Luxury branding for decades has been about exclusivity, excellence, and high price tag. However, it’s time luxury brands change the way they produce, promote, and sell products or services. Mainly because their target audience consists of millennials or Gen-Z with high disposable income who don’t associate luxury products with terms like ‘exclusive’ and ‘high-price tag’. Instead, they purchase luxury products or services that offer them pleasant experiences.
As the luxury market evolves, it’s important to embrace change and adapt to stay ahead of the competition.
What is Luxury Branding in 2023
Luxury branding is a marketing strategy that creates a difference between a luxury product and its competition. The difference can be in the form of quality, design, branding strategy, or others. Thus, helping brands stand out from their competitors. The definition of luxury branding is changing. In the past, it was associated with products that were exclusive and high-priced.
However, today, it’s associated with products that make intangible promises (e.g., quick response time or free after-sales services for one year) or offer superior customer experience, among others.
What Qualifies as A Luxury Product?
Products that have these three vital components- expensive, excellent, and exclusive can qualify as luxury products. As a result, any product whose quality matches its price tag qualifies to be a luxury product.
Below are some characteristics of a luxury product that makes it different from all other products.
Luxury products don’t follow the one-size-fits-all concept. Therefore, each luxury product is designed to match the likes and preferences of the user. For example, there are many premium bag brands that offer to add the initials of the customers on their bags.
Offer a Unique Experience
Luxury products offer an experience and not just a product. For the most part, luxury brands concentrate on little things that leave a remarkable impression in the customer’s mind. A few examples of it include how staff interacts with the customer during their purchase, how fast a product is delivered to the customer’s doorstep, and more.
Luxury products add value to the customer’s life. That is, they can enhance the customer’s lifestyle.
How Do Luxury Brands Create Demand for Their Products?
Luxury brands create demand for their product by focusing on customers’ desire to experience something exquisite and sophisticated.
Below are some areas that companies need to focus on to create demand for their luxury product in today’s time:
The key to creating a successful luxury brand depends on high-quality products. Premium materials, unique designs, and extraordinary technology can only be found in luxury products. Moreover, high-quality products help companies retain their customers.
Making Shopping a Pleasant Experience
Another way to create demand for luxury goods is by making the shopping experience pleasant. For instance, imagine a customer visiting a premium mobile phone showroom. When they visit the store, the concierge opens the door, the salesperson presents the products, a waiter serves drinks, and after the purchase, the products are well packed. All these things make the customer’s shopping experience pleasant.
Scarcity is one of Robert Cialdini’s (an author) six principles that brands can use to attract customers. Incidentally, luxury brands use scarcity to increase the demand for their products. Let’s take an example to understand how luxury brands use scarcity to increase demand for products.
Imagine that you dreamt of purchasing a luxurious scarf. You visit from one store to the other, from one brand to another, for a scarf, but you hear that the scarf is unavailable at all stores. Suddenly you see a shop where you get the scarf of your choice. You run to grab the product you have been searching for for a long time.
Luxury brands create a scarce scenario to increase the desirability of their products. The more unattainable something is, the more people will want it.
How To Build a Successful Luxury Brand?
Step 1: Find the Target Audience
The first step in building a luxury brand is to identify potential customers, people who are interested in purchasing your products. This step acts as a base for building a successful luxury branding strategy. It allows companies to determine who their customers are, how to communicate with them, and how to reach them effectively.
Narrowing down an audience niche helps to understand the competition. For instance, the two jewelry brands offer similar products in the same price range. Since both brands sell the same products at the same price range, they are expected to have a similar target audience. But what makes them unique? The unique design elements they offer in their respective products.
Step 2: Create a Unique Brand Identity
A company’s brand identity is defined as the visual and content choices they make to distinguish its products from the competitors. It is the face of a brand. Thus, after identifying their niche, luxury brands must develop an identity that syncs with their mission, values, and history.
Creating a strong brand identity helps develop a brand image that resonates with the target audience.
Step 3: Add a Symbolic Value To The Product
Adding a symbolic value to products makes audiences differentiate between premium products or services and those manufactured by cheaper merchandise. Let’s take, for example, a premium jewelry brand that associates romance with its products. A luxury bag manufacturer associates class and excellence with their brand, and more.
Each of these brands has a symbolic value that evokes a different feeling in their customers. Therefore, during luxury branding, organizations need to think about their product’s additional functional value and how they can communicate that with the audience.
Step 4: Build a Sense of Exclusivity
As mentioned earlier, one of the main components of luxury brands is exclusivity. So, when developing a luxury product, communicating with the audience is crucial for them to understand an exclusive product. This is the basis of luxury branding because exclusivity and luxury go hand in hand. But how can companies communicate that their product is exclusive? Companies can choose a marketing medium that communicates the feeling of availability or joining an exclusive club. They can use marketing strategies like influencer marketing to target the right audience and communicate their product or services.
Meanwhile, companies can also apply scarcity- the six principles of Robert Cialdini to evoke a sense of exclusivity. The more unattainable something is, the more people will want it.
Step 5: Create a Branding Strategy
Based on all the information about the customer, competition, and market, companies can develop a brand strategy that persuades audiences to purchase a product. Specifying things like brand mission and values, brand identity, branding short and long-term goals, competitor’s strategy, and brand promise.
Creating a branding strategy will help brands reach their target audience easily and effectively.
Step 6: Analyze the Results
The last step is to analyze results, compare feedback, and draw conclusions. Performing analysis helps companies understand details about which marketing avenue attracts customers, areas that need improvement, what kind of activities need more money, and the consumer behaviors of the target audience.
Learn Strategic Brand Management with Emeritus
Want to build successful brand strategies? Enroll in Emeritus’ sales and marketing courses. These learning programs teach participants how to build successful brands and acquire new customers. Joining these courses will skyrocket your career and open doors to exciting opportunities.