| LXFM 730, Marketing of Luxury Goods | Fall 2010 | Prof. Taylor Hastie | Rebecca Elena Glaser | Make it Mine – Customization as the Future of Luxury
1 “The things at Prada today are not well made, the fabrics are not as good, everything was much better in my time” Miuccia Prada
I.Purpose of Research
The changing landscape of the luxury industry challenges brands to find a new approach to reach out to their core costumers. Brands like Louis Vuitton, Gucci or Burberry are about to jeopardize their true customers and their image by overexposing themselves to a mass luxury clientele. Thus, a new approach must be found to bring back the feeling of true luxury, personal attention and to create a bond to their core customers. This paper’s purpose is to examine how luxury brands can adapt mass customization techniques in order to create a sustainable competitive advantage and bring back the notion of true luxury. Furthermore, it will be questioned if customization can harm a luxury brands image and status, taking into consideration the “anti-laws” of marketing, which propose to not pander to the customer’s wishes and to dominate the luxury client (Kapferer, Bastien, 2009, 64 f.). The goal is to come up with a conclusion that provides luxury brands with a direction of how customization could be implemented and what benefits or challenges may come with it.
From Class to Mass
Looking at today’s luxury fashion market one does not have to be an expert like Miuccia Prada to see things have changed. While almost every established luxury brand started out as a small business with a tradition of unique craftsmanship, utmost quality, best service and limited quantities, those attributes are not necessarily true for many of today’s still existing luxury brands. Luxury brands have gone mass. This is often referred to as “the democratization of luxury”, which means
2 that luxury brands have opened themselves for a mass market. While back in the day luxury brands were the domain of the rich only available in selected stores or brand owned boutiques, brands today want to reach a wider customer range. According to Thomas, aggressive growth was not a priority until the eighties (Thomas, 2007, 238). However, growth quickly became the main objective and store expansions have experienced a boom in Japan, as well as the USA. The middle market customer was born. By expanding their assortment lines in department stores with lower-priced items, such as perfumes, small leather goods and cold-weather items, luxury brands became attainable. No longer were people intimidated to walk into a luxury boutique, they often became tourist attractions in capital cities. Luxury brands were intrigued by the sudden success. It just took a few logo-covered products, which were the middle class’s favorite item and sales and profits grew steadily. However, the rapid expansion also created one of the luxury brands biggest problems today. As banking analysts conclude, the greatest problem that luxury brands have created for themselves by going mass is financial instability. “Before its global expansion to the middle market, luxury was immune to economic cycles. The companies were small and catered to a limited old-money clientele […] who shopped consistently and bought well. Luxury was a successful niche business. But when luxury changed its target audience to the cost-conscious middle market that shops when flush but stops cold when times get tough, it made itself dangerously vulnerable to recessions” (Thomas, 2007, 264). Another disadvantage from overexposing themselves is the loss of the traditional old money clientele, since their logos could be seen everywhere. Many brands jeopardized their exclusivity status along with their “well-crafted” message along the chase for higher profits, in order to keep the shareholders happy. The dilution of the luxury status peaked with the
3 introduction of e-commerce and outlet stores. In...
References: M. Edouard (2006), Revamping Luxury: Mass Customization Applied to the Luxury Goods Market. MBA Thesis, Massachusetts Institute of Technology. N. Franke, P. Keinz, & C. J. Steger (2009), Testing the Value of Customization: When Do Customers Really Prefer Products Tailored to Their Preferences?, Journal of Marketing Vol. 73 (Sept. 2009),103-121. J. Holusha (1996), Making the Shoe Fit, Perfectly; Companies Use Technology to Sell to a Market of One, The New York Times. J.N. Kapferer, V. Bastien (2009), The Luxury Strategy – Break the Rules of Marketing to Build Luxury Brands. London: Kogan Page. P. Zipkin (2001), The Limits of Mass Customization, MIT Sloan Management Review, Spring2001, Vol. 42 Issue 3, p81, 7p.
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