A Deep Discussion On Luxury Brands: Revealing The Truth Of The Growth Of Luxury Brands

Many colleagues (especially new young brands) tend to have a lot of "brand level" fantasies about luxury brands, and feel that luxury goods are different. Their brand operation is quite different from that of popular brands. Their brands are sold to a few more rich and loyal customers. Their brands are becoming valuable because they are small and rare. For this kind of rarity, let a few rich people buy more frequently... But in reality

What are the customers who buy luxury goods?

Behind the growth of luxury brands is the rich?

Are the growth of luxury brands really small and rare?

Will luxury goods be more disliked because they are more familiar?

Is the declining luxury brand really because of the so-called vulgar masses?

Here, from the perspective of HBG penetration theory, we will share with you a deep discussion on luxury brands in books. To learn more about HBG's penetration, at the end of the article, we can join the HBG assistants to conduct in-depth in-depth interviews with the official community. Of course, the premise of the discussion is that there is already a certain experience in brand operation or trading experience, otherwise, it will fall into pure emotional inquiry and lack the meaning of actual combat.

Luxury brands

Mainstream customers turned out to be "middle class"?

There is no doubt that the world is getting richer and richer. The whole global economy has been growing for hundreds of years, and not only the rich have become richer, but the fact is far from it. Nowadays, global wealth is growing and the middle class is increasing.

Relative to the current global economic growth, sales of luxury brands are also growing. The most obvious market is China, India and Russia. When a luxury brand marketer talks about the future direction of the brand, the market will never be ignored.

Maslow's hierarchy of needs theory holds that before a basic demand rises to a higher demand, a person needs to get a certain amount of material accumulation first. But this is not entirely true - even those who live on a few dollars a day will spend a small portion of their income on entertainment consumption. Obviously, people can't live on bread alone. Everyone needs some "luxury" from time to time.

The development of luxury brands in the developed countries is also remarkable.

Even daily necessities, there is a trend towards high-end brands. In Kenya, every family spends 45% of their total household income on food. In France, the proportion is only 14%, because France is richer and more productive, and people have more opportunities to buy other non essentials. Besides food, they can also buy expensive hand watches, yachts or life experiences. Of course, the French eat pretty well.

In rich countries, few people can't afford to buy food. They don't need to buy a lot, but they can buy better and more expensive food. In the United States, the advent of espresso and brewed beer is proof.

Luxury brands sell not only for the rich, but for the super rich, the average amount of luxury goods per person may exceed us, but the middle class is the main purchasing force, because the number of this class exceeds 1000 times.

This means that although luxury brands are not for everyone, they still need to compete in the mass market. This is an accident or even a shock to many marketers (and marketing theory researchers), because they all openly object to this conclusion. This conflict with their beliefs. In their minds, the secret of the success of luxury brands is to be regarded as unique and rare.

But in fact, how luxury goods continue to grow and grow is actually the same as that of other brands. Instead of loyal old customers, luxury customers are a lot of light customers and new customers, most of whom are not billionaires but middle class.

This is why luxury brands are also widely advertised. Luxury brand watches are advertised not only for billionaires, because there are too many rich people, and most people who buy advanced watches are not billionaires.

The more familiar the luxury, the more dislike it is?

Under the influence of Internet word of mouth and personal fantasies, we often feel that luxury goods should be rare and few people can enjoy it. Once it becomes full of streets, it will affect the sense of value of luxury goods, and people will dislike it.

So after the world-famous "YSL boyfriend lipstick" event marketing, many colleagues are singing bad YSL, think YSL will lose the hearts of old customers, because they are too familiar and become cheap. But in reality, the result is quite different.

A large number of data research (omitting the large amount of data survey process) shows the relationship between luxury brands in different countries in the following 3 dimensions:

Brand awareness

Brand ownership rate

Brand desire

First, the relationship between brand awareness and market share is very close (the correlation value is around 0.9).

Obviously, brand ownership is helpful to brand awareness, and people are reluctant to buy brands that have not been heard - especially for luxury goods. It is expected that in each category, brand awareness is much higher than share: This shows that popularity depends not only on purchase rate, but also on advertising.

Secondly, there is a strong correlation between brand awareness and desire level (0.8-0.9).

Many luxury brands are not famous, and people do not aspire to brands that they do not know. Prada and Rolex are two brands with a slight deviation. Their thirst is very high, and they all have the highest reputation in the same category. But it is likely that the two are not really deviations, but are influenced by the double crisis rule, and the leading brand desire also has the advantage.

In conclusion, the survey results do not support the so-called "more familiar and less valued" theory. Research shows that luxury brands, like other brands, are more likely to build mental saliency and convenience through competition. Many owners (higher penetration) will not lead to lower demand, even more or less the superiority and independence of luxury brands. The positive effects brought about by mental salience have already been offset or even surpassed by all shortcomings.

If it is easy to have

Will luxuries lose their aura?

For luxury brands, many people may think from a perceptual level that once they have acquired or become familiar with a luxury brand, the brand will lose a lot of luxury and attractiveness.

So when luxury stores are everywhere, and all the streets are luxury brands, does it mean that the brand has lost its aura? Do customers like the distinctive niche luxury goods?

There was once a survey that compared the brand attractiveness of the two groups of people who knew the brand and those who didn't have the brand. Does branding reduce attractiveness?

The results show that, in addition to some people who are seeking diversity, surely every market has, even if we control brand awareness, having a luxury brand will actually bring more attraction to the brand. Brand attractiveness scored higher among owners.

Of course, these owners may have higher desire for these brands before buying brands, but the actual consequences of them are also small. Compared with those who knew these brands but did not buy them, they still had higher desire to buy the brand.

Indeed, we would think that compared with the new customers of a luxury brand, the existing customers may be satisfied with the brand they already possess because of the diversified demand. However, the data show that the impact of diversity demand is negligible.

On the contrary, loyalty is the natural behavior of customers. Behavior determines attitude. If you have one, you will be more likely to buy it than others who are aware of it.

This effect has slightly less impact on luxury watch brands, and this category of customers has more diversified demand factors. A Rolex has been bought, and the owner will want to buy another brand watch to enrich the whole collection.

Luxury brands

Is the channel mysterious and small?

We often have this kind of cognition. Traditional luxury channels are often regarded as mysterious and only open to some high-end customers, so it will be luxurious, high-end and even unattainable.

But in reality, luxury brands are getting closer to popular channels. There is no essential difference between their offline channels and online channels and popular brands. They also aspire to reach more customers and facilitate more customers to buy.

Such a channel, to the masses, to make customers more accessible, will affect the growth of luxury goods and make the luxury goods cheaper? In another survey, it directly measures the visibility and exclusiveness of luxury goods, and the convenience of buying. Are brands that we believe are strictly restricted and hard to get through distribution channels, and are they more exclusive and luxurious in their eyes?

Actually, this is not the case. We find that the opposite is true. Most people think luxury and exclusive brands are not hard to buy. This means that exclusive sales have nothing to do with customers' perception of luxury and exclusiveness.

We need to look at other aspects of the entire marketing model to find out the root causes of exclusiveness (such as high prices). If you want a brand to look luxurious, it does not need to limit its purchase convenience.

In short, luxury brands, like other brands, should return to the essence of "big penetration" if they want to grow. To make a brand is not just based on the illusion and experience in the mind, but by scientific knowledge and insight into the professional rules of brand growth.