Luxury marketing is different, because luxury brands are different. Consumers have different motives to buy luxury. Some relate to a desire for quality or to own a “work of art,” and frankly some relate to a desire to let others know they can afford that work of art.
Luxury products are, after all, status symbols. The popular bumper-sticker slogan, “He who dies with the most toys, wins,” summarizes the desire to accumulate these badges of achievement. Status-seeking is a significant source of motivation to procure appropriate products and services that we hope will let others know we’ve “made it.” A study demonstrated how people turn to status symbols to prop up their self-concepts, especially when they feel badly or uncertain about other aspects of their lives. When subjects in auctions were made to feel that they had little power, they spent more to purchase items to compensate for this deficit.
The rise of a mass class means that many luxury brands have gone down-market. Does this mean that Americans no longer yearn for luxury brands as status symbols? Hardly. The market continues to roll out ever-pricier luxury goods and services, from $12,000 mother–baby diamond tennis bracelet sets to $600 jeans, $800 haircuts, and $400 bottles of wine. Although it seems that almost everyone can flaunt a designer handbag (or at least a counterfeit version with a convincing logo), our country’s wealthiest consumers employ 9,000 personal chefs, visit plastic surgeons, and send their children to $400-an-hour math tutors.
The social analyst Thorstein Veblen first discussed the motivation to consume for the sake of consuming at the turn of the 20th century. For Veblen, we buy things to create invidious distinction; this means that we use them to inspire envy in others through our display of wealth or power. Veblen coined the term conspicuous consumption to refer to people’s desires to provide prominent visible evidence of their ability to afford luxury goods. The material excesses of his time motivated Veblen’s outlook. Veblen wrote in the era of the “Robber Barons,” where the likes of J. P. Morgan, Henry Clay Frick, and William Vanderbilt built massive financial empires and flaunted their wealth as they competed to throw the most lavish party.
Consumers engage in conspicuous consumption as a way to display status markers, yet luxury brand marketers need to understand that the desired prominence of these markers varies from products with large recognizable emblems to those with no logo at all. Those “in the know” often can recognize a subtle status marker when another member of their elite group displays it, such as the distinctive design of a bag or watch—these are “quiet signals.” In contrast, some people may feel the need to almost hit others over the head with their bling; they use “loud signals.”
Luxury brands vary in the type of status signaling they employ. As a rule, those who are wealthier and don’t have a high need for status rely on “quiet signals” and likely will be put off by excessive displays. Luxury brand marketers need to understand these distinctions, because their customers may or may not value products with explicit logos and other highly visible cues that signal conspicuous consumption.
A luxury brand is a complex platform that conveys messages about quality, lineage, status, and taste. It often encompasses a set of visual icons, such as a distinctive logo, monograms, patterns and images. A good example isBottega Veneta, whose leather goods display no visible symbols or logo, but are instead recognized by the weaved leather pattern of their products.
A luxury brand marketing strategy aims to create the highest brand value and pricing power by leveraging multiple brand elements, such as heritage, country of origin, craftsmanship, scarcity, and prestigious clients. Advertising that emphasizes the emotional satisfaction of owning a “work of art” can be effective, but word-of-mouth also is important. Indeed, according to McKinsey, 50% of luxury goods buying decisions are influenced by what consumers hear or see online. Top luxury brands such as Burberry, Rolls-Royce, and Johnnie Walker are starting to pursue aggressive online promotional initiatives in addition to traditional formats.
It’s helpful to create a mystique around the luxury brand. This can be accomplished by building a “ritual” around obtaining it. For example, Le Laboperfume transformed the buying experience: Each bottle is hand-blended and individually prepared in front of the customer. The glass decanter is then dated and the customer’s name is printed on the label. After taking the perfume home, the customer must store it in the refrigerator for a week before she uses it.
Another strategy is to maintain the brand’s exclusivity, even to the point where it’s difficult for a customer to obtain it. Thus Herméscustomers must have a long buying history before they are offered the opportunity to buy one of the company’s “it” bags.
Some general characteristics of luxury brand marketing include:
- Performance: Superior experience at both a functional and emotional level.
- Pedigree: An extraordinary history that is part of the brand’s mystique.
- Scarcity: Limited editions, or products made with rare ingredients such as platinum.
- Public figures: Not necessarily a paid endorsem*nt; ideally natural placement of the brand with celebrities at events, etc.
- Pricing: Luxury brands must justify a higher price by maintaining perceived value.
