Understanding the concept of “luxury” is fundamental to creating and developing a brand that can be recognized and positioned in this field. Luxury is a sociological and psychological concept, as old as humanity itself, and it is a different way of understanding customers and managing the brand and the company.
Luxury is a marker of some form of social stratification, essential to human nature. Everyone can recreate their own layers according to their dreams. Luxury codes are cultural, because every luxury brand is born from the confluence of culture and social success.
Mass consumer goods marketing was created in the United States and took hold thanks to the work of large groups such as Procter & Gamble in the second half of the 19th century. Luxury strategies, on the other hand, were born in Europe and were implemented and made global through French and Italian groups. In the 20th century, particularly after World War II, small artisanal companies such as Ferrari, Louis Vuitton, Cartier, and Chanel, but also Gucci, Bulgari, and Ferragamo, were turned into major global brands through specific and original methodologies, which are still useful today for global application.
The ambition of this article is to reflect on some fundamental points that differentiate traditional marketing from luxury marketing: we will focus on some “anti-laws” that will transform our approach to the brand, giving us a new operational vision.
No to positioning, yes to identity in the luxury market
- Beyond positioning: luxury is not comparative
In traditional marketing, the concept of positioning represents the heart of every strategy and has the task of implementing actions aimed at driving people’s preferences. Generally, the focus is on a key attribute of the product, placing it within the reference context, comparing it with what competitors offer, and adapting it to consumer expectations.
The luxury brand does not compare itself with others: what matters is its personality, the expression of a unique taste, and the inspiration sparked by the “creator.” Identity is indivisible, non-negotiable, timeless, and durable. Luxury is always superlative and never comparative.
- Brand identity wins over customer desire and dominates it
Traditional marketing places customer desires at the center of the business: customers are listened to and their needs are translated into global products, sold through mass distribution channels.
The luxury product, instead, responds to a personal dream, it is based on hedonism and aesthetics: it concerns being for ourselves and for others, not “having” or “desire.”
It offers both a reward and a sign of social elevation.
To maintain this status, the brand must always dominate its customers; a certain distance is maintained from people to constantly preserve an aura of mystery. Luxury is the domain of culture and taste and plays the role of “consultant,” “educator,” and “social guide,” imposing its own trends and rules.
- The true target is only those who embrace the brand 100%
Traditional marketing is obsessed with chasing customers from other brands: sales growth is the primary measure for evaluating the success and performance of its managers.
In luxury, expanding the brand’s reach means diluting its value because increasing the brand’s accessibility erodes its dream potential. For this reason, brand growth is pursued by focusing on those who share its values without reservation, penetrating new countries rather than new market segments.
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The central role of production in luxury
- The charming flaw as a guarantee of authenticity
Luxury is the apotheosis of handmade or artisanal products; it must have strong human content, and any flaws give the object a unique character. The product must be a synthesis of inspiration, beauty, attention to detail, and care for the environment and the person.
- Limited production of luxury products does not follow demand
The primary goal of traditional marketing is to increase volumes, extensive distribution, and wide visibility. At Ferrari, production is deliberately limited to fewer than 10,000 vehicles per year: rarity—if understood by the customer—sells; deliberately resisting demand growth is a strategy that allows it to be governed.
- Production sites as a guarantee of quality
The luxury product must be anchored to a culture and a territory. Having local roots increases the perceived value of the object.
A luxury brand must remain faithful to its origins by producing in a place that gives it legitimacy. Every creation must stay true to its origins in a world that is culturally adrift, increasingly leaning towards vulgarization and uprooting. An object whose production site has been outsourced loses the right to be called a “luxury product.” Producing in one’s own territory is also a matter of creativity: the concept and the raw material must maintain contact with the production process so as not to distort the original product.
Luxury communication
- Communication should also be directed at those who are not in the target audience
The perceived value of luxury should be understood in two ways: luxury for oneself and luxury for others. To support the second meaning, it is essential that the brand be recognized globally; it is therefore essential to spread brand awareness beyond the actual target audience and communicate with a wider audience.
- Advertising must fuel the dream and mystery as its primary goal
Luxury strategy is the exact opposite of volume strategy: a fundamental principle to follow is not to try to sell at all costs. The best way to reach customers is to let them come to us; for this reason, it is essential to intrigue them with stories around the product, building myth, mystery, magic, and private events that put people at the center of the experience. - The use of stars in luxury advertising can be counterproductive
Using stars to promote luxury products can be detrimental, except in the form of testimonials. The luxury brand must also be courted by the stars themselves and must be the absolute protagonist of the scene, as abstract as a deity. In traditional marketing, there is nothing better than a stage star to promote the sale of mass products that need to be “ennobled” in some way. - Art as a tool of seduction at the service of luxury
Luxury brands are carriers of taste just as art is. They are creative and bold; for this reason, the promotion of artistic movements, especially if less popular, unusual, or unprecedented, is congenial to their nature. Luxury brands become patrons of emerging trends and exploit these symbiotic relationships, which are functional to their purpose of inspiring and guiding trends.
Relationships in luxury
- The purchasing process involves a certain degree of difficulty
Luxury must be imagined, desired, and earned. The higher the inaccessibility, whether actual or virtual, to the products, the greater the tension created. People can reach a luxury product after overcoming various types of obstacles: economic, cultural, logistical, or temporal (e.g., one must wait 48 to 60 months for a Ferrari).
- The relationship must always be personalized based on the customer’s “weight”
The brand must be segregationist and forget the democratic principles of society: customers must be “protected” from non-customers, and “big” customers must be protected from “small” customers; an emblem of this practice is the accessibility of the ground floor of showrooms to some types of customers and the first floor to others. Being too “open” harms the social function and exclusivity of the brand.
The role of price in the luxury market
- Luxury determines the price and not vice versa
The luxury market is defined by supply: first the product is created and then its price is established. The higher the perceived value, the higher the cost of the object should be. The price we imagine should always be higher than the actual price. In contrast to mass products, price is a mere technical detail; as soon as this aspect becomes important in the classic price-demand relationship, our product automatically no longer fits within the luxury sphere. By increasing prices, less loyal customers are lost, but the brand becomes very attractive to people who were apparently uninterested before.
Traditional marketing only deals with the base of the luxury pyramid, where only products derived from the luxury brand are sold.
If you want to delve deeper into the language of luxury, we have written an article on the secrets of luxury communication with a luxury vocabulary available for download.
Considering the counter-trends of luxury marketing can help entrepreneurs and communicators avoid behaviors that are counterproductive for their business.
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