Page 357 - Marketing Management

334 PART 5 SHAPING THE MARKET OFFERINGS

• Hearts on Fire diamonds. De Beers brought branding to
diamonds decades ago, making them a symbol of love and commit-
ment in part through its “Diamonds Are Forever” ad campaign in
1948. The marketers of Hearts of Fire diamonds have found a
Marketing InsightInsight
Marketin g market niche as the “World’s Most Perfectly Cut Diamond.”
Although diamonds have become increasingly commoditized on the
basis of the four Cs that define quality—cut, clarity, color, and
carat—Hearts on Fire have a unique “hearts and arrow” design.
When viewed magnified from the bottom, eight perfect hearts ap-
Marketing Luxury Brands pear; from the top, eight perfect fire bursts are seen. Sold through
independent jewelers, Hearts on Fire commands a 15 percent to
Luxury products are perhaps one of the purest examples of branding, 20 percent premium over a comparable diamond from Tiffany & Co.
because the brand and its image are often key competitive advantages
that create enormous value and wealth for organizations. Marketers for The recent economic recession challenged many luxury brands as
luxury brands such as Prada, Gucci, Cartier, and Louis Vuitton manage they tried to justify their value proposition and avoid discounting their prod-
lucrative franchises that have endured for decades in what some believe ucts.Those that have successfully extended their brands vertically across a
is now a $270 billion industry. range of price points are usually the most immune to economic downturns.
Just like marketers in less expensive and more “down-to-earth” The Armani brand extended from high-end Giorgio Armani and
categories, however, those guiding the fortunes of luxury brands must Giorgio Armani Privé to mid-range luxury with Emporio Armani, to afford-
do so in a constantly evolving—and sometimes rapidly changing— able luxury with Armani Jeans and Armani Exchange. Clear differentiation
marketing environment. Globalization, new technologies, financial exists between these brands, minimizing the potential for consumer con-
crises, shifting consumer cultures, and other forces necessitate that fusion and brand cannibalization. Each also lives up to the core promise
marketers of luxury brands be skillful and adept at their brand steward- of the parent brand, reducing chances of hurting the parent’s image.
ship to succeed. Table 12.1 summarizes some key guidelines in Horizontal extensions into new categories can also be tricky for luxury
marketing luxury brands. brands. Even the most loyal consumer might question a $7,300
Significantly higher priced than typical items in a category, luxury Ferragamo watch or an $85 bottle of Roberto Cavalli vodka. Jewelry
brands for years were about social status and who a customer was—or maker Bulgari has moved into hotels, fragrances, chocolate, and skin
perhaps wanted to be. Times have changed, and especially in the face care, prompting some branding experts to deem the brand overstretched.
of a crippling recession, luxury has for many become more about per- In the past, iconic fashion designers Pierre Cardin and Halston
sonal pleasure and self-expression. licensed their names to so many ordinary products that the brands were
The common denominators of luxury brands are quality and badly tarnished. Ralph Lauren, however, has successfully marketed an
uniqueness. A luxury shopper must feel that what he or she is get- aspirational luxury brand with wholesome all-American lifestyle imagery
ting is truly special. Enduring style and authenticity are often critical across a wide range of products. Besides clothing and fragrances,
to justifying a sometimes highly extravagant price. Hermès, Lauren boutiques sell linens, candles, beds, couches, dishware, photo
the French luxury leather-goods maker, sells its classic designs for albums, and jewelry. Calvin Klein has adopted a similarly successful
hundreds or even thousands of dollars, “not because they are in expansive strategy, though with different lifestyle imagery.
fashion,” as one writer put it, “but [because] they never go out of In an increasingly wired world, some luxury marketers have struggled
fashion.” Look at how luxury brands have been created across a to find the appropriate online selling and communication strategies for their
range of other categories: brand. Ultimately, success depends on getting the right balance of classic
and contemporary imagery and continuity and change in marketing pro-
• Sub-Zero refrigerators. Sub-Zero sells refrigerators that grams and activities.Luxury is also not viewed in the same way everywhere.
range from $1,600 for small, under-counter types to $12,000 In post-communist Russia for a time, the bigger and gaudier the logo the
for its specialty Pro 48 model with a stainless steel interior. The better. But in the end, luxury brand marketers have to remember they are
target is home owners with high standards of performance and often selling a dream, anchored in product quality, status, and prestige.
design who cherish their home and what they buy to furnish it.
Sub-Zero extensively surveys this group as well as the kitchen Sources: Beth Snyder Bulik, “Sub-Zero Keeps Its Cool in a Value-Obsessed
designers, architects, and retailers who plan for and sell their Economy,” Advertising Age, May 25, 2009, p. 14; David K. Randall, “Dandy
Corn,” Forbes, March 10, 2008, p. 70; Christopher Palmeri, “The Barroom Brawl
products.
over Patron,” BusinessWeek, September 17, 2007, p. 72; Bethany McLean,
• Patrón tequila. Cofounded by Paul Mitchell hair care founder “Classic Rock,” Fortune, November 12, 2007, pp. 35–39; Dan Heath and Chip
Heath, “The Inevitability of $300 Socks,” Fast Company, September 2007,
John Paul DeJoria, Patrón came about after a 1989 trip to a distill-
pp. 68–70; Stellene Volande, “The Secret to Hermès’s Success,” Departures,
ery in the small Mexican state of Jalisco. Named Patrón to convey November–December 2009, pp. 110–12; Cathy Horyn, “Why So Stodgy,
“the boss, the cool guy,” the smooth agave tequila comes in an el- Prada.com?” New York Times, December 30, 2009; Christina Binkley, “Like Our
Sunglasses? Try Our Vodka! Brand Extensions Get Weirder, Risking Customer
egant hand-blown decanter and is sold in individually numbered
Confusion,” Wall Street Journal, November 8, 2007; Special Issue on Luxury
bottles for $45 or more. Brands, Fortune, September 17, 2007.