This dissertation aims to study and analyse the brand building process of a luxury fashion brand using the dimensions of luxury fashion branding identified by Fionda and Moore (2009). This analysis begins with a review of brand and branding in general, followed by an overview of the concept of luxury fashion brands. The characteristics of the luxury fashion brands and buyers of luxury products are discussed in detail, followed by the consumer decision making process in the luxury sector and the luxury fashion branding process.
The research methodology utilises a qualitative research methodology using documentary sources. The analysis examines the brand building process of four brands, namely Burberry, Prada, Gucci and Hermès using the dimensions of luxury fashion branding identified by Fionda and Moore (2009). These brands have been chosen as they are one of the most valuable luxury brands worldwide in 2018.
The recommendations are included along with the analysis. A few general recommendations have also have been proposed based on the analysis and literature review. They are as follows –
a) Identify a niche segment.
b) Positioning based on brand experience.
c) Create and communicate Symbolic value.
d) Make use of brand heritage to tell stories about the products.
e) Pull customers rather than push customers.
f) Design a multifunctional store environment.
The luxury goods market revenue is expected to grow at a CAGR of 2.1% from 2018 to 2022 (Statista, 2018) and the revenue in 2018 is US$314,358m. Luxury fashion is the largest segment of the market with a “volume of US$91,623m in 2018”. United States is the highest revenue generator in this sector with a revenue of US$71,202m in 2018 (Statista, 2018).
The luxury goods industry comprising of drinks, cosmetics, watches, fashion, fragrances, handbags, luggage and jewelry, has been on a rising trend for a number of years (Statista, 2018). Luxury goods are considered to be at the “highest end of the market” in terms of price and quality. The manufacturers of luxury goods meet the demand of the consumers by focusing on quality materials, aesthetics, brand, pricing and superior craftsmanship, to convert “everyday objects into status symbols”. The rise and fall of the industry is directly proportional to the gross domestic product (Statista, 2018).
New openings in the market are providing the industry with growth points and luxury brands are now facing the challenge to cultivate customer relationship and “maintain brand equity”. As luxury is expanding into various industries, it is expected to become a “more mature segmented market” (Statista, 2018).
The rate of growth in this sector is driven by various factors (Fionda & Moore, 2009). However the most significant factor is the rise in the “number of high-net-worth individuals” who have an appetite for consuming luxury brands (Fionda & Moore, 2009). A number of laws of marketing which might apply to premium and traditional brands might not necessarily apply to luxury brands (Kapferer & Bastien, 2009). Some authors consider luxury brands to be an “unique market niche” (Twitchell, 2002). Certain important facets like complexity and work, logos, hand crafted, history, sustainability and rarity, being superlative and not comparative, exclusivity and tradition, help in building and maintaining the theme and notion of luxury (Kapferer & Bastien, 2009).
In order to be more competitive, luxury fashion brands must be more distinctive and pronounced (Hanna, 2004). Completing the customer brand experience, is as important as selling products (Fionda & Moore, 2009)
The market for luxury goods is booming. Although luxury is nothing new, the understanding of what luxury stands for has changed. It has evolved from the rare spices and pearls from “Caribbean in the seventeenth century”, to the products of fashion designers and great craftsmen like Louis Vuitton and Christian Dior in the nineteenth and twentieth centuries. More recently luxury has “increasingly” become brands that go beyond craftsmen and material, to invoke a world of images, dreams, motifs, and signs (Berthon, et al., 2009). Luxury is something that arouses people’s interest. Luxury brands is one of the fastest growing and most profitable segments (Berry, 1994)
The luxury brand sector can be divided into four broad product categories (Bruce, et al., 2004): They are as follows:
- Fashion and leather goods
- Wines and spirits
- Perfumes and cosmetics
- Watches and jewellery
The focus of this study is the luxury fashion and leather goods category for the following reasons:
- This sector accounted for 44% of the total revenue in the luxury market in 2017 (Brinckmann, 2018)
- The rate of change in this sector and the number of goods marketed under a single brand name, makes the “branding of luxury fashion goods” more complex as compared to other sectors (M.Moore & Birtwistle, 2004), (Bruce, et al., 2004), (Hines & Bruce, 2007).
This study relies on the following proposition that (Fionda & Moore, 2009)
- Luxury fashion brands are distinctive due to its application to an ever-changing and diverse assortment of products.
- Luxury fashion brands are a means of developing and communicating a personality and identity for the user.
- These brands operate as an “experiential brand”.
The understanding of the dimensions and the form of the luxury fashion brands will provide further understanding of functioning of branding, apart from understanding about luxury marketing (Fionda & Moore, 2009).
Brand building is the heart of differentiation. Using brand equity as a means of differentiation is necessary to develop a “sustainable competitive advantage” (Gorp, et al., 2012). As per Keller (2009), a carefully designed process for building a brand is the key to achieving brand equity. In the case of luxury goods, value generation for consumers is a consequence of aesthetic, functional and symbolic dimensions like social status and self-esteem (Kapferer & Bastien, 2009). As per Keller (2009), luxury brands qualify to be one of the “purest examples of branding”.
The most important factor that drives consumers to purchase luxury goods, is that they like to symbolize their identity. Brand building is the core competence of luxury good companies, whereas brand image and the brand itself are few of its competitive advantages and these help them to generate enormous wealth and value (Gorp, et al., 2012). Luxury goods might not exist and might not be as appealing as they are without the effect of branding (Okonkwo, 2007). The success of various luxury conglomerates such asRichemont, LVMH and PPR can be attributed to their ability to “leverage brand equity across their brands” (Gorp, et al., 2012).
1.2 Research objectives
It is necessary to understand the dimensions of a brand, before building one. The primary objective of this dissertation is to identify an appropriate model which will help evaluate the brand building process for luxury fashion brands. This leads to the following research questions:
- What constitutes a luxury brand?
- What are the characteristic of the buyers of luxury products?
- What is the decision making process involved in the purchase of a luxury product?
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