This book covers the subject of luxury in great depth, from image through managing the product life cycle and environmental considerations. Because of the depth of coverage, it will appeal to a number of audiences. There are 3 parts and 16 chapters.
Part one: Back to luxury fundamentals
The first four chapters cover the history of luxury, the confusion about luxury versus premium products and what the authors call “the anti-laws of marketing” (p. 66), i.e. precepts that might run counter to strategy for other products. For example, “Do not pander to your customers’ wishes” (p. 67): BMW has resisted for years its customers’ complaints that its rear seats do not have enough leg room. Then, “Make it difficult for clients to buy” (p. 71): “Luxury needs to excel in the practice of distributing rarity, so long as there are no real shortages” (p. 71). There are actually 24 “anti-laws” that build on the history and image protection of luxury products.
Chapter 4, “Facets of luxury today”, is aimed at luxury brand executives as a further exploration of what constitutes luxury. The visible nature of logos and brands is one aspect of luxury that holds great importance because “luxury is the symbolic and hedonistic recompense of success, and therefore of the acquisition of power” (p. 86); therefore, “the central unit of analysis is the brand” (p. 87). Luxury brands require roots, “the origin of an authentic lineage to which each new product can lay claim” (p. 93). The authors go on to list the time it takes to create a luxury brand, its rarity and its individuality rather than being compared with other brands. “Luxury never compares itself with others […]. Can you compare a Porsche and a Ferrari” (p. 91)?
Part two: Luxury brands need specific management
Chapters 5 through 12 cover the management of luxury brands. Chapter 5, “Customer attitudes vis-à-vis luxury”, explores geographic and cultural difference among luxury clients. Such examples include “there are more and more rich and very rich people in the BRIC countries” (p. 114). In addition, “the luxury clientele is defined less by its sociodemographic profile than by its behaviors, its purchases of products from so-called luxury brands” (p. 115). In other words, some people will invest a larger part of their salary to purchase luxury goods, but others with much greater wealth will live the modest life they did before they became wealthy.
Chapter 6, “Developing brand equity”, states that luxury brands do not follow the standard path. “Today it is the brand that endows the owner with its aura and communicates widely to be recognized by all those who will never buy it” (p. 139). In research, the authors found that “luxury is, first and foremost, a brand” (p. 140).
Chapter 7, “Luxury brand stretching”, warns that pushing line extensions too far might dilute the luxury pricing model. The chapter expands models of brand stretching and points out the important success factors, including risks such as “undermining the essence of luxury itself” (p. 192).
Chapter 8, “Qualifying a product or service as luxury”, continues comparing a luxury brand to a desire, or a wish. Statements such as “enjoying the wait” (p. 204), “each product has its raison d’etre” (p. 206) and “the challenge of luxury services: creating the gap” (p. 214) clue the reader that luxury products and services must be managed differently.
Chapter 9, “Pricing luxury”, points out that price elasticity “is rarely applicable to luxury products, even when they have reached a sizeable sales volume” (p. 218). The price level is generally known, but not explicitly showcased.
Chapter 10, “Distribution and the Internet dilemma”, notes that distribution is generally the weak link of luxury strategy because of the increasing costs of store real estate, the special requirements of sales personnel and the need to show off the luxury and communicate price without announcing it. In addition, “distribution must manage rarity” (p. 243). “From the moment that luxury democratizes, if it loses the attribute of rarity, it loses its essence and becomes common” (p. 243).
Chapter 11, “Communicating luxury”, demonstrates that luxury brands are advertised differently, if at all. “In luxury, you communicate in order to create the dream and to recharge the brand’s value, not in order to sell” (p. 255). The authors have already told marketers that money is not discussed; “You communicate, you don’t advertise” (p. 257).
Chapter 12, “Financial and HR management of a luxury company”, extends the discussion to the innate requirement that the investment in creating a luxury brand returns better-than-average profit. Expanding beyond borders must offer profit potential to justify the costs.
Part three: Strategic perspectives
Chapter 13, “Luxury business models”, moves from the nuances of luxury product management to the business model. Luxury brands require total control at the product and the production levels. “Focus on a core trade […] […] If, nonetheless, the introduction of a cheaper range is necessary, it must be compensated for by the parallel introduction of markedly more expensive products […].” (pp. 299-300).
Chapter 14, “Entering luxury and leaving it”, sees the authors tying up many of the principles they have discussed throughout the book but recognizing that luxury products also have a product life cycle. After reviewing the conditions of luxury and how to manage its growth, they discuss “the end of the luxury brand” (p. 331). The principle causes include the uncontrolled extension of distribution, contamination of the ‘pyramid’ as seen in Chapter 13, a lack of creativity and the short-term pressure of the current marketplace.
Chapter 15, Learning from luxury, extends luxury to niches not previously seen as luxury. “You can always find, in every trade or market, a luxury niche, or more precisely a niche in which a luxury strategy could be successful, even in those trades where it is not immediately apparent” (p. 341).
The authors show the reader how to use the elements of the luxury marketing mix, such as image, control and price, in not-so-obvious industries such as cosmetic surgery, electronics and coffee makers. They also refer to co-branding, such as Krups and Nespresso, where Nespresso benefits from the purchase of the Krups machine.
Chapter 16, Luxury and sustainable development: convergences and divergences, provides a final nod to the realities of dwindling natural resources. “It is true that people frequently see luxury as being opposed to sustainable development” (p. 363). The focus here is to “analyze the relationship between luxury and sustainable development more deeply” (p. 364). In fact, “there is not a single luxury group that has not made sustainable development a key strategic concern” (p. 368). Examples include Tiffany trading only with countries adhering to the Kimberly Process Act, Louis Vuitton using boats to ship a large part of their French-made products and the German appliance brand Miele organizing its own waste management.
“Adopting a luxury strategy to foster sustainable development” (p. 372) might include using social enhancements, perhaps giving the proceeds of recycling efforts to charity, to tie client needs to broader environmental needs.
I actually think this book is not just for those managing, or hoping to manage, luxury brands. It is for marketers who must tease apart the different ways customers feel about brands, how brand positioning is sustained and enhanced during the product life cycle and the pitfalls therein. It is an excellent book for fashion schools, for use in marketing classes and for training salespeople who embark upon a career in the luxury market.
The biggest problem with the book is its length and academic language. However, the target market here will benefit from the long experience and reasoning of the authors.
