Tuesday, November 26, 2013

8 P’s of Luxury Brand Marketing

"I think every girl deep inside dreams about having the money to be able to buy the Louis Vuitton bag or being at the red carpet herself and wear a beautiful Chanel dress" - Qualitative research, UAE, 2010.

With reference to Bates Pan Gulf (BPG Group), Dubai, UAE

 Luxury brands have always been a fascinating space and luxury brand marketing one of the most complicated ones. So, going by the above consumer quote, this paper attempts to decode what makes Louis Vuitton, Louis Vuitton; Chanel, Chanel – in simple words what makes a luxury brand desirable? What are the ingredients/components that make up a luxury brand?
Is it the physical / functional attributes like the product quality, craftsmanship, design, technology? As one respondent in one of the qualitative research in UAE said "When you buy something with really high-quality, you can genuinely feel the difference. It is in the touch, the feel of the material; it’s in the smoothness, it’s in its minute details..."

Or is it the self-asserting emotional stimulation of letting the others know that I’ve arrived & I have a penchant for finer things in life not common to many? A respondent said "I bought my BMW, just to keep my key on the table during the meeting." Another respondent said "If I stop at a signal I feel I will attract attention of people".

Or is it that luxury brands are just the stepladder to move to the right circle or an appropriate thing to have or wear in that circle? A respondent said "There is a proverb which says if you wear nice shoes you enter nice place".


In my assessment, by-and-large the above are the three major motivators that drive people to desire and acquire luxury brands. That said, it’s important to acknowledge that they are not mutually exclusive.

Exclusivity has always been connected to luxury brands. But from the consumer’s perspective the definition of exclusivity goes through an evolution. At the early stage, having the ability or affluence to own a luxury brand desirable and recognizable by everyone is exclusivity. It is a means by which consumers assert themselves - whether it is to fit-in or simply to make a statement.

As the consumer moves on and with more people joining the ‘ownership’ circle, just owning a recognizable symbol is not enough – the new need to "differentiate" sets in to further confirm their social status and to stand-out among the equals. The source of exclusivity, then, can manifest in form of acquiring limited editions or something with extraordinary product capabilities or rare materials, craftsmanship; it can also be driven by brand’s distinctive personality or simply the knowledge of the brand legacy. One can also observe that people who seek differentiation tend to have larger repertoire of luxury brands, have a choice of not-so-common luxury brands, have a definitive reason for their choice and sometime even prefer to stick to specialist brands. Few of the consumer quotes (below) from various quantitative researches in UAE emphasize this point:
"I prefer to buy my watch from an expert watch-brand, not a fashion label."

"I like things that are exclusive and specialized like the really top suit brands …and ties. You know, where one tie is the price of a good Armani suit, but that you’ll only find in Italy, only at one location and not in any branches anywhere else in the world. That’s like once in a while you want to buy something that’s special and wear it a few times on specific occasions."
While genuine appreciation for product excellent needs no explanation, as mentioned earlier it is not mutually exclusive. In simple words, it does not mean that people who acquire luxury brands for either asserting-self or differentiation have no appreciation and love for beautiful products. But, then there are others who buy luxury without having any baggage of what others think. They buy it because they genuinely love the physical / functional attributes that the product delivers or because they find a profound connection with the brand / the brand story.

The bottom line is that whether it is self assertion, differentiation or genuine appreciation for product excellence, these stories and the aura that surrounds the brands is what makes luxury brands desirable. Packaged as the 8 P’s of luxury brand marketing, this paper attempts to bring together the elements and interplay between them that are employed in the luxury brand marketing mix. Some of the elements have been named to fit the 8P packaging and therefore, my humble request to readers will be to take the broad-point made versus getting stuck in semantics. Yet, another point important to acknowledge is that the degree of significance of these elements may vary from brand-to-brand and market-to-market. The point-of-view of this paper is more that of a practitioner, than a theoretician.


Performance refers to the delivery of superior experience of a luxury brand at two levels – first, at a product level and second, at an experiential level.  At a product level, fundamentally it must satisfy the functional and utilitarian characteristic as well as deliver on its practical physical attributes – a recipe of quality or design excellence ingredients like craftsmanship, precision, materials, high quality, unique design, extraordinary product capabilities, technology & innovation.

A luxury brand must perform at an experiential level as well, i.e. the emotional value of the brand the consumers buy into – beyond what the product is to what it represents. For example: Rolex stands of symbol of heroic achievement & Tiffany is a symbol of love and beauty.

Many luxury brands have a rich pedigree and extraordinary history that turn in to an inseparable part of the brand’s mystique. This mystique is generally built around the exceptional legendary founder character of the past, making up an integral part of the brand story and brand personality.

So, when consumers buy say a Cartier or a Chanel product - it is not only because of the product performance factor, but subconsciously they are also influenced by the brand’s rich lineage, heritage and the years of mastery.

PAUCITY:  Over-revelation-and-distribution of luxury brand can cause dilution of luxury character, hence many brands try to maintain the perception that the goods are scarce. Case in point - Burberry diluted its brand image in the UK in the early 2000s by over-licensing its brand, thus reducing its image as a brand whose products were consumed only by the elite. Gucci, now largely sold in directly-owned stores, following a nearly crippling attempt to widely license their brand in the 1970s and 1980s.

Broadly, there’s natural paucity (the actual scarcity), the technology-led paucity and the tactical- driven paucity.
Natural paucity is triggered by scarce ingredients like platinum, diamonds, etc. and/or those goods that require exceptional human expertise, for example handcrafted quality that constraints the mass production.

PERSONA:  The persona of a luxury brand is largely a result of – first, its distinctive projection plus coherence of its applications across consumer touch-points and second, the brand communication through its advertising.  The visual brand identity captures the brand’s personality, mystique & emotional values in a nutshell. The distinct and consistent orchestration of the identity is central to establishing the visibility, familiarity & common identifiable brand imagery. The visual brand orchestration can manifest by way of its coherent application of its identity, the brand color(s), the other design elements like icons, the uniquely identifiable design, branded environment and even the tone-of-voice.

While the luxury brand’s visual identity is a fairly stable factor, luxury brand advertising is a more dynamic and versatile marketing vehicle. While the pedigree of the brand has its role, keeping-up the contemporary-appeal and the newness-factor is crucial for enduring brand relevance. Therefore, luxury advertising not only needs to generate the desire for the seasonal collection, but at the same time it must also enhance the brand’s cool-quotient, thereby making it continuously desirable and aspirational.

While the luxury brand’s visual identity is a fairly stable factor, luxury brand advertising is a more dynamic and versatile marketing vehicle. While the pedigree of the brand has its role, keeping-up the contemporary-appeal and the newness-factor is crucial for enduring brand relevance. Therefore, luxury advertising not only needs to generate the desire for the seasonal collection, but at the same time it must also enhance the brand’s cool-quotient, thereby making it continuously desirable and aspirational. At an overall level, luxury advertising messages can be observed:
As more emotional and sensual to distance it from mass-premium brands
Create a world and an aura that is truly exceptional to their brand signature
Generate major differentiation in its production and execution


One of the relatively new trends within luxury brand communication is the use of the long-form-commercials or the short-film-videos to generate interest with the online audience. It is clearly a pursuit where luxury brands are looking to bridge the gap between the familiar world of print and the fast-evolving world of online. It has also proved impactful as in a matter of few minutes, the viewer can have a clear understanding of the brand image or the story the brand is trying to convey or simply promotion of the new collection.

Apart from these, with the intent of enhancing the ‘emotional connections’ with discerning mindsets, luxury brands have been exploring the digital space by engaging them in their activation programs. The objective is to generate a genuine affinity with the brand that transcends beyond the product, to an extent where, the consumers feel that they have found a soul mate.

Some of the luxury brands have also utilized the social media. The objective may not necessarily be, as deep as, engaging the audience in their storytelling, but it has been done largely to generate the desire or the lust for the brand or the product. It is also an effective tool to keep-up the contemporary-appeal and the newness-factor by having a continuous dialogue.
Public-figure or celebrities have been traditionally employed as one of the marketing mix in luxury brand advertising and they still continue to garner attention, credibility and impact. Public figures can span from film-stars to music personalities, from sports personalities to royal families and even the designer themselves. But because celebrity endorsements are no longer exclusive to luxury space and extensively used (and abused) across mass categories, it take a different meaning when it comes to luxury brand endorsement.

Not only does the public figure’s associated values and personality have to resonate with that of the luxury brand’s aura, but there’s a distinct difference in the way celebrity role is crafted, executed and strategically utilized. Beyond traditional advertising (largely print in selected media), less in-your-face advertising tools are employed like

accessorization or dressing celebrities for their walk down the red carpet, product placements within movies and television programs, invites to special events. This strategy attempts to remove the appearance of "selling" while still promoting the product by making it seem as a part of the celebrity’s lives, thereby positively affecting consumer’s attitudes, brand value & purchase intention.

Long-form-commercials / short-films have also utilized the celebrity-factor. Chanel for instance recently created 3-minute short film with actress Keira Knightley who replaced Kate Moss in its ads for its Coco Mademoiselle fragrance. Other previous faces of Chanel have included French star Catherine Deneuve and Nicole Kidman, who represented Chanel No. 5.

Similarly, as a part of their ‘core values’ campaign, Louis Vuitton used their website as the online medium to showcase their celebrity endorser’s journey, their story to bring to life how the brand has been promoting the art of travel and inspiring legendary journeys.

PLACEMENT: The retail branded environment in luxury branding is all about heightening the consumer’s brand experience and amplifying the brand aura. Hence, the branded environment, the movement of truth, is where it must "live" the brand by orchestrating immaculate detailing that engages all senses of the discerning audience.
Starting from the choice of store location, the chain of touch-points consumer interacts, the salesperson’s presentation and the impact of each touch-point is critical in creating a unique indulging experience

That said, today’s evolving luxury consumers are increasingly seeking beyond the typical sophisticated, over-the-top, cosmetically elegant presentation or even the exclusive invites, privileged previews. With the increasing democratization of luxury brands and the rapid emergence of masstige brands – the luxury consumers have become more discriminating and demanding. They are seeking a more knowledgeable and professional assistance, a trusted and reliable collaboration helping them to manage their stature and lifestyle. Not only has this led to the new business offerings like Quintessentially (more below), but also luxury brands are increasingly investing in training and empowering their sales staff.

Another important point to note within the placement factor is that it is not limited to the physical environment where the brand retails, but it extends to all the environments or consumer touch-points that the brand associates itself with. This spans from the extremely selective niche media where it advertises to the sports, the events, art, conversations that it places itself with.

If luxury is about environment and aesthetics, then fashion magazines like Vogue, InStyle, Vanity Fair, Harper’s Bazaar, etc. provide that complementing environment and aesthetics for luxury brand to advertise in print media.

PR in luxury branding plays an enormous role in image proliferation of the brand, thereby subtly influencing public opinion. It is also employed to convey other supporting messages and attributes of the brand which cannot be explicitly captured in advertising, but by no means are less important to create brand’s personality, mystique and emotional values – whether it’s via the pedigree factor or via public-figure any of the previous 7 P’s mentioned.

It is also a sophisticated branding machine for maintaining ongoing relevance and dialogue with the luxury consumer, especially so in fashion, technology and seasonal trends driven categories. At a tactical level, PR is utilized to generate buzz & convey the brand news, point of views of inspirers and influencers (celebrity talk or the designer speak), a crucial support for brand activation (like the fashion weeks, sport-events, themed previews, etc.).
Pricing plays a quite a big role in the way consumers perceive luxury brands. Consciously or sub-consciously, consumers tend to generate a mental luxury stature or image with the price-range that the brand operates. Therefore, it is important for luxury brands to price thmeselves right – as setting the price lower than the consumer expectation and willingness to pay can potentially harm the brand value, whereas the reverse can potentially not given enough justification for consumers to go ahead and buy.

The pricing strategy in luxury brands gained spotlight in the recent past not only because of the challenging economic environment, but because of more informed-and-exposed consumers who are more discriminating and demanding, for whom premium pricing without substance doesn’t imply luxury. A recent research by Unity Marketing suggests that affluent shoppers won’t spend ten-times more for something only three times better. The luxury-brands must, therefore, justify their price through the interplay of the 7P’s mentioned on top, thereby keep-up and maintain a higher perceived value.

The sales promotions also tend to be handled differently by luxury marketers. While few have resorted to sales and discounts, most others play it by adding more value to the purchase like gift with purchase, gift-certificates or rebates for the next purchase, multiple item discounts, online or email exclusives, more loyalty points, no shipping and handling charges by online retailers, etc. Luxury brands also use the channel of luxury retailers like Harvey Nichols, Saks 5th Avenue who offer annual sales by offering them slightly lower prices.

In conclusion, the key to luxury brand marketing boils down to the following three points:

 Product excellence by itself in not enough, the luxury brand must perform at an experiential level as well. As luxury consumers evolve, not only these act as points of differentiation, but also as ‘substance’ to justify a premium value and pricing.

 While pedigree factor is important to exuberate the years of mastery or lineage, it is crucial to generate ongoing relevance and dynamism through the persona, PR & public-figure factor.
 Luxury brands must continue to maintain a certain degree of exclusivity and stature with the paucity factor and the placement factor – from the retail experience to the touch-points it associates itself with.

The 8 P’s of luxury brand marketing can provide a holistic framework to luxury marketers. The 8 P’s may not be a "universal methodology", yet it presents a strong analytical "toolbox" to audit and leverage the brand potential. That said, a pragmatic approach must be underlined, as the situation and challenges would differ from brand-to-brand and market-to-market.



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