The 8Ps of Luxury Brand Marketing

Source: Warc Exclusive, Bates Pan Gulf, December 2011

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What makes a luxury brand desirable? This article looks at the ingredients of a luxury brand and how to market them. Self-
assertion, differentiation and appreciation are the three major motivators that drive people to desire luxury brands. There are
eight elements that make up an analytical 'toolbox' to audit and leverage brand potential. These include delivery of superior
performance; pedigree and history; paucity - natural, technology-driven or tactical-driven; persona; celebrity association;
placement; public relations; and pricing.

Rohit Arora
Bates Pan Gulf

What makes a luxury brand desirable? What are the ingredients/components that make up a luxury brand?

Is it the physical or functional attributes like product quality, craftsmanship, design, technology? As one respondent in a
programme of qualitative research in UAE said "When you buy something with really high-quality, you can genuinely feel the
difference. It is in the touch, the feel of the material; it's in the smoothness, it's in its minute details"

Or is it the self-asserting emotional stimulation of letting others know that 'I've arrived'? One respondent said: "I bought my BMW,
just to keep my key on the table during the meeting." Another said "If I stop at a signal I feel I will attract attention of people".

Or is it that luxury brands are just the stepladder to move to the right circle or an appropriate thing to have or wear in that circle? A
further respondent said: "There is a proverb which says if you wear nice shoes you enter nice place."

Self-assertion, differentiation and appreciation

These are the three major motivators that drive people to desire and acquire luxury brands. That said, it's important to
acknowledge that they are not mutually exclusive.

Exclusivity has always been connected to luxury brands. But from the consumer's perspective, the definition of exclusivity goes
through an evolution. At the early stage, exclusivity means having the ability or affluence to own a luxury brand. It is a means by
which consumers assert themselves whether it is to fit in or simply to make a statement.

As the consumer moves on, and with more people joining the 'ownership' circle, just owning a recognisable symbol is not enough;
there is a new need to 'differentiate' to confirm social status and make the purchaser stand out among equals. The source of
exclusivity, then, could be the purchase of limited editions, or something with extraordinary product capabilities or rare materials,
or craftsmanship; it can also be driven by a brand's distinctive personality, or simply the knowledge of the brand legacy.

One can also observe that people who seek differentiation tend to have a larger repertoire of luxury brands, have a choice of not-
so-common luxury brands, have a definitive reason for their choice, and sometime even prefer to stick to specialist brands. Few of
the consumer quotes (below) from various quantitative researches in UAE emphasise this point:

"I prefer to buy my watch from an expert watch brand, not a fashion label."

"I like things that are exclusive and specialized, like the really top suit brands and ties. You know, where one tie is the
price of a good Armani suit, but that you'll only find in Italy, only at one location and not in any branches anywhere else
in the world. Once in a while you want to buy something that's special and wear it a few times on specific occasions."

All this does not mean that people who acquire luxury brands for either self-assertion or differentiation have no appreciation and
love for beautiful products. But there are others who buy luxury unburdened by concerns about what others think. They buy it
because they genuinely love the physical or functional attributes that the product delivers or because they find a profound
connection with the brand or the brand's story.

The bottom line is that whether consumers are driven by self-assertion, differentiation or genuine appreciation for product
excellence, the stories and the aura that surrounds these brands are what make luxury brands desirable. The elements that
contribute to this desirability can be grouped into the '8Ps' of luxury brand marketing though it should be pointed out that the
degree of significance of these elements may vary from brand to brand and market to market.

1. Performance

Performance refers to the delivery of superior experience of a luxury brand at two levels first, at a product level; and second, at
an experiential level.

At a product level, fundamentally it must satisfy the functional and utilitarian characteristic as well as deliver on its practical physical
attributes a recipe of quality or design ingredients like craftsmanship, precision, materials, unique design, extraordinary product
capabilities, technology and innovation.

Examples:

On its 70th anniversary, Patek Philippe unveiled a new complicated wristwatch. Along with a unique column wheel
chronograph movement, the day and month appear in a double window at 12 o'clock, with a hand indicating the date around
the moon phase. The leap year is displayed in a small round window at 4:30 opposite a matching window for the day/night
display at 7:30. It has two interchangeable backs one in sapphire crystal that reveals the complexity of the mechanism, the
other with a white gold solid back that can be personalized with a dedication or an engraving.
Omega Speedmaster Chronograph this was selected by NASA, and since 1969 has been used on six missions to the
moon. After it became a life-saving instrument during the Apollo 13 mission, the Speedmaster went on to become a symbol
of peace, as both American and Soviet astronauts wore it in the first joint space mission during the Cold War. It is still the
only watch certified by NASA for all EVAs (Extra-Vehicular Activities).

A luxury brand must perform at an experiential level as well. This is the emotional value of the brand the consumers buy into
beyond what the product is to what it represents. For example: Rolex stands as a symbol of heroic achievement, and Tiffany is a
symbol of love and beauty.

2. Pedigree

Many luxury brands have a rich pedigree and extraordinary history that turn in to a key part of the brand's mystique. This mystique
is generally built around the exceptional legendary founder character of the past, making up an integral part of the brand story and
brand personality.

So when consumers buy a Cartier or a Chanel product, it is not only because of the product performance factor, but
subconsciously they are also influenced by the brand's rich lineage.

Examples:

Coco Chanel started her business in 1913 and within a few decades, became a revolutionary couturier. Karl Lagerfeld took
the helm in the 1980s and has been modernizing the brand ever since. With Chanel Coco Mademoiselle campaigns in
1981, 2008, 2009 & the recent 2011, Chanel has continuously leveraged its pedigree / brand mystique.
Gucci opened the doors of its own museum in Florence to mark the completion of the house's 90th anniversary celebration.
Similarly, Rolls-Royce celebrated the 100th anniversary of its iconic emblem, the Spirit of Ecstasy, with '100 cars for 100
years' and featured a collection of Rolls-Royce models, supplied by members of the Rolls-Royce Enthusiasts' Club, dating
back to 1911

3. Paucity

Over-distribution of a luxury brand can cause dilution of its character, so many brands try to maintain the perception that the goods
are scarce. Burberry diluted its brand image in the UK in the early 2000s by over-licensing its brand, thus reducing its image as a
brand whose products were consumed only by the elite. Gucci is now largely sold in directly-owned stores, following a near-
crippling attempt to license its brand more widely in the 1970s and 1980s.

Broadly, there's natural paucity (the actual scarcity), technology-led paucity and tactical-driven paucity.

Natural paucity is triggered by scarce ingredients like platinum, diamonds, and/or those goods that require exceptional
human expertise for example, handcrafted quality rather than mass production.
Technology-driven paucity is the result of the time involved in continuous innovation and research and development.
 Tactical-driven paucity is more promotional in nature. It includes limited editions or special series to generate artificial
desire and demand. Another deviation within this is the customization of luxury goods. For example, Garson USA custom-
made a diamond-encrusted Mercedes SL600 for Prince Al-Waleed bin Talal of Saudi Arabia in 2007.

4. Persona

The persona of a luxury brand is largely a result of: first, its distinctive projection and its consistent application across consumer
touch-points; and second, the brand communication through its advertising.

The visual brand identity captures the brand's personality, mystique and emotional values in a nutshell. The distinct and consistent
orchestration of the identity is central to establishing the visibility, familiarity and common identifiable brand imagery. The visual
brand orchestration includes the coherent application of its identity, the brand colour(s), other design elements like icons, the
uniquely identifiable design, branded environment and even the tone-of-voice.

While the luxury brand's visual identity is a fairly stable factor, luxury brand advertising is a more dynamic and versatile marketing
vehicle. While the pedigree of the brand has its role, keeping up the contemporary appeal and the newness factor is crucial for
enduring brand relevance. Therefore, luxury advertising not only needs to generate the desire for the seasonal collection, but at the
same time it must enhance the brand's cool quotient, thereby making it continuously desirable and aspirational.

At an overall level, luxury advertising messages can be observed:

As more emotional and sensual to distance it from mass-premium brands.

Creating a world and an aura that is truly exceptional.
Generating major differentiation in its production and execution.

One of the relatively new trends within luxury brand communication is the use of long-form commercials or short films online to
generate interest with online consumers. Luxury brands are looking to bridge the gap between the familiar world of print and the
fast-evolving world of online.

The short videos on the Montblanc website focus on its craftsmanship legacy.
A one-and-half minute video by Tiffany & Co. focuses on promoting gifting during holidays.
Louis Vuitton created a three-minute thematic video for its 'Journey' campaign.

Apart from these, with the intent of enhancing 'emotional connections', luxury brands have been exploring the digital space in their
activation programs. The objective is to generate a genuine affinity with the brand that transcends beyond the product, to an extent
where consumers feel that they have found a soul mate.

With the objective of strengthening the brand's association with love and romance, Tiffany & Co. launched the
whatmakeslovetrue.com website and iPhone app as a guide to those who want to take their romantic relationship
forward. The website also showcases true love stories of real people.
 In line with its brand essence of 'symbol of heroic achievement', each year rolexawards.com showcases pioneering
projects of real people that demonstrate innovative thought and betterment of mankind. The goal is to establish a personal
affinity with the audience, beyond celebrity endorsement.

Some luxury brands have also utilised social media. The objective may not necessarily be as deep as engaging the audience in
their storytelling. It has been done largely to generate desire or lust for the brand or the product. It is also an effective tool to
maintain contemporary appeal and novelty factor by having a continuous dialogue.

Jimmy Choo organized a real-time treasure hunt around London via Foursquare to engage fans both online and off.
Gucci has successfully kept its high numbers of Facebook fans engaged by continually updating its content, thereby
sparking conversations in the form of 'likes' and 'comments'.

5. Public Figures

Public figures or celebrities have traditionally been employed within luxury brand advertising, and they continue to deliver attention,
credibility and impact. Public figures span from film stars to music personalities, from sports personalities to royalty, and even the
designers themselves. But because celebrity endorsements are no longer exclusive to the luxury space and are extensively used
(and abused) across mass categories, luxury brand endorsement has to take on new meaning.

The public figure's values and personality still have to resonate with those of the luxury brand, but there's also a distinct difference
in the way the celebrity's role is crafted, executed and strategically utilised compared with mainstream marketing. Beyond
traditional advertising (largely print in selected media), less in-your-face advertising tools are employed, such as dressing
celebrities for their walk down the red carpet, product placements within movies and television shows, or invites to special events.
This strategy attempts to remove the appearance of 'selling' while still promoting the product by making it seem part of the
celebrity's life, thereby positively affecting consumer attitudes, brand value and purchase intention.

Chopard has been official partner of the Cannes Film Festival for the last 14 years, showcasing and premiering its collection
by accessorising celebrities on the red carpet.
The Lebanese singer and Unicef goodwill ambassador Nancy Ajram was Cartier's special guest at the Cartier International
Dubai Polo Challenge held in Dubai, UAE in 2010.
Omega has sponsored the James Bond franchise since 1995 earlier with Pierce Brosnan and now with Daniel Craig.

Long-form commercials or short films have also utilised the celebrity factor. Chanel recently created a three-minute short film with
actress Keira Knightley, who replaced Kate Moss in its ads for its Coco Mademoiselle fragrance. Other previous faces of Chanel
have included French star Catherine Deneuve and Nicole Kidman, who represented Chanel No. 5.

Similarly, as a part of its 'core values' campaign, Louis Vuitton used its website to showcase its celebrity endorsers' journeys,
demonstrating how the brand has been promoting the art of travel and inspiring legendary journeys. Celebrities in the films
included Angelina Jolie.

6. Placement

The retail environment in luxury branding is all about heightening the consumer's brand experience and amplifying the brand aura.

From the choice of store location to the salesperson's presentation, the impact of each touchpoint is critical in creating a unique
indulgent experience.

That said, today's luxury consumers are increasingly looking beyond the typical sophisticated, over-the-top, cosmetically elegant
presentation, or even the exclusive invites and privileged previews. With the increasing democratisation of luxury brands and the
rapid emergence of 'masstige' brands, luxury consumers have become more discriminating and demanding. They are seeking
more knowledgeable and professional assistance, a trusted and reliable collaboration helping them to manage their stature and
lifestyle. Lxury brands are increasingly investing in training and empowering their sales staff.

This trend has led to the rise of new businesses such as Quintessentially, a UK company with 60 offices worldwide describe
themselves as a 'luxury lifestyle company' that provides concierge services to affluent and high-net-worth individuals. Services
include exclusive access to VIP events, cultural happenings, once-in-a-life time experiences, top restaurants, clubs, spas and
hotels, access to fine wines, private jets, luxury cars and yachts, and party planning.

Another important point to note is that 'placement' is not limited to the physical environment where the brand retails, but extends to
all environments or consumer touchpoints that the brand associates itself with. This spans from the extremely selective niche
media where it advertises to the sports, events, art, and conversations that it chooses to become involved in.

Rolex associates itself with more than 150 events in golf, sailing, tennis, motorsport, arts and equestrian tournaments but
avoids sports like football that have more mass following.
Italian carmaker Maserati placed its GranTurismo coupes in a product placement for the 2011 Limitless movie, where the
main character needed a ride to express luxury, style and performance.
Due to its origin in writing culture, Montblanc supports and honors modern-day patrons of the arts through forums such as
Young Artist World Patronage, Young Directors Project, the Montblanc Cultural foundation and the Unicef cooperation.

7. Public Relations

PR in luxury branding plays an enormous role in image proliferation of the brand, thereby subtly influencing public opinion. It is also
employed to convey supporting messages and attributes of the brand which cannot be explicitly captured in advertising, but are by
no means less important to create brand's personality, mystique and emotional values whether it's via the pedigree factor or via
a public figure.

It is also a sophisticated branding machine for maintaining ongoing relevance and dialogue with the luxury consumer, especially in
trend-driven categories such as fashion and technology. At a tactical level, PR is utilised to generate buzz and convey the brand
news, as well as points of view of inspirers and influencers. It is also a crucial support for brand activation at fashion weeks, sport
events, themed previews, etc.

8. Pricing

Pricing plays quite a big role in the way consumers perceive luxury brands. Consciously or subconsciously, consumers tend to
have an idea of what they should expect from the price-range within which the brand operates. Therefore, it is important for luxury
brands to price themselves right setting the price lower than consumer expectation and willingness to pay can potentially harm
the brand value, whereas setting it too high can potentially leave consumers without enough justification to buy.

The pricing strategy in luxury brands has been in the spotlight in the recent past, not only because of the challenging economic
environment, but also because consumers are better informed, more discriminating and demanding. For them, premium pricing
without substance doesn't imply luxury. A recent research by Unity Marketing suggested that affluent shoppers won't spend 10
times more for something only three times better. Luxury brands must, therefore, justify their price through the interplay of the seven
'Ps' mentioned above.

Sales promotions also tend to be handled differently by luxury marketers compared with mainstream brands. Few have resorted to
sales and discounts. Most prefer to add value to a purchase through gifts, gift-certificates, rebates for the next purchase, multiple
item discounts, online or email exclusives, more loyalty points, no shipping and handling charges by online retailers, etc. Luxury
brands also use the channel of luxury retailers like Harvey Nichols that offer annual sales by offering them slightly lower prices.
Another method of luxury brands is to create an extension into a secondary line with lower price points, such as Giorgio Armani's
Armani Exchange, Roberto Cavalli's Just Cavalli, Prada's Miu Miu, Alexander McQueen's McQ.

Key lessons
Luxury brand marketing boils down to the following three points:

Product excellence by itself in not enough. The luxury brand must perform at an experiential level as well. As luxury
consumers evolve, this acts as a point of differentiation, but also as 'substance' to justify a premium value and pricing.
While it is important to celebrate the 'pedigree factor' and a brand's lineage, it is crucial to generate ongoing relevance and
dynamism through the persona, PR and public-figure factors.
Luxury brands must continue to maintain a degree of exclusivity and stature, recognising the paucity factor and the
placement factor. In the latter case it must look at everything from the retail experience to the touchpoints it associates itself
with.

The 8Ps may not be a universal methodology, but they present an analytical 'toolbox' to audit and leverage brand potential. That
said, a pragmatic approach will be required too, as the situation and challenges differ from brand to brand and market to market.

About the Author

 Rohit Arora is Strategic Planning Director at Bates Pan Gulf (BPG Group) in Dubai, UAE.

Within the luxury segment, he has worked on strategic communication projects for De Beers, Ford-Lincoln, Al
Tayer Group, Omega watches, luxury real-estate projects, luxury healthcare project, high-end consumer durables
and banking solutions for high-end consumers. He previously worked at JWT and Y&R.
rohit@batespangulf.com

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