How to Market Luxury Brands to New Millionaires
It’s official: the luxury industry is back after a short hiatus. According to a Forbes article referencing global consulting firm, Bain & Company’s 2012 Luxury Market Update, the luxury goods sector is poised for a full recovery in 2011. The report is written by Claudia D’Arpizio, a partner with based in Milan office.
The study covered approximately 220 luxury brands, which include leather goods, fashion, jewelry, alcohol and cosmetics companies serving high net worth customers or customers with assets of $ 1 million or more and concluded that the luxury is expected to increase to around $ 230 billion annually by 2012. New millionaires from countries like China, India etc. they will lead the charge.
Rules of the game: While some golden rules of marketing remain, there are some new ones that need to be recognized. The new rich seem to believe in the maxim: “If you have it, you have to be able to prove it … otherwise you don’t really get it”
There are those who think that, due to the current poor economy, the rich now want to be underestimated and discreet about their wealth. Well, as far as the new rich are concerned, this idea is completely wrong.
Why Luxury Brands ?: The wealthy patronize luxury brands for a variety of reasons. Although most would simply prefer to say they buy for the quality of the product, the real reasons luxury brand consultant
are more on a subconscious level – such as peer recognition and approval, status, admiration (envy) of the not so wealthy, i.e. rich wannabes etc.
Luxury Brand Marketing: Luxury brands employ a wide variety of techniques to keep their brands in the mindset of their customers … both current and future customers. While public relations and select media advertising have been the mainstay, marketers have also been using event sponsorship for decades … but mostly in name only.
However, in recent years, a bearish economy has forced many luxury goods marketers to get more creative in reaching their target audience.
Historically, marketers of luxury brands such as spirits, perfumes, watches, fashion and cosmetics have consistently pursued a luxury pricing strategy in order to maintain an impression of exclusivity. That strategy meant limiting product availability, price reductions, etc. The idea was that their brands needed to be protected from brand devaluation.
But with luxury brands facing stiffer competition from new entrants and in an economy that presents additional challenges, the risk of becoming irrelevant or God forbid! Being considered ordinary is very real, luxury brands are reinventing themselves for a whole new generation of potential customers. They are moving above advertising, available to anyone on a budget, to consider unique and limited sponsorship of easily identifiable events and activities with the rich and famous, to differentiate their products.
Building the brand image through sponsorship: It takes a lot to build and a lot more to keep the high level image of a brand active in the minds of customers. And this is critical to the success of any luxury brand. There is no better and more affordable way to build and secure that image than by regularly aligning with luxury events organized by equally luxury-oriented organizations.