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2010 Brings Brands 10 Golden Digital Opportunities

Looking ahead to 2010, marketers will be facing Olympic hurdles that will require steadfast agility just to stay in the game, much less to hit the finish line ahead of the competition. Here are 10 ideas, wrapped in Olympic glory that should deliver the gold.

1. Social Media: A Marathon, Not a Sprint

Hoping to become fast friends with their targets, a lot of brands rushed into Facebook and Twitter in the last 24 months without investing sufficient time or resources. In 2010, savvy marketers will increase their commitment to social media by first listening and then offering up a steady stream of engaging content that their fans actually want. This will be particularly true for B2B brands, only 38% of whom included social media in their 2008 marketing plans (vs. 71% for B2C brands). With one comScore study indicating that branded social media activities can have a multiplier effect on search results, there is even a quantifiable rationale for brands to up the social media ante in 2010.

2. Mash-Ups: Taking Inspiration from Biathlons

A few innovative marketers took a shot at mash-ups in 2009. E.P. Carrillo, a new cigar manufacturer, created a mesmerizing Twitter and Google Maps mash-up for its "coming soon" site that tracks cigar tweets from around the world. In 2010, these kinds of mash-ups will become smoking hot as marketers look to extend the value of their social media activities. Recognizing that tech-savvy consumers glide seamlessly between personal and business, online and offline, mobile and desktop, farsighted marketers will bring together formerly disparate elements into a cohesive and self-perpetuating social media experience.

3. App Happy: On Your Mark, Get Set, Go Crazy

Given the success a handful of marketers enjoyed with their "apps" in 2009, expect a blaze of new entries in 2010. iPhone apps that provide demonstrable utility like Kraft's iFood Assistant recipe finder and Benjamin Moore's color matcher will continue to gain traction. Expect more app's that integrate with other social media like the Gap StyleMixer that allows you to mix and match clothes and share them with friends on Facebook. And don't forget the non-iPhone universe. The steakhouse Maloney and Porcelli cooked up a humorous and somewhat deviant web-based app at Expense A Steak that extrudes faux expense reports with stunning verisimilitude.

The Anti-laws of Luxury Marketing #17

17. Cultivate closeness to the arts

In traditional marketing, the brand seeks to appeal and to create an affective relationship. For that it often uses music, music that is as popular as possible, or at least appreciated by its target audience. The brand follows people’s tastes. The luxury brand is a promoter of taste, like art. As we explored in earlier posts, it maintains close links with art. But luxury is not a follower: it is creative, it is bold. That is why it is best for luxury to remain close to the unpopular arts – or rather the non-popular arts – those that are emerging and have yet to appeal to the majority, if they ever will. Louis Vuitton has long been sponsoring concerts of contemporary music, for example bringing the pianist Maurizio Pollini to the Abbaye de Royaumont to perform music by the little-known composer Luigi Nono, rather than by a great such as Mozart or Chopin. Similarly, following the pioneering work done by Cartier, the Fondations d’Art Contemporain are now flourishing in all the great luxury groups. In this way they are making themselves patrons of emerging trends, where they are forming symbiotic relationships that serve their purposes – making luxury-brand objects that are themselves works of contemporary art.

That is why it is so important to develop this curiosity about the here and now among those working in the luxury business and to encourage them to visit art galleries, biennales, and exhibitions of modern art.

Excerpted in part from: The Luxury Strategy: Break The Rules of Marketing to Build Luxury Brands by JN Kapferer and V. Bastien, in partnership with Kogan Page publishing.

Sponsored By: The Brand Positioning Workshop

Advertising Volume and Advertising Effectiveness

Next to the Internet, radio is my favorite medium. It’s one-to-one and personal in a way that no other traditional medium can duplicate.

My favorite radio personality is Neal Boortz, a nationally syndicated talk-show host who broadcasts out of Atlanta on 171 stations. I listen to Boortz every morning during the commute to my office in Roswell.

Yet at the top of the hour, I turn off my radio and don’t turn it back on until 8 minutes after the hour. Why? Because that’s radio’s black hole. Eight solid minutes of commercials, traffic, weather, news and more commercials.

The second black hole occurs at the bottom of the hour, but it’s not quite as bad. I turn off my radio for only 6 minutes.

For every ad that radio stations used to run, it now seems like they run two. Radio, in my opinion, has become Radiado, an extra ‘ad’ inserted at every possible point in the programming.

There’s a relationship between advertising volume and advertising effectiveness. The greater the volume the less effective any individual advertisement is likely to be.

9 Digital Trends For 2010

1: Facebook replaces personal email

Question: Google has it, Hoover has it (in the UK anyway), TiVo had it, lost it and has somewhat got it back. Xerox had it, but nobody really cares anymore. So what is it?

It's when a brand name becomes the verb associated with its use. So rather than searching, you Google, or TiVo when digital recording a television show. Arguably an even more powerful synonym is when a brand becomes a noun, such as Polaroid, for instant developed photographs, although that didn't end so well.

The newest one would seem to Facebook, although it has too meanings.

'I Facebooked you' could mean that you the person has added you as a Facebook friend or they sent you a private message though Facebook. The latter would seem to be of more interest as no-one has really owned this type of communication before. No brand ever became synonymous with email. To Hotmail or Gmail someone just never happened.

So the interesting and overlooked disruption of Facebook is its displacement of personal email as a communication tool. Completely permission based, no SPAM (yet), and no address book required - your friends are already on Facebook.

The Anti-laws of Luxury Marketing #16

16. Keep celebrities out of your advertising

In traditional marketing, stars of stage and screen are very often used in advertising: there is nothing like a David Beckham for selling sunglasses or shaving cream. Nestlé has also got in on the act, with premium brand Nespresso calling on the services of George Clooney, and Nescafé recruiting the famous English soccer player Ian Wright. Nestlé, the world’s number one in food marketing, knows what it’s doing.

However, using celebrities to promote luxury products is extremely dangerous. A luxury brand is courted by the stars, in the same way as those stars are courted by journalists and paparazzi. As we mentioned earlier about a luxury brand’s typical relationship with its customers, it must respect them, but it also has to dominate them. Even the most famous ones. Calling on the services of a star is tantamount to saying that the brand needs some of this star’s status just to survive, and admitting that it has none of its own.

For the luxury brand, this is a gross error of strategy, for it turns the relationship on its head. Only brand domination, standing above everything like a god, is acceptable, not simply behaving like any ordinary mortal. If celebrities are used to promote the luxury product, the status of the latter is reduced to that of a mere accessory. Louis Vuitton advertising with Mikhail Gorbachev, former USSR President avoids this:

•    first, the celebrity is not a fashion symbol but a man who changed the world;
•    second, his Louis Vuitton is not the hero, but only the witness of an exceptional moment (a strategic negotiation).

Excerpted in part from: The Luxury Strategy: Break The Rules of Marketing to Build Luxury Brands by JN Kapferer and V. Bastien, in partnership with Kogan Page publishing.

Sponsored By: The Brand Positioning Workshop

Brands and the Ladder of Life

One of the typical questions marketing people ask themselves is, What’s the lifetime value of a customer?

Presumably a company benefits by keeping its customers satisfied over an extended period of time. Nice idea in theory, but this kind of thinking often leads a company down the wrong path.

Take Saturn, for example. Here was a brand built on the ultimate in customer satisfaction. Comfortable showrooms, no high-pressure sales people, no haggling over prices. ‘A different kind of company. A different kind of car.’

The first Saturn model, the S series, was wildly successful. For a number of years, the average Saturn dealer sold more cars than the average dealer of any other brand. (In 1996, for example, the average Saturn dealer sold 776 cars versus 684 for Honda and 606 for Toyota. The average Chevrolet/Geo dealer that year sold only 237 cars.)

But what would happen when a Saturn customer got older and made more money? The S series, after all, was a relatively inexpensive compact car. No problem, decided Saturn management, We’ll take care of our customers by introducing the L series, a larger, more expensive car. ‘The next big thing from Saturn.’

Not a good move. Sales of the S series fell because the model was ‘long in the tooth.’ Sales of the L series suffered because prospective customers thought ‘it was a little too expensive for a Saturn.’

Uniting Naming and Promotion

X-13D? What kind of name is that for something you pop into your mouth?

Doritos turned naming conventions upside down with its savvy plan in 2007 to generate buzz – and, oh yes, a new name – for its new flavored chips. How? By submitting suggestions on the Web, prompted by these eye-catching black bags of cheeseburger-like chips with the 'classified' moniker.

“This is the X-13D flavor experiment,” said the text box on the bag. “Objective: taste and name Doritos flavor X-13D.” This was followed by directions to a website that linked to yet another website. And when snack-happy teens got there, they encountered something like an underground government operation with ambient noises and transmission glitches.

Bloggers blogged like crazy debating the new product, its taste, what to call it, and even where to find it. (Doritos sold the black bags on eBay weeks ahead of shipping it to stores.) And that was precisely the point. Doritos’ VP-Marketing told Business Week that the promotion was “all about enticing teenagers and spreading Doritos buzz online.”

Entice they did, with at least 100,000 naming suggestions logged. Will Doritos actually use one of them? That’s anybody’s guess. Will the offbeat new chips even return to market after the initial shipment of a million bags sells out? That’s also anyone’s guess.

Kids chattering, product moving, buzz building … this is not your grandma’s snack food anymore. Nor your grandma’s naming protocol.

Sponsored By: The Brand Positioning Workshop

When The Name You Want Is Taken

You've just found out the name you want for your brand is owned by somebody else. So, the temptation is to say, "Let's move on."

Not so fast. Names are property, and can be bought and sold (or leased) like real estate.

Coors licensed the name of its upscale beer Irish Red from a long-defunct brewery. Yves St. Laurent bought the name of its Opium fragrance for only $200 from two elderly perfumers.

The 1999 relaunch of National Airlines came about after the new owners paid $175,000 to buy the name at a bankruptcy sale from defunct Pan Am. (Pan Am had acquired the carrier in 1980.)

Not that long ago, we helped a Fortune 100 company acquire the rights to an automation software name from its Japanese owner. One week of phone calls and faxes produced a letter of agreement.

When the name you covet is owned by somebody else, go after it. Use an intermediary to open a channel of communications. Have a valuation in mind. Make sure the assignment of rights is perfectly clear. (For which countries, for what period of time are you acquiring the name?)

Sponsored By: The Brand Positioning Workshop

Complex Language Weakening Brands

"Call the law enforcement officers. We're being robbed."

Not a likely scenario. What the average person is much more apt to say is: "Call the cops. We're being robbed."

Unfortunately, marketing people are not average persons. Marketing people are much more likely to elevate their languages until, in some cases, they lose their meanings.

A few years back a senior marketing person at United Parcel Service asked me what I thought of the company's trademark.

I like it, I said, but what UPS really needs is a motivating idea or rallying cry, something like: UPS delivers more parcels to more people in more places than any other company in the world.

UPS, he said, is not in the parcel delivery business.

Huh. That came as a big surprise to me. We're a customer and I always thought that UPS was in the parcel delivery business.

No. UPS is in the logistics business.

He wasn't joking. At the time UPS was in the process of repainting some 88,000 vehicles with its new theme: Synchronizing the World of Commerce.

A serious impediment to communications is this constant upgrading of the language. No aspect of life is left untouched by the upgrade police. Not only does a term have to be politically correct, it has to be as long and as complicated as possible.

The Anti-laws of Luxury Marketing #15

15. Do not sell.

This isn’t arrogance, not at all. The luxury strategy is the very opposite of the volume strategy.

If you pursue the strategy of systematically raising all your prices, as illustrated by Krug, you have to be prepared to lose sales and to lose customers. Most brands don’t dare risk it, or else go running after customers; when you get to that point you’re no longer talking luxury but mass consumption – which of course can be extremely profitable as everyone knows.

Krug did lose some accounts, some importers, it is true. If not supported by the Rémy Cointreau management in the steps it took, Krug’s change in strategy would have been stopped as soon as the first big client walked away. In luxury, not trying too hard to sell is a fundamental principle in relations with customers. You tell the customer the story of the product, the facts, but you do not pressure them into making a purchase there and then.

We said a few words earlier about the campaign BMW had conducted on the internet in the US; a number of the most prominent film directors each made a short-length film around BMW, having been given completely free rein – not a commercial, but free expression. These films were made available on the internet and they very quickly did the rounds in the United States. Commenting on this decision, the marketing director at BMW USA said: ‘When it comes to luxury, the best way of reaching the very well-off is to let them come to you.’

Excerpted in part from: The Luxury Strategy: Break The Rules of Marketing to Build Luxury Brands by JN Kapferer and V. Bastien, in partnership with Kogan Page publishing.

Sponsored By: The Brand Positioning Workshop

Top Ten Integrated Marketing Trends for 2010

1. Less will get done: until we learn to do more with less.

While the year 2009 was marked as the 'great recession', we won't feel its full effects until 2010. Both marketers and their marketing services agency partners are dealing with reduced resources in terms of head-count and budgets. We won't likely see enough breakthroughs in the marketplace, simply because marketers and agencies alike have to remain focused on 'getting the work out the door'. The only way to 'do more with less' is to align resources toward a single and powerful integrated marketing solution. Individual marketing tactics will simply become marginalized and highly tactical with 'less'.

2. Marketers will mistakenly 'whack' a medium of the marketing mix.

With reduced marketing budgets, 'something has to give'. Unfortunately, marketers are making wholesale cuts to specific marketing/media channels in the process. We've seen the most dramatic cuts occur in print media: newspapers and magazines. I caution marketers to consider whether the remaining media in the market mix can compensate for the cuts. For example, does the internet behave like print? Is the consumer experience the same in both media? Are the message formats the same? The answer is a clear NO. Reduced resources should not come at the expense of an integrated, multi-channel mix.

3. Marketers rush to employ 'social networking' strategies.

Marketers are in a mad rush to enter the social networking space with 'tweets', 'widgets', 'apps' and 'fan pages'. However, social networking is not a marketing tactic; nor is it a surrogate for the brand's social experience. It is not a line item on a marketing plan, a specific channel, or a form of content. Rather, it is an outcome. And, no single channel has a lock on the 'social' nature of content. Most any medium can serve as the 'originating' medium in a journey that can take a great piece of content across channels and into vast networks of hearts and minds.

Marketing Is Not Communications

 

A 5-page foldout magazine advertisement opened up with the following 39 attributes spread out over two pages: Renegade, fearless, unexpected, bold, true, spontaneous, curious, intriguing, unwavering, rare, brash, provocative, intuitive, genuine, daring, uncommon, irreverent, brazen, absolute, unusual, visionary, idyllic, proud, maverick, wild, undaunted, resolute, poetic, dynamic, soulful, unconventional, strong, romantic, authentic, brave, unorthodox, deft, radical, dreamer.

What brand could possibly combine all these wonderful attributes? Turn the page and get the answer: The 315-hp FX45. And who makes the renegade, fearless, unexpected, bold, true, etc. etc. FX45?

There in small type at the bottom of the next page is the answer. Infiniti, accelerating the future.

What’s wrong with this advertisement and thousands more just like it? It assumes that the primary function of advertising is to communicate. ‘Tell more, sell more’ was the old advertising adage.

The idea that advertising is a form of communications is deeply embedded in the corporate psyche. Many Advertising Departments are now calling themselves the Marketing Communications Department or ‘Marcom’ for short. Too bad. The name encourages advertising people to go in exactly the wrong direction.

The Anti-laws of Luxury Marketing #14

14. Keep raising the average price of the product range

In traditional marketing, you launch a product at a skimming price, then when competition comes onto the scene, you drop the price. In luxury it is precisely the opposite. A luxury brand must always be seen to be restoring the gap, restratifying, and as such it is acting as a visible agent of meritocracy.

A brand that cannot grow in volume and profitability other than by launching accessible products shows that it is no longer part of the luxury market. For instance, the fact that Mercedes has launched its super top-of-the-range under a different brand name (Maybach -- pictured above) reveals its presumed change of strategy: Mercedes from now on will be the maker of regular and premium automobiles, and the luxury range now goes under the Maybach brand, no longer Mercedes.

China Embracing English Names

Go global, young man.

That was the advice from Harvard’s Theodore Levitt when his seminal article, "The Globalization of Markets," was published in 1983. Since then, globalization has become a dominant theme of international business strategy.

It really is a neat idea: You drive a global brand with one big differentiated idea, everywhere from Akron to Auckland. Your brand gets recognized on the shelf by travelers and natives alike. A single name lowers production and manufacturing costs.

That’s normally what we mean by a “global name.” But in China, the younger generation is giving globalization a provocative new spin. As China talks of opening itself to the world, its young people are presenting themselves to the world by selecting new names in English.

Neuroscience and Brand Connections

As neuroscience opens the brain to marketers' scrutiny, the electrical flashes that arise in response to stimuli make it increasingly apparent that what drives purchase decision making is actually a primal mechanism of the mind -attachment. This signal of a potent emotional attachment is the foundation for brand success. It's a form of primal brand magic, built on a near-mythical brand story that unconsciously transports one from the mundane to the imaginational, transforming our inner world and inspiring us to buy.

A brand experience has the potential to actually transform our brain chemistry. The experience of a product/service and its messaging, can be transformational in a sensory way and emotionally. More importantly, at the end of a satisfying product experience, our feelings have been transformed into a strong emotional attachment (magical/mystical bond) that endures until proven otherwise.

Fostering magical brand connections is particularly important in this "new normal" era of consumer frugality because an emotional connection creates consumers loyalty. But how can CMOs begin the quest for the
magic brand grail. These three keys will unlock the doors to begin the journey.

1. Understand the "right brain" of your category.

Inside Subliminal Advertising

Today, another request from the BSI Emailbag. Kris, a marketer from Tampa, Florida writes:

"Please describe the origins of subliminal advertising."

Certainly Kris. The term "subliminal advertising" was coined to describe advertisements on television and in movie theaters that include extremely short duration text messages or images that are embedded into the advertisement to provoke a subconscious response from the consumer. Such messages are limited in duration by the refresh rate of television systems, but can be made much shorter with films by using a separate projector to flash extremely short duration messages.

The single test case that claimed to demonstrate the power of subliminal advertising was later exposed as a fraud, because the person performing the test falsified the results of the test. An audience at a theater was exposed to very short duration messages flashed onto the screen, encouraging people to purchase certain food products.

The theory was that people would subconsciously absorb the content of these messages (e.g., "Buy Sudz, it's a great detergent") and respond by selecting the product in stores. Testing has never demonstrated any such correlation. However, the level of fear generated by the concept of subconscious persuasion was so high that subliminal advertisements were strongly discouraged, even though they were rarely used, apart from testing audience reaction, and did not produce the desired results.

When To Launch A Second Brand

Whenever a fashion or technological change occurs, an existing brand, no matter how dominant, faces a choice.

Should the brand be ‘stretched’ to encompass the new fashion or technology or should the company launch a second brand? If the change is significant enough, the better answer is almost always ‘launch a second brand.’

* The rise of casual clothing in the workplace led Levi Strauss to introduce Dockers which has become a billion dollar worldwide brand.

* The success of Mercedes-Benz and BMW led Toyota to introduce Lexus which has become the largest-selling luxury vehicle in the U.S.

* The success of Makita, a Japanese professional-tool brand, led Black & Decker to introduce DeWalt which has become the dominant brand in the category.

* The success of Costco led Wal-Mart to introduce Sam’s Club which is now neck and neck with the category leader.

When it comes to launching successful second brands, you rapidly run out of case histories. By far the majority of marketers prefer to expand their core brand to cover the new category. With mediocre success. Some examples:

The Anti-laws of Luxury Marketing #13

13. Raise your prices as time goes on in order to increase demand

In the standard market model, when the price falls, demand rises. With luxury, the relationship is reversed. In the 1950s, Krug was one of the smallest champagne houses. Its champagne had an excellent reputation, was adored by the great artists and performers of the day, and particularly appreciated in Great Britain. In the late 1950s Moët & Chandon, on finding that Krug was being rationed (the product’s objective rarity made that a necessity), launched its new product that was destined to upset the status quo radically. Dom Pérignon was introduced at a price three times higher than that of Krug. In order to speed up the symbolic acceptance of Dom Pérignon, a quantity of it was dispatched to the Queen of England, and in 1961, in the very first film of the James Bond series, Agent 007 drank nothing but Dom Pérignon.

How was Krug to respond to that in order to regain its position at the top of the champagne hierarchy?

-Should it do nothing, believing that the superiority of its product would speak for itself – the truth being in the glass?
-Or, should it imitate Dom Pérignon, and at the same time improve it (a Lexus-type strategy)? This seemed an impossible approach for a house that had been in existence for 160 years, managed by the same family for five generations, and conscious of its mission.

Innovation: Pathway To Brand Success

I am a huge advocate of innovation. Some of the most successful brands the world has witnessed are the result of innovation. Think Apple iPod or Toyota Prius or eBay or Amazon.com or even my hometown grocery chain, Wegmans. They have all experienced uncommon success based on innovation.
First, let’s define innovation. Innovation is the application of novelty to create value.

What leads to innovation? Here is my short list (based upon several experts’ extensive research in this area):

•    A penchant for experimentation and action over analysis
    o    Wegmans has succeeded over the years by constantly testing new concepts in a few stores and then, if they are successful, integrating them throughout their other stores.
    o    Organizations need to play to win rather than play not to fail.
•    The realization that in many industries, approximately 70% of innovations are developed by users, not the firm bringing the product to market (from research done by Professor Eric von Hippel at MIT)
    o    Harley-Davidson executives go on HOG Rallies with their customers taking notes and asking questions about accessories, bike modifications and other user-added features. They then debrief and act on what they discovered upon returning to their headquarters.

How To Attack The Leading Brand

You know the kid’s game. Rock (fist) breaks scissors. Scissors (two fingers) cuts paper. Paper (flat hand) covers rock.

So what’s the best strategy in a game of rock/scissors/paper? The answer is obvious. It all depends on what strategy the other kid uses.

So, too, in marketing. Your best strategy often depends on what strategy your competition is using. This is especially true if you are trying to compete with a No. 1 brand, perhaps the most difficult job in marketing.

Take Pepsi-Cola. How does the brand compete with No. 1 Coca-Cola?

Be the opposite. Coca-Cola is widely perceived to the real thing, the authentic brand, the long-time market leader. So how does Pepsi-Cola become the opposite of the real thing?

‘The imitation cola’ is not going to cut it. Pepsi had to look a little deeper into the situation. Coca-Cola is also perceived to be a brand that has been around for a long time. (Actually 123 years). It’s the cola your parents drank.

So Pepsi-Cola became the cola for the younger crowd. ‘The Pepsi Generation.’

Over the years, The Pepsi Generation is the only advertising strategy that has substantially moved the needle. And aside from a technological breakthrough, the only strategy that is ever likely to move the needle.

Be the opposite is a marketing strategy that can work for any brand in any product category. How did Loew’s, for example, manage to make substantial progress against market leader Home Depot?

5 Retail Marketing Trends for 2010

1) Inconspicuous Consumption

Consumers respond to the social moment by taking consumption into the closet. As when we talk about going to Fred's (in-store restaurant), not Barney's. Or, ask to have new purchases shipped, rather than be seen carrying a branded shopping bag. Or, decide to have shoes repaired and last year's jacket altered. Spending as a covert activity. No bragging rights.

2) The Dyslexic Dilemma

It's a "b." No. It's a "d." Consumers stall in their tracks, trying to figure out what to do, right now. Are we heading out of the woods, or perhaps a bit deeper into it. The moment to watch: What happens when unemployment hits 10 percent at the exact moment the Dow tops 10,000. That deer-in-the-headlights look on the consumers' face: Now or not yet? What is the real barometer of economic health? Dare I buy a peach?

3) Private Labeling

The number one brands thrive, innovating, advertising and product improving. But, the number 2s and 3s stop striving, unable to compete with performance advances or on price. Into the vacuum steps Private Label. No longer just "okay, available and cheap," these grocery aisle invaders are well-branded, feature rich and are oh-so-profitable for the stores. Say goodbye to familiar but moribund household names; say hello to snazzy new entrants that shave quarters off the check-out total without sacrifice. (Store brands in play at Walmart pictured above)

The Upgraded Brand Extension Threat

A recent trend in marketing is the downgrading of established brands by upgraded line extensions.

Take Budweiser Select. According to Anheuser-Busch, "When it comes to brewing beer, the prevailing assumption is that you can't have it both ways. You can either aim for the best possible flavor, forgetting about calories and carbs; OR you can keep the calorie count in check, and sacrifice taste along the way. Budweiser Select is the exception to these brewing rules."

So what does that make Anheuser-Busch's other low-calorie beer? "Bud Light Mediocre?"

Kroger, the country's largest supermarket chain, has opened new superstores in Dayton, Cincinnati and Atlanta, called "Kroger Fresh Fare."

So what does that make regular Kroger stores? "Kroger Stale Fare?"

Well, you might be thinking, nobody pays attention to words like "fresh fare" or "select" anymore. They are just part of our daily routine of pleasant promotional puffery.

It's true. The language of marketing has had the belief squeezed out of it. Years of hyperbole have wiped out the meaning of many of the words used in brand names and advertising.

There are, however, a number of examples of line extensions that could seriously damage the core brands.

The Anti-laws of Luxury Marketing #12

12. Luxury sets the price, price does not set luxury

Money does not do a worthy job of categorizing objects or stratifying them unless they have been culturally coded. This ‘anti-law’ means that luxury is what could be called ‘supply-based marketing’. That is why traditional marketing is in a state of confusion here: it is fully ‘demand-based’. In luxury, you first come up with a product, then you see at what price you can sell it; the more it is perceived by the client to be a luxury, the higher the price should be. This is the opposite to what applies in the case of a classic product or trading up, where the marketer tries to find out at what price level there is room for a new product.

There is one key consequence for selling: sales staff in a store help people understand, share the mystery, the spirit of places and objects, and the time invested in each item – which explains the price. Customers will be free to buy later.

Excerpted in part from: The Luxury Strategy: Break The Rules of Marketing to Build Luxury Brands by JN Kapferer and V. Bastien, in partnership with Kogan Page publishing.

Sponsored By: The Brand Positioning Workshop