Marketing Concepts of the Luxury Goods Industry

Marketing Concepts of the Luxury Goods Industry
Marketing Concepts of Luxury Goods Industry

Luxury goods are defined as items that are not important for survival but considered highly desirable within a culture or society. Demand for such goods increases with an increase in personal income. The increase in the sale of luxury goods is directly proportional to the percentage increase in income.

Due to their high value, it is the wealthy elite within the society that are disproportionate buyers. Such purchase of luxury goods might also be considered conspicuous consumption as it could be an effort to showcase personal wealth.

The luxury goods global market reached a whopping valuation of USD 331.6 billion in the year 2022. The main reason behind this growth was improving living standards and rising consumer disposable incomes mainly in emerging economies. Increasing market penetration of luxury goods is expected to be a catalyst for the luxury goods industry to grow at a CAGR of 4.4% to reach a global valuation of USD 429.36 billion by the year 2028. The dominant drivers of this growth are globalization, consolidation, and diversification.

Revenue of the luxury goods market worldwide from 2012 to 2025
Revenue of the luxury goods market worldwide from 2012 to 2025

Concept of Marketing Within the Luxury Industry
Characteristics of Luxury Marketing
Examples of Luxury Brands Marketing
Conclusion

Concept of Marketing Within the Luxury Industry

A luxury brand builds its consumer appeal through messages about quality, lineage, status, and taste. This is done through visual icons like distinctive logos, monograms, patterns, and images. Its marketing strategy often encompasses the emotional satisfaction of owning a piece of art and history. It aims to create the highest brand value by leveraging multiple brand elements like heritage, country of origin, craftsmanship, scarcity of product, a sense of mystique, and a list of prestigious clientele. A report by McKinsey states that almost 50% of luxury goods buying decisions are influenced by what consumers hear and view online.

Characteristics of Luxury Marketing

Luxury marketing is its own niche due to its niche clientele. This type of marketing is centered around experience, pedigree, endorsements, and maintaining a perceived value. Hence, marketing campaigns around luxury brands are in a different league than goods with mass appeal. There are some key characteristics that shape luxury marketing.

Creating an Experience

Allowing a customer to feel and experience the product forms the first essential step of luxury marketing. This creates a uniquely immersive experience for the customer. It highlights the emotion behind the creation of the product and its story creating a need within the prospective customer to be a valuable part of that story.

Creating Exclusivity

A key element that is considered important within the scope of luxury marketing is granting exclusivity to the product. This can be done at different levels and in different forms to maintain the customer’s desire through exception. This means that the advertising strategy and commercial plans can include indulging in a limited product repertoire, creating limited editions, waitlists, and many more. The idea is to inculcate a feeling of having exclusive access to the product along with aspiration.

Creating a Visual Identity

Many world-famous luxury brands understand the importance of creating brand success through their visual identity. To this end, they create unique logos with fonts that expertly capture the brand’s values, personality, and aura. The way the brand is showcased highlights the same luxury marketing concepts of emotions, aesthetics, and exclusivity.

Managing Brand History

One crucial factor of luxury marketing is the endorsement of the brand's history. This showcases brand pride and highlights the ideology behind brand existence. It also conveys the value of possessing the brand product, thus, playing an important role in marketing.

Optimizing SEO Content

The digitized world of commerce has made consumer reach easy and quick. Luxury brands optimize brand reach through engaging write-ups using various keywords. People engage in content that is inspiring with the best visual quality and graphics. It drives better product understanding and engagement and also manages real-time experience.

Endorsements

The ideal placement of products that look natural with celebrities at events is probably one of the most effective ways of luxury marketing. Other ways include sponsorships of high-value events, depending on the product. Not all of these are necessarily paid endorsements. These endorsements also help in maintaining the brand’s perceived high value.

Examples of Luxury Brands Marketing

LVMH (Moet Hennesey Louis Vuitton) Group

The design team at the LVMH Group governs aesthetics and taste rather than design for the current desire. Their marketing strategy revolves around directing their target customer to their designed product. The group has also positioned itself as a supporter of rising talent, earning a place for itself as a patron of the arts. With creativity at its heart, it sponsors contemporary music performers through its Louis Vuitton Foundation art museum. Through these marketing techniques, the brand maintains exclusivity with its clientele through experience as well as creates a visual identity through its patronage while also endorsing the brand.

Le Labo Perfumes

Le Labo perfumes have built a ritual around product purchase. Each bottle is hand-blended and individually prepared in front of the customer. The decanter is then dated with the customer’s name on it. This decanter, then, must be refrigerated for at least a week before use. This ritual of the brand accomplishes several things – it maintains the perceived value, and it also gives exclusivity to each client while creating an experience for them.

The making of Le Labo

Rolex Watches

The brand is more than a century old. That heritage and legacy show itself in each of its hand-crafted dials, hand-setting and testing each stone to deliver exceptional quality and exclusivity to each of its products. Rolex’s marketing strategies to create brand recognition have been in tandem with its innovative launches. The first time the brand launched its first water and dustproof watch, it proved its claim by partnering with British swimmer Mercedes Gleitz. Since then, Rolex has associated itself with historic events and admired personalities of the time including deep sea explorations, Golf, Formula One, Tennis Championships, Horse Racing, and several art and cultural events. Rolex is the perfect example of a luxury brand promoting the name rather than the product.

Rolex Marketing Strategy - How the Brand Differentiates Itself
Rolex is a luxury watchmaker brand that has always stood out among its competitors. But how does it market itself as a luxury brand? Let’s Find out.

Conclusion

Luxury brand marketing is about creating an image and mystique around a particular product. Because of the demography of the luxury market consumer, it becomes imperative for luxury brands to position themselves in a way that is exclusive, mysterious, and aspirational at the same time.

FAQs

What are a few examples of Luxury Goods?

Below mentioned is a list of a few luxury goods:

  • Louis Vuitton
  • Gucci
  • Prada
  • Rolex
  • Dior
  • Channel

What are the characteristics of Luxury Marketing?

The characteristics of Luxury Marketing are listed below:

  • Creating an Experience
  • Creating Exclusivity
  • Creating a Visual Identity
  • Managing a Brand History
  • Optimising SEO Content
  • Endorsements

Must have tools for startups - Recommended by StartupTalky

Read more

Top Productivity Gadgets for Entrepreneurs

Maximizing Efficiency: 8 Best Productivity Gadgets for Entrepreneurs

According to technology experts, productivity gadgets are devices or innovations that help individuals complete tasks more efficiently and effectively. These devices frequently use technology to automate operations, organize information, or simplify complex activities, eliminating distractions while increasing output. These devices come in various forms, from hardware to software programs, each

By Ria Sahni, Bhoraniya Huda Hifzur Rehman