Luxury brand management thesis

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Contents:
  1. The Evolution of Luxury: Brand Management of Luxury Brands, Old and New
  2. Compare 14 Master of Science Programs in Luxury Management
  3. Corporate social responsibility and brand value in luxury
  4. Dissertations on luxury brands - Best and Reasonably Priced Writing Aid
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With the high quality of a luxury brand, these brands offers durable top-of-the-line products, which will not end up in the garbage, even after many years of use or defections Heine and Phan, These brands will rather get repaired, and also will gain even greater value over time Heine and Phan, For example, I have friends who have bought used Louis Vuitton purses online, because they think the purses look better after several years of use. In addition to raw materials and detailed workmanship, design is also reflecting the quality of the luxury brand.

The extra value will often be a kind of added esthetical value, as with high fashion Mortelmans, Designers often sacrifice the wearability of the clothes for esthetical values Mortelmans, The differentiation within the luxury brands is also very important according to Okonkwo When consumers get their eyes on a luxury product, they are firstly attracted by the aesthetics De Barnier et al.

According to De Barnier et al. Heine further on describes the aesthetics of a luxury brand by saying that it behaves like a chic and vain dandy, who would never leave the house in less than perfect style, and that the brand always is embodied in a world of beauty and elegance. The aesthetic value of a product pertains to the pleasure derived from seeing the product, without consideration to whatever utilitarian function it might perform Hoolbrook, Venkatesh et al.

This garment is an example of a luxury fashion product, with its sleek aesthetic design and well-defined proportions. The biker jacket is comprised of a cotton canvas and real leather, and still expressing a sophisticated simplicity. According to Heine , the luxury brand, in contrast to mass-market brands, needs to limit its production. Hence the luxury brand plays hard to get, and is not available everywhere at every time Heine, Carcano et al. Originally, scarcity was a result of limited availability of raw ingredients, components, or the capacity of the production, as for instance lack of rain or sunshine for the wine industry Catry, The notion of limited editions has also been extended to special orders and series for the upper part luxury market, meaning that the luxury brands offer a unique product for each customer Catry, The place of distribution of a luxury brand, might also serve to stimulate a brand imagery or rarity without actually limiting the sales, as Chanel did with their No5 perfume, in its early years, making it available only in the company store at 31 rue Cambon in Paris Catry, By doing like Chanel, brands might be perceived as rare, just because they are not available on every corner Catry, Luxury brands can also have motives to provide selling environments that spread an elitist atmosphere Catry, Another interesting notion, regarding limited editions, is that these products face a great increase in price.

The Evolution of Luxury: Brand Management of Luxury Brands, Old and New

Heine reviews a potential luxury brand by saying that this is a brand that offers products that belong to the most expensive items in their category. As Mortelmans puts it, if someone buys something expensive, they know they are not going to get off cheap. However, if a product is nothing more than a mass-produced object with a high price, there is no real luxury Mortelmans, Nonetheless, all products in the luxury niche are, without exception, expensive Mortelmans, However, the high price can be said to be a consequence of the other characteristics Mortelmans, A high quality product requires high quality raw materials, and those materials are more expensive than the normal ones, and as a consequence, the product gets more expensive Mortelmans, An extra value of any kind gives the product an extra touch of prestige, and subsequently a higher price, hence will high-end pricing be an essential feature of a luxury product Mortelmans, Luxury brands use a premium pricing strategy to strengthen the brand, to emphasize high quality and exclusivity, and to differentiate themselves from the mass-market brands Okonkwo, Luxury is an expensive investment, and the high price has to be justified by outstanding quality and aesthetics that mass-produced goods cannot guarantee in a similar way De Barnier et al.

This is something that for instance the watch-making company Tag Heuer took advantage of, when they in appointed Jack Heuer, the former CEO and owner, as company honorary chairman, serving as a personification of the watch company Catry, The brand experience can be conceptualized as feelings, cognitions, and the behavioural responses inspired by the design and identity of the brand, packaging, and communication, as well as environment Schmitt et al. There are more than the functional and financial characteristics that make luxury products superior to non-luxury products, and as Mortelmans clams; rare, high value products with a specific added value are not exhaustive characteristics to describe luxury.

Okonkwo argues that luxury items have innate characteristics and are compromised by elements that speak more to passion than to reason. These innate characteristics include originality and creativity, and help determine what a luxurious brand is Okonkwo, In addition to originality and creativity, Okonkwo maintains that the innate elements include craftsmanship and precision, emotional appeal, exclusivity, high quality, and premium pricing, all made for a niche clientele.

Here, Berthon et al. The luxury tag is often affixed to any good or service with some degree of symbolic value, signalling a value for the consumers that goes beyond functionality Carcano et al. Status is a word I have already used, and which will appear many more times in this thesis. I think it is appropriate to mention status under the symbolic dimension to Berthon et al.

Wealthy people often use conspicuous goods and services to show off their wealth, thus luxury brands are purchased by consumers who seek to signal high levels of wealth Bagwell and Bernheim, A consumer may seek to purchase and consume goods and services for the status these things represent, regardless of the income or social class level of the consumer Eastman et al. According to Eastman et al. My focus will be on the final type of social status, the status acquired through the possession of products of luxury brands.

Eastman et al. The three luxury dimensions from Berthon et al. Functional value - What physical attributes does the brand possess? Experiential value - What does the brand mean to the individual? Symbolic value - What does the brand mean to others? Table 3— Constituent value dimensions of luxury brands Berthon et al.

Compare 14 Master of Science Programs in Luxury Management

These are concerns that I will revisit in chapter 5. Since this thesis is about purchasing and consumption of luxury products, I think it is appropriate to mention the postmodernist view of consumption. This is a view that is not related to the individual self-interest and the goods material characteristics, but rather to the consumer's quest for meaning, identity, and importance of social relationships Blindheim et al. Salomon et al. The material, or the physical product, constitutes the features that can be measured in the physical sense, such as size and colour, while the intangible product, on the other hand, is constructed by the properties that we ascribe the product, such as image, prestige, and emotions Troye, The typologies help shed light on why consumers demand luxury brands.

Categories of luxury will be the first discussed topic, before I will proceed to describe who the luxury consumers are, and their motives for buying luxury brands.

However, Dijk describes three main categories of luxury goods that can be used: 1 the home luxury goods, 2 personal luxury goods, and 3 experiential luxury goods. Home luxury goods refer to art, antiques, electronics, and furniture Dijk, The personal luxuries include goods like clothing, cosmetics, and fashion accessories, including handbags, shoes, or automobiles, but also wine and spirits Dijk, The third category, the experiential luxury goods, consists mostly of services like dining, entertainment, spa treatments, and travel Dijk, Mark Tungate adds transport to this listing, with the argument that while these are areas where the basics are available to most people, luxurious substitutes are only available to a few consumers Tungate, Fionda and Moore use four principal categories of luxury goods, which are 1 fashion, which including couture, ready-to-wear and accessories, 2 perfumes and cosmetics, 3 wines and spirits, and 4 watches and jewellery Fionda and Moore, As one can see, it is varying what kind of categories the different researchers include in the offer of luxury, although they share similarities, and often they just have different wordings for a category.

Dijk 2.


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Fionda and Moore 3. Berry 4. Mark Tungate, Table 4 — Categories of Luxury It is also important to remember that luxury brands can be distinguished in terms of their degree of luxuriousness. Heine includes brands like Hugo Boss and Mercedes in this type of luxury brands. Heine includes brands like Armani, Cartier, and Louis Vuitton as examples of top-level luxury brands.

Cartier, for instance, is an elite-level luxury brand, within the jewellery segment. Berry argues that luxuries are refinements of basic human needs, such as those for food, shelter, and health care. Berry further claims that one essential characteristic of luxury is that that the luxurious products please people rather than simply alleviate a state of discomfort. I think it is worth mentioning that the perception of what is necessity, and thus what is luxury varies from society to society Kemp, Kemp further reviews that it is possible for different people to disagree about whether particular commodities are luxuries or necessities.

Bourne made a framework where he proposed that reference group influence on product ownership and brand decisions with the dimensions of 1 luxury-necessity and 2 public-private Bearden and Etzel, Bearden and Etzel define a reference group as someone, being a single person or group of people, which significantly influences an individual's attitude and behaviour. A public product is a product that other people see that you possess and use, whereas a private product is one usually consumed at home, or in other private locations Bearden and Etzel, This is shown in figure 1 below:!

Figure 1 - Matrix of luxury items vs. The two scholars further concluded that publicly consumed luxury products are more conspicuous than privately consumed luxury products. Conspicuous luxury products can communicate wealth and social status, separating the consumer from other social groups.

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Corporate social responsibility and brand value in luxury

This symbolic value is stronger for public consumption than private Bearden and Etzel, So, my next question of interest is, who are these consumers? A luxury consumer is not only a trendy female whose wallet is filled with unlimited credit cards; men and children are also perceived as consumers in the luxury sector Okonkwo, According to Bagwell and Bernheim , luxury brands are purchased by consumers who seek to signal high levels of wealth. This represents a change from the past, when the luxury consumers were exclusively wealthy. In her book, Okonkwo suggests that the current luxury consumers are smart and intelligent, powerful and individualistic.

Further on, she points out that the luxury consumers are, generally speaking, sophisticated, brand literate, fashionable, and also well aware of their own tastes Okonkwo, Luxury consumers, identified by Dijk , are loyal to their brands, and belong to a group of people that has a strong buying power. Luxury is by definition something that few can afford, but many desire Wiedmann et al.


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  7. Some consumers purchase luxury products even though they cannot really afford them Gil et al. Their motivations for the purchase are reasoned with the providing of control over others, or the desire to identify with likeminded Gil et al.

    ISTITUTO MARANGONI • Fashion & Luxury Brand Management London

    Gil et al. Consumers today have the ability to choose their luxury items, and they can decide on which aspects of their lives to indulge in luxury — for example by buying luxurious cookware brands, and then choose more everyday brands for bathroom articles and clothing Danziger, As mentioned earlier in the thesis, when discussing the definition of the term luxury, I emphasize that for a product or brand to be perceived as luxury, it should consist of rare materials, have unique design and knowledge.

    Ideally, there should be few who can afford the luxury products, which leads to high expensive prices. This has, regarding the democratisation of luxury, changed in some way. More and more brands are sold at a lower price, and brands are increasingly exposed to "everyone and their mother. An interesting trend in the luxury market, is that more and more luxury fashion houses are now offering less expensive, secondary lines, resulting in an expansion of the group of luxury consumers. Another way to extend the offering from the luxury brands is that luxury retailers are collaborating with more affordable stores, thereby offering a taste of their brand to a wider consumer segment.

    For gaining insight on this, I find Han et al. I will therefore go through this research in the following paragraphs. The research of Han et al. Below, I present an example of the differences between conspicuous and discreet branded products. Figure 2 —Example of quiet and loud branding If one compares the Gucci bags in Figure 2; the bag to the right literally spells out the Gucci brand, while the one to the left is far less explicit. Han et al. Further on, the consumers are divided according to the extent to which they seek to gain prestige by consuming luxury goods Han et al.

    We end up with this pictorial representation of the complete framework as figure 3 below presents. Patrician Parvenu! Patricians signal to Parvenus associate! They use with other haves and Haves! They use loud The light arrows denote! Proletarian Poseur arrows denote! Proletarians do not Poseurs aspire to be!

    Dissertations on luxury brands - Best and Reasonably Priced Writing Aid

    They mimic the Have3! Figure 3— Signal preference and taxonomy based on wealth and need for status Han et al. The patricians in Han et al. The parvenus is described by Han et al. This third group is described by Han et al. For the poseurs, brand status is important, but since it is generally unattainable for them, these consumers are especially prone to buy counterfeit luxury goods Han et al.

    The proletarians neither seek to associate with the haves, nor to dissociate from other have-nots like themselves, and they neither favour, nor despise loud luxury Han et al. For a final comment of the discussed framework of Han et al. There are certainly finer gradations of consumers Han et al. For example, a consumer can be a patrician and a parvenu at the same time, is they use the quiet branded Gucci bag presented in figure 2 discreet signalling , with a Burberry plaid trench-coat explicit signalling.

    Similarly, a consumer can be a patrician and poseur at the same time, for example, if he or she wears a Brioni tailored suit with a fake Rolex watch. Before I start to look specifically on why consumers buy luxury brands, I think it is appropriate to first provide theories on consumption practices in general. For your convenience, I will first give a brief examination of the terms consumer behaviour and consumption, since they cover essential background elements for understanding the consumption practices of Holt Historically, studies on consumer behaviour have focused on decision making in regards to product, service, and brand Sciffman et al.