Luxury Branding in Today’s Economy
Luxury is an expensive word. But the perception that it is expensive is often more costly in the pockets of ordinary people than in those of rich people. True luxury is mostly a product of a certain Italian and French company model: a careful balance of almost impossibly high quality and seemingly supernatural yet undeniably human emotions, that leads to almost invariably irrational buying behavior. The idea of “luxury” is almost always used as an adjective (“classy”, “expensive”, or” elite”), but the concept of luxury itself is vague, and not easily reducible to a concrete price or market share position. Luxury is therefore not only a word used to describe high-priced products and services; it is also a concept, an attitude, and a culture, and even a class. The most conspicuous sign of luxury in today’s consumer culture is probably not the expensive car; although cars do constitute a large part of the consumer market, they are certainly not the only luxury items that are considered desirable and necessary by today’s consumer class.
Luxury items tend to get more expensive over time, but this does not mean that they have suddenly become more difficult to afford. Luxury goods have always been both expensive and a relative scarce commodity-they can be found on restricted lists, and the buyers who do manage to find them tend to pay very high prices for the privilege of owning them. Thus, in principle, both the consumers and the manufacturers of luxury items have long known how to affect the prices of luxury items-how much to charge, when to charge, and why.
Marketing professionals are currently experiencing a unique kind of luxury marketing challenge-the challenge of successfully marketing “unconventional” brands in an increasingly competitive marketplace. Luxury brands such as Gucci and Versace are fast becoming household names, but to build a firm, stable presence in this market, marketing professionals need to create a new niche that is different from, but not necessarily completely separate from, traditional brand names. This new niche may be based on quality or on price. It may also be based on a family business or on social status. In any case, it is likely that luxury brands will continue to experience intense growth as the economy-and the luxury sector-rewards top consumers with ever-rising prices for the items that they value most.