Free Luxury Marketing Essay Sample
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The main goal for companies to start a business is to generate profit and attain successful growth. Consequently, they employ different strategies to sell products and services they proffer. Companies/business organizations attempt to create, promote and sell services and products that can suit the needs of customers that they target. Therefore the best strategy that they can employ to reach their esteemed customers, enhance growth and emerge as more powerful organizations is marketing. However not all marketing strategies suit all kinds of businesses hence it is vital to know and consider the specific forms of marketing to engage in a given form of business to attain high sales, desired image and a good market share (Waldner, 2009).
According to Dubois et al (2009), marketing is defined as a practice of exploring, creating and bringing worth to satisfy the target market's wants and needs at a profit. For a very long time, the concepts of marketing have remained the same but because of technological development, there are many changes happening today due to the effects of technology. The evolution of internet has greatly affected how marketing is done, through such forms as e-selling/ e-commerce, traditional marketing medium is facing a threat of being replaced, to some extent. The internet has emerged as a new communication avenue, bringing long new marketing opportunities. Other discussing traditional marketing, this paper will also focus on luxury marketing and bring out the similarities of these two forms of marketing.
Luxury marketing can be looked at the art of pampering senses and ego of customers explicitly for the whole world to notice. This form of marketing does not look at price as a real objective because most of them find demonstrating to the world that prices are an issue, their greatest luxury. Due to their exclusivity, the Theory of Giffen goods can be practical in the luxury segment as essentially, luxury goes around services and experiences. This form of marketing is growing day by day and becoming predominantly more significant in emerging economies such as India. This is because in such places, the new rich desire to publicize themselves and the old rich desire to detach themselves (Dubois et al, 2009).
World's leading brands intends to effectively communicate the exceptional essence embodied in each brand to those found in target audience of the brand. There is however a prominent shift that is happening in the current world of luxury market, this is from "Old World Luxury Charm" to "New World Luxury Charm", a true reflection of the challenges that could face marketers of luxury brands incases of a failure to correctly address every segment of the luxury target. Every market is different when it comes to rationale, cultural, understanding and emotional & sociological values. All these values together with those linked to sentimental purchase are essential for successful luxury brand penetration (Hirschman & Holbrook, 2007).
Collocia (2002) observes that features, qualities, and attributes of products are the most prominent aspects of Old World luxury charm as opposed to New World luxury charm that emphasizes on consumers with a particular interests in goods and services they buy but not in the product's possession or ownership. It is therefore about the experience of luxury contrary to the Old luxury that emphasizes on the product itself. Today, most of the luxury segments like auto, property, accessories and apparel, manufacturers are recording fervent sales.
Hirschman & Holbrook, 2007 reiterate that although the high-net-worth market is essential, the current luxury marketing is more different from what it used to be some years back thanks to the consumers who are comfortably well-off for they make the world of luxury products move. This form of marketing assumes unity marketing as an important strategy that helps the marketers to comprehend the repercussions of major trends in this market." According to studies, a total of 9.5 million individuals across the world with assets of more than $1 million make up the high-net-worth (HNW) market. It is also apparent that North America is the world's number one when it comes to overall high-net-worth individuals (HNWI) together with their financial assets' volume.
"Within the region, North America, there is also a small but significant market segment of 3.2 million individuals structuring the ultra high-end luxury marketers among the high-net-worth market, selling goods and services whose affordability is only within the reach o the rich. However not only has the American luxury market changed but also the world's luxury market is has expanded to cover a diverse population than merely the rich. There is now a growing strategy to capture consumers of high income particularly more that 18 million households who are comfortably rich and whose incomes range between $100, 000 and $249, 000. These are now the leading target market for most of the major luxury brands, marketers and retailers presently" (Hirschman & Holbrook, 2007).
From the look of the things, it is not only the rich who can attain a luxury lifestyle but also those individuals with more modest income levels of income because of the amplified availability of luxury products and services.
Traditional marketing involves the use of various media like the television, radio, print media like newspapers and magazine and outdoor among other media. This form of marketing is very effective, time tested and has been found out to be good and make the business or product popular. Demographics are the tool that traditional marketing commonly use in an attempt to narrow down to targeted potential viewers (Blackwell, 2006).
In today's world , many market analysts have however claim that traditional marketing no longer works as it faces the challenges of the internet marketing. The world has changed gears and operates on a faster platform and everyone is advised to follow suit and take up the trends. Marketers today aim at a 360-degree marketing strategy; an all round strategy that envelops all the models intending to constantly recall the brand (Kashani et al, 2006). This is only available is only available in the online marketing hence becoming the hope for markers who want to met their specific buyers fasters and more effectively. On the hand those who still root for this form of marketing claim that this form of marketing is still rated as the best according to a survey conducted jointly by the two reputable research firms, the Harris Interactive and the Public Relations Society of America in 2005. The results of the firms showed that, the Fortune 1000 businessmen, general public and Congressional staffers voted for traditional method of marketing as the best method of marketing.
Traditional marking is mainly focused on passing out the message that is getting out the message. This means that the more people your message is intended to reach, the more potential the buyers you will get to purchase your product. This is a number game whereby the more the number of people you reach the more the number of buyers hence increased number of your sales. The major advantage of traditional marketing is that in the analogy of a fisherman, it is casts the net widely with the intention of drawing as many customers as possible.
As marketing is considered as the collective process where individuals or group of people exchange goods and services based on their needs and wants. Many others have written about various concepts and elements of marketing. Traditional marketing is therefore a situation whereby the needs and wants of the customers are discovered and satisfied by use of traditional channels and methods of communication. These methods include face to face communication television channels, radio and print media like newspaper catalogues and magazine. The main of these is to create products services that can sell themselves by providing what the customers need and want (Burstein, 2010).
There key tools that traditional marketing uses in order to reach its customers easily. Advertising is one among these tools. Advertisement is any paid form of non personal presentation and promotions of goods and services by an identified sponsor. This tool offers the customers the customer what is in offer directly. This can be done in many ways, different shapes and through different channels. To do this well and more effective companies get services from outside expert companies that are specialized in advertisement. The company advertising then has to decide on the budgetary allocation that should be set aside for the advertisement. The company should also decide on the media they want to use and how they want the results measured. All these decision are important has they prevent under or over spending.
Direct marketing is the other tool that has been used widely by traditional marketers. This involves use of different channels to reach customers. This communication can be done in different channels like the face to face meeting, mailing, telephone, catalogue and internet. With direct marketing, the person marketing seeks to for responses that are measurable from customers. Direct marketing also seeks to establish a direct relationship between the customer and the person selling the product (Geld, 2003). This relationship can further been enhanced through sending the customer a birthday card during his or her birthday, Offering free membership to the club and providing general information the company. In the long run, direct marketing builds a good personal relationship and feeling of communication towards the customer. Companies can also be more aware of the how to target specific customers.
Face to face is the also used extensively in traditional marketing. This is the most original mode of marketing and is still by many companies. The company involved sends its sells personal to meet its potential customer. The sales persons communicate with the customers give the offers. At the same time deal are made between potential customers and the sales representatives. Direct mailing is also used. This is a situation whereby the companies send direct mails to the customers. The mails or letters can be offers, announcements or reminders to the customers on particular products. With invention of this tool some related tools have also been established. These tools include fax, voice mail and e-mails. However the later that is, e-mail has proven be to the most effective one due to it fastness hence time saving and also cheap.
Catalogue marketing is the tool used. Here the company sends their catalogue to potential customers who are its targeted customers. In response the customers have the opportunity to order and purchase whatever they want in the list of goods and services in the catalogue. To make purchases and orders they respond through telephone, mail or e-mails. With this, customers have experience more comfort by shopping at the comfort of their home. This also increases the shopping of customers at different time of the day. The other direct marketing is telemarketing. Here the sales personal calls the customer and tries to sell the good or service and possibly the personal can also make a deal (Geld, 2003).
Traditional marketing has some disadvantages that have made it face completion for other forms of marketing like the internet and relationship forms of marketing. It is a very expensive and time consuming to promote a product of a business. Television promotions are always very expensive to the owners of the businesses or those who want their products advertised. It is also expensive and time consuming to process traditional marketing. In traditional marketing there is need for more employment of man power to carry out many specific tasks. This means that more money is required for spending
Differences between luxury marketing and traditional marketing
Traditional marketing has advertisement as its main business strategy. This is the main area through which goods and services in this form of marketing gets exposed to the world by using various modes of advertisement like Yellow pages, Newspapers, Billboards and posters. On the other hand, luxury marketing has incorporated new forms of marketing brought about by technology, online advertisement is very popular and electronic versions of white papers, brochures, data sheets, catalogues among others are being used (Hines & Bruce, 2007).
Secondly, traditional marketing is very expensive as compared to luxury marketing because buying radio and TV air time is very expensive. Other print media like magazines are also vey costly and requires long time and budget to achieve success. . As opposed to this, the use internet to marketing as used in luxury marketing is less costly and reaches the whole world at the touch of the button. Some of the companies using is Mercedes Benz and BMW.
Dubois (2009) states that as opposed to traditional marketing, luxury marketing often deals with individuals who are passionate about brands. For example most rich people are passionate about cars and would want to buy classy sports cars like Range sport, and so on due to the brand. They end up being advocates of the same brands. They can use expensive magazines to get to the affluent people in the society for example Luxury Travel 360 that gives the rich information on the most expensive tour travel to visit. The Luxury Marketing Council is also using Luxe SF Magazine to advertise too many to the well-off in the society.
In traditional marketing, there is segmentation of the market into many subsets according to demographic, psycho graphic behavioral, geographic variables. Each subset is homogenous and reacts in a specific manner to a specific marketing strategy. Consequently, a product for a specific segment gets unveiled after thorough research. On the other hand, luxury marketers have a different approach to this as they employ straightforward demographic criteria such as the occupation, college attended, zip codes, assets, income among other ways to reach their affluent market.
Lastly traditional marketing is product based and company focused. Its expectation and main objective is to enhance the company's visibility and the brand. Here, the message send to the customer is normally company-controlled and motivated. This is directly opposite when it comes to luxury marketing as it is usually consumer-focused and regulated to interests of the consumer. For example many posh car manufacturers like Ferrari, Chrysler, can customize their cars to suit the interests of their customers like interior design being done according to their color specification, car stereo being the one as requested for by the buyer and so on (Collocia 2002).
Similarities between luxury marketing and traditional marketing
Even though there are many differences that can be drawn between these two forms of marketing, there are also some similarities that can be drawn between because their ultimate goal is the same. They both attempt to achieve the growth and promotion of any business venture through such ways as advertising, publicity, research, distribution, merchandizing and sales. Even though there are different approaches to this in both models, in one way or another each model employs mechanisms of seeing the organization achieve success (Probst, 2007).
Another similarity is the market segmentation where both traditional and luxury marketing segment their target customers to maximize their ability of reaching them. As already discussed, traditional marketing can do this basing on age groups, geographical, psycho graphic variables while luxury marketing due to the nature of affluent individuals in the society, will employ the segmentation based on factors like income levels, institutions of higher learning attended, the spouses and so on (Hirschman & Holbrook, 2007).
Marketing Concepts in Luxury marketing
Concepts used in luxury marketing are generally the same concepts used in marketing in general. However, luxury marketers have identified some of the key areas that have to be paid attention in order to be successful. These are the people, product, passion, purpose, pleasure and the price of the product. These mostly cover the needs of the luxury consumers. Luxury marketers use these concepts to approach their customers and allow them to create unique relationships through out the buyer's journey (Hines & Bruce, 2007).
Whether one is selling the product through any channel or using direct sells, handling of people is very important. One has to value the importance of the people as this is critical to the success of the business transaction. Most successful luxury brand have build best practices from the training of their brand representative as this would directly or indirectly touch the customers through provision of their quality services. The product plays the centre role among the six key areas to be looked into in the luxury marketing (Collocia, 2002). Bernard Dubois French marketing professor identified six characteristics of a luxury good. That is quality, integrity, price scarcity and non -utility. These characteristics will mea different thing for different customers and should be understood by the marketer accordingly.
Passion is the other thing that should be put into consideration. The demand for luxury goods is as a result of passionate endeavors and the end result is that this is only done passionate customers. In many situations it is their passionate nature that has put them in positions to access these luxuries that comprise their lifestyles. Luxury marketer should be cognizant of these kinds of customers (Probst, 2007).
Luxury consumers derive the pleasure from the consumption of luxury goods or services over a long period of time. This pleasure can be felt through the sense or emotions. Luxury marketers need to ensure that the consumer have the opportunity for sensory connection with their product. They should therefore consider emotional appeal in their campaign. Luxury goods should also have a purpose. Most luxury products have a utilitarian aspect (Dubois, 2007). Luxury marketers should arm themselves with all possible combination of factual and practical information. Lastly, price is the other important aspect considered. Money matters to the affluent that tend to spent rationally though they seem to spend a great deal. To manage this, the have gone for fractional ownership. Marketers have factored this in their mix.
Traditional marketing can be viewed as the oldest form of marketing. It has however remained relevant even today in the era computer and internet which has brought about the coming to birth of internet marketing. Though this internet has proven to be the most effective one, traditional marketing has remain the choice of many because of the numerous advantages it has. Luxury marketing is a specialized form of marketing where only a specific of people consume some specific products. This form of marketing targets mostly the affluent in the society. Despite the disparities that may exist between these two forms of marketing, they both have one aim to achieve, ensuring that there is growth and promotion of the organization's business activities.