Emer Ward

Submitted by:

Karan McCabe

12^th March 2004

Accessible Super premiums, Old Luxury Brand Extensions and Mass Prestige/”Masstige”. Each brand fits into one of these categories. Accessible Super premiums are products which are easily bought at a high price. Old Luxury Brand Extensions are lower prices versions of goods which only the rich can afford. Mass Prestige/”Masstige are products are priced well below super premium or old-luxury brands.

To make business information available, to serve customers, to sell products, to Communicate with the customer, to make pictures available, to answer frequently asked questions, to stay in contact with salespeople, to open international markets and to obtain a competitive advantage.

There are Four Pools of a customers needs and a business needs to put their product or service into one of the following categories; Emotional, Questing, Connecting, Individual Style.

Top luxury brand leaders all tend to have the same characteristics in common which contributes to their success.

Today the world’s most valuable brands are truly global and brand owners are recognising that to have less brands can lead to more sales. Simply a recognition that to focus on one’s main brands should be more rewarding.

But what is a luxury brand? To some it is an object of desire, sometimes inspirational, sometimes almost lustful. It will be financially expensive, perhaps self indulgent and certainly not essential. Sometimes it’s a physical statement as with a luxury car or a superb watch, pen or piece of jewellery. Or as the Richemount year report defines it: “A luxury product is both an object and a catalyst for thought… the aim of a luxury brand is to awaken, desire and pleasure.”

“There's nothing more valuable to a luxury goods company than brand value. Image and feel are everything. Quality, of course, comes into the equation, too. But whether we are buying a set of wine glasses from Waterford Crystal or a diamond ring from Tiffany & Co, it's the thrill of exclusivity that gives us the familiar "buzz" or adrenaline rush.” - Quentin Fotrell

Objectives

The aim of this project is to find out why the consumer buys luxury brands, what types of luxury brands there are out there, and what categories do they fit into. This project will also explore why some established companies would go online with the brand that is offered, this includes compelling reasons to get online and the practices of luxury leaders.
Michael J. Silverstein & Neil Fiske summed it up well when it was said that, “Consumers have always had a love affair with products, but today they have more money, a greater desire to examine their emotional side, a wide variety of choices in goods and services and less guilt about spending. They seek goods that make positive statement about who they are and what they would like to be and that help them manage the stresses of everyday life”

These are products, which are easily bought at a high price. These products are usually at the top of the class, but people in the middle market can still afford to buy them, more often than not because they are comparatively low-ranking. People who earn more than others and who would be in the middle class would pay that little bit more just to have that something extra as in quality, for example, ‘Tesco Finest’ package their products different to their own plain ‘Tesco brands’ they say that their ‘Tesco Finest’ products are better quality but for middle Class it’s the way Tesco sell and advertise these products that makes theses consumers want them, they like the luxury of the product. Consumers will pay more for products in categories that mean more to them or are more important to them and consumers are inclined to trade down in categories that are less important to them, for example, Women will pay that bit extra for example ‘Charles Worthington Shampoo’ as opposed to Tesco or Dunnes Stores Shampoo and when buying lets say Washing-Up liquid, Dunnes Stores or Tesco will do fine, the consumer won’t be fussed about having the best brand of Washing-Up liquid.

Old Luxury Brand Extensions

These are lower prices versions of goods, which only the rich can afford. Examples of old luxury companies extending their brands would be Mercedes, Tiffany & Co., Burberry, all of these companies offer products that are more affordable to the average buyer. The likes of Burberry are known to most people as being unaffordable but they now offer new affordable fragrances to target the middle class market without bringing down the image of their brand.

Mass Prestige/”Masstige”

These products are priced well below superpremium or old-luxury brands. These products/brands position themselves as being the same/similar to other brands but are much more reasonably priced and within the middle classes needs.

All brands fall into one of the above categories and it is important that when one decides to go on-line with a brand, one must remember that the must brand have a target audience and a reason to go on-line. Companies can improve its marketing by using the Web. This would involve a detailed study of the extended product or service, how one can offer the best support to ones customers, and an appreciative of how improvement of a product or service can benefit both the customer and the organisation. An established business would consider going online for the following reasons;

a) To make business information available – Vital company information such as, location of business, contact numbers, email addresses, fax numbers and opening hours.

b) To serve customers – Offers the specification and cost of the product/service. One could perhaps print out an order form and fax it to the company to order, it is all about getting to know your consumer and see how they want to do business.

c) To sell product – most companies don’t just do a direct copy of the offline business. The company tries to offer something more online that will entice the customer to do business online.

d) To communicate with the customer – Before one decides to become a customer, one would want to know about the business (so one can trust), what the business does, and more importantly what the business can to for the customer.

e) To make pictures available – to show how to use the product, use of sound, and to show the dimensions of the product(s) offered.

f) To answer frequently asked questions (FAQs) – Potential customers versus existing customers. If a website has problem solving questions and answers on the website for existing customers, then potential customers might see it as faults of the business.

g) To stay in contact with salespeople – if the business has salespeople then that person can stay in contact with the business as well as matching the product to customers needs.

i) To obtain a competitive advantage - one must always remember to make website user friendly.

Companies/businesses now are realising that in order to get in touch with customers they must get inside the minds of their customers and businesses are now using exciting new personalisation techniques to offer the best possible service. There are Four Pools of a customers needs and a business needs to put their product or service into one of the following categories;

Too much work done and too little time to enjoy one self. When nowadays most married women work and when they come in from a hard days work and have to set into the households duties and one thinks to one’s self, Why have all this money and not use it to pamper ones self. This pool is the real luxury as in Health Spas, Gourmet Groceries, Cosmetics, Massages etc.

They pool involves gaining new experiences and overcoming personal limits. This challenges the consumer to define who they are in their eyes and the eyes of others. The consumer feels that what they drive and where they eat determines the person and the character they are or have.

The consumer needs to find, maintain and deepen relationships with others. Examples of such would be dining out with someone, sharing that experience with someone and trying to impress them you’re your surroundings. Kitchen Appliances would be a good example of this.

Demonstrates one’s success in life, also expresses one’s uniqueness and personal values. This is represented by one’s knowledge, taste and one’s own personal values in life.

BMW are the luxury leaders with their field. They offer that something extra, special and what the consumer wants. So how do the likes of BMW maintain their existence on the Web, without losing their brand value? Well one must remember the following to be in anyways successful as BMW;

Ø Shatter the demand curve - develop different products at different price ranges and see what happens to demand.

Ø Create benefits – Technical, functional and emotional benefits of your site or product.

Ø Render your own product outdated before anyone else does – constantly change and improve your site before someone else steals your ideas and makes them better.

Ø Use brand apostles – Getting existing customers that know and use your product/service and get them to talk about your product/service.

Ø Attack the category like an outsider – constantly criticise one’s own site to help improve it.

In conclusion Brands online are aimed at consumers within different categories and each brand is placed in a certain category based on quality and price.

When putting this project together it was very difficult to find figures for different businesses such as BMW and Tiffany & Co. The information available on the Web and in articles were insufficient to base the whole project around them. Research was carried out on the Web in specific websites such as BMW, Tiffany’s and Lexus also information was also obtained from class notes and Internet Marketing Related books. The problems with this was that one was tied down to such facts and figures and it was hard to get extra examples to explain or develop on these points.

Principles of Internet Marketing by Ward Hanson – Obtained from College Library

Brand Spirit – How cause related marketing builds brands by Hamish Pringle and Marjorie Thompson

Class notes from Internet Marketing Dated – 22 January 2004, 23 Febraruy 2004.

Article covered in Class “Luxury for the masses” by Silverstein and Fiske April 03

http://www.ireland.com/cgi-bin/dialogserver?SAVEDB=all&QUERY00=luxury+brands&STARTDATE0=&ENDDATE0=&DB=all&ORGANISE_CODED=&THRESHOLD=90&Search.x=0&Search.y=0