Wednesday, 25 February 2009

What Luxury Brands Can Learn from the Oscars

We picked up the above note on the Harvard blog. Wonderful note and very appropriately timed. We have been thinking about this for a while. In a challenging economic environment, what should a Louis Viutton do? The list from Lisa Burrell (click above note) lists some points, we added two more.

1. Luxury brands should reset their expectations in these times. Fewer consumers are in the market for luxury goods. But behavior patterns are set early in life and unless this recession lasts half a decade, folks will come back to buying luxury when it gets better.

Until then accept that there are fewer buyers out there and sales will fall.

This expectation is important becasue it prevents the brand from doing something silly to "buy" artificial sales. Do not lose focus on segmentation- targeting- positioning. You lose this and your consumers will never be able to find their way back to you in the good times.

2. Stay close to consumers that want to buy. Marketing is about getting new consumers and/or getting current consuers to buy more. If you're not finding the new ones, stay very close to the existing consumers. Be relevant to them, keep them excited in new products (dont cut investment in R&D and marketing) and make them feel exta special (if you have not cut down your customer facing emplyees already).

We suppose there are enough luxury goods CEOs that would have seen several of these cycles...and wouldn't be in a panic yet. We would be interested to know what they're thinking about.

In any case, we would not count on finding bargains in the luxury segment anytime soon.

Ritu and Venkat

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