In order to successfully launch a luxury brand, it is imperative to understand how the corporate business model works in this segment first. In case you are wondering, the answer is yes, top brands really do follow a separate business model that’s uniquely catered to fit that niche segment.
The interesting bit is that most of the ideas surrounding premium business models are widely applicable, meaning everything we are going to discuss next would be generally valid, whether you are planning to start a fine dining restaurant or a boutique of limited edition shoes.
Usual Laws of Marketing and Sales Do Not Apply
A sales executive working for Louis Vuitton will likely not call up potential customers trying to make a sale, nor will anyone from Gucci, Lamborghini, Rolex, or Ferrari for that matter! The entire industry is finding and pursuing leads, while the top luxury brands across the world are not even bothered about generating leads as much. This is in fact, a brilliant marketing strategy used by premium brands to create exclusivity.
Intelligent Marketing: Creating Demand by Not Seeking It
The topmost expensive brands have a very select, niche customer base, which means that most people can’t afford to buy what they sell. They have nothing to gain from marketing to such an audience, but everything to gain by not marketing to them.
What we can’t have are always the things we want, therefore, anytime someone reaches a stage of financial stability, where designer clothes and luxury cars start to feel affordable, they will be the ones to seek premium brands out, and not the other way around. The marketing strategy here is brilliant, and it works because premium manufacturers provide something that their niche target audience is always looking for – exclusivity.
Luxury Brands are Not Impractical in Running Their Business
We already discussed why the premium brands have a brilliant marketing strategy, even when they are not marketing, so rest assured that these companies did not make their billions by being impractical. Even the Pradas and the Bugattis of the world often cut costs where they have the window to do so, without affecting the standards to which they are held.
As an entrepreneur who is only starting out in this segment, it is important that you don’t forget that part either. Cut down on manufacturing costs significantly by reducing the strain from your energy bills. You can do this by comparing rates online. For example, Utility Bidder works with the top corporate business energy providers in the UK to find the best rates possible.
In manufacturing, where the electricity consumption is at its highest every year, the difference in per unit rates can be huge. Therefore, this would be a perfect example where the expenses are decreased, without affecting the quality of the products in any way.
Attention to Detail: Uncompromised Quality
A large section of the population considers premium products to be excessively priced, which is quite true when putting in perspective with mass manufacturers doing business in the same sector. That being said, the premium price grants the customer access to a product that has been tailored to perfection in every way possible. If anyone is to start a luxury brand of their own, this is an integral aspect of working in this niche sector which simply can’t be ignored, especially since they do not have decades of good reputation to rely on,
Information sourced by the author for luxuryactivist.com. All content is copyrighted with no reproduction rights available. Images are for illustration purposes only.