High purchase prices and unconventional communication methods are what luxury brands rely on to be considered luxurious. These communication methods exert a subtle influence on brand acceptance and understanding brand connotation, which leads to the eventual tolerance of their high prices.
High Price: The Main Characteristic
Why are you carrying a LV bag
Because, having an LV bag shows wealth.
ESPIRIT and LV are both well known name brands. But why is it that people who wear and use LV seem more confident than those who are using ESPIRT Perhaps it is due to; everybody is aware how expensive the LV brand is, however price is not the actual reason. The essence is: The luxurious brands are playing the parts of suggestion and association of success and wealth.
Luxury is considered as possessing something that costs a large sum of money and the feeling or experience due to the possession of that item.
Luxury brands are compared with popular brands and top brands. These brands concepts are not clear and understood by all, but everyone is aware of their positions in their respective industries. The only constant characteristic for luxury brands is high price.
So-called product classes, actually refer to different price ranges for one kind of product. There are different brands at different price ranges, and different prices conform to different customers. People who buy and wear Rolex are completely different from those who buy and wear Swatch, just as those who drive a Jetta are different from those who drive Bentleys.
If one day someone wants to sell you a Rolex for 400 yuan, how would you respond At first you would probably think it was fake or possibly stolen. We have witnessed the company Rolex reduce all of its products prices simultaneously throughout the world. This action may have caused some of their consumers anger over purchasing a watch which had a formerly had a luxury price, come tumbling down. In a way, Rolex actively made its brand inferior to others, so that its former luxury consumers stopped believing in the Rolex brand product values and stopped buying them. A similar example to this situation is Pierre Cardin.
Symbols for success and Affluence
Of course, the more luxury brands sell their products, the more money they will earn. However if their products prices are reduced, both their products essence as luxurious brand items and people s desire for them will disappear immediately. Therefore, a luxurious price must exist for a luxurious product. Most importantly, the expensiveness of the brand must be known to the public.
The core difference between luxurious brands and luxury is: BRAND. A brand is a symbol for high prices, for example, LV bags with the most impressive LV logo will be their best sellers. Men s T-shirts without Armani on them aren t so cool.
But why are people willing to buy a symbol for a high price The answer can be seen from looking at a Bora owner s inner feelings. He wants to have the freedom and choice of not walking; so he purchased a, convenient and perfectly suitable for his needs, Bora. However at the same time there is still a deep psychological thirst for him to buy a Benz. There are three factors supporting this desire:
1. He currently does not own a Benz.
2. Benz is such an expensive brand, that he can not afford to buy one.
3. Benz is a symbol for success and affluence.
The only actual differences between Benz and Bora merely lie in: higher price and better quality not functionality.
However, from the perspective of the public, there are only two kinds of people: successful people driving Benzs, and people striving for success driving Boras. The core reasons why this man wants to buy Benz now become apparent: what he wants to buy is actually a symbol of success, which he feels proves he is a successful person.
Luxurious brands, due to their high prices, are committed to being emblems for the people who can afford them. Just as, surnames and crests were once the symbols to show nobility, owning luxury brands is now considered symbols of success and wealth. In a financially based society both of these aspects of life are things people strive for, and desire. Those who possess luxurious brands communicate with the outer world through them. These brands show their owners attributes and uniqueness from other people.
Five Reasons: Supporting Luxury
How can a luxury brand be established This question can not be answered in one or two sentences because they cannot be established in one day.
The purchase price is what quantifies something as a luxury brand or not. Its pricing method is totally different from an ordinary brand. When luxury brands are priced, there are three factors which should be considered, first: who are the consumers What kind of price can they afford And how much are the present products and brands in the market Finally the purchase price will be decided in accordance to production cost, operational cost, and expected profit margin.
These luxurious companies can never start a price war. If they do, their brands or products will be reduced to ordinary brands. Once its price is reduced to the level anyone can afford, the products will become too common. At this point the brand has already exited the luxury brand industry.
Surely, it is not price alone that convinces consumers to buy a product. This idea is well known and clear to brand executives. They will always list other powerful reasons to justify a price point for their products. In short, explaining why their products are so expensive. The following are conventional but effective reasons:
1. Unique designer s inspirations, for example, Armani comes from the designer Giorgio Armani. Gucci arose to luxury from Tom Ford.
2. Respectable consumers, for example, British royalty are consumers of Rolls-Royce. Tiger Woods is a consumer of TAG Heuer.
3. Unique craftwork, technique, and materials, for example, Rado watches have a non-scratch surface. Jaguar cars have a total aluminum body.
4. Production location and producer, for example, a product made in France compared to one made in Thailand will arouse different associations in people s minds. The hand made leather seats made by superb British craftsmen is one of the prides of Bentley.
5. Brand history, we can find plenty of examples in America, Tiffany originated in 1837, French jewelry Cartier originated in 1847. British raincoat Burberry originated in 1856.
For all luxury brands there must exist: firm, steady and real reasons, to support their high prices. The reason why they are so expensive will be repeatedly enriched, explained and enhanced through many details such as store locations, store design and display, service attitude, product quality, publishing quality, etc. The consumers focus on luxury brands will make them constantly evaluate, understand and experience them. All the knowledge, perceptions, experience and judgments will form a kind of strong interest through the manufacturer s efforts and consumer s endeavors in following their favorite brands.
Luxury brands contain clothing, bags, clock and watches, jewelry, cars, famous alcohol, the list is endless. It is neither management scale nor cost and effectiveness that are the main competition. Even though these are all important factors for success, one of the key factors for success is whether the brand can represent the social classes it is trying to sell to.
If you became suddenly became more successful and wealthy, what kind of car would you drive What kind of watch would you wear What kind of suit would you wear What kind of pen would you use And what kind of briefcase would you carry
Many answers will be similar: I would drive a Benz, wear a Rolex, Zegna, LV, and use Montblanc. These companies are well known among consumers due to their years of marketing and brand building. For those who have possessed them or want to possess them, these brands have become symbols of special social classes these consumers want to belong to. They have become the mainstream of luxury brands and have successfully made most people desire them.
Unique Communications Beat Competition
As for how to compete with these mainstream luxurious brands, competitors must find unique strategies and methods.
BMW distinguishes itself from Benz by using the slogan Driving Fun , while Audi uses Technology as its distinctive factor. Super stars are chosen to be the spokesmen for OMEGA. The positioning of Tag Heuer as luxury a sports watch is used to differ itself from the professional flavor of Rolex.
Furthermore, we should use smart communications in order to establish impressions of brand names and core features in the public s minds.
Audi showed an impressive futuristic model in the movie I Robot and launched a hit new product from it: the new Audi A6. While you watch 007 sip a Finlandia Vodka Martini, drive a powerful BMW, and wear a multifunctional Omega watch, how do you feel Do you find yourself desiring a luxury filled lifestyle like 007
During an interview with Latin Pop King Ricky Martin he unconsciously unbuttoned his suit jacket to reveal the T-shirt he was wearing underneath. The shirt sported the logo Armani jeans. Do you suddenly feel you have the same tastes as Ricky Martin
CD brand products and famous impressionists masterpieces are exhibited simultaneously at an art exhibition in France. When all sorts of clothing and accessories and Manet s The Fifer are exhibited side by side, how can you help, but to feel impressed by the style and attitude of the CD brand
These are all elaborately planned communications and behaviors. It is unconventional activities that can adequately express the high status of luxury brands and make consumers gradually accept them and understand the brand s essence. In short, it means molding the consumers to accept the high prices of these brands due to their positions in their respective industries.
Development History of Luxury Brands in China
Luxury brands mainly come from developed countries such as Europe, America and Japan. So the question is: does China as a developing country have any opportunity to develop luxury brands The answer is YES.
The Borrowing Method , which means everything good can be borrowed for use, can be applied here. One method of becoming an luxury brand can be done through the means of consolidation. Let s look at the Hong Kong Pan Di Sheng s family lighter brand S.T. Dupont. Pan Di Sheng s family has managed to expand to many industries including, stationary, accessories, clothing, and watches. The Pan Di Sheng Family holds 55.52% percent of the shares, making them the majority share holders, which they acquired through consolidation.
Rather than consolidating or building an existing brand, we can also create a new luxury empire from nothing. Now that there are consumers for luxurious brands in China, there are potential market opportunities. In China, more and more people have similar interests for luxury brands. It has been pointed out in a recent report that the consumer market in China for luxury items is developing rapidly, at a rate of 20%. It is estimated that this market in China will reach 11.5 billion dollars by 2015, making China one of the biggest future markets in this industry.
Due to less-advanced technology, China s Ferrari may not appear in the next 10 years. But China s Armani , Tiffany and Rolex may appear in the clothing, bag, watch and jewelry fields. For example, Shuijingfang and Guo Jiao 1573 have been successful cases in the alcoholic beverage industry.
China, considered as an international factory produces clothes, accessories and bags. In all these fields, the local outstanding enterprises in China actually have been very competitive in the world, from the aspect of production scale, production methods and management. If these enterprises intend for further development, they only need to create brands. But actually, the most important factor for these companies is to be competitive in operations.
The operation ability of brands actually relies on innovation. For example, imagine if internationally famous designers were requested to design clothing using silk and embroidery, the unique materials and craftwork of China. If this situation could be realized and their designs reached the fashion mainstream of Milan and Paris, couldn t a luxury brand be created from their success
Success lies in whether you can find innovative methods or not. Innovation refers to discovering the needs of the consumers which have not yet been met. There are several ways for innovation, such as finding new materials and craftworks, developing new unique flavors and styles, exporting products for international marketing, and so on.
The situation may appear in 10 years where it will be considered as a symbol of a stylish lifestyle to drink exquisite Chinese wines in Paris; Milanese, rich merchants will proudly wear Chinese style clothing to parties; it will be regarded as glamorous for the ladies in Tokyo to wear Chinese jewelry.
The presupposition of all discussed above relies on the following questions: Do we really understand luxurious brands Where do they come from Who are the consumers Do we comprehend the consumers purchase behaviors What are the operations means necessary for these brands With the basis established, development of luxurious brands in China and effective practices can be further discussed.
Luxury: The Essence Of Luxurious Brands
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