How Luxury Brands Differ From Non-Luxury Brands

by | Oct 28, 2020 | Uncategorized

Before we jump into the fascinating world of luxury brands and their marketing, we have to start with the definition of luxury. Many premium brands (and their customers and advocates) strive to claim luxury brand status in an attempt to burnish their respective images. Think of Mercedes-Benz (or Rolex) and their aficionados as examples here—though, as you might expect, the list is truly very long. In this post, we will ignore these premium brands that “stretch,” or near-luxury brands, and focus on the pure luxury brands and what makes them different from all others.

Our current word “luxury” comes from the Latin word luxuria and means extravagance, indulgent living, delicacy and excess. As such, it is one of those words with both positive and negative meaning. Luxury is a concept whose affective interpretation is highly dependent upon perspective and context: It can be enjoyable, rewarding, deserved, soothing and expected by some, while at the same time evoke incomprehension, thoughts of inappropriateness if not injustice, and feelings of envy, anger and disgust in others. Accordingly, to be a luxury brand is not a straightforward, all-good thing as many might assume at first glance.

The Nature of Luxury Brands

Earlier I mentioned that some premium brands aspire to be, if not pose as, luxury brands, often on the basis of having a product or service that is more premium than their other, regular premium offerings (e.g., Mercedes S-Class). But true luxury brands are actually different in all three of the following ways from these “stretching” premium brands.

First, true luxury brands are something no one actually needs. They are exclusively the domain of dreams and desires.

An affluent consumer comparing sedans offered by Mercedes-Benz, Audi and BMW is still needing a vehicle. They simply have the wherewithal to find the best fit for their needs and wants among these premium brands. Each brand offers them a limited number of options or “options packages” to select from to suit their taste.

Now, contrast that with the wealthy individual customizing their Rolls Royce Ghost. Here, the car is actually somewhat incidental to their purchase, as it is unlikely to be a needed conveyance. In fact, as the CEO of Rolls Royce states, over 90% of Rolls Royce vehicles are so highly customized as to be considered one-offs. (The new Cullinan SUV model line is, in fact, entirely made up of one-offs). As the customer embarks on a months-long engagement with the various craftsmen at Rolls Royce to ensure the leather trim matches the shades of a favorite coat or pet, the embroidery patterns reflect some aspect of their heritage or of a dream and the star-studded LED ceiling depicts the star constellations on the very day of the owner’s birth, these customers are, in effect, expressing themselves. It is pure self‑actualization.

Real luxury brands may be recognized by a comparatively high degree of customization, personalization and craftsmanship within their product or service category. Naturally, the level of customization and creative expression executed by the craftsmen at Rolls Royce at the client’s behest (or whim, if you prefer) will make the cost more than 10 to 15 times greater than the sedan sought out by that affluent consumer. But then again, the money is not an important variable in this true luxury purchase.

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Second, real luxury brands are subject to little or no comparison- or cross-shopping by their target audience.

If you are shopping for a diamond necklace with matching earrings at Van Cleef & Arpels for that special someone, it is very unlikely you are also running over to the Cartier or Tiffany boutiques to compare products and pricing. Similarly, the well-heeled customer who fancies a Lamborghini is quite unlikely to cross-shop at the Porsche dealership at the same time.

Of course, the key term here is “target customer.” There will, of course, be “stretch” buyers of luxury products who are value-shopping across brands. But these consumers represent the incremental fringe to true luxury brands—customers that can add sales volume to the brand but who are not their core target. Called “climbers” by some, they are price-sensitive and often seek the most affordable way to signal higher social status.

And third, real luxury brands are much less concerned with the opinions and feedback from customers than other brands.

Ask any brand manager for non-luxury (including premium) products and you will quickly hear that successful brands regularly seek out and act upon input from their customers. Customer feedback is practically holy writ and considered essential to the brand’s success by brand management for non-luxury brands. Luxury brands, on the other hand, are about promulgating and proselytizing their vision and raison d’être; they are much less concerned with what consumers think. In that way, true luxury brands are more like artists or high-end artisans. “Target customers” for luxury brands are consumers who appreciate, share and buy into the vision of the brand (and, of course, have the financial means to afford them comfortably).

A quick look at history is informative here. Organized brand management for luxury brands is actually a relatively recent phenomenon. Luxury brands as we know them today developed out of workshops of individual artisans and craftsmen. For example, Louis Vuitton in Paris in 1854, Patek Philippe in Geneva in 1839 and Krug champagne in 1843 in Reims. These workshops, ateliers and wineries—what the French call “maisons” (family dynasties)—had customers seek them out and pay a premium for their superior products and services for well over a century and a half before holding companies (LVMH, Richemont, etc.) began acquiring these maisons and marketing their products as the brands we know today.

Luxury Brand Management & Marketing

Back in the mid-nineteenth century, the maisons sold products to customers who physically came in the door. But by the late 1970s and early 1980s, the large holding companies were bringing modern marketing methods to the luxury market, expanding distribution and engaging in global brand image advertising to grow sales and share. Now, luxury customers all over the world can visit boutiques at or close to home and even engage with their preferred luxury brands online, rather than traveling to the maisons like their grandparents did.

Thus, from maison names to brands.

Earlier I said luxury brands promulgate and proselytize a vision and raison d’être which attracts their target or core customers. It is this brand DNA that luxury brand managers cultivate and nurture to keep their brands unique. The trick is to popularize the brand vision and image without saturating the market with access to the product, as scarcity is one of the marketing levers for uniqueness and price stability. Given the importance of brand DNA, let’s explore three luxury brands in the same category (jewelry) and see how they codify and express that DNA in their marketing.

In this way, luxury brands stay islands unto themselves and remain relatively isolated from comparison shopping. The history and story behind the brand are very important to luxury brands, just as provenance is in the world of fine art. Customers are buying that history and story just as much as they are buying the brand’s vision. The two are, of course, highly intertwined, if not inseparable.

Regardless of whether you like or dislike true luxury brands, it is clear that they are unique in the world of brands and require deft management to continue to remain relevant and successful.

Further Reading

The Definition of Luxury is Expanding – Not Transforming

Sell it … or set it on fire?

The Inevitable Failure of Hype-Based Branding

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Frank Schab
An experienced marketing and branding strategist, Frank has been helping clients optimize the value of their brands through insightful analysis and effective strategy for more than three decades. Along with holding positions at General Motors and Pfizer, Frank served as a Managing Partner at Interbrand New York and VP of Global Brand Research at Opinion Research Corporation before co-founding Six Degrees. His brand-building work in various sectors including hospitality, medical device, pharmaceutical, automotive and technology has taken him to 17 countries on four continents. Frank holds a doctorate in psychology from Yale University and speaks fluent German.

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