Luxury Branding and The Online Shopping Environment - Essay Example

Luxury Branding and Online Shopping Environment Task 1: Luxury Branding Introduction 21st-century marketing has welcomed key development such as increased communication choices. Some of the notable developments include the advent of social media, use of do-it-yourself media and internet portals to reach out to the end users. Luxury branding has also sprung as a new concept in marketing. The following discussion will highlight the link between luxury branding and key objectives and branding theory. Symbolic consumption, concepts and strategies that relate to luxury branding will be discussed in great detail. The essay will utilize familiar models, frameworks, and applications examples highlighting firms that have embraced the concept of luxury branding. Luxury branding concept Luxury branding utilizes the experience and loyalty to sell fantasy to target customers (Hung et al., 2011). Companies offer exclusivity and distinction in order to create a lasting perception for the brands. The emotional relationship between the customer and the luxury product will determine the level of willingness to purchase a product or service. Miller and Mills (2012) argue that the functional benefits of the brands may not play a significant role in the management of the luxury brands. A framework of luxury brands in the 21st Century involves a number of products that consists primarily of beauty, beverages, jewelry, automobiles, property and fashion products (Stokburger-Sauer and Teichmann, 2013). The brands depend mainly on the opinion of the public and its relevance to the luxury consumers. Brand and Symbolic consumption Consumers are engaging in symbolic consumption due to the similarity between the personality of the luxury brand and end users (Fuchs et al., 2013). There has been increased interest in the brand personality concept because of the perceived symbolic benefits in luxury brands. The consumption of luxury brands occurs through a transition similar to Maslow’s Hierarchy of needs. Acquisition of luxury automobiles entails a transition from the basic car, through utility, quality, and premium to the luxury. A consumer with a luxurious personality would prefer a Rolls Royce as opposed to a basic Dodge model (Liu et al., 2012). An emphasis on taking advantage of the customer is vital to create strong symbolic brand identities. Brand concept Luxury brands defy the conventional marketing models (Som and Blanckaert, 2015). The marketing process is a paradox for many companies due to a great emphasis on high prices, quality, and publicity. Creation of brands that are highly visible in the marketplace is a top priority for firms producing luxury products. A model for brand concept entails high brand awareness with high perception on quality (Roper et al., 2013). Different consumers will emerge due to economic status and the motivating force that grants them fiscal status (Liu et al., 2012). A luxury brand consumer is visionary and hopes that the quality of the product will not change but adapt to the existing marketing trending and consumer expectations. Brand concept is defined by a paradox that drives it marketing; Figure 1: Luxury Product Paradox (Som and Blanckaert, 2015). Brand Strategy The cornerstone of the luxury branding strategy includes perceived quality, paucity, price, place, public figure, pedigree, present, and public relations (Kapferer and Bastien, 2012). The 8ps form the foundation for marketing mix for any commercial brand. The ability of luxury brands to defy the conventional marketing concepts emanates from their premium prices and profound awareness among consumers. Chevalier and Mazzalovo (2012) argue that brand positioning for luxury brands must utilize the concept of brand identity to create a strong external target group. Consumers want a demonstration of how the products will appear and how they will adapt to changing market needs and perceptions. The strategy for luxury brands features brand identity framework Figure 2: Brand Identity (Chevalier and Mazzalovo, 2012). Application Examples Louis Vuitton has a brand value of $19.4 billion because of a high status among luxury consumers around the world (Sherman, 2009). Other fashion houses lag behind in numbers including Hermes, Gucci, and Rolex. Consumer loyalty and perception that Louis Vuitton has a high brand value can be attributed to the increase in the number of sales for the fashion line. According to Sherman, (2009) Prada has also shown resilience in the recent past. Brand awareness and presence have been the compelling factors for the success of Prada. The aura of luxury in Prada brands has heightened the popularity of the product in the global market. The strategy involves creation of physical and virtual customer that is loyal to the company. Conclusion The creation and existence of luxury products have changed the way the traditional marketing concepts are perceived and handled. The products have a high level of awareness coming from the symbolic consumption and brand positioning concepts. The marketing features traditional marketing concepts, but a luxury branding process must utilize the inevitable concepts such as brand identity to garner successful sales in the market. Hung et al. (2011) indicates that massive differentiation for luxury brands is essential irrespective of the size of a firm. Luxury branding professionals are charged with creating a lasting brand image in the minds of consumers. References Chevalier, M. and Mazzalovo, G. (2012). Luxury brand management. Singapore: Wiley. Fuchs, C., Prandelli, E., Schreier, M. and Dahl, D. (2013). All That Is Users Might Not Be Gold: How Labeling Products as User Designed Backfires in the Context of Luxury Fashion Brands. Journal of Marketing, 77(5), pp.75-91. Hung, K., Huiling Chen, A., Peng, N., Hackley, C., Amy Tiwsakul, R. and Chou, C. (2011). Antecedents of luxury brand purchase intention. Jnl of Product & Brand Mgt, 20(6), pp.457-467. Kapferer, J. and Bastien, V. (2012). The luxury strategy. London: Kogan Page. Liu, F., Li, J., Mizerski, D. and Soh, H. (2012). Self‐congruity, brand attitude, and brand loyalty: a study on luxury brands. European Journal of Marketing, 46(7/8), pp.922-937. Miller, K. and Mills, M. (2012). Probing brand luxury: A multiple lens approach. J Brand Manag, 20(1), pp.41-51. Roper, S., Caruana, R., Medway, D. and Murphy, P. (2013). Constructing luxury brands: exploring the role of consumer discourse. European Journal of Marketing, 47(3/4), pp.375-400. Sherman, L. (2009). World's Most Powerful Luxury Brands. [online] Forbes. Available at: http://www.forbes.com/2009/05/01/powerful-luxury-brands-lifestyle-style-luxury-brands.html [Accessed 15 May 2015]. Som, A. and Blanckaert, C. (2015). The road to luxury. Stokburger-Sauer, N. and Teichmann, K. (2013). Is luxury just a female thing? The role of gender in luxury brand consumption. Journal of Business Research, 66(7), pp.889-896. Task 2: Online Shopping and the Future of Retailing Introduction Amplification of shopping trend is one of the key retailing trends. Retailers are adopting new strategies that are relevant to the online shopping environment because virtually every segment has gone digital (Krafft and Mantrala, 2010). However, the future is dependent on the online shopping environment as a way of bridging the gap between offline and digital retailing channels. Online shopping has redefined the retailing industry because of the profound impact it has brought to customer experience, and shopping journey in physical and digital stores. The following essay will entail analysis of future retailing through PESTLE framework. Online shopping will provide a point of focus because it is a key trend in the retailing industry. Current retailer’s response, future strategies and recommendations and their relevance in future retailing operations will also be discussed in detail. Online Shopping In the Retail Industry Retailing entails the sale of goods and services from a specified location such as departmental store (Madaan, 2009). The advent of information technology has brought transformation and consideration of online stores in retailing. Online retailing has emerged to improve the connection between businesses and consumers (Schwenker and Wulf, 2013). Analysis of online retailing as a new trend is essential. A PESTLE framework for trend is as follows; Political factors Prone to environmental sustainability regulations Adhere to tax policies that vary from one economy to another Subject to employment and consumer protection laws It is not affected by political instability Economic Factors Has a high growth rate due to customer response and participation (Sila, 2013). Subject to interest and monetary policies Increases consumer confidence Boosts government spending through tax Social factors Serves all demographics, age groups and population levels (Colla and Lapoule, 2012). Increases social and labour mobility A boost for entrepreneurial spirit Propels fashion and hypes Technological A source of new retailing invention and development Has a high rate of technology transfer and customer participation Subject to technological obsolescence Environmental factors Adopts sustainability strategies that are of benefit to the society, for example through a consumer-friendly e-commerce website Legislative factors Impacts government pricing and industry supplier regulations Subject to consumer protection and contract enforcement law Current Retail Strategy Retailing are using online shopping environment to respond to the constantly changing consumer shopping tastes and expectations (Mukherjee, Cuthbertson and Howard, 2014). A strategy that drives demand, efficiency and boosts consumption has the driver of sales in the retail industry. Arnold and Krancioch (2008) indicate that the strategy features three levels in response to the online shopping trend including Consumer orientation providing insights and knowing the needs of the end users, continuous innovation in which retailers have understood the essence of IT and have aligned relevant strategies to respond to diverse needs of the e-commerce retail consumers. The other trend is the collaborative transformation in which online shopping portals and websites create a platform where suppliers, vendors, and consumers can interact with mutual growth (Sparks and Fernie, 2004). Retailers’ response to e-commerce or online retailing has been through the provision of wide range of products online (Hackl et al., 2014) Retailers have ensured that different stores have different offerings for its target customers. Retailers are also offering subscription services and increase presence online through social media to boost sales (Swilley, Hofacker and Lamont, 2012). Relevance and Recommendations for Online Retailing Changing the way customers think about the product offers will be essential (Thau, 2015). Retailers will require the installation of components that offer instant gratification to consumers. Consumers must have information on the go in order to respond to online offerings through websites and social media avenues (Stephens, 2013). Creating customer loyalty will be possible through using systems that offer intuitive experience for example POS systems. A culture of borrowing will be relevant for online retailers (Jain, 2008). Consumers will be in need of products that are in keeping with the latest technology or fashion trends. Retailers will need to come together to look for avenues of handling the steady influx of products. Verma, Sharma and Sheth (2015) argue that firms will look for new ways to change pricing and costing structures. Product customization should be a guiding factor for future retailers (Ha and Stoel, 2012). Consumers want instant products that match their tastes and preferences in accordance with the collective selection theory. The lifestyle of consumers will be met through online product designs in logos and pictures. Every supply chain should have the requisite capability to respond to demand and all customers’ orders places through social media or interactive retail commerce websites. Application Versace deals with apparel and accessories and explores both lifestyle and retail industries. Online retail and E-marketing strategies will increase the importance of the company to consumers with high purchasing power. The demand for luxury brands has increased, but they must be supplied through the new online retailing platforms. Conclusion Online shopping is a force to reckon within the retailing industry. A PESTLE analysis of the online retailing has demonstrated the potential that consumers and individual firms can utilize. Online retail stores are the ultimate interactive environments that modern customers are looking for in the industry. In the process of responding to changing consumer needs, online shopping in retailing will require relevant technological improvements. References Arnold, G. and Krancioch, S. (2008). Current Strategies in the Retail Industry for Best-Agers. The Silver Market Phenomenon, pp.173-183. Colla, E. and Lapoule, P. (2012). E‐commerce: exploring the critical success factors. International Journal of Retail & Distribution Management, 40(11), pp.842-864. Ha, S. and Stoel, L. (2012). Online apparel retailing: roles of e‐shopping quality and experiential e‐shopping motives. Journal of Service Management, 23(2), pp.197-215. Hackl, F., Kummer, M., Winter-Ebmer, R. and Zulehner, C. (2014). Market structure and market performance in E-commerce. European Economic Review, 68, pp.199-218. Jain, N. (2008). Retail management. New Delhi: Global India Publications. Krafft, M. and Mantrala, M. (2010). Retailing in the 21st Century. Berlin: Springer-Verlag. Madaan, K. (2009). Fundamentals of retailing. New Delhi: Tata McGraw Hill Education Private Limited. Mukherjee, M., Cuthbertson, R. and Howard, E. (2014). Retailing in Emerging Markets. Hoboken: Taylor and Francis. Schwenker, B. and Wulf, T. (2013). Scenario-based strategic planning. Sila, I. (2013). Factors affecting the adoption of B2B e-commerce technologies. Electron Commer Res, 13(2), pp.199-236. Sparks, L. and Fernie, J. (2004). Logistics and retail management. London: Kogan. Stephens, D. (2013). The retail revival. Toronto: J. Wiley & Sons Canada. Swilley, E., Hofacker, C. and Lamont, B. (2012). The Evolution from E-Commerce to M-Commerce. International Journal of E-Business Research, 8(1), pp.1-16. Thau, B. (2015). A Look At The Retail Model Of The Future. [online] Forbes. Available at: http://www.forbes.com/sites/barbarathau/2015/02/10/a-look-at-the-retail-model-of-the-future/ [Accessed 15 May 2015]. Verma, V., Sharma, D. and Sheth, J. (2015). Does relationship marketing matter in online retailing? A meta-analytic approach. Journal of the Academy of Marketing Science. Read More