The Majority of Consumers in the Market Segment - Dissertation Example

? Luxury Fashion Brands: Small Business Issues, Branding, and Communication In recent years, the fashion industry has undergone many changes, particularly in terms of its increasing appeal to young people. Luxury brands, for example, are currently the latest in a number of fashion trends, and demonstrate the relationship that exists between brand appeal and the customers desire to purchase. This study reveals certain perceptions that exist among today’s consumers in terms of the rapidly evolving luxury end of the fashion industry. In an effort to better analyze competitive advantages inherent in certain markets, various interviews and case studies were incorporated into the study design. Basic small fashion business theory and principles were examined and issued within the scope of the study of as well. In-depth research into areas of luxury brand loyalty and image, as reflected by the fashion consumer, were discussed in order to better understand the various influences that marketing has on the small fashion business. In addition, data relevant to the overall luxury fashion business was analyzed and discussed in an effort to compare that information with the gathered qualitative data. Static data collected from gathered case studies are also presented to illustrate the attitudes of luxury brand fashion items that are inherent in the industry today. By presenting a combination of theoretical and practical analysis, final conclusions and recommendations are issued at the end of the study. 1. Introduction Fashion is a multi-billion dollar industry, and the luxury brand makes up a considerable portion of that prowess. Luxury fashion consumers, to a large degree, are the face and voice of the entire industry and, as such, it is important to understand the distinctions that make up various brands and give small fashion businesses a relative and comparative advantage. To begin this discussion, it is important to define brand and what the concept means to the luxury end of the fashion business. Aaker (2004) noted that, “A product is something that is made in a factory, but a brand is something that is brought by a customer. A competitor can copy a product, but a brand is unique. A product can quickly become updated, but a successful brand is timeless” (p. 1). These are important distinctions to be made from the outset, primarily because luxury brand items carry substantially more market appeal than other types of fashion accessories. They cannot be easily replicated and the consumer develops a strong loyalty toward a brand, but not necessarily toward a product. A successful brand is vital to the success of a fashion company, as it most often results in a competitive advantage over others in the same niche market (Aaker, 2004). Not only does a particular brand greatly contribute to the overall profit generated by a fashion company, but it also serves as the fact of the company by implementing a particular name or symbol that consumers can identify with. These ideas and concepts distinguish them from their competitors and generate interest within the market itself. Logos, trademarks, and package design all contribute to the image of the luxury brand, necessitating that fashion companies focus on the development of they major brands in order to identify and differentiate one company from another (Aaker, 2004, p. 5). With the continuing development and expansion of the global luxury fashion industry, there has come a renewed emphasis on understanding the consumer that desires to purchase such items and to apply a proper growth strategy that will form the future of fashion building. 2. The Nature of Fashion Building Fashion building takes time. The nature of developing a brand image that appeals across sectors of society takes ingenuity, design, and a bit of luck. It requires the foresight to understand the affluent consumer, the willingness to adapt to changing markets and circumstances, and the desire to maintain that competitive edge that separates it from the rest. 2.1 Branding and Communication Issues Brand image works largely to determine what items a consumer eventually notices, desires, and chooses to purchase. Luxury items are often sought after because of an innate desire to possess the latest fashion accessories that the global marketplace has deemed to be the latest and greatest trend in the industry. As such, the purchasing behavior of consumers not only depends on what they perceive the usefulness of the product to be, but also on the feelings that are often involved when owning such a product and displaying for others to see. Doherty (2004) has alluded to this in noting that our behavior as consumers is often an emblematic retain, which in the end provide to be more significant to the individual buyer, as opposed to an actual consideration of the functional advantages that the product actually possesses. Carrillat and Francois (2010) contend that a consideration of brand image actually guides purchasing decisions on the part of the consumer (p. 109). These authors conducted a fashion related study focused on luxury fashion branding and uncovered the reality that the function and quality of such products do not always form the primary source of consideration when a consumer is deciding what item to purchase. In the end, many studies allude to the fact that luxury brand fashion items sell themselves largely on name alone. It should also be pointed out, however, that Ross and Haradine (2011) wrote that a particular brand symbol or logo could end up impacting the status and self-esteem of the buyer. This contention is made to illustrate the reality that the decision to purchase a luxury brand is often made by a consumer who desires to feel good about possessing such an item. In order, then, for the brand item to actually be utilized for its intended purpose, it has been determined that it will be more enjoyable if the consumer make a connection between the product image of the luxury brand and the consumer’s actual need for the product (Ellwood, 2002). It has been suggested by practitioners in the fashion industry that brand image is largely dependent on individual consumers ability to understand the product line in question. This is also largely dependent upon how the luxury brand is remembered by consumers, contributing to the longevity of the product (George & Zinkhan, 1996). It can also be theorized that luxury brand image is most often constructed based upon a common understanding of the product between consumers, and on the ability of the fashion company to communicate these same concepts to the global marketplace as a whole (Keller & Lane, 2008). Pickton (2008) continues this line of thinking by affirming the reality that strong luxury brand association is only produced when the fashion company itself produces a brand equity that is focused solely on the desires and interests of the consumer (p. 155). The ability to clearly communicate certain brand associations, therefore, is critical. The attributes that need to be communicated include both the tangible and intangible characteristics of the product, the benefits of owning the luxury brand itself, and the attitudes expressed by society when owning the brand (Pickton, 2008). It has also been demonstrated that the impression created by a brand is often constructed by each respective product (Ellwood, 2002). As such, we need to understand that brand image is largely communicated through the consumer processing information given to them in form of societal approval and marketing information disseminated directly from the fashion business. Kunz (2011) went a bit further and suggested that the identity of a luxury brand is intended to convey an image that is set as a priority directly by the consumer themselves. In the end, this reality precedes any type of projection of brand image that might be transferred via various mediums of communication. It is clear that the fashion business must be clear in their communication about the luxury line of fashion products that they desire to deliver to their respective customers. This was support by Polhemus (1994) in their contention that a product is largely sold on the open market when consumers develop a positive perception of the luxury brand, thereby developing a loyalty to the company and the product that become long-standing and is difficult to break. 2.2 The Small Fashion Business and the Luxury Brand Luxury fashion brands most often are developed through careful consideration of the industry in general, and that fashion consumer in particular. With this in mind, it is important that the small fashion business focus on four key concepts when considering how to best develop and market the luxury brand fashion item or accessory to a particular niche market. First of all, the customers themselves largely determine brand image. As previous research has alluded to, not all fashion luxury items are actually practical and useful, yet the consumer has determined them to be a ‘must have’ item. This creates the luxury brand through the simple concept of consumer appeal. Research has also revealed that brand image is a concept constructed directly by consumers as they undergo a process of interpreting the product in question and determining it to be worthy of pricing at the higher end of the fashion market (Leeman, 2010). A third area affecting luxury brand image and the small fashion business is the reality that such image is not only influenced by the tangible attributes of a product. It must be noted that luxury brand image is quite often shaped by how the product is displayed though various marketing campaigns, and how a consumer’s particular peer group views the efficacy of the brand itself. Finally, consumers view brand image more from the perspective of how the produce is conceived, rather than what the product actually looks. This goes to the issue of customer loyalty. A consumer, irrespective of their individual tastes in fashion, often purchases luxury brands items. In a sense, they become extremely trusting of the fashion designer to determine what they should purchase based on available product lines (Cheverton, 2006). Brand image plays a vital role in not only influencing customers to purchase a particular product line, but also in maintaining their loyalty to the company for years to come. This reality comes into being via different ways that the fashion consumer associates a particular product with the image and brand that is presented by the business. These associations tend to have certain innate characteristics that distinguish them from other products, and they carry an important weight in shaping the eventual image of the brand that is developed (Chai, 2011). This leads us to the conclusion that consumers of the luxury brand are typically drawn to a purchase because they are seduced by an image that symbolizes a high-class member of society, success, and status. In return, the individuals who tend to purchase such luxury fashion brand items do not often consider the actual quality of the product. In many countries, particularly the West, sales of luxury brands tend to decline during periods of economic downturn. This is not always true, however, in emerging markets such as China and Russia as they appear to be well insulated at the higher end of the fashion market. Small fashion businesses, therefore, are wise to take this into account when considering various factors that serve to influence consumer preference, attitude, and unflattering loyalty towards a particular luxury brand item. Customer loyalty is critical for any industry, but especially so for the luxury fashion industry. This is primarily due to the reality that they are appealing to an already slim customer base, so they must serve to retain that loyalty in order to ensure future profitability. As competition in the industry increases, the value of maintaining a loyal customer base has been shown as a key to success in the continued vitality of the small fashion business. Such customer loyalty, however, is not built over night. Research has determined that, in the fashion industry in particular, this takes a high level of consistent hard work from the business to both attract the luxury consumer and to satisfy those needs mentioned previously in this study (Dai, 2010). It can be argued that customer loyalty in the fashion industry tends to be generated through a history of positive relationships that customers develop with their chosen brand. The small fashion business will be successful when they launch campaigns that attract customers to have positive feelings about the luxury brand, contributing to an overall sense of self-esteem and pride that comes with ownership. If the business can attract such customers, then those consumers will tend to purchase more products, spend more money, and refer members of their peer group to a particular location in order to purchase their own luxury fashion items. We need to remember that the luxury brand owner tends to develop a strong level of attachment to their preferred brand item, and they also would not consider buying from a competitor, as that would tend to compromise that sense of well being that they associate with ownership of the bran in question (Holt & Cameron, 2010). This feeling of attachment to a particular brand is quite difficult to explain. Fashion designers are constantly trying to discover what keeps the luxury item consumer coming back to them time and time again, yet the answer often eludes them. What has been determined is that it is not necessarily any of the physical features of the product, or even the usefulness of the item to the consumer. What it boils down to is that there is some type of psychological fulfillment that comes from purchasing the brand, and it is this same fulfillment that keeps the consumer coming back to the same brand time and time again (Haig, 2011). As such, fashion businesses must market to this type of psychological attachment with increasingly creative methods in an effort to retain that competitive advantages over companies offer similar fashion related items and accessories. In summary, it can be reasonably concluded that one of the strongest motivators influencing the purchase of a luxury fashion brand item is to fulfill a long-standing need to belong to a particular social group. The purchasing of the luxury item, then, provides the buyer with a sense of identity that only such a product can offer the consumer. This strong desire, or need, to belong and fit in is most often generated directly from the social environment that the consumer resides in. By creative a strong incentive to push consumers to purchase the same luxury product over and over again creates this sense of brand loyalty that we see expressed in the form of several fashion brands today. These would include product lines from Louis Vuitton, Gucci, Hermes, Armani, and others. The peer influences generated in many cultures are representative of certain mitigating factors that facilitate the development of brand loyalty among consumers of luxury fashion brands (Jobber, 2012). 3. Fashion Theory and Case Study There is a reason that fashion companies have multiple annual product lines. The typical fashion consumer quickly desires a new product to be unveiled that they can, in turn, purchase in order to continually satisfy their need for self-fulfillment. Many such consumers also are involved in a peer group that consists of fashion gurus as well, so the need to maintain appearances is high. As such, fashion companies, particularly in the luxury end of the market, are constantly faced with the need to evaluate their brand and product line in the face of increased scrutiny from the consumer. In addition, it is important to remain a competitive advantage over others in an already tight and saturated industry, while serving to developing a sense of customer loyalty towards their brand (Doherty, 2004). In order to accomplish all of these various factors, it is important to consider certain aspects of fashion theory. The model most applicable to the luxury fashion industry is the populist theory. This line of thinking encourages fashion companies to divide potential groups based on demographic differences, such as age, socioeconomic status, location, and culture to create a product line that is appealing to each of those groups. Since the luxury fashion industry in a niche market, it cannot remain stagnant and appeal to only one demographic. If it did so, an already narrow pool of customers would become prohibitively smaller. By developing luxury items that appeal across culture, gender, and age factors, however, the industry is promotion itself based on more of a populist model (Ross & Harrdine, 2011). One must also consider how fashion brands are distributed. The flow of fashion has long been described as a movement, or trick, from one segment of society to another. The various influences found inside a culture often determine how the fashion brands flows from group to group. This is largely believed to occur by either trickle down, trickle across, or trickle up. The trickle down theory of fashion is perhaps the oldest theory related to how luxury brands come into being. It is also the most applicable, as it involves the creation of a hierarchical structure to society whereby products are designed for upward mobility up the social ladder (Polheumus, 1994). This fashion theory depends on a social structure where consumers have the strong desire to identify with the more affluence part of society, thereby creating a market for luxury brands. The trickle across theory is less applicable to the luxury brand as it refers to the idea that the brand can be distributed in a horizontal direction between groups on similar social levels. While this might true at the higher ends of the fashion spectrum, social groups at the lower end tend to not be as concerned with keep up with the latest luxury fashion items. The relatively new fashion theory of trickle up has even less in common with the luxury brand. The trickle up theory involves a fashion brand becoming recognized at the street level, becoming popular, and then sweeping through all levels of society. This simply does not occur with the luxury item, as lower income consumers have no strong desire to purchase such brands in the first place. As such, the case studies in this dissertation focus on the trickle down theory of fashion as it related to individual brands maintaining their appeal across demographic groups of consumers who are interested in maintaining the appearance of affluence (Bassey, 1999). 3.1 Armani Case Study Developing a line of clothing or fashion accessory into a luxury brand often requires a combination of ingenuity, design prowess, and a bit of luck. Consumers often express that their motivation for purchasing a luxury item is not always the comfort or usability of the item, but rather the perceived value of the article when worn or adorned out in public. As such, small luxury brands that desire to attract the high-end purchaser must seek out ways to maintain a solid customer base, while keeping the enthusiasm for the product line high and to release new line of clothing and accessories on a regular basis. This takes marketing know-how and a desire to appeal to the rapidly changing tastes of the fashion consumer. Luxury items do not always have to be expensive items, but they must appeal to the consumer who has disposable income that they allocate to clothing and accessory items on a regular basis. Consider the Armani label, as an example. Luxury fashion has become so influential in recent years due a continual product upgrades and a willingness to go after the stylistic pursuit of modern consumers. All of this has coupled with the reality that such items need to be practical and that the consumers must be satisfied with the marketing campaigns that are deployed. The consumer wants to feel that the high dollar they are willing to spend for such luxury items are seen by society as being in vogue, chic, and reflective of an elevated stature in society (Cheverton, 2006). Consequently, Armani can be look to as a luxury fashion brand worthy of analyzing in an effort to determine the characteristics and business principles necessary to create a successful and effective product line in this most competitive business. It can certainly be argued that Armani is a professional and successful luxury brand due to its mature supply chain and aggressive marketing strategy. In reality, Armani has long been considered a leader in the luxury end of the fashion industry and is seen as a model to many smaller brands, such as Abercrombie and Fitch and Banana Republic. The product line is extensive, yet constantly changing in order to maintain a competitive edge in an industry that is dominated by the fluctuating needs and desires of the consumer. Founded in the 1970s, Armani is an Italian fashion house that has evolved into offering a diverse product line of high-end luxury label products. They have mastered the ability to appeal to both high-end male and female consumers, and they have withstood many changes to the fashion industry as a whole. Having sales of nearly 2 billion US Dollars annually certainly establishes it as one of the premier luxury retailers in the world. This is an interesting company to study because it provides hope for the small luxury brand. Armani had a humble beginning in Italy and gradually grew into the recognized luxury brand that the fashion world sees today. Armani has developed the unique ability to appeal to young and mature consumers alike. This is primarily due to the fact that they have a plethora of designers that develop seasonal fashion items based upon what various demographic groups are expressing an interest in at the time. Whereas many luxury brands are only successful at marketing to one particular demographic, Armani appeals to both sexes, on multiple continents, and in different age categories. Armani is highly regarded within the mainstream of high-end fashion consumers. As one of the leading luxury brands in the world, they have become a model of profitability and brand appeal. Small luxury brands desiring to develop a niche can learn from Armani as they develop ad campaigns that begin by focusing on specific demographic groups in an effort to gain recognition and notoriety in a particular geographical location. Many young fashion consumers, for example, have defined Armani as relevant, chic, and innovative (Kunz, 2011). This reflects the philosophy of Armani to constantly change as society does. This is a must in the fashion world, particularly when developing a brand designed to appeal to the high-end market. It is actually a simplistic marketing concept that have worked particularly well for Armani and has positioned itself amongst the industry leaders. It is that same simplicity that can work well for new entries in the luxury fashion brand market. The positioning of Armani into a global fashion house required that it develop a luxury fashion and accessory line that was easily accessible to the public, well marketed, priced to a specific demographic group, and had the distribution mechanism by which to introduce a continuous stream of new and innovative products (George & Zinkhan, 2006, p. 180). Armani has apparently excelled in each of the key areas. This is largely due to the reality that Armani now has design houses and apparel stores in most major cities of the world, so they are able to appeal to the unique demographic interests of a particular region. Whereas some smaller luxury brands must purposely keep their product line small owed to a lack of capital and a diminished market presence, Armani has no such inhibitions. They are able to offer different fashion lines and accessories depending on the location of the consumer and their unique needs, interests, and desires. While the small luxury brand can certainly not hope to compete on such a scale, they can learn from the importance of creating a product line that is tailored specifically to the location where the consumers are being marketed. Armani has design teams located in such diverse cities as New York, London, Paris, Milan, and Tokyo. As such, each designer is able to learn various concepts and designer that will help them position the company for future and long-term success in the luxury end of the fashion business. 3.2 Interview Regarding Luxury Brands In an effort to determine what fashion consumers look for in a luxury fashion brand, 10 people were solicited to participate in a short interview. A mix of respondents was sought to get a sampling of that attitudes, opinions, and insights of various demographic groups related to luxury fashion brands. There were 3 females aged 18-25, 4 aged 25-50, and 2 men aged 25-40 (Creswell, 1994). Since luxury brands appeal to individuals in a higher income range, each of the respondents reported living in a household with income in excess of 50,000 pounds per year. To begin, five out of the ten respondents expressed the belief that the comfort level of the clothing and the functionality of fashion accessories we an influencing factor in the luxury brands that they choose to purchase. This part of the interview revealed that both of the men who responded reported that comfort level and functionality was important, as did 2 of the females over the age of 25. Interestingly enough, none of the younger females indicated that the comfort of the item was a heavy influencing factor, indicating that they are more concerned with the image of the brand than with the actual product itself. When asked to rank five different luxury brands in terms of recognition, Armani ranked second overall. When determining brand preference, however, they ranked third, primarily as a result of younger women opting for other brands. This indicates that Armani may be losing some of its appeal to younger consumers given its longevity in the industry, yet it is certainly still holding its own in this category. This short interview revealed various opinions and consumer preferences related to luxury brands. The geographical location for the survey was not important, as individuals who are in the market for such fashion items are not confined to shopping in one particular store. In fact, all of the respondents stated that they typically do look for luxury fashion brands as they are traveling. When asked why they choose to purchase such goods outside of the United Kingdom, a majority of the responses revolved around the common theme of a larger variety of good available. They particularly felt that Armani did an exceptional job at this, as they noted different types of clothing items available outside of their home region. The younger females who responded to the interview revealed that being able to showcase luxury brands that might not be available at home is a major draw. If they can find an item that is associated with a luxury brand item, yet is relatively new to their friends, they will be more likely to make the purchase. This enhances the belief that Armani has mastered this concept by having different product lines available in different geographic regions. For smaller luxury brands that do not have the distribution network common with the bigger labels, they can learn from this by rotating products and introducing new designs and lines at a more rapid pace. This will keep the enthusiasm high amongst consumers, particularly the younger generation who crave the newest and latest craze, especially when it comes to fashion. The respondents to this study did note that females are the target market for luxury fashion brands, but they also indicated that companies would be wise to not neglect the potential of male market. With this in mind, once again Armani was rated high among five different luxury brands for being to reach out to the high-end male fashion consumer. it was noted that many of the Armani ads to focus on middle-aged chic men who are wearing the latest fashion in both leisure and professional environments. Marketing for luxury brands does tend to be focused on young female consumers, as they reflect a growing trend towards desiring to wear fashionable clothes and accessories (Keller & Lane, 2008). The younger people interviewed about luxury brands for this study revealed that the fashion brands they choose typically reflect on their personality. They aim to portray a certain image to their friends, and society in general, so they gravitate towards the brands that most reflect their own peer group. This indicates that the small luxury brand would be wise to conduct in-depth marketing studies to determine what exactly their target demographic desires. In so doing, they can begin to grow by focusing on one or two groups within society, marketing to them, and thereby gaining a following. 4. Conclusion Luxury brands develop longevity in a most competitive industry by attracting loyal customers who have money to spend (Carrillat, 2010, p. 109). The luxury brand truly has no geographical barrier, as consumers in this segment of the industry will find a way to purchase the items that they want. As such, the small brand can begin compete on a grand scale with a focused and direct marketed campaign that capitalizes on the unique tastes and interests of the high-end consumer, particularly among those that are younger. The majority of consumers in the market segment are not so much concerned with price as they are with the quality and fashion of the item. Loyal customers do not have to be ‘sold’ on a particular item, as the brand begins to sell itself. The example was given of Armani. The individuals interviewed for this study indicated that Armani, as an established luxury brand, the company can sell new product lines based almost solely on their reputation alone. This impacts the small luxury brand as the initial focus needs to be on developing such a loyal customer base that repeat purchases are almost a given. This enables the luxury brand to rarely focus on needing to discount their items and to put an emphasis on providing the customer with new designs and product lines. Even though luxury fashion brands do have a limited market based on the prices of their products, they benefit from such a specific niche within the fashion industry that affords them the benefit of focusing on existing customers and fashion trends to sell their products. References Aaker, A., (2004). Brand portfolio strategy. New York: Free Press. Aaker,D.A., (2004). A confirmatory test of a higher order factor structure: Brandequity and the truth scampering. Social Marketing Quarterly, 10 (1), 1-22. Bassey, M., (1999). Case Study Research in Educational Settings, Buckingham and Philadelphia: Open University Press. Carrillat, Francois A., (2010). Fortuitous brand image transfer. Journal of Advertising, 39 (2), 109. Chai, T., (2011). Fashion supply chain management. Hersey: Idea Group. Cheverton, P., (2006). Understanding brand. New York: Kogan Page. Creswell, J., (1994). Research Design: Qualitative and Quantitative Approaches, Thousand Oaks, CA: Sage Publications. Dai, X. (2010). Research on the brand marketing strategy of Chinese clothing enterprises. Asian Social Science, 6(12), 54. Doherty, M. (2004). Fashion marketing. London: Emerald Group Publishing Limited. Ellwood, I. (2002). Essential brand book: Over 100 techniques to increase brand value (2nd ed). New York: Kogan Page, Limited. George,M. and Zinkhan, T. (2006). Review: An overview of marketing strategy and planning Review: An overview of marketing strategy and planning. International Journal of Research in Marketing, 11(3), 185–218. Haig, M., (2011). Brand Success. New York: Kogan Page. Holt, D., and Cameron, D. (2010). Branding a store. New York: Kogan Page. Jobber, D. (2012). Foundations of marketing. New Delhi: Tata McGraw-Hill Education. Keller, T. and Lane, K. (2008). Strategic brand management: building, measuring, and managing brand equity (3rd ed). Upper Saddle River, N.J: Pearson. Kunz, Grace I. (2011). Going global: the textile and apparel industry. 2nd ed. New York: Fairchild. Leeman, J. (2010). Supply chain management. London: Bod. Pickton, David, (2008). What is a brand worth? The Journal of Brand Management, 15(3), 155. Polhemus, T. (1994). Streetstyle: From sidewalk to catwalk. London: Thames and Hudson, Inc. Ross, J. and Haradine, R. (2011). Fashion value brands: the relationship between identity and image. Journal of Fashion Marketing and Management, 15(3), 306-325. Read More