In a market where 'mass' and 'prestige' collide, is the popularly known luxury goods industry. Uche Okonkwo, (business strategy consultant, luxury industry) says: 'The marketplace would be colourless without luxury brands. Luxury fashion brands are unique, intriguing and special. Luxury fashion provides a means to a lifestyle that is triggered by deep psychological and emotional needs, which is expressed through ingenious products. Luxury brands are now trying to spread their wings in order to cover all classes. A luxury brand to survive has to invent and implement consistent integrated strategies, innovative techniques, management control and constant auditing. As every brand aspires to attain a luxurious prestigious status only a few brands make it. The succesful brand is one that understands the need to constantly innovate and find a balance in becoming timeless. But the question to ask is how do you market a brand as a luxury product when it has to sell items from £20 to £20,000. Where does the luxury bit come in?
Luxury brands didn't happen by accident. They have been uniquely crafted and created through consistent branding strategies. Why is it that if today Marc Jacobs shows a collection in white it will be the 'in' color or if Karl Lagerfeld decides that cone heels are the way to go the industry will be adopting the trend. The brands have created an image in our minds, an image of trust that whatever decisions they take make the fashion industry move forward. Uche Okonkwo states, 'The strong attachment that luxury consumers have to brands, which often defies logic, is the result of branding.'
The core characteristics of a luxury brand are innovation, premium quality, price, brand strength, exclusivity and craftsmanship. It is the number of hours put in to make that perfect Hermes Kelly bag by a single workman. The price of that craftsmanship is the symbol of luxury. A luxury brand strives to create a product for a consumer that satisfies him/her with the quality and service it provides. When you think of shoes you immediately think of Jimmy Choos/Blahniks, if you think of bags, Hermes pops into your head. This is the differentiation quality. All these brands have managed to create a niche for themselves in the market in terms of brand image and name.
One of the strategies of a luxury brand has been to make itself visible in every sector. Be it accessories, garments, home furnishings or even Marc Jacobs designing a dog cage. Its all about expansion and putting your brand name out there. The strategy is to reinforce, recreate and return into the minds of the consumer again and again to build brand loyalty. The name, logo, packaging and presentation; all go in the making of a brand. The luxury brand stands for unmatchable quality and desirable quantity.
Let us take the example of Giorgio Armani to study the strategies of a luxury brand. The sole shareholder of the Armani brand, Giorgio Armani has created a name for his brand by penetrating every market segment with his lines. The company stands for its design which is the most important ingredient of fashion and luxury apparel.The individual style of the designer has become crucial in creating and sustaining the fashion brand strategy.
Giorgio Armani with its iconic popularity amongst the elite of the society and the fashion literate segment of the market has followed steps by extending the brand. Today the Armani brand architecture encompasses one corporate brand and five sub-brands, each catering to different sets of target customers and at different price levels.
The signature Giorgio Armani line: This is the main collection of apparel that consists of the signature Armani suits, Oscar gowns and so on, which are of the ultra-premium price points and essentially targeting consumers in the 35-50 year old age group.
Armani Collezioni: This is Armani's venture into a slightly lower market segment. This basically caters to the segment of people who aspire to wear Armani apparel but cannot afford the ultimate signature line, or to those who crave to add extra products to their existing portfolios. The Armani Collezioni brand, with a price point of almost 20% lower than the main line, provides an excellent line of affordable fashion.
Emporio Armani: Targeted especially at the young professional segment in the 25-35 year old age group, the Emporio Armani brand provides contemporary designs that are relevant to the target customers.
Armani Jeans: This is the lowest range of Armani apparel. This is to the value segment what the signature line is to the premium segment. Catering necessarily to the young adults in the 18 to 30 year old age group, the Armani Jeans collection provides a trendy yet fashionable and luxurious line of apparel.
A/X Armani Exchange: This is the licensed brand of chain of retail outlets of Armani fashion house. This serves as the ultimate testimony to the power of the brand. By providing the entire range of its apparels and accessories, Armani Exchange provides customers with the complete feel of the luxurious fashion of Giorgio Armani.
They even ventured into confectionaries, resorts, furniture and flowers.
Armani's strategy was to make itself visible in every product category so that the consumer
could own atleast one luxury product and then even come back for more. Its pricing was done to attract every kind of segment and consumer class. While it provided haute couture to its high-end consumers it also reached out to the middle class ones. But how positively or negatively is this or was working in their favor. The concept of brand dilution entails that a company enters a new market through possessing strong brand identity in order to earn good profits and to enhance shareholder value by maximizing ROI. So by creating diverse revenue streams it resulted in diluting its image. Armani stands for its quality and name in apparel but by divulging into other streams it has it has reduced its exclusivity by franchising its name to literally everything.So in the luxury market where everything is set apart from the commercial brands like H&M and Zara that sell apparel at lower prices than luxury brands but are as good in quality, where do you find real luxury, if everything is so available?
(Images courtesy: Google)
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