Luxury Brand is a brand name good that is sold on the open market. Most luxury brands are extremely expensive and the consumer most pays for name recognition and not product quality
The modern understanding of a brand is consumer and identity oriented. Accordingly, brands are regarded as images in the minds of consumers and other target groups (Esch 2010, p. 22), which are designed by companies to identify their products (Kotler et al. 2009, p. 425). Luxury brands are highly associated with their core products (Kapferer 2008, p. 193). This is reflected by the larger part of the existing definitions of luxury brands, which refer to specific associations about product characteristics (e.g. Meffert and Lasslop 2003, p. 6). The constitutive characteristics of luxury products therefore correspond largely with those of luxury brands, which leads to the following definition: Luxury brands are regarded as images in the minds of consumers that comprise associations about a high level of price, quality, aesthetics, rarity, extraordinariness and a high degree of non-functional associations. There are explanations of these principles:
Price: The brand offers products which belong to the most expensive products of their category. Quality: The brand offers everlasting top-of-the-line products, which won't be disposed of even after long utilization or defect, but rather repaired and which often even gain in value over time. Aesthetics: The brand behaves like a chic and vain dandy, who would never leave the house in less than perfect style. Whenever and wherever the brand is seen, it embodies a world of beauty and elegance. Rarity: In contrast to mass-market brands, the brand needs to limit its production and tries not to disclose its (high) sales numbers. The brand plays hard to get and is not available at all times or places. Extraordinariness: The brand has a mind and style of its own and its products offer a "kick" and surprise with the "expected unexpected." Symbolism: The brand stands for "the best from the best for the best"; its charisma fills the room, and regardless of whether it is of a conspicuous or understated nature, deep inside, it is swollen with pride. However, luxury products have more than necessary and ordinary characteristics compared to other products of their category. Much research suggests that, the quality of luxury brands notwithstanding, consumers typically consume such brands in the service of numerous important social goals. Functional theories of attitudes (Katz 1960) suggest that attitudes serve a number of psychological functions, such as helping people organize and structure their environment (the knowledge function) and maintain their self-esteem (the ego defense function). Attitudes also serve important social functions such as allowing self-expression (a value-expressive function) and facilitating self-presentation (a social-adjustive function). Attitudes serving a social-adjustive function (i.e., social adjustive attitudes) help people maintain relationships (DeBono 1987). Vertu is good proof for this theory: It is a British manufacturer and retailer of luxury mobile phones established by Finnish mobile-phone manufacturer Nokia as a wholly owned subsidiary in 1998. In October 2012 Nokia sold Vertu to private equity group EQT VI. Vertu has sold about 370,000 handsets in the past 10 years, about as many phones as Apple sells every day, According to The Economist, the concept was to market phones explicitly as fashion accessories, with the idea "IF YOU can spend $20,000 on a watch, why not on a mobile phone?" Vertu has created a niche for high-priced handsets that are desired for the name and the quality of the manufacturing. Some models sell for tens of thousands of pounds. In 2006 the most expensive model it had ever made was the Signature Cobra, at £213,000 ($310,000); the most expensive 2006 regular model was the Signature Diamond at £55,000 ($83,000). It was designed with gold and...
Bibliography: Kotler et al. 2009, Marketing Management Pearson
erweiterte Aufl., Vahlen Verlag, München.
Jean-Noel Kapferer The New Strategic Brand Management, Kogan Page Publishers, 2008
Heribert Meffert, Ingo Lasslop, Luxusmarkenstrategie, Wiss. Ges. für Marketing und Unternehmensführung, 2003
Katz, Daniel (1960), “The Functional Approach to the Study of attitudes”, Public Opinion
DeBono, Kenneth G
Heine, K. (2012) Luxury Brand Management, Technische Universität Berlin, ISSN: 2193-1208, www.luxury-brand-management.com.
Please join StudyMode to read the full document