Lec 2

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MKT3057
Luxury Brand Management
Lecture 2
Luxury brands characteristics and
markets
By the end of this session you should
• Understand how Luxury has developed
over time
• Be able to describe the differentiating
characteristics of luxury brands
• Be able to define Luxury
• Understand what makes a strong luxury
brand
• Be aware of key players and relative size
Development of ‘Luxury’
Emergence
of many Democratizat
Historical luxury brands
Tension: ion of Luxury
in late C19 /
Early C20
• Globalisation
•Luxury as an • Industrial • Improved
aspirational / Revolution Comms
improving force • Female • Increase in
•Luxury as Emancipation spending power
enemy of virtue. • World Peace • Role in
•Luxus = • Democracy recreating our
Overabundance lost social
or Excess • Luxury for the
wealthy stratification
•Luxury for • Daytrippers
Leaders
Ancient / Modern Era Late 19th Century Postmodern Era
Jean-Noël Kapferer (2015). Kapferer on luxury : how luxury brands can grow yet remain rare.
London, United Kingdom ; Philadelphia: Kogan
Meaning of ‘luxury’ has converged but still some
idiosyncracies
What does luxury me

in your country?
The concept of ‘Luxury’ is difficult to pin down
and many academics have attempted to define it
Costello &
Taylor (2019)
came up with
these criteria
to assess
luxury brands
Ko, E., Costello, J. & Taylor, C. (2019) What is a luxury brand? A new definition
and review of the literature. Journal of business research. 99, pp.405–413.
Heine’s view of Luxury Brand Characteristics
Symbolism: “The best from the
best for the best”; its charisma fills
the room,
Extraordinariness: The brand has

Quality: Produce everlasting top-of-
a mind and style of its own and its
the-line products, which won’t be
products offer an extra kick and
disposed of and which often even gain
surprise with the “expected
in value over time.
unexpected”
Characteristics of
Luxury Products
and Brands
Rarity: In contrast to mass- PRESTIGE
market brands, the brand needs
to limit its production and tries not Price: The brand offers products
to disclose its (high) sales which belong to the most expensive
numbers. The brand plays hard to group of products
get and is not available at all
times or places. Aesthetics: Whenever and
wherever the brand is seen, it
embodies a world of beauty and
elegance
We will cover this in
more detail in our
Source: 1: Heine, K., The Concept of Luxury Brands. www.conceptofluxurybrands.com
PQRSEA - P workshop
2: Kapferer, Jean-Noel & Bastien, V., 2009. The Specificity of Luxury Management: Turning Marketing Upside Down.
Journal of Brand Management, 16(5/6), pp.311–322.
Luxury Brands are more symbolic
• Difficult to draw a clear
line, especially between
top premium brands and Product / Brand Characteristics
Luxury top
entry-level luxury brands
brands
• However, there is also
an essential difference Masstige
brands
• premium brands focus
on functional
Premium
characteristics brands
• luxury brands put much Medium-
more effort into level
brands
creating symbolic
meaning low
Price Quality Rarity Extra- Aesthetics Symbolism

ordinariness
Name a medium level,

premium, Masstige and
Heine, K., The Concept of Luxury Brands. www.conceptofluxurybrands.com. Luxury perfume brand
Kapferer’s view on how the perception of
Luxury is built
Kapferer’s Observations (1)
• Consumption is
qualitative not
quantitative
• Taste > Opulence
• Luxury is not simple
excess
• Hedonism >
Functionality
• Luxury products often
ask us to put Hedonistic
Pleasure first
• To suffer in the name of
beauty
Globe Garden chair by Peter Obsvik
Any other examples?

• Luxury is multisensory
• Sound of a Ferrari
• E.g. Shumukh perfume is
the world’s most expensive
(USD 1.29 million per
bottle)
• Holds the world records for
having the most diamonds set
on a perfume bottle and the
tallest remote-controlled
fragrance spray product.
• Aesthetics are key
• Not popular attraction - Undeniable Beauty (set apart from personal
hedonistic pleasure)
• High levels of human content

• Service/Experience is a key component of buying luxury
• Karl Marx (Diamonds)
Definition of Luxury Products and Brands
Definition of a luxury brand /

product
“A branded product or service that consumers perceive to

•Be high quality
•Offer authentic value via desired benefits, whether functional or emotional
•Have a prestigious image within the market built on qualities such as
artisanship, craftsmanship or service quality
•Be worthy of commanding a premium price
•Be capable of inspiring a deep connection, or resonance, with the
consumer”
Ko et al (2019)
Source: Ko, E., Costello, J.P. and Taylor, C.R. (2019). What is a luxury brand? A
new definition and review of the literature. Journal of Business Research, 99,
pp.405–413.
Definition of a luxury brand / product
“exclusivity, premium prices, image and status which combine to make

them more desirable for reasons other than function”
Jackson (2004)
“Luxury brands are regarded as images in the minds of consumers that

comprise associations about a high level of price, quality, aesthetics,
extraordinariness and symbolism”
Heine (2012)
Which is your favourite

Source: 1: Heine, K., (2012) The Concept of Luxury Brands [online] Available from: Upmarkit
definition?
www.conceptofluxurybrands.com
2: Jackson, T.B. (2004) International Retail Marketing. Oxford: Elsevier Butterworth-Heinemann
The Global Luxury Industry
• Includes (In size order) • The United States has long been
• Luxury Cars the largest regional market for
• Personal Luxury Goods such as luxury goods and it was estimated
drinks, fashion, cosmetics, to continue to be the leading
fragrances, jewellery, luggage personal luxury goods market in
and handbags 2020, with a value of 55 billion
• Hospitality euros.
• Fine Wines & Spirits • Remarkable increase in Asian
• Gourmet Food & Fine Dining markets – much of recent growth
• Furniture & Homeware has come from China, India &
• Art Middle East (Kim & Co, 2012)
• Private Jets & Yachts
• Luxury Cruises
Biggest categories?
Biggest Market?
Source: Statista
Key players in personal luxury goods
Brand value of the leading 10 most valuable luxury brands *
worldwide in 2021(in million U.S. dollars)
Biggest players?
Source: Statista
Note: * Luxury brands here defined to be “personal luxury goods” including garments, accessories, jewelry, watches, fragrances and
cosmetics
Louis Vuitton Moet Hennessy (LVMH)
Revenue share of the LVMH Group
• LVMH was the most worldwide in 2020, by geographic region
valuable personal
luxury brand in the
world, with a brand
value of about 75.7
billion U.S. dollars
in 2021
• The LVMH Group's

total global
revenue for the
2020 fiscal year
was about 44.65
billion euros.
Source: Statista

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This session may be recorded

Ancient / Modern Era Late 19th Century Postmodern Era

What does luxury me

Extraordinariness: The brand has

Price Quality Rarity Extra- Aesthetics Symbolism

Name a medium level,

Globe Garden chair by Peter Obsvik

Any other examples?

• High levels of human content

Definition of a luxury brand /

“A branded product or service that consumers perceive to

“exclusivity, premium prices, image and status which combine to make

“Luxury brands are regarded as images in the minds of consumers that

Which is your favourite

• The LVMH Group's

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