Introduction In the high end retail market, Gucci (1921), Louis Vuitton (1854) & Vertu (2000) are three successful so-called luxury brands. However, creating luxury brands is a difficult marketing exercise. Marketers are moving from the traditional marketing mix approach towards greater use of experiential marketing to create an emotional attachment between the brand and the customer. It is necessary for a brand to convey a personality that the customer can relate or aspire to. Q1: What are the key success factors in creating an exclusive product/service? Using the brands discussed in the case. a) Gucci * Gucci’s products grabbed the attention of many powerful celebrities including Jackie Kennedy, Grace Kelly and Audrey Hepburn. These women represent elegance and style, which enhances the prestigious aura of Gucci. * Another key success to maintain its exclusive status is to never compromise into the down-market even with bankruptcy at stake in the 90s. * A major influence on the success of Gucci in the 90’s was the appointment of leading designer Tom Ford as the creative director of Gucci overseeing product lines, store image and store design. In March 1995, his first collection caught attention of the press by utilizing sex and glamour, which reinvented its image to bring back an aura of exclusivity and prestige. In addition to this, Tom Ford believes in giving the whole experience of buying Gucci through stores with rich and classic decor located on expensive streets, model like salespeople, great customer service and distinctive Gucci packaging. (b) Louis Vuitton * Louis Vuitton has tried to modernize its image by using young designers, while maintaining the classic designs. However, no designers can eclipse the powerful brand image of Louis Vuitton itself. * Louis Vuitton stands out from peer by focusing on product quality. All products are extensively tested to make sure they can withstand wear and tear. The company emphasize integrate manufacturing initiatives such as “quality circles” in the production process. * The company operates a pricing strategy by practicing on never reduced in price and no sales period. * The company offers customized products such as personal engraving on their products and ponsoring elite sport events such as yachting and motorsport events. (c) Vertu * Vertu utilizes craftsmanship, precision engineering, high-end technology and unique personal service dimension, to create a distinctive luxury brand. Vertu wants their phones to be a status symbol and aims to create a fashion brand rather than a technology brand. * Vertu Concierge provides specialized travel assistance, allowing users to access and reserve restaurants, hotels, concert tickets and much more. Also, the company offers free upgradeability when new technology emerges. Q2: What is the importance of concentrating on retail environment when adopting a marketing strategy of experiential marketing? Give examples using the Gucci, Louis Vuitton and Vertu brands . Stores are another extension of brand image. * Gucci stores are located on expensive high street with provocative window display and free flow of interior that appeals more to customers, which allow them to browse comfortably. The decor is rich and classic. To add to the image, the salespersons are dressed smartly and even security guard is suitably dressed. For the convenience for the customers, Gucci products can also be purchased online. * Gucci became a Multi Brand Global Company through the acquisition of several labels and uses different channels of distribution for each of its acquired labels. * Vertu established flagship stores in exclusive shopping districts, thus benefiting from a halo effect. Vertu has developed a unique buying experience by creating “gallery-like” feels to its retail environments. In keeping with element of exclusivity, original artworks were commissioned and exhibited throughout the stores. By offering a first class personal service combined with extensive product knowledge, Vertu has enhanced their image of reliability and expertise. Vertu phones are available online and customer can personalize their mobile phone too. The company is also extremely particular when choosing suitable retail channels that must have a global reputation in offering quality and luxury products. Q3: Discuss how exclusive brands may lose their aura of exclusiveness and fashion status, identifying possible threats to these brands? Some brands are targeting both ends of the market. The risk of ‘democratizing’ the brand is that they may lose their aura of exclusivity – as it can be obtained by anyone. If one brand goes down-market, it may have profound repercussions on the appeal of the parent brand. Calvin Klein brand name was affected when they sold the jean in discount supermarkets such as Wal Mart during the 90s. This has downgraded the image of Calvin Klein jeans. Failure to retain talented designer or losing them to their rivals may also affect the brand’s exclusiveness. Counterfeiting is huge subculture within the luxury brand sector. The quality of fakes is getting better, making it harder and harder for people to distinguish the fake from the real thing apart from price. This is a huge threat to luxury brands. Conclusion Advertising can only create awareness for the product/service. The success of Gucci, Louis Vuitton and Vertu can be attributed to quality of service, brand image, retail environment, management structure, and ability to combine these factors to create exclusive experience.
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