International luxury brand management 10/03/10 Luxury Pyramid {draw:frame} THE PRICE IS PERCEIVED AS EXCESSIVE IN RELATION TO THE GENERIC CATEGORY. Paradoxes: Price: The higher the price the more desirable the object. Communication & Promotion: Sometimes there is no advertising Scarcity: Restricted in quantity, (sometimes the unique object) Distribution: Perception of very few retail outlets of ten restricted access to shops. CRM: Very close attention to individual client. Production: The hand of the craftsman or artist is the privileged means of production. The means of production is pre-industrial, pre-capitalist. Function: The psychological and social function of luxury goods is more important than their practical function. They are perceived as superfluous. Time: Often the client is kept waiting (2 years for a Birkin bag from HERMES, 1 year for certain PORCHE MODELS, 6 months for hand made shoes from JOHN LOBB). The unique hand-made luxury object is a reflection of the client’s ideal self. Narcissist.
Luxury objects are often perceived as timeless. (Chanel N5 over 80 years old), no life cycle. Age adds value to luxury. The DNA or genetic code of classic luxury brands does not change. Past: very often there are allusions to a vanished past (nostalgia) Competition: Often there is no competition (especially in Inaccessible).
A new model of ROLLS ROYCE is determined by the genetic code of the brand. PROBLEMS, DANGERS, THREATS: Counterfeiting:
To counterfeit, to fake, to forge, a fake Picasso different to genuine. Counterfeiting destroys the paradoxes of luxury. Brand dilution Loss of market share Economic Crises:
Increases the demand for counterfeit goods.
But Inaccessible luxury is not affected, and certain niches (art, gold) are considered safe investment. Social Crises:
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