The Luxury Market: Chateau Mouton Rothschild - Article Example

?The Luxury Market: Chateau Mouton Rothschild The luxury segment: ‘cause we live in a material world Prestige, reputation, honor, opulence, extravagance, all words that describe exactly what each of us wants. To be fair, it’s probably only the material beings on the planet that are seduced by the royalty of the material products in the world, but considering how many material earthlings are out there, it is quite a fair number. Whether fancy watches or a fancy mode of transport, the luxury segment creates a fan following that can easily be described as just plain absurd. It is difficult to fathom what convinces people to overspend to such an extent for products that easily have substitutes in the market that are not so heavy on the pocket. One simple answer: brand name. People trust the brand and “perceive them as having value over and above that of the ‘equivalent’ commodity” (Chernatony and McDonald 2003, p.367). The brand conveys a message. Hence the brand has aspiration, and people who want to be linked with that aspiration, and have the resources to ensure that happens are loyal to these brands. The brand makes one feel special; the brand makes provides one with superior confidence and heightened feeling. (Globe 2004). The brand is the differentiator; the brand is what helps you fit in. It is weird, but the brand is what conveys what you want to convey to the world. And if you can afford it, why not? Luxury Marketing To understand the difference in the marketing style for luxury brands, one must first understand the difference between regular and luxury goods. A brand that is highly priced does not automatically become a luxury brand. Price is only one factor. There are various others such as the quality of the product, its exclusivity, the precision in its making, innovation, and so much more! Such products are obviously targeted at consumers at the highest level in the wealth pyramid, ones that have resources they do not know what to do with. They need to be reminded about their status, the prestige, and so choose products from the luxury segment that differentiates them from the crowd and sets boundaries when it comes to their social status. (Vickers and Renand 2003). They are not worried about price of a product as much as the value it brings to their lives. These are the people who choose opulence over necessities, and why not? They have the resources for it. They even have an inexplicable bond with the products they choose. They prefer not to experiment and want what they want. Luxury Marketing Mix The marketing mix for luxury products differs from regular products in many ways. Let us take a look at what sets these apart. 1. Product: A regular product is produced in thousands, maybe millions. All these products have the same price, are standardized and are identical to one another in almost all aspects other than color or size. But take a luxury product and it become exclusive and special by customizing the product or producing a limited edition line. (Piron 2000). 2. Price: The pricing strategy for regular products is mainly value for money. This is due to the highly competitive market and the fact that there are substitutes in the market for almost anything. People know what they want and where they can get an alternate at a lower price. The luxury segment is premium priced for people who know exactly what they want and do not mind spending to get it. 3. Place: Regular products are easily accessible and are made available in multiple stores or in zones that will be convenient for the people in the target group. Luxury items do not need to be strategically placed. They are usually made available in very exclusive stores in high end areas where they will be accessible to the buyers. (Piron 2000). 4. Promotion: For a regular product, every form of promotion is used from Above the Line, Below the Line, advertising in all sorts of media, building product functional and aspirational appeal and so on. For a luxury product however, premium, above the line media are used, specific to the tastes of the target audience and the appeal created is aspirational and exclusivity. (Thompson, Rindfleisch and Arsel 2006). Also, celebrity appeal is mostly used for promotion, since these people would not want to have anything in common with the common man. These are the four Ps of the marketing mix and the difference between regular and luxury products is quite evident. We can also put forward a few more differences between regular and luxury products to better understand the marketing strategy of luxury products including Chateau Mouton Rothschild. Demand for regular products in inversely proportionate to their price. So, if the price is high, demand falls and if the price falls, demand rises. Not the case with luxury products, where demand increases with a rise in price as this is conceived as more exclusivity. Based on the product and it’s price, the involvement and research in the purchase of a regular product is relatively low. When it comes to a luxury product however, people tend to research a lot more before spending that kind of money. (Thompson, Rindfleisch and Arsel 2006). The drivers for regular products are its functional aspects and the innovation linked with the product. When it comes to luxury products, the drivers are more exclusive and may delve in to traditional and brand heritage aspects. Chateau Mouton Rothschild Chateau Mouton Rothschild is a large vineyard spread across 188 acres of land. Their wines are amongst the best in the world and have the aspirational value to them that makes them a luxury item. What makes these wines so special apart from their quality of course, is the way they are marketed. The process is not just about wine making, but about educating people about wine. People do not have too much knowledge about this beautiful spirit and the people at Chateau Mouton Rothschild concentrate not only on brewing delicious wine, but also educating the consumer about what they need to purchase and what they should compliment it with. (Anson 2008) Attractiveness to target market Chateau Mouton Rothschild did not have to try very hard to attract their target audience. The target audience comprises of people who are wine connoisseurs. They know what is so special about the wine. They know how the wine is brewed and what makes it so special. What added on to the collectability and what attracted people from the luxury segment towards this wine was something beyond taste. Chateau Mouton Rothschild had a specific way of branding their bottles of special wine. Every year, they chose a new artist to design their label or feature on their label. This factor also made sure that their bottles were now collectable items and people from the luxury segment love to have something special like this in their collections. (theartistlabels.com). No doubt they ensured their wine was up to standard, but adding an art masterpiece on to their bottle was a stroke of genius and enticed the target people even more. Chateau Mouton Rothschild: Pricing strategy Chateau Mouton Rothschild is aware that to fit in well with the consumer, they need to price accordingly. It is established that they need to price their wines in line with their quality. They cannot price their wines too high and expect people to purchase a low quality wine. As discussed above, when it comes to luxury goods, an increase in price usually results in increase in demand. (Simmons, Thomas and Truong 2010). This probably because people assume that the quality is now better or that since the price is higher, something extra has been added to their product. Potential opportunities and threats Every new product faces a lot of competition when they enter a new market, especially in a new country. There is the competition aspect from local and other established brands. Another factor to consider is the tastes and preferences of the consumers in the market. It is obvious that consumers in different markets may not have the same tastes and preferences as those in the home market or in other established markets. Therefore, this plays a very large threat, or more like a risk for the brand. Another aspect for entering a new market is the evaluation of the market scenario, the purchasing ability of the target audience and the existence of other similar products in the market. (Chernatony and McDonald 2003). As we know, luxury products are not something that people are willing to compromise on. They want what they want and there’s no changing that. So, if a similar product already exists, there is no way that they will purchase it, due to the fact that the consumer is constantly on the lookout for something exclusive, not a run of the mill product that is available anywhere and that can be purchased by anybody. Conclusions From all that we have established, it is evident that Chateau Mouton Rothschild has all the features of a luxury commodity, even though luxury could mean different things to different people. In spite of its subjectivity, Chateau Mouton Rothschild has been able to create something for its hard fan followers and has ensured that it is a product category in itself. It is in the category of conspicuous consumption, where a consumer purchases a product more for the purpose of satisfying a certain monetary display or that of wealth than the purpose of fulfilling a need. Chateau Mouton Rothschild also fulfills the consumers need for exclusivity, not only with its wine but also in terms of its different labels for every year that somehow steal the spotlight even though the wine in the bottle is the same. (Prion 2010). Most of all, Chateau Mouton Rothschild knows that customer loyalty is essential for its business. They have ensured that their customers go back to them repeatedly and they have kept them happy. Recommendations Chateau Mouton Rothschild is a large vineyard. They make beautifully tasting wine and market it in an amazing way. Their pricing strategy is very sensible and they have taken measures to ensure that their customers come back to them. They built such an amazing way for the consumers to find their way back by simply adding a masterpiece to every edition of the bottle. Thus, art lovers and wine enthusiasts could enjoy the bottle and would crave for it, both for the wine and for the collector’s value. This was a very wise move, as nothing adds more collective value to something like art. All these bottles were rare and not mass produced, similar to the brand notion of Chateau Mouton Rothschild. If anything needs to be recommended to the makers of Chateau Mouton Rothschild, it could be that the brand must also be able to communicate about the people it is targeted at. These people pay good money to be associated with this brand and they expect that the brand speaks about them. Perhaps these people could be given access to an exclusive club via membership and be given special privileges for being part of this club. They could be informed early of special editions of the bottle or they could be part of the group that got their hands first on a new release. Anything to make these people feel exclusive. They could also be given a tour of the vineyard and shown how the magic is created in these places. Considering a brand like Chateau Mouton Rothschild, there is not much we can do without getting into the brand formally, but studying it has taught us more than just the difference between a regular and a luxury good. It has made us aspirational to want such products at some point in our lives. References Anson, J 2008, Chateau Lafite Rothschild, viewed on December 12, 2011 http://newbordeaux.com/documents/chateau_lafite_rotschild.html Chernatony, L and McDonald, M 2003, Creating Powerful Brands, Butterworth- Heinemann, New York. Globe, M 2004, Distribution of the Brand, HWM, SPH Magazines. Piron, F 2000, ‘Consumers’ Perceptions Of The Country Of Origin Effect On Purchasing Intentions Of (In) Conspicuous Products’, Journal of Consumer Marketing, vol. 17, no. 4. Simmons, G, Thomas, B and Truong, Y 2010, “Managing i-branding to create brand equity.” European Journal of Marketing vol. 44, no. 9/10, pp.1260-1285 theartistlabels.com, Chateau Mouton-Rothschild, viewed on December 12, 2011 http://www.theartistlabels.com/ Thompson, CJ, Rindfleisch, A and Arsel, Z 2006, “Emotional Branding and the Strategic Value of the Doppelganger Brand Image.” Journal of Marketing vol. 70, no. 1, pp.50-64 Vickers, JS and Renand F 2003, The Marketing of Luxury Goods: An exploratory study- three conceptual dimensions, Westburns Publishers Limited. Read More