Votrag Fassnacht Luxusmarken

Transcription

02.05.2014
Managing the Dream.
Anomalies of Luxury Brand Management
Guest lecture at the University of Wuppertal
May 2, 2014
Univ.-Prof. Dr. Martin Fassnacht
WHU – Otto Beisheim School of Management
Holder of the Otto Beisheim Endowed Chair of Marketing and Commerce
Scientific Director of the Center for Market-Oriented Corporate Management (CCM)
Burgplatz 2
56179 Vallendar
Phone: +49 261 6509-441
Fax:
+49 261 6509-449
[email protected]
© WHU – Otto
School of Management
►Beisheim
www.whu.edu/market
Prof. Dr. Martin Fassnacht
Associate Member of the MEISTERKREIS – German Forum for Luxury
General Information
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Managing the Dream ■ May 2, 2014 ■ Wuppertal
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02.05.2014
General Information
Research Focus
Price Management
Retail Marketing
Brand and Luxury Management
Market-Oriented Corporate
Management
Activities and Functions
WHU – Otto Beisheim School of
Management
The Otto Beisheim Endowed Chair
of Marketing and Commerce
Burgplatz 2
56179 Vallendar
Professor and Holder of the Otto Beisheim Endowed Chair of Marketing and
Commerce, WHU – Otto Beisheim School of Management
2010
Winner of the “3. Georg-Bergler-Prize for Marketing” (awarded by journal
“absatzwirtschaft”, German Marketing Association and GfK-Nuremberg e.V.)
2003 – 2010
Academic Director of two executive education programs for METRO Group at WHU
2007 – 2009
Associate Dean of WHU
2006 – 2009
Academic Director of Marketing and Communications at WHU
2006 – 2007
Academic Director of the Master of Science Program at WHU
2001
Habilitation (post-doctoral thesis) at the University of Mannheim
2001 – 2003
Associate Professor of Marketing, University of Paderborn
1999 – 2001
Assistant Professor with Prof. Dr. Dr. h.c. mult. Christian Homburg, University of
Mannheim
Scientific Director of the Center for
Market-oriented Corporate
Management (CMM) at WHU
1996 – 2000
Consultant and Director for Management Education at Prof. Homburg & Partner
GmbH on a freelance basis
1999
Visiting Scholar at the McCombs School of Business, University of Texas at Austin,
Austin, USA
1996 – 1998
Assistant Professor with Prof. Dr. Dr. h.c. mult. Christian Homburg, WHU – Otto
Beisheim School of Management
1990 – 1995
Research Assistant and Ph.D. student with Prof. Dr. Dr. h.c. mult. Hermann Simon,
University of Mainz, Conferral of doctorate (Dr. rer. pol.)
1992 – 1993
Visiting Scholar at the Owen Graduate School of Management, Vanderbilt
University, Nashville, Tennessee, USA
1985 – 1990
Business Administration studies at the University of Mannheim, (Dipl.-Kfm.)
Chairman of the Advisory Board of
Henkel Center for Consumer
Goods (HCCG) at WHU
[email protected]
► www.whu.edu/market
since 2003
Professor and Holder of the Otto
Beisheim Endowed Chair of
Marketing and Commerce, WHU
Speaker of the Marketing Group
Phone: +49 261 6509-441
Fax:
+49 261 6509-449
Professional Career
Strategic Advisor for Consumer
Goods Manufacturers and
Retailers
Scientific Member of the Board of
“RUNDSCHAU für den
Lebensmittelhandel”
3
General Information
The Otto Beisheim Endowed Chair of Marketing and Commerce
We aim to follow up research projects and questions of managerial
relevance with a sound scientific standing. These are fundamental
elements not only within research but also within the scope of teaching.
TEAM
Directorate
Assistant
Holder of the Otto Beisheim
Endowed Chair of Marketing
and Commerce
Stephanie Krause
M.Sc.
Simone
Prochnow
RESEARCH
TEACHING
Fields of Research
Degree Programs
Price Management
Bachelor in Business Administration (BSc)
Retail Marketing
Full-Time MBA
Brand and Luxury Management
Part-Time MBA
Market-Oriented Corporate Management
Kellogg-WHU Executive MBA
Team
Research Assistants and Doctoral Students
Dipl.-Kfm.
Markus
Szajna
“
“
M.Sc.
M.Sc.
Annabelle C. Henrik
Scharwey
Brinkmann
Research Principles
Teaching Areas
Practical relevance of projects
Marketing Core Course
Innovativeness of projects
Brand and Price Management
Conceptual and theoretical foundation of
research
Retail Marketing
Empirical focus and elaborate research
methodology
International Marketing
Luxury Brand Management
Balancing theoretical reasoning and
practical implications in research projects
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02.05.2014
General Information
Become part of the team!
Open position as research assistant at WHU
The chair of Marketing and Commerce (Prof. Dr. Martin Fassnacht) at the WHU – Otto Beisheim School of
Management is constantly looking for a research assistant to support our team!
Your Tasks:
Creation and publication of scientific papers for
international recognized journals in order to
achieve the PhD (Dr. rer. Pol.)
Mentoring of lectures and student’s final theses
Support of cooperation projects with companies
Your Profile:
Excellent Masters degree in Business or
Psychology
Interest and experience in Marketing
Excellent knowledge of English (German
knowledge is desirable but not mandatory)
Independent, structured and goal-orientated
working style
Team spirit
Please send your application to:
[email protected]
Further Information:
www.whu.edu/market
5
General Information
Follow us on Facebook!
Prof. Dr. Martin Fassnacht & Team are looking forward to your visit on our facebook page!
facebook.com/Prof.Dr.Martin Fassnacht & Team
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02.05.2014
26. Juni 2014
5. WHU-Campus for Marketing:
Emotionalisierung von Marken – Lernen aus verschiedenen Branchen
Unsere Referenten:
Ralf Kleber (Geschäftsführer, Amazon.de)
Dr. Reinhard Zinkann (Geschäftsführender Gesellschafter, Miele)
Alexander Jobst (Vorstand Marketing, FC Gelsenkirchen-Schalke 04 e.V.)
Dietmar Müller-Elmau (Geschäftsführender Gesellschafter, Schloss Elmau)
Frank Dopheide (Geschäftsführender Gesellschafter, Deutsche Markenarbeit)
Rolf Sigmund (Geschäftsführer, L'ORÉAL Deutschland)
Veranstalter:
Prof. Dr. Martin Fassnacht & Prof. Dr. Dr. h.c. mult. Hermann Simon
Zentrum für marktorientierte Unternehmensführung
Veranstaltungsort:
WHU – Otto Beisheim School of Management @ Campus Vallendar
► Informationen und Anmeldung: www.campus-for-marketing.com
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General Information
Price Management – The Textbook
Reviews
The Authors
Prof. Dr. Dr. h.c. mult.
Hermann Simon
“GeorgBergler-Prize
for Marketing”
2011
"Without the right prices, which reflect the relevant
information about risks and scarcities, sustainable
profitability cannot be achieved. This book provides
decision-makers with the material they need for the difficult
task of pricing”.
Dr. Josef Ackermann
former chairman of the Management Board and the Group Executive Committee,
Deutsche Bank AG
Prof. Dr.
Martin Fassnacht
"A new edition of one of the best theoretical and practical
books on pricing for business decision makers operating in
different industries and settings."
Philip Kotler
S. C. Johnson & Son Distinguished Professor of International Marketing at the
Kellogg School of Management, Northwestern University
The Content
Strategic basics of price management
Simon/Fassnacht (2009):
Preismanagement: Strategie – Analyse –
Entscheidung – Umsetzung
3rd Edition, Gabler Verlag, Wiesbaden
ISBN 978-3-409-39142-9
Price: 59,90 EUR
Analysis phase
Decision phase
Implementation phase
Price-controlling (price-monitoring)
“Professional price management is one of the cornerstones
of Porsche’s successful business case and contributes as a
success factor substantially to the high profitability of our
company. Speaking from my own experience, therefore, I
totally agree with the core message of this practice-oriented
book that price management should be an integral part of
each business strategy“.
Dr. Wendelin Wiedeking
former CEO of Dr. Ing. h.c. F. Porsche AG
Industry-specific price management
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02.05.2014
Agenda
1
The luxury market and its clientele
2
Dreams and what they are made of
3
Anomalies of luxury marketing mix
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1. The luxury market and its clientele
A graphical definition of luxury brands. (1/2)
> 30 %
Luxury
Price premium
higher
versus product with
comparable tangible
values
>5x
Premiumtier
average
lower
Perceived relative value*
superlative
Rules of thumb:
Category
average price
Mid-tier
The price-value-fit corridor
Low-tier
lower
average
higher
superlative
Perceived relative price*
* Relative to respective market average
Source: McKinsey 1990; Kapferer/Bastien 2012, pp. 222-223.
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02.05.2014
higher
average
Premiumtier
Mid-tier
lower
Perceived relative value*
superlative
A graphical definition of luxury brands. (2/2)
Low-tier
lower
average
higher
superlative
Perceived relative price*
* Relative to respective market average.
Source: hm.com; peek-cloppenburg.de; ralphlauren.com; hermes.com
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The worldwide luxury market shows
strong post-recession growth.
In 2013, the worldwide luxury market* records € 217 bn sales.
Strong post-recession growth is mainly driven by Asian luxury consumption.
Worldwide luxury market* by region
CAGR ‘09-’13
9%
€ 191 bn
€ 173 bn
€ 153 bn
5%
RoW
Asia-Pacific
15%
12%
30%
5%
5%
19%
16%
11%
9%
31%
30%
€ 212 bn € 217 bn
5%
5%
20%
21%
9%
8%
31%
32%
Japan
Americans
38%
37%
37%
35%
35%
2009
2010
2011
2012
2013
Europe
* incl. Perfumes & Cosmetics, Fashion & Accessories, Jewelry, Watches, and Home Design; w/o Wine & Spirits, Means od Transportation, and Leisure Services
Source: Fondazione Altagamma/ Bain & Co. 2011
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02.05.2014
World map of luxury brands with European focus
Asia
US
Calvin Klein
David Webb
David Yurman
DKNY
Four Seasons
Harley Davidson
Harry Winston
Juicy Couture
Lana Marks
Nordstrom
Tiffany’s
Tom Ford
Saleen
Steinway & Sons*
UK
France
Switzerland
Italy
Germany
Alfred Dunhill
Asprey
Aston Martin
Clive Christian
Barbour
Bentley
Burberry
Gleneagles
John Lobb
McLaren
Morgan
Net-a-porter.com
Purdey
Rolls-Royce
Sotheby’s
TVR
Vertu
William & Son
Bollinger
Boucheron
Cartier
Chanel
Christian Dior
Christian Louboutin
Chloé
Dom Perignon
Givenchy
Guerlain
Hermès
Krug
Lancome
Louis Vuitton
Moet & Chandon
Nina Ricci
S.T. Dupont
Van Cleef & Arpels
Veuve Clicquot
Yves Saint Laurent
Audemars Piguet
Bally
Baume & Mercier
Blancpain
Breguet
Breitling
Bucherer
Chopard
Hublot
IWC
Jaeger Le-Coultre
Longines
Maurice Lacroix
Omega
Patek Philippe
Piaget
Richard Mille
Rolex
TAG Heuer
Tourbillon
Vacheron Constantin
Acqua di Parma
Alessi
B&B Italia
Bottega Veneta
Brioni
Bugatti
BVLGARI
Dolce&Gabbana
Ermenegildo Zegna
Fendi
Ferrari
Ferretti
Gucci
La Perla
Maserati
Pagani Zonda
Prada
S. Ferragamo
Tod’s
Valentino
Versace
A. Lange & Söhne
Bulthaup
Chronoswiss
Etienne Aigner
Gaggenau
Glashütte
JAB Anstoetz
KaDeWe
Lürssen
Maybach**
Meissen
MONTBLANC
Philipp Plein
Poggenpohl
Porsche
Strenesse
Van Laack
Wellendorff
Wempe
Wiesmann
Wunderkind
Chow Tai Fook
Honma
Issey Miyake
Mikimoto
Shang Xia***
Yohji Yamamoto
* Both New York and Hamburg based; ** In 2011 parent company Daimler announced to stop the brand. *** Launched by the French luxury brand Hermès in 2008.
Note: This map is not intended to be complete. Well-known premium brands such as Hugo Boss, Mercedes-Benz, Ralph Lauren, Coach etc. are deliberately excluded.
13
WLA ranking: world’s most valuable luxury brands 2013
95% European
Fashion
Cars
Watches
1
Hermès
France
1
Rolls-Royce
UK
1
Patek Philippe
Switzerland
2
Chanel
France
2
Bentley
UK
2
Vacheron Constantin
Switzerland
3
Louis Vuitton
France
3
Ferrari
Italy
3
Piaget
Switzerland
4
Christian Dior
France
4
Lamborghini
Italy
4
Jaeger-Le Coultre
Switzerland
5
Ferragamo
Italy
5
Maserati
Italy
5
Audemars Piguet
Switzerland
6
Versace
Italy
6
Aston Martin
UK
6
Blancpain
Switzerland
7
Prada
Italy
7
Bugatti
Italy
7
Rolex
Switzerland
8
Fendi
Italy
8
Spyker
Netherlands
8
Breguet
Switzerland
9
Giorgio Armani
Italy
9
Pagani
Italy
9
IWC
Switzerland
10
Ermenegildo Zegna
Italy
10
Koenigsegg
Sweden
10
Franck Muller
Switzerland
Jewelry
Cosmetics
Yachts
1
Cartier
France
1
Chanel
France
1
Azimut
Italy
2
Van Cleef & Arpels
France
2
Christian Dior
France
2
Sunseeker
UK
3
Boucheron
France
3
Guerlain
France
3
Ferretti
Italy
4
Harry Winston
USA
4
Givenchy
France
4
Lürssen
Germany
5
Chaumet
France
5
Helena Rubinstein
France
5
Riva
Italy
6
Kloybateri
Italy
6
Sisley
France
6
Wally
Monaco
7
Bvlgari
Italy
7
La Prairie
Switzerland
7
Princess
UK
8
MONTBLANC
Germany
8
La Mer
Germany
8
Pershing
Italy
9
Tiffany&Co
USA
9
Lancome
France
9
Beneteau
France
10
Mikimoto
Japan
10
Biotherm
France
10
Itama
Italy
Source: WLA – World Luxury Association 2013
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02.05.2014
The BIG THREE of Luxury
Paris-based LVMH is by far the largest luxury group worldwide in terms of sales, operating
profit and number of brands, followed by Swiss Richemont and French Kering Group
(former PPR).
Largest luxury groups by operating profit 2013 in million Euros
LVMH
5.424 (15%)
Richemont
2.426 (24%)
Kering
1.750 (18%)
Hermès*
885 (25%)
Burberry**
Valentino***
Armani***
Return on Sales
520 (21%)
248 (11%)
142 (9%)
* Status as of 2012, ** As of April 2014 currency exchange rate; *** 2009 figures.
Source: Chevalier/ Mazzalovo 2008, pp. 25-30; company annual reports 2012/ 2013
15
LVMH – the world’s leading luxury group
Group revenue 2013:
€ 27.399 m (+8%)
Group operating profit 2013:
€ 5.424 m (+2%)
wine & spirits
15%*
fashion & leather
35%*
Change to 2012
perfumes & cosmetics
13%*
watches & jewelry
10%*
retail & services
28%*
et al.
*share in group revenue 2013
Source: lvmh.com
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02.05.2014
Group revenue 2013:
€ 27.399 m (+8%)
€ 5.424 m (+2%)
wine & spirits
15%*
fashion & leather
35%*
Change to 2012
13%*
watches & jewelry
10%*
retail & services
28%*
et al.
Source: lvmh.com
17
Group revenue 2013:
€ 27.399 m (+8%)
€ 5.424 m (+2%)
wine & spirits
15%*
fashion & leather
35%*
Change to 2012
13%*
watches & jewelry
10%*
retail & services
28%*
et al.
Source: lvmh.com
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02.05.2014
Group revenue 2013:
€ 27.399 m (+8%)
€ 5.424 m (+2%)
wine & spirits
15%*
fashion & leather
35%*
Change to 2012
13%*
watches & jewelry
10%*
retail & services
28%*
et al.
Source: lvmh.com
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Group revenue 2013:
€ 27.399 m (+8%)
€ 5.424 m (+2%)
wine & spirits
15%*
fashion & leather
35%*
Change to 2012
13%*
watches & jewelry
10%*
retail & services
28%*
et al.
Source: lvmh.com
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02.05.2014
Luxury clients are not simply the wealthy show-offs.
Four luxury client segments based on wealth and need for status.
Luxury
clientele
Patrician
(quiet luxury)
Haves
Parvenu
(loud luxury)
Wealth
Have-Nots
Proletarian
Poseur
(does not engage in
signaling)
(wannabe, mimics
parvenu)
signaling status to peers
signaling status to others
Low
High
Need for Status
Source: Han/Nunes/Dreze (2010), p. 17
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22
Catering different needs for status.
Example: Horlogerie brands.
Patek Philippe
Rolex
Haves
Wealth
Gucci* or Rolex
Counterfeit
Have-Nots
Low
High
Need for Status
* Retail price: 725 EUR
Source: Han/Nunes/Dreze 2010, p. 17, p. 19; Kapferer 2010
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02.05.2014
Agenda
1
2
3
23
2. Dreams and what they are made off
Diffusion counteracts luxury appeal.
The “Dream Formula” from 19951:
Dream Value = – 8.6 + 0.58 * Awareness – 0.59 * Purchase
Awareness:
“Here is a list of luxury brands. Please indicate which
ones you know at least by name.”
Recent Purchase:
“Please indicate from which you have bought an item
during the past two years.”
Dream Value:
“Imagine that you are given the possibility of choosing
a beautiful present because you won a contest. Which
are the five brands you would like the best?”
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Brand
Armani
Laura Ashley
Bang & Olufsen
Bulgari
Cartier
Pierre Cardin
Chanel
Chivas Regal
Christophle
Daum
Christian Dior
Dunhill
Givenchy
Gorham
Gucci
Guerlain
Hermès
#
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Brand
Lacoste
Lancome
Lanvin
Estee Lauder
Ralph Lauren
Lenox
MONTBLANC
Omega
Oscar de la Renta
Remy Martin
Revlon
Rolex
Shiseido
Louis Vuitton
Waterford
Waterman
Yves Saint-Laurent
Based on N = 3,000 respondents from USA.
Source: Dubois/Paternault 1995, pp. 70-73
1
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02.05.2014
2. Dreams and what they are made off
Keeping distance between those who know and those who can.
A lack of dream value is vital for non-luxury brands as they strive for sales growth and
scale.
For luxury brands to succeed over time, however, creating dream value is key.
Lack of Dream Value
Dream Value
100%
Brand awareness
Brand awareness
Brand purchases
Brand awareness
Brand awareness
Brand purchases
Brand purchases
Brand purchases
0%
.
Source: Kapferer/Bastien 2009a, pp. 129-130
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26
Agenda
1
2
3
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02.05.2014
Anomalies in product management
Do not follow the demand of the mass.
27
3. Anomalies of luxury marketing mix
Do not follow the demand of the mass
when creating new products.
The essence of marketing is understanding consumers and their needs based on
which products and services are designed to maximize sales.
While the “customer is king” principle holds true for luxury services like hotels, retailers,
and airlines, the idea of luxury product creation is different: it starts with the vision of its
creators.
Luxury is about creating trends consumers are not yet aware of.
Non-luxury product creation starts unmet needs.
Customer
needs
Strategic direction
Input from retailers
Brand Signature
Production capabilities
General Trends
Unmet
needs
Market
offering
Marketing
Department
Creation
Department
Luxury product creation starts with the creator’s vision.
Customer
needs
Strategic direction
Input from retailers
Brand Signature
Production capabilities
General Trends
Market
offering
Marketing
Department
Creation
Department
Source: Dubois 1992, p. 31; Chevalier/Mazzalovo 2008, p. 237; Kapferer/Bastien 2009b, p.317
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02.05.2014
Do not follow the demand of the mass
when selling your products.
Recall the dream formula: purchase kills the dream.
Rarity is essential to legitimate the price premium and ensure profitability.
Types of rarity: from natural to virtual rarity and their compatibility with volume ambitions
High
Information-based rarity
Limited editions
Compatibility
with volume
Technological rarity
Natural rarity
Bugatti VeyronGrand Sport Vitesse
Prices beyond € 2m and exclusive
distribution make it rare.
(1200 hp is a technological rarity, too)
Rolls-Royce Phantom Extended Wheelbase “Year
of the Dragon” 2012
Limited edition dedicated to the Chinese clientele
Tesla Roadster 2008-2012
BEV – battery electric vehicle
Expensive to produce
Ferrari 250 GTO from 1963
Oldtimer,
only 39 units produced ever
Low
Natural rarity
Virtual rarity
Source: adapted from Catry 2003, p. 16
29
Anomalies in price management
No sales in luxury. Raise prices in the long run.
30
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02.05.2014
Pricing is the strongest marketing lever…
1
2
3
Pricing is
a direct profit driver.
Pricing is the
strongest profit driver.
Pricing is the
strongest marketing
instrument.
1% improvement in… induces
operating profit %-increase* of…
Profit = Volume x
(Price – Variable cost)
– Fixed cost
Price
elasticity**
Price
11,1%
Variable cost
Volume
Fixed cost
Advertising
elasticity***
7,8%
> 0.12
2.62
3,3%
2,3%
* Based on average economics of 2,463 companies in Compustat aggregated
** mean of 1,851 observations; absolute value
*** mean of 751 observations; absolute value
Sources: Marn/Rosiello 1992; Bijmolt/Van Heerde/Pieters 2005, p. 145; Sethuraman/Tellis/Briesch 2011, p. 457
31
…particularly to luxury brands.
4
5
6
Optimization of other
profit levers is limited.
Price serves as
strong signal.
Price elasticity
might be positive.
Profit = Volume x
(Price – Variable cost)
– Fixed cost
The higher the price the higher
the perceived…
Increasing volume vs.
keeping exclusiveness
Decreasing variable cost vs.
keeping finest quality
Volume
sales
Quality (Perfectionist)
Emotional value (Hedonist)
Anonymous*
160
ε
= +3
+60%
Conspicuousness (Veblenian)
100
Uniqueness (Snob)
Social value (Bandwagon)
+20%
100
120
Price
* Upscale watch operator not disclosed due to confidentiality
Sources: Simon/Fassnacht 2009; Kapferer/Bastien 2009; Veblen 1899; Dodds/Monroe/Grewal 1991; Vigneron/Johnson 1999; Vigneron/Johnson 2004; Völckner 2006
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02.05.2014
Price-response functions luxury brands may face.
Veblen effect: increasing prices leads to an increasing demand.
► Typical negative
price-response function
Volume
sales
► Price tolerance
► Veblen effect
Volume
sales
Volume
sales
Anonymous**
100
= -2.62*
ε
160
ε
= +3
+60%
100
+20%
10
10
13.44
Price
!
Only…
100
Price
120
Price
25%
27%
of luxury brands*** know their of luxury brands*** are aware of
the existence of the Veblenspecific price-response
effect.
function.
* ɛ = price elasticity; mean of 1,851 (non-luxury-specific) observations; ** Upscale watch operator not disclosed due to confidentiality; *** Based on N = 114 European luxury brands.
Sources: Simon/Fassnacht 2009; Mohr 2012; Bijmolt/Van Heerde/Pieters 2005; Kapferer/Bastien 2009a, pp. 178-180; Veblen 1970
33
Continuity is the ultimate luxury pricing objective.
Short-term price continuity: Keep prices constant.
Long-term price continuity: Increase prices over time to increase demand.
► Non-luxury goods
► Luxury goods
Skimming
Penetration
Price pt
Luxury pricing
Price pt
Short-term
Price promotions
Price pt
Short-term
Price promotions
Rigid continuity
across lifecycle
Time t
!
Only…
Time t
46%
of luxury brands*
rigidly avoid price
discounts.
Time t
42%
of luxury brands*
pursue long-term strategy
of increasing prices.
* Based on N = 114 European luxury brands.
Sources: Simon/Fassnacht 2009; Kapferer/Bastien 2009a, pp. 180-183 & 189; Fassnacht/Kluge/Mohr 2012
34
17
02.05.2014
Successful luxury brand managers apply a process perspective.
Luxury pricing
process
Clear strategic
direction
Comprehensive
analysis
Continuity of
pricing decisions
+
Financial
Performance
(EBIT)
+
Luxury Brand
Equity
Rigid price
implementation
Source: Mohr 2012
35
Anomalies in communications management
Communicate to those you are not targeting.
36
18
02.05.2014
Non-luxury and luxury brand communication:
efficiency vs. awareness.
General brand communication objective: reaching relevant audience.
► Non-luxury brands
Existing and potential customers.
Beyond the target audience every
communication effort is a false investment.
► Luxury brands
Existing and potential customers
+ non-customers.
Luxury brand communication is about
creating dreams.
Target
customers
Target
audience
Target audience
=
Target customers
Source: Kapferer/Bastien 2009a, p. 69
37
13.6 million users adore Ferrari
But only the happy few own one.
In 2013, Ferrari delivered 7,192 cars, i.e. <0.1% of Ferrari fans* on facebook
* The authors recommend a careful use of the term “fan” as being a fan entails more than expressing commitment to a brand by pushing the Like button
Source: Facebook 22/04/2014; fiatspa.com
38
19
02.05.2014
Social media creates awareness. Awareness creates dreams.
More than 1 billion monthly active facebook users worldwide.
UK
32.2m
Germany
51.6%
25.1m
France
25.3m
30.6%
Russia
Italy
39.1%
23.0m
7.6m
163.1m
5.4%
38.2%
Japan
USA
13.8m
52.6%
10.6%
China
0.6m
0.04%
Indonesia
47.2m
India
61.5m
Brazil
66.6m
19.4%
5.2%
Australia
33.1%
5.8m
27.4%
Source: data from socialbakers.com, 06/03/2013
39
How do the most valuable luxury brands perform in facebook?
Facebook benchmark: Burberry with > 16.9 million likes (1,2% Talkabouts/Likes)
Fashion
Watches
Rank Brand
Likes
Talkabouts/Likes
Rank Brand
Likes
Talkabouts/Likes
1
Louis Vuitton
16,168,215
1.0%
1
Rolex
2
Christian Dior
12,834,503
0.4%
2
IWC
3
Chanel
11,025,750
0.8%
3
Piaget
445,164
1.3%
4
Armani
5,475,268
0.2%
4
Audemars Piguet
366,796
2.4%
5
Prada
3,288,069
1.0%
5
Jaeger-Le Coultre
322,605
6
Fendi
2,132,063
0.8%
6
Vacheron Constantin
126,355
4.8%
7
Versace
1,952,767
1.8%
7
Patek Philippe
99,335
3.8%
8
Hermes
1,578,579
1.5%
8
Breguet
68,664
3.2%
9
Ferragamo
1,105,455
0.6%
9
Blancpain
44,829
1.1%
10
Ermenegildo Zegna
329,151
1.3%
10
Franck Muller
29,365
2.8%
Likes
Talkabouts/Likes
Likes
Talkabouts/Likes
Jewelry
Rank Brand
1,790,726
0.7%
715,858
2.9%
2.8%
Cars
Rank Brand
1
Tiffany&Co
5,431,764
8.9%
1
Ferrari
2
Bulgari
2,556,589
15.8%
2
Lamborghini
13,111,676
1.2%
6,700,916
1.6%
3
Cartier
2,416,777
9.7%
3
Aston Martin
3,013,454
3.2%
4
MONTBLANC
597,709
1.3%
4
Bugatti
1,571,024
2.1%
5
Van Cleef & Arpels
316,479
3.3%
5
Rolls-Royce
1,472,630
2.6%
6
Harry Winston
229,530
4.5%
6
Bentley
1,370,564
2.5%
4.0%
7
Maserati
1,076,995
5.7%
8
Pagani
168,342
11.7%
117,582
5.4%
10,970
5.0%
7
Mikimoto
97,602
8
Boucheron
83,642
0.9%
9
Chaumet
51,311
0.7%
9
Koenigsegg
10
Kloybateri
n/a
n/a
10
Spyker
Source: data from official company pages at facebook.com, 17/02/2014; Selection of brands based on World Luxury Association TOP 100 Luxury Brands
40
20
02.05.2014
Frequency and quality of user mentions
On average luxury brands are mentioned 350 times by users in social media during April 2014
Each negative mention is followed by 8 positive mentions.
Burberry was mentioned 447 times with a
Vacheron Constantin
ration of 106:1!
Jaeger Le-Coultre
Cartier
24
Maserati
Harry Winston
Bentley
Chanel
Versace
IWC
Positive-tonegativementions ratio in
social media in
April 2014
Dior
16
Rolex
Aston Martin
Prada
Spyker
Ferragamo
Ferrari
Bugatti
Boucheron Louis
Vuitton
Rolls-Royce
Lamborghini
MONTBLANC
Fendi
8
Van Cleef & Arpels
Pagani
Koenigsegg
Tiffany&Co
Emernegildo Zegna
Hermès
0
0
350
700
Number of mentions in social
media in April 2014
Source Authors; monthly data from socialmention.com March 1st 2012
41
L’Odyssée de Cartier: 360°campaign…
Fascinating content…
…consistently communicated.
Results:
+130% in “talking abouts”
In only 3 weeks.
Cartier.com
TV prime time*
commercial in USA
Facebook
YouTube
Cinema ad
PR
Banner ads
Cartier online magazine
“Rouge Cartier”
* March 4th; Program: Good Wife, Celebrity Apprentice, and Desperate Housewives. Media source: http://www.youtube.com/user/Cartier
42
21
02.05.2014
…echoes extremely well in the social community.
Number of social mentions increased by >30% as compared to before launch of campaign. Positive-to-negative
mentions ratio improved by >130% up to 19.
19
Facebook Metric “talking about” rose by >130%.
16
770
Cartier after
“L’Odyssee de Cartier”
March 22nd 2012
Positive-tonegativementions ratio in
social media in
February 2012
8
Cartier before
“L’Odyssee de Cartier”
March 1st 2012
0
0
350
700
Number of mentions in social
media in February 2012
Source Authors; monthly data from socialmention.com March 1st versus March 22nd 2012
43
Anomalies in sales management
Better have a small boutique in the most
prestigious location than vice versa.
44
22
02.05.2014
Luxury distribution formats.
Margin,
Control over brand
communication and prices,
exclusiveness
Offline
Online
Flagship stores
Direct
Monobrand
e-boutique
Monobrand
boutique
Factory outlet
E-commerce
integrated corporate
website
Dedicated corner
E-corner
Franchise stores
Multibrand specialty
online store
Shop-in-shop
Indirect
Multibrand specialty
store
Department stores
Online department
store
Duty-Free shop
Online outlet
High market coverage,
Low investments
97%
28%
72%
3%
Note: Percentages refer to worldwide luxury sales 2011.
Source: adapted from Quintavalle 2012, p. 88; data from Fondazione Altagamma/ Bain & Co. 2011
45
Call world’s metropolises your home
Recall chapter 2: >50% of luxury sales in metropolises is made by TLC.
Top luxury fashion brands show strong presence in world’s top 20 tourist destinations.
► Top 20 International Tourist Destinations 2011 and the Presence of Luxury Fashion Brands.
L. Vuitton
Gucci
Prada
Hermès
Chanel
Dior
Versace
Ferragamo
Fendi
E. Zegna
G. Armani
Hong Kong
City
International Tourist Arrivals 2010, in ‘000
21.830
●
●
●
●
●
●
●
●
●
●
●
Singapore
19.818
●
●
●
●
●
●
●
●
●
●
●
London
15.106
●
●
●
●
●
●
●
●
●
●
●
Kuala Lumpur
13.315
●
●
●
●
●
●
●
●
●
●
●
Macau
12.925
●
●
●
●
●
●
●
●
●
●
●
Bangkok
12.357
●
●
●
●
●
●
●
●
●
●
●
Antalya
12.025
Shenzhen
10.894
●
New York City
●
●
●
●
●
●
●
●
10.038
●
●
●
●
●
●
●
●
●
●
●
Istanbul
9.765
●
●
●
●
●
●
●
●
●
●
●
Guangzhou
8.875
●
●
●
●
●
●
●
●
●
●
●
Paris
8.403
●
●
●
●
●
●
●
●
●
●
●
Dubai
7.741
●
●
●
●
●
●
●
●
●
●
●
Shanghai
6.911
●
●
●
●
●
●
●
●
●
●
●
Miami
6.461
●
●
●
●
●
●
●
●
●
●
●
Mecca/Jeddah
6.412
●
●
●
●
●
●
●
●
●
●
Pattaya
6.002
Rome
5.966
●
●
●
●
●
●
●
●
●
●
●
Las Vegas
5.387
●
●
●
●
●
●
●
●
●
●
●
Barcelona
5.366
●
●
●
●
●
●
●
●
●
●
●
●
Source: data from Euromonitor International 2013, louisvuitton.com, gucci.com, prada.com, hermes.com, chanel.com, dior.com, versace.com, ferragamo.com, fendi.com, zegna.com,
armani.com
46
23
02.05.2014
Show off in Europe’s fashion capitals.
Paris, London, and Milan attract the most luxury fashion, accessories, and jewelry
brands.
On average, luxury fashion, accessories, and jewelry brands have 21 own boutiques
in Europe’s metropolises.
► Number of luxury brand boutiques in Europe’s luxury metropolises
Paris
► Top 25 luxury brands by their number of boutiques in Europe
Hugo Boss
Max Mara
Gucci
Cartier
Louis Vuitton
Prada
Escada
Burberry
Hermès
Montblanc
S. Ferragamo
Chanel
E. Zegna
Bulgari
Ralph Lauren
Tod's
Tiffany & Co.
Bottega Veneta
Chopard
G. Armani
La Perla
Paul Smith
Valentino
Christian Dior
Jimmy Choo
Versace
Yves Saint Laurent
154
London
125
Milan
87
Moscow
66
Rome
59
Madrid
47
Munich
46
Berlin
38
Barcelona
36
Zurich
33
Hamburg
32
Brussels
30
Düsseldorf
30
Frankfurt
28
Prague
28
Vienna
28
Istanbul
27
Amsterdam
22
Antwerp
13
Budapest
12
Warsaw
8
41
35
29
28
28
27
26
25
24
24
23
22
22
21
19
18
15
14
14
14
14
14
13
12
12
12
12
Source: Authors; data from Jones Lang LaSalle 2011, p. 5
47
Offline: Place Vendôme – the place to be for Haute Joaillerie
brands in Paris.
since 1893
since 1898
since 1902
since 1906
since 1955
since 1986
Since 1986
Since 1986
since 1991
since 1991
since 1995
since 2001
since 2006
n/a
!
since 1994
Anomaly of luxury retailing
The essence of retailing is serving places with unmet customer needs.
Consequently, non-luxury retail formats often select locations based on
customer needs not yet served by competition.
In luxury, two stores next to each other do not compete, but rather
complement each other.
Note: All brands listed operate their own monobrand boutique at Place Vendôme since the indicated year of opening.
Source: Authors; Quintavalle 2012, p. 89; Chevalier/Mazzalovo 2008, p. 330; Kapferer/Bastien 2009, pp. 203-204
48
24
02.05.2014
Concluding notes
10 key insights for you to take away.
1
Premium is not luxury.
2
China accelerates worldwide luxury growth.
3
Luxury is a European phenomenon.
4
The big three LVMH, Richemont, and PPR dominate the market.
5
Parvenu or patrician – the luxury clientele differs by wealth and need for status.
6
Dream is a function of awareness and purchase.
7
Do not follow the demand of the mass.
8
No sales in luxury. Raise prices in the long run.
9
Communicate to those you are not targeting.
10
Better have a small boutique in the most prestigious location than vice versa.
49
Thank you for your attention!
Holder of the Otto Beisheim Endowed Chair of Marketing and Commerce,
WHU – Otto Beisheim School of Management
Scientific Director of the Center for Market-Oriented Corporate Management (CMM)
Burgplatz 2
56179 Vallendar
Phone:
Fax:
+49 261 6509-441
+49 261 6509-449
[email protected]
► www.whu.edu/market
50
25
02.05.2014
References
Berthon, P./Pitt, L./Parent, M./Berthon, J.-P. (2009): Aesthetics and Ephemerality: Observing and Preserving the Luxury Brand, in: California Management Review, Vol. 54, Iss. 1,
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Bijmolt, T.H.A./Van Heerde, H.J./Pieters, R.G.M. (2005): New Empirical Generalizations on the Determinants of Price Elasticity, in: Journal of Marketing Research, Vol. 42, Iss. 2, pp.
141-156.
Catry, B. (2003): The Great Pretendes – The Magic of Luxury Goods, in: Business Strategy Review, Vol. 14, Iss. 3, pp. 10-17.
Chevalier, M./Mazzalovo, G. (2008): Luxury Brand Management – A World of Privilege, 1st ed., Singapore: John Wiley & Sons.
Dodds, W.B./Monroe, K.B./Grewal, D. (1991): Effects of Price, Brand and Store Information on Buyers’ Product Evaluations, in: Journal of Marketing Research, Vol. 28, pp. 307-319.
Dubois, B. (1992): Comment Surmonter les Paradoxes du Marketing du Luxe.
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Fassnacht, M./Kluge, P.N./Mohr, H. (2012): Do Luxury Pricing Decisions Create Price Continuity? In: Burmann, C./König, V. (2012): Identitätsbasierte Luxusmarkenführung,
Wiesbaden: Gabler (in print)
Fondazione Altagamma/Bain & Company (2011): Luxury Goods Worldwide Market Study 2011, 10th edition, October 2011:
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Kapferer, J.N. (2010): Luxury after the crisis: Pro logo or no logo?, in: European Business Review, September-October 2010, pp. 42-46.
Kapferer, J.N./Bastien, V. (2009a): The Luxury Strategy – Break the Rules of Marketing to Build Luxury Brands, 1st ed., London et al.: Kogan Page.
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Simon, H./Fassnacht, M. (2009): Preismanagement, 3rd ed., Wiesbaden: Gabler.
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Votrag Fassnacht Luxusmarken

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