The diamond as a symbol of luxury, power and love is perhaps one of the finest examples of what clever marketing strategy can achieve. Till the late 19th century, diamonds were being mined in South Africa in abundance and were considered semi-precious stones. People who had invested money in the mines knew that if the supply was not immediately curtailed, their huge investments would go waste. Result? They got together with other such investors to control production. The ensuing scarcity of diamonds created an illusion of rarity.
The De Beers story begins there. And every later chapter of the story has more to do with marketing genius than simply vending a precious product. Through advertising agency N.W Ayer, De Beers embarked on a well-planned advertising and public relations campaign. The strategy included having diamonds featured in movies by gifting them to film stars; in talk shows or having pictures of celebrities flaunting rocks flashed in niche magazines and newspapers; and even roping in the royalty of various countries to help promote the stones. The agency also came up with a clever catchline that has stood the test of time—A Diamond is Forever—to capture the spirit and essence of what the miners wanted the stone to be.
Diamonds, Swiss watches and French wines have all become what they are today on the back of successful marketing. They have come to symbolize the very definition of a luxury brand by: feeding the individual’s need for selfworth and the aspiration to belong to an exclusive club; emonstrating sophistication and class; and even assigning emotional values such as love and respect to the ownership or gifting of such products. In many ways, luxury-brand marketers are doing what German sociologist Max Weber once described as, “creating a status group through consumption”.
“In a modern, urban, bourgeois society, you consume products and experiences and consumption becomes a source of identity. Luxury, or any product, is a marker of differentiation. Thus, a LVMH bag or a Cartier watch helps you stand out,” says Surinder Jodhka, professor of sociology at Delhi’s Jawaharlal Nehru University.
The luxury market tries to reinforce this very need for exclusivity by creating products and experiences. At a premium. Suits made by Ermenegildo Zegna, a luxury clothes and accessories company, retail for around Rs75,000 on an average and could cost as much as Rs5,00,000. A Louis Vuitton or an Aigner tote can cost upwards of Rs1 lakh; customized bags from the same companies, up to five times as much. Porsche’s sports utility vehicle, Cayenne Turbo, sells for around Rs86 lakh, a solid-gold MontBlanc pen , for more than Rs2,00,000 and a Bentley automobile, for anything between Rs2 crore and Rs5 crore .
Most luxury-brand companies enjoy huge profit margins. “The value comes from the badge,” says Ramesh Jude Thomas, principal executive officer, Equitor Consulting, a marketing and branding consultancy. “A luxury brand’s value lies beyond its core product function: more than 80% of it comprises brand value, while the rest is made up with features such as quality, technicality and artistry, among other things,” adds Thomas.
The high margins lead up to the core value of luxury: an unparalleled product and a tag, justifiably expensive and meant for a select group. “Luxury is all about consumer perception and creating aspirational needs. And to create this perception, brands must match quality expectations with quality of service expectations from its target audience,” says Rahul Prasad, managing director, Zegna India.
Luxury merchants can congratulate themselves for successfully shaping consumer perceptions about their brands to such an extent that people have started associating their products with emotions. “Getting real stuff gives a real high,” says Riddhima Kapoor Sahni, a fashion designer and a luxury consumer. For Sahni, owning a Louis Vuitton or a Dior means much more than a luxurious bag. “You get talked about if you are flaunting something different and exclusive. It makes you feel good,” adds Sahni.
Savvy marketers also use the strategy of introducing an inner circle within the select group of luxury-brand consumers, thereby creating a super elite club. Signature products, limited editions and by-invitation-only viewings are means that are often employed by them to create an elitist oasis. Doing this is all the more important now, since luxury consumption is no longer reserved for a few given the rise in purchasing power, say brand consultants. “Prestige and exclusivity have to be driven by distance. Only, this distance is no longer financial, but intellectual and cultural. So, luxury-brand messages must connote a sense of intellectual and cultural distance,” says a report by JWT, a leading advertising agency.
However, what keeps the luxury world going is the fact that its ambit keeps changing with shifting psychographics, socio economic and geopolitical dynamics. The emergence of a corporate elite in the last few years is a case in point, says Jodhka. “A decade ago, this group was not big enough to elicit attention from luxury players, but today, it has become significantly big,” he adds.
Luxury is also relative: What was a luxury a few years ago may not be a luxury today; one man’s luxury may be another’s lifestyle. Luxury retailer M.H. Khan, who peddles watches and fine jewels from brands such as Cartier, Omega, Patek Philippe, Breguet and Lange & Sohne, explains why he must wear a Cavalli to the Geneva watch fair. “I have been going to the Geneva watch fair since 1997. In those days, I could get away with a well-cut Indian suit. But today, I need to wear a Cavalli or an Armani because of peer pressure. For me, a branded suit is a uniform.”
This phenomenon also pushes luxury brands to constantly innovate, in terms of communication if not products, to grow demand. Chanel’s chief executive Francoise Montenay echoes the objective of other luxury companies when she says, “My brand’s aim is to constantly surprise our clientele with the beauty and luxury of our creations, service and environment.”
And perhaps this pressure and changing demographics are the triggers behind De Beer’s latest offering—the right-hand ring, targeted at the mature, professional women with disposable incomes (married women wear wedding rings on their left hand; several campaigns now suggest that they can wear what they want on their right hands). Thus begins another clever marketing strategy and. perhaps, another luxurious consumer experience.