제 22 호 What Is Marketing?
Kicker: SOCIETY
What Is Marketing?
Marketing that shows why luxury goods are luxury goods
By Myung-Kwan Kang
The sales of overseas famous brands in department stores have been increasing rapidly every year, and in 2024, luxury brand sales also rose. What is luxury, and why do people love luxury goods enough to buy them even during an economic downturn? Let's find out.People have various reasons for purchasing luxury goods. Some buy them because others have them, for gifting purposes, out of necessity, or simply because they like luxury brands. However, when it comes to deciding which brand of product to buy, brand marketing plays the most significant role.Then what is marketing? It refers to planning activities to smoothly transfer products from producers to consumers and includes market research, product planning, advertising, and sales promotion.
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A brand called a luxury brand is one of the most popular brands around the world. However, in order to maintain high quality and aesthetic value, a high price range and appropriate marketing are essential. Accordingly, luxury brands are conducting all-out marketing to sell expensive products.
Marketing Strategy
One of the representative marketing strategies of luxury brands is building their brand image. Luxury brands build their own unique brand image by emphasizing high quality and aesthetic value. To this end, luxury brands are strengthening their brand image by collaborating with celebrities and holding fashion shows and events. In addition, luxury brands are conducting strategic marketing to customers who want to purchase luxury goods by partnering with high-end department stores that sell their products.
After establishing a brand image, a crucial step is to strengthen it through social media. Platforms like Instagram and Facebook consistently share stylish photos of the brand's products and announce new launches, fostering direct communication between the brand and its customers. Influencer marketing is particularly effective in this realm, as showcasing popular influencers using the brand's products heightens interest and awareness, leaving a lasting impression on consumers' minds and ultimately driving sales.
Now I will introduce the marketing strategy of LVMH, a globally renowned company. For those who may not be familiar with LVMH, let me provide a brief overview. LVMH is a French multinational luxury goods conglomerate established in 1987 following the merger of Moët Hennessy and Louis Vuitton. LVMH encompasses over 70 prestigious brands across diverse sectors, including fashion, leather goods, perfumes, and watches. Among its notable brands are Louis Vuitton, Dior, Fendi, Givenchy, Celine, and Kenzo. With a global presence, LVMH operates in more than 70 countries worldwide.
LVMH generates revenue by cultivating brands renowned for expertise, quality, and exclusivity, catering to affluent consumers who appreciate luxury goods. Moreover, its marketing strategy revolves around core ideas such as exclusivity, innovation, and storytelling.
Brand Storytelling
LVMH has crafted compelling narratives for each of its brands, emphasizing their rich histories, exceptional craftsmanship, and meticulous attention to detail. For instance, Louis Vuitton's story revolves around a legacy of travel and exploration, while Dior is renowned for its timeless elegance and sophisticated fashion designs. Utilizing these narratives in its marketing endeavors, LVMH aims to foster emotional connections with customers, enabling them to forge deeper bonds with the brand.
Celebrity Endorsements
LVMH has leveraged celebrity endorsements to enhance brand awareness and credibility. Renowned figures such as Rihanna, Jaden Smith, and Emma Stone have collaborated with the company to endorse its brands and products. Through these partnerships, LVMH gains access to wider audiences, introducing its products to new consumers.
Limited Editions and Collaborations
LVMH strategically employs limited editions and collaborations to generate buzz around its brand and products. For instance, Louis Vuitton has partnered with acclaimed artists and designers, such as Jeff Koons and Virgil Abloh to create exclusive, limited-edition designs that captivate consumers and drive sales. These collaborations ignite excitement within the market and reinforce the brand's innovative and creative identity.
Digital Marketing
LVMH enhances brand recognition through social media, email marketing, and various online channels. Additionally, they have curated engaging content on social media and prioritized e-commerce investments to facilitate seamless product purchases for customers.
Experiential Marketing
LVMH has invested in crafting immersive experiences that provide customers with fresh and exciting ways to engage with the brand. For instance, the company opened a pop-up store and presented the brand's extensive history and exceptional craftsmanship through captivating brand experiences like the Louis Vuitton time capsule.
In addition, LVMH utilizes a 4P strategy known as the marketing mix. This marketing mix encompasses product, price, place, promotion, and more, constituting a significant portion of marketing. Alongside the marketing mix, we prioritize customer service and brand image. Moreover, Using STP strategies to help brand reputation and make it more attractive to people
The differences between high-end brands and mid-range brands encompass various factors such as price, quality, and brand value. However, the distinction between luxury items and non-luxury items ultimately arises from marketing strategies such as brand storytelling, celebrity endorsements, limited editions and collaborations, digital marketing, experiential marketing, the 4P strategy, and the STP strategy. The criteria for what defines a luxury item can vary from person to person. However, the hallmark of a luxury brand is the effort the brand puts into its creation process, and this ultimately leads to consumers choosing it as a luxury item.
Why luxury goods are expensive and their consumption is increasing
When prices rise, consumption goes down, and conversely, when prices fall, consumption increases. But luxury goods defy this law of demand. What is the reason for this? The first reason is luxury goods. Luxury goods were items used by the royal family and nobles, so they were very popular items for people who wanted to show off.
The second reason is scarcity. For example, Hermes does not make a product if the quality of the leather is not satisfactory, and its products are made step by step by craftsmen from start to finish. Hermes' bags take at least 18 hours to make, and the company sometimes produces only two products a week. This is why rare luxury goods are expensive because not everyone has them, and even if you have money, you cannot obtain them.
The third reason is that luxury goods are positional goods. Objects in this world are divided into material goods and positional goods. Most items, such as TVs, computers, and cell phones, are material goods and have absolute value. However, some goods do not have absolute value but rather relative value or social value. These are positional goods, and luxury brands are a representative example. Positional goods must not be common to have relative and social value, so luxury goods are priced high from the beginning, and the more they are sold, the higher the price.
In this article, we have explored the concept of marketing and what sets the marketing of luxury brands apart. While many people perceive marketing as merely advertising and promotion, it encompasses everything that represents the brand itself. The future of marketing will see advancements in digital marketing and the utilization of AI and automation technology, driven by the progression of digital technology. Furthermore, with environmental issues having become increasingly prominent, brands with a sense of social responsibility, including environmental protection and social contribution, will thrive. Among these brands, Hermes, Louis Vuitton, Chanel, Gucci, and Dior are anticipated to demonstrate steady growth, as indicated by brand rankings and comprehensive evaluations in 2023.
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무엇이가격을결정하는가?, 마이클마이넬리, 이안해리스, 2012.11.0
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