LUXURY STRATEGY

BREAK THE RULES OF MARKETING TO BUILD LUXURY BRANDS

J.N. KAPFERER AND V. BASTIEN
KOGAN PAGE

THE

London and Philadelphia

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About the authors

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Introduction: To be or not to be luxury PART 1: Back to luxury fundamentals 1. In the beginning there was luxury A brief history of luxury The 20th century and the democratization of luxury Luxury, the individual and society Positioning of luxury in our present-day society Money, fashion, art and luxury: boundaries and ambiguities The end of a confusion: premium is not luxury The multiple approaches to the concept of luxury Denying the specificity of luxury? There is no continuous movement from premium to luxury It is not easy to exit luxury through a 'downwards' strategy From where has the current confusion arisen? . Exiting the confusion: the case of the car Relativity of luxury in cars Is automobile luxury the pursuit of perfection? Top-of-the-range, upper-premium and luxury cars The luxury car: creation, mythical models and social prestige

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What link does luxury have with technology? The constituents of the myth of the luxury car Luxury and expressions of national identity Beyond the product: services and privileges The cult objects: licences and boutiques 3. Anti-laws of marketing 1. Forget about 'positioning', luxury is not comparative 2. Does your product have enough flaws? 3. Don't pander to your customers' wishes 4. Keep non-enthusiasts out 5. Don't respond to rising demand 6. Dominate the client 7. Make it difficult for clients to buy 8. Protect clients from non-clients, the big from the small 9. The role of advertising is not to sell 10. Communicate to those whom you are not targeting 11. The presumed price should always seem higher than the actual price 12. Luxury sets the price, price does not set luxury 13. Raise your prices as time goes on in order to increase demand 14. Keep raising the average price of the product range 15. Do not sell 16. Keep stars out of your advertising 17. Cultivate closeness to the arts for initiates 18. Don't relocate your factories Facets of luxury today On the importance of the'label' Luxury: the product and the brand The ingredients of the luxury product: complexity and work Superlative, never comparative Luxury and cultural mediation Luxury and history Luxury and time Tradition is not passeisme Luxury is made by hand Real or virtual rarity? Luxury and exclusivity Luxury and fashion: an essential difference Luxury and art Luxury and charity

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PART 2: Luxury brands need specific management 5. Customer attitudes vis-a-vis luxury What is the size of the market? To be rich or to be modern? Heavy users and day trippers (also called excursionists) The four luxury clienteles A strong axis of segmentation: relationship with the product or with the logo? A second axis of segmentation: authentic does not always mean historical A third axis of segmentation: individualization or integration? Luxury by country Developing brand equity There is no luxury without brands A luxury brand is a real and living person A luxury brand has roots The luxury brand must radiate No life cycle for the luxury brand A legitimacy created from authority, class and creation, more than from expertise The financial value of luxury brands The core of the luxury brand: its identity Building coherence: central and peripheral identity traits Two modes of luxury brand building Building and preserving the dream Product roles and luxury brand architecture Managing the dream through communication Defending the brand against counterfeiting Counterfeiting as a way to diagnose the health of the strategy of the brand Always defend your rights and communicate frequently Luxury brand stretching The origins of stretching Luxury stretching: a practice that has changed the sector Two models for extension: vertical or horizontal? The pyramid The galaxy Typology of brand stretchings Leading a brand stretch An example of stretching: Mont Blanc

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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 No product without service The luxury product and the dream Functionality and dreams do not follow the same economic models The luxury product is not a perfect product, but an affecting product Luxury product and competitive universe Luxury product and time Occasion of use and perception of value Lasting a lifetime... and beyond Prolonging the ecstasy of a privileged moment Adapting to its time Structuring the luxury range: how is the range of a luxury brand organized? Innovating through a new product range Don't sacrifice the past to the future A mode of production as a lever of the imaginary The opposition between luxury and relocation Licences signal the departure from luxury Pricing luxury What about price elasticity? Increase the price to increase demand and recreate the distance What price premium? Fixing the price in luxury Managing the price over time No sales in luxury Price reductions? The price and its communication The price is not publicly advertised The price must be sold 158 158 159 161 162 163 164 164 164 165 166 167 169 172 173 175 176 177 178 180 183 184 185 189 189 190 191 191 193 193 194 195 196

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10. Distribution and the internet dilemma Luxury is in the distribution You sell to someone before you sell something It is the price, not the product, that is sold to the client The sales personnel should never earn direct sales commission

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Distribution shows that the brand dominates the client... but respects them Distributing is first of all about communicating Distribution should not only show off, but enhance the product image It is distribution's job to communicate the brand's price level A luxury purchase is a lengthy act Distribution is luxury's weak link The choice of a new sales point is not delegable Distribution must manage rarity Distribution protects you from competition Luxury and mode of distribution Luxury and internet distribution (the internet dilemma) 11. Communicating luxury You don't talk about money You communicate because you sell You communicate, you don't advertise No personalities in the advertising The role of 'brand ambassadors' Tightening the social driver'of desire Permanently encourage word of mouth What balance should there be between local and global communication? The internet and communication in luxury The codes of luxury communication ' Making the brand's visual language denser: the nine signatures of the brand Making the brand denser through tales, stories and rumours Adapting the communication register to the type of luxury The dialectic of the local and the universal 12. Financial and HR management of a luxury company Financial specificities of luxury companies Luxury and profitability Globalizing Luxury, volume and profitability Managing the human capital in luxury PART 3: Strategic perspectives 13. Luxury business models Luxury products with a profitable core trade

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What are the pitfalls to avoid in this working model of a luxury product with a profitable core trade? Luxury products with a too-restricted core range The perfume business model The business models of luxury trades with very high overheads The 'high-tech' business model (highly innovative industry) 14. Entering luxury and leaving it Wanting to be luxury is not enough: the conditions of luxury Why envisage a luxury strategy? Start small and become profitable Once profitable, grow quickly Acquiring an existing brand Departing from luxury The end of a luxury brand Taking a brand out of the luxury universe 15. Learning from luxury Luxury concerns all trades Understand the rules in order to adapt them How Apple follows a luxury strategy Luxury according to Mini Mixed strategies Managing a luxury strategy in 'B to B'? Think 'B to B to C Luxury marketing as the future of classic marketing? What marketing issues of today could luxury marketing help to resolve? The Lacoste example 16. Conclusion: Luxury and sustainable development Luxury and ethics Luxury and sustainable development
Bibliography Index

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