Tag Archives: luxury branding

Authentic Luxury Brands and E-Commerce: Incompatible to their Core Values

By James D. Roumeliotis

online-luxury-sales-image

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Definitions of “luxury” vary significantly and depend on with whom you discuss the topic and in what context. The term “luxury” is not the easiest to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria, depending who you ask. Irrespective what anyone considers the term, it denotes a privileged lifestyle and a “nice to have” product or experience.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, stated: “A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”

Authentic luxury brands compete on the basis of their ability to invoke exclusivity, prestige and hedonism to their appropriate market segments not the masses. There is a classic litmus test:

  • Is the product manufactured in artificially limited quantities? (i.e. the rarity factor)
  • Does the firm have a story to tell? (i.e. history & pedigree)
  • Is the firm portraying a unique lifestyle?
  • Is craftsmanship the hallmark, which delivers products that only High Net Worth individuals can purchase without question?
  • Does the brand offer authenticity?
  • Does it implement an absolutely no discounting policy?
  • Is the product (and at least most of its materials/parts) manufactured only in its country of origin?

Rationale of an absence of “authentic” luxury sales online

Many genuine luxury brands such as Hermes, Chanel and Louis Vuitton are reluctant to utilize the internet to sell their pricey merchandise ─ other than a limited number of more affordable items such as their cosmetic lines, fragrances and small leather goods, as well as their silk scarfs.

There are three major reasons why luxuries brands of this caliber should not sell their products online.

  • Unique business model: The top tier luxury brands such as Hermes, Chanel, Dior and Patek Philippe, amongst other prestige marques, require a controlled distribution environment whereby they determine merchandising and pricing. They are ultra-sensitive in the manner in which their label gets handled. This is why they target and legally pursue third party e-commerce sites vigorously. Moreover, unlike traditional marketing, the mention of price is considered a taboo in the unconventional luxury marketing strategy. In the ideal luxury world, price is not something which should be divulged ─ let alone online. As a golden rule of thumb, the presumptive price should be higher than it really is.
  • Total customer engagement: High-end luxury brand executives firmly and unanimously believe that high-priced and exclusive goods should be viewed and felt in person in a plush and attentive retail environment which attracts their best shoppers. Additionally, the well trained sales staff offer fashion advice and alterations on the spot. Their swanky online presence serves to bring the consumers to their bricks and mortar shops. This approach confirms the answer to this question: Do the well-heeled, who seek exclusivity and personalized experiences with their luxury purchases, want to make their extravagant purchases online such as a $15,000 watch or handbag? Probably not.
  • They are privately owned and operated: Unlike the mainstream market and publicly traded luxury brands such as Ralph Lauren, Coach, Tiffany & Co and others, top tier luxury brands are not eager for volume sales. To retain their scarcity, cache, and avoid diluting their intrinsic value, they refuse to respond to rising demand. They also include a conservative policy of making it more inaccessible to consumers whom they are not targeting. Consequently, with privately held luxury brands, profits are done with the long term in mind, not necessarily the next quarter. In comparison, the publicly traded ones, which are accountable to their shareholders, are constantly under pressure to trim production costs and increase revenues and profits which lead them to cater to a larger audience ‒ the mass affluent. So much for all the elements of ‘genuine’ luxury purveyors who are doing away with scarcity and exclusivity.

Vice president and principal analyst at Forrester, Sucharita Mulpuru-Kodali, stated, “Yes, maybe they could increase sales (through e-commerce).” However, she elaborated, “a brand’s goals aren’t always to increase sales. It may be to preserve the quality of the brand so that it stays in business for another 100 years.

According to David Sadigh, founder and CEO of the Swiss digital banking magazine, “Swissquote”, the share of e-commerce sales in the luxury domain amounts to about 5%.

Authentic luxury brands who are not catering to the mass affluent are in a league of their own when it comes to e-commerce. Having said that, their present conservative strategy achieves its intended purpose. Essentially, when someone acquires an object of desire, he or she purchases craftsmanship, cache, pedigree, created in limited quantities, enhance one’s lifestyle and offer exclusivity ─ the top tier in its domain.  This is a contrast to the “masstige” brands such as Ralph Lauren and Michael Kors, which according to a trend report from PMX – a marketing and research agency, revealed that both of those fashion labels dominated the online market share in their luxury category.

When it comes to authentic luxury sales, every touch point in the purchase process affects brand perception, which in turn makes customer service and presentation vital.

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

_____________________________________

Request your TWO FREE chapters of this popular book with no obligation.

 

3 Comments

Filed under Business, lifestyle marketing, luxury e-commerce, luxury lifestyle, luxury online sales, luxury storytelling

Genuine Luxury vs Accessible Luxury: Two Distinct Yet Opposing Categories

By James D. Roumeliotis

Mass - Masstige - Prestige

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

“Masstige” (a combination of two words: “mass” and “prestige” – aka mass with class) is a contemporary marketing term which denotes prestige for products perceived as luxurious and targeted to a wide range of customers known as the “mass affluent.” As per Wikipedia, the mass affluent are the high end of the mass market, or individuals with US$100,000 to US$1,000,000 of liquid financial assets, or consumers with an annual household income over US$75,000. These upper middle class individuals can afford to splurge on some of the finer (and affordable) things in life which include fashion merchandise, sporting goods, cosmetics, various accessories (silk ties, scarfs, small leather goods, perfumes etc.), high-end consumer electronics/gadgets, as well as culinary food and spirits. Brands in those categories depend on the “masstige” crowd for a majority of their sales, despite a few which also happen to be purveyors of inaccessibly priced products catered to the HNWI/UHNWI (aka the very wealthy or the 1% respectively).

This is purely an oxymoron and paradoxical since in the authentic luxury domain, “mass prestige” is an artificial term for “luxury” as it is not generally geared for the mass but rather the well heeled. Sadly, the true meaning of “luxury” has been bastardized by many brands who are falsely in the “luxury” business (in the true sense of the word and definition). ​However, there are luxury brands which have chosen to offer lowered priced products in a bid to join the “accessible luxury.” Think Coach with its leather bags and accessories or Chanel with its perfumes and cosmetics.

Defining the true meaning of the term “luxury”

Definitions of “luxury” vary significantly and depend on with whom you discuss the topic and in what context. The term “luxury” is not the easiest to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria in the mind, which creates a mood and what is generally referred to today as lifestyle.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, stated:

A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”

Authentic luxury brands compete on the basis of their ability to invoke exclusivity, prestige and hedonism to their appropriate market segments not the masses. There is a classic litmus test as follows:

  • Is the product manufactured in artificially limited quantities? (i.e. the rarity factor)
  • Does the firm have a story to tell? (i.e. history & pedigree)
  • Is the firm portraying a unique lifestyle? (i.e. the product or service will enhance one’s experience through an exceptional appeal)
  • Is craftsmanship the hallmark, which delivers products that only High Net Worth individuals (HNWI/UHNWI) can purchase without question?
  • Does the brand offer authenticity?

Genuine luxury purveyors remain relatively small and select in their category. Ultra wealthy (UHNWI) consumers purchase rare luxury products because they seek to distance themselves from the mass through the emotional value of acquiring flawless and rare objects of desire.

“Aspirational” luxury, on the other hand, is another fancy marketing parlance which is generally defined as a brand that most want but only a fraction of them can actually afford it. Most cannot afford a $2000 bottle of vintage wine but may be able to occasionally splurge on a $200 bottle of one of the finest single malt Whiskey.

Identifying luxury sectors

Genuine Luxury is classically defined in three key segments:

1) Luxury Goods: Fashion & Accessories, Watches & Jewelry, Well-being & Beauty products.

2) Lifestyle Purchases: Automotive, Experiential Travel, Home & Interiors, Exclusive Alcoholic beverages (exceptional wines, champagne & spirits)

3) Private/Executive Jets and Yachts: An absolute category in their own right.

Brands which fittingly claim authentic luxury status

Few brands can really claim the trademark of luxury. It is those which combine allure with pedigree and quality attributes. Discounting is not part of their strategy and their entire raison d’être is geared to the UHNW (Ultra High Net Worth). Many of their products actually increase in value over time since they are either discontinued or necessitate a long waiting list/time.

Most notable authentic luxury brands are in the haute merchandise category:

Hermes, Chanel, Louis Vuitton, Bottega Veneta, Rolex and Cartier.

Other players to this core list include: Bentley, Rolls Royce, Gucci, E. Goyard, Charvet, Salvatore Ferragamo, and Bulgari.

Exclusive and bespoke travel companies provide tailor made adventures and excursions. The four key players in this category include: Abercrombie & Kent, Kuoni, Orient-Express and Cunard Line.

Broadening our view of luxury services, certain firms offer services and privileges to a rare percentile. Such services include credit cards with no limits, jet ownership, private plan charters, global concierge services and the like. Think NetJets and Amex.

“Accessible” luxury is a marketing notion, not a merchandise category

The concept of making luxury available to the masses goes against what true luxury is as
there is no such thing as accessible luxury ─ it is either luxury or it is not as “accessible” luxury is a marketing notion and not any product category. Think Michael Kors, Coach, Ralph Lauren, Godiva and Apple among others. Top luxury brands such as Hermes, Louis Vuitton and Chanel have accessible luxury with perfumes and cosmetics, sunglasses, as well as accessories (leather, silk scarfs etc.).

In marketing parlance, being coined as an “accessible” luxury good can be deceiving when the quality of materials is not quite at par as one would normally find in a “genuine” luxury product. For such companies, becoming too commonplace is a risk for such brands as they lose their cache due to a lesser price line, as well as risk their reputation for the sake of increasing their revenues. Then there are some non-luxury brands which use the codes of luxury strategy to grow their sales. Needless to say, many consumers will eventually catch-on that such products are merely a gimmick thus on their way to lose their luster.

Masstige - My other bag is a Birkin

“Premium” and “prestige” categories defined

If luxury brands are related to scarcity, quality and storytelling then premium goods, on the other hand, are expensive variants of commodities in general: i.e. pay more, get more.

These brands are less ostentatious, more rational, accessible, modern, best in class, sleek design, and manufactured with precision. Beats headphones and TAG Heuer watches are a case in point and so is Audi and Lexus in automobiles.

“Luxury” and “prestige” brands respectively both have a similar status. Although some may disagree, in some cases, brands such as Mercedes-Benz automobiles, are considered to be both “luxury” and “prestige.” There are also brands which are either labelled one or the other. It depends how they are identified in the eyes of consumers.

Prestige brands offer a high level of innovation, craftsmanship ─ and with some categories, the finest ingredients or raw materials. Due to their well-established names, status and pedigree, they boast quite a loyal following. As a result, they can command premium prices which their clients do not mind paying for since they are made to feel special. Examples of some prestige brands include Breitling watches, Lancome cosmetics and Aston Martin automobiles.

The distinction between a prestige brand and premium brand is simply one of perception. In automobiles it is Cadillac and Lexus vs their German counterpart of BMW and Audi. In watches, it is perhaps a Rolex versus a Breguet and a Cartier.

On a final note

When it comes to lower priced supposed “luxury” products for the affluent masses, they are essentially “premium” products ─ otherwise known as “masstige.” The brands succeed at creating fancy designs and utilize expensive looking material to make their products appear very expensive which are then sold at a fraction of the price compared to genuine luxury brands in the same product category. Add clever window dressing and marketing and the result is that those products become affordable objects of desire. Unlike authentic luxury brands which are manufactured at their country of origin (mainly Italy, France or the U.K.), they are outsourced to low labour cost factories in Asia or Turkey. Despite this, they are given a premium markup which is intentionally done to create an aura of high value.

As long as there is a big demand for massitige products that its target market can afford and make them part of their social status and lifestyle, the category will be around indefinitely.

As a final point worth mentioning, at this day and age, there are luxury branding experts who claim that there are actually four categories of luxury: Old, New, Eco and Indie as exhibited in the following table (credit: David Sherwin). This translates into additional choices ─ categories to satisfy most desires.

Four Types of Luxury Chart

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

___________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

 

Leave a comment

Filed under brand positioning, Branding, Business, country of origin, Luxury, Marketing, mass affluent, masstige, selling luxury, what is luxury, what is premium

The Genuine Luxury Establishment: Perception, Ambiance & the Total Shopping Experience

Luxury Street - Cartier

by James D. Roumeliotis with a special contribution by Stephane Delille

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Consider this! You are walking on, what is considered, a prestigious street in a downtown area of a major city lined up with a slew of luxury shops. What do you particularly notice about the look of the shops as compared to mainstream stores? Would you say it’s the window displays which are striking? The entrance? The upscale and inviting interior design? The way the merchandise is displayed?

Designing a luxury shop is much more than four walls, racks and lighting. It’s a meticulous creative and holistic process taking into account that luxury stores have to transmit the identity of a luxury brand, so that the image the customer has of this brand is affirmed by each store visit. Needless to say, it’s a design concept coupled with the total customer experience in mind.

Piaget timepieces, Bond Street, London boutique

Piaget timepieces, Bond Street, London

Ambiance, personalized service and the total shopping experience 

In a world where the consumer has become savvier, luxury products more accessible through an increase in democratization of luxury brands and the rapid emergence of prestige brands, the retail environment in luxury branding is all about heightening the consumer’s brand experience and amplifying the brand aura.

A well designed luxury retail boutique should embody an extraordinary design that is timeless while maintaining a striking interior that is unique, inviting, functional, and most certainly portray a luxurious setting.

A custom designed attractive setting – yet alluring with captivating style, invites customers to truly feel the brand experience by adding character. It exudes a “You’ve arrived!” underlying message. This is accomplished by connecting the feeling of warmth and acceptance ‒ via emotions to a product or service, and infusing it with a tangible and intangible essence that remain in the customers’ minds. The vital elements are:

  • Location: The luxury brand store perception all begins with its location. A prestigious address/neighborhood makes an initial luxury statement ‒ whether on a prominent avenue such as Bond Street in London, Rue Saint Honoré in Paris or Rodeo Drive in Beverly Hills and at other renowned high-fashion streets worldwide. A high-end mall and airport outlets are becoming ever more popular due to their convenient spots along with an increasingly sophisticated environment.
  • Facade/Window Display: transparency/opacity of the windows, display highlights for outside windows (product type, arrangement of space, animation, colors and much more.), frequent creative displays and themes all play a vital role in showcasing merchandise with pizazz.
  • Main entryway: This should reflect an imposing appearance by creating the feeling of grand luxury access to the interior of the boutique. Elizabeth Arden’s signature red door is a distinguishable fixture at her stores and spas worldwide.
  • Decor: Attention to details including well-crafted attractive furnishings and materials (pillows or decorative accents) throughout. Choice of color palette, textures, combination of materials and accents all influence the overall store image in addition to being part of the overall design esthetics.
  • Lighting and its effects: The proper choice of illumination adds to the overall design and ambiance.Lighting can bring focus to merchandise displays, hide imperfections, add warmth, and help create a positive shopping experience for the brand’s clients. Halogen spots and LED lighting are the preferred variety for interior designers.
  • Smell and Background Music environment: These reflect the store’s personality. Smell is considered the olfactory of the fifth human sense. The scenting strategy is part of “sensory”/”sensorial” marketing and branding that’s meant to attach certain smells to brands, drive loyalty, and make people feel at home. Whereas, music/sound supports refining brand communication and in designing a better sounding environment. A discreet volume should be considered as an ideal comfort level.
  • Merchandising appeal ‒ display and layout: localization of displays (size, colors, kits, messages) while keeping in line with brand values and guidelines. The spaces where your clients see and touch your products have an effect on the visual aspect along with their shopping experience.
  • Lounge area: possibility or not to have private salons for VIPs, to utilize for private shows/demonstrations, presentations and other special gathering purposes.
  • Service amenities: Washrooms should possess panache and be spotless. Their design can achieve the look and feel of luxury with both functionality and comfort. A kitchenette can be an additional amenity for preparing and catering light food/hors d’oeuvres. A workshop for bespoke functions such as product setting on the spot, size customization, engraving etc). Perhaps a kid’s space with animation to keep a child/children busy while their mum/dad/parents are shopping. The kids can eventually be converted to the luxury label themselves.
  • Staff Caliber and Overall Customer Care: Luxury goes beyond good looks. The service offered is a major event in itself. This comprises of dress code, attitude, and politeness regardless of what the client looks/wears. As well as responsiveness, a consultative sales approach and accessibility. This requires proper hiring criteria, on-boarding and repeated training in product knowledge, presentation skills, and anticipating customer expectations to go above and beyond. Luxury firms need to implement KPIs (Key Performance Indicators) to gauge their service effectiveness which do not only measure the performance of organizational processes, but also warrant a consistent quality level of in-store service.

Bijan Boutique

Bijan Boutique, Rodeo Drive

Artisans of timeless and artistic retail interior design

It takes bold strokes to prevail from the competition by showcasing a distinctive look along with creating an emotional bond with the clientele. As such, luxury brands are making their mark on the map with a radical and explosive architectural vision. It’s where design innovation coupled with creativity are paramount when delivering artistic solutions driven by each individual brand’s image.

When it comes to commissioning distinctiveness with luxury ambiance interiors in the retail, restaurant and hotel sectors respectively, Yabu & Pushelberg have become the go-to interior designers akin to what Frank Gehry is to deconstructivist architecture. In over three decades, the duo partners, based in Toronto along with a New York City design studio, have fostered a client list that ranges from Louis Vuitton and Tiffany & Co to Four Seasons Hotels and renowned French chef and restaurateur Daniel Boulud. In their work, Yabu and Pushelberg manage to articulate luxury through contrasts, austere designs with fine materials, as well as through comfort and the casual, strong points of view, including a crafty mix of art and artisanship. For them, luxury is a state of mind, not a material.

Yabu-pushelberg-lane-crawford-sitting-area

A Yabu & Pushelberg sample interior

The final take

The ambiance created in a luxury boutique is one of the finest marketing tools. The aesthetic appeal to human senses, the feel of the brand creates the image. Along with great service, it is one of the most important reasons customers will choose to shop repeatedly. It’s where the brand lives by orchestrating immaculate detailing that engages all senses of the discerning target audience. Surround the brand and its products/services with fashion, beauty, design and attractive models – without any characteristics of tackiness.

It all begins with the choice of store location, the immediate initial impression (window display, entrance, store layout, merchandising, furnishings, lighting and much more), the sales staff presentation and the impact of each touch-point in creating a unique indulging experience. The small touches that regularly go unnoticed help to create a distinct sense of place in luxury commercial spaces.

Emporio Luxury Mall, New Delhi, India

Emporio Luxury Mall, New Delhi, India

All that said, today’s savvy luxury consumers are increasingly seeking much more than merely a cosmetically elegant looking bricks and mortar shops. They have become more discerning and seeking a more knowledgeable and professional assistance to help them in managing their lifestyle and stature. It all boils down to the total customer experience which embraces knowledgeable and helpful staff, alluring presentations, storytelling, exclusive invites and privileged previews amongst other lifestyle themed activities.

FOR THE “15 Retail Essentials – Your Opening Toolbox” PRESENTATION, KINDLY COMMUNICATE WITH JAMES AT: jdr(AT)affluencemarketing(DOT) ca

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

 ___________________________________________________

Request your TWO FREE chapters of this popular book with no obligation.

EntrepreneurialEssentials - FrontCover Final

Allow us to add sex appeal to your brand identity and products.

Inquire about our 30 minute free consultation

 

Google

 

Leave a comment

Filed under beauty and function, Branding, brands with sex appeal, Business, Luxury, luxury storytelling, management, Marketing, retail luxury interior design, selling luxury, sensuous brands, sensuous products

Brand Awareness: the influence in consumers’ purchasing decisions

by James D. Roumeliotis and Violetta Ihailanen (special guest columnist)

Brand Awareness

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Starbucks is an innovator when it comes to creating brand exposure, content quality and engaging with its audience on social media. It has an impressive following on various social networks and able to cultivate current relationships by encouraging sharing through special promotions, and customized experiences through programs such as My Starbuck Rewards.

Another American company, Farmers Insurance, decided to exploit the benefits of social media to build additional brand awareness, by creating a new campaign that would put their virtual airship on the screens of everyone playing the popular social game Farmville on Facebook. earlier last year, it was reported that Farmville had over 80 million users – and growing.

The raison d’etre of any for profit business is to increase sales and income. For this to occur, a company’s goal and objective is to attract new customers and encourage repeat purchases. Brand awareness signifies how aware existing, as well as potential customers are of your business and its products or services. Ultimately, to achieve successful brand awareness requires that your brand is very familiar and is easily recognizable. Brand awareness is crucial to differentiating your product/service from other similar products/services and competitors.

What does it take to build effective brand awareness?

Brand awareness affects perceptions and attitudes, which drive brand choice and even brand loyalty, which means that without brand awareness there is no brand equity. The latter signifies the value premium that a company achieves from a product/service with an identifiable name as compared to its generic counterpart. Moreover, solid brand equity is an asset that can be sold or leased.

The first dimension distinguishing brand equity is brand awareness. It is influential in consumers’ purchasing decisions and loyalty. This affects customers’ perceptions and attitudes (liking or disliking) and how they build brand preferences.

David Aaker, an authority on marketing & branding, in his various publications defines brand awareness as “a consumer’s ability to recognize or recall a brand in a certain product category”; in other words, the brand is called to mind when a consumer thinks about the category. Greater awareness of a brand increases the likelihood that a consumer will consider it.

Brand awareness has three levels, which is depicted by experts in a pyramid. It ranges from the pyramid’s base as uncertain feelings that begin the moment the brand comes to the consumer’s mind through a name, followed by a belief that the brand is the only one in a particular product category.

Brand Recognition:

This is the lowest level of brand awareness. It refers to consumers’ ability to discriminate between a previously encountered brand and new brands based on prior exposure to the brand. The choice of the brand may not have been supported by the information a customer retrieves from memory.

Thus, brand recognition creates positive feelings toward a brand, and more exposure to a brand name ─ while supported by the company’s image and products, strengthens consumer memory. In a luxury window display, executed by professional merchandisers, the name of the brand will be supported by the ultimate look of the collection.

Brand Recall:

The next level of brand awareness refers to consumers’ ability to recall the name of the brand when provided only with the product category as a cue. It usually takes place in a store, when a consumer compares a brand he/she can recall from memory in the presence of other brands. For example, a product-category cue may be signaled in a department store that has collections from several luxury brands. The significance of brand recognition depends on where a purchasing decision is made: in the store or outside the store. Brand recognition is generally more effective when the product decision is made in a store.

The Purpose of Brand Names & Symbols

Brand names and symbols are the facets of brand awareness that provide basic information for classifying brands as members of product categories. These affect inferences made about brand attributes and benefits.

Jean-Noel Kapferer and Vincent Bastien, authors of the venerable book “The Luxury Strategy”, which includes the notion of ‘Break the Rules of Marketing to Build Luxury Brands”, note that in the luxury domain, because of the complexity of the luxury concept, a “label” reveals the identity, class, knowledge and culture of the brand. It creates, for example, immediate recognition of the unique touch of Chanel, with the particular look of a garment anywhere in the world. In luxury, a name, logo, symbol or color, shapes distinct consumer perceptions ─ forming emotional links to the brand, as well as secondary links to product quality.

Brand name awareness is the basic step in the communication process between brand and consumer that supports the creation of brand identity. To be effective, the name should be easy to remember and have an emotional component. In luxury, a brand name usually belongs to its original creator and founder, as in Yves Saint Laurent, Christian Dior, Louis Vuitton and Coco Chanel.

A prominent brand name that’s different and distinctive enhances recognition. Distinctiveness is achieved through pictorial depiction of the brand name, which facilitates recognition of the symbol. Luxury brands that bear the names of their founders, such as Christian Dior, are already distinctive, whereas less-mature luxury brands could benefit from a pictorial approach, thus enhancing the brand awareness.

Brand symbol is a representation of the brand name and its product category. Companies that want to communicate their product or service effectively should depict their brand name as a symbol. In luxury brands, a symbol usually combines a brand name and a logo.

In this instance, the latter begins to communicate with a customer before a purchase, helping to maintain consistent memories of the brand. A logo provides a great deal of information through a small number of signs that translate the values and vision of the brand.

Other signs of brand recognition

Packaging and colour are also important associative characteristics in identifying the essence of a brand. Such unique appeal helps potential customers easily remember and quickly identify a brand from a distance. A brand’s name and packaging strongly influence quality perceptions and shape a brand’s reputation through purchasing behaviour that leads to brand loyalty Tiffany’s aqua blue colour reflects a relaxing and refreshing state because it resembles the colour of water.

A coordinated color that is used in signs, packaging, web pages and all advertising shows the character of a particular business, which influences customer satisfaction and loyalty. FMRI research (Columbia University’s Medical Center Program for Imaging and Cognitive Sciences) has shown a significant impact of differentiated packages on consumer choice, which can affect a customer’s emotions and increase sales. For example, perfumes presented in distinctively designed bottles linked to the brand name help create a distinctive brand identity.

Brand Awareness Via Social Media

Social media had become an important venue for companies of all sizes in building trust amongst their so-called “fans” or “followers’ who in essence are their consumers. Social media offers an array of functions, which can benefit a company’s reach and objectives. The Harvard Business review recently featured an article on how soft drink brands like Coke and Pepsi use social media to build trust with their consumers. Facebook and Twitter, amongst others, are effective tools for these brands to reinforce and expand their identities ─ as well as enhance customer relationships.

All Things Considered: Strategy & Implementation

A brand can offer the best products in its category, comes backed by the best service and deliver the best overall value; however, it’s meaningless if no one has heard of the brand.

To start with, consumers must be aware that there are different brands in the product/service categories in which the brands operate. Subsequently, they must be aware of the brands ─ ideally, the brands should be the first ones that come to their minds within specific product categories and associated with a USP (unique selling proposition). Consumers should also be able to identify which benefits are associated with the brand. Finally, they should have an idea where the brands are sold.

For companies to succeed in creating effective brand awareness, they should develop and execute a strategy that they can continue to update throughout the development of their brand. Successful brand awareness normally takes time to develop with regards to an effective awareness effort. Furthermore, it takes time for an effective communication to reach potential customers.

A few customers can respond early, while most will take time to hear about the products/services, make a decision to try them, as well as return for more at a later time. Establishing customer loyalty takes even more time as it requires extended experience with any company and its products/services. As a result of the aforementioned actions, positive brand awareness will increase. Brand awareness is essentially the impression people have of a brand.

In the soft drink industry, there is not much, which separates a private/white label soda from a brand name counterpart in terms of taste. However, consumers are very aware of the brands Coca Cola and Pepsi, in terms of their images and names. This higher rate of brand awareness equates to higher sales and further serves as a superior competitive advantage that prevents competitors from gaining additional market share.

__________________________

Footnotes
Article based on extensive research that has been conducted for an MBA dissertation based on the topic ‘The Influence of Brand Identity on Brand Equity in Luxury Segment’ by Violetta Ihailanen who has over 15 years of practical retail luxury experience with renowned fashion brands including Burberry amongst others along with an entrepreneurial stint.

Sources

Aaker (1991; 1996)
Bettman (1979)
Farquhar (et al, 1990)
Hoyer and Brown (1990)
Kapferer and Bastien (2009)
Keller (1993)
MacInnis (1999; 2008)
Rossiter and Percy (1987)
Zaichkowsky (2010)
Wilcox and Laverie (2008)

Your comments are welcome

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Request your TWO FREE chapters of this popular book with no obligation.

EntrepreneurialEssentials - FrontCover Final

Learn how to start or expand a business with free courses at
How to start a business

3 Comments

Filed under Branding, Business, Luxury, Marketing

Brand Experience, Not Product Branding: Cutting Through the Clutter

by James D. Roumeliotis

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Products in the same class-categories struggle to differentiate themselves. Consumers often take brands for granted. Purchases are not so much conscious brand selection as choice by default. The two following examples highlight this. Going out for coffee in North America usually dictates a visit to Starbucks. When sparkling water is ordered at a restaurant, Perrier appears almost by magic.

The age of the internet has made copying competitors’ products, marketing strategies, and overall business practices to name a few. It’s not enough to merely compete at a product and pricing level which doesn’t take long to be outdone. Anyone can lower prices. What begs the question is where you draw the line before your profit margins are eroded to the point of no return and many ramifications for a business. Savvy marketers look beyond pricing and product features. Instead, they search for sustained ways to market their brand rather than their product.

Brand Not Logo 

“Branding” redefined for the new era

 To begin with, a “Brand” is a promise of something that will be delivered by a business. This promise comes in a form of quality, an experience and a certain expectation in the mind of the consumer. It includes the Unique Selling Proposition (USP). Marketing, on the other hand, is about spreading compelling messages to your target audience while branding is a combination of words and action. Marketing is extroverted and communicates quickly, while branding is introverted and a slow process if it’s to produce any real impact. Effective marketing activities are vital in developing a brand. When combined successfully, branding and marketing create and promote value, trust, loyalty and confidence in a company’s image, products and services.

When consumers are delighted by a particular brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation.

A branding strategy should consist of:

  • Brand Positioning – Position is a descriptive sentence, slogan or image the brand is known for in the mind of the consumer and which the company delivers on it consistently. This is what sets the product or service apart from competitors.
  • Brand Identity – This is every visual expression of the brand, whether in print, television, digital or the iconic (Pullman) brown color identifying the trucks and delivery staff of the UPS courier company.
  • Brand Experience – Generally speaking, brands that are designed for a lifestyle should have a much higher emotional value to consumers than ones based on features like cost or benefits alone.
  • Storytelling – Brands build relationships by the stories they tell. Stories add personality to products which customers can better relate to and feel affinity with. Luxury brands boast their pedigree.
  • Engaging with your target audience – this is conducted through social media and asking for feedback. Simply put, engaged customers help you build your business.

Senses in Branding Strategy

The holistic selling proposition

Consumers today are more brand conscience, yet there are companies which continue to spend money advertising and selling product rather than brand. They place emphasis on price and quality as differentiators despite these two being overused by many copycats. Successful brands take a holistic approach to selling by exploiting the 5 senses which now constitute the brand. This is accomplished by what I regard as “ambiance marketing” and “sensory/sensorial branding”, through a captivating designed setting, yet alluring. This adds character and invites clients to truly feel the brand experience.

To put the aforementioned into perspective, consider the following:

  • Visual – lighting, décor, colors, layout…you can get a real sense of movement using these elements.
  • Auditory – music, effects, volume, vibrations…you set the tone and the energy of the room with your sonic selections.
  • Tactile textures, comfort, climate…this is all about how your guests interact with the environment.  This is a big thing to consider when you are designing the layout.
  • Olfactory fragrance, emotion, ambiance…this sense is under-rated and powerful. Of all our senses, the sense of smell is most closely linked to emotion and memory. You can use something as simple as burning incense or candles to something far more complex like computer controlled scent machines to enhance your environment. This could just be the extra touch needed to set the mood.
  • Gustative – with food establishments, the challenge is in finding the perfect balance between sour, salty, sweet, and bitter during menu designs and beverage selections.  The presentation also makes an impact on the overall image.

Customer Experience equals customer abbreviation

Developing the customer relationship through customer experiences

The Total Customer Experience is the sum total of the interactions that a customer has with a company’s products, people, and processes. It goes from the moment when customers see an ad to the moment when they accept delivery of a product and beyond.

According to Bain & Company, a leading management consultancy firm, out of 362 leading companies surveyed, 80% believe they deliver a superior customer experience, but only 8% of their customers agree.

The experiences customers go through with your business determine the ultimate perception of your brand and image. Customer experiences also spread the word (offline/online) to others (friends, relatives etc.) about your brand/image. That said, each customer contact (“touch points”) should be handled with the utmost care to ensure that the total brand experience a person has is constant. This requires proper training and occasionally evaluating employee performance. Moreover, improvements may be necessary with systems, technology, methods, services, products and even physical premises. Complacency should be replaced with continuous improvement.

Creating a lifestyle brand through emotional attachment

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. The most ideal example is when thousands of people line-up, regardless of weather conditions, to get their hands on the latest iPhone or iPad. This happens because Apple has built an emotional attachment to their products by creating a lifestyle choice rather than a product purchase.

It’s about how it makes you feel. Same goes for baby boomers, whether accountants or attorneys or business executives who purchase a Harley Davidson motorcycle and ride them for about four or five hours every Sunday afternoon. The bike makes them feel like a rebel – sort of an escape.

A brand that is designed for a lifestyle should have a much higher emotional value to consumers than one based on features like cost or benefits alone. The goal of a lifestyle brand is to become a way that people can utilize it to relate to one another. Those brands are an attempt to sell an identity, or an image, rather than a product and what it actually does.

Lifestyle brands have gained an increased share of the luxury market such as BMW, Armani, W Hotels, Louis Vuitton and Rolex ‒ just to name a few. These have given way to consumers to buy products that they associate with a “luxurious life.” They are essentially a status symbol. Abercrombie & Fitch has created a lifestyle based on a preppy, young elite lifestyle. Their retail outlets reflect this way of life through their luxurious store ambiance, attractive associates and images portraying young people living the Abercrombie & Fitch way.

 Apple Standsout amongst the others

B2B branding differentiation

Consumers are attracted to brands’ nonsensical benefits such as status, affinity, self-comfort and prestige, whereas, Business-to-Business (B2B) customers make their purchase decisions based on practical rationale including pricing, product performance and specifications, Moreover, brand loyalty in the B2B sector is higher than in consumer goods markets because companies in the commercial and industrial segments seek satisfying and long term relationships since jumping from supplier to supplier can cause havoc and inconsistencies with product quality control. Consequently, developing brand loyalty among enterprise customers can capture a larger share can increase profit margins while protecting them against lower-priced competitors.

The final take

The key to success is to market your brand, not your product. Contrary to popular belief, a brand is not a logo, label or product but rather a relationship with your customers. Branding positively adds value to your company including brand equity. This is considered intangible brand value.

A company can define itself as a lifestyle brand when its products promote a more than a product with key benefits and attributes. Note however that lifestyle branding is more than just promoting “a way of life.” It is a product or service that provides consumers with an emotional attachment to the lifestyle of the brand.

One way to overcome the ‘price only’ differentiation, which erodes profits and does not generate loyalty, is for a company to consider building a lifelong relationship with each customer. To do so, requires that each customer enjoys a positive and hassle-free transaction with each touch point. The goal is also to reduce or eliminate customer problems altogether, but that begins prior to and during the first contact with the customer. All problems should be documented, reviewed and corrected without much delay. Hiring the right people is vital, so is training them properly, as well as empowering them to deliver a remarkable customer experience.

When promoting brands, consider that earned media trumps paid media and enhances the brand image. With adverts, consumers don’t care what marketers say. According to the 2011 Nielsen Group report, “False” is the term 89% of consumers closely associated with advertising campaigns.

Whether a product or service ‒ is a luxury brand or falls into another category, it is how you stand out from the crowd that distinguishes you. Know your target audience, get inside their heads and understand how they think and feel. What are their fears, emotions and anxieties? Once you’ve understood this quite well, you then manage the brand consistently.

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

_____________________________________

Request your TWO FREE chapters of this popular book with no obligation.

EntrepreneurialEssentials - FrontCover Final

Learn how to start or expand a business with free courses at
How to start a business

Google

Leave a comment

Filed under Branding, branding not products, Business, catering to picly clients, customer service, discerning clients, discriminating clients, industrial sales, luxury storytelling, Marketing

Perceived Quality: Why Brands Are Intangible

by James D. Roumeliotis and Violetta Ihalainen

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

A study of 33 publicly traded firms over a 4-year period, as measured by the EquiTrend method, illustrated that perceived quality had an impact on stock yields ─ a key business performance measure.

The study looked at American Express, AT&T, Avon, Citicorp, Coke, Kodak, Ford, Goodyear, IBM, Kellogg’s, and 23 other firms for which the corporate brand drove a substantial amount of sales and profits. Not surprisingly, the influence of perceived quality was nearly as great as that of Return On Investment (ROI).

“Perceived Quality” is considered the customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose and compared to its alternatives/competition.

“Quality” Is Subjective

According to academics Scott Maynes and Valarie Zeithaml, as there is no general agreement on standards for the skewed term “quality”, a consumer’s judgment about a product’s excellence and superiority is an intangible aspect of a brand. As a result, objective quality is moot, and all quality evaluations are considered to be subjective.

This argument supports the premise that quality is determined by customers’ perceptions, based on individual values. Consequently, perceived quality is defined as a measure of belief.

Branding Activities Impact Consumer Perceptions

Branding activities are all a brand does that impacts consumer perceptions of the brand including product improvements, customer service, user manuals/quick-start guides, and discounts amongst others.

A notable example is with the branding activities Hyundai performed in the automobile industry that raised the product quality perception with both its dealers and consumers. The South Korean automobile manufacturer offered an extended warranty on all its vehicle models to encourage confidence. It worked superbly as demonstrated by their sales which peaked over the last few years.

Great advertising, great packaging and price are also key components. With consumer electronics and software, usability is the main component.

What Influences Perceived Quality in a Product and a Service Provider?

According to David Aaker, a brand strategist and author on the subject matter, perceived quality generates value. As for measurements in the product context, he identifies the following elements:

1. Performance: How well does a washing machine clean clothes?

2. Features: Does toothpaste have a convenient dispenser?

3. Conformance with specifications: What is the incidence of defects?

4. Reliability: Will the lawn mower work properly each time it is used?

5. Durability: How long will the lawn mower last?

6. Serviceability: Is the service system efficient, competent, and convenient?

7. Fit and finish: Does the product look and feel like a quality product?

Within the service context, he considers:

1. Tangibles:
Do the physical facilities, equipment, and appearance of personnel imply quality?

2. Reliability:
Will the accounting work be performed dependably and accurately?

3. Competence:
Does the repair shop staff have the knowledge and skill to get the job done right? Do they convey trust and confidence?

4. Responsiveness: Is the sales staff willing to help customers and provide prompt service?

5. Empathy: Does the bank provide caring, individualized attention to its customers?

Perceived Quality in the Luxury Domain

Although there are no extensive studies on perceived quality in the luxury market, marketing and branding experts, with emphasis in the luxury domain, contend that in the business of luxury, customers perceive quality in a product when they experience high-quality materials and service, when a product performs its function, as well as when it has desirable features, reliability, durability and design.

Luxury consumers also perceive quality based on service received prior to purchase, at the point of purchase and following their purchase. Superior service during the purchasing experience positively affects attitudes and future behavior towards the brand. Customers with little experience of luxury products are especially influenced by service factors.

A shopping atmosphere which exploits the five senses with the presence of sophisticated music, luxurious fixtures and exceptional service creates a mystique that is key to the luxury experience. Such an atmosphere can help persuade shoppers to make purchases that do not necessarily seem sensible in economic terms.

Similarly, exquisite packaging, such as perfume in a beautiful bottle, helps satisfy the ‘need for beauty’ and creates a link between the consumer and the aesthetic values of a luxury brand.

The same experts above, argue that premium prices are associated with prestige ─ the major indication of superior quality.

Making Perceived Quality Equate Actual Quality

Marketing and brand managers shouldn’t overlook the perceived quality concept. They must make consumer perceptions of quality match actual quality by following three recommendations along these lines:

1) Communicate the information about product quality to their customers continuously by utilizing integrated marketing communications tools such as public relations, advertising, sales promotion, personal selling etc.

2) Avoid boasting about product/service quality excessively despite the presence of high-level quality, otherwise, it can make customers feel as if the products and/or services can’t satisfy them as they greatly anticipated previously.

3) Pay attention to the factors affecting the quality of products/services such as pricing, advertising, warranty issues, and brand image etc. These can influence perceived quality directly. For example, using a low pricing strategy excessively can make the perceived product quality decrease because most consumers often equate cheap products with a low-end consumer sector. Consequently, brand image will lose its luster.

Conclusion

Financial performance is deemed to be linked to a brand’s perceived quality – a distinct relationship between them.

Perceived quality is an intangible and overall feeling about a brand and can’t essentially be objectively determined, partly because it is a perception and also because judgments about what is important to customers differ sharply in their personalities, needs, and preferences. However, perceived quality is based on essential factors which include characteristics of the products to which the brand is attached to such as performance and reliability.

In the luxury sector, customers expect luxury brands to be expensive; to satisfy them, luxury products should be in a higher price range. The scarcity of a product also affects the perception of quality during the purchasing experience.

____________________________

References

Maynes (1976)
Zeithaml (1988)
Chevalier and Mazzalovo (2008)
Dubois and Laurent (1999)

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

2 Comments

Filed under Branding, Luxury, Marketing

The Anatomy of Brand Loyalty

by James D. Roumeliotis

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

It’s no secret that there is a strong relationship between customer experience and brand loyalty. A recent Forrester Research report revealed that customer experience leaders have a 14 percentage point advantage in encouraging their customers’ “willingness to buy more, reluctance to switch, and likelihood to recommend.”

Function, features and benefits are an integral part of a product. However, they don’t matter as much as the perception of use value inherent in the brand’s promise.

Today, even online retailers have undertaken to create customer-centric strategies that drive brand loyalty. With a plethora of competition and better educated consumers, this has become more critical than ever before. However, how does one create and execute engaging customer experiences online or offline that will maximize brand loyalty?

Negligent Brands

Many brands are myopic to the point that they unintentionally and unknowingly allow their dissatisfied customers to go away without a thought. Front-line staff is either not trained properly and/or lacks the proper attitude to handle clientele appropriately.

During the industrial era, consumers would simply purchase what was produced, shopping where that product was available and paying the price the retailer demanded. In essence, the manufacturer and the store were in position of strength.

As products and consumers have changed over the years, the concept of ‘brand loyalty’ and ‘consumer insight’ came about. As we progressed into the new millennium, the transparency and unrestricted information available on the internet has changed all of that. Today consumers are not only better informed but they are also in control. They can make or break a brand through their actions.
So what does this say about listening?

Consumers will no longer refrain from informing companies on what may have gone wrong ─ whether it’s a particular brand or a competitor’s. With the numerous platforms for consumers to make their voices heard online, brands have to be very reactive and not allow anything to chance. In an age when the consumer’s outcries and influences spread quickly, the results can signify lost sales and a deterioration of brand loyalty.

By listening attentively – especially through the various online social venues, should keep a brand from becoming the next Netflix, Tropicana or Gap ─ each one with their costly blunders.

As for low prices, though they may seem attractive to shoppers, prices can only go so low. Retailers, whether in bricks & mortar or not, need to look beyond the quick sale and start to focus on building brand loyalty. Commodities find it hard to maintain loyal customers.

What contributes to Brand loyalty?

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. The most ideal example is when thousands of people line-up, regardless of weather conditions, to get their hands on the latest iPhone or iPad. This happens because Apple has built an emotional attachment to their products by creating a lifestyle choice rather than a product purchase.

It’s about how it makes you feel. Same goes for baby boomers, whether accountants or attorneys or business executives who purchase a Harley Davidson motorcycle and ride them for about four or five hours every Sunday afternoon. The bike makes them feel like a rebel – sort of an escape.

A study (2004) conducted by brand expert J. N. Kapferer reported that brand loyalty contributes to successful marketing programs, sales initiatives and product development.

The key aspect of brand loyalty is the consumer decision — which can be made both consciously and unconsciously to repurchase a brand continually. A consumer makes this decision that the brand is perceived the one that offers the right product features, identity or level of quality at the right price, thus establishing a positive image of the brand. Since brand loyalty leads to future purchases, it can be considered a valuable strategic asset for companies.

Brand loyalty requires trust as it’s a key factor in the development of brand loyalty. An additional and often overlooked principle in brand management is this: When a brand is successful, it’s because customers value an emotional experience more than a functional benefit. When the brand delivers on client expectations – and beyond, trust is earned, strong connections are made and ultimately, brand value grows.

As 2011 began, the top three U.S. coffee brands, when it comes to their own customer’s report of their degree of brand loyalty and engagement, are:

1. Dunkin Donuts;
2. Starbucks;
3. McDonalds (McCafe)

In Mr. Schultz’s new book, “Pour Your Heart into It,” he describes how the brand was built “one cup at a time.” This could not have been further than the truth as every brand thrives through a constant repeat of individual positive transactions. Unfortunately, many brands take consumers for granted once a business or new retail location is up-and-running.

Branding in the Luxury Sector – the Differentiators

Luxury brands rely on committed customers, who often provide “walking advertisements”/brand ambassadors ─ also known as indirect marketing. Evidence from academics suggests that this phenomenon has a strong presence in the luxury sector and may have a double positive effect on enhancing a brand’s overall image and status.

Consumers who trust a brand and its name are more likely to trust the quality of new and existing products. This leads to faithfulness, repeat business and positive word-of-mouth.

With luxury retailers, emphasis should be placed on providing a service or an experience that causes the luxury shopper to shift his/her spending from one brand to another. Giving your customer prestige or special recognition for buying your product or service should be a standard offering.

Simply thanking him/her who just spent $1 million at your luxury boutique isn’t adequate. A generous and memorable offering should be made rather than something that can be duplicated and repackaged by a competitor – whether online or offline.

Rewarding points, for example, will no longer make a large impact in demonstrating appreciation as it has become quite ubiquitous. It may be utilized toward buying an item he/she would have gotten anyway. But an “invitation-only” evening, for example, with a top designer can have much more of a positive impact.

Brand Loyalty: B2B Sector v, B2C

Brand loyalty in the B2B sector is higher than in consumer goods markets because companies in the commercial and industrial segments seek long term relationships as any experiment with a different brand will have impacts on the entire business. Therefore, it’s wrong to assume that marketing solely applies to consumer goods brands.

Among Interbrand’s 10 most valuable global brands, Microsoft, Intel, IBM and GE all generate far more B2B revenues than sales to end consumers. Consider, for example, that GE and Microsoft are hybrid brands with some direct-to-consumer sales that have helped to build the reputations of what are primarily B2B firms.

Although enterprises are selling to businesses, they want to be in touch with end consumers, with their aspirations and their needs. That is a source of competitive advantage in driving their innovation agendas can capture a larger share of channel margins and as a result, build loyalty.

The Impact of Social Marketing

Social media is proving a fertile ground for breeding brand loyalty. Recent research by eMarketer has shown that social media sites like Facebook are where consumers go to keep abreast of a brand’s products and promotions.

This is where consumers are converging and where online retailers should engage. Building a community around a brand not only increases exposure and traffic to a website, but also a very effective means of creating brand evangelists who will spread the brand’s message to a wider audience.

Starbucks has made effective use of social networking and micro-blogging such as Twitter and Facebook in interacting with their customers and measuring their interests and opinions on new branding activities. As of the beginning of 2011, the company had 1,237,169 followers on Twitter and more than 19.4 Million on Facebook.

Conclusion

When consumers are delighted by a particular brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation.

Consumers will often purchase a brand for the first time due to its reputation. The brand, therefore, adds value and certainty to an otherwise unknown product. The stronger a brand’s reputation, the higher the value of the brand and the greater revenue it will drive for the business.

Brand loyalty has a strong presence in the luxury segment because luxury goods consumers identify with the personality of the luxury brand and see no need to search for alternatives.

B2B marketers are realizing that developing brand awareness among their customers’ customers can capture a larger share of channel margins and build loyalty that can protect them against lower-priced competitors.

Using social media to build brand loyalty to a brand’s long-term success as it creates a digital holistic platform where loyal customers converge and whose voices are heard and spread beyond.

Those merchants winning the race are delivering the kinds of recognition that make these shoppers feel truly remarkable, even in their privileged surroundings.
_______________________________________

Footnotes:

Article based on extensive research that has been conducted for an MBA dissertation based on the topic ‘The Influence of Brand Identity on Brand Equity in Luxury Segment’ by Violetta Ihailanen who has over 15 years of practical retail luxury experience with renowned fashion brands including Burberry amongst others along with an entrepreneurial stint.

Sources:
Chaudhuri (1995)
Jacoby and Chestnut (1978)
Kapferer (2004)
Phau and Cheong (2009)

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

1 Comment

Filed under Branding, Business, Luxury, Marketing

Defining the Luxury Brand

by James D. Roumeliotis

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Open any quality fashion or lifestyle magazine, and you will see how brands conceptualize and package luxury. The hype is deafening, and in reality can be quite confusing. Everyone wants “luxury” brands, and from a marketing point of view defy sales trends and seem recession proof.

As consumers, we want to be made to feel special. Definitions of “luxury” can vary enormously and depend on who you ask and in what context. The term “Luxury” has never been something easy to define. It is in my view, a mysterious and elusive concept. Studies highlight that no one is immune and when properly executed makes products and services highly desirable by broad market segments.

To put things into perspective, I will discuss the nature of luxury, and how luxury and premium brands differ in the marketplace although both types of products and services can be targeted to similar audiences.

Why Luxury Brands?

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

YOU CAN READ THE REMAINDER OF THIS SUBJECT MATTER IN THE BOOK “ENTREPRENEURIAL ESSENTIALS: UNCONVENTIONAL BUSINESS WISDOM AND BOLD TACTICS

For a no obligation FREE preview (2 chapters), kindly click here.

6 Comments

Filed under Branding, Business, Luxury, Marketing

Embracing a New Paradigm Shift in the Luxury Product Domain – How to Defy the Recession

by James D. Roumeliotis

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

Today’s consumer spending pattern has shifted. As high-end consumers everywhere have suddenly curtailed their appetite for luxury goods, what was once considered a recession-proof industry has been hit hard. Early this year, in Tokyo, Louis Vuitton canceled plans for what would have been its largest and most glittery store anywhere while Chanel announced the layoff of 200 temporary employees – which the daily newspaper Le Parisien called the latter news a bombshell.

No category in the luxury domain has been spared a significant drop in sales including fine spirits, watches and yachts. Suddenly, the perception on the street is that – luxury goods are considered a sign of immorality, superficial and ostentatious. Restraint and modesty are in.

On the indulgence services side, lifestyle spending rose on health and wellness but dropped on luxury travel.

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine

YOU CAN READ THE REMAINDER OF THIS SUBJECT MATTER IN THE BOOK “ENTREPRENEURIAL ESSENTIALS: UNCONVENTIONAL BUSINESS WISDOM AND BOLD TACTICS

For a no obligation FREE preview (2 chapters), kindly click here.

Leave a comment

Filed under 1