Luxury Marketing Part 1: Finding Your Place in the Luxury Market

Even as the economy is going through a recession, a market for luxury goods and services still exists. While American consumers are cutting back on extravagant spending, they are not willing to give up on indulgences altogether. It is entirely possible for you to sell your art in this marketplace even in this current climate, as long as you understand luxe buyers and their behavioral patterns, and can then develop and implement a marketing plan geared toward this audience.

In this five-part series on luxury art marketing, we’ll take you through the business of luxury. You’ll learn how to identify and research your target audience; how to posit yourself as a luxury brand; and how to tap into buyer sentiments, as well as some creative ways to increase your market position.

Today’s luxury marketplace

The market for luxury goods and services has grown significantly in the last 20 years, expanding vertically and horizontally. There are more categories of products every year and more products available within each category. There are luxury entries now in virtually every product type imaginable, and it is constantly evolving toward more elaborate and higher quality offerings. Luxury buyers today differ in some important ways from their counterparts of a generation ago. Research has shown that today’s luxury buyers will not spend money indiscriminately in every luxury category, even if they are extremely affluent. Instead, they will trade up and spend more money in categories that have emotional importance and meaning for them, and trade down in or ignore other areas that they do not care about.

Income is not a reliable indicator of a luxury consumer either. James Twitchell, author of Living it Up: Our Love Affair with Luxury, stated that “since the 1980s, the bulk consumers of luxury have not been the wealthy but the middle class, your next-door neighbors and their kids.” Given these unexpected patterns of consumption, it is critical that purveyors of luxury goods and services study this market closely to formulate a marketing plan and deliver a message that resonates with prospective buyers.

Luxury buyers think differently.

In almost every case, buyers purchase luxury goods in order to satisfy various emotional needs, even if they are not consciously aware of those needs. As in the past, some needs like the desire for status and pride of ownership are still important motivating factors for today’s buyers.

The “must-have” sentiment runs deep in a luxury buyer’s mind. Writer Jill Kargman recently reported on the adjusted buying habits of affluent women in Manhattan whose husbands work(ed) in the now embattled Wall Street (“Hedge-Fund Wives: The Inside Story,” Harper’s Bazaar, April 2009). One of Kargman’s interviewees is quoted as saying, “I still want luxury, but it has to have and keep value, like a black Carolina Herrera gown, a bouclé Chanel suit, or an Hermès handbag.” Kargman summarized that “most women I’ve polled agree that they’ve cut back on spending but would still buy items they conceded were must-haves.” Companies that are successfully selling luxury goods right now are doing so because they have identified the emotional needs that motivate the consumer to make a purchase. How do you sell cut flowers, high-end chocolate, diamonds rings and other extravagancies despite the poor economy? One answer is to change the message. Diamond sellers DeBeers is touting its gems not as opulent objects but as a thoughtful investments; others play with the sentiment that we need something that makes us feel good during hard times.

Elements of luxury

Luxury means exclusive. Everything about luxury — price, product, packaging, personalized service — is crafted to emit an aura of eliteness. Chevrolet and IKEA, for instance, are not luxury brands because, among other things, their products are priced too low to fit into the luxe category. Another difference between common versus luxury products and services is that the latter are delivered with culture experiences of high expectations. A good example is the slick mailer that recently arrived in the mailbox from Porche. The ad, a promo for the Porsche First Mile test drive, read “You are under no obligation. Except to have to the most remarkable experience of your life.” Luxury implies that the experience of buying and owning will be unparalleled. Offer the ultimate culture experience that your buyer is seeking and you justify the exorbitant price tag.

Create an object of yearning.

Luxury is a culture that will forever be created. A good product or service can be adored (and sometimes ignored), but a luxury product or service is most often worshiped. Compare the status of an everyday person compared to a celebrity. While society may be indifferent to the “Average Joe,” a celebrity can develop a cult-like following. How do you achieve worship status? Branding, placement and PR.

Branding is central to creating a product of perceived high-end value and differentiation from another object of the same category because branding creates a personality. The language code in advertising and other marketing efforts attempts to get consumers to accept a product as extraordinary and magical, and then act on that notion by making a purchase.

As far as placement goes, a luxury product cannot appear in just any old place if it is to retain its high status. Consider the celebrity example once again. The public appearance of a movie star is carefully scripted. Appear everywhere and you lose your value as a superstar. You have to appear at the right venue; be seen with others from the A-list. Non-appearance, or scarcity, is, in fact, a huge part to creating the perception of luxury. “Limited edition,” “original” and “one-of-a-kind” are examples of how scarcity can be applied in the art world; rarity triggers a desire to have what others cannot.

Besides spending vast amounts of money on market studies and advertising, luxury companies also resort to public relations. Why? Because PR means exposure, which builds brand awareness and improves market position. Sure, it’s great if Mom or Dad talk up your product (and believe me, word of mouth is a powerful marketing tool), but get the “right” people buzzing over it because they read an article, blog or “tweet,” heard a radio clip or podcast, watched a TV program or YouTube video, and your positional value rises.

We’ve given you a broad overview of the luxury goods market. In the next article, we’ll provide you with the resources you need to study and understand luxury demographics so that you can tailor your marketing plan to address those unique desires. AC

 

Contributing writer and communications consultant Ligaya Figueras specializes in business writing, marketing and media relations for visual and performance artists, writers, nonprofit organizations and specialty service providers. Follow Ligaya on Twitter at twitter.com/LigayaFigueras, or friend her on Facebook at facebook.com/ligaya.figueras.

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