An academic definition of the luxury brand.
Luxury is quite an elusive term to define as it depends on how each of us perceives it. A guru in brand management, Jean-Noël Kapferer in 2015 has defined luxury based on the following 5 essential characteristics:
- A qualitative and timeless experience
- Unaffordable prices for the masses
- A reputation for heritage, and unique culture
- A restricted and controlled distribution network
- Giving a sense of belonging to the elite
To Kapferer, the luxury experience is timeless and distinctive, which means that a luxury brand can’t become old-fashioned. This sets luxury brands apart from fashion brands such as Zara, H&M, etc, which have been known for producing fashionable, short-lived clothing for the masses. Because of that, we have the second criterion which is about the inaccessibility. Luxury items are not for the masses. They can only be afforded by the rich and elitists in society. Unlike fashion and even premium brands, luxury powerhouses have their legacy and unique history that makes them incomparable. Finally, a luxury brand is known to fully control its sales channels to maintain the unique culture that is tied to the brand. That’s why we never perceive Zara, and H&M as luxury businesses even though they have been trying to build a prestigious image for decades.
A luxury brand exceeds ordinary consumption values
“A luxury brand provides you values that go beyond conventional consumption values.”
Thang Chu
To explain the above quote for my definition of a luxury brand, I’ll refer to the semiotic square of consumption values provided by Jean-Marie Floch, which is a valuable tool for understanding the underlying values driving consumer behavior.
1. The logic of utilitarian need (Does functionality matter to luxury consumers?)
“A luxury brand is never bought for its functionality and practicality. Premium brands can be even more functionally superior than luxury brands.”
Thang Chu
This refers to the practical benefits that we seek by consuming a product. When you buy something utilitarian or follow the logic of need, you’re treating it like a tool that helps you complete a task or fulfill a need. It’s not about emotions or trends, but about function and practicality.
Do you think we consume a luxury item because of its functionality? My answer is maybe. We all know that luxury brands are known for the quality and creativity of their products. People may love Ferrari due to its cutting-edge engineering, safety features, and durability. Yet, I don’t think that is the primary reason behind our luxury purchases. If our buying decision for a car is driven by practical benefits, then I guess premium brands such as Mercedes or BMW, with the most advanced technology and innovation should be prioritized. Many researchers have pointed out that functionality has been never a determinant of our buying decisions for luxury items.
2. The logic of interest (Don’t compare and think about prices)
“A luxury brand ignores the affordability and comparability of the products. A luxury brand wants us to perceive it as very expensive and unique.”
Thang Chu
Another critical aspect that may be overlooked by luxury brands is the logic of interest. This logic refers to the affordability and comparability of a product. It means that we’ll be interested in consuming something if we know it is affordable and has a higher quality than other alternatives.
To me, a luxury brand seems to be against this logic. I don’t think we, as consumers, ever perceive a luxury item as affordable. In contrast, a luxury brand should be perceived as very expensive and unaffordable to most of us. How about the comparability? Have you ever compared a luxury item to another brand? I think the answer is ‘no’. We can’t compare luxury brands to anything because they are unique in their world. That is why the logic of interest is completely ignored by luxury powerhouses.
3. The logic of desire (Luxury brands sell dreams)
“A luxury brand sells us its distinctive dream, a unique opportunity to live in its imaginary world, where we can showcase our elitism”
Thang Chu
The desire to consume a product isn’t just about practicality (the logic of need). It’s a complex dance between fulfilling needs, triggering emotions, and symbolizing identity. We might crave a product because it promises happiness, aligns with our aspirations, or simply feels good.
In this regard, luxury brands sell us the dreams they’ve created for good. They just simply go beyond your desire to become your ideal self. People consume luxury items that represent their personality traits and aspirations in life. We love Chanel because of its legacy, its creator, who redefined femininity with pantsuits and liberated women from constricting corsets.
4. The logic of pleasure (We buy a luxury experience, not an item!)
The final logic refers to the fact that sometimes we buy something not because we need it, but because it makes us feel good and satisfies our self-interests. That’s the hedonistic side of buying: seeking pleasure and a little “me time”.
The luxury brand goes beyond the object. It is the experience that is given exclusively to elitists. Luxury brands are about social stratification fulfilling the consumers’ need to prove their membership in an exclusive community in our society.
Other ‘Must-have’ characteristics that classify a luxury brand
1. Luxury brand should never delocalize its production
The brand should not move its production out of the country of origin. People may feel that this damages the profitability of the luxury businesses since they can minimize their cost structures if they outsource their manufacturing to new emerging countries with low-cost labor such as China or Vietnam. However, this trade-off is worth it because it sustains what constitutes a luxury brand: incomparability, selling dreams, and never concern about pricing.
I believe that we’ll no longer desperately desire to experience the feeling of shopping in a Louis Vuitton department store if we figure out that most of its items are assembled in a country that has no reputation for elitism such as China. The brand that can’t resist the temptation of delocalization may lose the know-how country of origin, devaluing the legacy and heritage that it has built for decades, and putting itself at risk of being counterfeited.
2. High quality with exceptional craftsmanship
This is where the uniqueness of each luxury brand is demonstrated. Luxury brands use the finest materials available, whether it’s rare animal skins, metals, exotic wood, or meticulously sourced fabrics, bringing about not only opulence but also superior durability and performance. It’s rumored that the average Rolls Royce has around 18 full bull hides to make a full interior, this is equivalent to shockingly 8 bulls.
Luxury brands must have a sense of human touch. Skilled artisans with years of experience hand-craft each piece to breathe life into the final items, which are then depicted as distinctive characters. However, we need to be aware that luxury items are not perfect products offering perfect functionality like premium brands. As I’ve mentioned above, we buy well-crafted luxury brands because of the emotional connection with them. It’s all about status, success, or even a sense of belonging to a select, elite group.
3. Luxury brands never reduce their price.
“Sales promotion is only for fashion brands whose products are short-lived, and temporarily fashionable. Luxury brand is timeless, and has to maintain its inaffordability for the masses.”
Thang Chu
I have mentioned the ‘timelessness’ and ‘inaccessibility’ of luxury brands above and price cutting will damage this aspect. High prices often imply high-quality materials, exceptional craftsmanship, and a long history of brand excellence. Price cuts can create doubts about these qualities, suggesting the product might be less enduring. Limited availability and high prices contribute to the exclusivity of luxury brands, making ownership a status symbol. Price cuts or sales promotions can make the brand more accessible, potentially diluting its exclusivity and perceived value.
4. Luxury brands must be exclusive and rare
Unlike contemporary luxury fashion brands nowadays, which are pursuing an affordable luxury strategy (selling prestige products to the masses), luxury brands have to resist the temptation to sell more and get more. Again, luxury brands sell dreams, aspirations, and self-expression. Elites value exclusivity, while the masses value affordability. Just imagine what would happen if we saw 8 or 9 out of 10 people walking on the street all carrying Louis Vuitton luggage. That’s why only 8.400 Ferrari models are manufactured each year. Therefore, please do not fall into the trap. Only exclusivity and rarity can fuel desire and make ownership of luxury more valuable, as it signifies belonging to a select group.
Academic sources for this blog:
Chevalier, M., and Mazzalovo, G. (2021) Luxury Brand Management : In Digital and Sustainable Times, 4th edition. West Sussex, England: Wiley.
Kapferer, Jean-Noël (2015) Kapferer on Luxury : How Luxury Brands Can Grow yet Remain Rare. London, England : Kogan Page.
Kapferer, Jean-Noël., and Bastien, V. (2012) The Luxury Strategy : Break the Rules of Marketing to Build Luxury Brands. 2nd ed. London: Kogan Page.
Ko, E., Costello, J.P., and Taylor, C.R. (2019) What Is a Luxury Brand? A New Definition and Review of the Literature. Journal of Business Research, 99 (2019), pp.405–13.
Sy Chu
As an analytical and creative marketing enthusiast skilled in customer analysis, content research and brand management, my passion is help businesses gain insights into their brand and marketing strategies to drive impactful outcome to their success.