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.