20 Do not hire management consultants
Management Consultants sell ‘do like others’. This is called
benchmarking or also ‘best
practices’. Using management consultants, formed in global
MBAs to the universals of
management, in this way would erode the specific
characteristics of a luxury
brand – and its ability to maintain its pricing
power to this specificity.
Let’s take a dramatic example: any non-luxury
should be obsessed by reducing costs. This is why
industrial platforms strategies, sharing all back-office costs, are so widely
spread. By the same token,
relocations are nothing but normal for a mass brand
and even a premium or
super-premium one. When one buys an Audi every single
dollar paid is to
bring a return on investment: you pay for what you get (more
that is all). Now, should the same
rules apply to a brand considered as luxury such as Jaguar?
Once bought by
Ford, a very well-managed traditional company, soon the cost
were hired, bringing with them methods which eroded the dream. Why
would a reader of Forbes or Fortune still want to buy a Jaguar
as a luxury
car when reading in his journal how much Ford was doing an
by sharing the Ford Mondeo structure and parts with some Jaguar
This is how the Ford Company killed the dream and could not have Jaguar
its luxury status – and had to sell it to the Indian company Tata. And Tata is
now returning to the luxury strategy for Jaguar, to turn around
By bringing methods from any normal economic sector, management consultants instill the poison of averaging everything. Luxury pricing power is
not based on cost reduction but on added value and feelings of uniqueness.
Certainly Hermès has to buy the crocodile skins at
the best price it can.
But, in any case, it will never buy anything but the
A similar risk is taken when luxury companies hire advertising
methods coming from Fast Moving Consumer Goods sectors. In FMCG, the marketing of demand is the rule.
All the concepts, methods, skills and frameworks are based on the idea that one
should be led by consumers’ wishes. How many advertising agencies’ recommendations
to luxury companies start with a chapter called ‘Understanding your target’, a
deep analysis of the motivations and declara
tions of the so-called target.
The natural consequence is to think of the
luxury brand as a brand trying to
please these consumers, answering their
needs, proposing consumer benefits,
having a brand positioning strategy.
little the same methods used by Nivea
or Olay are extended to Lancôme. If you refer back to anti-law 6, you
understand why this is a huge mistake. Marketing of demand fits when the goal
is to reduce pain and alleviate problems. One starts by asking consumers what
is their problem – for instance: there is too much sugar in a regular Coke, so
people fear becoming obese. The answer is Diet Coke. Luxury works just the
opposite way: it aims at creating dreams. Do you start by asking someone what
his or her dream is if you want to invent the dreams of the elite? Of course
Contributed to Branding Strategy Insider by: JN Kapferer, excerpted from his book, The Luxury Strategy with permission from Kogan Page publishing.
See all of the Anti-laws of Luxury Marketing here.
Sponsored By: The Brand Positioning Workshop
FREE Publications And Resources For Marketers