The Luxury Strategy

I recently read Kapferer and Bastien's book on Luxury Strategy, which started off dismally enough: a couple of snotty Europeans insisting that no-one born outside of France, Italy, or England quite grasps the concept of luxury accurately, particularly Americans.   A couple of chapters into the book, I found myself in complete agreement with them.

Their definition of "true" luxury pointedly excludes providers who are merely better than average or those which have a level of quality that is not strictly necessary to accomplish the basic function.   Luxury is a very small and highly exclusive group of brands, the superlative items that are affordable only to the top one percent (or even less) of the population - and in that regard there is definitely a distinct difference, though the point is largely moot for anyone who works outside of the fifty or so firms worldwide that produce goods in this category.

What is of interest to the rest of us, who work in the lesser strata of the hierarchy of consumer products, is that the notion of quality on any level (except the rock-bottom of the economy goods market) derives from some of the basic principles that define the luxury market, but executes them far less effectively.   And more importantly, the factors that lead to a impression of quality cannot be sustainably faked, but must derive from practices that genuinely follow at least some of the laws of luxury.

In particular:, consider three of the qualities of luxury borrowed by some premium products:

• A premium product appeals to hedonism rather than functionality, and the focus must be on the pleasure that the consumer derives from the product rather than the specifications and features of the product itself.
• A premium product is merely an artifact in a service experience that is focused on the needs and desires of the customer, such that if those needs and desires are not addressed, the artifact is not regarded as premium
• A premium product conveys a benefit related to the self-esteem of the owner, such that ownership and use of the product is regarded as a kind of privilege to which they are entitled 

There's a great deal more to be said in regards to luxury, as it was rather a lengthy book, but these three examples serve to explain why even a premium product is capable of commanding a price that exceeds the value of the mere functional benefits delivered, and implies the very reason that some brands are unable to sustain the price premium they hope by attempting to instill a sense "luxury" into a product without changing any other of their practices.

Ultimately, this means that there are very few brands that fall into the luxury category, though many claim to be.  But the pretenders are not luxury, are not genuinely attempting to become luxury, and do not have a sufficient understanding of what "luxury" truly is ... but a luxury strategy, like a luxury product, is not for everyone.

In all, it's given me a great deal to meditate upon, and much to reconsider about the notion of quality as I previously understood it.