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Luxury Glossary
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Accessible (vs. Exceptional) Luxury Products: As mentioned before, the major characteristics of luxury products provide relevant means of differentiation. Dubois and Duquesne (1993, p. 38 et seq.) suggest distinguishing between accessible and exceptional luxury products on the basis of an inter-categorial comparison of their selling price, which also impacts their diffusion level and repurchase rate. While accessible luxury products such as perfumes are affordable for most people at least from time-to-time, exceptional luxury products such as private jets are only affordable for very few people (inaccessible for most people). This differentiation is especially relevant for the evaluation of the luxury consumption experience, as it is far more revealing if someone buys an expensive car than a bottle of champagne (see also Heine 2010c, p. 136). This dichotomy can be complemented with the additional category of intermediary luxury products such as Porsche cars. Although they are usually bought by wealthy people, in contrast to private jets, they are still within reach for many people. For instance, a genuine fan might fulfil his dream of owning a Porsche after saving many years for this car, instead of saving for an apartment (see also Allérès 2003, p. 56). See...
Connoisseur brands (Differentiated by awareness, see also star brands): Connoisseur brands, such as Goyard, a French manufacturer of luggage, are limited awareness brands which often specialize in a niche market. These brands are made by and for connoisseurs, and do not even strive for high awareness beyond their relatively narrow target group of select insiders. Connoisseur brands are often also network brands, which are recommended by word-of-mouth between friends (Belz 1994, p. 647). See...
Conspicuous (vs. Understated) Luxury Products: These product types are differentiated by their proportion of conspicuous attributes. Manufacturers of conspicuous luxury products focus on price in particular, i.e. on a product image of being expensive. Therefore, they equip their products with typical symbols of wealth and high price such as big logos and rich decoration. It’s all about symbols, not about substance. True product quality and excellence are less important than maximum performance, features and size (Kapferer and Bastien 2009b, p. 315). A splendid example is the fountain pen "La Modernista Diamonds" by Caran D’Ache, an "over-priced savourlessness", which works with rather ordinary ink cartridges, but is decorated with 5.072 diamonds and 96 rubies (Marguier 2007, p. 85). Nevertheless, such products form a special market niche for consumers who feel extremely special. The biggest share of the luxury market consists of non-conspicuous products, which might also show some conspicuous attributes, but are not primarily made to be conspicuous. On the other extreme, there are luxury brands such as Jil Sander and Bottega Veneta that are known for their understated products, which seem to hide any conspicuous attributes. However, although Bottega Veneta bags cover no logo, they still have a characteristic design that can be easily recognized by connoisseurs, which makes them suitable for conspicuous consumption between connoisseurs. The major difference is that conspicuous consumption with understated products is nowadays considered a bit more sophisticated.See...
Democratization of Luxury: Both the trading-up strategy of masstige brands and the trading-down strategy of luxury brands make luxury-like products accessible for middle-class consumers. This development is referred to as the "democratization of luxury". According to the economic relativity of luxury (see above), democratic luxury products are characterized by Kapferer and Bastien (2009b, p. 314) as ordinary items for extraordinary people, which are at the same time extraordinary items for ordinary people. See also Masstige brands.
Elite-level luxury brands (Differentiated by luxury level, see also: Entry-Level, Medium-level, Top-level luxury brands): As niche brands in the top of the top segment, these brands determine the benchmark of the best quality and highest exclusivity within their category. Puiforcat, for instance, is an elite-level luxury brand within the silverware segment (Marguier 2007, p. 42). These brands target the "clientèle de connoisseurs", who do not just posses the necessary financial resources but also a "culture intellectuelle" (Lombard 1989, p. 16). See...
Entry-level luxury brands (Differentiated by luxury level, see also: Medium-level, Top-level and Elite-level luxury brands): As these brands rank just above the premium segment on the lowest luxury level, they are not even generally recognized as members of the luxury segment. Representative brands include Hugo Boss and Mercedes. See...
Exceptional (vs. Accessible) Luxury Products: See Accessible Luxury Products.
Expanded-diffusion products (Differentiated by their exclusivity and production volume, see also: Unique Pieces, Limited Editions and Limited-diffusion Products): Although their production volume is still relatively limited in comparison to mass-market products, their production process resembles mass-market serial production (Sicard 2003, p. 72). Examples include Dolce & Gabbana jeans, Poggenpohl kitchens and Porsche automobiles. In the fashion segment, this category can be referred to as high genre (Allérès 2003, p. 96). See...
Griffe: See Unique Pieces.
Limited-diffusion products (Differentiated by their exclusivity and production volume, see also: Unique Pieces, Limited Editions and Expanded-diffusion Products): The high rarity of these luxury products relies on their manufacturing complexity which requires a high degree of handwork and craftsmanship (Sicard 2003, p. 72). Limited-diffusion products include Gucci Bamboo bags, Maybach automobiles and Meissen porcelain figures. In the fashion segment, this category can be referred to as prêt-à-porter (Allérès 2003, p. 96). See...
Limited editions: (Differentiated by their exclusivity and production volume, see also: Unique Pieces, Limited- and Expanded-diffusion Products): Still very close to the ideal of the griffe are products made in highly limited editions. For instance, the Guerlain Kiss Kiss Or \& Diamants lipstick is produced in a limited edition of only 100 pieces (Trommsdorff and Heine 2008b, p. 1669). See...
Luxury: Basic definition: Luxury is anything that is desirable and more than necessary and ordinary. General perspectove: Luxury is anything that is desirable and which exceeds necessity and ordinariness. As a general rule, this is defined from a global perspective, for the present and for normal conditions. While the exclusivity of resources is evaluated by the entire society, the desirability of resources and the appearance of luxury are determined by the upper class. More...
Luxuries: Luxuries correspond to the philosophical-sociological understanding and the broadest scope of luxury, comprising all resources which are desirable and exceed what is necessary and ordinary. More...
Luxury Brands: Basic definition: Luxury brands are associated with products which exceed what is necessary and ordinary compared to the other products of their category. More... Operationalization: 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. More...
Luxury Goods: Luxury goods correspond to the micro-economic understanding and the middle scope of luxury, comprising all goods which exceed what is necessary and ordinary, and are suitable for exchange on the market. More...
Luxury Products: Basic definition: Luxury products correspond to the managerial understanding and the smallest scope of luxury, comprising all products which exceed what is necessary and ordinary compared to the other products of their category. More specific: Luxury products correspond to the managerial understanding and the smallest scope of luxury not comprising services or real estate, but products which exceed what is necessary and ordinary compared to the other products of their category. These products are branded, founder-independent, multi-regional, contemporary and possessed or used by a person to enhance his or her personal life. More... Operationalization: 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. More...
Masstige Products and Brands: The emergence of this new type of brand resolved the traditional dichotomy between luxury and non-luxury brands. The term "masstige brands’" easily conveys their basic idea: offering prestige to the masses (some authors also use "new luxury" or "mass luxury" (Kapferer and Bastien 2009b, p. 312). Typical masstige brands include Coach, Godiva, Starbucks and Victoria`s Secret (Silverstein and Fiske 2003, p. 51). Although these brands are not luxury brands, they still rate higher than middle-market brands on the major dimensions of luxury products. Masstige brands concentrate especially on creating symbolic benefits and prestige; they care very much about shine and therefore also about design. Zara exemplifies the idea of selling taste and style to the masses, which is accomplished by imitating the design of luxury brands for their clothing, stores and advertising. However, as demonstrated in figure 1, they are forced to cut back on the other major characteristics. A mass-prestige-business in the mass/middle-class market reduces the level of rarity and can only be achieved with reasonable prices, which, in turn, requires a compromise on quality, extraordinariness and aesthetics (see also Keller 2009, p. 295). The study carried out by Truong et al. (2009, p. 379) demonstrates that masstige brands successfully differentiate themselves from middle-range brands by their prestige and from luxury brands mainly by their reasonable pricing. The authors found out that products from luxury fashion brands are about three times more expensive than masstige products, which, in turn, are about twice as expensive as middle-range products. While there is only a relatively small difference in prestige between luxury and masstige brands, the latter were indeed perceived as being much more prestigious than middle-range brands.More...
Medium-level luxury brands (Differentiated by luxury level, see also: Entry-Level, Top-level and Elite-level luxury brands): These brands are widely recognized as members of the luxury segment, but are a step behind the forefront of luxury. Examples include Dolce & Gabbana, Escada and Moschino. See...
Personal (vs. Impersonal) Luxury Products: Product categories are especially suitable for a luxury strategy in a context where consumers employ luxury products to manage their self-image (Vigneron and Johnson 1999, p. 4), and where they increasingly build up a personal connection with these products (Nueono and Quelch 1998, p. 62). In contrast to products such as hedge shears and kerbsides, "people related items" such as apparel, glasses, and wristwatches are therefore especially suitable as luxury products (McKinsey 1990, p. 19). Furthermore, within the luxury segment there is a continuum that ranges from these very personal to relatively impersonal products, such as bathroom equipment and garden furnishing. See...
Publicely (vs. Privately) Consumed Luxury Products: These types of luxury products are differentiated by the social setting of consumption. While publicly consumed products such as cars are seen by others, privately consumed products such as kitchen appliances are not usually seen by many others. For some product categories, the categorization is especially situation-dependent. For instance, a good wine can be consumed conspicuously in a restaurant or just all by oneself at home. This distinction is especially relevant for studies about social purchasing motives and reference group influence, which concentrate on products that are "seen or identified by others’"(Bearden and Etzel 1982, p. 184 et seq.).See...
Premium Products and Brands: Luxury products and brands can be distinguished from the premium segment by their constitutive characteristics. As discussed above, the major characteristics can be considered as dimensions ranging from a minimum level that is also necessary for non-luxury brands to a maximum level that corresponds to the highest form of luxury. As demonstrated in figure 1, premium brands rate higher on these dimensions than medium-level brands, but still well below luxury brands. While premium brands still remain down-to-earth and cannot lose sight of the value-for-money ratio, luxury brands are reaching exceedingly reasonable levels in the major luxury dimensions, and some of them even work on topping the current top-of-top luxury level. The differentiation between luxury and premium brands is mainly a matter of degree, which makes it difficult to draw a clear line, especially between top premium brands and entry-level luxury brands. However, there is also an essential difference between these types of brands: while premium brands focus especially on functional characteristics, luxury brands put much more effort into creating symbolic meaning. For instance, Lexus entered the US market with the objective of growing by taking customers away from Mercedes, which was identified as its major competitor. Therefore, they took the Mercedes E Class as the model to overtake and developed a car with a similar design and even superior technical features that was only sold for about half of the price. Lexus generated high growth rates in the U.S. However, they still focused very much on functionality and even emphasized their car`s value-for-money, and also had no vision or story to tell – which clearly positions Lexus as a non-luxury brand (Kapferer and Bastien 2009b, p. 316). See...
Prestige Products and Brands: The terms luxury brand and prestige or status brand are often used interchangeably (Bagwell and Bernheim 1996, p. 349; O'Cass and Frost 2002). However, prestige ranks as one of the major purchasing motives over all product categories and allows for the achievement of social reward and status (Trommsdorff 2009, p. 117). Luxury brands have what prestige-seeking consumers crave: they enjoy social prestige, which can be gained by buying these products. Nevertheless, the consumption of luxury products is by far not the only way to satisfy the need for prestige. As mentioned in above, there are also non-luxury products that allow consumers to increase their prestige including premium products such as Adidas sneakers or masstige products such as Godiva chocolates and Häagen-Dazs ice cream. The ability to increase the prestige of their consumers is not enough to distinguish luxury from non-luxury products and brands. Therefore, the term "prestige brands" should rather be used for all luxury and non-luxury brands whose products allow consumers to gain prestige. Accordingly, prestige brands correspond with the mirco-economic scope of luxury (see figure 1). The study carried out by Dubois and Czellar (2002, p. 3) also demonstrates that in many categories, prestige can be achieved independently of luxury and that luxury and prestige are also perceived as different in the eyes of consumers. See...
Star brands (Differentiated by awareness, see also Connoisseur brands): Star brands, on the other hand, strive for maximum brand awareness well beyond their actual target group. This is in contrast to both connoisseur brands and mass-market brands, which aim at minimizing wastage in their brand communications outside their core target group consumers. Even if star brands are bought only by relatively few people, they preferably should be known by everyone. One of their consumers’ major purchasing motives is to demonstrate their wealth to other people, who often cannot afford these luxury products. Therefore, star brands such as Rolex or Louis Vuitton also have to be known by non-target group consumers in order to fulfill the need of their target group consumers for demonstrative consumption. If people would fail to recognize the brand and thereby the value of a Rolex wristwatch, part of its value would be lost (Kapferer and Bastien 2009b, p. 319). Star brands can be differentiated by their actual level of awareness into the following types:
- Little stars strive for high awareness, but are (still) relatively little-known. Examples include Asprey, Brioni and Shanghai Tang.
- Big stars have already achieved a high level of awareness, but still rank somewhat behind the global stars. Examples include Chloé, Fendi and Moschino.
- Global stars are globally well-known flagship brands such as Hugo Boss, Louis Vuitton and Rolex. See...
Status Brand: See Prestige Brand.
Top-level luxury brands (Differentiated by luxury level, see also: Entry-Level, Medium-level and Elite-level luxury brands): These brands are established beyond doubt as leading luxury brands. Examples include Armani, Cartier and Louis Vuitton. See...
Understated (vs. Conspicuous) Luxury Products: See Conspicuous Luxury Products.
Unique pieces (Differentiated by their exclusivity and production volume, see also: Limited Editions, Limited- and Expanded-diffusion Products): This top category typifies the ideal of the luxury segment and is more accurately described by the French word "griffe", which refers to the clutch of an inspired creator, who is obsessed by the idea of forming a unique masterpiece, an œuvre d'art, that is truly unsurpassable in its perfection. This ideal is exemplified by the haute couture clothing of the exclusive circle of couture houses such as Chanel, Christian Dior and Jean Paul Gaultier (Kapferer 2001, p. 323). See...
Heine, K. (2011) The Concept of Luxury Brands. In: Luxury Brand Management, No. 1, ISSN: 2193-1208, Technische Universität Berlin, www.conceptofluxurybrands.com, download here.