The document discusses how luxury brands can use social media to enhance customer value. It provides examples of how Gucci, Ferrari, and Nike use social media to increase functional, symbolic and experiential benefits for customers. The document also recommends that brands use multiple interactive media channels, integrate online and offline activities, create shared themes to dominate, and find and communicate with topic-specific influencers.

1. Social Media for Luxury Brands
y
Janghyuk Lee
Associate Professor of Marketing
Korea University Business School
http://biz.korea.ac.kr/professor/janglee
http://www.facebook.com/jangleeMKT
(Internet marketing open course)

2. Gucci on the Internet
Gucci added commerce function to its web site from which Gucci’s
customer could purchase directly
directly.
It reduces experiential benefit of shopping off-line and does not discount
price. Who will purchase Gucci web site?
Main target: customers (probably who are used to buy luxury brand products
and do not have time to enjoy shopping experience).
© 2012, All rights reserved. Janghyuk Lee 2

3. Why Social Media?
Enhancing Value for Customer
g
Value for customer (customer perceived value)
Benefit – C t
B fit Cost
Functional, symbolic, experiential benefits (CW Park 1987)
Price, opportunity cost
pp y
© 2012, All rights reserved. Janghyuk Lee 3

4. Why Social Media?
Social Media & Brand Value
Based on Twitter transaction data (Dec 2011 for two weeks), Twitter
activities such as the number of users tweeted or exposed to ‘brand
brand
keyword’ tweets and the average volume of tweets are highly correlated
with the brand value. (the case of consumer electronics)
(source: Interbrand, NiBD Lab)
Correlation
Coefficient
© 2012, All rights reserved. Janghyuk Lee 4

5. Why Social Media?
Enhancing Symbolic Benefit
g y
2 hours of F1 racing is too short for Ferrari fans!
© 2012, All rights reserved. Janghyuk Lee 5

6. Why Social Media?
Enhancing Symbolic Benefit
g y
As more people interact with a brand, symbolic benefit for the brand
increases.
increases
In case Ferrari, the large number of its fans (non buyer) is one of key
assets compared to similar luxury brand Maserati less performing on
SNS.
Facebook Performance
© 2012, All rights reserved. Janghyuk Lee 6

7. Why Social Media?
Enhancing Experiential Benefit
g p
Nike tries to keep in touch with its customers and prospective ones
through various channels notably smart phone and game machine in
order to enhance their experiential benefit through customer – company
interaction.
© 2012, All rights reserved. Janghyuk Lee 7

8. Why Social Media?
Impact of Mobile Internet
p
Mobile internet outperforms fixed internet:
Instant
I t t usage (e.g., always on, between tasks)
( l b t t k )
Context based customized service (e.g., location info)
Ubiquitous coverage
Fast penetration
© 2012, All rights reserved. Janghyuk Lee 8

9. What to Do?
Use Multiple Media Interactively!
p y
Old spice ran ‘Your man could smell like’ campaign by integrating ‘Twitter’
and ‘Youtube’ as well as TV ad.
Youtube
Number of videos made: 180+
Number of video views: 5.9 million
Number of comments: 22 500
22,500
http://www.youtube.com/watch?v=_-fLV28SkZ8
© 2012, All rights reserved. Janghyuk Lee 9

10. What to Do?
On & off-line integration
g
As a part of ‘Happiness’ project, Coca-cola Korea installed a dancing
vending machine at a trendy place in Seoul which attracted not only
shopping mall visitors but also more than 1 million page views on
YouTube.
http://www.youtube.com/watch?v=DgtijpUNKGo
© 2012, All rights reserved. Janghyuk Lee 10

11. What to Do?
Create a Theme to Share and Dominate it!
Nike ‘True City’
City guide of 6 major cities
In 1 month of campaign, Google
search 1.3M, App D/L 140K
(iTunes store #1 in Europe)
( # )
http://www.youtube.com/watch?v=Qet4NGswKfA
Smirnoff ‘Night Life Exchange’
g g
Where were you?
Unique experiences from 14 countries
Offering invitation to other countries’ events
http://www.youtube.com/watch?v=wWlXbZZ3ALA&feature=relmfu
© 2012, All rights reserved. Janghyuk Lee 11

12. What to Do?
Find Topic Specific Influencers and Communicate with them!
p p
Hyundai & Genesis
Tweet: 3,775
3 775
User: 923,458
Lotay Yang @lotay
• Philanthropist, founder of black card circle
• lotay.com
• 71,485 followers
• Based in California
(source: NiBD Lab)
© 2012, All rights reserved. Janghyuk Lee 12

13. What to Do?
Find Topic Specific Influencers and Communicate with them!
p p
Lexus
Tweet: 162,379
,
User: 7,511,689
Hiroko Tabuchi @hirokotabuchi
• New York Times reporter in Japan
• Pulitzer award finalist 2011
• 55,152 followers
1 2 f ll
• Based in Tokyo
(source: NiBD Lab)
© 2012, All rights reserved. Janghyuk Lee 13

14. Check-Up List
Mobilizing new media?
Mobile
M bil web, smart phone app
b t h
Off-line activity integration (e.g., geo tagging, NFC)
SNS
How are they interlinked?
Center & peripheral
Customer experience measurement?
Easy
Enjoyable
Useful
Aligned with internal CRM database?
© 2012, All rights reserved. Janghyuk Lee 14