luxury consumption

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.

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A long, slow crawl to affluent consumer confidence?

Isaac Mostovicz writes that luxury consumption might be starting to improve...


We’ve seen many a doom-and-gloom story about the economy and the luxury market recently, so here’s one offering a glimmer of hope. Unity Marketing’s latest Luxury Consumption Index showed a slight improvement, meaning that affluent people are starting to feel slightly better about their economic situations. They aren’t necessarily willing to spend again–over 40% of the respondents still said they planned on cutting their spending on luxury over the next 12 months–but nevertheless, any improvement in attitudes toward luxury should be welcomed. People need luxury–it’s a basic human need. They need to find ways to express themselves through it.

Unity Marketing’s chief economist Tom Bodenberg expressed a worry though:

The media’s focus on ‘recession chic’ – personal expression that deliberately excludes luxury goods – may leave a lingering distaste for conspicuous consumption and parading luxury labels.

I disagree–whether something is ‘recession chic’ depends on one’s personal interpretation, and this does not deliberately exclude luxury. Luxury companies that provide true value–financially, emotionally or otherwise–will emerge from the recession stronger than before.

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Brand nostalgia as Hydrox cookies make their return

Isaac Mostovicz writes...

In difficult economic times, where can brand owners find equity? Several are turning to nostalgia–bringing back shelved brands and tweaking slogans and mascots to draw on heritage and appeal to old and new consumers. Hydrox cookies from Kellogg’s and Eagle Snacks are two examples–Kellogg’s discontinued Hydrox cookies (which are similar to and compete against Nabisco’s Oreo cookies) in 2003, but plans to bring the brand back after discovering brand equity in people discussing and remembering the cookies on the internet. Reserve Brands, the company behind Eagle Snacks, found that 6 out of 10 adults remembered the brand, meaning bringing it back would cost less than creating a new brand.

Playing to nostalgia is a great way to appeal to Theta personalities–Thetas use socially-derived understandings of product characteristics as a basis for their consumption, meaning they want to fit in and are driven a great deal by what their peers and social group like. If their social group has been reminiscing about these brands, or nostalgia is something that their peer group values, then these revived products will find a Theta audience and have a greater chance for success.

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Gen Y wants personal and specific luxury

Isaac Mostovicz writes...


scenarioDNA, a research and branding consultancy based in New York, published a very interesting trend report ‘Redefining Luxury’ earlier this month.

The basic premise: for Generation Y (the cohort born after Generation X, now in their mid-twenties or younger) to choose a given product, it really needs to captivate. Just being tied to a well-known brand won’t be enough, because with more information and the tools to hunt and find what they want, Gen Y are less likely to stick with a name.

The article discusses how young people long for rare moments and special, unique experiences. As Gen Y grew up in McMansions, luxury brands became increasingly ubiquitous at the expense of originality and exclusivity. Now young people have fractured expectations for luxury.

This theme resonates with an article in the FT from earlier this month by Michael Schrage, “Customers want loyalty not perfection.” Marketers and brand managers are upset that consumers today are “brand sluts” who seek immediate gratification without any loyalty. But really “established brands have cheated on and betrayed their most loyal customers” as they’ve charged more and more for less and less and added complexity rather than value to their products.

Once again we’re reminded that unique experiences and value worth the premium are what keep people coming back to the brands they trust.

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