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Luxury Challenge for brands
Luxury Challenge for brands
Luxury Challenge for brands
Luxury Challenge for brands
Luxury Challenge for brands
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Luxury Challenge for brands

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Chanel, maker of one of the 21st century’s most iconic perfume brands, finds itself perceived to be less culturally vibrant than a manufacturer of low-cost, flat-pack, self-assembly furniture. …

Chanel, maker of one of the 21st century’s most iconic perfume brands, finds itself perceived to be less culturally vibrant than a manufacturer of low-cost, flat-pack, self-assembly furniture.
How can we make sense of this?
MYTHS ARE HARD TO DEFEND AND RENEW
Globalization and the free-flow of goods and information are a challenge to luxury brands, whose appeal rests on principles of scarcity, uniqueness and a sense of intimacy. In a world awash with counterfeit goods – claim and counter-claim – preserving the purity of the myth becomes significantly more difficult.

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  • 1. LUXURY IS CHANEL OUT-STYLING LOUIS VUITTON? Luxury never shouts, darling… You might think that globally-recognised luxury brands, such as Chanel and Louis Vuitton, have no problem generating Cultural Traction™, associated as they have long been with glamour, glitz, aspiration and desire. But you would be wrong. Added Value’s latest Cultural Traction™ study reveals that Chanel and Louis Vuitton (placed #14 and #21) find themselves out-shone by technology and lifestyle brands like Apple, Samsung and even, IKEA. Most worryingly for these purveyors of luxury, is that this proves true even among the wealthiest cohorts interviewed for the study. Chanel, maker of one of the 21st century’s most iconic perfume brands, finds itself perceived to be less culturally vibrant than a manufacturer of low-cost, flat-pack, self-assembly furniture. How can we make sense of this? MYTHS ARE HARD TO DEFEND AND RENEW Globalization and the free-flow of goods and information are a challenge to luxury brands, whose appeal rests on principles of scarcity, uniqueness and a sense of intimacy. In a world awash with counterfeit goods – claim and counter-claim – preserving the purity of the myth becomes significantly more difficult. A brand’s Cultural Traction™ is defined by its ability to reshape itself, surprise, excite, and inspire continuously. Cultural Traction™ is VIBE – how Visionary, Inspiring, Bold and Exciting the brand is perceived to be – over time. So will luxury brands have to venture into new territory to retain their desirability? Or should they stick resolutely to the defence and re-interpretation of their founding myths? www.added-value.com/culturaltraction culturaltraction@added-value.com View the article online to share © Copyright 2013 Added Value. Proprietary Information. All Rights Reserved.
  • 2. CHANEL VERSUS LOUIS VUITTON Maybe we can find an answer to these questions in the surprising fact that Chanel, whose marketing tactics are currently more conservative than the experimental Louis Vuitton, is actually generating more traction than its rival. Family-owned Chanel is still operating in a fairly discrete and secretive fashion. Intimacy and direct consumer interactions are still the key operational principles of a brand that refuses to be distributed online. It favours tailored, high-end services, such as at-home trial sessions for its VIP customers. Overall, Chanel is sustaining and nourishing the myth of craftsmanship, intimacy, and exclusivity. Luxury never shouts, darling… Product launches build on references to the House’s founding icons, such as the 2012 worldwide launch of the “The Little Black Jacket” exhibition, celebrating one of the brand’s “timeless classic” designs. Invitation-only parties amplify the sense of exclusivity. Chanel’s portfolio is also managed in a tighter fashion with a stronger focus on females, resulting in higher marginal scores amongst this target audience. Chanel is showing a clear lead over Louis Vuitton when it comes to attracting 16-34 year old females. This is even more pronounced amongst Leading Edge consumers. www.added-value.com/culturaltraction culturaltraction@added-value.com View the article online to share © Copyright 2013 Added Value. Proprietary Information. All Rights Reserved.
  • 3. Louis Vuitton was very active in 2012, following the launch of its “L’Art du Voyage” campaign, disseminated worldwide across many channels from museums to online. One perceives a more audacious and ambitious approach from the brand in its marketing. But in its effort to disseminate more widely and via more channels does Louis Vuitton run the risk of diluting the exclusive appeal of its products? Mass availability via increasing numbers of high-street stores as well as online ordering, puts it in the same category as other less luxurious mass-market retailer brands. Could its products become commoditized and less valued as they lose their rarity value? Luxury, above all else, is about exclusivity, uniqueness and individuality. Louis Vuitton may be working hard to boost brand awareness and presence, but it could be sacrificing its luxury brand essence. Luxury never shouts, darling… ICONS AND ARCHETYPES Chanel’s discreet but sensuous image correlates with its associated archetype: “the Lover” – a voluptuous, passionate, sensual character embodying a sense of intimacy, subtlety and secretiveness. The image of its feisty, pioneering founder Coco Chanel, portrayed in recent biographical movies, has no doubt reinforced this archetype, not to mention Marilyn Monroe’s famous quote: “What do I wear in bed? Why, Chanel No. 5, of course.” By contrast, Louis Vuitton scores heavily on “Ruler” traits: authoritative, structured, flawless. The eponymous founder started out as a maker of trunks in the 19th century – solid, practical products with their famous unpickable locks – and the association with travel and adventure has run through the company ever since. It is tempting, though probably too simplistic, to view Chanel and Louis Vuitton as respective embodiments of female and male characteristics, although their VIBE scores do bear this out. www.added-value.com/culturaltraction culturaltraction@added-value.com View the article online to share © Copyright 2013 Added Value. Proprietary Information. All Rights Reserved.
  • 4. Luxury never shouts, darling… THE LURE OF THE EAST Both brands have been eyeing the potentially huge, fast-growing and newly consumerist market of China for a long time. But Chanel registers a higher VIBE score there than Louis Vuitton, despite the fact that the latter fashion house has been established there for longer. It could be that Chanel is benefiting from the novelty factor, or that its strategy of exclusivity – 12 stores in China compared to Louis Vuitton’s 43 – is more successful amongst a newly-affluent upper class looking to differentiate themselves from the masses. Chanel’s emphasis and subtlety and tradition, its historical pedigree, is still firmly based on the values and activities of its founder. DISRUPTION OR DILUTION? Louis Vuitton’s audacious multi-channel marketing blitz may seem the best tactic to generate Cultural Traction™ and brand vibrancy, but only if the product lines continue to reflect the core brand values of luxury, refinement, quality and desirability. It is harder to maintain an aura of exclusivity within a model of mass-market distribution. Chanel’s more conservative, organic approach – staying true to the founding principles and trading on the company’s well-publicised history – is distinctive in a globalized marketplace dominated by low-cost production lines churning out millions of identical units. In this context, individuality and rarity seem to be disruptive qualities in their own right. www.added-value.com/culturaltraction culturaltraction@added-value.com View the article online to share © Copyright 2013 Added Value. Proprietary Information. All Rights Reserved.
  • 5. The next stage for the luxury house, just as for Louis Vuitton, will be to effect more daring reinvention from within without compromising the principles underlying its success so far. Both brands – French, historic, with a whiff of nostalgia for l’ancien regime – achieve their weakest VIBE scores in the “Excitement” category. To raise this score they will have to stop trading on their pasts so much and look to the future. Luxury never shouts, darling… For more information on luxury brands please visit www.added-value.com/culturaltraction www.added-value.com/culturaltraction culturaltraction@added-value.com View the article online to share © Copyright 2013 Added Value. Proprietary Information. All Rights Reserved.

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