The Luxury Strategy

by Kapferer, Jean-Noel; Bastien, Vincent

• ISBN13: 9780749464912
• ISBN10: 0749464917
• Edition: 2nd
• Format: Hardcover
• Copyright: 2012-10-28
• Publisher: Kogan Page Ltd

Summary

Luxury is in fashion and is now to be found in almost every retail, manufacturing and service sector. New terms like "mass-luxury," "new luxury" and "hyper luxury" attempt to qualify luxury, causing confusion today about what really makes a luxury product, a luxury brand or a luxury company. Luxury experts Jean-Noel Kapferer and Vincent Bastien provide the first rigorous blueprint for effectively managing luxury brands and companies at the highest level. The new edition of The Luxury Strategyincludes more information about digital strategy, globalization, sustainable development and why luxury brands are resilient to a crisis, such as a recession. It analyzes in depth the essence of luxury, highlights its managerial implications and rationalizes the highly original methods - often very far from the usual marketing strategies - used to transform small family businesses such as Ferrari, BMW, Louis Vuitton, Cartier, Chanel, Armani or Ralph Lauren into worldwide successes. The Luxury Strategyrationalizes those business models which have achieved profitability, while sustaining the luxury status of their brands, and sets out the counter-intuitive rules for successfully marketing luxury goods and services.

Table of Contents

Introduction	p. 1
Back to luxury fundamentals	p. 3
In the beginning there was luxury	p. 5
A brief history of luxury	p. 5
The 20th century and the democratization of luxury	p. 9
Luxury, the individual and society	p. 16
Positioning of luxury in our present-day society	p. 22
Money, fashion, art and luxury: boundaries and ambiguities	p. 24
Luxury: learning from religion and art	p. 35
The end of a confusion: premium is not luxury	p. 39
The multiple approaches to the concept of luxury	p. 40
Denying the specificity of luxury	p. 41
There is no continuous movement from premium to luxury	p. 42
It is not easy to exit luxury through a 'downwards' strategy	p. 43
From where has the current confusion arisen?	p. 43
Towards a definition of luxury	p. 45
Exiting the confusion: the case of the car	p. 48
Relativity of luxury in cars	p. 49
Is automobile luxury the pursuit of perfection?	p. 50
Top-of-the-range, upper-premium and luxury cars	p. 51
The luxury car: creation, mythical models and social prestige	p. 53
What link does luxury have with technology?	p. 56
The constituents of the myth of the luxury car	p. 57
Luxury and expressions of national identity	p. 59
Beyond the product: services and privileges	p. 61
The magic of cult objects: licences and boutiques	p. 63
Anti-laws of marketing	p. 65
Forget about 'positioning', luxury is not comparative	p. 65
Does your product have enough flaws?	p. 66
Do not pander to your customers' wishes	p. 67
Keep non-enthusiasts out	p. 69
Do not respond to rising demand	p. 69
Dominate the client	p. 70
Make it difficult for clients to buy	p. 71
Protect clients from non-clients, the big from the small	p. 71
The role of advertising is not to sell	p. 72
Communicate to those you are not targeting	p. 73
The presumed price should always seem higher than the actual price	p. 74
Luxury sets the price, price does not set luxury	p. 74
Raise your prices as time goes on in order to increase demand	p. 75
Keep raising the average price of the product range	p. 76
Do not sell	p. 76
Keep stars out of your advertising	p. 77
Cultivate closeness to the arts for initiates	p. 78
Do not relocate your factories	p. 78
Do not hire consultants	p. 80
Do not test	p. 81
Do not look for consensus	p. 82
Do not look after group synergies	p. 82
Do not look for cost reduction	p. 83
Just sell marginally on the internet	p. 83
Facets of luxury today	p. 85
On the importance of the 'label'	p. 85
Luxury: the product and the brand	p. 87
The ingredients of the luxury product: complexity and work	p. 89
Superlative, never comparative	p. 91
Luxury and cultural mediation	p. 91
Luxury and history	p. 93
Luxury and time	p. 95
Tradition is not passéisme	p. 97
Luxury is made by hand	p. 98
Real or virtual rarity?	p. 99
Rarity and sustainability	p. 103
Luxury and exclusivity	p. 103
Luxury and fashion: an essential difference	p. 106
Luxury and art	p. 107
Luxury and charity	p. 109
Luxury brands need specific management	p. 111
Customer attitudes via-à-via luxury	p. 113
What is the size of the market?	p. 114
To be rich or to be modern?	p. 115
Heavy users and day trippers	p. 117
The four luxury clienteles	p. 118
A strong axis of segmentation: sensitivity to the product or to the logo?	p. 120
A second axis of differentiation: authentic does not always mean historical	p. 123
A third axis of differentiation: disruption or integration?	p. 123
How countries differ in their attitudes	p. 124
Why are Western luxury brands globalized?	p. 127
China today and tomorrow	p. 130
Why India resists Western luxury	p. 133
Russia; the psychology of oligarchs	p. 135
Developing brand equity	p. 139
There is no luxury without brands	p. 139
Managing luxury by the brand	p. 140
Products, experiences and brands	p. 141
A luxury brand is a real and living person	p. 143
A luxury brand has roots	p. 143
A luxury brand must radiate	p. 143
No life cycle for the luxury brand	p. 144
A legitimacy created from authority, class and creation, more than from expertise	p. 145
The financial value of luxury brands	p. 145
The core of the luxury brand: its identity	p. 147
Building brand coherence at contact points: central and peripheral identity traits	p. 151
Two modes of luxury brand building	p. 152
Building the luxury brand: the dream equation	p. 153
The luxury brand compass: architecture of product roles	p. 156
Luxury brand equity in the digital era	p. 158
Why and how does the digital world challenge luxury?	p. 159
Managing the dream through communication	p. 163
Defending the brand against counterfeiting	p. 163
Counterfeiting as a way to diagnose the health of the strategy of the brand	p. 168
Always defend your rights and communicate frequently	p. 169
Luxury brand stretching	p. 171
Luxury expansion through line extensions and brand extensions	p. 172
The origins of luxury brand stretching	p. 173
Luxury stretching: a practice that has changed the sector	p. 174
Comparing the Italian and French models of extension	p. 175
Two models for brand stretching: vertical or horizontal?	p. 176
The pyramid	p. 178
The galaxy	p. 179
Success factor of luxury extension	p. 179
Typology of brand stretchings	p. 182
Leading a brand stretch	p. 184
Growth by stretching: the Mont Blanc case	p. 185
Stretching: preserve coherence, but be creative and unexpected	p. 188
Maintaining brand identity across sub-brands: the Armani case	p. 190
Building credentials in a new category: the Chanel case	p. 191
The risk factors of brand stretching	p. 192
Controlling the boomerang effect of brand stretching	p. 195
Qualifying a product or service as luxury	p. 197
No product without service	p. 197
The luxury product and the dream	p. 198
Functionality and dreams do not follow the same economic models	p. 200
The luxury product is not a perfect product, but a sacred product	p. 201
Luxury product and competitive universe	p. 201
Luxury product and time	p. 202
Occasion of use and perception of value	p. 203
Lasting a lifetime... and beyond	p. 203
Prolonging the ecstasy of a privileged moment	p. 203
Adapting to its time	p. 205
Structuring the luxury range: how is the range of a luxury brand organized?	p. 206
Innovating through a new product range	p. 207
Don't sacrifice the past to the future	p. 211
A mode of production as a lever of the imaginary	p. 211
The opposition between luxury and relocation	p. 213
Licenses signal the departure from luxury	p. 214
The challenge of luxury services: creating the gap	p. 214
Pricing luxury	p. 217
What about price elasticity?	p. 218
Increase the price to increase demand and recreate the distance	p. 219
What prince premium?	p. 222
Fixing the price in luxury	p. 223
Managing the price over time	p. 224
No sales in luxury	p. 227
Price reductions	p. 228
The price and its communication	p. 229
The price is not publicly advertised	p. 230
The price must be sold	p. 230
Price: the two challenges of the luxury strategy	p. 231
Distribution and the internet dilemma	p. 233
Luxury is in the distribution	p. 233
You sell to someone before you sell something	p. 234
It is the price, not the product, that is sold to the client	p. 235
The sales personnel should never earn direct sales commission	p. 236
Distribution shows that the brand dominates clients, but respects them	p. 237
Distributing is first of all about communicating	p. 238
Distribution should not only show off, but enhance the product image	p. 239
It is distribution's job to communicate the brand's price level	p. 239
A luxury purchase is a lengthy act	p. 239
Distribution is luxury's weak link	p. 241
The choice of a new sales point cannot be delegated	p. 243
Distribution must manage rarity	p. 243
Distribution protects you from competition	p. 244
Luxury and mode of distribution	p. 244
Luxury and digital distribution (the internet dilemma)	p. 247
Luxury brands: when, what, and how to sell on the internet	p. 252
Communicating luxury	p. 255
You don't communicate to sell	p. 255
You communicate because you sell	p. 256
You don't talk about money	p. 256
You communicate, you don't advertise	p. 257
No personalities in the advertising	p. 261
The role of brand ambassadors	p. 262
Building the social driver of desire	p. 263
Permanently encourage word of mouth	p. 264
What balance should there be between local and global communication?	p. 265
The internet and communication in luxury	p. 265
The unique codes of luxury communication	p. 271
Making the brand's visual language denser: the nine signatures of the brand	p. 271
Making the brand denser through tales, stories and rumours	p. 272
Adapting the communication register to the type of luxury	p. 273
The dialectic of the local and the universal	p. 275
Financial and HR management of a luxury company	p. 277
Financial issues in luxury companies	p. 277
Luxury and profitability	p. 279
Globalizing	p. 281
Luxury, volume and profitability	p. 281
Managing the human capital in luxury	p. 284
Strategic perspectives	p. 295
Luxury business models	p. 297
Luxury products with a profitable core trade	p. 298
What are the pitfalls to avoid in this working model of a luxury product with a profitable core trade?	p. 302
Luxury products with a too-restricted core range	p. 305
The perfume business model	p. 312
The business model of luxury trades with very high overheads	p. 315
The 'high-tech' business model (highly innovative industry)	p. 318
Crises and luxury business models	p. 320
Entering luxury and leaving it	p. 323
Wanting to be luxury is not enough: the conditions of luxury	p. 323
Why envisage a luxury strategy?	p. 325
Start small and become profitable	p. 326
Once profitable, grow quickly	p. 327
Acquiring an existing brand	p. 329
Departing from luxury	p. 331
The end of a luxury brand	p. 331
Taking a brand out of the luxury universe	p. 335
Leveraging the image in a low-cost strategy	p. 338
Learning from luxury	p. 341
Luxury concerns all trades	p. 341
Understand the rules in order to adapt them	p. 342
How Apple follows a luxury strategy	p. 342
Luxury according to MINI	p. 345
Mixed Strategies	p. 347
Managing a luxury strategy in B to B	p. 349
Luxury marketing as the future of traditional marketing	p. 352
What marketing issues of today could luxury marketing help to resolve?	p. 353
The Lacoste example	p. 353
Learning from luxury	p. 355
Luxury and sustainable development: convergences and divergences	p. 359
Luxury and sustainable development	p. 360
Adopting the luxury strategy to foster sustainable development	p. 372
References	p. 377
Index	p. 383
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