A Twitter thread by Patrick OShaughnessy.
“Behind the Curtain” Book #2: The Luxury Strategy by Jean-Noël Kapferer and Vincent Bastien.
Curious if, after reading the below, you think there can be “luxury” investment products
Since the dawn of humanity there have been objects, symbols and lifestyles specific to leading groups. Luxury is part and parcel of life in society.
Marketing of modern luxury goods runs counter to most marketing—and is rich with the use of scarcity as a principle of influence.
The ultimate in luxury is to be able to live vitally and to live on. Two aspects of this luxury are ever-present: great pomp and splendor during life and a highly ritualistic approach to the afterlife.
Luxury products tend to have extremely high margins.
The essence of luxury, therefore, is the symbolic desire to belong to a superior class, which everyone will have chosen according to their dreams, because anything that can be a social signifier can become a luxury.
Luxury must be multi-sensory: it is not only the appearance of a Ferrari that matters but also the sound of it, not only the scent of a perfume but also the beauty of the bottle it comes in. It is multi-sensory compression.
Rules for marketing luxury:
Do not pander to your customers’ wishes
Keep non-enthusiasts out
Do not respond to rising demand
Dominate the client
Make it difficult for clients to buy
My favorite idea: The dream must always be recreated and sustained, for reality kills the dream.
Every time someone buy a luxury product they destroy a little bit of the equity.
Luxury has two value facets – luxury for oneself and luxury for others. To sustain the latter facet it is essential that there should be many more people who are familiar with the brand than those who could possibly afford to buy it for themselves.
The goal of Rolex’s advertising is not to sell Rolexes, but to make those who have the means to buy a Rolex happy that others, who do not have the means to do so, know what Rolex means. The luxury dream is boosted by the distance between those who know and those who can.
In the luxury world, price is something not to be mentioned. As a general rule, the imagined price should be higher than it really is. It’s the opposite in traditional marketing.
The symbolic power of the brand, painstakingly acquired through quality, creativity, and status, is the lever of pricing power.