeping unit): wide range to satisfy many needs (walmart predictive system)
‒High similarity among different products in the range (production efficiency)
-High rotation (Zara)
Luxury product:
‒Few sku: short range to reduce costs
‒Few Entry and Image products
‒High product differentiation (perfume bottles)
‒Product stay in the range for long time (some forever..) Ex Birkin bag Hermes
Zara everyday calls spanish HQ and leaves notes on what cusotmers want. Zara changes their collection every 2 weeks. They’re trying to create the effect of rarity, interesting.
What are Vleben goods?
Some types of luxury goods, such as high-end wines, designer handbags, and luxury cars, are Veblen goods, in that
▪Decreasing their prices decreases people’s preference for buying them because they are no longer perceived as exclusive or high-status products. ▪Similarly, a price increase may increase that high status and perception of exclusivity, thereby making the good even more preferable
This contradicts the typical law of demand, where higher prices usually lead to a decrease in demand.
What is the difference in availability of classic vs luxury products?
The aim of classic marketing is to make the product available in a wide and easy way. On the opposite a luxury product requires an effort (price, codes of understanding, waiting list, few locations)
Is as broad as possible
-Forces customer to buy quickly
-Focuses on price and availability
Luxury:
-Sets and sell the price-Is selective even scarce-Increases customer and product standing (experience)
-Encourage a calm and safe purchase
-Might be focused city-by-city instead of countries
What did Hermes and Apple do and why?
Hermes and apple watch: their consumer base is getting older. Capturing the new generation. Apple gets a lot of prestige.
