Publishing houses are increasingly attempting to turn some of their first edition books into exclusive (and expensive) collector’s items. Taschen, the Los Angeles-based publisher, and luxury publisher Kraken Opus are among a handful of publishers who are publishing books in unusual formats with unusual features for exceptional prices. One example is a book about Indian cricket star Sachin Tendulkar. Published by Kraken Opus, the limited edition of ten copies ($75,000 each) includes a special page made from paper pulp mixed with a pint of Tendulkar’s blood.

Taschen has found such demand for some of its collector’s edition books that it has raised prices for some books it has already released. Its Helmut Newton photography book, titled “Sumo,” now costs $15,000, up from $1,500 when it came out in 1999.

These beautiful books appeal to Theta personalities, for whom a well selected book can make them feel like the true ‘them’, as well as Lambda personalities–for them a special, exclusive book can make them feel exceptional. In either case, how the individual interprets the book determines its value for him or her.

I came across an interesting press release from the International Diamond Manufacturers Association (IDMA) this week calling for the international diamond manufacturing community to restructure diamond financing. They are worried because while demand for rough diamonds remains greater than the rough supply, the same cannot be said for consumer demand for polished diamonds, particularly in the US.

Stores are closing or having a hard time turning a profit, and the focus is on lower prices and lower quality. The supply of diamonds going to retailers will decrease, but for now consumers have not yet returned to retail stores. Nevertheless IDMA are calling for retailers to pay their suppliers fair prices, necessitating keeping their prices up for consumers. Said Moti Ganz, the president of IDMA:

“Consumers can still buy three pieces of diamond jewelry for the price of one Louis Vuitton bag. The price of diamonds today should be at least 200 percent more than their price in the 1990s. Just look where gold and platinum are and look where we are!”

Should we ask ourselves why the price of diamonds has not kept pace? Actually that’s the wrong question–there is no direct link between the price of rough diamonds (based on the internal considerations of the diamond industry) and the price of polished diamonds (dictated by the consumer of diamonds and diamond jewellery, a population that was forgotten by the industry).

In my view, luxury retailers must first understand why someone goes out and buys a diamond in the first place. In my PhD research, I found that luxury shoppers are looking to express themselves and connect with how they see the world. The better a retailer can help the luxury purchaser understand her goals and connect authentically to her values and personal qualities, the more successful the retailer will be. Walking out of the store, the lucky woman or man should feel empowered, special and unique, respected and feeling free.

Providing the right service doesn’t come easily. A jeweller should be able to detect first who the client is. A Theta woman seeks diamond to help her be ‘truly her’ in a world where most things are temporary and dependent on social setting and circumstance. A Lambda woman wants a diamond that helps her to be unique and genuine; her diamond is unlike any other diamond on the planet, an individual selection that will make her exceptional. As for price, do not underestimate yourself. If you fell confused, the only reason is that the offer of the diamond was not done correctly. When the luxury customer is presented with the right offer, he or she knows exactly what the value of it should be.

Following these values for many years we found that we can properly help the luxury customer, and together with our colleagues we were very successful doing so in the last 25 years. However, the diamond industry failed in respecting the need for luxury and tries to turn the luxury consumer into a diamond dealer when the effort should be done in the other direction.

We hope that we have enough practical knowledge to start offering the luxury consumer what he or she wants. We are aware that this practical knowledge is in the hands of very few people, yet the entire world could appreciate this freedom of expression and choice. Recently we started an initiative that will bring our message to the luxury customer and enable him or her to properly purchase his or her special and unique diamond that can fit only her or him. We will need your help to check our luxury hypotheses and to see whether what we say is really convincing you. In the coming days we will address you again and ask you to be our ambassadors to help us spread our important luxury message. Stay tuned!

Women have been flocking to see the latest Sex and the City film. While the reviews haven’t been that positive, this article by Cynthia Sliwa on the JCK Blog makes the jewelry look quite appealing. While I think that Sliwa’s statement that ‘there’s no more romantic gift than jewelry’ works for many people, it must be noted that people interpret things in different ways, and what one person thinks is the most romantic thing in the world another person might find off-putting.

The whole Sex and the City series is quite interesting to look at in terms of Theta and Lambda. As the women portrayed in the series are stylish urbanites who are the best of friends, many women want to emulate them and match their styles. In this way, Sex and the City fans fit into the Theta worldview, where they seek affiliation and unity, looking to contextualize themselves within a larger group of women with the tastes and styles of the four Sex and the City protagonists.

Yet a Lambda worldview prevails in this new film: Carrie, the main character, received a unique diamond-studded black diamond from her husband Big, who says that he gave her such a unique ring because there’s no one else like her. Lambda personalities seek originality and challenge, and love products that make them stand out and feel unique.

It’s nice that both worldviews are included in the film, but could the popularity of the series make these black diamond rings become popular so that having one no longer makes the possessor unique? With a series so popular, it’s certainly a possibility.

In my previous blog post, I talked about China’s young luxury population and the Chinese consumer pyramid. We also looked at how Tom Doctoroff’s ‘Confucian Conflict’ model of Chinese mentality parallels with my own Theta-Lambda theory on luxury consumption.

Acknowledging the fact that of course not everyone can fall neatly into one category and certainly, I am not saying one should be completely Theta or Lambda. What is still peculiar but altogether fascinating here though is the fact that Chinese consumers, if not all, but majority of them have this Theta-Lambda duality ingrained within their consumer consciousness. If we look at the study below, it might perhaps shed some more light on this:

Added Value did an interesting study where they had two variables which defined where a country was placed in terms of luxury. One axis was from maintaining to transforming lives, and the other was from inner to outer motivation. And in the transforming and inner motivation you have Japan, then you have the UK, which is about maintaining inner motivation, the US is in maintaining and outer motivation, and China in transforming and outer motivation. So Japan is about confidence – ‘don’t be shown up’, the UK is about pleasure and knowing, USA is showing you know/status and China is about showing and status but also moving forward in society.

Here we can see that the UK has a more Theta-like tendency; being more comfortable in the sphere of knowing and belonging with others, whilst the USA possesses more of a Lambda tendency; more motivated by externally displaying knowledge and status. China’s showing and status is a Lambda quality; showing off what you have achieved and differentiating yourself by being one of the few to be on top of the pyramid. However, status to the Chinese can also be interpreted as fitting in, belonging with your fellow peers. As Doctoroff puts it, you can’t be blatant in your ambitions, you can’t ‘crash through the gates’ because there are rules to observe and follow. You can say this is the Chinese way of being a Lambda but in the fashion of a Theta. It is then not surprising that what makes a ‘luxury’ brand in China are its benefits externalized.

Luxury, says Doctoroff is a tool, a means to an end and because the luxury segmentation in China is so diverse, it becomes a more important tool than ever. This again goes back to idea of the Chinese’ ‘Confucian Conflict’, of wanting to ‘play in the game.’ This statistic by TNS shows this difference in perception of luxury goods:

According to TNS, 64% of Chinese think luxury brands denote success, and only 1% think they denote superficiality.

In China, luxury brands are synonymous with success, yet they do not share in the western fear of fake luxury taking sales away. Instead, a brand that is copied substantiates the brand’s luxury status. However, because luxury goods are synonymous with success, it becomes even harder for someone to pull off wearing a fake.

Anybody that has the money to buy a luxury brand would not be caught dead with a fake.

…

Chinese can tell very quickly if something is real; it would be a huge loss of face to be discovered with a fake.

In order for luxury brands to succeed in the Chinese market, they must have mass media exposure, must be big and omnipresent and in the right stores in the right locations. Physical presence is also important so you must have an overseas marketing department; you cannot import your content and it cannot be done digitally. Education of your luxury brand to the public is also imperative, as well as the ability to demonstrate innovation of your luxury brand. The idea of a mass media exposure on the public very much hones into Theta personalities, because it’s telling them that everyone else will have this and in following this trend, you desire to belong with this group of people. But it also appeals to the Lambda side of the Chinese consumer because it is so in your face and because the public would have been educated of this particular brand, they would know just how successful you are.

In summary, we’ve explored Doctoroff’s Chinese model of mentality, his ‘Confucian Conflict’ and found how very important it is for a luxury consumer in China to exercise this when buying luxury goods. In addition to this, we have also seen how this ‘Confucian Conflict’ comprises of essentially the same two parts as my Theta-Lambda dichotomy, but here they co-exist in a more symbiotic relationship, and what’s more, it is the majority of the China’s population who subscribe to this luxury, symbiotic mentality.

Photo: Flickr

I came across a very interesting piece by Tom Doctoroff in the Huffinton Post. Titled ‘The Confucian Consumer and Chinese luxury: FAQs’, it explores the differences of the Chinese mentality on luxury goods and how establishing a luxury brand in China should also be implemented in an approach that is reflective of this. China’s continued economic growth and effect on the global market has become so prominent that it has become a recurring theme in many of my blog posts, with looks at its effect on the diamond market, property market, auto market and even art market. Therefore, Doctoroff’s FAQ comes at an opportune time to explore the mentality behind China’s booming economy alongside my theory of the Theta-Lambda relationship.

According to Doctoroff, China’s luxury population is very young because it is a very ambitious society. The Chinese adhere to an ideology which he calls the ‘Confucian Conflict’, regimentation vs. ambition for innovation. This conflict is very similar to the Theta-Lambda persona. China’s regimentation parallels Thetas’ own importance on comfort, affiliation and belonging, while Lambdas’ search for challenge, achievement and differentiation are synonymous with China’s ambition for moving forward.

Unique to this Chinese mentality is their desire to maintain this conflict, this ying-yang balance.

Individualism in China (in the sense of society encouraging individuals to define themselves outside of that society) doesn’t really exist here. But on the other hand, ego – the demand for acknowledgement – is very powerful.

Doctoroff further says that luxury goods in China are a sign of the consumer’s intention to ‘play in the game’, to become a potential competitor for that spot at the top. What we are seeing here is a very strong Lambda trait of that need for acknowledgement.

Despite having this ‘Confucian Conflict’, Doctoroff describes what can only be a Chinese consumer pyramid. At the top you get your most elite, but to stay on top, he must have reached a high level of mastery and connoisseurship that he can ultimately demonstrate and manipulate however he wants.

An example would be Audi 8, where you’re establishing a parallel between the craftsmanship and attention to detail and ancient Chinese art. So again, it’s for somebody that has truth and ultimate mastery.

This somebody could well be a Theta because of its high emphasis on truth, unity and brilliance. Next down the pyramid are men who are moving forward whilst in the middle of their journeys. Then we have the independent women and at the widest point, we have the youth.

So for the people on top – and this gets back to the resolution of the Confucian Conflict – it’s about a need to tick competitors away who are angling from below to maintain their position at the top. It’s a way of subtly exerting power and control…So then you move into new luxury, and these are people that need to demonstrate they shine through, but always through substance – because they can never be superficial. Their complex is that they need to move up the hierarchy, but their ambitions can’t be too blatant. This is not a space where you crash through gates; rules are sacred. So it’s a way of demonstrating progress, a reassurance that new money doesn’t need to be uncouth.

Again, this model of behaviour takes parts from both Theta and Lambda personalities. You are ambitious and seeking achievement in the highest form possible, yet you are not ostentatious in the respect that you still observe social boundaries and rules for fitting in, if still only in appearance. This is very different to trends in Western culture where society encourages individualism and western marketing reflects this. It is for this reason that a western marketing approach to China’s consumers will just not work. You can’t have a ‘western individualistic messaging’ approach to a culture where individualism is not emphasized or in existence.

Photo: Flickr

Luxury cars stole the spotlight at this year’s Beijing Auto show, despite its original, intended focus to be aimed at green technology. The article on Merinews describes the shift of attention as being due to car makers’ response to the unanticipated, phenomenal, economic growth in China’s auto market.

Ian Robertson, BMW head of Sales said, “Nobody anticipated the growth here. Growth rates [like this] happen once in a lifetime in mature markets. Here, they’re happening every year.”

Last year China’s auto market outsold the US by a staggering 13.6 million vehicles in comparison to US’ 10.4 million. In particular interest to these car manufacturers’ is the amount of luxury cars being sold in China. The LA Times has the figures:

Although many of those vehicles are stripped-down economy models, the nation’s wealthy are fast developing a taste for pricey cars.

Luxury car sales in China were up 66% the first three months of 2010 compared with last year, according to J.D. Power and Associates.

Mercedes-Benz has seen its China sales more than double so far this year compared with 2009.

BMW announced at the event that it was boosting its sales target in China from 100,000 to 120,000, which would make the country its third-largest market. The company sold 90,000 cars here last year.

This is not the first time China’s potential market has sparked car companies’ interest, we saw BMW, Audi and Aston Martin all take advantage of this as well as highlighted China’s growing presence on the property market and also talked about the continued, growing trend in Chinese consumers heading west to buy luxury goods.

Favourite cars among these luxury Chinese consumers are Ferrari’s 599 GTO, Porsche’s Panamera 4 and Mercedes Benz’s SLS AMG. People choose these sorts of cars for their features, and the most popular include cars with more legroom and footstool in the rear, Bang & Olufen Speakers, ambient lighting with rotating colours, walnut folding table, 10.2 inch LCD screen and massage chairs. These backseat features take precedence over the driver’s seat because it is the preference and style of Eastern buyers to be chauffeured around in what Audi A8 project leader, Matthias Mueller calls ‘statement’ cars; ‘It has to show you’ve made it.’ Popular buyers in this market appear to gravitate more towards Lambda personalities, because not only do they get the extravagant interior of the car but also the show-stopping exterior that Lambdas would immediately attach a back story to. A story of success, achievement and accomplishment and in a manner that is so hard to miss. Thetas would also love these luxury makes as it not only provides discreet opulence within but also maintains their desired standing among China’s elite community.

Photo: Flickr

An interesting article in the New York Times looks at how the continued trend in the luxury market of quality and value as being the decisive factors are affecting the sales of luxury watches. In a previous blog of mine, I discussed how people are keener than ever to find value for their money and that Thetas, who seek comfort, belonging and affiliation are more likely to be sensitive about the value of the purchase and of overpaying than their Lambda counterparts. We can see this shift being translated in the current market of luxury watches. High-end watches with unique and intricate designs and mechanisms are selling better than the lower end, ‘fashion’ watches. According to a post in DNA, watches over $25,000 are increasing while figures dropped in those under. Catherine MacDonald-Home, editor of Luxury Briefing says ‘It has to be something that’s limited edition or of very high quality [in order to sell well].’ Rise in popularity of these more costly watches is helped along by the arrival of new revolutionary, technological advances in the art of watch-making. Editor of International Watch magazine, Michael Thompson talks about the new lightweight materials and components:

“These watches are so light and wispy that when you have them on your wrist, you forget they are there,” he said, speaking of watches from Richard Mille that are made from carbon nanofibers.

As well as being lighter and non-obtrusive, other new innovations include Patek Philippe’s silicon moving parts and Montblanc’s Metamorphosis watch of two different faces and functions.

In the general public, these watches aren’t likely to draw attention the way a jewel-encrusted timepiece might.

“If you wear a million-dollar mechanical watch, or even a $40,000 one, in the average room no one will know,” Professor Drèze said. “The watches are actually examples of inconspicuous consumption.”

These new generations of inconspicuous, luxury watches are perfect for the present money-conscious Thetas; without the compromise of quality, you get value for money but in a manner that is more subtle, more Theta-like. Lambdas are not forgotten in this revolution in luxury watches, as Audemars Piguet will release three new versions of its luxury sports watches which are also lightweight, carbon cased but feature ‘brilliant colors reminiscent of racing cars.’ An aspect that is sure to satisfy and catch the eye of any discriminating Lambda.

The economic recovery continues. According to this story in the New York Times, wealthy people are spending money again, but they’re keener than ever to find value.

According to Jane Bayard, executive vice president at Warburg Realty Partnership of Manhattan:

Today if they buy, they are not willing to be embarrassed by overpaying. There were times in 2007, for example, when there were multiple offers and people paid millions over the asking price. Today, nobody wants to be the last monkey in the tree.

Let’s think about this from a Theta-Lambda perspective. It seems as if part of the reason that people are unwilling to overpay is because they don’t want to be embarrassed in front of their wealthy peers. This ’seeking affiliation and belonging’ characteristic is a typical Theta behavior. Lambdas are less sensitive to prices and more sensitive to the value they will get personally from an item, and how it will make them unique. As the economic recovery continues, it will be interesting to see if Lambdas are as sensitive to value as Thetas, still looking for things that challenge themselves, but at a lower cost than before.

Earlier this month I reported that London’s luxury commercial property market was heating up. The trend continues to this day. But now it is being helped by a spike in London’s luxury home prices, which is seeing the highest price increase since March 2008.

BusinessWeek has more:

The value of houses and apartments costing more than 1 million pounds ($1.5 million) rose 3.2 percent from January, the London-based property broker said in an e-mailed statement today. The annual increase was the largest since the market peaked in March 2008 and compares with an 11.5 percent advance in January.

Overall this is good news for the luxe market both in the UK and abroad. But read a bit further in the article and you’ll see the emergence of a trend that I referenced in a previous blog post about Chinese Lambda personalities buying Western art and vintage wines, something that is somewhat uncommon in Mainland China:

The pound’s 22 percent decline against the euro in the past three years attracted purchasers from Russia, Italy and Greece, in particular, Bailey said. Foreigners bought 45 percent of properties sold for more than 2 million pounds in the past year, according to the broker.

Theta personalities typically own numerous properties across their homeland, and perhaps one or two smaller properties in other countries. Those properties are likely to cost <$1 million. So when we see that 45 percent of properties sold for >£2 million ($3 million), this tells us that these foreign buyers are likely Lambda personalities. Owning a luxury property in London is seen as an accomplishment, both personally and professionally.

Consumer confidence in the UK is on the rise, which helps to explain why this is happening now. Things aren’t great, but they’re better than than they were. Lambdas are seeing an opportunity to re-assert their dominance and be among the first to polish their images with spashy purchases.

Watch for similar trends in more traditional luxe markets such as Paris and Berlin. London could just be the start of a the new European luxe revival.

While there was not doubt that Aston Martin is a brand aimed strictly at Lambda personalities, the recent product release by Aston Martin proves it anyways.

Coming optional with the purchase of a new Aston Martin Rapide is a $33,000 watch. And with this watch and your new Aston Martin Rapide, you can lock or unlock their car doors by simply touching the sapphire-crystal face.

Only a handful of individuals can afford to buy even the Aston Martin. Even fewer could afford the optional $33,000 watch. The timing of this is interesting, because while the global recession is receding, it is not completely over, yet.

Watches are a much-loved item amongst Lambda personalities, because they bestow status and are durable. They’re seen as investments and heirlooms.

During the worst pont in the recession, The Wall Street Journal published a column “How to sell a $35,000 watch in a recession”, which offers a look into the new methods that luxe retailers are using to keep sales moving.

After years of double-digit sales growth, sales of Swiss watches have fallen off drastically. Watchmakers like IWC—a 140-year-old company whose watches are considered collectors’ items and generally cost between $3,000 and $300,000—are having to re-learn the old-fashioned art of salesmanship.

The ‘old-fashioned’ art of salesmanship that is used is selling the experience as tantamount to the product itself. In luxe, people buy because it looks good, feels good and it makes them appear important.

He used PowerPoint to impart what he calls the “macaroon technique,” referring to the sandwich-like French macaron pastry. This can be applied to most any product (including, presumably, a Xerox machine) and goes something like this: “Madam, this timepiece (or diamond or handbag) comes from our finest workshop and it has a value of $10,000. If you buy it, your children are sure to enjoy it for generations to come.”

This tactic by Aston Martin to package the watch with the car is an extension of the salesmenship methodology talked about in the Wall Street Journal article: Show a Lambda personality how well their new, ultra-exclusive watch works with their new, ultra-exclusive car.

The expression also suggests the person will have a long family line, which causes them to envision their children and grandchildren as Lambda personalities, enjoying and cherishing this watch that their father, also a Lambda personality, purchased years ago and passed onto them.

A  true Lambda Personality won’t be able to resist it, and Aston Martin knows this.