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| Tao Okamoto - Emporio Armani SS12 |
The Damier Canvas pattern has evolved from being a signature
to being a part of Vuitton’s DNA. Although some may argue that there is a
saturation of what was first considered to be a hyper exclusive signature,
Vuitton continues to improve its brand image, despite moving away from the
traditional notion that the rarer a luxury brand is, the more desirable it will
become. Do CMOs at some of the world’s leading brands still consider exclusivity
as a key component of their expansion strategies? How does a brand like LV, which can be
considered to be ‘saturated’ in the sense that it is available everywhere,
remain being the most valuable brand in terms of its brand equity? Does niche
targeting still work? A couple of years ago you wouldn’t talk about product
positioning without mentioning niche targeting. One would feel that the 2008 financial
crisis was partly responsible for this shift in mind set. I’ll explain.
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| Interbrand - Lux Brand Equity 2002-2011 |
Brand equity is a brand’s value in monetary terms. Defining
how much a brand’s equity is requires a lot of research which takes into
account both quantitative and qualitative aspects of the brand’s environment.
Interbrand is one company that has been able to capture brand equity accurately.
Interbrand gives a detailed method of what it takes into consideration when
calculating brand equity, to mention a few; authenticity, relevance,
consistency, presence, clarity, and responsiveness among others. When you look
at the chart of brand equity by luxury industry, you’ll see that since 2004,
Vuitton’s growth in brand equity took off in an exponential manner. The other
brands on this list are the ones that wanted to remain exclusive, ‘unsaturated’,
under segmented, or to be known as simply ‘signature brands’. I for one am
questioning the niche targeting strategy. I understand that it’s better to be
known for one thing and to excel at it, but we live in a fast paced world! What
business school graduates call the ‘learning curve’ is becoming more vertically
straightened than ever; anybody can execute the exact same ‘signature’, and to
make it worse, at an even lower cost price.
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| Interbrand - Top Lux Brand Equity 2011 |
Niche targeting is dead! If you want to survive then evolve,
adjust, learn continuously. Consumers are always curious, but consumers have
more options now. Make your presence felt by occupying more than one product
category. The influx of goods from low cost manufacturing destinations makes it
harder for signature brands to survive. Instead, exclusivity must turn into
personalization. Niche brands are always caught trying to satisfy their
customers, forgetting that their customers’ purchasing decision making changes
all the time. As an illustration, every brand at the moment is playing the
environmentally friendly card. It’s time to rethink niche strategies because
less exclusivity does not mean saturation. There are control mechanisms that a
brand can apply.
