Luxury Brand Essay

Introduction One can describe as luxury all that exceeds the bare essential. It covers all that one considers superfluous and useless. But in the usual direction, luxury means ostentation and refinement in the manners of living (art of the table, elegant toilet, sumptuous decoration ? ). The luxury discusses and is acquired by great expenditure. The philosophers of the Lights had divergent opinions concerning the luxury. Voltaire considered that that represented an essential support of the economy. Rousseau as for him saw the luxury like a principle of exploitation of the small people and the spring of all perversions, because the luxury is made to be admired, it dazzles. We will see through our study how much industry luxury is a singular world in our economy: with very consequent sales turnovers, actors gathered in great powerful groups. We will also be interested in the luxury brands: with the identity of brands, the targets of those. Finally we will analyze the risks for the luxury brand to fall into the hands of standard population. Isn’t the luxury in the street for the greatest number, recent phenomenon, likely you it not to carry damage to the brands? These problems deserve to be posed because it returns to the identity and the image which the luxury brand wishes to give to itself? PART I The industry of the luxury Until the Middle Ages the writings tell us luxury which it was the reflection of the religious mystery which pushes the man to be exceeded by an offering or a sign. We will see how much the concept of going beyond remains, still today for the man, important when it is a question of having luxury. But the blessed time of the luxury is without any doubt: the Rebirth (XVth and XVIth centuries), period of literary, artistic and scientific flowering. This time represents the tangible explosion of the luxury: sail of the sumptuous architecture inspired of Italy, progress of the ornaments of jewels. Also furniture becomes more luxurious; the art of the table avoids refinement. The luxury articles then remain rare objects, related exclusively on the Aristocracy and the Court. With the Rebirth the luxury has a contrasted position. But thereafter it will become the prerogative of the Middle-class. It will take intellectual connotations, results of the great voyages from the time. It is also of this time that dates the luxury for the books, thanks to the work of the bookbinders. Another strong time for the luxury: the XVIIIth century and the positive role of the Encyclopedia. This one treated in its chapters thoroughly: technical and industrial aspects of clothing and the accessories. The trades related to the industry of the luxury can then be shown with the eyes of all as to mean that the luxury is however reserved for elite. At the XIXth century, the economic influence results in new forms of manufacture and distribution. The industry of the luxury is then made up brotherhoods of craftsmen, all having their distinctive signs. From this time one will retain especially, as Zola in â€Å"With the Happiness of the Ladies tells it†, the opening of department stores symbolizes the democratization of the luxury. XXth century will have to be waited, to see flowering in Paris, a multitude of small workshops of craftsmen, devoted to the trades of the luxury. In 1929, in spite of the economic crisis, the intellectual radiation of our country is preserved and Coconut Chanel, Jeanne Lanvin, Louis Cartier are the kings and the queens that the â€Å"large ones† are torn off to get dressed or buy jewels. But the war of 1939-1945 will carry a new blow to France and the development of the industry of the luxury. France will take again its place of leader of the industry of the luxury only per hour of the Release, thanks to: fashion in particular of Christian Dior and the â€Å"new look†, per hour of the revolution zazou and the existentialism. In the post-war period it will really be necessary to wait, the years 1950 and them assistances of the Marshall plan so that manufactures take again their activities. The textile comes then at the head from exports with nearly 20% to the value to the exported products, thanks to Parisian creations very appreciated on the other side of the Atlantic. The period from May 68 reminds all, concerning the luxury, that it should not make forget the great technological stakes of the XXe century. Industrial development is from now on priority and proof is made by it by Pompidou itself: â€Å"Dear old France! Good kitchen! Madness-Shepherdesses! Merry-Paris! The High-Seam (?. )! It is finished. France started and largely started an industrial revolution†. The Seventies were wiser years, years of centering. Fashion is enough conformist, nothing of shocking and nothing eccentric. These years of oil crisis were the period when the Arab emirs invade the jewelers and the large dressmakers. The striking fact of the Eighties is at the level of the consumer of the luxury. The young people discover the luxury thanks to the accessories. We will see further in our study how much this phenomenon is still of topicality today. End of the year the 80 shops will multiply. The actors of the industry of the luxury are from now on conscious of the risk of competition. It becomes necessary to occupy all the crenels; to conquer new territories for fear the competitor does not occupy them. The rather morose Nineties, years, did not save the luxury, which passed through a crisis however more psychological than economic. That will engage a true thoughtfulness on the bases of the luxury. One directs oneself step by step towards a new luxury: of quality, deeper, more spiritual, and more moral. XXIe century is not as certain experts had predicted it, the era of the obliteration of the luxury. In spite of major events: on September 11, 2001, the war of the gulf which amplified an economic crisis in the sector of the luxury, this one holds good while drawing the conclusions necessary. The sector of the luxury is more sensitive than other sectors to the risks of the economic situation. Once the crises passed, the luxury finds all its heat then. 2. General characteristics of the luxury We will approach the luxury here in the broad sense. This definition will help us in the continuation of our study to better including/understanding the relation which is tied between the consumer and luxury brands. Initially we talk about luxury which is characteristic of a civilization and men who compose it. The luxury, eternal, is a valve essential to the human activity as well as the relaxation, the sport, the thinking and the love. It is a considerable share of dream, a manner of appeasing our phantasms. The luxury is a universe, separately, governs by codes, rules, signs. The luxury is a considerable world market, strongly concentrated in Europe and North America. France is a leader in the sector of the luxury, with about half of the production. The luxury is the second economic sector in France thanks in particular to the fact that it is addressed to broader customers and knew periods of strong growths on a world level. Today, the industry of the luxury is somewhat weakened by the reversal of the economic situation world: the fall of tourism, the stock exchange crisis, which touches mainly occasional customers. But the luxury resists while being pressed on solids structural elements. This sector can rely in particular: on the growing proportion of the classes with high incomes in the population, the conquest of new markets such as China, and the development of travels. Broadly the European goods of luxury have a place of choice: they profit from a certain standardization of the modes, universalization and hardly suffer from the competition of the other continents. The sector is addressed to increasingly many customers, this which present important prospects for growth for the next years. One of the paramount characteristics of the luxury is that it has its lines, its forms, its configuration. It transmits its codes of beauty which can even surprise to shock. But the luxury articles are not aesthetically neutral. The creator and the owner incarnate themselves in the luxury article. The choice of this one is thus never indifferent: it signs our personality and fact of us refined beings. Three components develop the luxury: – The object corresponds to a personalized step, – the object is technically perfect, – The object is aesthetically beautiful. In the luxury, the desire is higher than the need insofar as it nourishes our psychic in the same way that the satisfaction of the needs corresponds to our physiological life. One seeks by the means of the luxury article with: to allure, give or give pleasure. Dependent on the beauty, the luxury calls upon the five directions but also with individual passion (search constant and personalized) and with freedom (to rise with the top of its condition). All the actors of the luxury must keep in mind the rules which govern industry of the luxury and particularly during the introduction of products on the market. The first rule, that we will re-examine in the ultimate part of this work, it is to respect the aspirations of the consumers and to even include/understand them to anticipate them in order to ensure the marks of luxury, certain perenniality. We can observe that the market from now on is characterized by the bursting of the request. The offer is today the territory of large owners groups various large marks delivering a keen war. Initially, let us recall that the luxury is a sector gathering various activities. We will present one of typologies here allowing bettering analyzing these activities: – The cultural market (market of Art) – Means of transport (car, yacht, private aircrafts) – Equipment of the person (high-seam, perfumery, leather working, shoes, cosmetics, clock industry, jewelry) – Leisure (cruising, sports of luxury, hotel trade of luxury) – Equipment of the house (art of the table) – Habitat (residences of luxury, decoration of luxury) – Food (wines and spirits, grocer and restaurant of luxury) All these activities form the industry of the luxury. This industry returns to products of high quality, at a concentrated market, gravitational, much targeted and much segmented. Some brands rhyme with luxury and pleasure. Behind these names are however powerful groups, very skilful, which compete unceasingly as regards management of the marks, creativity, communication and distribution. The tendency has been for a few years with the concentration: operation consisting in integrating into a great group, detached houses. In addition, the large actors of the luxury reinforce their positions with international and are more and more obliged to increase their visibility. The current economic situation forced the industrialists of the luxury to engage of the modifications in their policy. Thus we observed on behalf of the great groups a real will to free of debts ourselves. Recent evolutions allowed: an increase in the financial capacity, a modernization of the production equipments, a development of the sales networks, more creation and of innovation. 3. Actors of the luxury – Manpower: 125. 000 people – Sales turnover: 10 billion Euros In 2002, the world market, it were evaluated to 90 billion Euros (HT wholesale price). This market is today in a phase of deceleration. The most flourishing period, because of economic situation quasi-euphoria, is located between the years 1998 and 2000, where the progression of the market bordered to them + 16%. From now on, the growth does not turn any more but around + the 10%. As regards luxury, Paris remains the center of creation, the decision and the definition of the strategy of the companies. On the other hand the manufacturers are present on all the French territory. The leader of the market of the luxury is group LVMH (Louis Vuitton Moet Hennessy)1. The challenger is the group PR (Pinault Spring Redoute). These two groups are French. The other principal actors are: the Richemont group (Swiss) and groups it Prada (Italy). These large financial groups and industrialists in common have the possession of the wallets of luxury brands which have a history founder, which is necessary to exploit. They understood that a brand needs to have a starting point, a human history, even old or remote. In our second part we will approach the luxury brands and beyond they are the strategies of the great groups which will take shape in filigree. PART 2 Marks of luxury And general public 1. Identity of brand The name of a brand or its logo is only the visible part of a more complex reality. These visible signs ensure the mediation between the identity of the company (essential values that it conveys) and its image (perceptions which the customers have of this mark). The concept brand identity remains still too little used by the managers. However this identity constitutes the base and the federator element of all the manifestations of the brand. In term of brands’ management, the concept of identity can appear as a capital importance. Thus if there are â€Å"richer† brand than others, it is that this one profit from a potential evocation more important and more easily mobile. With regard to the sector of the luxury, the identity of brands is a considerable strategic data. It can moreover confer a competing advantage on brand and represent a very pointed strategic tool for the managers of the mark. It should be noted that the identity of brand does not make it possible to intervene directly on the choices of the offers’ structure, of customer, margin and price determination target? It is on the other hand a major resource and a reference brand in the development of the total strategy of the company. The identity of brand will thus affect creation and the communication like on the distribution, the production?. The identity reasoning will be able to thus have an influence more or less pronounced on the strategy of the company and in return the identity of the brand itself will be affected by decisions taken in other functions. In other words, the identity is the substance of the brands and one will see further in our study than it arrives sometimes than this identity, if it is badly perceived by the consumers, perhaps the cause of a crisis of brand. Brands can be considered like vector of direction: it communicates a speech, a message with recipients. Each brand creates a speech which is clean for him, in relation to its products, its history, its projects, the tastes of its customers. The brands take part then in the process of communication because one finds: a transmitter (the company), a recipient (the consumer, the customer), a message. The identity can also be conveyed by a personality which brings all its size to the mark. From there has come for a few years an intensive use famous character to represent the brand: Ex: Ines Sastre for Lancome, Carole Bouquet for Chanel, Kate Moss for Calvin Klein But the identity of brand can be reinforced by talented personalities which carry to end of brand’s arm arm the mark, ex: Tom Ford for Gucci, or Giorgio Armani, Pierre Cardin, Yves SAINT LAURENT, Jean-Paul Gaultier †¦ For considerable luxury brand, it is nowadays dominating to know to perpetuate the identity of the brand, in spite of: the disappearance of the creator or the departure of the personality which characterized it? The goal is to not perturb the customer: it is for example the problem that has recently to face the mark Gucci after the departure of emblematic the fashion designer Tom Ford and chairman of the brand, Domenico de Sole The articulation of a horizon of value makes it possible for brands to connect two distant universes: that of the products and that of the consumers. This contact transforms this relation: on the one hand the brand makes possible to invest the universe of the products with values symbolic systems and imaginary; and in addition it makes it possible to represent and consider the consumer, according to various visions: commercial, industrial or economic. The consumer is considered, as we already specified, like recipient. Brands, by using a language of values, are addressed more to the individual, apprehended in totality its being, of its personality, of its needs, that with the consumer. In the sector of the luxury, consumption is done through a context of life and the identity of mark does nothing but reinforce this context. In short to be a mark with success, it is necessary that the identity of the brand is built starting from various points: 1 In 2004: Tom Ford and Domenico De Sole announced their departure of Gucci group and do not renew its contract with PR. All wonder which is the future of the Gucci mark without the Genious creator . ? A genetic code : a history founder. A mark absolutely requires for a starting point, a history of man, even if it is old. ? Know-how: it can be transmitted in a subjective way without technical relationship to reality of today. But this know-how is a pledge of quality and professionalism and confers on the mark all its reputation. ? Distinctive signs: they are essential. It can be a question of the logotype (certain companies go until selling their logotype1), but also of services, products, the design, color (ex: the red Ferrari)? ? A language of the brand : this one will be able to be thus found in the communications of the mark. ? A distribution network : this one will have to evolve/move with the behavior of the consumers. ? A spirit of idiot searches : the territory of the brand is defined by the most representative of the company which has the role of projecting the mark in a anticipative vision. ? Charisma: a luxury brand must imperatively have a charismatic dimension. It is a credit of image which is the first step towards an identity strong and impossible to circumvent. We saw throughout this part that a brand needs a strong identity to be visible and gravitational with the eyes of the consumers. To be visible, it is thus necessary for the luxury brand to have adequate communications. 2. Communication of the luxury brands The universe of the luxury, intended either for the ornament of the individual, or the embellishment of its personal environment, answers a series of needs, desires, wishes, dreams. ? Targets of the luxury brands The products of the marks luxury brands, as we specified before, must tell a history which must correspond to waiting of the customers. Customers, heart of target, present of the particular characteristics of which first are that they are consumers to financial means much more important than average (the highest CSP). This social category, elite, has a very particular motivation: it is necessary to meet their desires and not their needs. It will be a question of playing on the mental one more than on the material. Hedonists, less and less faithful to the marks, they await always more quality, of safety and especially of immaterial added value: services, citizenship, ecology, environmental protection? For customers , heart of target: the request should be caused. Generally the creator imposes his tastes. This category of affluent continues by choosing the most selective luxury articles, newest and most inaccessible. It is eager to mark its social status. Its completely distinctive life style, is an escape ahead, in order to escape the correction from the â€Å"new classes: rich person and avid of modernity â€Å". The luxury is for them a bench brand, a brand of membership of a club which they want relatively selective. The principal target gathers it, of the classes of â€Å"new rich person†, rather young person who acquired a social status raised thanks to incomes resulting from the business world, industries of high technology? With regard to the characteristics of the targets: it acts people of more than 25 years having a social status raised certainly, which have good taste but which sees especially the luxury as a universe which reflects their aesthetic choices like their personality. We are in a society, whose modes of consumption to the wire of the decades changed. Yesterday, one consumed necessary. Today it is not any more the case and the modification of the behaviors also had effects on the consumption of the luxury. More than ever, today there is a search for pleasure above all. In our company, there is from now on a â€Å"social legitimating of the pleasure†1, which leads the individuals to want what there is best and of more beautiful for them. Via the communication and the media we receive messages more and more, praising the benefits and the legitimacy of personal blooming. Legitimate targets inaccessible luxury, are not with a view to consumption to conclusive dimension. For these raised categories, the luxury is an ordinary consumption exceptional people. And yet the report has not been pus also Net for a few years. We will see in our ultimate under-part that the luxury can also be an exceptional consumption ordinary people. But our report will go, on the consequences, of this last tendency, for the marks. ? The Positioning of the marks of luxury Each mark of luxury wishes to give to the public an image, of it and its products, which aims at being strongly anchored in the spirit of the customers. Thus the stake is to dissociate itself, to be distinct from competition. Examples of positioning: – Vuitton : Louis Vuitton, give heart to your desires. – Gucci: Gucci, to play the chart of the ultra seduction. – Chanel: Elegant and modern: you are so much Chanel. ? Objectives of communication of the marks of luxury We will take the example of the objectives of communication of the Louis Vuitton brand. These objectives are very representative of those of the other marks of luxury. – It is necessary to develop a more human image, less centered on the research of the immediate profit, nearer to the consumers of the mark, while keeping an elitist tone, obliged symbol of the marks of luxury. – It is necessary to make known the various lines of goods and to make like the products. – It is necessary to propose the know-how house of the products, but also the aspects innovating, the matters design? – It is necessary to be different from competition in the spirit of the consumers, while being affirmed like a credible mark in all its actions and able to give satisfaction to customers with very different waiting. Each brand as we have already seen contains values as well as a capital of evocation which it is a question of registering in the spirits of the consumers. It is the role of the communication which to make so that the consumers are to attract by such or such public image. ? Strategy of the means of communication of the marks of luxury It is of primary importance for a mark of luxury: to control its image. That implies on behalf of the seat to take account of the information brought by actors present on the ground: subsidiary companies and distributors. The marks must be permanently held with listening of all the markets of the house to optimize the effectiveness of the communication campaigns. It is regularly necessary to go in each country, where the mark holds of the shops to take the temperature of the market. The subsidiary companies have an active role in the development of the advertising campaigns, being precisely on the ground. The marks leave them certain flexibility, in particular on the choice of the products to be proposed like on the most relevant interpretation making pass by the words of the international advertising concept. A country can also have a direct action via initiatives the editorial ones in the local magazines. As regards communication of the products of luxury there is homogeneity of the campaigns. In general for a product or a mark, the campaigns are international and no distinct according to countries’. However, it can happen that the cultural factor is determining in the design of products of luxury. It is noted for example that the woman Chinese or Japanese uses much more beauty products than the Western woman, which can push the houses of luxury (ex : Lancome) to vary the products according to the characteristics of the various countries where the mark is established. All that will thus affect the communication campaigns, which will be able to then vary according to markets’ (Europe, the United States or Asia). The globalization allows a â€Å"interbreeding† of the tastes. Today, the marks do not propose any more one single reference to the markets of the whole world but adapt the products to the request. The strategy of communication of the brand of luxury is before a whole strategy of image. The codes of the communication of the luxury aim at creating diktats of marks. Publicities are often minimalists. The majority show the product alone resting on no support. This representation is supposed to show the perfection of this one. The product and its mark are the message and do not have no need, seems you it of development. In the majority of the cases one recalls the existence of the product and the mark, without necessarily putting them in scene. The communication of luxury composes with three paramount elements: – the quality of the product – The dream and public image – For certain brands, the quality of service The means of communication usually used are: the press, the event-driven one, sponsoring. The magazine: of two great types – the female press magazine, of mode: It, Cosmopolitan, Pace1†¦. Press multi-local, more expensive than the national but more flexible press. – the press European, international: Time, Newsweek?. Allows capitalizing on a total image, The event-driven one/sponsoring When a mark of luxury engages in sponsoring, sportsman for example, his goal is to improve his notoriety and his public image. For that most interesting and the least expensive for a mark is to associate its name a prestigious sporting event, which makes dream. Ex: Cut of America and Louis Vuitton. For the sport, it is of primary importance that the event conveys positive values close to those of the luxury: purity, beauty, exclusiveness. But today, in front of the exacerbated competition that the actors of the luxury and with inaccuracy of the customers deliver themselves who follow a fashion in perpetual change, all these marks seek to be dissociated even more, from/to each other and with becoming even more single. This tendency will also touch the actions of sponsoring. Thus the mark of luxury will not be satisfied to affix its name with an event; it will become a quasi fusion partner. The mark will communicate on the event in which it takes part in its points of sale and will use the public relations in order to it mediates to the maximum. A tendency emerges on behalf of the large houses of luxury: to touch a younger public, in order to widen their customers. For that the means of communication used will be: Internet and the event-driven one. 3. Luxury and general public Initially let us point out the problems which were the discussion thread of this work: which are the risks and consequences for a mark, which multiply occasions to be to have by the greatest number? These problems will bring us, in this part to question us on the luxury and general public. As we endeavored to show it throughout this work, the luxury is not a sector like the others, a long time it was the territory of the â€Å"happy few† (target population of the luxury having the incomes more raised)1. During twenty last years, the luxury was democratized considerably. The products and services of luxury are gradually descended in the street and from now on, by ex: the perfume of luxury brand, certain products (like the accessories) are occasionally consumed by the greatest number. To make flash back the prestige top of range, on more accessible products in order to better sell them?certain houses of luxury did not hesitate to democratize their offer in order to widen their customers, thus hoping to make volume. Thus the greatest number will be able to be scented with Must of Cartier, to get dressed with a tee-shirt DKNY (Karan gave), to put its keys in a small trousseau at the monogram LV (Louis Vuitton)? The prosperity of the companies of luxury rests a paradox: to put in scene products glamour reserved at the elite, for better selling standardized products with the greatest number. â€Å"The widening of the customers for twenty years has been the great success of the sector â€Å". To arrive to this widening, the houses of luxury followed two directions: – Diversification This method consists in for a mark becoming multi segment by granting licenses, sometimes to all goes. Ex: Gucci, leather dealer at the beginning. Since 1995, the mark had multiplied the licences. Lighters were found Gucci as well as bottom-of-the-range products, distributed everywhere. – The variation That consists in creating products or signs of entry of range. Ex: Christian Lacroix, propose a Bazar line with articles with less than 150 euros. Ex: Louis Vuitton, propose toners, very cheap. Some follow even the two tracks. Ex: Giorgio Armani : its top-of-the-range claw gave rise to less expensive sub-brands (ofEmporio Armani with Armani Jean). But the diversification and the variation of the claws of luxury, are not without risk. A true strategic interrogation is posed: how much products a mark can it carry without galvauder? The marks must take care to keep their positioning luxates. The products of luxury, supposed being inaccessible, are qualified products phantasms. If they are standardized, made common, with the range of the greatest number, the products of luxury are likely to lose will have to them. A whole of risks watches for the marks which are engulfed in the methods of diversification and variation: – Loss of the imaginary character of the marks – mental loss in value of the products – vulgarizing of the mark – devalorization of the mark – Dilution of the mark about competition – deterioration of the public image The disappointment of a customer on an article of entry of range quickly made fade on the image of the unit. It seems of thus be likely to multiply the occasions of entry of range to satisfy the passion with general public for the luxury. Finally the largest risk for a mark would be more not to be regarded as marks of luxury. Ex: Gucci. The company had multiplied the licenses so much, that in 1995 one did not regard it any more as one mark of luxury. It will be necessary, to find a strong statute of mark of luxury, to give up the strategy of diversification and to count on the genius of the creator Tom Ford and on the ingeniousness of the chairman Domenico de Sole. But is thus to answer the passion of general public that the marks launched out in these strategies like acquiring a planetary stature. But today with the risks of vulgarizing, the marks prefer to control their production and their distribution. It is besides by using a distribution in selective network that the marks of luxury will be able to touch the public which agrees to them. Conclusion In strong progression, in spite of the international events of these last years, the sector of the luxury continues its change on multiple axes: reinforcement of the groups, widening of the territories of mark, atomization of the customers, need for conquest of rising generation, evolutions of the distribution networks and political news of communication? These transformations require quite informed actors in order to make the best decisions. General public occasionally seeks to get products of luxury. But contrary to the most affluent classes, it is a step of demonstration of the marks. One wants to show with the eyes of all which one has would be this only one accessory of a large mark. The passion of general public for the products of luxury led a phenomenon to develop at speed large V: the counterfeit of marks. There is a request as regards luxury and the offer is done by products of counterfeit. There it is not a question of vulgar copy, quickly uncovered by the authorities. The marks must from now on face a counterfeit with the identical one, which sows the doubt in the spirit of the consumer. The consequence first is that certain marks go down in the street. It was the case for the mark Burberry. The second consequence is that the mark saw its image deteriorating near its target public so much so that it decided to take legal measures to fight against the counterfeit. It was also necessary to centre its products in a very top-of-the-range positioning. As we saw throughout this work, the importa.