A PROJECT REPORT ON

“A study on creation of luxury brands”

A PROJECT SUBMITTED TO THE

UNIVERSITY OF MUMBAI

For partial completion of the degree of

Bachelor of Management Studies

Under the faculty of Management

By
Ms. Hijab Hasan Taqvi

CLASS: TYBMS ELECTIVE: Marketing Roll No: 28

UNDER THE SUPERVISION OF

Ms. Sonal Jain

EENA MEHTA COLLEGE OF ARTS, COMMERCE, SCIENCE & MANAGEMENT

STUDIES
BHAYANDAR (WEST), THANE-401101.
 ACADEMIC YEAR 2022-2023

A PROJECT REPORT ON

"“A study on creation of luxury brands”

A PROJECT SUBMITTED TO THE

UNIVERSITY OF MUMBAI

For partial completion of the degree of

Bachelor of Management Studies

Under the faculty of Management

By
Ms. Hijab Hasan Taqvi

CLASS: TYBMS ELECTIVE: Marketing Roll No: 28

UNDER THE SUPERVISION OF

Ms. Sonal Jain

REENA MEHTA COLLEGE OF ARTS, COMMERCE, SCIENCE & MANAGEMENT

STUDIES
BHAYANDAR (WEST), THANE-401101.
 ACADEMIC YEAR 2022-2023

DECLARATION

I the undersigned Ms. Hijab Hasan Taqvi here by, declare that the work embodied in this project work titled
“A study on creation of luxury brands” forms my own contribution to the research work carried out under
the guidance of Ms. Sonal Jain is a result of my own research work and has not been previously submitted to
any other University for any other Degree / Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.
I, here by further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

Ms. Hijab Hasan Taqvi

Certified by
Ms. Sonal Jain
(Project Guide)
 CERTIFICATE

This is to certify that Ms. Hijab Hasan Taqvi has worked and duly completed the project work for the
Degree of Bachelor of Management Studies under the faculty of Management in the subject of
MARKETING and the project is entitled ““A study on creation of luxury brands”

” Under my supervision.

I further certify that my entire work has been done by the learner under my guidance and that no part of it
has been submitted previously for any degree or diploma of any University.

It is their work and facts reported by his personal findings and investigations.

Principal Head of Department Project guide

Dr. (Mrs.) Satinder Kaur Gujral Ms. Sonal Jain Ms. Sonal Jain

Date-

Place-
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous, and depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this project.

I would like to thank my Principal, Dr. (Mrs.) Satinder Kaur Gujral for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Head of Department Ms. Sonal Jain, for her moral support and
guidance.

I would also like to express my sincere gratitude towards my project guide Ms. Sonal Jain, whose guidance
and care made the project successful.

I would like to thank my College Library, for having provided reference books and magazines related to
my project.

Lastly, I would like to thank every person who directly and indirectly helped me in the completion of the
project especially my Parents and Peers who supported me throughout my project.
 Executive summary

This report supplies a logical vision and validation for a deep and sustainable luxury
industry. In today’s context, true luxury brands are those which supply supreme positive
offerings to consumers. These brands recognize their customers as having the means and
enthusiasm to respect both people and the planet. This phenomenon can be called as ‘a
deeper luxury’. This new breed of luxury brands has both the prospect and the liability to
encourage sustainable consumption. The definition of luxury and the way it is perceived by
others is changing. A lot of successful citizens now want their brands to be their concerns
and aspirations for an improved planet. This occurrence is true not only in western luxury
society, but also gradually becoming clearer amongst the affluent social classes of
developing economies. As part of the research, variables that influence ‘value perception’
were found and categorized into four groups, viz. intrinsic factors, extrinsic factors, ethical
factors and individual factors. The data collected was analyzed using frequency analysis,
multiple linear regression and factor analysis. The research findings show a drift in the value
belief of consumers of luxury apparel retail. Though factors like quality and brand feeling
continued to show a positive trend to perceived value, loyalty towards the brand was seen
to be a hindrance in adding value. Also, increased environmental focus of a luxury apparel
brand had a strong influence on the consumers’ feeling of value. These findings reaffirm the
consumer shift towards ‘self-actualization’ in Maslow’s pyramid in the hierarchy of needs.
That is, self-actualization through the need of ‘a deeper luxury’. What is luxury? “Luxury is
something you could do without but that you don’t want to do without”

The word luxury originates from the Latin word ‘luxus’ which means ‘abundance’. It also
carries nuances of a ‘contradiction from the basic’.
 INDEX

1 Acknowledgment
2 Executive summury
3 WHAT IS LUXURY BRAND?
4 WHAT MAKES A LUXURY BRAND
5 THE CONCEPT OF LUXURY BRANDS
5.1 Handbook for the creation of the luxury brand
6 Luxonomy
6.1 Taxonomy of luxury
6.2 The major understanding of luxury
6.3 The Philosophical-Sociological Understanding of Luxury
7 The Micro-economic Understanding of Luxury
8 The Managerial Understanding of Luxury
9 Limiting the Scope of Luxury
10 The Definition of Luxury Products
11 Types of Luxury Products
12 Personal vs. Impersonal Luxury Products
13 Publicely vs. Privately Consumed Luxury Products
14 Accessible vs. Exceptional Luxury Products
15 Conspicuous vs. Understated Luxury Products
16 Luxury Brands
16.1 The Definition of Luxury Brands
16.2 Types of Luxury Brands
16.3 Luxury Brands by Luxury Level
16.4 Luxury Brands by Awareness
I.5. Distinguishing Luxury Products and Brands from similar
17 Concepts
17.1 Premium Products and Brands
17.2 What are Masstige Brands?
17.3 What are Prestige Brands?
18 The Characteristics of Luxury Products
18.1 Price
18.2 Quality
18.3 Aesthetics
18.4 Rarity
18.5 Extraordinariness
18.6 Symbolism
19 What is Brand Identity?
19.1 Brand Identity vs. Self-Concept
19.2 The Brand-Self-Seven
20 The Importance of Branding in Business
21 Types of luxury brands
21.1 Luxury Brands in Retail
21.2 Luxury Brands in Hospitality
21.3 Luxury Brands in Automotive
22 Few examples of Luxury Makeup Brands
23 Five Steps to Build a Strong Luxury Brand
24 Conclusion
25 Bibliography
What is luxury brand?
Luxury brands are present in many different sectors, especially retail, hospitality and automotive.

What Makes a Luxury Brand?

The main factor that makes a luxury brand is how exclusive it can be. Of course, it’s a given that luxury
brands will be of high quality, but that can also be achieved by premium brands, which supply high quality
and look to sell to everyone who can afford it.

Luxury brands, on the other side, do not seek to serve the masses, nor do they want their products to be
readily available, even at high prices. Scarcity is key when it comes to luxury marketing, and this is what
makes it aspirational in the first place.

It’s not the rich that fuel the luxury sector, it is people who aspire to belong to this segment. And so, a
brand that wants to succeed in being a luxury brand, needs to keep a prominent level of exclusivity and
scarcity, in addition to other premium characteristics.

The Concept of Luxury Brands

The eBook about the Definition, Characterization and Categorization of Luxury Products and Brands. It
includes a Taxonomy of Luxury and a Handbook for the Creation of Luxury Products and Brands

"The Concept of Luxury Brands" characterizes both luxury products and brands and distinguishes similar
concepts such as premium and masstige and differentiates between major types of luxury products and
brands such as accessible vs. exceptional luxury products and connoisseur vs. star brands.

As luxury is constantly on the move, this concept will be constantly updated. Therefore, please feel free to
send me your feedback and ideas. The latest publication you can find here.

The paper is split into the following two major components:

I. Taxonomy of Luxury:

The tasks of distinguishing between luxury and non-luxury and of categorizing luxury into several types
reminds one of the work of taxonomists, who try to order organisms into groups based on their similarities
and differences. The classification of organisms is not that simple, not only because of their vast variety,
but also because boundaries between species are diffuse. However, similarly to the taxonomy of
organisms, the taxonomy of luxury should supply a definition of "luxury products" and "luxury brands"
that, for any products and brands, allows one to decide as best as possible if they are part of what is meant
by these terms. In addition, the taxonomy should give an overview of the major types of luxury products
and brands, as well as of similar concepts
II. Handbook for the Creation of Luxury Products and Brands:

For humankind, classification had to be carried out from the very beginning, because the accurate
identification of food, predators, mates, fuel, building materials etc. was crucial to survival. This proves that
classification also leads to a better understanding about the objects of investigation. Besides their value in
the classification of luxury, the characteristics of luxury products and brands thus also help to develop an
understanding about how they are created. As this is a distinctive area of application, the explanations
about their characteristics are combined in a separate part of the paper, which should serve as a handbook
for the creation of luxury products and brands.
Part I: Luxonomy
The task of distinguishing between luxury and non-luxury and of categorizing luxury into several types is
reminiscent of the job of taxonomists, who try to order organisms into groups based on their similarities
and differences (Stace 1991, p. 5). "Taxonomy" is more generally used today for classifications of any types
of objects of investigation, including, for instance, shopper motivations (Westbrook and Black 1985),
vehicles (Pirotte and Massart 2004, p. 2) and luxury consumers (Han et al. 2010, p. 16). This part of the
paper presents a taxonomy of luxury particularly for use within the field of luxury brand management.
Starting from a basic definition of luxury, it distinguishes between the major understandings of luxury put
forth by different areas of research, defines luxury products and brands and gives an overview of the major
types of luxury products and brands and of similar concepts. The definitions of "luxury products" and
"luxury brands" should allow one to decide as best as possible, for any products and brands, if they are
part of what is meant by these terms.

I. The Taxonomy of Luxury

Despite confusions, researchers across all disciplines share a basic understanding of luxury. To begin with,
luxury is defined as something that is more than necessary (e.g., by Bearden and Etzel 1982, p. 184;
Mühlmann 1975, p. 69; Reith and Meyer 2003, p. 10; Sombart 1922, p. 85).

In contrast to necessity, some authors also characterize luxury by non-necessity and superfluity (e.g., by De
Barnier et al. 2006, p. 5; Dubois et al. 2001, p. 15; Csaba 2008, p. 3; Geerts and Veg 2010, p. 2; Jäckel and
Kochhan 2000, p. 75).

The distinction between necessity and luxury is based on the availability or exclusivity of resources. While
necessities are had by virtually everyone, luxuries are available exclusively to only a few people or at least
only on rare occasions (Bearden and Etzel 1982, p. 184).

Bearden and Etzel (1982, p. 186) imagined the necessity-luxury dimension as a continuum ranging from
absolute necessity to absolute luxury. So, they developed a six-point Likert scale ranging from "a necessity
for everyone’" to "a luxury for everyone" to measure the luxuriousness of a few product categories (see
also Kemp 1998, p. 594).

Today however, people spend the biggest part of their income on goods that satisfy more than their
necessary or basic human needs, but most of these goods might still not be considered a luxury. Therefore,
Chaudhuri (1998, p. 158 et seqq.) criticized the necessity-luxury continuum produced by Bearden and Etzel
(1982) and measured necessity and luxury as two separate variables on a seven-point agree/disagree scale
("This product is a luxury [necessity] for me.") No significant relationships were found among these
variables (p. 163), which supports the approach of these authors. However, there were goods with low
ratings on both variables such as cornflakes, frozen dinners, and potato chips, showing the need for
another category of ordinary goods. Bearden and Etzel (1982, p. 186) already considered this category, as
they defined luxuries "as not needed for ordinary, day-to-day living.’" Instead of subsuming ordinary goods
into the necessity category, the scale can also be extended to the necessity-ordinary-luxury scale, which
might be more intuitive for today’s consumers.

In old lexica, luxury is defined as anything that is more than necessary (e.g., Brockhaus 1846, p. 179). After
the increase in the standard of living over many social classes in the late 19th century, the definition was
further narrowed by luxury being also that which is more than ordinary (e.g., Meyers 1890, p. 1035). Since
then, most lexica share the notion of luxury as anything that is more than necessary and ordinary (e.g.,
Meyers 1995, p. 189).

However, not everything that is neither necessary nor ordinary is a luxury. For instance, most people rarely
have moths in their wardrobe, but still do not consider this extraordinary occurrence a luxury. This proves
that the characterization of luxury as non-necessary and superfluous can be misleading because luxury is
always meant to satisfy some human needs and desires (Berry 1994, p. 4 et seqq.; Geerts and Veg 2010, p.
2; Giacalone 2006, p. 34; Goody 2006, p. 341). So, luxury is also associated with "dream" (e.g., by
Seringhaus 2002, p. 5; Dubois and Paternault 1995, p. 69). While necessary and ordinary goods are also
desirable (or required), a study by Kemp (1998, p. 599; 603) points out an essential difference: "similar
items [are] more likely to be perceived as a luxury if they [produce] a positive effect for the recipient than if
they [relieve] a state of discomfort [… so that luxuries are…] positive instead of negative reinforcements."
Therefore, Kemp (1998, p. 592) compares the necessity-luxury continuum with the hierarchy of needs
produced by Maslow (1970), which ranges from basic physiological needs such as hunger (necessities) up
to needs of self-actualization (luxuries). These facts prove that the luxuriousness of any resource is not only
based on its availability, but also on peoples’ desire for it.

So, the basic definition of luxury may be summarized as follows:

Luxury is anything that is desirable and more than necessary and ordinary.xury usually refers to single
items, in which case it is described as qualitative luxury. In contrast, quantitative luxury refers to the
profusion of an excessive number of resources, which are not necessarily luxurious. For instance, this
includes lighting a cigar with a handful of matches (Sombart 1922, p. 86).

I.2. The Major Understandings of Luxury

There are three major understandings of luxury, which will be explained in the later sections.

The Necessity Luxury Continuum

I.2.1. The Philosophical-Sociological Understanding of Luxury

The proponents of a philosophical-sociological understanding of luxury concentrate mainly on the

evolution of attitudes towards luxury and its societal benefits (e.g. Berry 1994; Mandeville 1724; Sombart
1922, p. 86 et seqq.) and on the changes in the appearance of luxury and preferences for luxury (e.g.
Dohrn-van Rossum 2002; Fuehrer 2008, p. 185 et seqq.; Koschel 2005 and Reitzle 2001, p. 26 et seqq.).

The Philosophic-Sociological Understanding of Luxury

This understanding is the broadest scope of luxury that can be referred to as luxuries or luxury resources.
Examples include musical talent, time, and true love (see also Sombart 1922, p. 85). Luxuries are defined as
follows:

Luxuries correspond to the philosophical-sociological understanding and the broadest scope of luxury,
forming all resources which are desirable and exceed what is necessary and ordinary.

I.2.2. The Micro-economic Understanding of Luxury

The micro-economic understanding of luxury is a middle scope that is limited to goods that are suitable for
exchange on the market. In microeconomics the term luxury goods were set up for that and mainly refers
to entire product categories (see Meffert and Lasslop 2003, p. 4; Reich 2005, p. 36). The marketability of
micro-economic luxury is its major difference from the philosophical-sociological understanding of luxury.
According to Chaudhuri (1998, p. 162), product categories such as barbecue and golf equipment are (still)
regarded as luxury goods. The definition of luxury goods can be summarized as follows:

Luxury goods correspond to the micro-economic understanding and the middle scope of luxury, forming all
goods which exceed what is necessary and ordinary, and are suitable for exchange on the market.

Luxury goods are distinguished from necessary or ordinary goods by consequence-related measures; thus,
the luxuriousness of any good is not decided by its characteristics, but by peoples’ reaction (changes in
demand) to exogenous stimuli. These measures include price and income elasticity of demand (Pöll 1980,
p. 29).
I.2.3. The Managerial Understanding of Luxury

The managerial understanding is the smallest scope of luxury. The major difference separating it from the
micro-economic perspective is that the managerial understanding of luxury does not usually refer to entire
product categories, but only to the best products of a category, or to products with certain characteristics.
So, products that fall within the managerial scope of luxury

Luxury products correspond to the managerial understanding and the smallest scope of luxury, forming all
products which exceed what is necessary and ordinary compared to the other products of their category.

The definition of luxury brands is linked to the definition of luxury products and usually refers to specific
associations about their products’ characteristics. So, the broad definition of luxury brands is summarized
as follows:

Luxury brands are associated with products which exceed what is necessary and ordinary compared to the
other products of their category.

These definitions allow one to say some typical examples of luxury products and brands including Louis
Vuitton bags and Rolls-Royce automobiles. For the sake of simplicity, the luxury product business will be
referred to as the luxury industry.

The managerial scope of luxury becomes even clearer in comparison with the other understandings of
luxury. This is not a horizontal differentiation (such as dog, cat and bird), but a vertical differentiation (such
as dog, animal, living being), which refers to the relation between terms of different levels of abstraction
(Eckes 1991, p. 120). As proved in the figure below, luxury products are a subset of luxury goods, which, in
turn, form a subset of luxuries. This means that the characteristics of luxuries also apply, to a substantial
extent, to luxury products (see also Hoffmann 1986, p. 31 et seqq.).
Limiting the Scope of Luxury

Despite its small scope in comparison to luxuries, the definition of luxury products still covers a wide
variety of various products. Therefore, the scope of luxury products is further limited by differentiating the
major luxury market segments as follows:

Luxury Products, Services and Real Estate: The managerial luxury understanding usually refers to movable
assets ("products" in the classical sense), as the luxury industry was and is characterized by artisanship and
engineering (Belz 1994, p. 648; Berthon et al. 2009, p. 50). Beyond that, luxury services and luxury real
estate form distinct luxury segments. Marketing knowledge about products offers a basis for other luxury
segments, but still needs to be adapted to their specific characteristics.

Branded vs. Unbranded Luxury Products: Unbranded luxury products are usually made on commission by
craftsmen. Because of the high relevance of brands in the luxury segment, this paper considers only
branded luxury products (see Kisabaka 2001, p. 104; Vigneron and Johnson 2004, p. 486).

Private vs. Public Luxury Products: Instead of public luxuries such as altar pieces or national monuments,
the term luxury products usually refer to private luxury, which is owned by a person or a private
organization (Sombart 1922, p. 86; see also McKinsey 1990, p. 13).

B2B vs. B2C Luxury Products: B2C luxury products, also referred to as personal luxury products, are
marketed to end consumers and can be used by a person to enhance his or her personal life (Sombart
1922, p. 86; Reith and Meyer 2003, p. 10; Valtin 2004, p. 186). In contrast to that, there is a distinct B2B
luxury segment, which includes luxury-specialized suppliers to luxury brands. One such supplier is Peter
Bock, a manufacturer of nibs for luxury fountain pens.

Founder-independent vs. Founder-dependent Luxury Products: This paper considers only founder-
independent luxury products, which means that the existence of brands and the manufacturing of
products should not depend on the life of their creators. The manufacturers of luxury products should have
a distinct brand personality and at least the ability for infinite business operation. Although an artist could
become a brand, these requirements are not fulfilled as he or she may only create founder-dependent
products. Compared to other products, the luxury art market follows extremely specific rules and therefore
forms a distinct luxury segment. The same is true for other industry segments such as (star) architect
offices and the relatively complex and fast-changing market of (fashion) designer products.

Uni-regional vs. Multi-regional Luxury Products: This paper disregards uni-regional luxury products, which
are only available in specific regions. For instance, shopping in the KaDeWe is only possible in Berlin and
spending the night in Le Bristol is only possible in Paris. However, many uni-regional luxury brands have the
potential to become global. For instance, the luxury group Hilton developed the New York-based Waldorf
Astoria into a global luxury hotel chain.

Contemporary Luxury Products vs. Luxury Antiquities: With reference to temporal relativity (see above),
only new products are considered. Luxury antiquities (including antique cars) form a distinct luxury
segment.
Examples of Non-Luxury Products
I.3.1. The Definition of Luxury Products

Although the term "luxury products" is broadly defined and therefore basically comprehensible (see earlier
section), it still needs to be operationalized because it is not yet clear which products are actually "more
than necessary and ordinary compared to the other products of their category." As shown in several
studies, consumers perceive that luxury products have six major characteristics including price, quality,
aesthetics, rarity, extraordinariness and symbolism. These constitutive characteristics and their typical sub-
categories are explained in detail in one of the following chapters. In that way, the operationalization helps
to decide for most products if they are part of what is meant by the term "luxury product" (see also
Kromrey 2009, p. 110).

The definition of luxury products can be summarized as follows:

Luxury products have more than necessary and ordinary characteristics compared to other products of
their category, which include their relatively prominent level of price, quality, aesthetics, rarity,
extraordinariness, and symbolic meaning.

Comparative terms such as luxury rely on continuous characteristics (as explained in the paper). Therefore,
the major characteristics of luxury products can be considered as dimensions ranging from a minimum
level that is also necessary for non-luxury products to a maximum level that corresponds to the highest
form of luxury. As these major characteristics must apply to virtually all luxury products at least to some
degree, they are therefore referred to as constitutive characteristics. Although luxury products require a
relatively high rating for all the major characteristics, there still exists a wide range of possible ratings
within the luxury segment. According to the principles of the prototype theory, luxury products therefore
differ in the degree to which they are qualified as representatives of their category. The luxuriousness of a
product increases when the level of at least one of these characteristics increases. Not surprisingly, the
luxury level therefore is one of the major means of differentiation for luxury products and brands (Esteve
and Hieu-Dess 2005).

The characteristics of luxury products are not independent of each other. This means that if one dimension
is at a prominent level, it also induces prominent levels of other dimensions, offering additional support to
the argument that these six characteristics are constitutive of luxury products. For instance, their relatively
small production volumes (high rarity), their superior level of quality and the relatively high effort made for
aesthetics, extraordinariness and a happy story behind the product inevitably lead to a relatively high price
(see also Dubois et al. 2001, p. 8 et seqq.; Mortelmans 2005, p. 507). Products that are more than
necessary and ordinary obviously need to be scarce and cannot be owned by everyone, which is not
possible as they are too expensive anyway (see also Wiedmann et al. 2007, p. 7). Moreover, consumers use
price as an indicator of product quality (Trommsdorff 2009, p. 96 et seqq.) and the study proved that many
are also willing to pay more for products which are different and not owned by everyone.

The definition, by its constitutive characteristics, refers to the prototype of luxury products. The idea of the
prototype becomes clearer by complementing these constitutive characteristics with typical sub-
characteristics, which are not necessarily relevant for all luxury products (see one of the following
chapters). Moreover, the characterization of luxury products becomes even clearer by describing both the
prototype and relevant exemplars. Therefore, some typical exemplars are presented in one of the
following chapters such as the Guerlain "Kiss Kiss Or & Diamants" lipstick. A Typical Luxury Product: The
Guerlain "Kiss Kiss Or & iamants" Lipstick.

Consumers' judgements about quality and the other product characteristics depend on the comparison
between product expectations and perceived product attributes, and this comparison influences their
(expected) product benefits and thereby their purchase decision (Belz 1994, p. 649; Kisabaka 2001, p. 89 et
seqq.; Kotler et al. 2007, p. 633). This has two major implications. First, different consumer target groups
differ in their expectations for their ideal luxury product, which usually do not require all characteristics to
be at a maximum level. Therefore, luxury companies adjust the luxury level of the major characteristics to
a specific combination depending on the preferences of their target groups. Consequently, the six
dimensions offer basic means of differentiation for luxury products and brands (see following sections).

Secondly, this proves that objectively existing product attributes are not as important as consumers`
subjective feelings about the product’s characteristics. Consequently, luxury companies compete for the
best possible perception of the luxury product’s characteristics on the basis of their target groups (Catry
2003, p. 17; Mortelmans 2005, p. 505; Phau and Prendergast 2000, p. 123), which is realized by adequate
marketing and especially by communication measures (Kisabaka 2001, p. 102 & 119; Vigneron and Johnson
2004, p. 490). Because of their strong relevance, one of the following chapters gives a concise overview of
the luxury marketing-mix strategies that allow companies to influence consumer perceptions regarding
major luxury characteristics.

I.3.2. Types of Luxury Products

As luxury marketing strategies differ to at least some extent between them, it makes sense to differentiate
between major types of luxury products:

I.3.2.1. Personal vs. Impersonal Luxury Products

Product categories are especially suitable for a luxury strategy in a context where consumers employ
luxury products to manage their self-image (Vigneron and Johnson 1999, p. 4), and where they increasingly
build up a personal connection with these products (Nueono and Quelch 1998, p. 62). In contrast to
products such as hedge shears and kerbsides, "people related items" such as apparel, glasses, and
wristwatches are therefore especially suitable as luxury products (McKinsey 1990, p. 19). Furthermore,
within the luxury segment there is a continuum that ranges from these very personal to relatively
impersonal products, such as bathroom equipment and garden furnishing.

I.3.2.2. Publicely vs. Privately Consumed Luxury Products

These types of luxury products are differentiated by the social setting of consumption. While publicly
consumed products such as cars are seen by others, privately consumed products such as kitchen
appliances are not usually seen by many others. For some product categories, the categorization is
especially situation dependent. For instance, a good wine can be consumed conspicuously in a restaurant
or just all by oneself at home. This distinction is especially relevant for studies about social purchasing
motives and reference group influence, which concentrate on products that are "seen or identified by
others’"(Bearden and Etzel 1982, p. 184 et seq.)

I.3.2.3. Accessible vs. Exceptional Luxury Products

As mentioned before, the major characteristics of luxury products supply relevant means of differentiation.
Dubois and Duquesne (1993, p. 38 et seq.) suggest distinguishing between accessible and exceptional
luxury products based on an inter-categorial comparison of their selling price, which also impacts their
diffusion level and repurchase rate. While accessible luxury products such as perfumes are affordable for
most people at least from time-to-time, exceptional luxury products such as private jets are only affordable
for very few people (inaccessible for most people). This differentiation is especially relevant for the
evaluation of the luxury consumption experience, as it is far more revealing if someone buys an expensive
car than a bottle of champagne (see also Heine 2010c, p. 136). This dichotomy can be complemented with
the added category of intermediary luxury products such as Porsche cars. Although they are usually bought
by wealthy people, in contrast to private jets, they are still within reach for many people. For instance, a
genuine fan might fulfil his dream of owning a Porsche after saving many years for this car, instead of
saving for an apartment (see also Allérès 2003, p. 56).

Hierarchy of Luxury Products by their Accessibility

Unique Pieces, Limited Editions, Limited- and Expanded-diffusion Products: Luxury products can also be
differentiated by their exclusivity and production volume (which also corresponds with their production
method) into the following categories:

Unique pieces: This top category typifies the ideal of the luxury segment and is more accurately described
by the French word "griffe", which refers to the clutch of an inspired creator, who is obsessed by the idea
of forming a unique masterpiece, an œuvre d'art, which is truly unsurpassable in its perfection. This ideal is
exemplified by the haute couture clothing of the exclusive circle of couture houses such as Chanel,
Christian Dior and Jean Paul Gaultier (Kapferer 2001, p. 323).

Limited editions: Still close to the ideal of the griffe are products made in highly limited editions. For
instance, the Guerlain Kiss Kiss Or \& Diamants lipstick is produced in a limited edition of only 100 pieces
(Trommsdorff and Heine 2008b, p. 1669).

Limited-diffusion products: The high rarity of these luxury products relies on their manufacturing
complexity which requires a high degree of handwork and artisanship (Sicard 2003, p. 72). Limited-
diffusion products include Gucci Bamboo bags, Maybach automobiles and Meissen porcelain figures. In the
fashion segment, this category can be referred to as prêt-à-porter (Allérès 2003, p. 96).

Expanded-diffusion products: Although their production volume is still relatively limited in comparison to
mass-market products, their production process resembles mass-market serial production (Sicard 2003, p.
72). Examples include Dolce & Gabbana jeans, Poggenpohl kitchens and Porsche automobiles. In the
fashion segment, this category can be referred to as high genre (Allérès 2003, p. 96).

I.3.2.4. Conspicuous vs. Understated Luxury Products

These product types are differentiated by their proportion of conspicuous attributes. Manufacturers of
conspicuous luxury products focus on price, i.e., on a product image of being expensive. Therefore, they
equip their products with typical symbols of wealth and high price such as big logos and rich decoration.
It’s all about symbols, not about substance. True product quality and excellence are less important than
maximum performance, features and size (Kapferer and Bastien 2009b, p. 315). A splendid example is the
fountain pen "La Modernista Diamonds" by Caran D’Ache, an "over-priced savourlessness", which works
with rather ordinary ink cartridges, but is decorated with 5.072 diamonds and 96 rubies (Marguier 2007, p.
85). Nevertheless, such products form a special market niche for consumers who feel extremely special.
The biggest share of the luxury market consists of non-conspicuous products, which might also show some
conspicuous attributes, but are not primarily made to be conspicuous. On the other extreme, there are
luxury brands such as Jil Sander and Bottega Veneta that are known for their understated products, which
seem to hide any conspicuous attributes. However, although Bottega Veneta bags cover no logo, they still
have a characteristic design that can be easily recognized by connoisseurs, which makes them suitable for
conspicuous consumption between connoisseurs. The major difference is that conspicuous consumption
with understated products is nowadays considered a bit more sophisticated.

4. Luxury Brands

I.4.1. The Definition of Luxury Brands

The modern understanding of a brand is consumer and identity oriented. So, brands are regarded as
images in the minds of consumers and other target groups (Esch 2010, p. 22), which are designed by
companies to find their products (Kotler et al. 2009, p. 425). Luxury brands are highly associated with their
core products (Kapferer 2008, p. 193). This is reflected by the larger part of the existing definitions of
luxury brands, which refer to specific associations about product characteristics (e.g., Meffert and Lasslop
2003, p. 6; Büttner et al. 2006, p. 12; Valtin 2004, p. 30). The constitutive characteristics of luxury products
therefore correspond largely with those of luxury brands, which leads to the following definition:

Luxury brands are regarded as images in the minds of consumers that form associations about a prominent
level of price, quality, aesthetics, rarity, extraordinariness and a high degree of non-functional associations.

Any potential luxury brand should be evaluated by the constitutive characteristics of luxury, which are
described in detail in one of the following chapters. These explanations are summarized by the following
principles:

Price: The brand offers products which belong to the most expensive products of their category.

Quality: The brand offers everlasting top-of-the-line products, which won't be disposed of even after long
use or defect, but rather repaired and which often even gain in value over time.

Aesthetics: The brand behaves like a chic and vain dandy, who would never leave the house in less than
perfect style. Whenever and wherever the brand is seen, it embodies a world of beauty and elegance.

Rarity: In contrast to mass-market brands, the brand needs to limit its production and tries not to show its
(high) sales numbers. The brand plays hard to always get and is not available or places.

Extraordinariness: The brand has a mind and style of its own and its products offer a "kick" and surprise
with the "expected unexpected."

Symbolism: The brand stands for "the best from the best for the best"; its charisma fills the room, and
regardless of whether it is of a conspicuous or understated nature, deep inside, it is swollen with pride.

I.4.2. Types of Luxury Brands

I.4.2.1. Luxury Brands by Luxury Level

As mentioned before, the degree of luxuriousness is decided by the major luxury dimensions and
constitutes one of the major means of differentiation for luxury brands (Esteve and Hieu-Dess 2005).
According to this criterion and based on the World Luxury Brand Analysis, it seems reasonable to split
luxury brands into the following types:
Entry-level luxury brands: As these brands rank just above the premium segment on the lowest luxury
level, they are not even generally recognized as members of the luxury segment. Representative brands
include Hugo Boss and Mercedes.

Medium-level luxury brands: These brands are widely recognized as members of the luxury segment but
are a step behind the forefront of luxury. Examples include Dolce & Gabbana, Escada and Moschino.

Top-level luxury brands: These brands are set up beyond doubt as leading luxury brands. Examples include
Armani, Cartier and Louis Vuitton.

Elite-level luxury brands: As niche brands in the top of the top segment, these brands decide the
benchmark of the best quality and highest exclusivity within their category. Puiforcat, for instance, is an
elite-level luxury brand within the silverware segment (Marguier 2007, p. 42). These brands target the
"clientèle de connoisseurs", who do not just have the necessary financial resources but also a "culture
intellectuelle" (Lombard 1989, p. 16).

According to the relativity of luxury, a brand is ranked in comparison to the other luxury brands. The
categorization of a luxury brand changes over time. There are brands climbing up the luxury ladder, such as
the English fashion brands Asprey and Burberry since they were repositioned some years ago (Phan et al.
2011), high-potential brands, such as the German chocolatier Leysieffer, which might enter the luxury
segment in the future, and once-upon-a-time luxury brands, such as Calvin Klein, Jaguar and Pierre Cardin,
which ruined their luxury image (Kapferer and Bastien 2009b, p. 312).

I.4.2.2. Luxury Brands by Awareness

Luxury brands can be differentiated by their brand awareness into connoisseur and star brands (see also
Nueono and Quelch 1998, p. 63). This differentiation is of high relevance for brand management, as these
brand types require partly contradicting marketing strategies (see one of the following chapters).

Connoisseur brands, such as Goyard, a French manufacturer of luggage, are limited awareness brands
which often specialize in a niche market. These brands are made by and for connoisseurs, and do not even
strive for high awareness beyond their relatively narrow target group of select insiders. Connoisseur
brands are often also network brands, which are recommended by word-of-mouth between friends (Belz
1994, p. 647).

Star brands, on the other hand, strive for largest brand awareness well beyond their actual target group.
This contrasts with both connoisseur brands and mass-market brands, which aim at minimizing wastage in
their brand communications outside their core target group consumers. Even if star brands are bought only
by relatively few people, they preferably should be known by everyone. One of their consumers’ major
purchasing motives is to prove their wealth to other people, who often cannot afford these luxury
products. Therefore, star brands such as Rolex or Louis Vuitton also must be known by non-target group
consumers to fulfill the need of their target group consumers for demonstrative consumption. If people
would fail to recognize the brand and thereby the value of a Rolex wristwatch, part of its value would be
lost (Kapferer and Bastien 2009b, p. 319).

Types of Luxury Brands by Level of Luxury, Awareness and Business Volume

The figure summarizes the luxury brand types by luxury level, awareness, and business volume. There are
some relationships between them: for instance, luxury brands with exceedingly high business volumes
often cannot reach the top levels of luxury. In addition, there is also a tendency of elite-level brands to be
connoisseur brands.

I.5. Distinguishing Luxury Products and Brands from similar Concepts

I.5.1. Premium Products and Brands

Luxury products and brands can be distinguished from the premium segment by their constitutive
characteristics. As discussed above, the major characteristics can be considered as dimensions ranging
from a minimum level that is also necessary for non-luxury brands to a maximum level that corresponds to
the highest form of luxury. As proved in figure 1, premium brands rate higher on these dimensions than
medium-level brands, but still well below luxury brands. While premium brands remain down-to-earth and
cannot lose sight of the value-for-money ratio, luxury brands are reaching exceedingly reasonable levels in
the major luxury dimensions, and some of them even work on topping the current top-of-top luxury level.
The differentiation between luxury and premium brands is mainly a matter of degree, which makes it
difficult to draw a clear line, especially between top premium brands and entry-level luxury brands.

However, there is also an essential difference between these types of brands: while premium brands focus
especially on functional characteristics, luxury brands put much more effort into creating symbolic
meaning. For instance, Lexus entered the US market with the aim of growing by taking customers away
from Mercedes, which was identified as its major competitor. Therefore, they took the Mercedes E Class as
the model to overtake and developed a car with a similar design and even superior technical features that
was only sold for about half of the price. Lexus generated high growth rates in the U.S. However, they still
focused very much on functionality and even emphasized their car`s value-for-money and had no vision or
story to tell – which clearly positions Lexus as a non-luxury brand (Kapferer and Bastien 2009b, p. 316).
I.5.2. What are Masstige Brands?

The emergence of this type of brand resolved the traditional dichotomy between luxury and non-luxury
brands. The term ‘masstige brands' easily conveys their basic idea: offering prestige to the masses (some
authors also use 'new luxury' or 'mass luxury' (Kapferer and Bastien 2009b, p. 312). Typical masstige brands
include Coach, Godiva, Starbucks and Victoria`s Secret (Silverstein and Fiske 2003, p. 51). Although these
brands are not luxury brands, they still rate higher than middle-market brands on the major dimensions of
luxury products. Masstige brands concentrate especially on creating symbolic benefits and prestige; they
care very much about shine and therefore also about design. Zara exemplifies the idea of selling taste and
style to the masses, which is carried out by imitating the design of luxury brands for their clothing, stores
and advertising. However, as proved in the Figure below, they are forced to cut back on the other major
characteristics. A mass-prestige-business in the mass/middle-class market reduces the level of rarity and
can only be achieved with reasonable prices, which, in turn, requires a compromise on quality and
extraordinariness (see also Keller 2009, p. 295). The study carried out by Truong et al. (2009, p. 379)
demonstrates that masstige brands successfully differentiate themselves from middle-range brands by
their prestige and from luxury brands mainly by their reasonable pricing. The authors found out that
products from luxury fashion brands are about three times more expensive than masstige products, which,
in turn, are about twice as expensive as middle-range products. While there is only a relatively small
difference in prestige between luxury and masstige brands, the latter were indeed perceived as being
much more prestigious than middle-range brands.

The masstige strategy is also applied by many luxury brands. They are trading-down by extending their
product range with masstige products that are more accessible to middle-class consumers (Kapferer and
Bastien 2009b, p. 321; Truong et al. 2009, p. 379). This kind of price differentiation marks one of the major
growth strategies for luxury brands. The challenge that comes with this strategy is one of preserving an
image of exclusivity (Keller 2009, p. 292 et seq.). This problem has been solved by Ferrari with line
extensions in product categories that do not compete with the brand’s core identity: while Ferrari cars still
are expensive and exclusive, the value of the brand is exploited by offering products in categories as
diverse as apparel to computers (Berthon et al. 2009, p. 54).

Both the trading-up strategy of masstige brands and the trading-down strategy of luxury brands make
luxury-like products accessible for middle-class consumers. This development is referred to as the
'democratization of luxury.' According to the economic relativity of luxury (see above), democratic luxury
products are characterized by Kapferer and Bastien (2009b, p. 314) as "ordinary items for extraordinary
people", which are at the same time "extraordinary items for ordinary people".

I.5.3. What are Prestige Brands?

The terms luxury brand and prestige or status brand are often used interchangeably (Bagwell and
Bernheim 1996, p. 349; O'Cass and Frost 2002). However, prestige ranks as one of the major purchasing
motives over all product categories and allows for the achievement of social reward and status
(Trommsdorff 2009, p. 117). Luxury brands have what prestige-seeking consumers crave: they enjoy social
prestige, which can be gained by buying these products. Nevertheless, the consumption of luxury products
is by far not the only way to satisfy the need for prestige. As mentioned in above, there are also non-luxury
products that allow consumers to increase their prestige including premium products such as Adidas
sneakers or masstige products such as Godiva chocolates and Häagen-Dazs ice cream. The ability to
increase the prestige of their consumers is not enough to distinguish luxury from non-luxury products and
brands. Therefore, the term "prestige brands" should rather be used for all luxury and non-luxury brands
whose products allow consumers to gain prestige. So, prestige brands correspond with the mirco-
economic scope of luxury (see figure 1). The study conducted by Dubois and Czellar (2002, p. 3) also
demonstrates that in many categories, prestige can be achieved independently of luxury and that luxury
and prestige are also perceived as different in the eyes of consumers.
Handbook for the Creation of Luxury Products and
Brands
Besides their value for the classification of luxury, the major luxury characteristics also help
in developing an understanding about how to create luxury products and brands. As this is
a distinctive area of application, the explanations about the characteristics of luxury
products are combined in this part of the paper. According to their definition, luxury brands
must create associations about the major luxury characteristics, which can only be achieved
by adequate marketing measures. Because of their high relevance, this part also gives an
overview about the major marketing-mix strategies that allow for the influencing of
consumer feelings about the major luxury characteristics.

II.1. The Characteristics of Luxury Products

As explained above, the characteristics of luxury products rely on relevant literature and an
empirical study (as outlined in part II of the paper). The results suggest that consumers
perceive that luxury products have six major characteristics including price, quality,
aesthetics, rarity, extraordinariness and symbolism. The characteristics were categorized
into typical sub-characteristics, which are not necessarily relevant for all luxury products.
Size, for instance, can be considered as especially product category dependent. The table
below gives an overview of the characteristics of luxury products. They are ranked in order
of relevance according to the number of times they were mentioned by the respondents
(Heine and Phan 2011, p. 111; see also Hoffmann 1986, p. 78).

The
characteristics
are also
categorized into
manufacturing,
concrete and
abstract
characteristics.
Concrete
characteristics
refer to physical
product
attributes and
are directly observable. A combination of several concrete attributes yields to an abstract
attribute such as comfortability (Olson and Reynolds 1983, p. 80).
The category of manufacturing characteristics was added because it proved to be relevant
to the respondents (see also Dubois et al. 2001, p. 40). These characteristics refer to the
specific manufacturing process that allows for the creation of concrete and abstract
product characteristics.
II.1.1. Price

All the respondents referred to price in characterizing luxury products. In addition, it is also
the most widespread characteristic in the literature, as it is regarded as the most objective
and the easiest-to-measure criteria to evaluate the luxuriousness of a product (McKinsey
1990, p. 16; Meffert and Lasslop 2003, p. 5; Mutscheller 1992, p. 65).
First, there is a necessary condition requiring that these products are high-priced in an
inter-categorial comparison, which excludes "affordable indulgences" such as Häagen-Dazs
ice cream (see Dubois and Duquesne 1993, p. 36; Lasslop 2002, p. 331; Nueono and Quelch
1998, p. 63). On the other hand, there are non-luxury products that are expensive in an
inter-categorial comparison such as the Stemme S6 sailplane for allround-flightsports.
Although a private airplane can be considered a luxury good, Stemme airplanes still do not
count as luxury products, as they drop out in an intra-categorial comparison.
Luxury products belong to the most expensive products in an intra-categorial comparison,
which requires a considerable price premium to products with comparable functional
characteristics (see Kapferer 2001, p. 320; McKinsey 1990, p. 16). Kisabaka (2001, p. 121)
proposes that the five percent of the most expensive fashion products belong to the luxury
segment. However, such price limits serve only as a rule of thumb because they are
generally accepted neither on an inter-categorial level nor within specific product
categories.
Price proved to be especially important for some respondents who like to possess luxury
products that look expensive: "There’s no way I’d drive a Porsche – this car is just for
people who cannot afford something else." Many respondents are especially excited about
making a bargain with a luxury product that others think was expensive.
Nowadays there is even a zone of price overlap between premium and entry-level luxury
products, which makes it impossible to rely merely on this criterion for differentiating
luxury from non-luxury products. Moreover, Kapferer and Bastien (2009a, p. 43 et seq.)
emphasize that increasing the price does not automatically turn a premium into a luxury
product.
II.1.2. Quality

Just as was the case for price, all the respondents mentioned superior quality as a
constitutive characteristic of luxury products. Respondents perceive that quality relies on
the following criteria:
II.1.2.1. Manufacturing Characteristics

Ability of manufacturer: Respondents consider the manufacturers of luxury products as the

leading experts with a strong `"reative power" in their area of excellence (Mutscheller 1992,
p. 222), which covers their technical and stylistic competences (Meert and Lasslop
2003, p. 2; Vickers and Renand 2003, p. 471). Technical competence can rely on a long-time
experience in their industry and on a strong focus on innovation and R&D. A respondent
was impressed that "Steinbrueck won the first prize in a competition by the European
Association of Craft." Stylistic competences of luxury manufacturers are expressed by
associations with exceptionally talented designers, who have an enthusiastic sense for taste
and aesthetics and create latest trends with "love and inspiration.’" Their ability even places
luxury manufacturers in a "position of superiority with respect to its clients, […] which is a
necessary condition for the richest and most powerful people to crave for luxury
[products]" (Kapferer and Bastien 2009b, p. 314).
Manufacturing complexity: The manufacturing of a luxury product requires considerable
effort, which often includes handcraft (see Lasslop 2002, p. 331) and a lot of time. For
instance, a respondent said that "manufacturing one of the excellent Lange \& Söhne
wristwatches often takes one and a half years."
II.1.2.2. Concrete Product Characteristics: Product Attributes

Material & Components: The material is a key characteristic of luxury products and one of
the most important criteria that respondents judge the value of a product by. In contrast to
materials such as plastics, there are materials that are generally associated with a higher
value in an inter-categorial comparison such as gold, silver or diamonds (Schmitz-Maibauer
1976, p. 232). However, these associations and the smallest requirements for materials
depend on the product category. For instance, in an intra-categorial comparison, silver
might be an adequate material for the luxury segment of cutlery, but the smallest
requirement for luxury watches is rather gold or platinum (Kisabaka 2001, p. 85 et seq.).
Construction and Function principle: The construction and function principle of a luxury
product is especially well thought-out. This category refers to the functional design of a
product, including, for instance, the construction of a chair, the function principle of an
umbrella and the cut of a fashion item. The construction and function principle are seen as
a prerequisite for durability, for instance, if two pieces of materials are stitched instead of
being glued together or are double instead of single-stitched. In addition, it is also a
prerequisite for comfortability and functionality.
Workmanship: A luxury product requires absolute perfectionism in workmanship with a
zero-tolerance for flaws. For instance, there can be no scratches on the material or any
imperfectly stitched seams. Consequently, the manufacturing of luxury products requires
much stronger efforts in quality control (see also Kisabaka 2001, p. 91; Mortelmans 2005, p.
50). However, some luxury products also feature some "planned imperfections" because of
handmade manufacturing, which do not reduce, but rather prove the quality of these
products.
Features: Luxury products offer more features than ordinary products, but only if they are
desired by the target group and do not reduce product usability. Although a jacket could
have special extras, such as a pocket for a MP3 player, distinctive features are especially
important for electronic equipment and cars. One of the respondents confessed: "I don’t
want to miss out on my distance alerter, my automatic lighting and the rain-sensing
wipers."
Product size: The product size should be as proper to function as possible, which depends
on the product category. For instance, while TV screens and mega yachts usually should be
as big as possible, complications in wristwatches should often be as small as possible.
Service: Kapferer and Bastien (2009b, p. 312) argue that luxury products "must have a
strong human content […] with services rendered by a human to another human" (see also
Keller 2009, p. 292). Excellent service covers the purchase experience and the (after-sales)
customer relationship management (see Kapferer and Bastien 2009b). The major service
tasks include customer advice, product modification or personalization, and reparation
(Valtin 2004, p. 109). A respondent realized that she bought a new skirt mainly because she
"could not resist entering this beautiful boutique on Sylt, where [she] got a coffee and
enjoyed the warm, friendly atmosphere." Another respondent explained: "You get a
lifelong guarantee with a Hermès belt. If you need a new hole, you just send it to them, and
they do that for free."
II.1.2.3. Abstract Product Characteristics: Product Benefits

Durability & Value: Most respondents expect that a luxury product is of high and long-
lasting value, which could result from superior materials, manufacturing efforts or
sophisticated construction and function principles. Durability covers the aspiration of luxury
product manufactures to create everlasting products, which will not be disposed of even
after long periods of utilization or defect, but will rather be repaired and even appreciate in
value over time (see Lasslop 2002, p. 342; Kisabaka 2001, p. 95) so "that you can even leave
them to your grandchildren." This is one of the reasons why many respondents do not
perceive trend products such as the iPhone as luxury products. Durability includes also \
textbf {product reliability}, which means that a luxury car, for instance, should work for a
long time without any problems (see also Lasslop 2002, p. 342). Luxury products are
traditionally associated with endurance, which is represented by De Beers’ traditional
slogan "A diamond is forever’" (Berthon et al. 2009). Some respondents also mentioned
that they buy long-lasting luxury clothing as these releases them from "wasting time with
shopping."
Comfortability & Usability: The abstract product characteristics rely on a combination of
concrete characteristics. For instance, superior materials and a perfect cut make a shirt cozy
to wear and a bigger car with nice technical gimmicks is also more comfortable.
Sophisticated construction and function principles can increase the usability and
practicability of luxury products, which help consumers to save time and effort. For
instance, this includes intuitive and easy to use radios, easy to clean kitchen appliances, and
easy to keep cars.
Functionality & Performance: Luxury products have a superior functionality, which means
that they `"ust do their job better." Luxury products have a prominent level of performance,
which is often much more than necessary and even ordinary as this statement
demonstrates: "In this car you can float over streets with a great sense of power. I don't
need to, but it's a very relaxing feeling."
II.1.3. Aesthetics

Almost all respondents perceive aesthetics as a distinct characteristic of luxury products. In

comparison to the other characteristics, aesthetics was mentioned most often by the
respondents. Kapferer and Bastien (2009b, p. 314) argue that "money is not enough to
define luxury [products (…) because it] is not a measure of taste." The aesthetics of luxury
products follow the taste of the upper class, which is the cultural relativity of luxury (see
above; also, Kapferer 2001, p. 322). Dubois et al. (2001, p. 13) emphasize the polysensuality
of luxury products as they "not only look beautiful but also are (and should be) pleasant to
hear, smell, taste or touch" and therefore offer a "source of sensual pleasure.’"A
respondent described her visit to the Gucci boutique in Miami as "sex for the eyes."
Another respondent emphasized the relevance of aesthetics: "The well-designed object is
essential in life to feel well." Not surprisingly, aesthetic product design is one of the most
important strategies of manufacturers of luxury products to differentiate themselves from
mass market manufacturers (Kapferer 2001, p. 321).
II.1.4. Rarity

Luxury products are not ordinary, but rather a rarity (Kisabaka 2001, p. 96). One of the
respondents explained: "I was the only one with this bag – and that adds a great additional
value." Another respondent argued: "I have already had this bag for a year and now
everyone is walking around with one – so I’m going to get rid of it soon."

Luxury
companies
ensure rarity
through limiting
production and
the
individualization
of their products
(Catry 2003, p. 11 et seqq.; Kisabaka 2001, p. 103; Nueono and Quelch 1998, p. 63). There
are natural limitations, which arise from the limited availability of product components
such as noble metals. In addition, most luxury brands employ artificial limitations such as
special editions. These limited editions can be improved further towards the ideal of a
unique piece by individualization. This includes intended irregularities by hand-made
manufacturing, by using natural materials or by artificial variations, which includes the
change of the starting point during the processing of fabrics or labeling products with serial
numbers. These measures are complemented with personalization of products according to
consumer wishes (Kisabaka 2001, p. 97 et seqq.). The consumers of the Guerlain "Kiss Kiss
Or & Diamants’" lipstick for 45,000 €, for instance, can choose jewels to decorate their lip
stick cover, request an engraving and get the creative director to mix them their very own
lip stick color (Trommsdorff and Heine 2008a, p. 1669).
II.1.5. Extraordinariness

This attribute was mentioned by most of the respondents but is often overlooked in the
literature. The extraordinariness of a luxury product often results "only" from a distinctive
design or construction principle. In their role as experts, luxury manufacturers often decide
the stylistic trends, which are then adopted by mass market manufacturers (Goody 2006, p.
344 et seq.). The respondents described that they expect something special from a luxury
product, a certain "kick", which could arise from insignificant details such as special buttons
on a shirt or an unusual positioning of the button border. A respondent explained that her
new blouse "seems to be army-style from a distance, but from close-up it appears to be
covered in small trees." This was described also as an "eye catcher at the second view."
These examples show that luxury products seem to have an ESP, an eccentric selling
proposition.
Nevertheless, extraordinariness may also be achieved with innovative functional attributes.
Many innovative technologies are introduced in luxury products before they spread to mass
market products. This was the case for technologies such as the ABS and the airbag (Valtin
2004, p. 26).
In addition to eccentric or innovative functional features, extraordinariness may also arise
from the product’s history or its manufacturing process. For instance, a respondent was
excited about "a jacket, which was made of Tibetan quilts from a Russian immigrant in
Paris." Finally, the extraordinariness of luxury products may be achieved by the brand
image.
II.1.6. Symbolism

While mass market products mainly stand for their functionality, luxury products generate
numerous non-functional, abstract associations. Mortelmans (2005, p. 505) argues that
"every notion of functionality is reduced as far as possible." In fact, there is no other
product category with a similar relevance of symbolic benefits, which often even exceeds its
functional benefits. One of the respondents explained: "I have a special relationship to
cars. They must turn me on. It’s very much about feelings, a lot of feelings. A [Mercedes] S-
class can come with super features, but it just doesn’t turn me on." Another respondent
thinks that these products "have a lot to say – they talk to you."
The symbolic meaning refers to a substantial extent to human values and lifestyles
(Kapferer 2001, p. 321; Vigneron and Johnson 2004, p. 490). Consequently, the symbolism
of luxury products and brands is covered to a substantial extent by the concept of brand
personality, which was adapted to the luxury segment by Heine (2009). The five major
dimensions of the luxury brand personality include modernity, prestige, sensuality,
understatement and eccentricity.
Luxury products cannot symbolize anything, but just as with their aesthetics, they need to
follow the worldview and taste of the upper class. Kapferer and Bastien (2009b, p. 314)
argues that "the DNA of luxury is the symbolic desire to belong to a superior class."
Therefore, all luxury brands must possess a high level of prestige, which they also have to
symbolize at least to some extent (Keller 2009, p.291).
Symbolic meaning can be conveyd through product design (Kotler et al. 2007, p. 636; Valtin
2004, p. 116) or with specific product information, for instance by showing that a famous
movie star recommends the product. Luxury products are often linked to popular
celebrities, prestigious events or an attractive country-of-origin (Keller 2009, p. 292). An
oenophile daydreamed: "It is very fascinating to open a bottle of wine from 1912, which
witnessed two World Wars – and when you imagine everything that has happened since
that time..." Of course, the symbolic meaning of luxury products is also highly influenced by
their brands (see also Me_ert and Lasslop 2003, p. 5; Nueono and Quelch 1998, p. 62).
This chapter explained in detail the characteristics of luxury products. According to their
definition, luxury brands must create associations about a prominent level of price, quality,
aesthetics, rarity, extraordinariness and a high degree of symbolic meaning, which can only
be achieved by adequate marketing and especially communication measures. Because of
their high relevance, the next chapter gives an overview about the major marketing-mix
strategies that allow for the influencing of consumer feelings about the major luxury
characteristics.

What is Brand Identity?

Building a brand is about developing an identity. For both an individual and a brand, identity is the
answer to the key question: “Who am I?”

Brand identity is a detailed blueprint of brand meaning that decides precisely (1.) what
managers want their brand to stand for and (2.) how they would like it to be perceived by
customers and other internal and external stakeholders. It covers all kinds of thoughts and
associations that may influence people’s opinions about a brand (see also Aaker, 2010;
Heine, 2018; Kapferer, 2012). It encapsulates who you are, why you exist, what you believe,
what you do, and how you communicate. Brand identity planning helps to create your
brand’s unique fingerprint to give it an aura and soul, and a personality all its own (Upshaw,
1995).
 A brand’s identity is usually outlined in a central document that is known as the brand
platform, brand handbook, or brand guidelines. Every company, no matter their size and no
matter what industry they are in, should have a brand platform. It will be your constant
companion to build and grow your brand. It ensures that everyone in your company knows
what your brand is about – and it also helps to explain your brand to agencies and other
external partners.
Brand Identity vs. Brand Image

Brand image is the counterpart of brand identity (see

Figure below). It is the total set of associations about
a brand shaped in people’s memory because of
marketing measures and other experiences with
reference to the brand. So, when you want to be a
sophisticated person, that's your personal brand
identity – and when people think that you are highly
embarrassing, that's your personal brand image.
 
Brand Identity vs. Self-Concept

Brand identity and self-concept seem to be pretty much the same thing: In psychology,
‘identity’ is also referred to as ‘self-concept’. A person’s self-concept refers to her/his
feelings about who s/he is (attributes, self-worth, etc.) and who s/he wishes to become
(Rogers, 1959). This short definition suggests that there are several types of self-concept
(see Figure below).
But the key point here is Brand identity stands for not the actual, but the ideal (social) self.
It should not describe what a brand stands for today, but instead should represent...
The ideal self – what brand managers wish their brand to become in the future and
The ideal social self – how they would like the brand to be seen by their target groups.
Brand identity is goal-driven – it serves as a guiding star for brand managers.

The Interplay between Brand and Customer Identity

Because of the basic human need for self-consistency, people are motivated to consume
brands that they feel are consistent with their self-concepts. They are less drawn to brands
that have no relevance to their self-concepts – or to those that appear contradictory.
 
Because of the basic human need for self-esteem and personal growth, we are all
motivated to close the gap between our actual and ideal selves via discrepancy-reducing
behaviors (Higgins 1987). One particularly trendy way is through buying new stuff.
Depending on their desired self, some people must have a Hermès Kelly bag, some swear
by their Toyota Prius, and some don't want to miss their organic supermarket.
Clothing, housing, and automobiles are all bought as a 'second skin' in which others may
see us. Consumption of such products is an expression of people's self-concepts and a form
of impression management (Ward and Dahl, 2014). People often perceive such possessions
even as part of their self (called extended self; Belk, 1988). Brands can provide with their
products the means for their customers to move closer to a higher goal - to become the
person they want to be.
Crafting a meaningful brand identity is, therefore, an important prerequisite to attract your
target customers.
 Brand Identity vs. Brand Positioning

Brand Positioning is “what a brand stands for in the minds of customers and prospects,
relative to its competition, in terms of benefits and promises" (Upshaw, 1995, p. 14).

 
A short Recap of how traditional Positioning works
Traditional positioning is typically used in the mass-market but is also used by big prestige
car brands such as Audi and BMW. They conduct surveys to ask consumers to compare
their brand with competing brands. The results are depicted in a positioning map (see
Figure below). The dimensions of the positioning map correspond with the criteria that are
especially relevant for the customer’s purchasing decision (Keller, 2012). Car brands may be
positioned by prestige, performance, and innovativeness. Based on the positioning map,
brand managers evaluate the attractiveness of their brand’s market position: Is it too close
to competing brands? Is it close enough to their customer’s ideal brand? Then they find
positioning gaps and decide whether they want to move their brand to a new position. To
position BMW as more innovative, they could roll-out an ad campaign and then measure
the changes in the brand image.
 
 
 
Traditional Positioning is not compatible with Identity-driven Branding
Compared with positioning-based (mass) marketing, the main source of inspiration for
identity-driven (high-end) branding has shifted from consumer and competitor analyses to
the companies’ own beliefs and vision (Kapferer, 2012). Identity-driven brands do not
change their beliefs (about who they are, about what is right or wrong, and about how to
do business) according to market trends and circumstances, but instead want to remain
true to themselves and create their own trends. They go out into the market and look for
customers who share their vision. Instead of changing their core values, they would rather
change their market and seek out different customers.
 
 The Brand-Building Canvas:
How to Build a Business and a Brand in One Go
 

 
The Brand-Building Canvas can be used for
both Business Modeling and Brand Identity
Planning
Entrepreneurs never just create a business
– but also a brand at the same time. Today,
the ‘symbolic meaning’, the brand’s vision
and story are not just a nice add-on, but in
many cases the central idea of a new business. Most young entrepreneurs do not just want
to make money but create purpose-driven brands. As building a business and building a
brand are so closely intertwined, the Business-Building Canvas (Osterwalder and Pigneur,
2010) was combined with brand identity planning into the Brand-Building Canvas. As it
covers all aspects in the Business Model Canvas and the major brand identity planning
models, it can be used to analyze and develop a business model and a brand’s identity.
  The Brand-Self-Seven

If you focus on brand-building, you need to consider only the first seven blocks of the
Brand-Building Canvas.
This part is referred to as the Brand-Self-Seven:
 

 
 The Brand-Self-Seven (the Big Seven of Brand Identity) help to develop a Brand’s Self
(Identity) by moving through seven Brand-Building Blocks.
The seven blocks of the Brand-Building Canvas are arranged simply by common sense: The
Vision is on top (block I); the Product (business idea) is the starting point (block II); the
Customers are in the center of attention (block III); it follows the Brand Character (the
meaning behind) on the left (block IV); Relationships describe the mode of conduct
between the brand (IV) and the customers (III) (block V); Touchpoints connect the products
(II) with the customers (III) (block VI) – and all this is symbolized by  Brand Expressions,
placed at the bottom (block VII). Assuming you want to explain your brand to a colleague,
agency, or friend, the seven blocks help you to answer their typical questions about a
brand: What is the product (advantage)? Who are the customers? Who is behind the
brand? Why are they doing this? How do they reach customers? How do they deal with
their customers (personal, automated, etc.)? How does the brand look like (logo, etc.)?

Because of their focus on non-functional benefits, this template is particularly

suitable for identity-driven brands (lifestyle brands), especially for high-end,
cultural, and alternative brands. The Brand-Self-Seven template provides the
foundation and structure of the book "How to Build a Brand to Change your
World." Each main section of the book supplies an overview about one of the
seven major brand-building elements. As some of them cover various other brand
identity elements, they are structured by additional brand-building templates.
A short Overview about the major Brand Identity Elements

Block I: Vision

Like a great dream, a vision is a picture of the

preferred future of a brand, but also of the future
of society and the subculture or industry in which
the brand operates. As part of the vision, the
brand purpose outlines a brand’s fundamental
reason for existence and how it aims to make the
world a better place. As a brand’s overarching
guiding idea, the vision shapes a brand’s identity
and influences all other aspects of marketing and branding. Therefore, it must be part of
the brand identity (but is not included in most major models). In addition, it makes no sense
to class the vision as a subcategory of another brand identity element (e.g., part of ‘Brand
Tonality’ by Esch, 2017), but it should be placed on top of the brand identity model.

Block II: Product

Product-related associations are a major part of brand image (Keller, 2003). As the most
important components of brand image play the biggest role in shaping people’s opinion
about a brand, they should be included in brand identity planning. Whatever is unimportant
in shaping brand attitudes, does not need to be considered for the development of brand
identity. This brand-building block refers to the products and product characteristics you
want potential customers to associate with your brand.
Block II.2: Brand authority: 
If consumers are interested in a product category, they generally have some idea about
what brands they believe to be the quality leaders. And when they think about a certain
brand, they ask themselves: What is this brand good at? This brand identity element covers
the ‘product scope,’ ‘product uses’ and ‘competencies’ that you want your brand to be
known for (Aaker, 2010; Kapferer, 2012).

Block II.3: Brand Qualities: 

Brand qualities cover the attributes and benefits that a brand

wishes customers to associate with its products. What you
would like your brand to be may also depend on (1) your
customer’s product evaluation criteria and (2) the product
characteristics of your competitors. Brand qualities supply the
basis for positioning.
Block II.4: Value Proposition: The value proposition outlines the
most convincing reasons (key benefits) why target customers
should buy a particular brand/product. To differentiate from
competitors, you can try, over time, to make your brand known
for products that fulfil a specific key benefit. The value proposition is something each of
your employees and customers should know about – therefore, it must be part of the brand
identity.

Block III: Customers

When asked about their opinion about a certain brand, people often at once describe the
typical customer they have in mind (Keller, 2003). As a typical part of brand image, it must

also be a major brand identity element.

Block III.5: Target Customers: 

Ideally, target customers refer to a specific niche segment. They are often not the same
people who you want your customers to think would buy your products, but they are still
part of the brand identity for these two reasons: First, thinking about a brand’s prototypical
users without specifying its target customers first, leads almost always to confusion.
Second, brand identity does not only refer to what you want customers to think about your
brand, but also what you want to your brand to be. Apart from segments that are
unattractive in terms of economic criteria (e.g., buying power), you may want to stay away
from customers who do not fit to your brand (vision, values, etc.).

Block III.6: Prototypical Users:

 This brand identity element describes the typical users who you want your customers to
associate with your brand. A brand’s ‘proto-typical user image’ refers to consumer feelings
about the users or buyers who seem to be addressed by the brand. Depending on their
opinion about these perceived users (if actual clients or not), people like or dislike this
brand. Because this has a profound impact on their business success, brands aim to
influence their prototypical user image through brand communications. Porsche portrays in
adverts men who are as young and dynamic as their actual 60+ customers would like to be
again. The prototypical user is the ideal (social) self of your core target customers – the
person they would like to be.

Block III.7: Brand-related Self:

 The ‘brand-related (desired) self’ describes what you want your customers to feel and think
to become when using your brand/products (Kapferer, 2012). Dove clients may feel being
more beautiful and self-confident when using their creams. Connecting your
brand/products with the life goals and desired self of your customers means that they can
be used by your customers as means to achieve a higher end: to feel living their desired
lifestyle and to become ‘who they really want to be.’ This brand element can help your
brand to play a significant role in the lives of your customers and can help you to connect
your customers to a higher purpose (beyond the self), to achieve even ‘irrational loyalty’
(Tait, 2013).
 

Block III.8: Brand Culture:

 Every group of people develops a common subculture over time – and everybody is part of
a culture or of different subcultures. So, everybody does not only have a personal, but also
a cultural identity. This should be reflected in the brand identity framework by having both:
brand personality and brand culture. Sides of brand culture include place of origin, brand
nationality, brand spirit, brand values, brand principles, and brand lifestyle. When you
associate your brand with a subculture, you create brand meaning and inspiration. For
instance, Ralph Lauren is American aristocracy and Boston high society and WeSC (fashion)
is rooted in skateboarding. Brand culture creates the frame for brand personality.

Block III.9: Brand Theme: 

Brands are constantly driven today to create new (social media) content to grow traffic and
sales. But many brands just add noise by creating content for content's sake. A brand
theme is particularly useful to supply direction and meaning to a brand’s (social media)
content marketing, which is so important today that it should be included in the brand
identity model. It is an ‘overarching idea’ that supplies the foundation of your brand’s
content strategy over the long term and can inspire the design of your marketing-mix
instruments (posts, websites, adverts, events, stores, etc.). For Louis Vuitton, for instance,
‘travel’ has been a major inspiration since the brand's beginnings in the 1800s.

Block IV.10: Public Face: 

When asked what they know about a certain brand, consumers typically come up also with
people-related aspects, about the brand’s founders, owners, managers, designers, and
other representatives. This brand identity element describes who is behind a brand. For
instance, for many consumers it makes a difference whether this is a family business or
some multinational corporate group. Given the desire of many people to set up trustworthy
(business) relationships with real people, brands need to think about who they want their
customers to see as the face of their brand. Many fashion designers or star chefs become
the face of their business and develop into personal brands. However, every brand should
cultivate at least one powerful personal brand from within the company.

Block III.11: Brand Personality: 

Brand personality is so well-established and important for brand-building that it is included

in all major identity models. A brand’s personality is often described by only a few
personality traits such as decent, cheerful or honest. To create a more meaningful, inspiring
and consistent brand, you can employ personality-driven branding strategies: (1) Describe
your brand personality in sufficient detail to evoke a metaphoric mental picture about the
person you want your brand to represent; do not just rely on personality traits, but also
include demographics, life goals, motives, reference groups, etc. (2) Imagine your brand to
be a real person and keep her/him in mind for all type of branding decisions (about the
design of a website, store, etc.).

 Block IV: Brand Character

This is the core identity that characterizes the ‘who’ behind a brand (also called ‘brand
tonality’ by Esch, 2012). Given that consumers find it increasingly important to know who's
behind a brand, this brand-building block supplies a key source for creating (symbolic)
consumer benefits.
Block IV.1: Brand Relationships

This brand element is

considered in most of
the major brand
identity frameworks (by
Aaker (2010) and Esch
(2017) as a subcategory
of brand personality).
The brand relationship
block describes the
mode of conduct and
operation a brand aims
to set up with its target
customers and other
stakeholders. They
affect the way a brand behaves, delivers services and communicates with its clients.
Companies like Uber created competitive advantages by disrupting the established
relational roles in their industry (from driver/passenger to entrepreneur/supporter).
 

Block IV.2: Brand Touchpoints

Touchpoints generally refer to the principal stage’s customers pass through in their
interaction with a brand. When people think about a brand, they also associate typical
communication and distribution touchpoints with the brand (Keller, 2003). Therefore,
touchpoints should also be considered in brand-building as a part of brand identity. Brand
touchpoints describe for what type of interaction and marketing channels a brand wants to
be known for. For instance, to become an internationally renowned luxury house, brands
need to develop concept stores in prestigious shopping streets such as Avenue Montaigne
in Paris.
 

Block IV.3: Brand Expression

When you know what your brand should stand

for, it is time to think about how to express that
to its target groups (also referred to as ‘brand as
a symbol’ by Aaker, 2010). For instance, Louis
Vuitton uses the Monogram Canvas pattern to
express its heritage and elegance (Esch, 2017). A
brand’s identity can be expressed by brand
design, communication, and behaviour. Brand design alone is a broad field of work
including, for instance, the brand logo, layout, colors, and typography. Many companies still
instruct an agency to develop their website without thinking first about what they want
their brand to stand for. And many agencies still start with the brand design before laying
the conceptual groundwork. The process of identity planning works like a structured
creativity technique that delivers the creative input for brand design. A meaningful,
inspiring, and consistent brand design is an expression of the great deal of thought and
effort spend on the conceptual work.
The Concept of Luxury Brands

The eBook about the Definition, Characterization and Categorization of Luxury

Products and Brands. It includes a Taxonomy of Luxury and a Handbook for the Creation of
Luxury Products and Brands
"The Concept of Luxury Brands" characterizes both luxury products and brands and
distinguishes similar concepts such as premium and masstige and differentiates between
major types of luxury products and brands such as accessible vs. exceptional luxury
products and connoisseur vs. star brands.
As luxury is constantly on the move, this concept will be constantly updated. Therefore,
please feel free to send me your feedback and ideas. The latest publication you can
find here.

One of the most pervasive domains in the last forty years that has captured the attention of
CEOs, consultants, managers, and academics is branding. How can companies build
successful brands? How can they make those brands resonate with customers across time
and space? What are the key success factors that allow certain brands to dominate the
global brands cape?
Although these questions have been asked and answered variedly repeatedly over time,
CEOs and brand managers across the world still grapple with building iconic brands. And
the handful of brands that have collectively captured consumers’ psyche are the ones that
originated a couple of decades ago.
This yet again drives home the point that the emergence of new iconic brands is not an
easy task. This is the case in the special context of luxury brands. Given their unique
positioning and niche targeting within the larger mass markets, luxury brands face a double
whammy of the liability of market newness and the uphill task of competing with well
entrenched incumbents that have made deep inroads into the local cultural fabric.
As competition increases and the trend from commoditization continues, companies are
keener than ever to create strong brands, especially luxury brands that can increase their
revenue base, enhance their overall brand equity, and strengthen the base of their loyal
customers. However, building luxury brands is extremely challenging.
Given these inherent challenges, how can companies build globally successful luxury brands
that simultaneously appeal to key customers while differentiating themselves with the field
defined by long-standing brands?
This article proposes a practical framework for CEOs and brand managers to build
resonating luxury brands by following certain key strategic steps. Specifically, this article
provides five key steps for CEOs and brand managers that can facilitate the creation of basic
building blocks for creating a resonating luxury brand.
Identifying a niche segment

One of the fundamental principles of effective branding is for brands to diligently select a
lucrative segment that they can then target through an enticing positioning. Although this
general principle is universally applicable, luxury brands are substantively different from
other brands.
Luxury brands are built on the premise of offering high symbolic value to a very selective
segment of consumers that are more focused on high status associations than the
underlying price. As such, the first step for companies to build a powerful luxury brand is to
identify a niche segment of affluent customers and devise offerings that are valued by those
customers.
Given the focus on highlighting symbolic value either through an overall brand experience
or via exclusivity in offerings, price points or availability, luxury brands have a heightened
need to identify their niche segment to which they design their offering to.
For example, the Giorgio Armani brand is known globally for its very high end designer
clothing line for men. Although the brand began by specifically targeting the ultra-high end,
mobile professionals that cared for a high quality product, over the years, it has gradually
expanded its brand architecture scope with different products and slightly broader
customer segments.
Recently, Armani announced that it would launch the Armani jeans in the US market
targeted at fashion looking for yet price sensitive youngsters in the urban metro cities in
the US. Selecting such a niche segment is key even to an established luxury brand such as
Armani. As such, it becomes even more important to an aspiring luxury brand.
2. Positioning based on high levels of differentiation

As global brands strategize their competitive moves, they are likely to either follow a cost
leadership strategy or a differentiation strategy. All luxury brands follow a differentiation
strategy. However, unlike differentiation on mere product attributes, luxury brands should
aggressively differentiate their brand experience.
Unlike the usual mainstream brands, luxury brands are characterized by high levels of
customer loyalty, key features that define their identity and powerful associations with
certain central intermediaries in the market for luxury products. These features mandate
that the level and type of differentiation that luxury brands carry out be even more
powerful, more distinct, and more focused on the symbolic value that it offers to
customers.

Southwest Airlines is a leading brand that has always consistently followed a differentiation
strategy. But the bases for its differentiation are its overall cost structure and its corporate
culture. Although such a differentiation has propelled Southwest as one of the most
successful airlines, those very bases have also highlighted primarily the functional value of
the brand and have differentiated it from a true luxury brand.
On the other hand, Bang & Olufsen, the iconic Danish luxury brand in design and
electronics, is globally acknowledged as a leading luxury brand in its industry as the bases of
its differentiation highlight primarily the symbolic value and appeal to customers’
psychological need to associate themselves with brands that are high on the social
hierarchy. In this context, Bang & Olufsen does not only compete with similar brands in the
same industry category – they compete with other luxury brands.
3. Emphasizing the symbolic value

The most important element of creating luxury brands is the brand’s ability to create and
communicate symbolic value for its customers. Brands usually offer two types of value –
functional value and symbolic value. Functional value emanates from the features and the
potential uses of the brand. Functional value highlights the base line value that customers
expect when they buy a brand over a commodity or a store brand because of its underlying
promise of quality, reliability, and trust. As such, it directly reflects the tangible ability of the
brand for the customers.
Symbolic value on the other hand emanates from the social standing of the brand, that is,
the extent to which the brand is perceived as being an elite offering aspired by the
customers. As such, symbolic value reflects the extent to which the brand is endorsed and
validated by the cream of the customers. Global brands aspiring to build luxury brands
should carefully devise strategies to emphasize their symbolic value for their customers.
Unlike many of the mainstream brands, luxury brands are all about creating a sense of
social standing for customers, for which they don’t mind paying premium prices. As such,
aspiring luxury brands should strive to carve out their own way of creating symbolic value in
the segment of customers that they are primarily targeting.
One way to emphasize the brand’s symbolic value is through storytelling and building a
longstanding heritage. If one were to study the similarities between luxury brands in the
market today, it is very apparent that all luxury brands have a story to tell, from its
founder’s story of founding the brand, to its sustainable efforts in connecting with society.

One very good example is the Ralph Lauren brand. Starting out with making rags into ties,
the American label is truly the rags-to-riches American Dream personified. As Ralph Lauren
once said, “I don’t design clothes, I design dreams”.
Another example of a brand that has leveraged on this strategy of creating a
perception of a longstanding heritage is TWG Tea. The 1837 date on its
logo marks the beginning of when the island became a trading post for teas,
spices, and fine epicurean products, but also serves as an element
reflecting the heritage of tea making and the brand’s commitment to fine tea
production

4. Creating perceptions of exclusivity

What makes a brand to be perceived as possessing symbolic value? Among others, an important factor is
the perception of exclusivity. All luxury brands strive to create a sense of exclusivity for its customers.
Perceptions of exclusivity can in terms of unattainable price, limited geographic availability, barriers to
possession, or even limited supply. These mechanisms of creating perceived exclusivity not only creates a
pseudo sense of demand for the brand in the eyes of the observer but also enables those who patronize
the brand a sense of special status.

Furthermore, creating the perception of exclusivity also enables the brand to sustain its positioning in the
face of extreme external shocks such as heightened competition, regulatory shocks or even recession. As
such, CEOs and brand managers striving to build luxury brands should carefully devise their strategies and
resulting tactical actions to create a sense of exclusivity for their brands.

Consider the example of Nokia Vertu, the ultra-high-end mobile phone launched by Nokia only directed at
luxury seeking customers. In addition to selling them through “Vertu Stores” that were located among
showrooms of Prada, Gucci and Louis Vuitton, Nokia also managed to limit its supply to create a very
strong sense of limited availability and exclusivity.

Another example of a brand that is well-known for using an exclusivity strategy is Hermès.

The aura of exclusivity around the brand is a result of its

philosophy and aim to always remain “ultra-premium luxury” -to
be afforded by only the very few and not be easily available.
Such strategies can facilitate aspiring brands to create
successful luxury brands.

5. Uncompromising delivery on superior brand promise

One of the biggest challenges for any brand is to consistently deliver on all the brand promises. Successful
brands are those that create supportive organizational and operational structures that facilitate the
implementation of strategies to deliver on the promises. However, delivering on brand promises involves
multiple dimensions in the case of luxury brands. Not only do luxury brands need to consistently deliver on
the promise of symbolic value, but they also will need to project consistency and continuity in every
possible touch point.

Giorgio Armani, the Italian luxury fashion brand, takes great efforts to ensure that all touch points are
effectively met across its vast global operational system. Singapore Airlines is also another great brand
that is the embodiment of a well-delivered brand promise with strong Asian roots. The Singapore Girl was
created in 1973 based on the promise of a great way to fly based on delivering consistent great service and
by using the latest technology available.

To add to this, given the external shocks in terms of global recession leading customers to cut down on
their luxury products, they are also forced to compete on non-luxury brands, many time on the price front.
In fact, many luxury and high-fashion brands have not been immune to this as we see many companies
creating sub-brands in their brand architecture to capitalize on and cater to the lower-priced customer
segment. In such situations, it becomes even more important for luxury brands to solely focus on
highlighting the symbolic value through brand experiences than being inconsistent to its brand promise of
high value.
For example, the recent recession and global downturn was a huge challenge for luxury brands as
customers may postpone spending money on luxury purchases. However, the most successful of luxury
brands are not right away getting involved in a price war. Louis Vuitton is a good example of this as the
brand is never on sale, and any surplus merchandise is destroyed systematically to avoid dilution of the
brand equity. Maintaining their focus on superior value and unique brand experience across time and space
is an important part of uncompromising delivery of brand promise.
The Importance of Branding in Business
A business’s branding is more important than you might think. On the outside, your brand may seem like it
consists only of elements such as logos and colors, but your brand is the entire identity of your business.
Your brand gives you personality.

Branding has always been a vital part of business, but it may be more important now than ever before. With
social media, consumers get exposed to new brands every day. This can be great for consumers who have
plenty of options and are able to do research to find the best one, but it makes it harder for businesses.

There’s a huge amount of competition today, so businesses need to go the extra mile of ensuring
they stand out in a crowd. To do this, you should invest in creating a strong brand that will get and keep
people’s attention. With the right branding, you have the chance to get some control over how people
perceive your business, so you don’t want to overlook this.
More People Will Recognize Your Business

One of the most obvious reasons that businesses need branding is to help them get recognized more often.
If you have strong branding for your business, people will naturally take note of it much more than they
would a business without it. A business that doesn’t really have any cohesive branding isn’t going to stay in
someone’s mind for very long.

However, a business with elements such as a distinct logo, attractive colors and other visual elements will
be much more memorable. Someone might see your brand for only a moment, but if it sticks out in a
positive way, there’s a good chance they won’t forget it, even if this person isn’t ready to use your products
or services just yet. Eventually, when they’re ready to take the next steps, if your branding has stuck with
them, they’ll come back to you.
Branding Can Help Build Trust 

Trust from your audience is one of the most important things you can have as a business, but this isn’t
always easy to gain. A business that’s missing key elements of branding will have an even harder time
getting people to trust them.

Branding is something many of us expect to see when we look at businesses in any industry and missing
this could be a red flag to some. Without branding, you have very little to show for your business.

If you had to choose between a business with clear, professional-looking branding and a business that
hasn’t made this effort, you probably know which one you’d trust more. Branding helps you show potential
customers that you’re an established, credible business. You can use this to tell people very early on what
they can expect from your business. This is an investment your business is making to improve itself, and
potential customers will recognize that you put in the work to create your brand.
You Can Improve Your Advertising

Your business won’t be able to get very far without advertising. Branding and advertising go hand in hand.
If you want to have better advertising for your business, you’re going to need to work on creating a brand
first.

When you’re advertising your business, you want everything to be cohesive and represent your business’s
identity and values. This can be a challenge when you haven’t taken the time to form your brand. If you’re
advertising without solid branding, you’re missing out on a lot of great opportunities to create an effective
campaign. Incorporating branding into your advertising will help increase recognition of your brand when it’s
all tied together.
It’s Great for Your Employees 

Branding provides value inside of your company as well. Of course, you want your employees to love
working for your company and feel like they’re a part of a team. A company with great branding will have an
easier time getting employees to feel like they’re involved with something more than just a job.

In addition to branding that can help draw in new customers, you also want to invest in the aspects of
branding that keep your team motivated. This includes little things like branded apparel and merchandise,
but also the look of your entire office space. If you can motivate your employees by creating a sense of
unity through branding, you could end up seeing great results all around.
Branding Creates Loyal Customers

You don’t just want customers who recognize your brand and use your business once — you want to
create customers who continue to come back. With good branding, you can give your brand a more human
side, which your customers can relate to more than a company that’s strictly all business.

In many ways, you can appeal to people’s emotions through branding and make them feel more connected
to your company. Branding allows you to build relationships with your audience, which can eventually turn
them into loyal customers. You can create a brand that people care about and put yourself ahead of
businesses that aren’t using this to their advantage.

Luxury Brands in Retail

Luxury retail groups usually produce several luxury brands under their umbrella across various retail
segments. These include fashion, beauty, accessories, and beverages. Most of the luxury segment in retail
is consolidated under a few conglomerates.
For example, LVMH is a conglomerate specializing in luxury goods, and owns some of the most popular
luxury brands, such as Louis Vuitton, Fendi, Christian Dior, Givenchy & Marc Jacobs.

See a List of: Luxury Fashion Brands and the conglomerates they belong to

Another player is the Richemont group, which owns brands such as Cartier, Van Cleef & Arpels & Mont
Blanc.

Luxury fashion brands vary in their degree of exclusivity, where Haute Couture involves the highest level of
scarcity with very few pieces for select few customers and RTW have a broader market with standardized
products.

In all cases, those brands maintain a very high degree of quality and craftsmanship and force their level of
exclusivity through high price points.

Types of luxury brands

Luxury Brands in Hospitality

Marriott is one of the largest hotel groups in the world and has several luxury hotels brands under its
umbrella. These include Bulgari, The Ritz Carlton, JW Marriott, and St Regis.
These hotels tend to provide a special experience that makes their guest feel exclusive and special.

Luxury Brands in Automotive

A lot of automotive manufacturers that sell to the masses also add a luxury brand to their product line.

For example, Nissan’s luxury brand is Infiniti and Toyota’s luxury brand is Lexus.

Other automotive players specialize in luxury lines, such as Rolls Royce, Jaguar, and Range Rover.
Luxury vs. Premium

A lot of people confuse between luxury brands and premium brands, or assume they are the same.

The main difference between luxury brands and premium brands is in the audience they are targeting.
Premium brands target a large audience, basically whoever has the need for its product and is willing to
pay up for the high quality.

Luxury brands, as we mentioned, do not seek to appeal to everyone and want to remain exclusive, and so
they set their prices at a prohibitively high level, even though it does not necessarily translate into a much
higher quality than the premium.

If a luxury brand attempts to appeal to a broader market by lowering its prices and becoming more
accessible, it risks losing its luxury status because it will no longer possess the scarcity aspect.

This is important to understand while starting a fashion line, because it will determine how the brand will be
marketed and priced.

Take our foundations of marketing course, and learn why marketing fundamentals play a big role in retail
buying, merchandising and pricing.
Few examples of Luxury Makeup Brands

 Chanel

The French company Chanel has been around for nearly a century, but it only started producing makeup a
few years ago. The brand’s high-end products are now a staple among the world’s most famous women,
including Gwyneth Paltrow, Jennifer Lopez, and Nicole Kidman. Chanel’s makeup products are luxurious
and beautifully packaged, making them ideal for gift-giving.

While the brand’s lipstick, eyeliner, and other products are pricey, they have a high-end quality that justifies
the cost. Some of Chanel’s most popular products include the Coco Hydrating Coco Lotion ($85), Coco
Mademoiselle Eau de Parfum ($100), and Rouge Coco Lip Colour ($32).

2. Estee Lauder

Estee Lauder is one of the oldest and most successful cosmetics companies in the world. The brand
continues to produce a wide variety of skincare, fragrance, and makeup products, including the iconic
“Lipstick” product. Estee Lauder’s Double Wear Foundation is a top-rated product among makeup artists
who work with celebrities.
Other popular products include the Pure Color Envy Sculpting Palette, the Bronze Goddess Sculpting
Mascara, and the Estee Lauder Blindfold fragrance. The brand’s skincare products are also worth
mentioning, especially the Estee Lauder Advanced Night Repair Eye Cream and the Advanced Anti-Aging
Cream. No matter what your beauty needs might be, Estee Lauder has a product for you.

3. Dolce & Gabbana

Italian designers Domenico Dolce and Stefano Gabbana are the masterminds behind luxury fashion brand
Dolce & Gabbana, whose makeup and fragrance products are beloved by celebrities and fashionistas
across the globe. Some of the brand’s most popular products include:

The Dolce & Gabbana the One perfume ($69.99), the Perfection beauty makeup palette ($69.99), and the
Full-on Lashes Mascara ($29.99). The brand’s makeup palettes and lipsticks are also worth mentioning,
especially the Lip and Eye palette. Dolce & Gabbana’s makeup line is available at the D & G stores, as well
as other high-end stores where the brand’s products are sold.

4. Gucci

Although Gucci is primarily known for its handbags, the Italian fashion house makes some luxurious
makeup and fragrance products as well. The brand’s makeup line is designed to stand out: its eyeshadow
palettes feature bright colors, and its lipsticks are rich in color. Gucci’s makeup products are best suited for
those who like to stand out and make a statement.

The brand’s eyeliners, lipsticks, and eyeshadow palettes are beautifully packaged and sure to catch the
attention of everyone around you. If you’re looking for a high-end makeup brand that stands out, Gucci’s
products are worth a try. Its makeup products are available through Gucci stores and other high-end
retailers.

5. Lancome

The French luxury brand Lancome makes both skincare and makeup products. The brand’s foundation and
mascara are best suited for beginners, while its eyeliners and lip liners are popular among makeup artists
and celebrities. Lancome’s high-end products are popular because of their ability to blend in with most skin
types.
Whether you have oily or dry skin, the brand’s makeup products are good enough for any occasion — and
they’re great for gift-giving, too. Lancome’s makeup products are available at the brand’s stores and other
high-end retailers.

6. Mac Cosmetics

Beauty brand Mac Cosmetics is primarily known for its skincare and professional-quality makeup products.
The brand’s skincare products are great for protecting the skin from harmful UV rays, while its makeup
products are designed to last all day long. Mac’s Lipsticks are some of the most popular products in the
brand’s makeup line.

There are so many shades to choose from, you’re sure to find your perfect match. Its eye-catching lipsticks
are also available in a variety of different finishes, so you can find the one that works best for your skin
type. Mac Cosmetics’ makeup products are available at the brand’s stores, as well as other high-end
retailers.
7. Marc Jacobs Beauty

Fashion designer Marc Jacobs has recently branched out into the beauty industry, launching his own
makeup line named Marc Jacobs Beauty. The brand’s products are inspired by New York’s urban culture,
making them a perfect fit for the city’s trendy women. Marc Jacobs’ Highliner eyeliner ($25) is one of the
brand’s most popular products.

The brand’s eyeshadow palettes are also worth mentioning, especially the “Re-Invented” palette. Marc
Jacobs’ makeup line is available at the brand’s stores and other high-end retailers.
8. Tom Ford Beauty

Fashion designer Tom Ford’s eponymous fashion and beauty brand is an industry favorite. The brand’s
high-end products are designed to make people feel confident and beautiful, which is something all women
can appreciate.

Tom Ford’s lipsticks are the brand’s top-selling products. The brand’s lipsticks are rich in color, long-lasting,
and comfortable to wear. Tom Ford’s makeup products are available at the brand’s stores and other high-
end retailers.

9. Huda Beauty Cosmetics

If you’re looking for an affordable makeup brand that will give you quality looks, Huda Kattia Shattiwal is the
one for you. The founder of the brand is a makeup artist who understands the needs of her customers. She
understands that makeup is more than just something to cover up your flaws—it’s supposed to enhance
your natural beauty.
Her range of makeup products is affordable and yet the quality is top notch. The Huda Beauty range is
extremely pigmented and will stay on for longer without fading. The best part about Huda Kattia Shattiwal
is that she never stops searching for better formulas, so the more you buy, the more she adds to her
inventory! Huda Beauty is available for sale on various e-commerce portals like Nykaa, Make-Up 24, and
even Amazon.

10. Dior Beauty

Dior is a world-famous luxury beauty brand that was founded in France in 1918. The brand is loved by
women the world over and has a wide range of products available under the Dior Beauty label. While the
makeup range is classic and elegant, it is quite affordable and available in India.

The range includes eye shadows, eyeliners, lipsticks, lip glosses, and many more products. You can go
online and buy makeup from Dior Beauty and get it delivered to your doorstep. There are also many online
portals that sell Dior products. You can choose from among them.

The Bottom Line

When it comes to high-end makeup brands, there are many excellent options to choose from. No matter
what your skin type or beauty needs are, there’s a top luxury makeup brand that will give you the confidence
to walk out the door and feel your best. The best way to find the right high-end makeup brand is to try out
different products until you find ones that work well with your skin type and beauty needs. If you’re looking
for a high-end makeup brand that’s both luxurious and high-quality, these brands are worth trying out. From
beautiful packaging to skincare-enhancing ingredients, these products are a joy to use.
Conclusion: Building a luxury brand is a journey

In conclusion, the luxury brand stands outside a traditional marketing strategy. To create and maintain
customers’ loyalty and brand value, it should apply a set of unique and innovative measures. The latter
might include advertising, collaboration with other luxuries, the very image of the product, and plenty of the
other issues that are discussed in this paper.

However, the most important point concerns the fact that luxury brands are required to satisfy the
requirements of the modern world. Globalization processes, as well as digital technology, make brands
change their presentation and retail environment. All in all, the paramount sources of the luxury brand value
creation are creativeness and innovativeness in combination with heritage and tradition.

Indeed, building a luxury brand today amidst other longstanding brands in the current market landscape
may seem daunting. However, with a clear plan to identify a niche customer segment and emphasize the
brand’s symbolic value, there is huge potential for brand managers in Asia to differentiate and position new,
iconic luxury brands in the market. Some recent examples are Shang Xia, a Chinese luxury fashion brand
offering high-quality products with a contemporary twist on traditional Chinese aesthetics and crafts.

In addition, another challenge that luxury brand managers need to deeply consider is how to make digital
and technology a key business enabler. The purchase decisions of luxury consumers go much more
beyond just financial extravagance; but instead allows them to pursue a passion or associate themselves
with the brand’s image and aspiration. In such a digitalized and commoditized world, brands need to be
able to express the same emotion that can resonate with luxury consumers. Digital disruption and
emotional engagement, although seemingly opposite, can be combined to enable companies to reap the
most out of their luxury branding efforts.

Aspirational CEOs and brand managers seeking to create luxury brands should make the above elements
core to their corporate strategies. With digital disruption being the norm in the industry, it will be exciting to
see what new luxury brands will be discovered in the coming 5 years and how they will find new ways to
engage consumers.
Bibliography:

Books :

Luxury Brand Management: A World of Privilege (Hardcover) by. Michel Chevalier. (shelved 6 times as
luxury) avg rating 3.77 — 73 ratings — published 2008.

Kapferer on Luxury: How Luxury Brands can Grow Yet Remain Rare (Paperback) by. Jean-Noël Kapferer.
(shelved 4 times as luxury)

Websites:

https://www.thecollective.in/
https://upmarkit.com/
https://www.researchgate.net/