Category Archives: selling luxury

Filed under 1, Luxury, luxury branding, luxury lifestyle, luxury storytelling, selling luxury, what is luxury

Tagged as Business, customer engagement, defining luxury, e-commerce, fashion, lifestyle, Luxury, luxury brand management, luxury branding, luxury brands, wealthy clients, wealthy consumers

March 3, 2023 · 8:03 am

The Distinction Between CPG Brand Management and Luxury Brand Management

By James D. Roumeliotis

Brand management is the process of creating, developing, and maintaining a brand in order to achieve business goals. It involves establishing a brand identity, building brand equity, and ensuring that the brand remains relevant and competitive in the market. However, brand management strategies can vary depending on the type of brand being managed. In this article, we will explore the differences between managing a consumer-packaged goods (CPG) brand and a luxury brand.

What is CPG brand management?

CPG brands are typically everyday products that consumers use on a regular basis, such as food, beverages, personal care products, and household items. CPG brand management is all about creating a brand that appeals to a broad range of consumers and maintaining that brand in a highly competitive market. CPG brand managers need to focus on product innovation, pricing, packaging, distribution, and marketing in order to succeed.

The focus of CPG brand management is on creating a consistent and reliable product that consumers can trust. CPG brands often have lower profit margins than luxury brands, which means that cost control is critical to their success. CPG brand managers need to carefully balance the cost of producing their products with the price they charge consumers in order to maximize profits. Additionally, CPG brands need to be marketed in a way that appeals to a broad audience and drives sales volume.

What is luxury brand management?

Luxury brands, on the other hand, are products or services that are associated with high levels of quality, exclusivity, and status. Luxury brand management is all about creating a brand that conveys a sense of prestige and luxury to consumers. Luxury brand managers need to focus on product design, craftsmanship, exclusivity, and marketing in order to succeed.

The focus of luxury brand management is on creating a sense of exclusivity and rarity that appeals to a select group of consumers. Luxury brands often have higher profit margins than CPG brands, which means that their pricing strategy can be more flexible. Luxury brand managers can charge premium prices for their products, and they often use scarcity and limited availability to create a sense of exclusivity.

Luxury brands are also marketed in a way that is different from CPG brands. Instead of appealing to a broad audience, luxury brands target a niche market of high-net-worth individuals who are willing to pay a premium for quality and exclusivity. Luxury brand managers often use celebrity endorsements, event sponsorships, and other high-end marketing techniques to build brand awareness and create a sense of exclusivity.

Key differences between CPG brand management and luxury brand management:

Target market: CPG brands target a broad audience, while luxury brands target a niche market of high-net-worth individuals.
Product features: CPG brands focus on creating a reliable and consistent product, while luxury brands focus on exclusivity and rarity.
Pricing strategy: CPG brands typically have lower profit margins and need to balance the cost of production with the price they charge consumers, while luxury brands can charge premium prices and use scarcity to create a sense of exclusivity.
Marketing strategy: CPG brands are marketed in a way that appeals to a broad audience, while luxury brands use high-end marketing techniques to build brand awareness and create a sense of exclusivity.

In conclusion

While both CPG brand management and luxury brand management involve creating and maintaining a brand, the strategies used to achieve these goals can be very different. CPG brands focus on creating a consistent and reliable product that appeals to a broad audience, while luxury brands focus on exclusivity and rarity to appeal to a select group of high-net-worth consumers. Understanding these key differences is essential for developing effective brand management strategies in either context.

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September 6, 2022 · 10:28 am

The Art of Selling Luxury Products: Brand Story Telling & Persuasion

By James D. Roumeliotis

Correct link: https://bit.ly/3ew7I56

Recently, I followed a Linkedin luxury sector group thread. Discussion centered on the appropriate manner clients should be treated by sales personnel in a luxury retail shop such as Gucci.

To my astonishment, one participant, posing as an expert stated that salespeople at such boutiques should be snooty. The reason given was that this attitude was part of the luxury cachet.

How ludicrous and puerile, I thought.

In my experience, this is precisely what you should not do. Whether you spend $10,000 or more on a Rolex or $20,000 or more at Hermes all clients should be treated with respect. Period. Aspiration and negative attitude sales pitches are not only counterproductive, but they are also destructive. (I might add, that this should be true of all human interaction and not just the act of buying luxury products.)

Does Luxury Really Have Meaning?

Luxury was never about price. This is an outdated concept built on a social model which is incompatible with democratic values. It is about brands, which are authentic. Authenticity implies function, design, intrinsic value, and in certain cases heritage and pedigree.

Luxury must provide the right experience.

Sophisticated customers want the wow factor.

This means touching the heart and dazzling the senses. When done in this manner, the client feels their lifestyle enhanced. Yes, I know, like you do that a product is just a thing. However, things act as a trigger and can alter perception, inner balance, and outer harmony.

Look at the keys to luxury brand management and you will recognize the essentials in selling aspiration:

1) Self-expression and sense of self
2) Exceptional treatment and experience when in the act of purchase
3) Craftsmanship=Quality
4) Authenticity
5) The Rarity Factor
6) Emotional Bonding
7) Mystique

To achieve these elements the brand must be expert storytellers. One of the grand storytelling kings, Ralph Lauren, understands this like the lines on his hand.

Exceeding Expectations

Luxury goods are not sold the same way as mainstream products. It’s not enough to simply introduce and sell a luxury brand surrounded by a fancy store with design-inspired display cases either. Consumers of luxury brands tend to have higher expectations than that of traditional consumers. They are discerning and sensitive to questionable tactics, as well as intolerant when comes to aggressive salespeople.

The attitude, product knowledge, and overall delivery/presentation of the product by the sales consultant/brand ambassador all play an equally important role. This translates to a well-educated, skilled staff having good communication skills, a high level of presentation skills, and a customer-centric approach.

A study by The Luxury Institute, in New York, finds that Burberry and Bottega Veneta excel far better in CRM (Customer Relationship Management) than other companies. Their key findings were under the title:

“Leading Edge Insights Into The World Of The Wealthy”

Sales associates should be employed from related luxury brands and products, with consideration given to those in the service sector such as hospitality or premium airlines: Singapore Airlines, Swiss Airlines, Emirates, and others — or perhaps from premium apparel brands and high-end cosmetic brands. One thing is certain: Training ought to be based on specific brand requirements.

As more luxury brands open their own retail outlets to stand apart, they need to better control sales channels, image, and front-line personnel.

One cannot stress enough for Sales teams to have the right training.
For new sales hires not familiar with selling luxury brands, a company has to invest to train them and ensure occasional retraining including recap courses. Luxury sales training should include:
– In-depth product knowledge – specifically how it will help satisfy the customer’s needs;
– Focus on the customer – who they are, what they like/dislike, determine needs, motivations and preferences;
– Exceed customer expectations by delighting and surprising;
– Appeal to client emotions;
– Never put down the competition.

Ultimately, craftsmanship, design innovation, exclusivity, and pedigree sell themselves. Correct sales attitudes should personify the luxury branded products and it becomes in the client’s eyes a done deal.

Selling, or Rather, Storytelling with Product Knowledge and Finesse

Consumers today are sophisticated when it comes to shopping – thanks primarily to the internet where information on just about any product can be researched and used for comparison purposes. Consequently, when a prospective client walks into a store, he/she is armed with knowledge – which is why the sales professional should be product proficient and adept at assisting and guiding the client to the purchase by making use of flattery, romance, and showmanship. Charisma is an asset.

To illustrate, if a sales consultant, wearing a pristine white pair of gloves is presenting, for instance, a Chopard watch, he/she will utilize terms with finesse and avoid using language which discusses a specific price tag. In its place, the word “value” can be used. Instead of calling the product an obvious “watch”, the sales consultant can say, “timepiece”, “masterpiece” or simply pronounce the model name. It should then be demonstrated in a dazzling manner emphasizing its innate qualities and timeless design with functionality – amongst other features that focus on one’s sentiments.

When selling a niche automobile such as a Porsche, the sales professional can talk about racetracks, describe road-holding capabilities, and build up a fascinating story – after which time he/she can bring up reliability and the technical details which confirm to the discerning client what he/she is already aware of.

Hiring Selection Process: Who Should Make the Cut?

When seeking to hire sales consultants, there should be a set of criteria established to ensure a successful performance. The people selected for the end-user contact should have the following characteristics:

1) Retail sales experience in a luxury environment;

2) Empathetic: expertise in establishing customer relationships that translate into sales;

3) Image: proper attire and fashion accessories, verbal communication, and grooming. Clients should see the brand made manifest so it has a personal connection;

4) Skilled at the emotional aspects of a sale: bond with customers so that relationship leverage is genuine;

5) Passionate and Professional mindset;

6) Highly collaborative: knows how to work with and through others in a team-based environment;

7) Entrepreneurial, competitive, self-confident, and self-motivated.

Discounted Luxury is an Oxymoron

Under no circumstances should luxury brands be discounted. They need to stick to their true sense of meaning and heritage. By cutting prices, brands risk changing the quality-price relationship in the customer’s mind. This practice normally stems from sales consultants, who may not be convinced that the particular luxury goods offered for sale actually merit the price.

Such an attitude can be tricky to navigate effectively. Customers need to believe otherwise they question and the product is devalued in their eyes. Salespeople, who are not up to this aspect of brand personification should not be hired.

Price discounts should be a tactic of last resort.

A robust alternative is to offer gift items or bonuses such as complimentary tickets to Art exhibitions, gift certificates, or access to a coveted local restaurant.

Employ Mystery Shoppers

In the retail brand experience, nothing should be taken for granted. In a progressive customer-driven entity, training and developing human assets should be an ongoing process. Moreover, brands should be an enemy of the status quo.

Hiring mystery shoppers to gauge the total sales cycle approach and report back their experience to management should not be ignored.

Another suggestion is for the luxury boutique owners to hire a third party such as a consultancy firm, which specializes in the high-end retail domain, to shadow the sales consultants and evaluate their performance.

Both techniques need to be conducted with frequency. How can you understand what the client expects by acting and gauging behavior in the field? You can’t.

The Final Take

Remember, a luxury sales professional does not pressure customers to buy.

He/She plays the role of a luxury purveyor and advisor – someone who is an expert product consultant and keeps a client’s best interests at heart. By demonstrating value, a sales consultant establishes himself/herself as a professional.

It’s about establishing a person-to-person relationship as opposed to a salesperson-to-customer relationship.

In today’s economy, service has become a core competitive advantage. Hiring the right people and training them to sell properly, increase sales and retain the brand’s luster should all be part of its ongoing ambitions.

Sophisticated customers want products that dazzle their senses, touch their hearts and stimulate their minds – which they can relate to and can incorporate into their lifestyles. The degree to which a luxury product is able to deliver a desirable customer experience is vital.

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EntrepreneurialEssentials - FrontCover Final

1] Start-up Essentials: A Universal Roadmap for Starting a Business — Infographic

Filed under 1, Business, description of luxury, Luxury, luxury frgrances, luxury storytelling, selling luxury, what is luxury

Tagged as luxury branding, luxury development branding, luxury lifestyle, luxury marketing, luxury marketing strategy

January 2, 2021 · 12:14 pm

The Top 10 Most Read Articles in this Blog for 2020

Top 10 Articles of 2017 - Training Industry

To begin the new year, I have once again rounded up the ten most read/popular articles — this time for 2020. The following ten captured the most attention by numbers and from 152 countries in all. See them all below!

Your views are always encouraged including subject matter you think I should be covering more of.

THANK YOU for your readership and I look forward to feeding your mind with additional practical business food for thought this year which can be applied for timely results.

2] The Luxury Brand Ranking and Consumer Accessibility Pyramid: What It Takes to Move Up

3] Why do Rolex Watches Retain Their Value? Quality, Savvy Marketing and Cache are the Core Motives

4] The Notorious Cruise Industry: A Glorified and Reckless Offshore Business

5] Sex and Sensuality in Advertising: Why it is effective and how to refine it

6] What Products and Services Must Do to Flourish: Increasing the Odds at Profiting in a Competitive Market

7] Exceeding the Hotel Guest Experience: Anticipating and Executing Desires Flawlessly

8] Enticing the Luxury Home Buyer Through a Holistic Marketing and Sales Approach

9] The Art of Selling Luxury Products: Brand Story Telling & Persuasion

10] The Ultra Luxury Purveyors: Lessons from brands catering to the wealthiest one percent

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Filed under 1, cruise liners, cruise ship industry, description of luxury, luxury lifestyle, luxury storytelling, mass affluent, selling luxury, sensuality in advertising, sex in advertising, sexy advertising, Sexy branding, sexy brands, small business branding, stimulating brands, what is luxury

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February 2, 2016 · 6:01 pm

Genuine Luxury vs Accessible Luxury: Two Distinct Yet Opposing Categories

By James D. Roumeliotis

“Masstige” (a combination of two words: “mass” and “prestige” – aka mass with class) is a contemporary marketing term which denotes prestige for products perceived as luxurious and targeted to a wide range of customers known as the “mass affluent.” As per Wikipedia, the mass affluent are the high end of the mass market, or individuals with US$100,000 to US$1,000,000 of liquid financial assets, or consumers with an annual household income over US$75,000. These upper middle class individuals can afford to splurge on some of the finer (and affordable) things in life which include fashion merchandise, sporting goods, cosmetics, various accessories (silk ties, scarfs, small leather goods, perfumes etc.), high-end consumer electronics/gadgets, as well as culinary food and spirits. Brands in those categories depend on the “masstige” crowd for a majority of their sales, despite a few which also happen to be purveyors of inaccessibly priced products catered to the HNWI/UHNWI (aka the very wealthy or the 1% respectively).

This is purely an oxymoron and paradoxical since in the authentic luxury domain, “mass prestige” is an artificial term for “luxury” as it is not generally geared for the mass but rather the well heeled. Sadly, the true meaning of “luxury” has been bastardized by many brands who are falsely in the “luxury” business (in the true sense of the word and definition). However, there are luxury brands which have chosen to offer lowered priced products in a bid to join the “accessible luxury.” Think Coach with its leather bags and accessories or Chanel with its perfumes and cosmetics.

Defining the true meaning of the term “luxury”

Definitions of “luxury” vary significantly and depend on with whom you discuss the topic and in what context. The term “luxury” is not the easiest to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria in the mind, which creates a mood and what is generally referred to today as lifestyle.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, stated:

“A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”

Authentic luxury brands compete on the basis of their ability to invoke exclusivity, prestige and hedonism to their appropriate market segments not the masses. There is a classic litmus test as follows:

Is the product manufactured in artificially limited quantities? (i.e. the rarity factor)
Does the firm have a story to tell? (i.e. history & pedigree)
Is the firm portraying a unique lifestyle? (i.e. the product or service will enhance one’s experience through an exceptional appeal)
Is craftsmanship the hallmark, which delivers products that only High Net Worth individuals (HNWI/UHNWI) can purchase without question?
Does the brand offer authenticity?

Genuine luxury purveyors remain relatively small and select in their category. Ultra wealthy (UHNWI) consumers purchase rare luxury products because they seek to distance themselves from the mass through the emotional value of acquiring flawless and rare objects of desire.

“Aspirational” luxury, on the other hand, is another fancy marketing parlance which is generally defined as a brand that most want but only a fraction of them can actually afford it. Most cannot afford a $2000 bottle of vintage wine but may be able to occasionally splurge on a $200 bottle of one of the finest single malt Whiskey.

Identifying luxury sectors

Genuine Luxury is classically defined in three key segments:

1) Luxury Goods: Fashion & Accessories, Watches & Jewelry, Well-being & Beauty products.

2) Lifestyle Purchases: Automotive, Experiential Travel, Home & Interiors, Exclusive Alcoholic beverages (exceptional wines, champagne & spirits)

3) Private/Executive Jets and Yachts: An absolute category in their own right.

Brands which fittingly claim authentic luxury status

Few brands can really claim the trademark of luxury. It is those which combine allure with pedigree and quality attributes. Discounting is not part of their strategy and their entire raison d’être is geared to the UHNW (Ultra High Net Worth). Many of their products actually increase in value over time since they are either discontinued or necessitate a long waiting list/time.

Most notable authentic luxury brands are in the haute merchandise category:

Hermes, Chanel, Louis Vuitton, Bottega Veneta, Rolex and Cartier.

Other players to this core list include: Bentley, Rolls Royce, Gucci, E. Goyard, Charvet, Salvatore Ferragamo, and Bulgari.

Exclusive and bespoke travel companies provide tailor made adventures and excursions. The four key players in this category include: Abercrombie & Kent, Kuoni, Orient-Express and Cunard Line.

Broadening our view of luxury services, certain firms offer services and privileges to a rare percentile. Such services include credit cards with no limits, jet ownership, private plan charters, global concierge services and the like. Think NetJets and Amex.

“Accessible” luxury is a marketing notion, not a merchandise category

The concept of making luxury available to the masses goes against what true luxury is as
there is no such thing as accessible luxury ─ it is either luxury or it is not as “accessible” luxury is a marketing notion and not any product category. Think Michael Kors, Coach, Ralph Lauren, Godiva and Apple among others. Top luxury brands such as Hermes, Louis Vuitton and Chanel have accessible luxury with perfumes and cosmetics, sunglasses, as well as accessories (leather, silk scarfs etc.).

In marketing parlance, being coined as an “accessible” luxury good can be deceiving when the quality of materials is not quite at par as one would normally find in a “genuine” luxury product. For such companies, becoming too commonplace is a risk for such brands as they lose their cache due to a lesser price line, as well as risk their reputation for the sake of increasing their revenues. Then there are some non-luxury brands which use the codes of luxury strategy to grow their sales. Needless to say, many consumers will eventually catch-on that such products are merely a gimmick thus on their way to lose their luster.

“Premium” and “prestige” categories defined

If luxury brands are related to scarcity, quality and storytelling then premium goods, on the other hand, are expensive variants of commodities in general: i.e. pay more, get more.

These brands are less ostentatious, more rational, accessible, modern, best in class, sleek design, and manufactured with precision. Beats headphones and TAG Heuer watches are a case in point and so is Audi and Lexus in automobiles.

“Luxury” and “prestige” brands respectively both have a similar status. Although some may disagree, in some cases, brands such as Mercedes-Benz automobiles, are considered to be both “luxury” and “prestige.” There are also brands which are either labelled one or the other. It depends how they are identified in the eyes of consumers.

Prestige brands offer a high level of innovation, craftsmanship ─ and with some categories, the finest ingredients or raw materials. Due to their well-established names, status and pedigree, they boast quite a loyal following. As a result, they can command premium prices which their clients do not mind paying for since they are made to feel special. Examples of some prestige brands include Breitling watches, Lancome cosmetics and Aston Martin automobiles.

The distinction between a prestige brand and premium brand is simply one of perception. In automobiles it is Cadillac and Lexus vs their German counterpart of BMW and Audi. In watches, it is perhaps a Rolex versus a Breguet and a Cartier.

On a final note

When it comes to lower priced supposed “luxury” products for the affluent masses, they are essentially “premium” products ─ otherwise known as “masstige.” The brands succeed at creating fancy designs and utilize expensive looking material to make their products appear very expensive which are then sold at a fraction of the price compared to genuine luxury brands in the same product category. Add clever window dressing and marketing and the result is that those products become affordable objects of desire. Unlike authentic luxury brands which are manufactured at their country of origin (mainly Italy, France or the U.K.), they are outsourced to low labour cost factories in Asia or Turkey. Despite this, they are given a premium markup which is intentionally done to create an aura of high value.

As long as there is a big demand for massitige products that its target market can afford and make them part of their social status and lifestyle, the category will be around indefinitely.

As a final point worth mentioning, at this day and age, there are luxury branding experts who claim that there are actually four categories of luxury: Old, New, Eco and Indie as exhibited in the following table (credit: David Sherwin). This translates into additional choices ─ categories to satisfy most desires.

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Filed under brand positioning, Branding, Business, country of origin, Luxury, Marketing, mass affluent, masstige, selling luxury, what is luxury, what is premium

Tagged as branding, branding strategy, luxury branding, marketing, mass affluent, masstige, premium vs prestige

December 1, 2014 · 11:06 am

Exploring the Luxury British Automotive Total Customer Experience: Part 2 ‒ Jaguar Cars

Viewpoint by James D. Roumeliotis and Petrona J. Joseph

In part 1 of this 4 part series, the Aston Martin automotive brand was the star focus. In this part, the spotlight is on the customer expectations with the British luxury automaker Jaguar Motors. For over 90 years, this high-status marque has pushed the boundaries of what was once considered impossible in the automotive industry.

Sir William Lyons – founder of Jaguar Motors, combined performance and beauty in the designs and manufacturing of the ‘Jag’. A feat unprecedented of his time, his uncompromising vision set new benchmarks which is still followed by the manufacturer until today. Despite a tumultuous period during the Ford Motor Company ownership, its present owner (the Tata industrial conglomerate based in India) has invigorated a new model lineup together with a bold marketing strategy through a substantial cash infusion. It also acquired, from Ford, the Land Rover luxury SUV brand.

With the big news of Jaguar’s upcoming justDrive™ ‒ an industry-leading app technology that integrates multiple smartphone apps into a single, voice-activated in-car experience; it is now a leading contender amongst its competitors.

The Jaguar driver profile

The Jaguar customer is typically a refined man or woman – for the most part, a university graduate with a dynamic presence, and status symbol visible. Moreover, the Jaguar driver can be classified on some levels to the “blue temperament” – which is an analytical, prudent, detail-oriented and precise personality. In serving a Jaguar customer, one must not sway into personal details on the onset. In addition, the sales consultants have been trained to not ask many open-ended questions but rather ask close-ended questions and listen attentively. I also suggest note-taking, because the majority of Jaguar drivers (most in Executive positions) do not like to repeat themselves. By taking notes, one demonstrates the prospective Jaguar owner that you are unconsciously like them by mirroring their behavior.

Following is an outline on how authorized Jaguar dealers respond to customers – from Sales to Service.

Initial Sales Consultation

– Greeted promptly by the receptionist

– The sales consultant must greet the potential Jaguar consumer with the appropriate handshake (particularly the dominant handshake)

– Ask close-ended questions to ensure need and quality prospect.

– Initiate test drive

– Review objectives & listen to this customer clearly while note-taking

– Warning- there is a fine line between explain the benefits to this customer versus being aggressive in your approach. Allow this customer time to review the advantages of owning a Jaguar.

– An overnight test drive is quite rare, however during the test drive, outline the benefits of the drive and the technology.

Sales Process

Allow the appropriate time for this customer to choose options, colors and technology combinations. At this point, once trust and careful attention has been established- then proceed with open-ended questions.

Delivery

– Short and succinct (keeping in mind that this customer is discerning and either a professional practitioner, executive or a successful entrepreneur who may have to return to the office for an important meeting.

– The customer should be shown the basic functionality of his or her new Jaguar

– The customer should be asked to reschedule a one hour detailed information session at his/her place and time of convenience.

The automobile which reflects a luxury lifestyle

Premium and luxury car owners seek the total package with the car brand they choose to be loyal to as they would when checking in to a luxury resort. They seek more than just a vehicle they can enjoy from point A to B. In practice, its owner might use this automobile to commute to work, but this is not sole incentive. Jaguar is clearly a brand with authenticity and heritage. The principals shaping the consumer’s buyer behavior go beyond intention. There is a sense of engagement in fulfilling a dream. It can be to make a social status statement or a personal style choice. Whatever it is, it is not an unconscious choice. The codifiers are clear: This is who I am, and what I believe in. Ultimately, it can also articulate the owners’ sense of self-worth and their emotional aspirations. The most important emotional benefit is that a product of this caliber and class expresses itself when the consumer can declare: “It suits my lifestyle.”

Discreet and unconventional selling approach

Jaguar in North America is testing, in several major cities in the U.S., a novel way it presents new vehicles by showing appreciation to its most loyal customers, which it labels as “super-loyalists” by hosting elaborate receptions in their homes. In turn, the “super-loyalists” invite friends and associates who may be interested, and can afford, one of Jaguar’s elegant models. This idea takes away the perception of any high pressure sales normally associated with auto sales at dealerships.

Dealers of prestigious auto brands as custodians of heritage

A luxury dealership’s ultimate goal is to make an entire ownership experience a pleasure ‒ let alone a Jaguar. They strive to build relationships, which is why so many of their clients remain loyal. A luxury dealership serves as a guardian for the rich heritage of their prestigious brands thus make certain to continue their legacy.

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Filed under Branding, Business, catering to picly clients, customer experience, customer service, discerning clients, discriminating clients, Luxury, luxury storytelling, selling luxury, sexy brands, super luxury cars

Tagged as catering to picky customers, luxury automobile brands, luxury car brands

November 16, 2014 · 10:34 am

Exploring the “Super Luxury” British Automotive Total Customer Experience: Part 1 ‒ The Aston Martin

Viewpoint by James D. Roumeliotis and Petrona J. Joseph

When we encounter the word “luxury”, images of: seamlessness, awe, the rarity factor, cache, opulence, aristocracy, supreme workmanship, stellar service and reverence come to mind, amongst others

Now, close your eyes for a moment. What images come to mind when you consider mention of the following vehicles: Aston Martin, Jaguar, Bentley and Range Rover? That’s what we will be analyzing in this four part series of the luxury British automotive icons and the above average expectations of consumers seeking such extravagant motor vehicles.

What qualifies the authors to give such commentary? Having worked and served — most notably with prestigious brands such as Gucci, Aston Martin, Jaguar, Bentley and Range Rover, as well as with mega yachts and coupled with extensive research and consultations in this domain –, both can accurately define the exceptional treatment tendered to a HNWI (High Net Worth Individual) luxury seeking discerning consumer. Brands which qualify to serve this exclusive market provide attention to detail, a plethora of product knowledge/competence, and discretion along with an implementation of an anticipated flawless post-sale/follow-up policy.

Price aside, a luxury car brand should embody cache, exclusivity, pedigree, craftsmanship and limited production. R.L. Polk and Company, a global automotive information and marketing firm that provides solutions to automotive and related industries, has re-defined the term with the appellation, “super luxury”, ‒ i.e. cars that cost over $100K. This category includes brands such as Rolls Royce, Bentley, Maserati as well as the Aston Martin being featured here.

Aston Martin: License to thrill

We begin with the initial luxury automotive brand in this four part series: Aston Martin. This high valued motor car producer brings images of James Bond, a ladies gent, British heritage, sophisticated technology, sex appeal, speed, agility and soul.

Considering the above persona, the makeup of a typical Aston Martin customer.is a male (no gender discrimination intended), in his late 30’s early 40’s, handsome, successful, possibly with an attractive spouse (or if single, a striking companion), possesses a deep knowledge of refined luxury, knows what he wants virtually at any price level, and enjoys adventure, as well as thrives at constant new challenges.

Initial impressions and consultative sales process

When a prospective owner, or existing customer of an Aston Martin walks into any impressive looking Aston Martin showroom, the total experience should normally result as follows:

– To be greeted initially by the attractive receptionist/hostess (brand ambassadors) by the owner or General Manager of the dealership;

– Introduce the prospective client to an Aston Martin specialist;

– Offer a hot or cold fine beverage;

– Be given a tour of the impressive premises;

– Exhibit the various models and a test drive initiated during which time rapport is being built;

– Offer of an overnight test drive to create the feel and experience of the automobile and its performance characteristics;

– Thank and greet the prospect by the dealership owner or GM upon returning the vehicle followed by the sales specialist;

– Customer’s contact information should be entered into the dealer database (CRM);

– If a sale is initiated – the sales process should ensue. However, if a sale does not occur, effort should be exerted in a discreet and pragmatic manner (consider “consultative” selling) to close the sale. Statistics show that 60% of car purchases have been consummated on the spot when they received what they considered was an excellent presentation and demonstration. Either way, a follow-up is imperative within 24 hours.

Sale & delivery

– An appointment should be set for delivery;

– Upon arrival to pick-up the vehicle, customer should be congratulated by owner and/or GM;

– Explanation of vehicle model should be thorough along with a post-sale follow-up the following day;

– Customer should be offered a token appreciation for his/her business. This can be in the form of champagne from a strategic partnership for example, Moët & Chandon and/or an additional gift in good taste.

Exceeding customer expectations for the discerning client-driver

To succeed in gratifying the seemingly sophisticated client, a high-end organization should develop a comprehensive strategy along with efficient implementation tactics. These include:
– Having a clear and unique value proposition that hooks them;
– Consider exploiting the five senses to attract and retain them – categorized as “ambiance”/”sensorial” marketing and branding;
– Staff must be customer centric, patient, empathetic, and good listeners – remaining calm under duress during client interactions;
– Employee retention – hiring for attitude and training for skills;
– Utilizing a hands-on approach;
– Probing clients’ specific needs/requirements – recognizing their motivations – reading their body language;;
– Earning their trust and respect by exuding confidence, empathy and transparency;
– Offering a personal touch – individualized attention with customized solutions – It’s all about the customer;
– Being frank and transparent with pricing, offers, proposals and promotions;
– Proposing an expansive product selection and service options;
– Outstanding and consistent levels of customer service throughout the organization;
– Reducing or eliminating waiting times – whether on the phone (reservations, customer service etc.), as well as for service or an appointment at the physical location;
– Offering customer loyalty programs through joint collaborations with other luxury purveyors – a great way to make them feel special by receiving something extra;
– Asking for feedback with regards to service and product experiences for ways to improve those experiences. Discerning clientele are typically strongly opinionated and relish giving their views.
– Implementing the latest technology with all touch points.

The Aston Martin automotive brand with its power, beauty, soul and heritage as its tagline delivers to a specific and limited market segment by giving way to its consumer target to acquire their models they associate with a “luxurious and sporty lifestyle.” The brand is essentially a status symbol.

Brand loyalty is about building an emotional, and in some cases, irrational, attachment in a product. “Total customer experience” is not an option but rather compulsory as part of an alluring brand. It takes savvy planning, execution and perpetual refinements to stand above the crowd. It’s how you get noticed and remain relevant. Luxury brand desirability is driven by standout design, craftsmanship, as well as what is felt.

A typical Aston Martin showroom portrays a super luxury car brand able to offer a “wow” factor to its intended customers with an unconventional retail experience which exploits the five senses. This includes a showroom floor with ideal lighting, the various models well positioned/presented, impeccably dressed/groomed staff, and an upscale lounge ‒ overall, presenting sight, sound, smell, touch sensorial experiences and creating a feeling of lavishness. Some will go as far as offer art exhibitions on the premises, five star dining events and wine tasting to name a few. It’s what its type of clientele crave.

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Filed under beauty and function, Branding, brands with sex appeal, Business, catering to picly clients, customer experience, customer service, discerning clients, discriminating clients, Luxury, luxury storytelling, Marketing, retail luxury interior design, selling luxury, sexy brands, sexy marketing, sexy products, super luxury cars, what is luxury

Tagged as aston martin, automotive total customer experience, British luxury cars, luxury car branding, luxury car marketing, luxury cars, luxury cars customer service, super luxury cars

September 1, 2014 · 6:25 pm

The Genuine Luxury Domain and Its Country of Origin: Why the Latter Matters

Viewpoint by James D. Roumeliotis

With the proliferation of Italian and French luxury brands bearing the ‘Made in China”, ‘Made in Turkey’ or made elsewhere remote from their land of origin, it makes one ponder whether the brands are diluting their image for the sake of lower prices and higher profits. This begs us to revisit the question of what constitutes an “authentic” luxury product and whether manufacturing in a country unknown and unfamiliar for evoking luxury is a good long term strategy for the brand with heritage.

Luxury vs. Premium vs. Fashion: Clarifying the Disparity

Definitions of “luxury” vary enormously and depend on with whom you discuss the topic and in what context. The term “Luxury” has never been something easy to define. It is relative, mysterious and elusive. In essence, it revolves around subjective criteria in the mind, which creates a mood and what is generally referred to today as lifestyle.

The proliferation and marketing misuse of the word “luxury” on many products across sectors is quite evident. Brands either do it out of ignorance or to enhance the desire for the consumer to purchase their products.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, affirmed:

Authentic luxury brands compete on the basis of their ability to invoke exclusivity, prestige and hedonism to their appropriate market segments not the masses. There is a classic litmus test:

Is the product manufactured in artificially limited quantities? (i.e. the rarity factor)
Does the firm have a story to tell? (i.e. history & pedigree)
Is the firm portraying a unique lifestyle?
Is craftsmanship the hallmark, which delivers products that only High Net Worth individuals can purchase without question?
Does the brand offer authenticity?
Does it implement an absolutely no discounting policy?
Is the product (and at least most of its materials/parts) manufactured only in its country of origin?

Luxury is not premium – and premium is not luxury. They are two dissimilar categories catering to different market segments.

Luxury Product Roots and Perception: Key Factors of Authentic Luxury

A luxury product is rooted in a culture and comes along with a small fragment of its native soil, of its heritage. This proposes that in order for a “luxury” product to remain true to its origins, as one of its main criteria, its production shall remain in the country of origin ‒ whether that is France, Italy or elsewhere (most notably in Europe). Tempting to relocate production elsewhere can cause the brand to lose its lustre and character.

Professor Jean-Noël Kapferer, an author and lecturer at the Kellogg Business School (Northwestern University, USA), as well as at HEC Paris, Europe’s premier academic research center on Luxury, clarified his views on this subject matter by stating that:

“Looking at luxury companies’ own attitudes, there is a clear segmentation, based on their brand positioning and business model. A first group (such as Louis Vuitton, Hermès, Chanel) emphasize quality and heritage as the main sources of their incomparability. They are patriots. For them, a country of origin is a homeland, much like the soil in a vineyard – a miracle made of earth, nature, sun, rain, and sophisticated human labor, loaded with culture. For them, ‘made in…’ tells a whole story, tying production to a long heritage.”

He further affirmed that:

“To remain a true luxury brand, following the luxury business model, entails sticking to local production. This is not an easy task for many luxury brands. Those that comply must create the conditions that are necessary to sustain this production. This is why they often buy their local sub-contractors in case the latter go bankrupt, to be sure to keep alive a historical know-how that might otherwise disappear.”

France and Italy are considered the leading countries for luxury and trend setters for clothing and accessories. Luxury watches (better known as “timepieces”) are manufactured in Switzerland ‒ the undisputed leader in this category. London, is considered to be the luxury spirit capital of the world with Burberry as the most prominent luxury brand. Whereas, Germany Italy, as well as the UK are for luxury automobiles. However, what they do produce elsewhere in the world are not ‘luxury’ but rather their lower priced “premium” derivatives (think BMW, Mercedes and Audi). Other illustrious automotive names, such as Ferrari and Rolls Royce, continue to manufacture solely in their native country.

Private vs. Public Luxury Purveyors

For the good of their distinguished image and cache, top-tier luxury brands should remain small privately held, with no pressure to sell and family run beyond the reach of speculators. These companies are managed, and their equity held, by those families. Consequently, management of brands, people and profits are done with the long term in mind, not necessarily the next quarter, which most investors would not have the patience to deal with if the luxury brand was publicly traded. In essence, the privately held have the luxury of taking risks as they desire and staying the course when they don’t. They have the freedom to invest for 5-10 years without receiving a financial return. In comparison, the publicly traded ones, which are accountable to their shareholders, are constantly under pressure to trim production costs and increase revenues and profits which lead them to cater to a larger audience ‒ the mass affluent. So much for all the elements of ‘genuine’ luxury purveyors which are doing away with scarcity and exclusivity.

The most prominent smaller and privately held ‘authentic’ luxury brands which fulfill every criteria ‘luxury’ truly exudes are as follows:

Soft Luxury Goods (high-end apparel, leather goods and exclusive fragrances) include: Hermès (70% owned/controlled by the Dumas family ‒ the descendants of its founder), Chanel (100% ownership by the Wertheimer family) and the niche perfume house, Creed Fragrance Company founded in 1760 (100% ownership by the Creed family ‒ descendants of its founder).

Hard Luxury Goods (products such as watches, jewellery and pens) include: Rolex, Chopard, Patek Philippe amongst others.

According to the Millward Brown luxury brand survey, which includes the large luxury groups, Louis Vuitton, Hermes, Gucci, Chanel, LVMH (Moët Hennessy Louis Vuitton), Rolex, Cartier, Fendi and Tiffany & Co. respectively, are the most successful family owned luxury brands. Moreover, research done by SDA Bocconi, renowned for providing world class luxury education, revealed that unique characteristics of most family-owned or managed business fit almost perfectly with the competitive logic of hard and soft luxury approaches. Needless to say, their management culture, retaining the mystique (crucial in the ultra-luxury domain), and long-term decision approach are all instrumental for cultivating and preserving their brand heritage.

Hermes 2013 Ad Campaign

In the Final Analysis

There should be no confusion between luxury and premium or even a fashion category. When someone buys a luxury object, he/she purchases craftsmanship, cache, pedigree, made in limited quantities, a special place in the world of lifestyle and exclusivity (made for the few). The premium business model is based on the manufacturing of best-in-class products, with an image of style. Fashion is a general term for a popular style or practice, especially in clothing, foot wear, and accessories. Fashion references to anything that is the current trend in look and dress up of a person. Usually not timeless. A “luxury” and a ‘premium” product can be both – as in a tailored made fine wool suit for example.

Therein lies the major differences between a luxury product and a premium product. It’s legitimate for a premium product to seek out the most suitable and most economical manufacturing location, so long as quality and service levels can be maintained.

Brands such as Nike, Adidas, Ralph Lauren, Hugo Boss, Tommy Hilfiger, amongst others, are doing an exceptional job of selling solely an image to the masses. Indeed, far from being a genuine ‘luxury’ brand, most of their products are manufactured in low labor countries such as China.

The ‘made in’ label plays a significant role for luxury aficionados who hold higher expectations including a value added quotient to ‘luxury’ brands who produce their products in their respective country of origin – mainly France, Italy and the U.K. For categories other than apparel and accessories, production should be elsewhere in Western Europe.

In the article “Building a Luxury Brand Image in a Digital World” by David Dubois, INSEAD Assistant Professor of Marketing and Debbie Teo, INSEAD MBA, they quote the following:

“Hermès has no desire to become ‘masstige’ (a mass producer of prestige goods) the company’s CEO Patrick Thomas stated in 2009. In essence, he asserted that his brand was not in a position to dilute its image and compromise on quality in the interest of short-term results. This is truly one of very few authentic “luxury” brands befitting the model and criteria in the sense of the word.

Privately held luxury brands are prone to view business with long-term vision and remain rigid with quality over quantity. Comparatively, their publicly traded counterparts go out of their way to please their shareholders which may dilute their “luxury” status for the sake of volume and short–term gains.

Good business decisions are not the domain of tactical “bean counters” — exploiting the luxury brands for all their worth. They may also come from strategic planning and overall financial leadership.

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Filed under Branding, Business, catering to picly clients, country of origin, customer experience, description of fashion, description of luxury, description of premium, discerning clients, discriminating clients, Luxury, luxury storytelling, made in france, made in italy, Marketing, selling luxury, what is fashion, what is luxury, what is premium

Tagged as country of origin, luxury made in france, luxury made in italy

April 2, 2014 · 7:13 pm

The Genuine Luxury Establishment: Perception, Ambiance & the Total Shopping Experience

by James D. Roumeliotis with a special contribution by Stephane Delille

Consider this! You are walking on, what is considered, a prestigious street in a downtown area of a major city lined up with a slew of luxury shops. What do you particularly notice about the look of the shops as compared to mainstream stores? Would you say it’s the window displays which are striking? The entrance? The upscale and inviting interior design? The way the merchandise is displayed?

Designing a luxury shop is much more than four walls, racks and lighting. It’s a meticulous creative and holistic process taking into account that luxury stores have to transmit the identity of a luxury brand, so that the image the customer has of this brand is affirmed by each store visit. Needless to say, it’s a design concept coupled with the total customer experience in mind.

Piaget timepieces, Bond Street, London

Ambiance, personalized service and the total shopping experience

In a world where the consumer has become savvier, luxury products more accessible through an increase in democratization of luxury brands and the rapid emergence of prestige brands, the retail environment in luxury branding is all about heightening the consumer’s brand experience and amplifying the brand aura.

A well designed luxury retail boutique should embody an extraordinary design that is timeless while maintaining a striking interior that is unique, inviting, functional, and most certainly portray a luxurious setting.

A custom designed attractive setting – yet alluring with captivating style, invites customers to truly feel the brand experience by adding character. It exudes a “You’ve arrived!” underlying message. This is accomplished by connecting the feeling of warmth and acceptance ‒ via emotions to a product or service, and infusing it with a tangible and intangible essence that remain in the customers’ minds. The vital elements are:

Location: The luxury brand store perception all begins with its location. A prestigious address/neighborhood makes an initial luxury statement ‒ whether on a prominent avenue such as Bond Street in London, Rue Saint Honoré in Paris or Rodeo Drive in Beverly Hills and at other renowned high-fashion streets worldwide. A high-end mall and airport outlets are becoming ever more popular due to their convenient spots along with an increasingly sophisticated environment.
Facade/Window Display: transparency/opacity of the windows, display highlights for outside windows (product type, arrangement of space, animation, colors and much more.), frequent creative displays and themes all play a vital role in showcasing merchandise with pizazz.
Main entryway: This should reflect an imposing appearance by creating the feeling of grand luxury access to the interior of the boutique. Elizabeth Arden’s signature red door is a distinguishable fixture at her stores and spas worldwide.
Decor: Attention to details including well-crafted attractive furnishings and materials (pillows or decorative accents) throughout. Choice of color palette, textures, combination of materials and accents all influence the overall store image in addition to being part of the overall design esthetics.
Lighting and its effects: The proper choice of illumination adds to the overall design and ambiance.Lighting can bring focus to merchandise displays, hide imperfections, add warmth, and help create a positive shopping experience for the brand’s clients. Halogen spots and LED lighting are the preferred variety for interior designers.
Smell and Background Music environment: These reflect the store’s personality. Smell is considered the olfactory of the fifth human sense. The scenting strategy is part of “sensory”/”sensorial” marketing and branding that’s meant to attach certain smells to brands, drive loyalty, and make people feel at home. Whereas, music/sound supports refining brand communication and in designing a better sounding environment. A discreet volume should be considered as an ideal comfort level.
Merchandising appeal ‒ display and layout: localization of displays (size, colors, kits, messages) while keeping in line with brand values and guidelines. The spaces where your clients see and touch your products have an effect on the visual aspect along with their shopping experience.
Lounge area: possibility or not to have private salons for VIPs, to utilize for private shows/demonstrations, presentations and other special gathering purposes.
Service amenities: Washrooms should possess panache and be spotless. Their design can achieve the look and feel of luxury with both functionality and comfort. A kitchenette can be an additional amenity for preparing and catering light food/hors d’oeuvres. A workshop for bespoke functions such as product setting on the spot, size customization, engraving etc). Perhaps a kid’s space with animation to keep a child/children busy while their mum/dad/parents are shopping. The kids can eventually be converted to the luxury label themselves.
Staff Caliber and Overall Customer Care: Luxury goes beyond good looks. The service offered is a major event in itself. This comprises of dress code, attitude, and politeness regardless of what the client looks/wears. As well as responsiveness, a consultative sales approach and accessibility. This requires proper hiring criteria, on-boarding and repeated training in product knowledge, presentation skills, and anticipating customer expectations to go above and beyond. Luxury firms need to implement KPIs (Key Performance Indicators) to gauge their service effectiveness which do not only measure the performance of organizational processes, but also warrant a consistent quality level of in-store service.

Bijan Boutique, Rodeo Drive

Artisans of timeless and artistic retail interior design

It takes bold strokes to prevail from the competition by showcasing a distinctive look along with creating an emotional bond with the clientele. As such, luxury brands are making their mark on the map with a radical and explosive architectural vision. It’s where design innovation coupled with creativity are paramount when delivering artistic solutions driven by each individual brand’s image.

When it comes to commissioning distinctiveness with luxury ambiance interiors in the retail, restaurant and hotel sectors respectively, Yabu & Pushelberg have become the go-to interior designers akin to what Frank Gehry is to deconstructivist architecture. In over three decades, the duo partners, based in Toronto along with a New York City design studio, have fostered a client list that ranges from Louis Vuitton and Tiffany & Co to Four Seasons Hotels and renowned French chef and restaurateur Daniel Boulud. In their work, Yabu and Pushelberg manage to articulate luxury through contrasts, austere designs with fine materials, as well as through comfort and the casual, strong points of view, including a crafty mix of art and artisanship. For them, luxury is a state of mind, not a material.

Yabu-pushelberg-lane-crawford-sitting-area

A Yabu & Pushelberg sample interior

The final take

The ambiance created in a luxury boutique is one of the finest marketing tools. The aesthetic appeal to human senses, the feel of the brand creates the image. Along with great service, it is one of the most important reasons customers will choose to shop repeatedly. It’s where the brand lives by orchestrating immaculate detailing that engages all senses of the discerning target audience. Surround the brand and its products/services with fashion, beauty, design and attractive models – without any characteristics of tackiness.

It all begins with the choice of store location, the immediate initial impression (window display, entrance, store layout, merchandising, furnishings, lighting and much more), the sales staff presentation and the impact of each touch-point in creating a unique indulging experience. The small touches that regularly go unnoticed help to create a distinct sense of place in luxury commercial spaces.

Emporio Luxury Mall, New Delhi, India

All that said, today’s savvy luxury consumers are increasingly seeking much more than merely a cosmetically elegant looking bricks and mortar shops. They have become more discerning and seeking a more knowledgeable and professional assistance to help them in managing their lifestyle and stature. It all boils down to the total customer experience which embraces knowledgeable and helpful staff, alluring presentations, storytelling, exclusive invites and privileged previews amongst other lifestyle themed activities.

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Filed under beauty and function, Branding, brands with sex appeal, Business, Luxury, luxury storytelling, management, Marketing, retail luxury interior design, selling luxury, sensuous brands, sensuous products

Tagged as luxury branding, luxury interiors, luxury marketing, luxury retailing, retail luxury interiors

January 1, 2014 · 11:09 pm

The Top 10 Most Read Articles in my Blog for 2013

As we closed the year 2013, I have rounded up the ten most read articles of 2013 by my readers. The following ten articles captured the most attention. See them all below in descending order. Your views are always encouraged.

THANK YOU for your readership and look forward to feeding your mind with much more business food for thought which can be applied for timely results.

10] 10 Pitfalls of Start-ups: How to Succeed Through the Initial Three Years and Beyond
9] Luxury vs. Premium vs. Fashion: Clarifying the Disparity
8] The Art of Selling Luxury Products: Brand Story Telling & Persuasion
7] The Business Model: Prelude to the Business Plan
6] The Ultra Luxury Purveyors: Lessons from brands catering to the richest 1 percent
5] Perceived Quality: Why Brands Are Intangible
4] Mass Customization & Personalization: The Pinnacle of Differentiation and Brand Loyalty
3] Sensorial Purveyors: Creating an Enticing Ambiance in the Hotel Domain
2] Sales and Marketing Functional Lingo: Defining their Differentiation
1] Brand Awareness: the influence in consumers’ purchasing decisions

Filed under 1, account management, B2B sales, Branding, branding not products, brands with sex appeal, Business, business development, business model, business plan, Business success, catering to picly clients, customer service, description of fashion, description of luxury, description of premium, discerning clients, discriminating clients, entrepreneur, entrepreneurship, entrepreneurship success, leadership, Luxury, luxury storytelling, management, Marketing, sales, sales strategies, selling luxury, sensuous brands, sexy brands, starting a business success, stimulating brands, what is fashion, what is luxury, what is premium

Tagged as business success, top blog articles

March 7, 2013 · 10:14 pm

Mass Customization & Personalization: The Pinnacle of Differentiation and Brand Loyalty

by James D. Roumeliotis

Simple Ways to Offer Customized Products - Practical Ecommerce

There was a time when customized products and personalized services were catered exclusively for the discerning and well heeled.

London’s Savile Row stands as a testament to personalized luxury. In a world full of luxury dumbed down and mainstream, there has been an up-shift by certain manufacturers trying to offer tailored ranges and services to a wider audience.

This development is technically referred to as “mass customization” and “mass personalization”. So why the shift?

Simply put, clients are demanding more and don’t share the same sense of brand loyalty as previous generations. Marketing strategists believe that focus must be on generating a community tied to customer satisfaction. I won’t call this CRM on steroids but the analogy could hold.

With ever increased competition, brands must show genuine benefit to hold the client’s attention as well as affection. The trend is quite sweeping once you start to examine the determinants. Look at fashion apparel, beauty care products, shoes, bicycles, laptops, and even smart phones. All claim they are perfect for customization.

Mass Customization vs. Mass Personalization

According to Wikipedia, the definition of the term “mass customization” in marketing, manufacturing, call centers and management, is the use of flexible computer-aided manufacturing systems to produce custom output.

These systems combine the low unit cost of mass production processes with the flexibility of individual customization.

“Mass personalization” on the other hand, is the custom tailoring by a company in accordance with its end users tastes and preferences.

The main difference between the two concepts is the ability for a company to give its customers an opportunity to create and choose product specifications. There are however limits.

The Financial Times lists “personalized production” among six other factors driving the future of manufacturing – namely network manufacturing, technological innovation, industrial democracy, boutique manufacturing, cluster dynamics, and environmental imperatives.

A case in point: Pomarfin is a small family owned Finnish footwear company. With strong competition from Asian manufacturers, the firm decided to change its strategy. It carefully looked at the adaptation to the mass customization paradigm, alongside a revision of its business model. Its choices were to either outsource the manufacturing of its shoes to China and simply become an ubiquitous brand, or differentiate itself while keeping its production in Europe. It chose the latter, by deciding to compete in mass customization, making made-to-measure shoes for discerning and affluent men. Pomarfin then introduced the clever concept of installing and utilizing a foot scanner in retail stores, which sells its shoes. The client’s foot gets scanned and the image is then uploaded to a server and sent to the firm’s manufacturing plant. The client then decides if he wants his exact fitting shoes shipped directly to his address of choice or picked up at the retailer.

Moreover, as an additional convenience, the customer can reorder custom shoes through Pomarfin’s website. To be fair and retain loyalty with its retailing partners, Pomarfin pays them a royalty for life for each new pair of shoes purchased by a customer sent its way.

Untitled

Broad Marketing of Bespoke Products & Services

Clients have simply become more demanding. They expect more, and have no loyalty to brands that do not come up with the experience to match the product or service hype. This trend is both at the B2C and B2B level.

Everyone it seems is looking for the enviable win-win scenario.

It is natural to think that bespoke is the sole domain of the fashion industry whether shoes, suits, shirts or haute couture. These items with their stress on handmade carry heavy price tags and are geared to people with a high DPI.

You would be mistaken to believe that this is not possible for a mass market. For example, Dell computers was the first firm to offer customization to their entire range. In fact, designing your own computer needs with a consultant is the DNA of this organization. Dell understood that this type of differentiation would mark them apart from anyone else in the industry.

Other consumer goods operations quickly followed suit. For example, Adidas AG launched the miAdidas unit which offers custom sports shoes. Nestle delivered a market coup to the coffee industry with Nespresso, bringing single serve coffee into the home and office. Now you can serve different types of coffee within a group with no effort.

Individuality is a Sign of Personality: The Way Forward

The mass customization trend has been a rolling bandwagon. Understanding and harvesting this demand is easier said than done. Smart firms generally respond by building production facilities and systems with an increasing number of modifications in order to produce and deliver individualized units as per customer’s preference.

This certainly has its benefits and drawbacks:

Advantages
– Allows customers to create customized products
– Products deliver excellent value for money
– Makes comparative shopping difficult
– Shifts the focus from price to benefits
– Economies of scale/mass efficiency
– Manufacturer can justify charging a premium
– Easily differentiated against similar products
– Provides deeper form of customer engagement and data

Disadvantages:
– Increased overall complexity
– A significant initial investment + per unit cost of production
– Layover time – takes longer to manufacture
– No return policy on custom orders

Progress in manufacturing technology such as computer-aided manufacturing (CAM) and computer-aided design (CAD) have increased the flexibility, as well as the efficiency of the modern-day factory to achieve build-to-order products.

Ordinary is for the Mainstream – Do Luxury Brands Have Your Number?

Traditionally, the wealthy have great purchasing power. In theory, they are sophisticated and unafraid to express their taste as trendsetters and style mavens. They can also be the hardest segment to market to effectively because they are spoiled for choice.

Yet billions are spent catering to the tastes of this ever growing segment. Take the Paris Fashion Week shows and you can see the parade, the fanfare, and the glitz. Everyone is here: the paparazzi, fashionistas, and even fashion bloggers. Is it any wonder? Everyone craves glamor and it’s big business.

If you are one of the Jet-Set, do you want to be just mainstream? Of course, you don’t. The luxury trade has got your number, no matter how idiosyncratic your taste or preferences. Need private banking where professionalism and discretion are key? You got it. Want to stay in a boutique hotel so exclusive that few even know it exists? It’s there for the taking.

The providers of these services use what I refer to as “Bespoke Marketing” along with “Sensorial Branding” to differentiate their message and total customer experience respectively. These branding exercises are narrow in scope and speak of privilege the way its understood among the cognoscenti.

It is typical for certain shoppers at Louis Vuitton on the Champs-Elysees in Paris to serve the right customers flutes of champagne while they try things on or discuss their luggage needs upstairs. It must be said that LV knows how to coddle their clients. As I am sure you can appreciate, LV is not the only store in this town to offer VIP red carpet treatment. Most major luxury firms do likewise such as Cartier, Dior, and Chanel.

Need a personalized briefcase? Why not pop over to Hermes? They are awaiting your next visit. The world of Hermes personifies exclusivity. Open one of their in-house magazines, and a special universe is revealed. The key beyond outstanding products is the creation of something bordering on revelation. The store itself has become a stage set, and sales pros are the players who embody the firm’s DNA.

Bespoke is the middle name of this institution. Real luxury brands understand this concept like Stradivarius handcrafted violins.

Needless to say, the term “luxury” has been misused over the years. It is mysterious and elusive. In essence, it revolves around subjective criteria referred to as lifestyle.

Gary Harwood at HKLM, one of the founders and directors of a leading strategic branding and communication design consultancy, stated:

“A luxury brand is very expensive, exclusive and very rare – not meant for everyone. When it ceases to be these things, then it’s lost its exclusive cachet. Commoditizing luxury brands and making them more accessible to the middle market puts them at risk of becoming ordinary, common and less desirable. And the more available a brand is, the less luxurious it becomes.”

Perfume connoisseurs are taking their choices a notch above most as the top-end of the fragrance industry is a very personalized one. Consequently, niche perfumes for the discerning and well-to-do are growing rapidly. This sector is creating new trends in the beauty and fashion world through an artisan approach. Customers visiting bespoke perfumery shops expect highly trained staff to advise on fragrances. A great “nose” knows different clients value different scents, and thus will prescribe like an old fashioned doctor, who used to make house calls. Chemistry and diet also play a role in developing your own signature perfume.

Quite sophisticated and personalized indeed. But then, isn’t this the true symbiotic meaning of luxury?

novero_victoria_gold_stripes

The Final Take

“Mass customization” and “mass personalization” (or “build-to-order marketing” and “one-to-one marketing”) in delivering either products or services when properly implemented, bring about across-the-board improvements in all dimensions of a business. This includes, price, responsiveness, quality, and a positive experience. Competitiveness and operational effectiveness of a company also improve.

However, mass customization also has a few drawbacks as it does come with a cost. Along with a substantial initial investment in manufacturing equipment upgrades, the primary challenge in pursuing mass customization stems from increased complexity in its operations. A higher level of product customization requires greater product variety, which, in turn, entails greater number of parts, processes, suppliers, retailers, and distribution channels. As a result, bigger challenges exist to manage all those aspects of the business from raw material procurement to production and eventually to distribution. In addition, an increase in product variety has the effect of introducing greater uncertainty in demand realizations, increase in manufacturing cycle times, as well as an increase in shipment lead times.

In the luxury sector, traditionally there hasn’t been any shortage of customization for the ultra-high-net-worth. Exclusive and bespoke travel companies provide tailor made adventures and excursions, whereas, the ultra luxury and exotic automobile sectors such as Rolls Royce and Ferrari respectively offer a wide array of customization options. Each vehicle coming out of the studio will be completely unique and guided by a personal designer at the manufacturers.

“Good things come to those who wait.” Or so the saying goes.

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Filed under 1, B2B sales, Branding, Business, catering to picly clients, customer service, discerning clients, discriminating clients, luxury frgrances, Marketing, niche perfumery, perfume branding, perfume marketing, selling luxury

Tagged as customization branding, customization marketing, customization of products and services, mass customisation, mass customization, mass personalisation, mass personalization, personalization branding

March 3, 2013 · 2:55 pm

Ambiance Marketing/Sensory Branding — in IMAGES

Today, consumer purchase decisions are increasingly driven by consumers’ hearts. With ambiance marketing/sensory branding, a custom designed attractive setting, yet alluring with captivating style, invites customers to truly feel the brand experience by adding character. This is accomplished by connecting the emotions to a product or service, and infusing it with a tangible and intangible essence that remain in the customers’ minds.

See images and videos which depict the essence of ambiance marketing/sensory branding.

CLICK ON THE IMAGE for the link to the images/video page

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