What is the "Code of Luxury"? - Part I: Functional Component

 

Luxury brands such as Dior and Rolls-Royce have some attributes in common, which distinguish them from non-luxury brands such as H&M and Toyota. Since luxury brands are characterized by selling luxury products and since they are also highly associated with their core products (Kapferer, 2008), they are generally also defined by consumers’ associations with their product attributes. The definition and categorization of luxury products and brands by their attributes is therefore considered to be part of the functional component of the luxury brand identity. Luxury products were operationalized by identifying comparison criteria between luxury and non-luxury products based on several consumer surveys. Results suggest that consumers perceive that luxury products have six major characteristics including price, quality, aesthetics, rarity, extraordinariness, and symbolic meaning. These characteristics help to decide for most products whether they are part of what is meant by the term “luxury product”. The characteristics are used for the following definition of luxury products and brands:

 

Luxury products have more than necessary and ordinary characteristics compared to other products of their category, which include their relatively high level of price, quality, aesthetics, rarity, extraordinariness, and symbolic meaning.

Luxury brands are regarded as images in the minds of consumers that comprise associations about a high level of price, quality, aesthetics, rarity, extraordinariness and a high degree of non-functional associations.

 

As shown in the figure below, the major characteristics were complemented with further sub-categories. They are categorized into concrete, abstract and manufacturing characteristics. The latter category refers to the specific manufacturing process that allows for the creation of concrete and abstract product characteristics. Concrete characteristics refer to physical product attributes and are directly observable. A combination of several concrete attributes yields an abstract attribute such as comfortability. The process of classification also leads to a better understanding of the objects of investigation. Besides their value in helping to define and classify luxury, the characteristics of luxury products and brands thus also help to develop an understanding about how they are actually created (Heine, 2012).

 

Major Characteristics of Luxury Products

Major Characteristics of Luxury Products

 

The constitutive characteristics of luxury products and brands can be referred to as the “code of luxury” that any luxury brand has to comply with at least some degree (see also Kapferer and Bastien, 2009). A detailed explanation of the luxury characteristics serves as a handbook for the creation of luxury products and brands (see Heine 2012). The major characteristics are summarized by the following principles:

  • Price: The brand offers products which people think belong to the most expensive products of their category.
  • Quality: The brand aims to create everlasting top-of-the-line products, which won’t be disposed of even after long utilization or defect, but rather repaired and which often even gain in value over time so that consumers can even hand them on to their grandchildren.
  • Aesthetics: The brand behaves like a chic and vain dandy, who would never leave the house in less than perfect style. Whenever and wherever the brand is seen, it embodies a world of beauty and elegance.
  • Rarity: In contrast to mass-market brands, the brand needs to limit its production and tries not to disclose its (high) sales numbers. The brand plays hard to get and is not available at all times or places. • Extraordinariness: The brand has a mind and style of its own and its products offer an extra kick and surprise with the expected unexpected.
  • Symbolism: The brand possesses a high level of prestige and stands for “the best from the best for the best”; its charisma fills the room, and regardless of whether it is of a conspicuous or understated nature, deep inside, it is swollen with pride.

As comparative terms such as luxury rely on continuous characteristics, the major characteristics of luxury products can be considered as dimensions ranging from a minimum level that is also necessary for non-luxury products to a maximum level that corresponds to the highest form of luxury. Of course not all luxury products and brands are equally luxurious. The luxuriousness of a product increases proportionally with the increasing level of at least one of those dimensions.

The characteristics of luxury products are not independent from each other. This means that if one dimension is at a high level, it also induces high levels of other dimensions, offering additional support to the argument that these six characteristics are constitutive of luxury products. For instance, their relatively small production volumes (high rarity), their superior level of quality and the relatively high effort made for aesthetics, extraordinariness and a good story behind the product inevitably lead to a relatively high price (see also Dubois et al, 2001; Mortelmans, 2005). Products that are more than necessary and ordinary obviously need to be scarce and cannot be owned by everyone, which is not possible as they are too expensive anyway. Moreover, consumers use price as an indicator of product quality.

Consumers’ judgments about quality and the other product characteristics depend on the comparison between product expectations and perceived product attributes, and this comparison influences their perceptions about product benefits and thereby their purchase decision. This has two major implications. First of all, different consumer segments differ in their expectations of their ideal luxury product. Not everyone would prefer a Rolls-Royce to a Bugatti or Porsche. Therefore, the objective is not for all characteristics to be at a maximum level, but to adjust the luxury level of the major characteristics to a specific combination depending on the preferences of their target groups. Consequently, the six dimensions offer a basic means of differentiation for luxury products, brands and consumers (Esteve & Hieu-Dess, 2005). For instance, while Hermès emphasizes its superior quality standard and thereby attracts traditional and aristocratic luxury consumers, bling-bling designer Peter Aloisson concentrates with his Kings Button iPhone on the dimensions rarity (home button of a rare 6.6 carat white diamond) and price (more than 2 million €) and therewith on typical snob consumers.

Secondly, objectively existing product attributes are not as important as consumers’ subjective perceptions of the product’s attributes. The rarity of Louis Vuitton bags is determined partly by the production volume and partly also by the brand’s marketing tactics. Consequently, luxury companies compete above all for the best possible perception of their luxury characteristics by their target groups (Catry, 2003; Phau and Prendergast, 2000). A brand only qualifies as a luxury brand if it actually succeeds in evoking luxury-specific associations in the minds of its target groups. It has to transfer its intended brand identity into the minds of its target consumers without it being distorted by other external influences, such as the marketing measures of competitors. Meeting this challenge requires a great deal of expertise in effective luxury marketing techniques. Accordingly, many luxury brands are true master teachers in creating illusions and influencing consumer perceptions (Catry, 2003). Their techniques include glamorous advertising campaigns and prestigious flagship stores, but also many subtle details. For instance, Aigner may (slightly) improve the quality perception of their leather bags by making sales people putting on white gloves before they present a bag to a customer.

The functional component of the luxury brand identity is explained in detail in "The Concept of Luxury".

After building a functional foundation of the luxury brand identity, the next challenge is to master the creation of luxury-specific symbolic meaning, which will be discussed in the subsequent paragraph.

 

 

Source (an excerpt from): Heine, K., Phan, M., Waldschmidt, V. (2014) Identity-based Luxury Brand Management. In: Berghaus, B., Müller-Stewens, G. & Reinecke, S. (2014) The Management of Luxury. Kogan Page: London, pp. 83-98.