Accurate positioning – the key to success in the luxury goods market
Speaking at an event in Milan earlier this week, Mr Santo Versace, Chairman of VERSACE Group indicated that in order to succeed in the luxury goods market, brands must be accurately positioned within three tier system. He based his thesis on the research of the Altagamma Foundation, the association of Italian luxury brands which he also chairs.
The three tiers of the luxury market are defined as accessible, aspirational and absolute:
Accessible luxury (brands such as Burberry and Tiffany & Co): a market segment in which opinion formers need to be in constant contact with the target audience concentrating messages on product performance characteristics. One of the main communication tools is advertising, closely integrated with PR and events.
Aspirational luxury (brands such as Gucci and Yves Saint Laurent): a segment based on an imitative process – from opinion leaders and trendsetters to the customer base. In addition to performance characteristics, the marketing messages are enriched by aesthetic, stylistic, artistic and design content. The goal is to re-create the emotional and creative world of the brand, containing the cultural and psychological references that justify the price. Here, the communication focus switches to PR and events, with advertising playing a supporting role.
Absolute luxury (brands such as Hermes and Brioni): a similar approach to the aspirational segment but with an even greater importance attached to building the brand’s emotional environment. Messages about product characteristics are now in the background, as aesthetic content dominates the positioning and the aim is to generate a perception of exclusivity. Advertising is not used with these products and communication programs are driven by PR and events.