06 - Developing Luxury Brands

Question 1

traditional model of brand management vs luxury model of brand management

Answer 1

traditional: brand positioning is foundation of strategy (POP + POD)

luxury: brand identity is foundation of strategy

Question 2

Kapferer’s brand identity

Answer 2

physique (salient features)
relationship (counterpart given by brand to consumers: tangible + intangible)
customer reflection (desired consumer type)
personality
culture (values, inspiration…etc)
self-image

Question 3

entry level products: 2 strategies

Answer 3

high volume + high margins (Gucci)

limited range, small volume + lower margins (Hermes)

Question 4

why luxury brand stretching?

Answer 4

1. enter new territories
   - ex: Cartier product portfolio expansion
2. reach new consumers w/out rejecting current ones
   - ex: Hermes launched a sari line in India

Question 5

luxury brand expansion strategies (new products)

Answer 5

line extension (w/in core business)
- ex: Cartier watches

brand extension (outside core business)
- ex: Bentley bags

Question 6

2 models of brand stretching

Answer 6

pyramid model (stretch top-down)
- may also be inverted (ex: Giorgio Armani resorts)

galaxy model
- all entries in the brand are ‘equivalent’ (ex: Ralph Lauren lifestyle)

Question 7

essential to lead a successful brand stretch

Answer 7

respect the brand identity
- coherence to the facets of a brand’s prism

fail: Pierre Cardin (patchwork brand)