Kedge Business School Luxury Marketing Session 1 PDF

WHO? EDUCATION - Classe préparatoire ENS D2 - ENS Cachan RESEARCH - L3 Université de la Sorbonne - Branding, especially brand - M2 Université Paris-Dauphine...

WHO? EDUCATION - Classe préparatoire ENS D2 - ENS Cachan RESEARCH - L3 Université de la Sorbonne - Branding, especially brand - M2 Université Paris-Dauphine resurrection and brand heritage - Agrégation d’économie-gestion - Childbearing and childbirth - Doctorat IAE de Paris - Immersive games - Qualitative and quantitative methods Several research prizes TEACHING NEOMA BS, Université Catholique de Lille, ENSAE, Ecole hôtelière de Paris, Classes préparatoires… Dr Johanna Volpert Associate professor in Marketing Office n° 1422 [email protected] 03/09/2024 1 COURSE PLANNING Session Theme Case study 1 Strategic marketing in luxury Taittinger 2 Operational marketing in luxury 3 Luxury consumers Ultraviolet 4 Luxury services Claridge’s 5 International luxury Héloïse & Abélard 6 Luxury and CSR LVMH x Olympics 7 Luxury and heritage Hermès 8 Luxury and digital 9 Revision fair - 10 Final exam - 03/09/2024 2 SESSION PLANNING Case study documents available BEFORE the session on LEARN one week before session DURING the 1 h 30 theoretical course 1 h 30 graded case study session Course slides available on LEARN AFTER the session after each session 03/09/2024 3 GRADING Group work (40 %) Final exam (60 %) Oral presentation on a graded case study Matter of course questions (25%) (40%) + + Essay questions (75%) Grading of the slides of a randomly chosen case study (40%) + Revision game conception (20%) Grades will be published at the end of the semester on « Campus Virtuel ». Grades will not be disclosed before the official release date. 03/09/2024 4 What to expect from me Help to reach your academic, voluntary and professional goals Knowledge and examples Availability 03/09/2024 5 Ce que j’attends de vous Timeliness Professional attitude Intellectual curiosity 03/09/2024 6 Luxury Marketing Session 1 – Strategic marketing Luxury Marketing Session 1 – The concept of luxury Defining « luxury » From the latin « luxus » which means « excess, debauchery », and « pomp » According to the Merriam-Webster dictionary → “a condition of abundance or great ease and comfort : sumptuous environment ” Interpersonal aspect →“an indulgence in something that provides pleasure, satisfaction, or ease” / “something adding to pleasure or comfort but not absolutely necessary” Personal aspect 03/09/2024 9 Various conceptions of luxury Pierre Hermé Guy Savoy What is superfluous is very necessary. Luxury is Luxury lies in the differentiation richness of through creativity. craftmanship, in the expression of creative genius and in ancestral know-how. 03/09/2024 Voltaire 10 Origins of luxury 19th century Popularization of luxury Greek Antiquity thanks to liberalism and Athens VS Sparta as the industrial revolution fight for or against luxury Egyptian Antiquity Monarchies and Pomp during and revolutions after life for an elite The luxury way of life at the heart of social conflicts 03/09/2024 11 The success of luxury today Democratization Emancipation of women Today’s social classes are less Opening a new market with stratified and more porous. increasing purchasing power. Inequalities fuel the desire for better living conditions. Ratchet effect Once a consumer has tasted luxury, Increasing purchasing power they cannot go back to regular Growth, economic, social and products even if their purchasing technological advances fuel power decreases. purchasing power of all social classes. Communication Mass media allow the rich to Globalization promote their lifestyle, thus Accelerates the increase of wages and the triggering imitation effects decrease of prices, thus increasing purchasing from lower classes. power. It accelerates the promotion of different 03/09/2024 cultures and expertises. It opens new markets. 12 Facets of luxury Excellent quality Scarcity and uniqueness Ancient heritage and personal history High price Aesthetics and polysensuality Superfluous Source : Dubois et al., 2001 03/09/2024 13 The makings of luxury Emotion, aesthetic, pleasure, hedonism Quality, lasts in time Price is higher than expected for product use Linked with heritage, culture, history, know-how Available in few points of sale Comes with personalized services Marker of social status, gives a sense of entitlement 03/09/2024 Source: Kapferer, 2012 14 Different ways to experience luxury LUXURY = EXPERIENCE 03/09/2024 15 The luxury experience FACTORS EXPERIENCES OBJECTIVES Subjectivity The meaning given to Materialism consumption and experiences Ostentatious experience The luxury experience brings joy to depend on one’s personality, The experience is centered on the consumers because it improves context, etc. expression of one’s social status their perceptions of themselves and belonging to a social group. individually and socially. Social factor Social ties and bonds explain consumption and are part of a goo experience. Distinctive experience Elitism The experience is centered on the The luxury experience reassures expression of one’s identity, consumers on their competences Sensory factor values, uniqueness. to identify quality offers, to enjoy Consumers perceive the world through the 5 senses. Those good things and to appropriate perceptions affect their feelings, goods and services. emotions and behaviors. 03/09/2024 Source: Batat, 2022 16 Luxury Marketing Session 1 – Luxury checklist 1) Forget positioning, focus on identity Positioning means reasoning in terms of the competition. Luxury is superlative and not comparative. Therefore, luxury brands must build strong identities. 03/09/2024 18 2) Does your product have enough defects? Perfection often means standardization. Imperfections are associated with uniqueness, craftsmanship, authenticity. 03/09/2024 19 3) Don’t adapt the product to your client’s wishes You don’t alter Vera Wang to fit you. You alter yourself to fit Vera. Not granting consumer wishes can help preserve the authenticity and identity of the luxury brand. 03/09/2024 20 4) Exclude non-believers Expanding the target can dilute the values and authenticity of the luxury brand. Better focus on core consumers and increase their expense. 03/09/2024 21 5) Luxury must be earned Scarcity and exclusivity are at the heart of luxury. Luxury products have to be at the same time accessible but not so that they lose their exclusivity. Limited series and editions, waitlists, cultural and technological barriers can keep consumers on edge and make them want the product more. 03/09/2024 22 6) Segregate clients VS non clients Luxury makes people feel entitled and privileged. Therefore, the select few who enjoy luxury should have a special treatment from luxury brands: VIP spaces, specific communication, etc. 03/09/2024 23 7) Don’t reach out to customers Luxury brands do not need to get consumers to buy their products. Their aura of mystery and domination is enough for consumers to come to them. Relationship marketing must be exerted with caution to cultivate that aura. Luxury brands sometimes need to lose clients to keep their identity. 03/09/2024 24 Luxury Marketing Session 1 – Luxury and the rest Do not confuse Luxury Trend - Timeless - Passing - Local - Cost control - Rare - Available Luxury Premium - High price - Quality warrants the price - Unique experience - Comparisons with other brands on the market 03/09/2024 26 Do not confuse LUXURY Social upliftment, Priceless out of time Present DREAM Social imitation, Value for money Instant, ephemeral Investment Performance SEDUCTION REALISM TREND PREMIUM 03/09/2024 Frivolous Serious 27 Reminder: usual marketing approach Analysis and Strategic Operational diagnosis marketing marketing External Segmentation Product Internal Targeting Price Positioning Communication Distribution 03/09/2024 28 Strategic marketing for luxury firms Analysis and Strategic Operational diagnosis marketing marketing External Segmentation Product - Usual marketing Internal Targeting Price to the Positioning according Positioning target Communication Distribution - Luxury marketing Positioning according to all population, so that the target can consume conspicuously 03/09/2024 29 Strategic marketing for luxury firms Analysis and Strategic Operational diagnosis marketing marketing External Positioning Product Internal Segmentation Price Targeting Communication Distribution 03/09/2024 30 Luxury brand functions (BLI) According to the Brand Luxury Index, luxury brands fulfill the following functions: Interpersonal Personal Ostentatious Affective Identity Utilitarian Distinctive 03/09/2024 31 BLI The BLI determines the degree to which a brand is a luxury brand. It allows to differentiate premium from luxury brands. Image from Briot & Lassus, 2014 03/09/2024 32 BLI: ostentatious function Interpersonal Personal Ostentatious Affective - Conspicuous Identity Utilitarian - Elitist - Extremely expensive - For the wealthy Distinctive 03/09/2024 33 BLI: identity function Interpersonal Personal Ostentatious Affective - Leading - Very powerful - Rewarding Identity Utilitarian - Successful Distinctive 03/09/2024 34 BLI: distinctive function Interpersonal Personal Ostentatious Affective - Very exclusive Identity - Precious Utilitarian - Rare - Unique Distinctive 03/09/2024 35 BLI: affective function Interpersonal Personal Ostentatious - Exquisite Affective - Glamourous - Stunning Identity Utilitarian Distinctive 03/09/2024 36 BLI: utilitarian function Interpersonal Personal - Crafted Ostentatious - Luxurious Affective - Best quality - Sophisticated Identity - Superior Utilitarian Distinctive 03/09/2024 37 Luxury Marketing Session 1 – Stakes in the luxury industry Production and ressources Preserve excellent Push innovation at each know-hows and quality step of the value chain 03/09/2024 39 Lifecycle Sustainability Scarcity Novelty Usage 03/09/2024 40 Customer relationship Phygital challenge Increase digitalization while keeping extraordinary offline experiences Have a continuum between online and offline experiences 03/09/2024 41 Responsibility Be part of the social and environmental transition 03/09/2024 42 Globalization Anticipate global risks, and forestall geostrategic dependence 03/09/2024 43