THE LUXURY STRATEGYTHE LUXURY STRATEGYTHE LUXURY STRATEGYTHE LUXURY STRATEGY
Break the rules of marketingBreak the rules o...
PlanPlan
Copyright JN KapfererCopyright JN Kapferer
•• The luxury business growthThe luxury business growth•• The luxury b...
Luxury market is growingLuxury market is growing
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
Its highest perspective ...
Why does this market grow ?Why does this market grow ?
There are more very rich peopleThere are more very rich peopleThere...
The gap grows betweenThe gap grows between
extraordinary and ordinary peopleextraordinary and ordinary people
©Jean-Noël K...
Why does this market grow ?Why does this market grow ?
Copyright JN KapfererCopyright JN Kapferer
The democratization of l...
Luxury is correlated to GDP growthLuxury is correlated to GDP growthLuxury is correlated to GDP growthLuxury is correlated...
Why does this market grow ?Why does this market grow ?
Copyright JN KapfererCopyright JN Kapferer
Because the mass wants t...
Why does this market grow ?Why does this market grow ?
Copyright JN KapfererCopyright JN Kapferer
Because people like luxu...
People like luxuryPeople like luxury
Copyright JN KapfererCopyright JN Kapferer
1 t 10 IPSOS WLT
China 8.2China 8.2 HKHK 6...
Why does this market grow ?Why does this market grow ?
Copyright JN KapfererCopyright JN Kapferer
Why people like luxuryWh...
Luxury is in dangerLuxury is in danger
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
The middle class growth in manyThe...
Confusion in the marketConfusion in the market
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
Main Street brands imitate...
Unclear frontiersUnclear frontiers
©Jean-Noël Kapferer HEC Paris
Unclear frontiersUnclear frontiers
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
Chanel’s worldly known designerChanel’...
Unclear frontiersUnclear frontiers
©Jean-Noël Kapferer HEC Paris
Unclear frontiersUnclear frontiersUnclear frontiersUnclear frontiers
©Jean-Noël Kapferer HEC Paris
Unclear frontiersUnclear frontiers
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
ZARA is a low cost producer butZARA is...
Confusion in the marketConfusion in the market
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
A lot of new terms come ou...
New terms add confusionNew terms add confusionNew terms add confusionNew terms add confusion
©Jean-Noël Kapferer HEC Paris
Confusion:luxury or premium?Confusion:luxury or premium?
©Jean-Noël Kapferer HEC Paris
Key source of confusionKey source of confusionyy
LuxuryLuxury
Price
Premium
Brand
Mass Qualities
©Jean-Noël Kapferer HEC P...
L i t “ f i ”L i t “ f i ”Luxury is not “more of premium”Luxury is not “more of premium”
Luxury
Price
Premium
Brand
Mass Q...
L i ifiL i ifiLuxury is specificLuxury is specific
Luxury is not more of premium , orLuxury is not more of premium , or
be...
A turning pointA turning point
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
Today, all these porous frontiersToday, al...
A turning pointA turning point
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
Stripes and stars are backStripes and star...
Status for everyday lifeStatus for everyday life
©Jean-Noël Kapferer HEC Paris
What is luxury after all ?What is luxury after all ?
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
©Jean-Noël Kapferer ...
This is surely not luxuryThis is surely not luxury
©Jean-Noël Kapferer HEC Paris
This is not luxury eitherThis is not luxury either
©Jean-Noël Kapferer HEC Paris
Is this luxury ?Is this luxury ?
©Jean-Noël Kapferer HEC Paris
Are they all luxury brands ?Are they all luxury brands ?
©Jean-Noël Kapferer HEC Paris
What is luxury after all ?What is luxury after all ?
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
No commonly agreed d...
What definition for luxury?What definition for luxury?
What is luxury ?What is luxury ?
Traditionally the word luxuryTradi...
What definition for luxury?What definition for luxury?
What is luxury ?What is luxury ?What is luxury ?What is luxury ?
««...
What is luxury after all ?What is luxury after all ?
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
What is luxury ?What...
What is luxury after all ?What is luxury after all ?
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
Need to distinguishN...
What is luxury after all ?What is luxury after all ?
Ab l t lAb l t l«« Absolute luxuryAbsolute luxury »: a consensus»: a ...
©Jean-Noël Kapferer HEC Paris
©Jean-Noël Kapferer HEC Paris
©Jean-Noël Kapferer HEC Paris
What is luxury after all ?What is luxury after all ?
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
«« A LuxuryA Luxury ...
“ A Luxury “ is relative“ A Luxury “ is relativeA Luxury is relativeA Luxury is relative
In India « a luxury » is drinkabl...
What is luxury after all ?What is luxury after all ?
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
«« My LuxuryMy Luxur...
Understanding luxuryUnderstanding luxury
Copyright JN KapfererCopyright JN Kapferer
HOW ECONOMISTS DEFINE LUXURYHOW ECONOM...
Understanding luxuryUnderstanding luxury
Copyright JN KapfererCopyright JN Kapferer
HOW ECONOMISTS DEFINE LUXURYHOW ECONOM...
Understanding luxuryUnderstanding luxury
Copyright JN KapfererCopyright JN Kapferer
HOW ECONOMISTS DEFINE LUXURYHOW ECONOM...
Understanding luxuryUnderstanding luxury
Copyright JN KapfererCopyright JN Kapferer
HOW ECONOMISTS DEFINE LUXURYHOW ECONOM...
Understanding luxuryUnderstanding luxury
Copyright JN KapfererCopyright JN Kapferer
HOW ECONOMISTS DEFINE LUXURYHOW ECONOM...
Go beyond functionGo beyond function
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
art for art ?art for art ?art for ar...
Luxury is close to artLuxury is close to artLuxury is close to artLuxury is close to art
©Jean-Noël Kapferer HEC Paris
Luxury cultivates the artsLuxury cultivates the arts
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
©Jean-Noël Kapferer ...
Understanding luxuryUnderstanding luxury
copy right J.N. Kapferercopy right J.N. Kapferer
What does Etymology say aboutWha...
Understanding luxuryUnderstanding luxury
copy right J.N. Kapferercopy right J.N. Kapferer
What does Etymology say aboutWha...
What chinese etymology saysWhat chinese etymology says
Big people / Lot of peopleBig people / Lot of people
©Jean-Noël Kap...
What indian etymology saysWhat indian etymology says
sanskrit : vitasarsanskrit : vitasarsanskrit : vitasarsanskrit : vita...
Understanding luxuryUnderstanding luxury
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
What History saysWhat History sa...
Understanding luxuryUnderstanding luxury
What History saysWhat History saysWhat History saysWhat History says
By making it...
Understanding luxuryUnderstanding luxury
What is new today ?What is new today ?What is new today ?What is new today ?
Thi ...
Why luxury ?Why luxury ?
COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER
A clear marker of a social gapA clear marker of ...
RECREATING THE GAPRECREATING THE GAP
P i i l f l tP i i l f l tPrinciples of luxury managementPrinciples of luxury managem...
Luxury : reLuxury : re--create the gapcreate the gapLuxury : reLuxury : re create the gapcreate the gap
©Jean-Noël Kapfere...
Luxury fashion premiumLuxury fashion premiumLuxury , fashion, premiumLuxury , fashion, premium
LuxuryLuxuryLuxuryLuxury
So...
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The Luxury Strategy. Break the Rules of Marketing to Build Luxury Brands

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The Luxury Strategy is the definitive work on the essence of a luxury brand strategy. It puts an end to the confusion around the term, and explains the fundamental differences between 'premium', 'fashion', and 'luxury' strategies. Based on an analysis of the social functions of luxury, of worldwide best practices and on first hand direct experience, it sets out the rules for success, and turns established marketing rules upside down. The Luxury Strategy provides the first rigorous blueprint for the effective management of luxury brands and companies at the highest level, including human resources and financial management. It also unveils the original methods that were used to transform small family businesses such as Ferrari, Cartier, Chanel, Gucci, and Ralph Lauren into profitable global brands.

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The Luxury Strategy. Break the Rules of Marketing to Build Luxury Brands

  1. 1. THE LUXURY STRATEGYTHE LUXURY STRATEGYTHE LUXURY STRATEGYTHE LUXURY STRATEGY Break the rules of marketingBreak the rules of marketing to build luxury brandsto build luxury brands Prof JeanProf Jean--Noël KAPFERERNoël KAPFERER HEC P iHEC P iHEC ParisHEC Paris April 19 , 2010April 19 , 2010 ©Jean-Noël Kapferer HEC Paris p ,p ,
  2. 2. PlanPlan Copyright JN KapfererCopyright JN Kapferer •• The luxury business growthThe luxury business growth•• The luxury business growthThe luxury business growth •• A growing market confusionA growing market confusion•• A growing market confusionA growing market confusion •• The question of luxury definitionThe question of luxury definition•• The question of luxury definitionThe question of luxury definition U d t di th ifi lU d t di th ifi l•• Understanding the specific rulesUnderstanding the specific rules of luxury managementof luxury managementof luxury managementof luxury management ©Jean-Noël Kapferer HEC Paris
  3. 3. Luxury market is growingLuxury market is growing COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER Its highest perspective is in theIts highest perspective is in theIts highest perspective is in theIts highest perspective is in the BRIC countriesBRIC countries ©Jean-Noël Kapferer HEC Paris
  4. 4. Why does this market grow ?Why does this market grow ? There are more very rich peopleThere are more very rich peopleThere are more very rich peopleThere are more very rich people --Oct. 2009 : 130 Chinese billionairesOct. 2009 : 130 Chinese billionaires $$$$ --Forbes Feb 2010 : 1000 billionnairesForbes Feb 2010 : 1000 billionnaires --The CLEWI index goes up , muchThe CLEWI index goes up , muchg pg p more than the regular price indexmore than the regular price index ©Jean-Noël Kapferer HEC Paris
  5. 5. The gap grows betweenThe gap grows between extraordinary and ordinary peopleextraordinary and ordinary people ©Jean-Noël Kapferer HEC Paris
  6. 6. Why does this market grow ?Why does this market grow ? Copyright JN KapfererCopyright JN Kapferer The democratization of luxuryThe democratization of luxury -- economic growth : middle class feelseconomic growth : middle class feels optimistic , is richer and wants to trade upoptimistic , is richer and wants to trade upp , pp , p -- women work and marry laterwomen work and marry later --« you are what you wear »« you are what you wear » --access pleasure through shoppingaccess pleasure through shopping mallsmalls ©Jean-Noël Kapferer HEC Paris
  7. 7. Luxury is correlated to GDP growthLuxury is correlated to GDP growthLuxury is correlated to GDP growthLuxury is correlated to GDP growth ©Jean-Noël Kapferer HEC Paris
  8. 8. Why does this market grow ?Why does this market grow ? Copyright JN KapfererCopyright JN Kapferer Because the mass wants to own aBecause the mass wants to own aBecause the mass wants to own aBecause the mass wants to own a bit of what symbolizes the betterbit of what symbolizes the better life of the happy fewlife of the happy few -- economic growth makes you go beyondeconomic growth makes you go beyond needs and liberates your aspirationsneeds and liberates your aspirationsy py p -- Luxury is consumption at its best : itLuxury is consumption at its best : it delivers rare intense emotions ( love ,delivers rare intense emotions ( love , power, pleasure, pride, reward, social sign)power, pleasure, pride, reward, social sign) ©Jean-Noël Kapferer HEC Paris p , p , p , , g )p , p , p , , g )
  9. 9. Why does this market grow ?Why does this market grow ? Copyright JN KapfererCopyright JN Kapferer Because people like luxuryBecause people like luxuryBecause people like luxuryBecause people like luxury ©Jean-Noël Kapferer HEC Paris
  10. 10. People like luxuryPeople like luxury Copyright JN KapfererCopyright JN Kapferer 1 t 10 IPSOS WLT China 8.2China 8.2 HKHK 6.36.3 1 to 10 ; source IPSOS WLT China 8.2China 8.2 HKHK 6.36.3 Mexico 8 0Mexico 8 0 RussiaRussia 6 16 1Mexico 8.0Mexico 8.0 RussiaRussia 6.16.1 India 7 3India 7 3 Italy 6 1Italy 6 1India 7.3India 7.3 Italy 6.1Italy 6.1 UK 7 3UK 7 3 Germ 6 1Germ 6 1UK 7.3UK 7.3 Germ 6.1Germ 6.1 USA 6 8 F 5 7USA 6 8 F 5 7USA 6.8 France 5.7USA 6.8 France 5.7 K 6 4K 6 4 J 5 6J 5 6 ©Jean-Noël Kapferer HEC Paris Korea 6.4Korea 6.4 Japan 5.6Japan 5.6
  11. 11. Why does this market grow ?Why does this market grow ? Copyright JN KapfererCopyright JN Kapferer Why people like luxuryWhy people like luxuryWhy people like luxuryWhy people like luxury --It elevates themIt elevates them --It gives them pleasure, beauty ,style in lifeIt gives them pleasure, beauty ,style in life --It gives them products with meaning , withIt gives them products with meaning , with high quality out of the ordinaryhigh quality out of the ordinaryhigh quality, out of the ordinary ,high quality, out of the ordinary , --With prestigious brands, known as visasWith prestigious brands, known as visas of social distinction.of social distinction. Saving the face becoming a personSaving the face becoming a person ©Jean-Noël Kapferer HEC Paris --Saving the face , becoming a personSaving the face , becoming a person
  12. 12. Luxury is in dangerLuxury is in danger COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER The middle class growth in manyThe middle class growth in manyThe middle class growth in manyThe middle class growth in many countries is a business opportunitycountries is a business opportunity for luxury andfor luxury and also a great dangeralso a great danger To capture this huge demand massTo capture this huge demand massTo capture this huge demand , massTo capture this huge demand , mass brands imitate luxury , mimick its codesbrands imitate luxury , mimick its codes How will luxury show its difference ,andHow will luxury show its difference ,and ©Jean-Noël Kapferer HEC Paris avoid running too after volume ?avoid running too after volume ?
  13. 13. Confusion in the marketConfusion in the market COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER Main Street brands imitate HighMain Street brands imitate HighMain Street brands imitate HighMain Street brands imitate High Street brands , creating confusionStreet brands , creating confusion between luxury and non luxurybetween luxury and non luxury Today many mainstream brands useToday many mainstream brands useToday , many mainstream brands useToday , many mainstream brands use the codes of luxury (small series , topthe codes of luxury (small series , top models ) : frontiers seem porousmodels ) : frontiers seem porous ©Jean-Noël Kapferer HEC Paris
  14. 14. Unclear frontiersUnclear frontiers ©Jean-Noël Kapferer HEC Paris
  15. 15. Unclear frontiersUnclear frontiers COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER Chanel’s worldly known designerChanel’s worldly known designerChanel s worldly known designerChanel s worldly known designer Karl Lagerfeld partners with H&MKarl Lagerfeld partners with H&M ©Jean-Noël Kapferer HEC Paris
  16. 16. Unclear frontiersUnclear frontiers ©Jean-Noël Kapferer HEC Paris
  17. 17. Unclear frontiersUnclear frontiersUnclear frontiersUnclear frontiers ©Jean-Noël Kapferer HEC Paris
  18. 18. Unclear frontiersUnclear frontiers COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER ZARA is a low cost producer butZARA is a low cost producer butZARA is a low cost producer butZARA is a low cost producer but its stores do not look low costits stores do not look low cost ©Jean-Noël Kapferer HEC Paris
  19. 19. Confusion in the marketConfusion in the market COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER A lot of new terms come out everyA lot of new terms come out everyA lot of new terms come out everyA lot of new terms come out every day adding to the confusionday adding to the confusion --new luxurynew luxury --mass prestigemass prestige --mass luxurymass luxury --trading uptrading up ©Jean-Noël Kapferer HEC Paris --premiumizationpremiumization
  20. 20. New terms add confusionNew terms add confusionNew terms add confusionNew terms add confusion ©Jean-Noël Kapferer HEC Paris
  21. 21. Confusion:luxury or premium?Confusion:luxury or premium? ©Jean-Noël Kapferer HEC Paris
  22. 22. Key source of confusionKey source of confusionyy LuxuryLuxury Price Premium Brand Mass Qualities ©Jean-Noël Kapferer HEC Paris
  23. 23. L i t “ f i ”L i t “ f i ”Luxury is not “more of premium”Luxury is not “more of premium” Luxury Price Premium Brand Mass Qualities ©Jean-Noël Kapferer HEC Paris
  24. 24. L i ifiL i ifiLuxury is specificLuxury is specific Luxury is not more of premium , orLuxury is not more of premium , or beyond premium or more expensivebeyond premium or more expensivey p py p p than premium : it is elsewhere ,than premium : it is elsewhere , Luxury is Janus: two indissociableLuxury is Janus: two indissociable facesfacesfacesfaces –– AA sociological facesociological face : it represents ,and: it represents ,and bli l i t i l t tifi tibli l i t i l t tifi tipublicly incarnates social stratificationpublicly incarnates social stratification –– AA psychological facepsychological face : giving oneself: giving oneself aa l d d f til d d f ti ©Jean-Noël Kapferer HEC Paris pleasure and dream of exceptionpleasure and dream of exception
  25. 25. A turning pointA turning point COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER Today, all these porous frontiersToday, all these porous frontiersToday, all these porous frontiersToday, all these porous frontiers recreaterecreate a need of clear sociala need of clear social markers of the latent verticalmarkers of the latent vertical social hierarchysocial hierarchysocial hierarchy…social hierarchy… especially in soespecially in so called open orcalled open or… especially in so… especially in so--called open orcalled open or “classless” societies“classless” societies ©Jean-Noël Kapferer HEC Paris
  26. 26. A turning pointA turning point COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER Stripes and stars are backStripes and stars are backStripes and stars are backStripes and stars are back ©Jean-Noël Kapferer HEC Paris
  27. 27. Status for everyday lifeStatus for everyday life ©Jean-Noël Kapferer HEC Paris
  28. 28. What is luxury after all ?What is luxury after all ? COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER ©Jean-Noël Kapferer HEC Paris
  29. 29. This is surely not luxuryThis is surely not luxury ©Jean-Noël Kapferer HEC Paris
  30. 30. This is not luxury eitherThis is not luxury either ©Jean-Noël Kapferer HEC Paris
  31. 31. Is this luxury ?Is this luxury ? ©Jean-Noël Kapferer HEC Paris
  32. 32. Are they all luxury brands ?Are they all luxury brands ? ©Jean-Noël Kapferer HEC Paris
  33. 33. What is luxury after all ?What is luxury after all ? COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER No commonly agreed definitionNo commonly agreed definitionNo commonly agreed definitionNo commonly agreed definition that clearly separates it from superthat clearly separates it from super premium or even mass prestigepremium or even mass prestige ©Jean-Noël Kapferer HEC Paris
  34. 34. What definition for luxury?What definition for luxury? What is luxury ?What is luxury ? Traditionally the word luxuryTraditionally the word luxury applies to tangible goods , suggesting superior materials and designs sold in an upscale retaildesigns sold in an upscale retail environment Bain & co . ©Jean-Noël Kapferer HEC Paris Bain & co .
  35. 35. What definition for luxury?What definition for luxury? What is luxury ?What is luxury ?What is luxury ?What is luxury ? «« Exclusivity premium pricesExclusivity premium prices«« Exclusivity, premium prices ,Exclusivity, premium prices , image and status which combineimage and status which combinegg to make them more desirable forto make them more desirable for th th f tith th f tireasons other than functionreasons other than function »» T J kT J k ©Jean-Noël Kapferer HEC Paris T.JacksonT.Jackson
  36. 36. What is luxury after all ?What is luxury after all ? COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER What is luxury ?What is luxury ?What is luxury ?What is luxury ? Another definitionAnother definitionAnother definitionAnother definition « Expensive rare objects with an« Expensive rare objects with anp jp j image of good taste »image of good taste » ©Jean-Noël Kapferer HEC Paris
  37. 37. What is luxury after all ?What is luxury after all ? COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER Need to distinguishNeed to distinguishNeed to distinguishNeed to distinguish «« LuxuryLuxury » ( absolute meaning ) from» ( absolute meaning ) fromLuxuryLuxury ( absolute meaning ) from( absolute meaning ) from the happy few to the man in the streetthe happy few to the man in the street «« A LuxuryA Luxury » ( relative meaning ) for a» ( relative meaning ) for a specific group trading up for morespecific group trading up for morespecific group trading up for morespecific group trading up for more quality and prestige ,not the happy fewquality and prestige ,not the happy few «« My LuxuryMy Luxury » ( purely individual )» ( purely individual ) ©Jean-Noël Kapferer HEC Paris
  38. 38. What is luxury after all ?What is luxury after all ? Ab l t lAb l t l«« Absolute luxuryAbsolute luxury »: a consensus»: a consensus Categories and famousCategories and famous brands held in the worldbrands held in the world as symbols of luxury ©Jean-Noël Kapferer HEC Paris
  39. 39. ©Jean-Noël Kapferer HEC Paris
  40. 40. ©Jean-Noël Kapferer HEC Paris
  41. 41. ©Jean-Noël Kapferer HEC Paris
  42. 42. What is luxury after all ?What is luxury after all ? COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER «« A LuxuryA Luxury » is a relative statement» is a relative statement«« A LuxuryA Luxury » is a relative statement» is a relative statement F C h iF C h iFor some consumers , Coach is «For some consumers , Coach is « aa luxuryluxury », it gives them a feeling of extra», it gives them a feeling of extrayy , g g, g g quality , of prestige, above that ofquality , of prestige, above that of ordinary bags Same for Lancelordinary bags Same for Lancelordinary bags . Same for Lancel , …ordinary bags . Same for Lancel , … But the «But the « happy fewhappy few » disagree» disagree ©Jean-Noël Kapferer HEC Paris But the «But the « happy fewhappy few » disagree.» disagree.
  43. 43. “ A Luxury “ is relative“ A Luxury “ is relativeA Luxury is relativeA Luxury is relative In India « a luxury » is drinkable water for a majority of people but golden taps for a ©Jean-Noël Kapferer HEC Paris minority
  44. 44. What is luxury after all ?What is luxury after all ? COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER «« My LuxuryMy Luxury » is very private» is very private«« My LuxuryMy Luxury » is very private» is very private «« My luxuryMy luxury » is not «» is not « your luxuryyour luxury »»«« My luxuryMy luxury » is not «» is not « your luxuryyour luxury »» What is rare and priceless for me mayWhat is rare and priceless for me mayp yp y not be the same for you. «not be the same for you. « My luxuryMy luxury »» does not imply social comparison : it isdoes not imply social comparison : it isdoes not imply social comparison : it isdoes not imply social comparison : it is intimate andintimate and does not create a marketdoes not create a market ©Jean-Noël Kapferer HEC Paris
  45. 45. Understanding luxuryUnderstanding luxury Copyright JN KapfererCopyright JN Kapferer HOW ECONOMISTS DEFINE LUXURYHOW ECONOMISTS DEFINE LUXURY ©Jean-Noël Kapferer HEC Paris
  46. 46. Understanding luxuryUnderstanding luxury Copyright JN KapfererCopyright JN Kapferer HOW ECONOMISTS DEFINE LUXURYHOW ECONOMISTS DEFINE LUXURY PRICEPRICE ©Jean-Noël Kapferer HEC Paris FUNCTIONAL BENEFITS
  47. 47. Understanding luxuryUnderstanding luxury Copyright JN KapfererCopyright JN Kapferer HOW ECONOMISTS DEFINE LUXURYHOW ECONOMISTS DEFINE LUXURY PRICEPRICE PremiumPremiumPremiumPremium ©Jean-Noël Kapferer HEC Paris FUNCTIONAL BENEFITS
  48. 48. Understanding luxuryUnderstanding luxury Copyright JN KapfererCopyright JN Kapferer HOW ECONOMISTS DEFINE LUXURYHOW ECONOMISTS DEFINE LUXURY PRICEPRICE LuxuryLuxury PremiumPremium yy ©Jean-Noël Kapferer HEC Paris FUNCTIONAL BENEFITS
  49. 49. Understanding luxuryUnderstanding luxury Copyright JN KapfererCopyright JN Kapferer HOW ECONOMISTS DEFINE LUXURYHOW ECONOMISTS DEFINE LUXURY PRICEPRICE LuxuryLuxury ArtArt PremiumPremium yy PremiumPremium FashionFashion FUNCTIONAL BENEFITS ©Jean-Noël Kapferer HEC Paris FUNCTIONAL BENEFITS
  50. 50. Go beyond functionGo beyond function COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER art for art ?art for art ?art for art ?art for art ? ©Jean-Noël Kapferer HEC Paris
  51. 51. Luxury is close to artLuxury is close to artLuxury is close to artLuxury is close to art ©Jean-Noël Kapferer HEC Paris
  52. 52. Luxury cultivates the artsLuxury cultivates the arts COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER ©Jean-Noël Kapferer HEC Paris
  53. 53. Understanding luxuryUnderstanding luxury copy right J.N. Kapferercopy right J.N. Kapferer What does Etymology say aboutWhat does Etymology say about the essence of luxury ?the essence of luxury ?the essence of luxury ?the essence of luxury ? ©Jean-Noël Kapferer HEC Paris
  54. 54. Understanding luxuryUnderstanding luxury copy right J.N. Kapferercopy right J.N. Kapferer What does Etymology say aboutWhat does Etymology say about the essence of luxury ?the essence of luxury ?the essence of luxury ?the essence of luxury ? LUXUSLUXUSLUXUSLUXUS L ti dL ti d l til ti lt f ilt f iLatin word «Latin word « luxatioluxatio », result of going», result of going apart , making a leap ,apart , making a leap , a big gapa big gapp , g p ,p , g p , g g pg g p ©Jean-Noël Kapferer HEC Paris
  55. 55. What chinese etymology saysWhat chinese etymology says Big people / Lot of peopleBig people / Lot of people ©Jean-Noël Kapferer HEC Paris Big people / Lot of peopleBig people / Lot of people
  56. 56. What indian etymology saysWhat indian etymology says sanskrit : vitasarsanskrit : vitasarsanskrit : vitasarsanskrit : vitasar To dazzle , to impressTo dazzle , to impress ©Jean-Noël Kapferer HEC Paris
  57. 57. Understanding luxuryUnderstanding luxury COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER What History saysWhat History saysWhat History saysWhat History says The business of luxury goods hasThe business of luxury goods hasThe business of luxury goods hasThe business of luxury goods has been created by the collapse of thebeen created by the collapse of they py p aristocratic societies where strictaristocratic societies where strict l hibit d th diff i fl hibit d th diff i frules prohibited the diffusion ofrules prohibited the diffusion of luxury signs and goods (etiquette)luxury signs and goods (etiquette) ©Jean-Noël Kapferer HEC Paris luxury signs and goods (etiquette)luxury signs and goods (etiquette)
  58. 58. Understanding luxuryUnderstanding luxury What History saysWhat History saysWhat History saysWhat History says By making it accessible luxuryBy making it accessible luxuryBy making it accessible, luxuryBy making it accessible, luxury business has grown on the basisbusiness has grown on the basisgg of the drive for social imitationof the drive for social imitation d th d ti i ht td th d ti i ht tand the democratic right toand the democratic right to happiness and hedonismhappiness and hedonism ©Jean-Noël Kapferer HEC Paris happiness and hedonismhappiness and hedonism
  59. 59. Understanding luxuryUnderstanding luxury What is new today ?What is new today ?What is new today ?What is new today ? Thi l ti h ti l t d thThi l ti h ti l t d thThis evolution has stimulated theThis evolution has stimulated the consumption of luxury productsconsumption of luxury productsconsumption of luxury productsconsumption of luxury products but the central sociologicalbut the central sociological function (signaling the socialfunction (signaling the social stratification )stratification ) has been losthas been lost ©Jean-Noël Kapferer HEC Paris stratification )stratification ) has been losthas been lost
  60. 60. Why luxury ?Why luxury ? COPY RIGHT J.N. KAPFERERCOPY RIGHT J.N. KAPFERER A clear marker of a social gapA clear marker of a social gapA clear marker of a social gapA clear marker of a social gap YesterdayYesterday TodayTodayYesterdayYesterday TodayToday AristocracyAristocracy MeritocracyMeritocracyyy yy An obligationAn obligation Reward byReward by demonstratedemonstrate signing one’ssigning one’sdemonstratedemonstrate signing one’ssigning one’s your inherited rankyour inherited rank successsuccessyy Noblesse obligeNoblesse oblige and accessingand accessing ©Jean-Noël Kapferer HEC Paris EtiquetteEtiquette elit pleasureselit pleasures
  61. 61. RECREATING THE GAPRECREATING THE GAP P i i l f l tP i i l f l tPrinciples of luxury managementPrinciples of luxury management ©Jean-Noël Kapferer HEC Paris
  62. 62. Luxury : reLuxury : re--create the gapcreate the gapLuxury : reLuxury : re create the gapcreate the gap ©Jean-Noël Kapferer HEC Paris
  63. 63. Luxury fashion premiumLuxury fashion premiumLuxury , fashion, premiumLuxury , fashion, premium LuxuryLuxuryLuxuryLuxury Social elevation Timeless S lf di ti ti Priceless Hedonism Self distinction Superlative GiftDreamDream Tribal differentiation Performances / Price F hi P i Tribal differentiation Imitation Ephemeral Performances / Price Rational Investment Comparative Seduction Realism ©Jean-Noël Kapferer HEC Paris Fashion PremiumFrivolous Seriousness
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