Luxury Brand Management: A World of Privilege
The luxury notion has become so central in contemporary consumption and communication activities that it has naturally generated a whole literature related to it. However, the publications have the tendency to be largely conceptual, and not adequate for practical management purposes. Having identified that a pragmatic textbook on the management of luxury brands was missing, and confident in our own respective professional experiences in luxury brand management, we decided to write that first textbook on the topic, and the first edition of Luxury Brand Management was published in 2008.
The year 2008 will be remembered as the year of the financial crisis that followed the bankruptcy of Lehman Brothers. Since then, many events have occurred that have slightly modified the operating system of the luxury industry. Many experts predicted it was the end of the luxury business, as it operated then, without understanding that we were faced with a phenomenon that went far beyond economic processes, and deals with human nature. Crises provide an opportunity to modify competitive positioning and luxury brands have come out of this last one with a different position, as we will show in this new edition.
What is the definition of luxury? As we set out to write a book on luxury, we must answer this question. However, there is no single answer to this question but a large number of alternatives.
One could first answer that a luxury brand is a very exclusive brand that is almost the only one in its product category and that can appear as a very selective symbol of scarcity, sophistication, and good taste. It might also have a slightly understated and aristocratic dimension. In that case, there would be only one luxury car: Rolls Royce. A car like Ferrari, with its flashy red color, might be considered the epitome of bad taste. If we singled out a brand for each product category to make it a luxury icon, we would have Krug or Dom Perignon for champagne, Guerlain for fragrance and cosmetics, Herme`s for leather goods, and maybe, in ladies’ ready-to-wear, Armani or Valentino. For men’s suits, Brioni could be the ultimate luxury, and Van Cleef & Arpels could be considered a special and distinctive brand of jewelry.
This restrictive definition of luxury makes sense. It does not represent the situation as we know it today. Even brands like Hugo Boss or Lacoste will be considered luxury in this book, because we believe that there is a need for an operational definition that takes into account the location of the brands in the stores and the perception of them by the consumer. A luxury brand is a brand that is selective and exclusive, and that brings an additional creative and emotional value to the consumer. In this case, the definition is much larger and includes a large part of fashion products.
There is also a debate as to distinguishing between fashion and luxury. According to this point of view, a brand would start, in the textile and accessory field, as a fashion brand and would be given the status of luxury only when it had obtained some stability and timelessness. In getting started, a brand would have to be creative and, every season, come up with new ideas, new concepts, and new products to attract the interest of the consumer. As its status moved from fashion to luxury, it would develop classic models that would sell, year in and year out, and would be able to impose a style, and create permanent bestsellers. This distinction is, of course, interesting intellectually, but it is at the same time misleading and dangerous. It is misleading because, even if it belongs to the luxury field, a fashion brand, for example, Chanel or Dior, must come up with new dresses or new accessories every season, presented in new ways to make sure that customers remain interested. It is also dangerous because it implies that a luxury brand does not have to innovate as often as nonluxury ones, which is obviously not the case.
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