Before you leap into the luxe market, you’ve got to develop a marketing plan, which starts with defining and studying your target market. In this article, we’ll discuss the things you need to know about your prospective buyer, where to find this information and how to analyze the data you uncover so that you can decide whether and how to sell your products to affluent buyers.
You cannot guess who your customers are or pretend to know their needs. Knowing your target market means being able to describe demographics (sex, age group, education, household income, disposable income) and psychographics (lifestyle, values, shopping habits, family characteristics, attitudes toward money and other attributes that describe what the group cares about, and how the group feels and lives). What are the media habits of your target clientele? Are they consumers of TV, radio, print magazines and newspapers, or do they get most of their information from the Internet?
The more you know about your target market, the better you can discover the problems and opportunities for entering this market, establish precise marketing objectives and goals, and develop a marketing strategy and tactics for implementing the strategy.
Many organizations will be happy to take your big check for a report, survey or access to a database. But for those working within a limited marketing budget, there are other, less expensive ways of gathering information. Mining for data takes time, but it is essential for pointing you toward successful ventures and keeping you from potential disasters. Below are a few places to start your search. I also like Paula Berinstein’s Business Statistics on the Web, which lists online sources for data as well as research tips.
- Chambers of commerce and regional economic development boards – Contact the chamber or economic development board in the geographic area you are targeting. They can supply you with demographic information such as income, education, and stats on the community and current business conditions.
- Consumer magazines and journals — Specific magazines geared toward affluent readers include: Fine Art Connoisseur, Flaunt, Lux, LUXE Magazine, Luxury Insider, Millionaire, Ornament Magazine: The Art and Craft of Personal Adornment, The Robb Report and many Condé Nast publications such as GQ, Lucky, Vanity Fair and Vogue. Download their print advertising/media kits; these are full of details from readership studies. As you flip through the magazines, note the category of products advertised, and read articles for insight into consumer spending trends.
- Marketing trade publications — Among the magazines for marketers and ad execs are Advertising Age, Brand Week, Deliver, DMNews, Marketing Today, Multichannel Merchant, Promo Magazine and Target Marketing.
- U.S. Census Bureau — www.census.gov. Your gateway to demographics.
- U.S. Small Business Administration — The SBA can provide you with market analyses, national directories, basic library reference sources and other information that will help your market planning.
Get People Together
Your most valuable research can come from generating primary source data yourself, so start talking with potential clients. “Identify folks who are interested in what you do and get them together,” says Bruce Kupper, marketing expert, founding partner of Black Twig Communications and author of the book Personality Sells. Kupper suggests that artists without gallery representation who are looking to expand into the luxury marketplace test the market by approaching upscale frame shops in their community with the proposition of holding an art show. “I worked with the Deck the Walls people for years and we developed followings all over the country for artists that specialized in abstracts, sports, landscapes, etcetera,” he explains.
Kupper points out the benefits of this kind of partnership: Frame stores often have a mailing list of between 300 and 3,000 customers, many of whom consider themselves collectors; while the store will mark up the price so that it can get a 30 percent margin, the store pays promotional expenses. In addition, the store improves its own market position by holding these events. “They [buyers] will look at the guy as more than a framer, as someone who really understands artwork. All of a sudden, the frame shop becomes a mini art gallery,” explains Kupper, who noted that the 14 Deck the Halls stores located in upscale malls around the country who participated in the fine art program did 400 percent more business than those who only sold frames.
If you are a talented sketch artist, Kupper suggested another way to conduct primary research: Participate in a charity cocktail party or other high-brow fundraiser by sketching guests. In the course of an evening, you might do 10 to 15 sketches, each lasting 15 minutes or so. “You donate 10 percent of the sales to charity. The sketch gives you a chance to talk to the person, and you get a feel for your market. That’s an inexpensive way to do research,” Kupper comments.
Analyze the Data
Once you amass critical information about your target market via primary and secondary sources, try to discern relevant data and important relationships that will enable you to compile a list of problems and opportunities, as well as buyer wants, needs, expectations and other indicators that can help you fine-tune your product, placement, pricing and promotion for this market.
Take, for instance, data from the third annual Survey of Affluence and Wealth in America, released in April by Harrison Group and American Express Publishing. The study queried more than 1,500 upper-middleclass, affluent, super affluent and wealthy individuals about the impact of the current economic crisis on their financial planning and spending. The respondents, who have discretionary annual incomes up of at least $100,000, ranging up to $5 million, represent 10 percent of the American population, but account for half of all retail sales.
The joint press release issued by Harrison Group and American Express Published stated that: “Respondents reported an increase in conscientious savings, a newfound economic resourcefulness and an enjoyment of life’s value-priced ‘micro-pleasures’ — smaller-scale purchases and experience versus grand expenditures.”
“The purchase criterion for the upper-middleclass, affluent and the truly wealthy … is now, ‘What do I really need?’” says Cara David, co-director of the study and an executive with American Express Publishing. Findings also revealed that more than half of the respondents believed that “a few luxuries were important in tough times.”
“This new resourcefulness means, however, that as the recession ebbs, merchants cannot expect a return to the sort of ‘retail gluttony’ that has characterized the last 10 years,” states David. “Instead, consumers will continue to apply their newfound skills in comparative pricing, needs identification, budget-based and values-based shopping. Brands will have to get in line with the spirit of this ‘rational exuberance.’”
How might you market your artwork within a “rational exuberance” framework? If your localized target market research, like this nation-wide survey, reveals psychographic findings that “family, togetherness, goodness and small pleasures” are the ideas that will sell the best in 2009, how do you intend to satisfy those needs with your artwork?
These are just a few of the problems and opportunities you need to discern so you can move toward the next phases in your marketing plan — establishing marketing objectives and goals (think sales volume, market share, return on investment), and manipulating marketing variables (product, price, promotion and distribution) that result in the optimal marketing mix for your entry into the luxury marketplace. 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.