II.2.1. Luxury Product Policy

 

II.2.1.1. The Luxury Product Paradox

The development of new products in mass markets usually relies on consumer research. For instance, Berentzen, a producer of alcoholic beverages, used trend scouting in bars to discover the market niche of vodka energy drinks. They then designed the product and its taste, packaging and advertising according to the expectations of the target group (Trommsdorff and Heine 2008a, p. 1674). Dubois (1992, p. 31) terms these products as "produits réponse." However, this approach contradicts the basic principles of luxury brand management. Luxury brands rely on their specific identity and their unique vision and standards (Kapferer 2001, p. 321), translating their vision into symbolic characteristics and thereby creating the greater part of their product benefits. Therefore, they must be very convinced about their vision and cannot constantly change and adapt it to new market trends and short-term consumer expectations. Based on that, the product paradox of luxury marketing can be summarized as follows (Dubois 1992, p. 31):

 

The Luxury Product Paradox

 

To resolve this problem, luxury brands have to employ specific market research to better understandwhich products would please their consumers best. Moreover, they have to think further in order to provide their demanding consumers with the "expected unexpected" (see also Trommsdorff and Heine 2008a, p. 1674).

 

II.2.1.2. Achieving Associations of Quality

Of course, the product policy heavily impacts the quality dimension, sub-dimensions as well as the extraordinariness dimension. For instance, quality is reinforced by generous warranties (Keller 2009, p. 292) and packaging, which is particularly important in the luxury segment as it is instrumental in communicating symbolic meaning (Fionda and Moore 2009, p. 357).

A prerequisite for luxury brands to excel in product quality is achieving the status of an expert, which is obtained through high investments in innovation and creativity and also by appointing talented designers and professionals (Fionda and Moore 2009, p. 359). The status and expertise of a luxury brand can be proved with memberships in recognized luxury brand associations. National luxury brand associations include Altagamma in Italy, the Comité Colbert in France, SALA in South Africa and Walpole in the UK. The most famous industry-specific luxury brand association is the Chambre Syndicale de la Haute Couture in Paris. Only fashion brands that are members of this association are permitted to label their brand as "maison de couture" and their creative director as "grand couturier." In addition, "haute couture" is a legally protected and controlled label that can only be used by active members of this association. Furthermore, the status of a luxury brand can also be proved by affiliation to a recognized luxury group. Some of the most recognized luxury groups are LVMH, PPR and Richemont. In contrast to these luxury-specialized groups, which own almost only luxury brands, there is a variety of mass-to-luxury groups, which focus on a specific industry and have a differentiated, bottom-to-top (mass-to-luxury) brand portfolio. Mass-to-luxury groups are recognized because of their expertise in their specific industry. Typical examples include L`Oreal, with cosmetics ranging from Garnier to Helena Rubinstein, the Swatch group, with watches ranging from Flik Flak to Glashütte Original, and Volkswagen, with automobiles ranging from Seat to Bentley.

The segment-specific product strategies also include the development of iconic products, which epitomize the brand signature (Fionda and Moore 2009, p. 357). Great examples of iconic products include the Chanel no. 5 perfume, the Hermès Kelly bag, and the Montblanc Meisterstück pen. These iconic products are indeed true masterpieces that rate at the very top of the major luxury dimensions. The rationale of luxury brands behind the development of iconic products is to prove their excellence and to enhance their luxury brand image, which should also improve consumer perceptions about the other products they offer.