The segmentation of consumers towards the diversification of luxury brands

Thèmes abordés

LUXURY BRAND/ DIVERSIFICATION/ BACCARAT / CONSUMER SEGMENTATION/ BEHAVIOUR/ BRAND EXTENSION

Résumé du document

In a world where the competition is hard, luxury brands expanded their strategies in order to attract new customers and leverage their equity against their several competitors. Apparently, the main products derived from the original brand do not anymore suffice to the luxury brands, which are now offering new products and services to their customers. This new strategy is called the brand extension and is the subject of our study.

Few research have been found on the brand extension in the case of luxury brands and especially no one were found on the segmentation of the population towards the brand extension in the case of the luxury industry. We are interesting in this study to identify the different factors, which could influence the transfer of attitudes between the brand and its extension firstly and the one impacting on the purchase intention of the extension on the marketplace. So, the marketing research problem of this study is the following: how to segment the population towards the brand extension in the case of luxury brand?

The brand Baccarat, a luxurious crystal glass-making, was selected as an example to demonstrate our conceptual framework made of 14 hypotheses. We proposed two different types of extension one towards the cosmetics products, representing the low product involvement and the other towards the hotel business, representing the high product involvement. In order to give some managerial recommendations to the marketers and practitioners, we are using a quantitative method for our survey.

Thanks to two questionnaires (one designed for each study) online, 303 responses were obtained and this permits to elaborate an ideal's profile of consumers for each case of extensions. The people, who are more likely to purchase Baccarat cosmetic's products, are in general young between 18 and 45 years old, with a low level of education and income, working as executives, traders or workmen mainly. Their favorite magazines are the decoration, the news, the feminine, the politics and their important personal values are the security and the joie de vivre.

Finally, they are very knowledgeable and very involved towards the brand Baccarat. Concerning the hotel case, the target segment are older (more than 45 years old), with a higher income and higher level of education, working as executives, traders or retired. These people are reading mainly the decoration, the economics, the sport, the feminine and the news magazines. Same as for the cosmetics extension, they are very knowledgeable and involved with the original brand.

However, some of the demographic data are not significant, such as the gender, the level of education and the place of habitation. Only some of the values appear to be important for the purchase intention of the cosmetics products but not for the hotel extension. In general the cosmetics extension was perceived negatively by respondents whereas the hotel extension was viewed more positively. In this report, the different media used for the promotion of these two extensions are highlighted and managerial recommendations are proposed.

Tags: Luxury brands, cosmetics extension, high product involvement, brand extension,cosmetics products, quantitative method

Extraits

[...] For the cosmetics case, others values such as the security or excitement, could be more important for the consumers, who are likely to purchase the products of Baccarat cosmetics. As the brand are not specialised in the field of cosmetics, we think that the people, who intend to buy the new Baccarat cosmetics, are more likely to trust the brand in their expertise to provide secure and reliable products. However, little research has been found on the impact of values on the intention of purchase in the context of brand extension. [...]

[...] Fifth, the extended self is used to classify consumers with others consumers and also to describe the personal identity of luxury product's users. Figure 1.2 : The 5 perceptions of consumers towards luxury by Vigneron & Johnson (2004) Adélaïde DINKEL - Mémoire de fin d'études - IESEG 9 Moreover, luxury is a universe on its own, governed by rules, codes, norms and signs. Luxury is a mobile sector, which regroups several activities: -the Cultural market (Art's market) -the means of transportation (automobile, yacht, private airplanes) -the equipments for the person (haute-couture, perfumery, leather goods, shoes, cosmetics, clock-making, jewellery ) -the leisure (hotel business: e.g.: Bvlgari Hotel, luxury sports, cruise) -the equipments for home and habitat (prestigious table and interior decoration: e.g.: Armani Casa) -the food (wines and hard liquor and luxurious restaurant: e.g.: Armani restaurant). [...]

[...] In order to give some managerial recommendations to the marketers and practitioners, we are using a quantitative method for our survey. Thanks to two questionnaires (one designed for each study) online responses were obtained and this permits to elaborate an ideal's profile of consumers for each case of extensions. The people, who are more likely to purchase Baccarat cosmetic's products, are in general young between 18 and 45 years old, with a low level of education and income, working as executives, traders or workmen mainly. [...]

[...] As luxury products are more expensive than fast moving consumer goods, luxury is more reserved for an clientele, who have the sufficient income to dispose of luxury goods. According to Gilles Lipovetsky, “Consume luxury products: this is about consuming a product, a myth, a legend, a tradition, a know-how Consumers are looking for superior quality, unique, exclusive, superior workmanship and materials in luxury items but more importantly a unique purchase experience. According to a marketing study1, luxury is about achieving a satisfying and easier lifestyle, which is not necessarily about money but more about the experiences and the emotions provided by the purchase of luxury products. [...]

[...] We distinguish four different groups in the luxury market: on the one hand, the two major French luxury groups are LVMH (Louis Vuitton- Moët Hennessy) and PPR (Pinault-Printemps-Redoute), on the other hand, we find the foreign groups Richemont (Switzerland) and Prada (Italy). First, LVMH is the leader on the luxury market and is composed of more than 50 international luxury brands. LVMH was created by Bernard Arnault in 1987 thanks to the merger of Moët Hennessy and Louis Vuitton and dispose of more than 60 international luxury brands in its portfolio, such as Guerlain, Kenzo, Givenchy, Fendi . [...]