It has been a few weeks since we last had a guest post on our site. For this reason, it was a pleasure for us to receive the following article from Angelo Ponzi, who is Director at C3Centricity‘s partner PhaseOne. His comments on the luxury industry and how to communicate to potential clients is illustrated with examples from the watch industry.
As a marketer, you know that different audience segments have different needs and motivations for making purchase decisions. And, regardless of the amount of money your customer has in the bank, the decision process leading up to the purchase of an Omega is longer than the decision to purchase a Timex.
Br ands selling to the affluent know that their marketing efforts need to be highly persuasive and that they need to differentiate themselves with not only design, quality and craftsmanship, but also price.
Examining a slice of the luxury market — watches — a recent article in WatchTime identified 60 br ands that spent more than $1 million on ads for their watch br ands in 2012, according to Kantar Media. Rolex (often considered the optimal sign of luxury) topped the list with more than $52 million spent on advertising. And, according to Kantar Media, watch br ands spent more on U.S. advertising in 2012 than ever before.
The multiple reasons for luxury br and purchasing
You and I know, however, that media spend doesn’t necessarily translate to sales or a strong positioning of your br and among consumers the way you intended. Marketing of a luxury br and is also different than marketing mass br ands. Luxury br ands need to convince consumers that their br and is worth the extra money. Consumers of luxury br ands tend to buy for a multitude of reasons, which can include perception and self-worth. The desire to own luxury br ands could be based on the individual consumer’s need for high quality, exclusivity, craftsmanship, precision, innovation, recognition, status or even envy among their peers. Sticking with the watch category as a point of discussion, while there were huge advertising investments made by br ands to help them tell their stories, how does a luxury br and market itself differently from fashion br ands? How do these br ands in different watch segments approach their communications so their customers identify with their preferred br and and see that it is a reflection of who they are or hope to be? Based on recent research conducted by PhaseOne among 16 high-end/luxury watch br ands across North America, Europe and Asia, we found that br ands tended to cluster into three segments, both creatively and by price: Fashion Br ands, Personal Lifestyle Br ands, and Luxury Indulgence.
The three clusters of luxury watch communications
Fashion Br ands (e.g., Swatch, Guess) presented themselves through an expression of trends and style. In their advertising, Fashion Br ands highlighted the aesthetics of the watch and its role as an accessory. For br ands that clustered in Personal Lifestyle Br ands (e.g., Raymond Weil, Tissot), they tended to add more specific personal or lifestyle interests in their advertising, such as music and travel, as a way to build a connection with the intended audience. And the communications by br ands that clustered into the Luxury Indulgence segment (e.g., Rolex, Patek Philippe) tended to focus on quality craftsmanship and design to imply exclusive status and indulgency in opulent luxury. What is of most interest is that a br and’s communication alone does not carve out the niche in which it clustered. After all, if you take a Fashion br and and produce an ad that contains all of the visual and descriptor cues found in br ands in the Luxury Indulgence segment, it does not make that br and a luxury br and. What the research confirmed is that price also plays a significant role and that not only did these 16 watch br ands cluster based on their br and attributes and personality, but on price as well.
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The essential questions for positioning
Therefore, regardless of if you’re a Luxury, Lifestyle or Fashion br and looking to reinforce your current positioning or to move up or down into a new segment, you need to make sure you ask yourselves the right questions prior to making a significant investment. Consider these as a starter:
#1 Determine the cluster in which you currently compete or want to compete.
#2. Conduct an analysis of each competitor’s communication in order to determine how they use visuals and/or text to reinforce their position. What “cluster” cues are they using to reinforce their positioning?
#3. Determine what br and attributes you and your competitors currently own.
#4. Determine the br and attributes you would like to own.
#5. Develop a br and positioning by breaking down the rational and emotional aspects of your br and that you would like your consumer to reflect:
i. What does the product do for me?
ii. How would I describe the product?
i. How the br and makes me look?
ii. How does the br and make me feel?
#6. Test your concepts before rolling out your creative campaign to minimise your risk and ensure your messages are persuasive and clearly resonate with your target audience.
Keep in mind that br ands in a cluttered market struggle the most to clearly differentiate themselves, therefore consumers tend to select br ands they are familiar with or believe are the leaders. Having a significant point of differentiation, especially in the luxury category, is key to becoming a category leader. To see the findings of PhaseOne’s study on luxury advertising, click to download the whitepaper, “Luxury Advertising: Is now the time to break the mould?”
If you would like some more ideas on how to improve your own communications, check out our website: https://www.c3centricity.com/home/engage
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