Welcome Luxury Brand Development Management and Internalization Dr

Welcome! Luxury Brand Development, Management and Internalization Dr. Satyendra Singh Professor, Marketing & International Business University of Winnipeg, CANADA https: //abem. uwinnipeg. ca s. singh@uwinnipeg. ca

The concept of brand development: Add value first Commodity 1₡-2₡ Goods 5₡-25₡ Service 75₡-$1. 5 Experience $2 -$2. 50 Then, we’ll do positioning, pricing, branding and communication around the value proposition 2

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Saussure theory (1983) 4

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Signs, interpretations and logos 6

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Sources (messages) of value to the brands Mercedes Engineering, sophistication and safety MBW engineering and driving Nike Performance Starbuck Best coffee experience Fed. Ex Overnight Harvard Leadership skills MIT engineering and management 3 M Innovation Luxury Dream!! Which dream? You can brand anything eg water, yourself… 8

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Lamborghini bicycle: $25, 000 — lightest 10

Franck Muller: Master of Complications 11

24 Complications—functionality other than timekeeping 12

Celestial map, do we need it? 13

900 parts in luxury versus 90 in ordinary versus 0 in electronic watch 14

Omega co-axial escapement watches 15

Brand identity (Only 3 made) 16

Black Credit Card 17

The Luxury: The dream club 18

The luxury product: the uncontrollable desire to be a celebrity You pay $5000 Limousine ride, hovering photographers red carpet, 4 hysterical fans… Can you imagine? 19

Characteristics of luxury brand Dream a dream with value Create exclusive club Functional Given Exchange Last long, can outlive you Emotional You adore it, source of joy Mythical There is something about it Ethical Links to social responsibility Identity Convey something about you 20

Brand content To sustain brand image To be the leader, set trends ↑ functional and emotional value How do we do it Educate customers History and heritage Interviews, fashion shows, manufacturing process Link brand to community Show social responsibility Gucci (mrf process), Chloé (fashion show) www 21

Brand identity… Levis Jeans with distinctive labels Missoni Knitted fabric in a special way Toblerone Chocolate, red/yellow packaging Tod’s Moccasins (shoes made from deerskin very soft, single piece of leather Ferrari Red automobile LOGOS play important role in forming brand identity 22

Brand identity… Ostrich Crocodile 23

Brand identity (Ethiopian Yarn) 24

Luxury brands and social responsibility Louis Vuitton Contemporary art education Montblanc UNICEF $10, 000 for a dinner ticket To help children Rich people compete to donate! Singer Bono’s brand in Africa Employment 25

Louis Vuitton Foundation: Contemporary art museum 26

Montblanc and UNICEF 27

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Employment generation 30

Employment generation: Vietnam 31

Employment generation: Ethiopia 32

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Luxury customization – Rich people like it Product LV: Choose color and material Point of delivery Bring receipt to customer, engrave their name Shopping experience Assistance to old people, special invitation, discount Customization online Online interaction Shop with a friend live video chat assistance Sales $20 m $60 m 35

Online product display 50% of luxury brands are online now Virtual mannequins 360 degree pictures i. Smell software You can smell the product on your computer! 36

10 Cs of luxury fashion online marketing Customer value Satisfaction Convenience Cost Communications Faster and targeted Computing Able to track online Customer franchise Trust, live assistance Customer care Community Social network Content Customization 37

Luxury logos are simple and elegant Japanese like logos more space for logos Europeans do not like logos on tie; US ok Icon apple Index relationship (smoke means fire) Symbols Ambiguous (Lion on Venice flag) Numbers, animals, initials, monograms, … 38

Luxury brand hinge North European Classical type Clear lines, contours, saturated colours, closed… shape, entirely visible Jil Sander, Ikea, Helmut Lang, BMW USA Calvin Klein, Donna Karan Mediterranean Brands Baroque type Criss-cross, open, exaggeration, line shadows… Loewe, Ferragamo, Dolce and Gabbana, Majorica, Lamborghini, Versace, Ronerto Cavelli 39

Internationalisation of luxury brands ① Create brands visibility awareness, Expand product line, men women ② License abroad 1 st perfume then fashion ↑ advertise for perfume ↑ brand awareness ③ Open flagship stores in big cities abroad. Balance Merchandise between COS & franchisee ④ Buy back franchisee. Get new balance. 40

Internationalisation by brands LV USA, Germany, Italy, Spain Burberry, Prada China Audi China: Chinese officials, made-in-China Hermés Shang Xia … 41

International luxury brand management Brand development Initially one product line extensive variety and colour Brand registration (5 -7 years validity) Register brand in few countries first $2, 000 - $3, 000 per brand (lawyer fee, tax…) If target 100 countries $200, 000 - $300, 000) Registration renewal Show proof of usages, or counterfeit operator Usually 20%-30% brands need renewals 42

Luxury brands become international when $50 m sales are reached 50% of public knows the logo Brand outlives investor eg 3 rd generation Brand is present in USA, Europe and Asia New category is developed successfully No longer advertisement is needed to sell 43

Questions? s. singh@uwinnipeg. ca https: //abem. uwinnipeg. ca