Luxury, Price and Brand Narrative

If you ask somebody in emerging luxury market the following questions.:

• What is  Rolex?

• What is  Louis Vuitton?

• What is Chanel?

• What is Hermes? 

• What is Goyard?

The answers fetched are likely to be different but many would be able to connect these with the brand’s most prototypical product category. One common running theme is likely to center around price or expensiveness. High price and luxury have gone together forever and it is what sits at the core idea of luxury. Semantically, it is opposite to ‘necessary’.  Necessaries are indispensable as these are essential for survival. Luxury has been associated with excess, abundance and opulence. One of the examples of ‘excess’ as the defining aspect of luxury is a watch.  Brands like Breguet make ultra-complicated watches by adding features which push designing and manufacturing to breach the limits of possibility and confer the status of luxury on the product.  Luxury can be viewed from several angles: 

Price: Most probably it is going to be  high price, very expensive, exorbitant, beyond reach. High price is the most overt sign of luxury brands.  The price is a relative indicator and it positions the product towards the top end of the spectrum. Consequent upon the high price two things happen. This superior position links them to high perceived quality. Quality is often  difficult to decipher especially by non-experts. So, price becomes a powerful surrogate for quality. Often, price itself serves as a signifier of a nebulous amalgam of physical reality and invisible undefinable. For instance, Patek Philippe Nautilus costs about 150000 dollars. 

Aspiration and expression:  The people on top of the social hierarchy become aspirational because of emulation in consumption practices. Luxury in this realm operates as visible markers for emulators who seek connections through consumption parity with people on higher pecking order. The essence of this aspect of luxury was articulated by Veblen as conspicuous consumption where brands are used as status markers. Luxury  is evocative of a lifestyle, typically associated with the elite. Luxury brands enable the aspirants to achieve parity with higher classes through commonality of consumption. Through this practice the customers gain a feeling of elevation by being able to buy products related with higher classes. Mercedes cars sport bigger and bolder three-pointed star on their hood to cater to this market.  A bag with big ‘LV’ sign is commissioned by the owner to shout out loud. This ,however, is not done by Birkin which does the same but silently. 

Uniqueness: The high price of luxury may stem from objective reasons traceable to unique ingredients or processes (rare fur or skin or metal or intricate craft). Louis Vuitton uses Vachetta leather known for

high quality or Rolls Royce is hand crafted machine or intricate Argyle pattern introduced by Pringle. The high price that draws from objective considerations adds differentiating dimension or  uncommonness pushing the product into the realm of uniqueness. Every Hermes bag is the outcome of ‘painstaking work of the craftsman’ where leather is still  pieced together by saddle stitch. 

Self-esteem: This uniqueness operates to serve luxury buyer in two ways: first as a device of signaling system of differentiation to the external world and second, as something of self reward or adding sheen to self-concept. A Rolex is not just a time keeping device or ‘certified chronometer’ but a symbol of achievement. The brand is credited for remarkable achievements in the domain of horology including waterproof and dust proof watch (Oyster), date display (Datejust) and Helium escape valve (Sea- Dweller).  Mercedes is credited with innovation including multi-valve engine, four- wheel suspension and ABS and many more. 

Spirit: A painstakingly crafted porcelain or intricately woven fabric or fine piece of jewel carries an invisible but perceptible aura of the maker. The intimate bond between the creator and created embeds the soul of craftsperson. Therefore, many luxury pieces are called ‘one of its kind’. The creation liberates itself from the narrow confines of utility into the realm of  art. It is artistic authentic expression of the spirit into physical form. Many luxury brands imprint their unique spirit or soul on to whatever products they carry. 

In a world of mass production and spread of prosperity, markets have been democratizing consumption. The descending economic entitlement is both boon and bane for the luxury marketers. The pursuit of ‘more’ is likely to negate the very essence of luxury. And luxury bought simply because of high price is unlikely to touch customer at deeper level without which it may tantamount to shallow or superficial consumption. Luxury without an appropriate brand narrative (its myth and mystique) is devoid of psycho-socio-cultural meaning rendering luxury consumption hollow. Suppose you can afford an expensive watch (not too expensive) which one would you buy?

Would it be a Rolex, Omega or Tag Heuer? 

Depends upon whether you choose to buy a time keeping instrument or a narrative that runs below visibility of assembled components.

Luxury, Brands and Top Luxury Brands

The 2013 survey of luxury brands by Brandz compiled by research firm MillwardBrown ranked the following brands as the top global luxury brands. The brands that sit at the top of the luxury heap are Louis Vuitton, Hermes and Gucci.Louis Vuitton

Hermes

Gucci            

Prada

Rolex

Chanel

Cartier

Burberry

Fendi

Coach

 

A term is best understood by opposition. The listed antonyms of luxury are austerity, essential and poverty. So the concept of luxury is linked with great expense/ cost, beyond essential functionality and rich class or affluence.  Can the notion of luxury be built into anything if these criteria are applied? Consider a trunk or box used to store things or a leather hand bag. Louis Vuitton transforms bags and boxes into word’s top most luxuries that one can lay hands on.  Consider a brand like Rolex which reigns at the top in the class of chronometers transforms a timekeeping device into luxury par excellence.

So the question is what goes into making of a luxury? A number of opposing dimensions can be used to analyze the construction of luxury- form or function; aesthetic (beauty) or crude; concrete or abstract; common or rare; contemporary or heritage; limited or mass; indulgence or forbearance; desires or needs; ordinary or extraordinary; reason or emotion, craft or factory, culture or nature.  By applying these dimensions one can decipher the code that luxury brands use in their process of first emptying a product of its meaning and filling it with mystique and mythology. Luxury is experiential and it is rarely about product and its functions.  

 

One of the most common features of luxury brands is their heritage. Consider brands like Louis Vuitton was founded in 1854 in France, Burberry came into existence in 1856 in England,  Hermes was born in 1837 and Rolex birth goes back to 1905. History is different from heritage. History is only chronology of past events but heritage is about past events that hold value today. Luxury brands’ history is marked by innovations and improvements in their way to achieving excellence. It is worth noting that how Louis Vuitton took ordinariness out of trunks and hand bags by perfecting locking mechanism, use of the finest leather and crafting them with superlative finesse. Hermes’s route to extra ordinariness began with crafting saddles for czar of Russia which later went on to include leather garments with its unique fermeture Hermes or fastener to nobility including Prince of Wales.

 

Product excellence is usually is the founding stone for on which luxury edifice is built. The pursuit of extraordinariness in quality (bordering beyond need) renders the product so exclusive that it is accessible only a select group of customers. This is where a brand begins to get socialized and acquires symbolic properties. The process by and large is that of exclusion or social power hierarchy. Luxury is in way about transcendence beyond product or functionality or reason. Brands in their path to luxury first transform themselves from being something physical to abstract by enveloping layers of symbolic properties and then become symbolic resource to be used by people in construction of their psycho-social identities.      

 

Luxury, Transfunctionalisation and Dispensability

Marketing is a search for something material or mystical. Theoretically, marketing is about filling gaps or voids which leave people in a state of discomfort, displeasure and dissatisfaction.  Many brands therefore operate within the realm of what is needed; these fulfill need gaps, expressed or otherwise. Accordingly there are products and brands, the absence of which is likely to result in a state of annoyance and discomfort.  A necessity is something unavoidable or indispensable. Necessary goods are the ones which are essential for survival; hence they are indispensible like food, shelter and water. But no absolutes exist.  A necessary good for someone may be luxury for the other. Sunscreen lotion may be necessary for a working executive but luxury for a construction worker.

Luxury on the other hand is non-essential or unnecessary.  Luxuries certainly bring pleasure comfort but their absence is not likely to put life at risk. A watch is necessary for an MNC’s executive but Rolex is not. His travel to office is essential but driving a BMW is not.  And his signing of paper is indispensible part of his job but writing with a Mont Blanc is not. Luxuries in this conceptualization are un-necessary, dispensable and avoidable. So the big question is how marketers transform their inessential wares into something deeply coveted, cherished and wanted. The market for luxuries is huge and growing.  Luxury is a two tiered phenomenon.  First, the luxury connotations prevail at goods categories level and secondly, at the brand level.

Absence of a necessity creates a condition of discomfort and this gives rise to their marketing justification.  But then what justifications do luxury brands offer? So why must luxury brands like Mercedes, Jimmy Choo, Louis Vuitton, Harry Winston, Vertu, Hermes, Macallan Single Malt, Chanel, and Ralph Lauren be bought? Luxury brands develop their justification not by fulfilling the discomfort or annoyance void by functionality. The first building block at the heart of a luxury brand is its ‘inessentiality’. Luxury brands do not address to annoyances and discomforts rather they subvert brand narrative by pushing it into the realm of inessential, something which is dispensable for survival. The discourse about essential or functionality is opposite of the concept of luxury. Luxury in this construction implies discovering something material or immaterial that falls outside the boundary of the ‘essential’.

Is the concept of luxury universal? Luxury is a culturally constructed phenomenon.  For instance, a high carat diamond may not hold any luxury connotations for an African tribe. This is also true for brand building, the connotations or symbolism signifying (Nichole Kidman/ diamond dial for Omega Ladymatic) luxury depends upon culture.  A car denotes a vehicle but a BMW connotes luxury which is more than a car. A watch denotes a time keeping device but Rolex connotes luxury.  Luxury making is about making appearances and disappearances. In both these cases, the objects (car and watch) fade into background and some symbolic construction comes to forefront.

Luxury branding is about investing something ‘extra’ into a product.  This may take physical or non-physical form. Luxury brands transform the way they are looked at by their consumers. But then there is not universal way of looking at things. The way of looking at things is culturally determined. Culture supplies values, codes and norms which are then applied to decode meaning.  Objects can be viewed employing physical, mechanical, economic or social perspective.  Meanings operate at two levels. The first order meaning is about what it denotes and is functionally determined. The second order meaning or connotation is creation by the process of transfunctionalisation . Initially an object is devoid of any sign value. Luxury is not about denotation or functionality, it is about connotation.  The sign value (brand as signifier) is constructed by an interplay of socio-cultural process. Marketers use cultural as sign system to achieve this transformation, in which mass media plays a dominant role. Here the product is made to stand for something that it is inherently not by and interplay of signs and codes drawn from the culture.

A semiotic study of luxury watch brands revealed interesting findings as to how these time keeping devices are transfunctionlised into pieces of luxury- unique and highly desirable.  The five codes used by these brands were:  transfunctionalisation into jewelry which takes the watch away from its functionality. It is signified through design aspects like looks, diamonds, bracelets and availability at jewelry stores.  Second, luxury signified through quality or what is inside the case of a watch- the technology.  It is expressed through complications of movement, precision, sapphire glass etc.  Then there a code relate to jewelry is about watch’s construction with precious metals and materials like diamonds and gold. And lastly luxury is about scarcity and exclusivity. These brands create an impression of scarcity by not letting their brands available everywhere.    

Making of a luxury brand is about transformation of an object into a construct of imagination by systematic conversion of exchange value into sign value.