luxury branding

Doing or Being?

Isaac Mostovicz writes that marketers must focus on understanding what motivates their customers above all else ...

I recently gave a keynote speech at an international conference in Lisbon, Portugal. The topic of the conference was “Marketing & Consumption: What future?”  I offered a variation on this topic which discussed the way marketing heads are discussing, “Marketing: quo vadis?”

 

Reflecting on luxury, I think that we sometimes err in our thinking. We believe that if we could only define what marketing or luxury or brand are, we’d have found a Holy Grail. Thus, with the mysterious exception of luxury, many articles and textbooks try to create as accurate as possible definitions of what marketing or brand are. The question is, of course, once we have a definition what can we do with it? The answer is very obvious – nothing.

Isaac Mostovicz presents at the “Marketing & Consumption: What future?” conference

Well, some of us enjoy knowledge for the sake of it and there are experts in brands and marketing just as there are experts in medieval Mongolian poetry, pre-historic music or other esoteric topics. However, when we want to put this marketing knowledge to use, we fail. One of the leading journals in marketing checked how many practicing marketers research their field or read the findings that appeared in that journal, which claims that its audience consists of both academia and marketing practitioners. The answer was, as you might expect, that nobody cares to read or learn what those findings are.

 

In my opinion, we make the cardinal mistake of asking the wrong question. The question is not what marketing is but what marketing /brand/ luxury does. How does it affect us, what benefits do we draw from it and how can we properly use this knowledge? This question is not simply a different question but indicates a mindset that is opposite to the one prevailing in academic and practitioners’ circles. While trying to understand what a term like marketing is reflects on us and on our egoistic satisfaction, asking what something like marketing does recognises that there is a world around us that we need to satisfy, that we want to affect and influence and that we need to consider first.

 

Others agree with my approach, e.g. Ernest Dichter, the father of motivational research that changed the landscape of US marketing . Additionally, in 1960, Theodore Levitt published “What is Marketing?”, arguably the most popular article to appear in Harvard Business review of all time and said, “when a customer asks you for a ¼” drill he actually asking for a ¼” hole”. Both of them told us that marketing starts with knowing who your customer is and what they want. However, despite the sound nature of this simple idea and vast empirical proof, marketers are not as focused as intensely as they should be on what emotions are driving their customers. When checking who the customer is, marketers must look at the deeper psychological layers that motivate the customer to choose one product or option over the other.

 

This lack of customer insight is widely apparent, and to cite the recent Goldman Sachs example, it’s clear that treatment of customers can range from extremely bad to extremely good.  To take myself as an example, I would not choose Goldman Sachs as a financial provider because they are apparently untrustworthy, but it’s possible that they employ managers that are genuinely nice people who have merely acted in an untrustworthy fashion. In this way, my motivation for choosing a product has been selecting what I perceive to be a “good” brand (if such a one exists) over a “bad” one.

 

To use a different example – Blackberry, iPhone and Android phones are all excellent products but customers will choose one option over the other equally good option. In this instance, as marketers we should understand what the parameters are that have made each customer identify with the different product. The assumption is that the customer who wants a BlackBerry doesn’t want an iPhone – I know that some people prefer the Android operating systems over those of the iPhone, for example. Nevertheless, they might advise me to buy an iPhone since my psychological needs are totally different to theirs.

 

When dealing with my own customers I always ask, “Who is your customer?” and gradually, people start to realize that they cannot describe him or her to me. What I am actually looking for is a description that allows me to identify the typical customer according to defined parameters, but it seems that nobody can describe what those parameters are. For example, one client told me that he has 10,000 customers. But he was actually referring to 10,000 people he has served in his shop at one moment or another. Yes, they were his customers in the past but can he consider them future customers? Will they visit him the next time they shop? Past performance is not a guarantee for future success.

 

Another question I ask them is what the needs of their customers are. Of course, every jeweler will tell you that their customer is looking for jewelry and every owner of a shoe shop knows that people come to their shop to buy shoes. But does the shopkeeper know what motivates the customer? Can he recognize their deeper reasons for wanting a particular product? When dealing with my customers, most cannot answer this simple question or, in Theodore Levitt’s words, my clients know that the customer wants a ¼” drill but they do not know what the ¼” hole looks like.

 

Brand consulting suffers from a similar problem.  A typical request that one of my clients made was that “we need to be differentiated and we need branding”. I told him that the cheapest and quickest way would be for his entire company to paint their faces green – that would differentiate them and even attract a lot of media attention. Actually, my client realized what his company’s problem wa – all the companies in his industry (hi-tech) look the same. He failed, though by spelling out only half of the problem. While he wanted to be differentiated, he did not consider the situation through the eyes of his clients or consider how this differentiation would address his client’s needs. Well, this is the just the beginning.

 

Brand takes us one step further. When I asked this client to describe his customer of choice and to use a real-life example, his face lit up and he told me about two of his preferred customers. He quickly told me that it was not the money his company earned on the deals that was important to him, but the bond he created with these customers. Not all our customers are those we would like to work with and not everyone is our customer of choice. It is not enough to know who our customer is or what his needs are. We need also to know who we are and what our needs are. If we manage to match our needs with those of our customers, then we have a strong brand. Do we need to differentiate? Not exactly. What we need to understand is that if we really want to interact with only those who share the same worldview and deep needs with us, our market is limited. A brand’s profit does not come from sheer volume of sales but from our ability to address the needs of our customer of choice in a way nobody else can – because we truly and intuitively understand their needs.

 

Luxury marketing is the ultimate test. Luxury is the behavior of needlessly overspending. We cannot begin marketing if we do not intimately know who our customer is and what their needs really are. Describing luxury behavior as needless tells us that those needs are much deeper and cannot be logically explained. Do we know what they are and do we know who our customer is? Can we describe the parameters that will allow us to find our customers? In terms of our brand, are we proud about what we offer? Will we be able to look back when time arrives and say that we believed in what we were doing? Luxury strips away all superficial logical arguments and asks us to delve deep and to face the real questions. Do we know how to do this?

 

Apple is the rare example of a brand that does know how to do this. It really understands its customers and that is why its fans are so loyal. The brand also develops its products according to the needs of its customers. The fact that their systems are a “walled garden” to other technology companies and that each application for the iPhone requires Apple’s approval is not mere greed, but based on a deep understanding of their customers’ needs.

knokke says of this article...

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Is gem demand on the decline?

Isaac Mostovicz writes...

diamond_20hand_small

Interesting news out of Dubai this week. At the 5th City of Gold Jewelry Conference, business leaders suggested that a unified marketing strategy for the global gems and jewelry industry is necessary in order to prevent gems and jewelry from losing ground in the worldwide luxury market.

KPMG recently undertook a study for the Gem and Jewellery Export Promotion Council of India in which they predict that the global gems and jewelry industry (currently worth $146 billion USD) will see its compound annual growth rate (CAGR) drop from 5.2 percent to 4.6 percent over the next ten years. Other luxury goods, such as luxury apparel (estimated to grow 10–15% over the next seven years) are expected to compete with jewelry for the wealthy consumer’s dollar.

The chairman of the Indian Gem and Jewelry Export Promotion Council, Sanjay Kothari, said that the global industry needs to rethink the retail experience in order to create emotional connections that will inspire consumer confidence. (Emotion in luxury is a topic we’ve discussed before on Janus Thinking).

Says Kothari:

It is time for retailers to take the initiative to grow the market. We need to look into new markets, identify new segments and new value propositions. Most of all, we need to contribute to creating a single unified global marketing masterplan that we can then tailor to the regions of the world.

One new market he identifies is luxury electronics and the potential for integrating precious metals and gems into them. He also suggests a more coordinated effort should be made to introduce jewelry to men, children and people over 65 (all non-traditional markets).

Kothari’s idea for global marketing coordination isn’t a bad one, but I can’t see anything practical coming out of it. There are too many players globally. But if the KPMG projections are true and demand for diamonds, other gems and precious metals does decline over the next decade, drastic times may call for drastic cooperative measures.

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