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The Luxury Strategy

ChrisV

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View attachment 21195 Stumbled upon this at the mall, $71,000 for a plantnium Rolex. I think pricing factors into what is luxury quite a lot. Sure the Rolex can be of higher quality than timex, but is it really worth $71,000? On the other hand if you charge $20 for the Rolex is it a luxury brand? All price points . I think I’ll start a luxury underwear brand , anyone wanna invest $5m for startup?
I hate rolex. I think that they’re low-medium end ka-ka

That being said, they are of way higher quality than your average Timex or Quartz watch

So if you got the quality that Rolex offered for $20? That would be amazing. That’s kind of what Apple does and what Eichler Homes did in the 70s.

joseph_eichler_home_remodel_klopf_silicon_valley_6.0.jpg

Both of those brands made a complete killing and offered amazing products for reasonable prices.
 

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ChrisV

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Now compare to a 60 year old with a ferrari that likes to track the car and a vette or lambo just doesn’t feel the same. It’s not because his friends will think he’s awesome. They all know that he’s rich. It’s because he actually needs it’s performance capabilities.
That’s why I would buy a Ferrari. Nothing... I repeat nothing.... drives like a freaking Ferrari. And Corvettes handle like like Golf carts. Lambos I don’t know, but I don’t see them as Driver’s cars.
 

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Good stuff! I always wondered myself what the fine points of luxury would be. This sort of area is a whole 'nother level.
 

MTEE1985

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Funny to think its just a piece of wood if you look at it but not exactly true.
Ahhh...exactly. Or it’s a box with 4 wheels and an engine, or a shirt, or a $30,000 coffee table book BUT not exactly true. A $1,000 snowboard might be worth it to many, to me it’s worth $0. I live in Arizona, I don’t snowboard.

As @rpeck90 points out, to create a luxury item is to illicit an emotional response and value far beyond the items functional value. What that value is, is up to the individual. Having said that, now I want some coffee table books.
 

ChrisV

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I read some interesting statistics once actually... The average billionaire gives far less of crap than the 2-5 million dollar guy wanting to let everyone know how successful he is. The average net worth of a newer S class driver was more than the average Rolls driver (Rolls was only like 3 million AVERAGE).

I know a lot of multi-millionaires and a few billionaires... The richer of them daily drive things like S classes, Lexus LS/LX and Range Rovers. Hell, one in particular, easily worth 50m, daily drives a Nissan Armada. Another, a Honda Pilot. GMC Denali. Lincolns. Escalades.
Well yea because when you’re a billionaire everyone knows it already.

But I feel like a lot of people get stuck on “people but luxury products to show others they are rich” and I don’t know if that’s fully the case. I have a lot of really nice things that no one will ever see.

Like a Rolls vs a S-Class? Don’t get me wrong, an S-Class is a beautiful car. But if you look one after the other and compare a Phantom to a Maybach S, I honestly think the S/Maybach S looks tacky. Example: the S class has accent/mood lighting. You can set it in any color you want. Pink, purple, orange. The Phantom also has mood lighting. You can set it in any color you want. As long as those colors are either White or Frost White LOL. Makes the notion of Orange mood lighting seem tacky.

Just my personal opinion.

But that being said, I would only own a Rolls if it were in a VERY wealthy neighborhood where there are more than one. I’m not gonna be driving around with everyone staring at me.

It was bad enough when I had my BMW and BMWs are pretty common. Mine just looked reallly nice so ALL day people would be like “omg that’s such a nice car” “what do you do for work that you can afford that.” The irony being I didn’t even buy it because it looked nice, I bought it because the Driving experience was like having an orgasm.

They don't need or want the attention a rolls gives off.

I think buying an S class when any of these folks could easily have a Rolls is more a decision of quickly deminishing marginal returns as they spend more and more... No one bats an eye at an S class. Rolls is rap star, hollywood, drama city. The same reason they buy Embrarer light jets instead of Gulfstream. Paying more for drama? Not an upper class thing to do. Maybe their kids would.
Ah, I just read the rest of your post where you covered that. I was replying as I got through the post. Yea I agree. An RR would be WAY too much attention. Damn shame though.

It’s like when car enthusiast/Autotrader columnist Doug Demuro owned a Ferrari for a year. He said as a car lover, the attention was unbearable.

They're coming for it next week. The shipping company, that is. They're picking up the Ferrari, taking the keys, putting it inside a trailer, and transporting it far away to a new owner, thus bringing to an end my childhood dream of owning a Ferrari. I should be downtrodden; dismayed; depressed. I should take time to gaze at it longingly during the last few days before its departure. I should take it on one final drive with tears welling up in my eyes. I should be browsing AutoTrader for a new one.

But I'm not.

I'm happy to see it go.

The simple truth is that owning a Ferrari for the last year just wasn't all it's cracked up to be.

Let's start with the thing that annoyed me most: the attention. As far as I can tell, most Ferrari buyers fall precisely into two camps: those who buy the car for the attention, and those who buy the car for the driving experience. Admittedly, there's some crossover – but you can usually distinguish the "Let's go on a mountain drive" people from the "Let's wrap it in neon gold and cruise up and down busy streets" crowd.

As for me, I prefer the driving experience: few things in life sound more appealing than an uninterrupted hour in the car, going through the gears, hearing the sounds, negotiating curves, and staring at the engine through the rearview mirror. But when you're driving a bright red Ferrari, "uninterrupted" isn't really possible.

At every light, the guy next to you will ask what it cost. At every gas station, a guy in a Chevy pickup will come over and ask if you "wanna trade?" People will want to take pictures of it, next to it, and in it. Kids want you to rev so they can put a video on YouTube. And no matter where you drive it, everyone goes a little faster when they're near you, eager to prove that they can keep up – whether they're driving a Subaru or a Porsche.

And over the last year, I've indulged every single person with a big smile. The guy who wants to know what it costs gets to sit inside. The guy who asks if I want to trade gets to see the engine up close. Kids get rides, parent permitting. And if anyone wants to take a picture with it, I grab their camera and invite them to sit behind the wheel. But it gets tiresome. And every so often, when I'm thinking about taking out the Ferrari for an hour or so, I'll pause for a moment and remember the attention. And I'll fire up Forza and drive a Ferrari there, instead.

Now, I shouldn't say that I don't like attention on the road. In fact, I loved it when people would approach me at gas stations, restaurants, or stoplights when I was driving my E63 AMG wagon or my CTS-V wagon. But that's because those were car people, eager to discuss one of the most unusual — and most subtle — cars on the road. In the Ferrari, it's everyone, coming at you from all sides, asking personal questions about how I can afford it, and what it cost, and what I do for a living. After a while, it simply gets old.

https://jalopnik.com/owning-a-ferrari-for-a-year-was-a-disappointment-1668355120

This video is hilarious. He compares the attention he got with his Ferrari to the attention he got with his Aston Martin.

Although I wonder how much it had to do with the color. I think getting a muted gunmetal grey F430 might solve that for the most part.

5967001861_f2f60d1608_b.jpg
 

Kak

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Well yea because when you’re a billionaire everyone knows it already.

But I feel like a lot of people get stuck on “people but luxury products to show others they are rich” and I don’t know if that’s fully the case. I have a lot of really nice things that no one will ever see.

Like a Rolls vs a S-Class? Don’t get me wrong, an S-Class is a beautiful car. But if you look one after the other and compare a Phantom to a Maybach S, I honestly think the S/Maybach S looks tacky. Example: the S class has accent/mood lighting. You can set it in any color you want. Pink, purple, orange. The Phantom also has mood lighting. You can set it in any color you want. As long as those colors are either White or Frost White LOL. Makes the notion of Orange mood lighting seem tacky.

Just my personal opinion.

But that being said, I would only own a Rolls if it were in a VERY wealthy neighborhood where there are more than one. I’m not gonna be driving around with everyone staring at me.

It was bad enough when I had my BMW and BMWs are pretty common. Mine just looked reallly nice so ALL day people would be like “omg that’s such a nice car” “what do you do for work that you can afford that.” The irony being I didn’t even buy it because it looked nice, I bought it because the Driving experience was like having an orgasm.



Ah, I just read the rest of your post where you covered that. I was replying as I got through the post. Yea I agree. An RR would be WAY too much attention. Damn shame though.

It’s like when car enthusiast/Autotrader columnist Doug Demuro owned a Ferrari for a year. He said as a car lover, the attention was unbearable.

They're coming for it next week. The shipping company, that is. They're picking up the Ferrari, taking the keys, putting it inside a trailer, and transporting it far away to a new owner, thus bringing to an end my childhood dream of owning a Ferrari. I should be downtrodden; dismayed; depressed. I should take time to gaze at it longingly during the last few days before its departure. I should take it on one final drive with tears welling up in my eyes. I should be browsing AutoTrader for a new one.

But I'm not.

I'm happy to see it go.

The simple truth is that owning a Ferrari for the last year just wasn't all it's cracked up to be.

Let's start with the thing that annoyed me most: the attention. As far as I can tell, most Ferrari buyers fall precisely into two camps: those who buy the car for the attention, and those who buy the car for the driving experience. Admittedly, there's some crossover – but you can usually distinguish the "Let's go on a mountain drive" people from the "Let's wrap it in neon gold and cruise up and down busy streets" crowd.

As for me, I prefer the driving experience: few things in life sound more appealing than an uninterrupted hour in the car, going through the gears, hearing the sounds, negotiating curves, and staring at the engine through the rearview mirror. But when you're driving a bright red Ferrari, "uninterrupted" isn't really possible.

At every light, the guy next to you will ask what it cost. At every gas station, a guy in a Chevy pickup will come over and ask if you "wanna trade?" People will want to take pictures of it, next to it, and in it. Kids want you to rev so they can put a video on YouTube. And no matter where you drive it, everyone goes a little faster when they're near you, eager to prove that they can keep up – whether they're driving a Subaru or a Porsche.

And over the last year, I've indulged every single person with a big smile. The guy who wants to know what it costs gets to sit inside. The guy who asks if I want to trade gets to see the engine up close. Kids get rides, parent permitting. And if anyone wants to take a picture with it, I grab their camera and invite them to sit behind the wheel. But it gets tiresome. And every so often, when I'm thinking about taking out the Ferrari for an hour or so, I'll pause for a moment and remember the attention. And I'll fire up Forza and drive a Ferrari there, instead.

Now, I shouldn't say that I don't like attention on the road. In fact, I loved it when people would approach me at gas stations, restaurants, or stoplights when I was driving my E63 AMG wagon or my CTS-V wagon. But that's because those were car people, eager to discuss one of the most unusual — and most subtle — cars on the road. In the Ferrari, it's everyone, coming at you from all sides, asking personal questions about how I can afford it, and what it cost, and what I do for a living. After a while, it simply gets old.

https://jalopnik.com/owning-a-ferrari-for-a-year-was-a-disappointment-1668355120

This video is hilarious. He compares the attention he got with his Ferrari to the attention he got with his Aston Martin.

Although I wonder how much it had to do with the color. I think getting a muted gunmetal grey F430 might solve that for the most part.

View attachment 21202
Good post. Agreed about the mood lighting. Terrible. I'd flip it to white and leave it there.

I liked Doug. He's pretty funny.
 

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Ahhh...exactly. Or it’s a box with 4 wheels and an engine, or a shirt, or a $30,000 coffee table book BUT not exactly true. A $1,000 snowboard might be worth it to many, to me it’s worth $0. I live in Arizona, I don’t snowboard.

As @rpeck90 points out, to create a luxury item is to illicit an emotional response and value far beyond the items functional value. What that value is, is up to the individual. Having said that, now I want some coffee table books.

Luxury dog shoes it is... (my new niche) :D

I was kidding, but out of curiosity after a google search.. it does exist!

Luxury Petique

With some good copyright and marketing + a proper website someone could pull this off, this website looks totally broken

Gucci Dog shoes anyone?
 
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MTEE1985

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Luxury dog shoes it is... (my new niche) :D

I was kidding, but out of curiosity after a google search.. it does exist!

Luxury Petique

With some good copyright and marketing + a proper website someone could pull this off, this website looks totally broken

Gucci Dog shoes anyone?

What cracks me up most about this site...what’s one word that most true luxury brands NEVER use?

Luxury.

This site can’t use it enough, I’d be interested to know if they’re trying to convince their customers or themselves.
 

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Luxury dog shoes it is... (my new niche)...
With some good copyright and marketing + a proper website someone could pull this off
What are you waiting for? For pigs to fly into the sky? :cool:
 

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ChrisR

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That’s why I would buy a Ferrari. Nothing... I repeat nothing.... drives like a freaking Ferrari. And Corvettes handle like like Golf carts. Lambos I don’t know, but I don’t see them as Driver’s cars.
And yet that great handling Ferrari uses Corvette suspension...

Ferrari to use Corvette-derived suspension on 599 GTB Fiorano

Your Corvette statement shows how little you know about cars.

Also, you're insane if you think a Ferrari is anymore a "driver's car" than a Lamborghini. Neither are real driver's cars.
 
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ChrisV

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ChrisV

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And yet that great handling Ferrari uses Corvette suspension...

Ferrari to use Corvette-derived suspension on 599 GTB Fiorano

Your Corvette statement shows how little you know about cars.

Also, you're insane if you think a Ferrari is anymore a "driver's car" than a Lamborghini. Neither are real driver's cars.
The fact that you think that a cars suspension is the only thing that determines it’s Handling Abilities

They say that the difference in lap time between a top Ferrari driver and someone who’s a complete butterfingers is ~1 second.

So buddy.. you tell me. What would be your ‘driver’s car'
 

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Been busy lately so haven't posted here for a while. However, I spent the past few days reading all the replies and I'm glad to see that (some) of you guys are either starting to, or have already grasped the concept of luxury and what constitutes a true luxury product.

-

With all the confusion that has arisen here on what is luxury and what is a luxury product, it's important to note that it is the brands themselves that make people think of their products as luxury, not the other way around. For example, although LV handbags that are part of the Monogram & Epi lines are indeed luxury products (although it can be argued that counterfeiting has resulted in the vulgarization of the Monogram bags) LV also sells a myriad of other products which are not luxury; mainly accessories, perfume and even some clothing.

Does this mean that LV is not a true luxury brand? On the contrary, LV is valued higher than any luxury brand out there ($33.6 billion as of May 2018) and has been included in Forbe's most valuable brands list. The reasons for this 'diversification,' despite it not contributing significantly to the brand's profits under its diamond selling model (where the majority of profits come from 'mid-range' luxury products, e.g. $1,000 handbags and not from the ultra expensive custom-made trunks OR the cheaper accessories/clothes) lie on LV's attempt to partially imitate fashion and engage in what is known as brand stretching. This practice, which has been attempted several times in the past by multiple brands, is usually catastrophic for the image of a luxury brand BUT, since this is the world's biggest luxury brand we're talking about and especially one which has established several timeless iconic products, these should not harm the brand much - if at all - as long as they are not promoted much and are still primarily sold in the brand's own stores. Let me make it clear though that this is an EXCEPTION to the so-called rules of luxury and not the norm!

On the other hand, there are 'access products' which ARE luxury, but sold at lower prices and therefore posses lower margins, which are used to extend a brand's reach to less affluent individuals who still value the brand & what it stands for and thus wish to have it enrich their lives in some kind of way. The eventual goal of course, is for these clients to make their way up to pricier pieces as they further immerse themselves in the brand's world and ideals.

This is why a brand like Mercedes (which btw temporarily abandoned its luxury strategy in the 90s for 'growth reasons' and went for a more premium strategy instead - which resulted in a significant decrease in profits) makes cars like the E-class for example, despite being perfectly capable of making more expensive, hedonistic, and overall better performing cars.

-

Having said that, it is clear that focusing on more functional products (especially cars) has been nothing but hurtful to this thread as people tend to get too easily emotionally attached with some set of ideas (either utilitarianist or otherwise) and try to publicly impose those on others. Thus, I would appreciate it if @sparechange would stop posting on topics which he obviously does not understand nor value and allow the rest of us to engage in growth-inducing intellectual discourse. If he wishes to join us, then that is fine. But hijacking a thread for the sole purpose of pushing your own opinions, as well as questioning the beliefs and values of others is not only annoying, but I am pretty sure is also NOT in line with the purpose of this forum.

Wanna argue on cars like a frustrated teenager? There are plenty of forums out there who will allow you to do so.

-

I will write several other posts the following days/weeks covering some of the misconceptions surrounding luxury products, as well as steer the conversation away from the products themselves to outline some of the strategic management decisions that a luxury brand MUST engage in if it wishes to be perceived as such, especially in relation to how it promotes itself.
 

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I will write several other posts the following days/weeks covering some of the misconceptions surrounding luxury products, as well as steer the conversation away from the products themselves to outline some of the strategic management decisions that a luxury brand MUST engage in if it wishes to be perceived as such, especially in relation to how it promotes itself.
Looking forward to hearing your thoughts and insights. What fascinates me most about luxury brands is not so much their product as anybody with enough money could start producing ultra-expensive items and call it “luxury”, but the story behind how the true luxury brands became known as such in their respective categories.
 

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They say that the difference in lap time between a top Ferrari driver and someone who’s a complete butterfingers is ~1 second.
I don't care what "they" say. If you actually believe that statement, I was right when I said you know little about cars.

Furthermore, if you think a car that practically drives itself is a drivers car, you should probably just stop commenting on the subject. You CLEARLY have no clue what you're talking about.
 

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Good question....that’s the whole point right? What exactly is anything “worth?” There are very few items in this world with a (relatively) universally agreed upon worth. Gold, Silver, copper etc for their melt value maybe?
Silver has more industrial uses than gold and a higher conductivity.

If they were equally abundant with no history as money, silver would probably be more valuable than gold.
 

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If they were equally abundant with no history as money, silver would probably be more valuable than gold.
That's a big IF though, don't you think? One on hand you have a metal that is more functional yet (more) abundant and on the other, one that is not only more scarce (scarcity aka rarity is a big part of ANY luxury product/brand) but also looks awesome!

Just from its appearance it becomes evident as to why ancient Egyptian kings would use it to adorn themselves and thus differentiate themselves through such ostentatious displays. Funny enough, this is actually in the first chapter of the book, which covers the background history of “luxury” and how it came to be.
-
the story behind how the true luxury brands became known as such in their respective categories.
I'm going to admit @MTEE1985 this is a tough one and the part of luxury brand "construction" that I've had the most trouble with so far.

As @rpeck90 was kind enough to point out in an earlier post on this thread, pedigree/heritage are KEY if one wants to properly promote and sell a luxury good/service. For example, if I were to steer the conversation away from goods/services and talk about something more abstract such as culinary culture, why is it that Southern European countries which have a long history of contribution in both the arts and sciences such as Italy, France and Greece come to mind? Not that the food(s) associated with each one of these cultures is necessarily better than any other, but I think we can all agree that having brunch in a small cafe in Milan or the Swiss Alps for example, carries a certain degree of sophistication and respect not present when referring to other culinary cultures; especially those countries with minimal contributions to the modern world. The same applies to (luxury) brands.

For example, Cartier, a model luxury brand IMO can boast of making the first leather strap wrist watch (if I'm not mistaken). A sports car manufacturer like Porsche, can boast of its race-track achievements. And Audemars Piguet, one of the most respected Swiss watch makers contributed heavily on the evolution of mechanical watches; similarly to how Mercedes did with cars, on top of actually inventing the damn thing!

Notice a trend here though? All of the above 'creations' relate to primarily functional (yet still, beautiful and hedonistic) products. Why? Because technology wasn't the same back then as it is now, and so most of the big luxury brands started with function first and then moved on to 'beauty.' And so the question is: How does a contemporary luxury brand, especially one whose products do NOT rely on a specific function, can distinguish and promote itself through some kind of history or heritage?
 

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How does a contemporary luxury brand, especially one whose products do NOT rely on a specific function, can distinguish and promote itself through some kind of history or heritage?
Maybe it just needs time to develop an actual history and heritage. Decades of consistently high quality, low quantity products will lend itself to the type of legacy that other luxury brands have. It's not coincidence that the majority of luxury brands are decades (or even centuries) old.

Briefly reading the history of Cartier, per Wikipedia, the company began in 1847, but it wasn't until the founder's grandsons took over the business did the brand become recognized worldwide. It looks like the company really began to gain some traction in the early 1900s. That's over 50 years after the company was started. By that time, you have 50 years and three generations of family running this business. You now have heritage.

Perhaps that's just one example. Chanel did not take 50 years to grow huge, but it certainly started small, with Chanel making hats for wealthy socialites.

It takes time to gain the recognition necessary to qualify as a luxury brand. It takes years of consistently excellent quality, and it requires independent recognition by qualified critics (i.e. fashion critic reviews).

What are some newer luxury companies started in the last few decades? Screaming Eagle Winery is who comes to mind for me. Their success came from a combination of hiring a world-class winemaker and getting a top score by a world renowned wine critic (who happens to be close friends with said world-class winemaker).
 

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MTEE1985

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How does a contemporary luxury brand, especially one whose products do NOT rely on a specific function, can distinguish and promote itself through some kind of history or heritage?

Awesome post and great question, especially in the age of purchasing perceived luxury a la Frye Festival which we all know was the opposite.

I found the chart below to interesting, specifically as it relates to the points of sale each product is available at. I find scarcity to be a good metric in the luxury market. I agree with @Merging Left regarding time as being #1 though.


upload_2018-9-13_10-13-14.jpeg
 
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LittleWolfie

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That's a big IF though, don't you think?
At our current level of advancement sure, for ever no. Diamonds are a lot more common than they were 100 years ago.

We can make gold too, it's just too expensive in energy to be worthwhile. Getting off topic though.
 

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Awesome post and great question, especially in the age of purchasing perceived luxury a la Frye Festival which we all know was the opposite.

I found the chart below to interesting, specifically as it relates to the points of sale each product is available at. I find scarcity to be a good metric in the luxury market. I agree with @Merging Left regarding time as being #1 though.


View attachment 21560
I am actually familiar with this pyramid chart and find it to be a good starting point when it comes to evaluating the price points of various luxury (and non-luxury) brands. However, as you get deeper into luxury and even branding in general, you come to realize that price is only a tiny piece of the puzzle and which exists as a result of everything else (promoting rarity, beautiful hedonistic products made to last, tied to a specific culture, heritage, etc).

We can make gold too, it's just too expensive in energy to be worthwhile. Getting off topic though.
Interesting thought. Just goes to show how highly some goods/materials are valued despite their functions (or lack thereof) as well as humankind's attraction to not only luxury goods, but also the concepts of luxury, comfort and pleasure in general.

Maybe it just needs time to develop an actual history and heritage. Decades of consistently high quality, low quantity products will lend itself to the type of legacy that other luxury brands have. It's not coincidence that the majority of luxury brands are decades (or even centuries) old.
This is true. But, considering the vast amount of resources we have in our disposal as creators/entrepreneurs, is there a way to speed this up and create a heritage 'out of nothing?'

Let me try to answer my own question. The book (whose co-author used to be the CEO of LV in the late 80s) distinguishes between three types of history:

1. True History. This is quite self-explanatory. However, saying that you've been in business for 100 years for example won't do much for you; in the words of the authors, "it just makes you old." Thus, what is needed here is a "founding legend" or story which eventually shows what you actually accomplished throughout that time. A great example would be how Louis Roederer's Cristal champagne used to be specially made for the Russian czars. This approach though is obviously time-consuming and not suitable for allowing a contemporary luxury brand to flourish relatively quickly.

2. The reappropriation of true historical elements in the service of a recent brand. For this, the authors offer the example of Dom Perignon champagne (made in the 50s) which borrows from the true myth of Monk Dom Pierre Perignon who was alive in the 1600s and made important contributions to the development of winery. This obviously, is a lot easier to do as it gives the brand a semi-true backstory/founding legend on which the brand's achievements can then be added on, possibly resulting in the same degree of heritage offered by "true history" but in just a few decades. However, this is not easy to do, as this myth must be closely related to the brand's identity and the culture to which it is tied (e.g. Ferrari is Italian, Dom Perignon is French, etc).

3. The creation of a new, contemporary legend. Of the three, this is obviously the most vague one and definitely the most difficult to pull off effectively. Thus, it is highly individualized and copying here - or even modeling to a certain extent - are not viable options. An example of this would be how Ralph Lauren (though not luxury) represents the modern reincarnation of The Great Gatsby and the American dream, as seen from the perspective of English aristocrats who migrated to the US East Coast many generations ago - even though Ralph Lauren himself (real last name Lifshitz) was a US born Ashkenazi Jew and not an English aristocrat, he did a great job at embodying that aspect of the wealthy US East Coast aristocracy, which is highly evident in each one of his stores. Thus, according to the authors: "the history does not...need to be that of the brand itself; it may be the history of its universe of expression." In essence, the KEY here (as @rpeck90 has previously pointed out before) is to identify who YOU are and what YOU have to offer.

As a recent example of a luxury brand, Bell&Ross, a watch maker started by two French businessmen in 1992 managed to amass a devoted and passionate clientele by focusing on the abstract concept of aviation and especially military aviation, as a symbol of technological advancement, accomplishment (which is heavily in line with male-driven motivation; as @rpeck90 had said, something is either done to "get paid" or "get laid") and product excellence as defined by being able to survive in the harshest conditions. How do they back this up with accomplishments? Well, their watches have been worn in space before, which shows that they are perfectly capable of living up their promise(s).

What do you guys think of these?
 

ChrisV

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This is why a brand like Mercedes (which btw temporarily abandoned its luxury strategy in the 90s for 'growth reasons' and went for a more premium strategy instead - which resulted in a significant decrease in profits) makes cars like the E-class for example, despite being perfectly capable of making more expensive, hedonistic, and overall better performing cars.
Well one thing to note is also that Mercedes... their luxury reputation? That’s mostly an American phenomenon. They’re not really thought of as Luxury cars in Europe as much. For instance you can get most Mercedes with cloth interiors, which you can’t in the US.

329df1ac-5511-4fcb-a9e4-7b591449e72e.jpeg

In Germany they’re really just the German motor company.

https---blueprint-api-production.s3.amazonaws.com-uploads-story-thumbnail-4814-merc_trucks.png

They make trucks, vans, airplane engines, boat engines, etc

I mean there is "Volks wagon" which translates in English to “the people’s car”.. which h is more geared toward being the everyday joe car, but still Mercedes isn’t what is is in the US.
 

rpeck90

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How does a contemporary luxury brand, especially one whose products do NOT rely on a specific function, can distinguish and promote itself through some kind of history or heritage?
Maybe it just needs time to develop an actual history and heritage.
I think that pedigree / heritage are symptomatic of luxury (not its causation). They're social proof.

The real difference between all the big luxury brands - regardless of when they were founded - is their creators were (generally) pioneers in some sector.

In every brand I've personally looked at, there's someone (or maybe a few) who lay it the core of it all, committed to a completely different (new? better?) way of doing things and was eventually adopted. The adoption by members of the higher social class added the required credence to justify their ideas to everybody else. Prussian king Frederick the Great (Der Kartoffelkönig) and the potato are good examples.

We see the whole "heritage" thing coming up even in areas where premium/luxury isn't an issue...



The real "secret" of most of these brands is that this founder/creator had ONE overarching "goal" they put at the forefront of everything else; their products embodying this ideal to the core. Steve Jobs wanted to give "geniuses" a "bicycle for the mind"; Lamborghini hated his Ferrari so decided to make a car stripped of ALL the non-essentials in the pursuit of pure power.

The social proof was the justification of that particular way of doing things. A VERY apt example of this is Henry Ford. We all know Ford, and his eponymous company, but back in the day - he struggled to gain traction after going BK 3 times (I think?)... it wasn't until he beat Alexander Winston in 1901 that investors began to realize that he knew what he was doing.

The "luxury" nature of a brand is typically adopted after the initial innovation. The job of marketeers is to take the heritage prevalent in most "great" brands and make it a major contributor to the perceived value of the company, its products, values and - ultimately - results.

If you think about it logically, what difference does LV being founded in the 1850's have on its present day products? We went to the moon since it was created; if they don't employ some sort of advancement in their processes, I'd be shocked. What its pedigree tells me is that since it's such a RARE and UNIQUE thing to have (you can't exactly go back in time to found a business), LV must have some inherent value simply by virtue of trading for so long. *HOW* this value is transmuted in the modern world is then up to the product design, development and manufacturing process.

In other words, there are plenty of "luxury" brands (Tom Ford) which were founded within the last 20 years, and are still as potent as many of the longest-lasting. The difference lies not in the fact a company was created earlier than another, but their processes, ideas & underlying value are encrusted in the gems they built over their time.

The part where heritage *really* adds value is in what that product/company/founder was responsible for introducing into the world. This is generally where we start to see the "real" winners emerge. The pedigree / heritage play is mostly a result of the "impact" the company/founding team had at the time - with that value being echoed through the ages in the companies they left in their wake.

--

In the end, all this is arbitrary -- the real deal is trying to determine how we could imbue this sort of process into our own brands / companies. As mentioned previously, luxury is subjective. I am looking at buying some Tom Ford clothing. Why? It's not because he's a recent designer... it's because his stuff gives me a social precedent I'm eager to aspire to.

In this light, it's my opinion that the best thing that can be done is to focus on the "service" you provide as a person/company, amplify that over time with poignant products and then if you find something which sticks, you're able to use the likes of pedigree etc to enhance the message/offer.

Here's a good example - my dad was showing me an electronics magazine he kept from 1983 the other day. This thing is ancient in terms of its age BUT could be considered a part of "my" company's brand heritage (I'm involved with software development):



On its own, it means nothing. But as part of my company's "story" (that I've been using computers since I was 3 years old and programming since I was 13) allows me to do stuff like this:



Looking someone in the eye, I can confidently tell them that my Dad got me into PC's since I was super young. This heritage is backed up by the fact he was "in the game" when it was still a hobbyist bastion.

The implication is that I know what I'm talking about with it. I may not know... but compare this "home grown" talent to some guy who basically learned to code from a book in university, and you'll start to see the difference between a "me too" company, and one with the potential to become a timeless brand.

--

Here's another good example... Girls Girls Girls.

In that song, they mention the Crazy Horse in Paris. Ever wonder why I looked up the CH in a previous post? The social credence from going there would far outweigh any practical value; adding to our social standing as a company.
 

rpeck90

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I am actually familiar with this pyramid chart and find it to be a good starting point when it comes to evaluating the price points of various luxury (and non-luxury) brands. However, as you get deeper into luxury and even branding in general, you come to realize that price is only a tiny piece of the puzzle and which exists as a result of everything else (promoting rarity, beautiful hedonistic products made to last, tied to a specific culture, heritage, etc).


Interesting thought. Just goes to show how highly some goods/materials are valued despite their functions (or lack thereof) as well as humankind's attraction to not only luxury goods, but also the concepts of luxury, comfort and pleasure in general.


This is true. But, considering the vast amount of resources we have in our disposal as creators/entrepreneurs, is there a way to speed this up and create a heritage 'out of nothing?'

Let me try to answer my own question. The book (whose co-author used to be the CEO of LV in the late 80s) distinguishes between three types of history:

1. True History. This is quite self-explanatory. However, saying that you've been in business for 100 years for example won't do much for you; in the words of the authors, "it just makes you old." Thus, what is needed here is a "founding legend" or story which eventually shows what you actually accomplished throughout that time. A great example would be how Louis Roederer's Cristal champagne used to be specially made for the Russian czars. This approach though is obviously time-consuming and not suitable for allowing a contemporary luxury brand to flourish relatively quickly.

2. The reappropriation of true historical elements in the service of a recent brand. For this, the authors offer the example of Dom Perignon champagne (made in the 50s) which borrows from the true myth of Monk Dom Pierre Perignon who was alive in the 1600s and made important contributions to the development of winery. This obviously, is a lot easier to do as it gives the brand a semi-true backstory/founding legend on which the brand's achievements can then be added on, possibly resulting in the same degree of heritage offered by "true history" but in just a few decades. However, this is not easy to do, as this myth must be closely related to the brand's identity and the culture to which it is tied (e.g. Ferrari is Italian, Dom Perignon is French, etc).

3. The creation of a new, contemporary legend. Of the three, this is obviously the most vague one and definitely the most difficult to pull off effectively. Thus, it is highly individualized and copying here - or even modeling to a certain extent - are not viable options. An example of this would be how Ralph Lauren (though not luxury) represents the modern reincarnation of The Great Gatsby and the American dream, as seen from the perspective of English aristocrats who migrated to the US East Coast many generations ago - even though Ralph Lauren himself (real last name Lifshitz) was a US born Ashkenazi Jew and not an English aristocrat, he did a great job at embodying that aspect of the wealthy US East Coast aristocracy, which is highly evident in each one of his stores. Thus, according to the authors: "the history does not...need to be that of the brand itself; it may be the history of its universe of expression." In essence, the KEY here (as @rpeck90 has previously pointed out before) is to identify who YOU are and what YOU have to offer.

As a recent example of a luxury brand, Bell&Ross, a watch maker started by two French businessmen in 1992 managed to amass a devoted and passionate clientele by focusing on the abstract concept of aviation and especially military aviation, as a symbol of technological advancement, accomplishment (which is heavily in line with male-driven motivation; as @rpeck90 had said, something is either done to "get paid" or "get laid") and product excellence as defined by being able to survive in the harshest conditions. How do they back this up with accomplishments? Well, their watches have been worn in space before, which shows that they are perfectly capable of living up their promise(s).

What do you guys think of these?
GREAT insights!

The big thing I would add is to say that it's relatively simple to observe what others have done; difference lies in what you're doing. If you invented a contemporary legend, how would that look for a modern prem/lux brand?
 

smark

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Well one thing to note is also that Mercedes... their luxury reputation? That’s mostly an American phenomenon.
You're absolutely right Chris. As someone who wasn't born in the US but has been here for the past 2 years I've noticed that the brand is glorified much more outside Europe. However, I was meaning that more towards how Mercedes approaches its management and marketing and not purely in terms of its products (some of which are quite affordable) or how the brand is perceived.

MINI and BMW are other examples of non-luxury car brands but which for the most part follow - or have primarily followed in the past - a luxury strategy, as I had defined it in page 1 of this thread. Same goes for Tesla or Apple. But again, these companies primarily follow a luxury strategy, in the sense that they are not "true" luxury brands (at least not when compared to Audemars Piguet, Pagani, Hermes, etc) but rather, 'borrowed' some management & marketing principles from the luxury sector and applied them to their respective industries with great success.

So Joe and Elon get luxury. F*** now I like them even more!! Hahahahaha

it's relatively simple to observe what others have done; difference lies in what you're doing. If you invented a contemporary legend, how would that look for a modern prem/lux brand?
It is. I've always thought that action is what truly separates those who can from those who can't. The high number of hopeless - yet often intelligent - underachievers on Earth perfectly illustrates this.

As far as creating a contemporary luxury legend goes, I honestly don't know how that would look. BUT, like you said, it often comes down to who YOU are and what YOU believe in; with your brand/company becoming a manifestation of those. All big brands (luxury or otherwise) have a "brand legend" that catches people's attention (i.e. Amazon was founded in a garage) BUT, what truly separates one from everyone else is the reason WHY they chose to do what they did, as in their underlying reason for existence.


I was first introduced to this way of thinking by the above video. Although the speaker focuses more on the aspect of 'Why' in the context of marketing/advertising it can be applied to any area of business where one seeks to stand out and offer something truly new to the world.

As someone had posted earlier in this thread "Luxury brands don't even need advertising." And the reason for this lies on the fact that what they did and the way they did it, as well as WHY they chose to do it made them so unique that people were bound to be drawn to them over time. Why is Apple the biggest company in the world and why has it been since 2012? I would argue that without Steve Jobs' ideas and way of thinking (on top of his understanding of business transactions and good design) Apple would just be like every other boring computer company out there.

For example, what helps me stand out as an individual and what has attracted people to me since a very young age is just that, that I stand out. I don't know how exactly YET, but apparently the way I present myself, act and think draws people to me. And what I'm planning to do is embody (as well as promote) that with my business. Of course, the way I think of this will change over time WHILE I'm taking action, but so far I have a solid framework on which to build on. Those actions are then what will infuse me and my company/brand with a sense of heritage which will act as social proof as a means of attracting the social elites of our societies with the eventual goal of becoming known by pretty much anyone, anywhere.
 

ChrisV

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You're absolutely right Chris. As someone who wasn't born in the US but has been here for the past 2 years I've noticed that the brand is glorified much more outside Europe.
Wanna know something funny about a similar phenomenon? One brand that’s held in the same regard in China/Japan? You won’t believe it. Buick. I shit you not, but Buick is the ultimate symbol of class and sophistication in Asian cultures.

Edit: well, you might believe/know that, but other people usually can’t believe that.

Buick is a lot more than a dad wagon in China

Why Chinese Buyers Are Obsessed With Buick

Not just your grandma’s car, Buicks shine in Chinese luxury market

So Joe and Elon get luxury. F*** now I like them even more!! Hahahahaha
I love it because Joe started the convo knocking it a little if you rewind.
 

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Leviev.... I literally drool at those diamonds. And I don’t even particularly like diamonds.

You throw your chick a piece from Leviev I guarantee it will be worth your investment in how she puts it down alone.

BMW are other examples of non-luxury car brands
You really consider BMW non-luxury? I had one before my Mercedes and I find that it’s luxury features are almost equal, though not on par. I mean they’re more of a sports car than a luxury car, but I still think they keep the lux elements in tact. Loved some of the in-dash computerized features or the fact that the battery for the key fob would recharge whenever you put it in the slot, so you never had to change batteries.
 
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smark

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I love it because Joe started the convo knocking it a little if you rewind.
Yeah I saw that! Can't get enough of Joe's wisdom and conversational skills.

I remember thinking some years ago how much knowledge and insights a guy like that must have attained through all the interviews he's done over the years.

You really consider BMW non-luxury?
Partly, but only because of the "accessibility" of their lower models; which btw is how I think of Mercedes too. I did start thinking of BMW way more highly than the other large German car brands since I started looking into luxury though.

IMO and that's how the book makes this distinction too, if a brand does not follow ALL of the "requirements" that make people think of it so highly and thus associate it with luxury, then it is not holistically a luxury brand. Is BMW capable of producing luxury cars? You bet. Most likely even better than Mercedes. But, since they both employ marketing and management methods often found in the luxury sectors (i.e. jewelry, precious antique furniture, Michelin star restaurants etc) it can be said that they follow a "luxury strategy." I know, very confusing but this is how the book breaks it down and I think it's a nice way to think of things.

Honestly though, if we're talking about a car manufacturer who holistically embodies the concept of luxury, then Pagani would probably be the first name to come to mind (besides the likes of Ferrari, Lambo, Bentley etc).
 

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I remember thinking some years ago how much knowledge and insights a guy like that must have attained through all the interviews he's done over the years.
I would love that job. Tim Ferris too. He just wrote a book Tools of the Titans distilling down all the most important things he’s learned from guests.
 

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Bump:

Payless sells $30 shoes for $600 to fashion snobs... Payless literally invented a new brand name and sold their $20-$30 shoes for hundreds at some fashion event. They plan to use the footage in an ad campaign.

"Payless? no no, these are 'Palessi'."
 
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NuclearPuma

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And so the question is: How does a contemporary luxury brand, especially one whose products do NOT rely on a specific function, can distinguish and promote itself through some kind of history or heritage?
You embellish.

Tim Ferris explains the tricks in 4HWW.
 

ChrisV

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I don't care what "they" say. If you actually believe that statement, I was right when I said you know little about cars.

Furthermore, if you think a car that practically drives itself is a drivers car, you should probably just stop commenting on the subject. You CLEARLY have no clue what you're talking about.
Yea, you're right, I don't know that much about cars. I have no business learning about a bunch of shit that will never make me money. Unless you're an engineer for NASCAR or F1, you really have no business 'knowing about cars' because it's not making you money. I know about my field, which. So you're right. I don't 'know about cars,' nor do I consider sitting on the internet jerking off about a bunch of fast cars that you'll probably never own a symbol of status. Most of these kids who 'know about cars' are kids who plaster their walls pictures of Lamborginis that they'll never own and girls they'll never sleep with. I don't really care to be your kind. I just buy the cars I like and talk to the girls whom I find attractive.

And also I don't particularly care about Ferraris. I think they're tacky blatant cries for attention. I prefer the subdued style of say BMW or Mercedes. Or even better.. Jeep (which is what actual wealthy people drive)

That being said everything about Ferraris are designed so that your average driver can drive like Jeff Gordan. They're not like Corvettes where you hit the gas in the wrong spot you'll spin out into a wall.

So maybe you're right. Maybe that's not the correct lap time. Let me know if you find the info in your Road & Track magazine. Also say hello to your Christie Brikley printout for me as well.
 

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Now going back to the topic at hand, which is why I came back to this thread. I wanted to address the status symbol thing, because actually in a sense, it's true. It true, and it actually works.

In evolutionary psychology we call this a "costly signal" or similiarly "honest signal"

So think about the reason that peacocks have huge amazing tail. There's no reason for this. While other prey camoflauge themselves peacocks have this huge tail that basically signals to predators "here I am bitch, come F*ckin catch me." It's a cocky strut. It's a superbowl dance. The same way that in a horserace the horse with the heaviest handicap weight is actually the fastest horse. It's basically saying to preditors "haha despite the fact that I have this huge heavy-weight GPS tracker on my a$$, YOU STILL CAN'T F*ckIN EAT ME." It signals genetic fitness. And that's WAY attracting to female peacocks because it shows that their children are less likely to be eaten.

Humans do the same thing. In 2019 almost ALL of us have the basic things needed to survive. But the extra stuff it partly a way of signaling to mates "Hey, i'm so genetically fit that I can afford to do things that make it less likely to survive." A normal guy who spends $200K on a Ferrari would be in the poorhouse, just as if you took a peacocks tail and strapped it to a pigeon it would be eaten by predators in a second. And it works. There are plenty of studies on this and women will sleep with a man with a nice car faster than they'll sleep with a man with a Prius (or a neckbeard who posts Lamborginis on his wall.)

Screen Shot 2019-03-12 at 7.57.42 PM.png

Screen Shot 2019-03-12 at 7.54.33 PM.png

So essentially a Ferrari is a costly signal. is a way of signaling to prospective mates "Hey I can drop 200K on a car without an issue." Does it work? Sure F*cking does.
 

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