The Anti-Laws Of Luxury Marketing #23

Jean-Noel KapfererDecember 4, 20122 min

#23 Do not look for cost reduction.

Creating value is the motto in luxury marketing. But this value creation must not come from cost reduction. It must come from added value. Being creative is not enough to sustain a systematic price increase – which is the key issue in luxury. For example, brands need lots of creativity in a low-cost industry to reduce costs and invent new business models, sell at a significant lower price than competition, and be profitable – but this is the job of the CEO. Luxury brands 
need lots of creativity in the fashion industry to keep selling at the same 
price point – but this is the job of the designer. In luxury, you must install 
the whole company in the creating value process: luxury value creation does not rely only on the talent of a creator, but on each employee of the company:

• Production people: lots of new ideas originate on the workshop floor. This is the reason why a luxury company must make its products and not relocate production – creation teams live in symbiosis with artisans.

• Sales staff: new ideas come from customers – not by pandering to their wishes, but by understanding their dream. This is why you must have your own sales staff (they are fully part of the company) 
and why they must be local – the customer must be able to talk in 
his or her language with sales people sharing his or her culture.

• And, of course, top managers must lead the value creation process.

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.

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