Janus Thinking

The Bentley brand is associated with quality and for creating products that allow customers to travel in style. The luxury car manufacturer is now aiming to make cruising the information super highway a similarly extravagant experience for the select few who will own the new Bentley laptop computer.

Bentley’s new product, one of the most expensive on the market, debuted at the British International Motor Show in London in July and will be retailed globally in high-end stores in October - but only to the first 250 people able to splurge the £10,000 to get one of the limited edition laptops.

Featuring Windows Vista, a 64-bit processor, a 160GB hard drive and 12 direct access keys, each Bentley laptop is hand-built, and encased in leather with the same cross-over stitching detail seen on the car seats. The chrome carry handle is modelled after the trademark automobile’s door handle as well.

Bentley paired up with Ego Lifestyle, a luxury and lifestyle product designer, who specialize in creating customized computers, to produce the laptop. Though it’s not the first time high-end car brands have relied on their brand perception to launch into the electronics market, to date this type of pairing has been mostly the domain of sports car manufacturers, like Ferrari, Lamborghini and Koenigsegg.

Bentley’s newest addition to the market stands apart from the specialist designs created by the sports car manufacturers. These brands are associated with products that are sharp and fast, and promote the idea that the computers will have the same type of edge the sports cars evoke. The difference with the Bentley laptop closely reflects the differences in the brands, with Bentley emphasizing individuality and class. And while the sports car branded laptops retail at between £1,200 and £1,700, the Bentley laptop’s much higher price is a clearly distinctive point.

Bentley’s new product will appeal to luxury consumers of both the Lambda and Theta worldviews. Each PC can be moulded into a highly specialized look based on the consumer’s colour choice for the leather casing as well as the chrome interior, so there’s little chance of running into someone with the same piece and the same bespoke detailing, a plus from the Lambda perspective. On the other hand, the Bentley logo is clearly visible, and the laptop exudes the same sense of craftsmanship associated with the automobile brand, which will appeal to the Theta consumer.

With the Bentley laptop set to go on sale next month, it will be interesting to see how quickly the few available products will be snatched up. Success in this venture may see Bentley, like other luxury goods makers, continue to use its status as a trusted brand as a platform to hype existing markets.

Gone are the days when demographics were the primary marketing targeting resource. Information available through demographic analysis cannot solely be accounted for marketing strategy since it’s based on correlation, not causality. Demographics continue to be important within the marketing craft, but without the context of psychographics they have limited usefulness.

Psychographics refer to a set of characteristics shared by specific demographic markets that indicate lifestyle choices, buying habits, attitudes or opinions.

The Theta-Lambda worldviews that I’ve developed are an example of psychographic characterisation consisting of two personality types. The typical Theta (Θ) personality seeks affiliation and control whereas the Lambdas (Λ), seek achievement and uniqueness as an ultimate end goal.

As another example, SRI Consulting Business Intelligence classifies luxury consumers into three segments based on psychographics:

• Luxury as functional: This segment is composed of consumers who buy luxury products for their superior functionality and quality. They usually involve themselves in a longer decision making process in order to make rational and logical decisions, rather than emotional or impulsive ones.

• Luxury as reward: This segment purchases luxury goods in order to showcase their achievements. They are motivated by their desire to be successful and demonstrate this to others. They usually purchase ‘smart’ luxury that demonstrates importance while not leaving them open to criticism.

• Luxury as indulgence: This group’s purpose for luxury goods is to self-indulge. They are willing to pay a premium for goods that express their individuality. They enjoy luxury for the way it makes them feel, therefore have a more emotional approach to purchases.

The understanding of psychographics plays an important role within the luxury industry. Although there is no standard definition of luxury or classification of consumer psychological profiles, by understanding the importance of psychographic analysis, one can constantly redefine and refine the term ‘luxury’ in relation to individual customers’ views. By engaging in this analytical process, marketers are able to tailor a product and the marketing message in order to appeal to customers’ desires and motivations.

Luxury marketers should make note that the luxury consumer is always looking for newer ways to satisfy his/her continuously changing needs. Hence, the need to keep a close tab through insightful and concurrent psychographic research is of prime importance.

How far will one go for a bottle of bubbly? To the bottom of the ocean it seems for some, as 200 bottles of champagne have been recovered after nearly 100 years underwater. Not only will you be drinking one of the oldest champagnes in the world but you must be able to pay £156,000 a bottle for this luxury. The vintage 1907 Heidsieck champagne, that sunk on its way to the Russian Imperial family in 1916, was found near Finland and will go up for auction at the Ritz-Carlton in Moscow, date still unknown.

Earlier this year we saw the “community of the super-rich” offered up the chance to customize their own bottle of Perrier Jouet champagne, whereby, after lengthy discussion with the Cellar Master, you could personally add your chosen ‘liqueur’. At the time, this limited edition offer was the most expensive bottle of new champagne, going for a mere $6,485. it doesn’t compars to the starting price for this most recent discovery.

Has the time come when the elite are paying over the odds for a unique experience? Those with a Lambda worldview may disagree: for them, this once-in-a-lifetime, long lasting, perfectly preserved bubbly provides them with an unparalleled, unique experience, not to mention a great talking point over dinner. Thetas, on the other hand, would likely purchase one of the 200 bottles on offer for the chance it gives them to gain entry to this most elite “community of the super-rich”. To them, this bottle is yet another validation ticket into the inner circle for champagne connoisseurs.

Those lucky enough to be able to purchase one of the 200 bottles may be satisfying a collector’s impulse or simply indulging on a small piece of history.

A new book out by author Dana Thomas, called Deluxe: How Luxury Lost its Lustre, explores how the manufacture of luxury goods, and in particular luxury clothing, has been outsourced almost in its entirety to a handful of developing countries such as China and Turkey.

Thomas explains that despite the protestations of certain luxury house owners, the competitive landscape for luxury goods companies is one which makes this phenomenon hard to resist.

For the last sixty years, the actual production of luxury goods themselves has become much like any other type of product.  The big difference – something which I often explore in my academic thinking – is the way in which these luxury goods have been marketed to make you feel a particular way.

In my Theta-Lambda dichotomy of personality types, Lambdas purchase luxury goods which help them connect to their desire for challenge and individuality.  Thetas, on the other hand, purchase goods which help them affiliate themselves to a certain group of people or lifestyles.

Luxury goods brands understand this marketing principle so they mostly produce cheaply and market generously.  As Thomas notes in her book, the lion’s share of a product is made in China but then a small piece (a piece of stitching or pocket, for instance) is added in the West so that the ubiquitous ‘Made in China’ label can be avoided and the luxury illusion can be maintained.

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.

A study to be published next month by scientists at the Netherlands’ Erasmus University will argue that being happy can help you live a longer life.  It concludes that, while being happy does not cure ills, it does correlate to people not getting sick in the first place.  It can also add years to your life because happy people are more likely to look after themselves, both physically and mentally.

So should happiness take its place as the consummate luxury pursuit?  And, if so, how can it be pursued?

Happiness as a concept is being studied from more and more perspectives.  Developments in neuroscience are allowing scientists to measure and map our behavioural reactions to an increasing number of stimuli.  Is the ultimate luxury product then the one that registers the best emotional response to you personally or perhaps the highest average positive emotional response amongst a given group?

Lord Richard Layard of the London School of Economics has also developed an economic model which is often referred to as “happiness economics”.  He argues that current tax regimes and public policy do not address (or attempt to disincentivise) the negative impacts of competiive consumption rom our lives (i.e. the consumption which does not make us any happier, or makes us even sadder).  Nor does it account for the fact that our tastes evolve over time so that we might need extra money to achieve the same level of happiness as someone with different tastes.

Various studies have also determined that our level of happiness does not substantially increase after an individual’s purchasing power reaches around US$10,000.  Instead, cultivating closer ties to one’s family, friends, or to common interest groups can help, or being able to freely express oneself (in speech and through voting, for example) and to enjoy a reliable and predictable system of justice can make one feel happier. (And even more interestingly, these might differ according to how one pursues his life purpose, as an earlier Theta vs. Lambda post suggests.)

The jury is still out on whether happiness itself will become the metric du jour for what constitutes a luxurious life.  For now, its material proxies still seem to be hotly pursued.

As stories continue about how much the wealthy are suffering in this economic downturn, it’s interesting to note what people are still spending on. This article from the Wall Street Journal reports that many luxury firms have so far been resilient in more difficult economic times, finding consumers at the high and low end of the luxury market who are still willing to spend. The article includes examples from three individuals:

Jordan Shapiro, a 25-year-old Wall Street recruiter, says he isn’t sure what his income will be this year, so he put his plans for an African-safari honeymoon on hold. But he splurged a few weeks ago on a $3,000 Omega watch, which he considers an investment. “I hope it’s going to retain or gain value,” he says.

Stephanie Wickouski, a 55-year-old New York attorney, walked out of an Hermès store this week with a “heart-stoppingly expensive” $950 cashmere shawl. Despite the price, she says the shawl is a good value for the money, because it has “range and permanence,” meaning it can be worn over a dress, paired with a skirt or even worn on an airplane when it gets cold.

Margaret Schwartz, a 24-year-old assistant ad-sales representative in New York, shops for clothes at cheap-chic chain H&M. Yet she recently bought a $300 pair of Bulgari sunglasses — one of the Italian jewelry label’s least-expensive items — because she figured she could afford an “investment piece.” “Aviators are always in style,” she said, strolling past Tiffany’s Wall Street store.

This small amount of information about each individual is enough to categorize them as Lambda or Theta. I would consider Mr. Shapiro and Ms. Schwartz to be Thetas. In their mid-twenties, they consider their luxury purchases as investments. I would guess that they are also using their purchases as a way to stand out among their peers (Mr. Shapiro can be seen in his watch on Wall Street, and Ms. Schwartz’s sunglasses are “always in style.”). This desire to fit in is a typical Theta characteristic.

Ms. Wickouski, on the other hand, seems to be more of a Lambda. She recognizes how expensive her new Hermès shawl is, but the pleasure and utility she derives from it makes it completely worth it to her. She interprets “range and permanence” as something highly desired; the shawl makes her unique.

An awareness of what Thetas and Lambdas are looking for, and of what products represent to them, can help marketers reach these individuals more directly.

Photo by Doozle

The way in which consumers interpret companies’ marketing efforts affects how successful their marketing has been.

This might seem like an obvious point to make, but it is a particularly useful point to remember in the marketing of luxury products.

To understand better these different pathways to interpretation, I have developed a simple characterisation consisting of two personality types.

I call them Theta and Lambda. These two personality types differ based on what individuals perceive to be
their life goals or purposes.  These differences are central to how they then interpret the products they buy.

The typical Theta (Θ) personality seeks affiliation and control as an ultimate life purpose.  Because of this, they loom to fit in or contextualise themselves within a desired group and use socially-derived understandings of product characteristics as a basis for their consumption.

Lambdas (Λ), on the other hand, seek achievement and uniqueness as an ultimate end goal.  As a result, they are more likely to interpret products based on their individual responses to the product, how it helps/prevents them to stand out, and how the product benchmarks against their regular consumptive patterns.

What this means is that marketing strategies – and particularly those of luxury brand owners – can apply different positioning to similar products in order to fulfill people¹s different expectations for how the product is meant to help them represent themselves and reflect their life goals.