At the end of the 1970s, the luxury industry was far from what it is recognised as today. Over a century ago, the majority of luxury goods brands were established as small, family-run businesses that created exquisitely, hand-crafted products for the elite (Thomas, 2008). It is only in recent decades that great structural changes have been made, specifically as a result of the change of focus from independent, artisan stores to large, luxury conglomerates such as Louis Vuitton Moët Hennessey (LVMH), Kering and Richemont.
At the forefront of this shift was French businessman, Bernard Arnault. After taking control of the textile group Boussac in 1984, Arnault saw potential in the luxury market. His aim was to merge with LVMH, which had generated around €2.8 billion worth of sales and achieved a net profit of approximately €480 million at the time (Thomas, 2008). By 1990, he had been successful in this pursuit and subsequently, initiated the construction of what is now the most powerful, luxury conglomerate in the world (Business of Fashion, 2017). Shortly after, Richemont and Pinault-Printemps-Redoute (PPR, now known as Kering) would also follow Arnault's lead.
With the emergence of these new luxury groups, came completely new business strategies. Previously, marketing strategies had simply not existed within the luxury industry and it is with their implementation that the value of the conglomerates has dramatically increased. Today, the turnover for the entire luxury industry has reached an outstanding €1.08 trillion (Bain & Company, 2016), and Figure 1 shows that €249 billion of this is made up by the personal luxury goods market alone.
However, it is significant to discuss what has been deemed as a detrimental consequence of this success. It has been argued that ‘the luxury market has changed, almost beyond recognition' (Coste-Manière, et al., 2012, p.5), and that its attention has been diverted from craftsmanship to profit as a result (Contant, 2017a). This suggests that -while it is undoubtable that the introduction of marketing strategies has created an exponential growth within the luxury market- it is important to analyse and assess the ways in which brands are balancing profit with the maintenance of essential luxury characteristics.
The ultimate goal of any luxury brand is a balance of high financial and emotional value. In order to achieve this, -and thus, a strong brand equity- certain marketing strategies must be implemented. An understanding of the most influential strategies is pivotal, and therefore components of the marketing mix must first be identified and examined. Traditionally, these components have been referred to as the 4P's, but more recently have increased to the 7P's: Product, Place, Price, Promotion, People, Physical Environment and Process (Jackson and Shaw, 2001). Therefore, in order to evaluate and conclude the extent of which marketing communication strategies have influenced the strength of brand equity, the most relevant components to the personal luxury goods market must be analysed and compared in depth: Promotion, People, Place and Product.
The term marketing communications refers to the means by which a firm informs, persuades and reminds consumers about the brand that they sell (Contant, 2017b). These strategies fall within the promotion element of the marketing mix, and have been known to take shape in the form of packaging; advertisements; public and press relations (PR); and visual merchandising (Jackson and Shaw, 2001). It has been argued that these communication strategies are at the core of the luxury industry, to the point that it has been stated that ‘luxury and communication are consubstantial' (Kapferer and Bastien, 2009, pp.210). However, in order to conclude whether or not these two elements are one in the same, each promotional activity must be assessed on their contribution to the emotional or financial value of a luxury brand.
Primarily, it is important to recognise that any brand within the luxury industry must aim to build an emotional connection as well as a financial one. As a result, their goal is to sell an experience as opposed to a product (Atwal and Williams, 2009). This attitude means that different marketing strategies must be used within the industry and that it is fundamental for each brand to identify and communicate who they are and the dream they are trying to sell.
The identity of a brand is crucial to the creation of their dream, and it is imperative that a strong set of core values or codes are encompassed within this. Ultimately, a brand's identity is made up of its functional, rational and tangible elements, which include both appearance and personality. In addition to these two components is ‘brand essence', which refers to the set of core values that are central, timeless and clearly represent the brand (Contant, 2017b). J N Kapferer -a specialist in branding- has created the ‘Brand Identity Prism' to enable luxury brands, such as Chanel (see Figure 2), to clearly identify their values and visualise their identity. This tool asks that the brand categorises their values into six essential sections: physique, personality, relationship, culture, reflection and self-image. However, it has been said that it is only with the communication of these elements to the consumer, that the identity of the brand will come to life (Kapferer, 2012). Consistency within this is also key, as clarity allows for correlating emotions to be evoked (Turunen, 2017). Therefore, it is clear that there is great importance in the effective communication of the core values of a luxury brand, as it has enabled an emotional connection to be made with the consumer.
The identity of a brand is the foundation on which further communication strategies are built. Once the dream is established, luxury brands must continually reinforce it through various other marketing communication tools (Coste-Manière, et al., 2012). This makes the likes of advertisement, PR and visual merchandising essential to the reiteration of the dream and in turn, the desired increase of emotional value.
Advertisements have played a key role in the promotion of luxury brand identities. Through the likes of magazines, television and billboards, luxury brands continually reinforce the experience that they are trying to sell. As a result, the essence of each brand can be firmly embedded in the mind of the consumer (Newman and Atkinson, 2001), which has significantly enhanced the allure of the dream (See Figure 3).
Despite this, there have been dramatic alterations made within the advertising of luxury brands in recent years. It is arguable that the communication channels for promotion have become increasingly more complex in the past decade (Lowrey, quoted in Doran, 2015), and that the luxury industry has been slow to adapt to this change. With the development of social media and digital marketing, luxury brands have struggled to recreate the allure of luxury through the Internet (Ait Addi, quoted in Doran, 2015). While some luxury brands have been developing innovative ways to create an emotional connection with their consumer online, others are hesitant. This is largely due to the fact that embracing social media may lessen the sense of exclusivity that is so fundamental to the industry (Turunen, 2017). Therefore, with the limited and dubious embrace of digital marketing, it is clear that advertisements within the luxury industry have not yet reached their full potential in strengthening brand equity.
In addition to advertisements, public and press relations are fundamental to the communication of brand identity. Defined as ‘the supply, dissemination and management of information regarding an individual or a company to the public or press' (Business of Fashion, 2015), PR presents the opportunity to build relationships between the brand and consumer, while simultaneously maintaining an element of exclusivity. This is largely due to the fact that it allows brands to focus on people who reflect their brand's essence and therefore, can enhance the attraction towards their products (Kapferer and Bastien, 2009). However, in order for this to be successful, it is indispensable that the attitude, actions and personality of the figure are coherent with the dream that is being sold. This means that celebrities and brand ambassadors are very carefully chosen, such to the extent that celebrity endorsement has been described as a ‘delicate matchmaking game' (Shuang, 2015). This makes clear that PR is essential to the increased emotional and financial value of the personal luxury goods market, but caution must be taken in ensuring each brand is being well represented.
Experiential marketing is also a highly influential tool that has been used in PR. This term refers to ‘the engagement of consumers through their participation in brand events, such as exhibitions, shows, concerts and immersive retail experiences and entertainments' (Business of Fashion, 2015). It is vital that these events also reflect the identity of the brand, so as to take the ‘essence of a product and amplify it into a set of tangible, physical and interactive experiences' (Atwal and Williams, 2009, p.341). Ultimately, this has provided the consumer with an exciting and personalised experience that has enhanced the sense of exclusivity and luxuriousness of the brand. As a result, the strength of brand equity has successfully been increased.
Finally, there is an important role to be played by the physical surroundings within which the luxury products are sold. The reinforcement of core, brand values is largely achieved through visual merchandising, which has been stated as ‘the language of the store' (Ebster and Garaus, 2015, p.77). Within this form of communication, there are four strategies that can be implemented: merchandising to manage; merchandising to seduce; merchandising to communicate; and merchandising to organise (Corrons, 2017).
Significantly, ‘merchandising to communicate' encourages luxury brands to consider store image. As with advertisements and PR, it is vital that this is coherent with the identity of the brand. It is evident that, in order to ensure the creation of a relevant concept and suitable atmosphere, brands must consider the physical designs and displays within the store - from window displays and fixtures to signage and mannequins (Newman and Atkinson, 2001). Not only does this visually communicate the identity of the brand (see Figure 4), but it has the potential to direct consumers to certain products and encourage impulse sales (Ebster and Garaus, 2015). Therefore, visual merchandising has been hugely influential to the increased emotional and financial value of any luxury brand.
Ultimately, marketing communication strategies and promotion do play a very important part in strengthening brand equity within the personal luxury goods market. It has been said that ‘what the brand says, and how it says it, is critical to evoking an impression of luxuriousness' (Tururen, 2017, p.108). This has certainly proven to be the case. Defining a brand's identity and their core values have laid the foundations of a successful communication strategy. This is due to the simple fact that in order to sell the dream, it is first required to identify what that dream is. Reinforcements have then been made through advertisements, PR and visual merchandising, which present individual opportunities to enhance the experience that the brand is trying to sell. It has become clear that a huge amount of strategic planning has been put in place in order to ensure the coherence of each of these elements. This is what has enabled luxury brands to create a strong sense of desire and an emotional connection with the consumer, which in turn, has encouraged more sales and has resulted in an increased financial value.
Defined as the ‘customers, suppliers, and the fashion retailer's staff who are involved with the buying and selling of products' (Jackson and Shaw, 2001, p.62), the people element of the marketing mix is certainly influential to the personal luxury goods market. It has been argued that the customer must be at the heart of any luxury brand, with Wilson branding the consumer as King (2001). This clearly suggests that the needs and desires of the target market is what drives and directs the strategies used within the industry. In order to determine the extent of truth behind this, an analysis of the ways in which luxury brands ensure they remain desirable must be carried out. This, in turn, will allow for a conclusion to be made as to how influential these strategies are to the strengthening of brand equity within the industry.
As previously noted, a strong relationship between the brand and consumer enables an emotional connection to be made. In order to achieve this, it is fundamental that a luxury brand defines and identifies its target market. Through the use of customer segmentation bases, the market has been divided into sections (Jackson and Shaw, 2001), therefore allowing for a suitable consumer base to be derived from geographic, demographic, behavioural and/or psychographic differentiators. However, it can be said that in past 30 years, these segments have become increasingly more complex (Contant, 2017b). By creating brand extensions, luxury brands have branched into new categories in order to target a wider range of customer. It is undoubtable that these have increased the financial value of the brands, but it has also puts at risk the emotional value. This is due to the fact that increasing accessibility leads to the decrease of exclusivity, in addition to a weaker understanding of their original target market.
Being able to deeply understand the demands of the identified target market is crucial to the creation of a strong brand equity. In order to ensure the use of the most effective marketing strategies, luxury brands must be aware of the ever-changing expectations and tastes of the consumer (Hoffmann and Coste-Manière, 2012). This makes clear that a thorough analysis of the demands of individual clusters is necessary, and can be exemplified through the nature of wealth of the consumer.
Ultimately, the nature of wealth refers to the way in which individuals have acquired their riches. For some, this may be as a result of 20th century money; for others, this may be through newly acquired wealth as the number of High Net Worth Individuals (HNWI) continues to dramatically increase. Despite this, Figure 5 shows that of the ~400 million luxury consumers, only 16 million are classed as ‘top luxury'. This makes clear that the majority proportion of luxury consumers are made up of ‘ordinary people' (Kapferer, 2015, p.166). There is an assumption that the tastes and desires of HNWI are entirely different to those of an upper middle class individual, which can be solidified through the millennial attraction to more accessible luxury goods, such as shoes, fragrances and cosmetics. Therefore, by understanding the target market, luxury brands can implement strategies that enable them to appeal directly to the cluster of consumer they are targetting. This has allowed for the creation of a personalised and tailored experience for consumers, which has contributed significantly to the increase of the emotional and financial value of the brands.
Defining and understanding the target market lays the foundation for a strong brand image, which can subsequently influence the strength of brand equity. This term refers to any associations that have been made by the consumer, and it is hoped that the perceptions created are consistent with the identity of the brand (See Figure 6). Keller has explained that these affiliations are largely created by non-physical attributes and particularly result from direct or in-direct customer experiences (2013). This makes clear that in order to achieve the desired emotional connection, luxury brands must ensure they are meeting the expectations of the consumer. As a result, it can be argued that a huge amount of the scope for success lies within the hearts and minds of the consumers (Kapferer, 2012), thus emphasising the extent of value in ensuring a positive impression is made.
The implementation of certain strategies based on a specific type of consumer enables luxury brands to strengthen their brand image. It has been argued that these strategies control where a brand is positioned within the market, which in turn, ‘determines how a product or brand will be seen and understood by its consumers compared with competitors' (Jackson and Shaw, 2001, p.70). This is hugely significant in allowing brands to be seen as distinguishable from the perspective of the consumer (Kotler, et al., 2009), which can be clearly visualised through the use of a brand positioning map (see Figure 7). Resultantly, this has created an allure of uniqueness within the industry that has helped to increase the emotional value of the brand. By heightening the element of exclusivity, luxury brands have strengthened brand equity through their perceived image.
Additionally, personal selling refers to the face-to-face interaction that the brand has with the consumer, which has also been fundamental to the creation of a strong brand image. It has been established that understanding the customer's expectations is critical. This includes those working at each point of sale and as a result, many luxury brands have placed a strong focus on training employees to make sure that they are achieving their full selling potential (Contant, 2017b). Ultimately, this training has encouraged the sales team to initiate the start of an emotional relationship with the consumer, reinforcing the idea that the experience of luxury is ‘about making the direct, personal connection with the client' (Kapferer and Bastien, 2009, p.151). This further reiterates the importance of providing an exceptional service in order to increase the equity of a luxury brand.
In addition to the strengthening of brand image, brand resonance can be encouraged through the understanding of the consumer. This has been defined as ‘the depth of the psychological bond that customers have with the brand, as well as the level of activity engendered by this loyalty' (Keller, 2013, p.70). Ultimately, by creating a strong emotional investment with the consumer, luxury brands aim to encourage the creation of loyal and regular customers. This possesses huge benefits that brands strive to achieve, including trade leverage as well as reduced marketing expenditure, since attracting new customers has a much greater cost than maintaining relationships with existing customers (Contant, 2017b). Therefore, not only has this increased the emotional value of the brand, but it has greatly contributed to the financial value.
Thus, it is evident: strategies held within the people section of the marketing mix are also hugely influential to the strength of brand equity within the personal luxury goods market. It has been stated that ‘no business can succeed without identifying and satisfying its customers' needs' (Jackson and Shaw, 2001, p.64), which has become abundantly clear. In order to ensure the creation of a strong connection with the consumer, luxury brands have implemented strategies that allow them to define and understand their target market. This allows the expectations of the consumer to be met through quality products and exceptional service. It is only then that the brand can start to build a relationship with the intention of strengthening its image. Additionally, through the likes of brand positioning and personal selling, luxury brands have encouraged coherence between brand image and brand identity. This, in turn, has led to the development of brand resonance which possesses huge benefits to the strengthening of equity within the industry.
The place component of the marketing mix has been referred to as ‘the means by which firms distribute their products to consumers' (Keller, 2013, p. 211). This, therefore, encompasses the various types of distribution channels used within the luxury industry, as well as their location, level of accessibility and aesthetic (Jackson and Shaw, 2001). It is understood that these elements are of significance, with it being stated that ‘distribution plays a key role in luxury management' (Kapferer and Bastien, 2009, p.193). However, in order to evaluate the extent of the contribution made to brand equity within the personal luxury goods market, each strategy must be assessed individually.
In the last 20 years, globalisation has played a significant role in the international expansion of the luxury industry. Defined as ‘the increasing internationalisation of the production, distribution and marketing of goods and services', (Lévy, quoted in Hines, 2001, pp.5) it is this that has allowed luxury brands to reach customers worldwide. As a result, a great number of new luxury markets have emerged, with the most profitable existing in the US, Japan, China and Europe (see Figure 8). As a result, this has significantly increased the financial value of luxury brands through the higher level of accessibility and brand awareness. It has become clear that there are a number of potential benefits to this, including widening the market coverage; harnessing sales potential; publicising the brand and expanding the customer base. However, as previously stated, this has notable consequences for the emotional value. By decreasing the element of exclusivity, a brand can fundamentally reduce the allure of luxury. Therefore, it can be seen that the rarity of distribution channels must be considered and that brands must be selective in their choice. (Kapferer and Bastien, 2009) This has meant that in recent years, luxury brands have decreased the number of stores (Contant, 2017c) in order to ensure an effective balance and in turn, a stronger
It is important to note that there are a number of different types of distribution methods that luxury brands must utilise in order to strengthen their emotional and financial value. It has been argued that varying strategies possess varying opportunities and obstacles and thus, brands must ensure they are incorporating a wide range of channels (Keller, 2013). Retail and wholesale are two strategies that are key to achieving distribution success (see Figures 9 &10). Of the two, it has been found that wholesale is currently the most prominent method. At present, it makes up 65% of the personal luxury goods industry (Bain & Company, 2016) due to the fact that it creates a wider market exposure and is a cost-effective way to expand. However, Figure 11 shows that by 2020, luxury brands are expected to move towards retail channels in an attempt to regain
control of their brand image, and enhance the luxury experience through direct contact with their customers. Therefore, this suggests that by increasing the percentage of retail distributors, luxury brands are balancing their methods of distribution and in turn, strengthening brand equity.
In addition to this shift towards retail channels, luxury brands have also started to embrace and develop an online presence. While still a very controversial form of distribution for the luxury sector, e-commerce has almost doubled its market share since 2012 to 7% (Bain and Company, 2015). As previously established, integral characteristics of the luxury dream may be lost through digital strategies, but it is clear that online stores are a current consumer trend. Therefore, by meeting the expectations of the consumer, brands have the opportunity to increase their relevance and desirability. Thus, online distribution does have potential in strengthening the brand equity of the personal luxury goods market.
In recent years, there has also been a notable increase in the number of distribution channels found within airports and aboard cruise ships. A correlation can be made with this developing, travel retail market and the exponential growth of the tourism industry. Significantly, the travel and tourism sector has outpaced the growth of the global economy for almost a decade and is expected to continue doing so for the forthcoming ten years (World Travel & Tourism Council, 2017). This has shown to be of great importance to the personal luxury goods market, due to the fact that large countries with developing economies have the greatest potential for luxury brands looking to expand internationally (Contant, 2017c). As a result, airport retail now makes up 6% of the global luxury market (Bain & Company, 2015). Therefore, by adapting and responding to the needs and desire of consumers in this way, luxury brands have ensured an increase in emotional and financial value.
With regards to all of these distribution strategies, the location and appearance of each channel are fundamental to the strengthening of brand equity. It has been argued that the identity of the brand must match the image of the store in order to ensure consistency in the creation of the dream (Keller, 2003). Visual merchandising makes clear the extent of success this strategy has on brand equity, and therefore, suggests it should also be considered in the location and the design of the building itself. For luxury brands, this means that flagship stores must be opened in a ‘highly symbolic place' (Kapferer and Bastien, 2009, p.211) in order to enhance the sense of luxuriousness. As a result, the likes of New Bond Street in London, Avenue Montaigne in Paris and 5th Avenue in New York have become icons of exclusivity and in turn, have enhanced the emotional and financial value of the brands located there.
Furthermore, the design of the building should be adapted to each location while also ensuring that it remains true to the brand. In the past, standardised stores were used in order to allow consumers to recognise the brand and, in turn, increase brand awareness. However, this has hugely developed in recent years and today, brands create different experiences in different stores depending on the desires and values of local consumers. This has led to the creation of strategies that can either focus on proximity, precision, customer, space or innovation (Contant, 2017c). Ultimately, by doing this, luxury brands have created a more personalised experience for the consumer so as to enhance brand image and thus, brand equity.
Therefore, it has been made clear that distribution strategies do impact the strength of brand equity within the luxury industry. Globalisation has allowed for the emergence of a number of profitable markets across the world, and by ensuring a balance between accessibility and exclusivity, luxury brands have significantly increased their financial and emotional value. Selectivity has proven critical, but it is through the implementation of a variety of distribution strategies that luxury brands have ensured that they are adapting to consumer trends, as well as maintaining brand identity and a sense of luxuriousness. Additionally, the reflection of brand identity through the location and appearance of the stores has furthered this, and in turn, has greatly enhanced the strength of brand equity within the industry.
With reference to the marketing mix, product has been defined as ‘the complete package of benefits offered to the customer but represented in a tangible fashion product' (Jackson and Shaw, 2001, p.62). In its entirety, the luxury industry creates an incredible range of products, which have been categorised into markets such as personal goods; wines and spirits; hospitality; art and design; and transportation. Each of these areas holds significance, but it is the personal luxury goods market that is represented by wearable products. As a result of the total sales equating to that of €249 billion, it has been argued that wearables are at the heart of the luxury industry (Bain & Company, 2016). However, in order to understand how effective wearable products are to the strengthening of brand equity, a number of strategies must first be analysed.
Primarily, the design characteristics of luxury wearables are pivotal to the creation of a strong brand image. It has previously been established that the consumer's perception of a luxury brand is key to its success. Therefore, in order to ensure a positive affiliation, the creation of a high-quality product or service is imperative. This means that consideration must be made to the durability of the product, with it being stated that ‘the luxury product must remain current and timeless' (Kapferer and Bastien, 2009, p.165). This makes clear that in order to prevent extinguishing a strong brand image, attention must be paid to the style of the product as well as the durability of the materials used to create it.
For many years, the luxury industry was solely comprised of quality craftsmanship, and it is vital that this element is not lost to profitability in the industry today. As a result, there is a great deal of importance in including a handmade element within the design process (Kapferer and Bastien, 2009). As well as this, brands must communicate in order to ensure the consumer is aware of this (see Figure 13). Ultimately, by incorporating this well-crafted and personalised element, luxury brands can ensure a distinctive point of difference (POD) against other competitors within the market (Jackson and Shaw, 2001). This has enabled the creation of a sense of uniqueness that has further added to the allure of luxury products. As a result, the emotional and financial value of the brands has increased which in turn, has enhanced brand resonance.
The reflection of the brand's identity and dream within the types of products sold is also incredibly important to the creation of a strong brand image. It has been explained that ‘the luxury product always comprises a functional side and a symbolic side' (Kapferer and Bastien, 2009, p.160). This suggests that the communication of brand essence is just as important as the physical attributes of the product. As a result, it is vital that brands carefully consider the type of products that they sell and specifically, how these demonstrate what the brand stands for. It is through this that luxury brands have enhanced the communication of their dream, which in turn has allowed for an increased brand resonance.
Ultimately, brand resonance is fundamental to the successful introduction of new product ranges. The term brand extension refers to a strategy that enables the branding of a successful business to be expanded into different product categories (Branding Strategy Insider, 2008). It is through this maintenance of coherent branding that luxury brands have the opportunity to increase their target market. Arguably, this has been the key to the successful growth of the majority of brands (Kapferer and Bastien, 2009). Despite this, it is important to weigh up the benefits of encouraging the democratisation of luxury against its consequences.
Significantly, brand extensions have opened up the industry to a wider range of people. It has been said that brands often achieve greater profitability from the sales of accessories, perfumes and beauty products, as opposed to Ready-To-Wear and Couture fashion (Jackson and Shaw, 2001). This is largely due to the differences in price, which has allowed people ‘who couldn't afford the more expensive things in the shop to own a small piece of the brand's dream' (Thomas, 2015). It is undoubtable that this has added financial value to luxury brands, with accessories –such as handbags and shoes- dominating sales, as well as beauty products showing sharp growth (see Figure 14). However, it is important that this increased accessibility is created with caution. As discussed previously, it is vital that the creation of new products does not weaken the brand (Hoffmann and Coste- Manière, 2012). Therefore, luxury brands have ensured that they maintain
a degree of exclusivity in order to increase their emotional value.
Thus, the products sold by a luxury brand significantly contribute to the success of the industry. It has been argued that both the tangible and the intangible elements are important to product strategies (Keller, 2013), and it is evident that this is true. The creation of a strong brand image is crucial to brand resonance, and both the physical and symbolic attributes of the products influence this. As a result, the creation of brand extensions have been possible and ultimately, these product categories account for a great percentage of industry sales. It is important to note that a balance between accessibility and exclusivity is pivotal in order to ensure the maintenance of a brand's luxury identity. Ultimately, achieving this has revealed an abundance of opportunity for a stronger brand equity.
It is undeniable that the introduction of marketing strategies to the luxury industry has greatly contributed to its increased growth over the past few decades. The breakdown of strategies through the marketing mix has made clear that specific focuses must be placed on key areas within the market. Of the 7P's, it is evident that promotion, people, place and product have pivotal parts to play in the creation of a strong brand image within the personal luxury goods market. Ultimately, this is what has led to the strengthening of brand equity and the exponential success of the industry.
The promotion element of the mix has an incredibly important role in the development of a strong brand equity. This has largely been achieved through marketing communication strategies that have allowed for the identification of brand essence. This is essential in creating the dream that is so fundamental to the sales of the luxury industry. Coherence has proved crucial and as a result, the dream must continually be reinforced. Promotional strategies such as advertisements; PR; and visual merchandising have all significantly helped to emphasise the dream. However, it has become evident that this is the conclusive aim of each marketing strategy.
It is indisputable that the consumer is critical. It is their perception that creates the strong brand image and thus, helps to build a strong, emotional relationship with the brand. Luxury brands have ensured that they are aware of who is buying their products and what they are looking for, so as to tailor their dream to their target market. Ideally, luxury brands want to ensure that the brand image and the brand identity is consistent, in order to encourage brand resonance and in turn, brand loyalty. Significantly, these elements have contributed to the strengthening of brand equity by increasing the number of potential customers and thus, the financial and emotional value.
Distribution strategies have also enabled a stronger brand equity. Globalisation has allowed for sales on a worldwide scale by enabling the emergence of a great number of new target markets. Through balancing accessibility with exclusivity, brands can heighten profitability while maintaining important characteristics of luxury. The location and appearance of each point of sale are fundamental and luxury brands have ensured consistency with the brand's dream, which in turn has strengthened brand image and equity.
Finally, the products that luxury brands sell are critical to strengthening brand image. As a result of designing quality products that reflect the dream, brands have increased their desire and, in turn, brand resonance. This is a fundamental element of a successful brand extension which resultantly, has allowed for an increased target market. A balance between accessibility and exclusivity is imperative and once achieved, the potential for sales is greatly increased.
Thus, it is evident that each of these marketing components can individually contribute to the increase in sales within the luxury industry. However, when implemented together, these strategies have allowed for the optimum reinforcement of the dream. This is what has enabled the ultimate brand image and in turn, the creation of a strong brand equity that is required to ensure the luxury market continues to grow.
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