Luxury Brands Quiz

Just for fun, I have created a luxury brands quiz to test your knowledge of luxury brands.

1. Which of these is not a superyacht builder?

1. Lürssen
2. Vard
3. Opus
4. Cantiere della Marche

2. Which of these is not a tailored clothing brand?

1. Gieves & Hawkes
2. Huntsman
3. Richard James
4. Phineas Auden

3. Which of these is not a jet brand?

1. Dassault Falcon 7x
2. Briggs & Stratton M550
3. Embraer EMB190 BJ Lineage 1000
4. Bomardier Global 7500

4. Which of these is not a helicopter brand?

1. Leonardo AW169
2. Bell 505 Jet Ranger
3. Janus CRX 507
4. Airbus ACH145

5. Which of these is not a luxury watch brand?

1. Patek Philippe
2. Richard Mille
3. Oliver Silas
4. Chopard

6. Which of these is not a luxury furniture manufacture?

1. Giorgetti
2. Boca do Lobo
3. Fendi Casa
4. Jasper Dashiells

7. Which of these is not a fine wine?

1. Château Pichon Longueville Lalande Pauillac
2. Rotem & Mounir Saouma Châteauneuf-du-Pape Omnia
3. Château Léoville Barton St.-Julien
4. Errazuriz Chardonnay Max Reserva Aconcagua Costa

8. Which of these is not a luxury hotel brand?

1. Seraphina
2. Soneva
3. Aman
4. Rosewood

9. Which of these is not a famous glass artist?

1. Samuel Hutchins
2. Winnie Teschmacher
3. Pavel Novak
4. Robert Dane

10. Which of these is not a world class ski resort?

1. Courchevel
2. Ascona
3. Zermatt
4. Aspen Snowmass

11. Which of these is not a luxury automobile?

1. McPearson Z500
2. Lamborghini Sesto Elemento
3. Pagani Huayra BC
4. Bugatti Divo 

12. Which of these is not a high-end loudspeaker brand?

1. Klipsch
2. Spellman
3. KEF
4. Moon Audio

13. Which of these is not an exclusive enclave for the rich and famous?

1. Hvar
2. Ibiza
3. Xanadu
4. The Maldives

14. Which of these is not an exclusive yacht club?

1. Yacht Club de Cuomo
2. Royal Hong Kong Yacht Club
3. Yacht Club Costa Smeralda
4. Yacht Club de Monaco

15 .Which of these is not an elite equestrian event?

1. Palm Beach Masters Series
2. Vejer de la Frontera
3. Basel International
4. Land Rover Kentucky Three-Day Event

16. Which of these is not an exclusive college club?

1. The Crypt
2. Porcellian
3. The Fly
4. Skull & Bones

17. Which of these is not a jewelry brand?

1. Chopard
2. Graff
3. Delatour
4. Van Cleef & Arpels

18. Which of these is not a destination travel lake?

1. Lake Titicaca
2. Plitvice Lakes
3. Lake Bord
4. Lake Como

I will provide the answers to this quiz in my next bog post.

Brands, Mystery & Exclusivity

Mystery and exclusivity are two very powerful human motivators. Let's take one at a time.

A partial reveal is always more powerful than a full reveal. And the more often one is exposed to the partial reveal, the more one craves the full reveal. It's human nature. Whether it is in a new product unveiling or a television series plot line, people get hooked based on the mystery and not knowing. I have witnessed many successful new product introductions in which outdoor advertising reveals a little bit at a time in each subsequent iteration until the buzz reaches a very high level. In dating, playing "hard to get" is often a very successful strategy. 

Which leads to exclusivity. If a brand is only available in certain places, especially a limited number of upscale places, it usually has significantly more cache. For instance, if you can only purchase the brand on Rodeo Drive in Beverly Hills, Upper Fifth Avenue in New York, Hong Kong's Causeway Bay, New Bond Street in London, Champs Elysees in Paris, Orchard Road in Singapore or The Mall at Short Hills in New Jersey, then your brand likely has significant luxury cache. 

A brand is even more exclusive if the vast majority of people in developed countries have never even heard of it. Such a brand can serve as a badge to inner circle members. These brands might be found in enclaves such as Aspen (Colorado), Costa Smeralda (Sardinia), Côte d’Azur (France), Monaco, Northeast Harbor (Maine), St. Moritz (Switzerland) and Yellowstone Club (Montana). 

Sometimes being mysterious and playing "hard to get" creates even more demand. Some brands might want to choose this strategy.

In case you are wondering, the image at the top of this blog post is of a Maybach Exelero. It's a very nice car with a top speed of 218 mph. You can purchase one for $7.8 million.

Luxury Brands and Exclusivity

Exclusivity is an important aspect of true luxury brands. People who purchase these brands want something that few others can have. A few different things contribute to their exclusivity: limited distribution, prohibitive price points and highly targeted marketing. Often, luxury brands are "insider brands," that is, they are so "high end" that most people have never even heard of them. Only others who are in the same socio-economic circles will recognize and truly appreciate them.

Limited distribution may mean that they are only in high end specialty boutiques in high end shopping districts in only the most elite enclaves around the world. This not only rules out Walmart but also Macy's and maybe even Nordstrom and Neiman Marcus. 

The price points may also be prohibitive for most people, for instance a $5,000 Rubin Singer party dress, a $4,000 pair of Christian Louboutin evening shoes or $600 Vilebrequin men's swim trunks. Or consider the $2.4 million Bugatti Veyron Super Sports car, the $66 million Bombardier Global 8000 private jet, or a variety of super yachts that range from $200 million to $1.2 billion each. And consider purchasing an Ocean Pearl 2-person mini-submarine for your yacht. It is one of several brands that are priced between $80,000 and $4 million+.

Regarding marketing, consider Rolex. Rolex is the primary sponsor of many elite yachting and equestrian events. I doubt you would ever see Rolex sponsoring a hockey, baseball, basketball or football event.

Here is the interesting thing about luxury brands - some of them are also intended to be aspirational brands for people from the next socio-economic rung down who aspire to enter the higher socio-economic circle. Sometimes those brands create lower price point products as entry products to the brand. While this may expand sales significantly, it can also turn off the original customers if they perceive that the brand is becoming less exclusive. The brand loses its mystique or cachet.

What is it about exclusivity that is so appealing? Is it its ability to turn heads and cause hushed conversations? Is it its ability to provoke envy? Is it just knowing that you have something that few others in the world can have? Is it firmly reinforcing your social status? Is it just finding and possessing something that you have never seen before? Or is it the item's rarity itself?

If you are responsible for a true luxury brand, you must consider the notion of exclusivity as part of your brand's essence.

Did you know?

Research has shown that the media environment affects advertising claims. For instance, quality claims are more effective on elite or prestigious websites because people associate the claim with the media environment.
(Source: Dean Donaldson, “Location Matters: How Ad Environments Affect Performance,” Advertising Age, December 10, 2009, adage.com/article/digitalnext/location-matters-ad-environments-affectperformance/140980/.)

Aspirational, upscale, and high status brands have the potential to alienate customers who lack confidence. While these customers might admire these brands, they don’t feel comfortable using them. Building warmth, humor, and less formality into the brands to make them more approachable helps overcome this problem.
(Source: Max Blackston, “Observations: Building Brand Equity by Managing the Brand’s Relationships,” Journal of Advertising Research 32, no. 3, May/June 1992, pp. 79−83.)

Excerpted from Brand Aid, second edition, available here.

Extending Brand from Premium to Mid-Market

Brand extension can be tricky. If done well, it can strengthen the meaning of the brand. If done poorly, it can dilute the meaning of the brand. It is particularly tricky to extend the brand down from a premium or luxury segment to a more mid-market segment. It is tricky because much of the brand's cache is in the status it confers based on its high price point and exclusivity. By definition, extending the brand down into a more moderate price point decreases the brand's exclusivity and status among its original customer base. 

The other trick is how to offer the brand at lower price points without cutting corners on the brand's product or service quality. Can one create a "brand lite" without harming the original brand?

Often, this brand extension decision becomes irreversible. 

Frequently, there is customer pressure to offer a lower priced version of the brand, especially among aspirational consumers. Retail chains, especially discount chains, would love to offer luxury brands at a lower price point, promising the brand owner significant unit volume. 

Imagine offering a $34,000 version of a $120,000 luxury car. Would it be the same car? How would the lower price point version of the car affect perceptions of the brand? Imagine offering Hermès scarves at a significantly lower price at Kmart. Columbia sportswear took its brand out to the mass channel, creating significant incremental sales volume, but at the cost of not being perceived as being comparable to North Face or Patagonia in quality. 

Some brands approach this as a consumer entry strategy. Capture the Millennials with the lower price point, get them hooked on the brand and then lead them up to the higher price points as their incomes rise.

How often have you heard someone say, "That brand used to be good. Now they have watered it down to appeal to the mass market."?

Think about this when you are considering extending a luxury or premium brand down to a more mid-market segment:

• Is it acceptable to us that this might be an irreversible decision?
• Is the incremental sales volume and total profit worth the possible decrease in brand cache?
• If we decide to do this, in what ways can we approach this to minimize the negative impact on our current customers?
• If we do this, how will our brand's products and services vary across the price segments?
• Could using a sub-brand help us achieve this?
• At the same time we are making our brand more accessible to more people, can we also create an even more exclusive version of the brand for our historically loyal customers? 

Evolution of Luxury Brands

In a previous article, I outlined what upscale consumers want. In this article, I will outline trends in luxury marketing:

• Luxury brands will need to increasingly understand and meet the needs of millennial consumers.
• Luxury brands should focus on enhancing the purchase and usage experience.
• Luxury brands will be impacted by consumers who are world travelers and have had luxury brand experiences globally. (For instance, US domestic airlines should be concerned about how business or first class accommodations and services are executed by non-domestic carriers on international routes just as US airports must be concerned about the evolution of airport ambience and services globally.)
• Luxury brands need to continue to focus on aesthetics and the tactile quality of their products.
• Luxury brands should increasingly focus on history, heritage, culture, pedigree and shared values.
• Luxury brands need to perfect their stories.