Luxury brand match with social media???

The Big Idea: Fashion Marketing and Communication
http://www.youtube.com/watch?v=Np2pr7t_Ygg&feature=related

Jewellery industry is known for innovation and creativity, but why luxury brands and social media have been identified as a love-hate relationship? Luxury brand seems afraid of effect of social media and it is not the trendsetters of social media users in regards to this revolutionary phenomenon. 

Moreover, the luxury industry shows little or low interesting towards integrating social media, and present most of the hesitation is caused by large conflicts between luxury brands’ way of being managed strictly from the inside versus the way consumers define or comment the brand from the outside on social media.

There are three main reasons why luxury brands have been hesitant to join the social media party:

- The top-down dynamic has shifted to bottom-up affiliation and showed upside down effects on social media

- Social media is perceived as a destination for the masses      and conflicted with the original characteristic of jewellery industry

- Controlling ones brand on social media is impossible

Top-Down Dynamic

There is a unique relationship between luxury brand and its consumers; because consumers look up to luxury brands, so, the existing characteristic of the relationship is to a large extent as being top-down. However, if this unique relationship is shifted to social media where the consumer is in total control and expects to be looked up to. Luxury brand would likely presented resistance, apprehension and anxiety from the top (the luxury brand) and disappointment from the bottom (the luxury client).

-Social media is perceived as a destination for the masses and conflicted with the original characteristic of jewellery industry

The base feature of social media and luxury brand are quite different. Some of the innate characteristics of luxury brands include exclusivity and limit in access for a niche consumers. To compare with that luxury goods have always targeted direct disparity with the niche consumer base, social media is a wide platform which perceived as being available to a mass consumer base. A major contradiction that luxury brands face online is quite risk of exposure on the “mass and classless Internet world” (Okonkwo, 2009:

304).

Ironically, a large part of this mass consists of luxury consumers, and luxury consumers are also active users of social media. Therefore, Kapferer & Bastien (2009:39) had pointed out “Luxury requires another way of doing things, almost opposite to that which flourishes in mass-consumption and upper range goods”and the luxury industry’s resistance to social media derives from their perception of being unique compared to other industries.

-Controlling ones brand on social media is impossible

Every social media user has complete freedom to give their opinion and judgement thus it becomes impossible for marketing managers to control the content and frequency of information on social media (Mangold & Faulds, 2009). For luxury brands that are managed and controlled strictly from the inside, the loss of control may be the biggest reason for resisting social media. Luxury brands prefer consistency and perfectionism in everything they do, and luxury brands are horrified at losing control. With the entry of social media, luxury brands are challenged to let go of a carefully planned, executed, and controlled integrated marketing communication programme (Safko & Brake, 2009: 681).

However, luxury brands’ control on the Internet is limited only to each brand’s own website

Is Luxury and Social Media an Incompatible Match?

Clearly, there are some issues between the way luxury brands are managed and the principles of social media. These tensions may caused some problem while luxury brand match with social media.

As argued above, the biggest reason why luxury has been hesitant to join the social media party is due to the fear of losing control over their premium image. Will social media really affect luxury brands to loose all control of their brand? Yes and no.

Nevertheless, luxury brands are afraid to lose control on social media is because the control they never had in the before. But, consumers will gossip and party on social media with or without luxury brands, thus, luxury brands might as well join the party.

Furthermore, the top-down dynamic is turned upside down on social media. Thus luxury brand managers cannot dominate and preserve their distance to the customers.

On social media, customers do not want to join a party where the luxury brand decides who is invited, what they can talk about and how they should act. On social media, consumers set the topics and if luxury brands wish to participate, they must act accordingly. This will bring and causing a reverse top-down dynamic.

 

So, are luxury and social media an incompatible match?  On the surface, yes. The characteristics of luxury and luxury brand management do not seem to be compatible with the main dynamics of social media.

The hesitation is understandable, but social media is unavoidable. In short, luxury brands’ fear of losing control and appealing to the masses is irrelevant on social media. The control is already lost and the masses are only a threat as long as you try to control them.

Luxury And CRM- Back To Purity

I mentioned that luxury brands have suffered plenty barrel and challenges in the article”Luxury Guilty”. These companies may force to be changed because globalization and then they need to give a direct communication to present their value to consumers. In a market point of view, it is worth nothing that not just luxury industry but all business type to focus on‘ customer equity ’ , ‘ lifelong customer value ’ and ‘ being customer-driven ’. so we can see which industries move to this new evolution, for example, banks, insurance companies, rental companies, credit cards, services and so on. Move into consumer market or business to business.

The last brands to make a step in this their price premium on the attractiveness

and fame of their own names, that is, on their brand equity.direction have been brands that used to base. Thus, L’ Or é al Paris started a customer relationship programme only in 2005, with the creation of a database and with the associated customer relationship management (CRM) that goes alongside. Last but not least, luxury brands are now starting to examine the benefits of the ‘lifelong customer value ’ approach, beyond building the social prestige of their names.

 

However, Luxury brands have a great and unique fortune with which they can build customer relationships: they have their own distribution outlets. So, do luxury brands need to think of building a CRM program? And what critical they need to follow

WHY LUXURY BRANDS ARE MORE AND MORE INTERESTED

IN CUSTOMER RELATIONSHIP MANAGEMENT

Luxury companies, such as Rolex, Cartier, Louis Vuitton or Chanel, have achieved outstanding and durable worldwide growth over time, thanks to their heritage, to the prestige of their names and above all to their taste for quality and their constant flow of creations. Still, these brands now have to face many challenges:

Competition has got stronger and more complex.

Premium brands have worked on their products and image, and have given birth to ‘ new luxury ’ – which now threatens traditional luxury ’ s image and legitimacy, or at least blurs its boundaries.

Classic luxury brands have grown a lot themselves. They are now selling evergrowing

product arrays on a worldwide scale, and brands can have a tough time

controlling their image, or even their distribution. Heavy licensing leading

to less control over their distribution channels can damage their image in the

long run. Last but not least, customers have changed. The development of ‘ new

money ’ as well as new buying habits (for example, ‘ trading-up ’ ) makes it

more diffi cult for brands to address new, chameleon-like customers. Even the

customers who love luxury now split their expenses between a growing

number of brands, which can be luxury and non-luxury brands, or even massmarket

brands such as Zara, Mango and so on.

we dont just make car but make joy- BMW

http://www.youtube.com/watch?v=wrS-yXXVNMg&feature=related

LUXURY CUSTOMER RELATIONSHIP MANAGEMENT

MUST FOLLOW THE ‘ SHOPKEEPER ’ S BENCHMARK ’

To image that if we were a shop owner and trying so hard to earn customers’ trust, what will we do? What if we are just running one shop but plenty competitors are around us, what should we change to face the challenge?

We can see what we call the ‘ shopkeeper ’ s benchmark ’ is a real guideline for luxury CRM. This case is that of a shopkeeper in the 1950s, who has a restricted clientele, and who knows his customers by name, remembers their tastes and preferences and addresses them in a personalized way.

The shopkeeper does not only offer a very qualitative product: he also initiates a long-term relationship that can go beyond traditional, commercial interaction. Customers become more loyal: they give particular value to signs of recognition and gratitude.This ‘ shopkeeper’ s benchmark ’ implies three distinct steps:

The first step is to identify customers. Welcoming every customer with extreme politeness, calling loyal customers by their name, because we present the brand and will show the brand ’ s good disposition to start a sincere, bilateral relationship with its customers.

In luxury hotels, proofs of attention represent the main part of the

experience.

The second step is to understand the customer ’ s desires and expectations.

Companies must actively listen to their customers: they cannot impose anything,

and should only offer relevant answers to complex customer expectations.

All this can reach its acme with product customisation – which is the root of prestigious companies like Louis Vuitton or Aubercy.

The last step is to show the brand ’ s gratitude. This will be a perfect way to

feed the relationship in the long run – customers all have a variable ‘ lifetime value ’ .

to sum up, in this red ocean industry, luxury brands need to find out what is the nature of them, what is the pure value that they can provide to consumers. In addition, adding more unique characteristic and extra feature base on their pure value.

Luxury guilty

In the last two decades, luxury brand management has caused lots of interest and discussion in the academic and business area. The reason is because more and more people have ability to afford luxury goods and this trend actually brings much revenue to the industry. We can see the growth of the trend leader LVMH, Gucci Group and Richemont<Swiss luxury watch,jewellery company> have increased dramatically from US $ 20billion in late 1990 to $US 180 billion now.

The reason caused them growing so quickly is because these luxury brands received benefit brought by globalization, wealth-creation opportunities, new market segments, digital communications, international travel and culture convergence.  

However, they have also faced a volume of aspects and effects to be forced to change because globalization, like counterfeiting, production, outsourcing, country-of-origin effects, more options and competitions, and oriental luxury consumption more than western.

Besides, the war in luxury goods has changed to multiple layer and context. Whether it is fashion and accessories, leathergoods, fragrance, skincare, cosmetics,wines, spirits, timepieces, jewellery, automobiles, private jets, hotels, home decoration

or concierge services, the supply of luxury is currently incessant. The competitions across all luxury categories and its offering is resulted because the expansion of the luxury client base and the subsequent lowering of the entry barriers to this industry. More and more people can afford luxury goods and aware by continuous updated fashion information. Therefore, the driving force has been controlled by client and the ‘top-down ’relationship that has existed for centuries with luxury brands has shift to a

‘bottom-up’ affiliation where the client has become as important as the product.

Furthermore, in terms of consumers’ perception, Bruce Himelstein Executive Vice-President at Zimmerman Advertising said that luxury has become a dirty word. Few years ago in the global financial crisis, AIG ask to borrow money from American government, but the high level supervisors were playing golf while the whole country suffer high unemployed rate. Again, From Wall Street to Main Street everyone has felt the crunch of the economic crises because the “Fraudulent Bankrupt” of Lehman Brothers. But these financial agents still enjoy their fortune while people lose their jobs.    

Recession Challenges for Luxury Brands- Bruce Himelstein
http://www.trendhunter.com/keynote/bruce-himelstein2

Therefore, it is time for luxury brand to find out “who are we”, and reposition their core value because customer have changed and look for real value.

reference:

http://inphobe.blogspot.com.au/2009/04/rich-people-feel-guilty-buying-luxury.html

http://www.thephuketinsider.com/tourism/luxury_becomes_a_dirty_word.php

http://www.trendhunter.com/keynote/bruce-himelstein2

Premium? Luxury?

When we open any fashion or lifestyle magazine, we can see luxury products has been dominated our lives, like watches, jewelry, vehicle, and clothes. The hype is deafening and can be so confusing. As consumers, we want something “luxury “and we want to be made to feel different and special with others. However, from a marketing point of view, “luxury “has never been easy to define. The term luxury can be so vary enormously and fill of judgment. Also, the definition of luxury is depends on what we ask and what we recognize in what context.  

http://www.youtube.com/watch?v=t3TfGoyP2g0


So what is the difference between luxury and premium brands

First of all, we need to understand why people purchase luxury brand. There are plenty reason is based on the consumers’ need for high quality, exclusivity, craftsmanship, precision and innovation.

We can see the “esteem” part in Maslow’s hierarchy, all the people have a need to be respected and to have self-confidence and self-respect. Meanwhile, we need a communication to present our success or connect to others and it involves issues of self perception and self worth. These underlying reasons lie at the subconscious level of the individual and include points such as peer recognition and approval, and status.

Luxury products can be broken down into three categories: Prestige, Premium and Fashion brand.

Prestige brands such as Louis Vuitton, Rolex, Mercedes-Benz and Cartier represent a highest form of craftsmanship and command a loyal consumer following that is not affected by trends. Due to their pedigree, they are well established as status symbols. For example, If Daniel Craig or George Clooney wear an Omega watch in an advert or film, sales immediately spike.

Premium brands are those brands like Polo Ralph Lauren, Calvin Klein and Tommy Hilfiger that aspire to be luxury and prestige brands but their marketing is geared more to, as a term, an affluent mass market or mass-luxury brands.

Fashion brands on the other hand are those that address the masses and whose designs can be seasonal. Call them the “hot trends” or “fads” of the immediate moment.

However, some companies are foolish to think that they can simply launching a product with a “luxury” label attached will increase their targeted market and sales. Hence, for a real luxury brand, it takes diligent planning, execution, clever strategic marketing and PR<public relationship> buzz alongside ambiance and finesse. Besides, hard promotion and management is necessary equipped.

The Rise of Chinese Luxury Brands

The consumption of luxury goods in China had reached $10.7 billion as of the end of March 2011, the amount of luxury brand purchsing not include luxyry jets,yachts and cars which account for a quarter of global consumption.

China's luxury retail market is dominated by foreign luxury marketers, who have been fighting for growth in the mainland. Now, Chinese companies like Shang Xia are starting to produce local luxury brands, and looking overseas for growth.

Are westerners ready to accept a "made in China" luxury brand and can local luxury brands provide the status that Chinese shoppers want?also, how can foreign luxury companies build up their own "luxury china brand"?? Hermès Chief Executive Patrick Thomas of Shang Xia provied the answers.

Marking its first anniverary, Shang Xia, the Chinese luxury brand developed and launched by Hermès, announced it will expand to Paris and Beijing.

“A second shop and a third shop should open in Paris and Beijing, probably next September,” said Hermès Chief Executive Patrick Thomas.

Hermès has always intended to make Shang Xia a global Chinese luxury brand, although it was launched specifically for the Chinese market.

“The idea is to bring the Hermès philosophy to China, to create a Chinese Hermès,” said

Thomas,“Instead of buying another company, ‘Why not create a brand from the ground up that shares our philosophy — outstanding quality, creativity, and strong style?’”

Sales have exceeded expectations, but Shang Xia is not yet profitable.

Thomas expects Hermès China sales to increase by 40 percent this year. This market “has huge potential for growth… which will stay above 25 percent in the coming years,” Thomas said.

Shang Xia's has targeted those consumers who look for different types of luxury brand combined with specific element or cultural.

However, Industry experts and competitors are following Shang Xia closely to see how successful Hermès is in its strategy to grow a local brand either as an early participant in the emerging movement of “home-grown” luxury brands or as a strategy to capture a larger share of China’s coveted luxury market without compromising Hermès’ exclusivity.

Moreover, there is a level of difficulty for luxury companies to develop brand in China. Because china is such a mass market for luxury goods, and companies are targeting a huge population with growing economy. Also, the test of western and eastern is quite different.

The luxury brand can be operated by horizontal and vertical dimension. In western style, the brand is about how unique the product is; be yourself. The brand needs to be personal style, ugly can be beautiful, strange style can be elegance. That is horizontal dimension which means the creativity

But in China, the test does not just about knowing you, but it also requires proving yourself. Spending on luxury in China is also including the value, cultural, and knowledge. And this is the vertical dimension.

Hence, the future trend for foreign companies who want to build up China luxury brand is how they can provide their western and eastern value to customers. And that is why so difficult that the luxury brand to be accepted by Chinese or ester countries.