Pure surface marketing will not make a mass brand into a top-class brand.
From average to luxury brand: How to uptrade brands
Article
28. Februar 2012 ▪ Reading time: approx. 2:00 min.
In order to extricate themselves from the ever faster downward price spiral, many companies and brand managers consider "uptrading" their brands. Because premium or even luxury brands bear promises of new growth and good profits.
The – supposedly – suitable handymen are only a phone call away: An advertising agency whose eyes glaze over at the mere mention of the words "premium" and "uptrading", a design agency that loves to pretty up boring packaging for the masses, and of course the event agency that is already dreaming of top-class events.
Surface marketing does not lead the way into the luxury class
The brand has to become more refined, more elaborate, and more expensive, but: will an up-valued new surface be enough? Ultimately, the money has to roll back in through increased sales and/or price increases.
The sales staff can usually tell that there is something amiss with the new strategy. They know that the existing retailers are not going to just change their attitude about a familiar brand – and that they will wonder if they can make their customers accept the new strategy and the unavoidable price increase. What is the consequence? Will the brand company need to find new retailers in the premium segment? And will these new retailers want to add the brand to their product list?
Premium brand, prestige brand, luxury brand – what is the difference?
To minimize the risk of failure and increase one's chances for success, it makes sense to spend some time with the performance content and boundaries of brand systems in the top class.
For the „Marketing Review St. Gallen“, the marketing magazine published by St. Gallen University, we have tried to make the structure of brand systems in the high-end brand segment transparent. To do so, we developed a categorization scheme defined by the parameters "Benefit focus" and "Performance leadership". Starting with the assumption that luxury brands always have a status benefit in addition to a performance benefit, we inferred a structure of four fields that is helpful for the successful uptrading of brand systems.
Examples for these four categories:
- Premium brand: Swarovski
- Prosumer brand: Hasselblad
- Prestige brand: Louis Vuitton
- Luxury brand: Hermès
The selected parameters and the resulting categorization shows: Uptrading is only possible with a changed and superior performance bundle. Just surface marketing cannot make a mass brand into a top-class brand.
Building the status benefit – the freestyle exercise in the uptrading process
The second driver is the benefit focus: an outstanding basic and additional benefit may be your ticket to the upper class of brands, but the transition from product benefit to status benefit is the high art of brand management in the Champions League.
However, the essential point is the absolutely indispensable attitude change in people toward the brand. It starts in your own enterprise and continues with marketing agents, customers, observers, and influencers. Only when their views and evaluations change will an average brand become a top brand that can benefit from the high returns of the top-class segment. Strong brands always grow from the inside out, and of course the same goes for luxury brands.
The article "Erfolgreiches Luxusmarketing – eine provokative Diskriminierung" erschien in der "Marketing Review St. Gallen" (Successful luxury marketing – a provocative discrimination) appeared in the "Marketing Review St. Gallen" on pages 11 to 16 (February 2012, Issue 1/2012).
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» Interview: "Eine Luxusmarke darf keine Kompromisse eingehen – weder in der Leistung noch im Preis"
