Ad Research class - Brand strategy briefing

2. Background and current problem

3. Since 1907 Neiman Marcus has been the leading seller of luxury retail goods for the affluent consumer in the US.

4. The store oozes luxury, and the elite feel right at home playing in their palace. Spacious and elegant it is the destination for the ultimate luxury experience where the wealthy are catered to individually and addressed by first name every time they shop.

5. Neiman Marcus’ annual “Christmas Catalog” is the perfect example of what the company stands for – extreme luxury and exclusivity. The catalog offers one of a kind “fantasy gifts” that come with heavy price tags: airplanes, cars, submarines, hot air balloons, camels, Egyptian mummy cases, and much more that normally sell out within 24 hours. The most expensive item to date: a $35 million Boeing business jet.

6. But alas, Neiman Marcus’ sales have been dropping since 2007. Their overall revenue dropped roughly 23% in 2009 alone. Luxury goods sales, and retail sales in general, have been declining since the start of the “late-2000’s recession”.

7. The company’s marketing strategy has been based on CEO Burton Tansky’s motto of “we like rich people”. But that philosophy has gotten them into trouble since the recession has kicked in, and people’s shopping habits have changed dramatically. Even the rich are spending less.

8. So what’s the creative challenge?

9. Make extreme luxury a necessity again for our wealthy consumer who is living in a complex economic landscape where high-priced is seen as insensitive.

10. Who are we talking to and what are they about?

11. The affluent fashionista The top 2% income bracket in the US, primarily women, and luxury goods shoppers who regularly desire to show off their elite status by draping themselves in high-end brand name designer clothing and accessories.

12. They are connoisseurs by nature but aren’t necessarily innovators or trend-setters, they are more often either early adopters or mainstream luxury shoppers that love to attain that which is already considered desirable within their social circles and that which will set them apart from the “common folk”. In this recession they have been forced to spend more modestly, but they still cravethe finer things in life that come with a hefty price tag.

13. They are convinced they still deserve the best, even if the world is struggling and up in arms.

14. So, what’s the single most compelling idea to communicate?

15. Luxury justified.

16. Why does this work? Our affluent fashionistas know they are the backbone to the American economic system. If not the ladies themselves, it was their husbands, their brothers and their daddys who built this country and the companies and run both now. They are the ones that invest and keep the system afloat. They don’t feel remorse when they purchase expensive: houses, cars, clothes, jewelry, trips… because they deserve the best in life even if others can’t have the same.They have the right to splurge no matter what the consensus of the people is about the economy or how they should be spending or behaving. They built their empires so they deserve the spoils.

17. Remind them that living luxuriously is the reason they became rich in the first place.

18. Class: Ad Research - Brand strategy project Preliminary research conducted by Katrina Yulo, Paul Landholt and Christina Churchill Strategy and presentation by Christina Churchill