Deck 2

The overlap is caused by price similarities and the relative perception of luxury in different markets

Fashion creates horizontal differentiation through social imitation, while luxury creates vertical differentiation through social elevation.

Luxury's willingness to pay is driven by desire, dream, and symbol rather than functional attributes.

Both luxury and art emphasize aesthetics and increasing value over time, but luxury also integrates practical utility and exclusivity.

Intrinsic value includes tangible attributes like performance, durability, craftsmanship, and material quality, while symbolic value encompasses emotional values like brand story, heritage, and social distinction

1. Forget about positioning, think identity only.

2. Do not look after the product that seduces too many people.

3. Make it difficult for your client to buy.

4. Do not pander to your customer’s wishes.

5. Luxury sets the price, price does not set luxury.

Luxury focuses on identity rather than positioning

They emphasize creating and maintaining high visibility, restricted access, and managing desirability

In luxury marketing, the brand is the king, and the client is treated as royalty, meaning the brand does not compromise its identity to meet customer demands.

The brand serves as a symbol that differentiates products and consistently delivers promise and meaning

Luxury communication should focus on creating dreams and recharging the brand’s value rather than selling.

Luxury brands use data analytics to analyze consumer behavior and preferences, enabling personalized marketing campaigns, product recommendations, and optimized inventory management.

Strategies include localization, brand building, e-commerce and digitalization, and sustainability and corporate social responsibility.

Price in luxury is set to increase demand, recreate distance, nurture the dream, and maintain exclusivity, often exceeding functional value

Differentiation in competitive markets, creation of high added value, and cultivation of a strong, unique brand identity

By combining intrinsic and symbolic values, leveraging craftsmanship, heritage, and emotional storytelling to build a unique brand identity

Seeking consensus can dilute the brand’s unique identity and reduce its exclusivity and desirability

Increasing the average price helps maintain the distance and rarity, nurturing the dream and enhancing desirability

By showcasing products, engaging with consumers, and collaborating with influencers to amplify brand visibility and reach new audiences

They enhance customer engagement, streamline the purchasing process, and reward loyal customers with exclusive perks and personalized offers

Localization, selective distribution, brand building, leveraging e-commerce, digitalization, and focusing on sustainability and corporate social responsibility.

Luxury brands have managed to grow by appealing to the affluent class, focusing on high-end, fully priced products, and leveraging economic growth in emerging markets. Additionally, they employ strategies like virtual rarity, association with art, and the fashion business model while maintaining their exclusivity and allure.

The luxury business model avoids delocalizing production to maintain quality and cultural integrity, always increases prices to enhance exclusivity, and develops direct relationships with clients. In contrast, the fashion business model seeks low-cost production, values seasonality, and uses sales to eliminate inventory, focusing more on trends than timeless quality.

Virtual rarity is the perception of exclusivity and privilege created without actual physical scarcity. Luxury brands achieve this through limited editions, selective distribution, and strategic communication that extends beyond their target audience, thus maintaining the allure of rarity.

The shift from craftsmanship to art in the luxury sector involves positioning designers as star figures and creative geniuses. This association with art enhances the perception of luxury products as timeless and unique pieces of contemporary art, which helps in democratizing luxury and extending its appeal without compromising on exclusivity.

In Asia, luxury brands are seen as symbols of status and social belonging, leading to high demand for well-known Western luxury brands. This contrasts with Western individualistic societies where luxury often signifies personal achievement and distinction. Luxury brands must adapt their strategies to cater to these cultural differences by balancing exclusivity with broader market appeal.

Iconic products, such as the Porsche 911 or Chanel No. 5, are kept permanently in the catalogue and associated with significant moments in the brand's history. They serve as timeless symbols of the brand's heritage and exclusivity, helping to counteract the dilution of aura caused by large-scale production.

Maintaining full control over the value chain, from ingredient sourcing to retail experience, ensures the delivery of consistent quality and exclusivity. It prevents dilution of the brand's image and guarantees that the luxury promise is upheld at every touchpoint.

Luxury brands balance short-term growth with long-term brand equity by avoiding practices that dilute their exclusivity, such as delocalization and extensive discounting. They focus on creating supra-luxury products and experiences, maintaining high prices, and nurturing their brand's symbolic power.