Marketing To A High-End Consumer, Using The Luxury Strategy

40 years ago, a group of European luxury brands, famous but small at the time, decided to use the opportunity of globalization to grow significantly beyond the small circle of their happy-but-few historical customers. To do so, they needed to implement a marketing strategy, but they quickly discovered that while the usual marketing strategies would help them grow, they would also put them out of the luxury bracket. So, they decided to implement a totally new business strategy, which lies behind the nonstop success of those brands. All this is detailed in The Luxury Strategy, the book that I co-authored with Jean-Noël Kapferer, based on my own experience with Louis Vuitton- one of the leaders of this strategic move. For this article, I will focus on the marketing aspect of this strategy, and, more precisely, on what we named “the anti-laws of marketing.” In fact, we coined the term anti-law of marketing to designate the counterintuitive managerial principles, which made these brands command their incredible pricing power and margins.

Reaching your client

The first step is to understand that in the so-called luxury market, there are three possible strategies, which I named in my book as luxury, fashion and premium. The difference between these three strategies is huge. It does not change much in the eyes of most basic consumers, at least in the short-term. But when one has to manage a brand, the difference is pivotal. In fact, if you decide to implement a fashion or a premium strategy, the classical marketing styles works pretty well. But if you decide to implement a luxury strategy, you need to reconsider all the aspects of your marketing management.

A. The luxury strategy aims at creating the highest brand value and pricing power by leveraging all intangible elements of singularity- i.e. time, heritage, country of origin, craftsmanship, man-made, small series, prestigious clients, etc.

B. The fashion strategy is a totally different business model: here, heritage, time, are not important; fashion sells by being fashionable, which is to say, a very perishable value.

C. The premium strategy can be summarized as “pay more, get more.” Here the goal is to prove -through comparisons and benchmarking- that this is the best value within its category. Quality/price ratio is the motto. This strategy is, by essence, comparative.

The luxury strategy was originally developed for the broadly defined luxury market, and it is there that you can find it the most today as well– in fact, it’s the most efficient strategy in this market. It is seldom met on other markets, even though it can be very successful there, as brands like Apple and Nespresso have demonstrated. There are 24 anti-laws (see the full list below); thereafter, I analyze four that require an in-depth treatment.

The 24 anti-laws of marketing

  1. Forget about positioning; luxury is not comparative.
  2. Does your product have enough flaws to give it soul?
  3. Don’t pander to your customers’ wishes.
  4. Keep non-enthusiasts out.
  5. Don’t respond to rising demand.
  6. Dominate the client.
  7. Make it difficult for clients to buy.
  8. Protect clients from non-clients, the big from the small.
  9. The role of advertising is not to sell.
  10. Communicate to those whom you are not targeting.
  11. The presumed price should always seem higher than the actual price.
  12. Luxury sets the price; price does not set luxury.
  13. Raise your prices as time goes on, in order to increase demand.
  14. Keep raising the average price of the product range.
  15. Do not sell.
  16. Keep stars out of your advertising.
  17. Cultivate closeness to the arts for initiate.
  18. Do not relocate your factories.
  19. Do not hire consultants.
  20. Do not test.
  21. Do not look for consensus.
  22. Do not look after group synergies.
  23. Do not look for cost reduction.
  24. Do not sell openly on the Internet.
  25. In consumer marketing, at the heart of every brand strategy, you will find the concept of positioning, of the unique selling proposition (USP) and the unique and convincing competitive advantage (UCC A). Every classic brand has to specify its positioning, and then convey it through its products, its services, its price, its distribution and its communication. Positioning is the difference that creates the preference for a given brand, over the one that it has decided to target as a source of new business and whose clients it is going to try to win over.

    Nothing is more foreign to this approach than luxury. When it comes to luxury, being unique is what counts, not any comparison with a competitor. Luxury is the expression of a taste, of a creative identity; luxury makes the bold statement “this is what I am,” not “that depends”– which is what positioning implies. It is identity that gives a brand that particularly powerful feeling of uniqueness, timelessness, and the necessary authenticity that helps give an impression of permanence. Chanel has an identity, but not a positioning. Identity is not divisible, it is not negotiable– it simply is. Luxury is superlative, and not comparative. It prefers to be faithful to an identity rather than be always worrying about where it stands in relation to a competitor.

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