Saturday, June 27, 2015

Of counterfeits and the democratization of luxury

When my friend Raghavendra flaunted to me his brand new all gold Rolex I was taken aback for a minute. He comes from a modest background and the watch costs over 20 lakhs INR. This particular rose gold Day Date model is something I have always aspired to buy. Some day, I had always consoled myself. It has exquisite craftsmanship, the right mix of luxe and panache, and the patented hand-crafted Rolex movement. I took the watch very carefully and started checking out the dial, old habit. I realized the unique identification number that is etched in every Rolex, was missing. I knew at once it was a fake, rather a first copy. The quality of steel and its heaviness was as good as real. The gold was plated and not solid. The movements are re-created by some craftsman in a remote Chinese or South East Asian town and not in Switzerland. But a great counterfeit, I must say as it is usually quite difficult to escape my eyes at first glance.
So I asked Raghavendra how much did you shell out? He said 10,000 INR. I told him great. He had purchased it from a website selling luxury brands at a crazy discount, like many others which are doing a roaring business across the globe selling counterfeits. I reluctantly told him that it is a first copy, but a good counterfeit. He said, “Of course I know that. I just wanted you to see how good it was. See, I don’t know whether I will ever be able to buy the real one. But this I can experience today. I am happy. Unlike people like you who are experts, how can anyone say that it is a fake? It is automatic, looks the same, I am happy that I won’t have to wait a lifetime.”
His parting words made me think. Is it worth the wait for people with limited means to get something they aspire for but can’t afford? Are counterfeits helping democratize luxury?
Snob value is an integral part of luxury brands. In the core they are supposed to be exclusive and not available for all. Democratization will kill a luxury brand. This exclusivity is why a premium is charged by these luxury brands. This exclusivity is usually a legacy that you are made a part of. The dazzle can be replicated by a counterfeit and so is the label, but you can’t replicate the exclusivity that the original can offer. The gold plated watch may shine more than the solid gold one, but this can’t give you the legacy of a Rolex or a Patek or a Breguet.
I think the luxury brands in order to be more inclusive and to tap the Great Indian Middle Class have made a mistake of focusing on masstige. The biggest folly with masstige is that the focus is only on the label, the monogram. And that is why even a key ring with just LV will be very coveted as you think you have become a part of that legacy.
A world-class brand attains a certain stature not only for marketing or branding. We need to delve deeper and understand what makes it so sought after in the first place -- it is the exquisite craftsmanship, the intense labour hours given by masters, the elegant design, the patented movements, the finishing and the hand crafted creations. These can’t be replicated. These can’t be cheap, these must have a premium, these must be exclusive, just like all good things in life.
Luxury is not skin deep.
So luxury brands need to move beyond just focusing on the labels and popularize how these labels have become what they are. It is the responsibility of these luxury brands to make people aware of the difference between a Rolex-patented movement and the one my friend is flaunting. It is the responsibility of these brands to share with its clients, both current and potential, why they are exclusive and how futile it is to buy a fake, a counterfeit or a first copy.
Although it might look that the world of counterfeits are democratizing luxury but in reality it is just taking you further away from the real world of elegance, luxe and exclusivity. Luxury brands surely have a role cut out for them in achieving this desired outcome.
Let your quest for luxury continue.

Monday, June 01, 2015

A guide to strategic luxury brand marketing

 horse, a horse! My kingdom for a horse!
Well, that’s luxury marketing opportunity the bard William Shakespeare has spelt out for you. A game of pureplay demand of luxe-addiction and constrained supply in the name of limited-edition or handcrafted-edition.
The first step is in understanding the very basic difference between marketing of luxury brands vis-?-vis non-luxury.
A marketer needs to understand that straightforward cost-effectiveness card is off the table. You have to sell the dazzle card, not the value-for-money card (not upfront, it will come in a very different format much later in the play).
So luxe is your USP.
The second step is to sell the story – a tale of aspiration, a tale that you will want the buyer to crave to be a part of. This story will justify to the buyer the premium you are charging. This needs to be a story of legacy, of historical stature and of aspiration.
The third step is n convincing the client that this is the only chance, the only window of opportunity to become part of that legacy. The object, be it a watch (say a Rolex) or a pen (Montblanc) or a trunk (Louis Vuitton) or a car (Rolls Royce), will make the client a part of that proud history. So the strategy is that even after listening to the history the client still is not convinced, convince him/her that he/she is making the biggest mistake of his life as this is an opportunity of a lifetime.
The key(words) that usually opens the doors of the minds of the clients are – handcrafted, limited edition, special edition, exclusive, hand-picked, exquisite craftsmanship in some remote hamlet, say in Venice.
The mindset of a typical Indian buyer seldom goes beyond “value-for-money”. So at some level you have to address that. But never in the first step, but only after the story is sold. The premium charged is complete value for money because the legacy is priceless. The moment the client is sold on the value proposition the deal is sealed.
Now let us look into the steps that need to be taken for strategic marketing of news brands which want to make a mark in the luxury space.
First, define the brand aspiration, the strategic objective. For example, 10 years down the line you want to become the most-sought after watch brand among men in the age-group of 30-45 years at a certain price-point in China. So the objective needs to be very specific and spelt out – period, geography, target audience, price point, etc.
Second, weave a story, a story of legacy, of exquisite craftsmanship, a story that willjustify your raison d’erte in the luxury brand space.
The third step is to understand and take stock of the initial conditions: What is the current positioning, which is the current target group, what is the current price point, which is the geography currently present in, and what’s the position vis-a-vis competition in minutest details.
This will give you clarity of the distance you have to traverse to reach your strategic objective.
The fourth step is to define is every minutest details the final conditions. This will flesh out the brand aspiration into specific targets. This will capture all the conditions that will enable attaining the strategic objective. Say, elimination of current market leader in that geography, dominating a certain geography, top of the mind recall among men in a specific age bracket, etc. This will help flesh out the final results that you want to achieve for reaching the SO.
The fifth and most crucial step is to formulate action points which will help map the starting point to the end points. These action points will show how to bridge the gap between the initial “have nots” and the final “haves”. This mapping will tell you how over the years, one year at a time, you will slowly reach your objective of brand aspiration. Study the model of competition and understand the modalities as to how marketing needs to be done differently, what is the selling point, what is the story, etc.
These action points are basically strategic marketing activities put together in the marketing plan.
Always remember, the story is priceless.
Let your quest for luxury continue.