But are they really? can a rearview camera, a GPS and premium price transform a small truck into a luxury vehicle?
What is the difference between luxury and premium? Are there different degrees of luxury? or is it something you either are or not?
By the time this boom goes bust, marketers who couldn't quite answer these questions will find themselves unable to sustain the healthy margins of luxury and instead competing on price and features.
To help shed some light on the issue, here are 7 key observations from some of the the world's profitable brands:
1- Luxury dominates: it is consumed to elevate us, and therefore it can't be "our peer". It treats us with utmost respect, but always keeping its distance.
2- Like art, luxury is driven by its creator's inspiration, not by consumer demand. It doesn't follow consumer tastes, it creates them.
3- Luxury needs to cater to "those who know", who understand the subtleties, appreciate the craft, revel in the myth. The others will follow by imitation, but without a core of passionate connaisseurs, a luxury brand is destined to disappear as such.
4- Luxury is both eternal and ephemeral: Created 1921, N.5 is still Chanel's best selling fragrance. but sprinkles of disruption can help design stay relevant (Stephen Sprouse inspired graffiti on LV's bags)
What is the difference between luxury and premium? Are there different degrees of luxury? or is it something you either are or not?
By the time this boom goes bust, marketers who couldn't quite answer these questions will find themselves unable to sustain the healthy margins of luxury and instead competing on price and features.
To help shed some light on the issue, here are 7 key observations from some of the the world's profitable brands:
1- Luxury dominates: it is consumed to elevate us, and therefore it can't be "our peer". It treats us with utmost respect, but always keeping its distance.
2- Like art, luxury is driven by its creator's inspiration, not by consumer demand. It doesn't follow consumer tastes, it creates them.
3- Luxury needs to cater to "those who know", who understand the subtleties, appreciate the craft, revel in the myth. The others will follow by imitation, but without a core of passionate connaisseurs, a luxury brand is destined to disappear as such.
4- Luxury is both eternal and ephemeral: Created 1921, N.5 is still Chanel's best selling fragrance. but sprinkles of disruption can help design stay relevant (Stephen Sprouse inspired graffiti on LV's bags)
5- Luxury doesn't speak in USPs. It is not a product, a price, a set of features. It is a UNIVERSE defined by carefully groomed ingredients like its history (since 1876), its creator (madame Chanel), its craftsmen and their attention to detail, its myths (Cliquot overcoming Napoleon's blockade to ensure supply to Russia's imperial court), visual cues (Louis Vuitton's LV) and stories told among users and connaisseurs (Panarea watches used by Italian submariners in WWII)
6- Luxury brands focus on excelling at 3 things: product, distribution and communications, so that consumers forget about the fourth: price.
7- Luxury seeks to fuel desire, not sales: employees at LV stores do not earn a commission on their sales. Luxury never advertises price, but if it must be disclosed: it's $15,000 and never $14,990.
6- Luxury brands focus on excelling at 3 things: product, distribution and communications, so that consumers forget about the fourth: price.
7- Luxury seeks to fuel desire, not sales: employees at LV stores do not earn a commission on their sales. Luxury never advertises price, but if it must be disclosed: it's $15,000 and never $14,990.
But perhaps a more colorful way to define luxury is spelling out what it's not, in the words of madame Chanel:
"Luxury lies not in richness and ornateness but in the absence of vulgarity".
"Luxury lies not in richness and ornateness but in the absence of vulgarity".
Mademoiselle, chapeau.
For more on Luxury, read "Luxe Oblige" by V. Bastien and JN, Kapferer
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well articulated ... Jay
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