... of the website and more globally of digital media; 3) Product integrity - quality, functionality and .... beauty and rare quality of the product must be communicated (Alleres, 2006). ... using the best materials and craftsmanship. .... campaigns. .... also interesting to observe the use of online social media by luxury goods.
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Brand Building: Luxury Leather Goods Brands Anatomized
Abstract Brand building is central to achieving differentiation in most economic sectors. This is paramount for luxury goods where customers buy a symbol as much as a product. The brand and its image are key factors for competitive advantage and brand building is a central competence for luxury goods companies. This study aims to explore brand building of traditional luxury leather goods brands. A multiple case study of Delvaux, Bottega Veneta, Hermès and Loewe allows us to replicate and extend Fionda and Moore’s (2009) findings about luxury fashion brands. Results show that the nine dimensions identified by these authors also apply to these brands. Moreover, five additional sub-dimensions are uncovered – website, e-shop, link with art, customization and workshop – and these should be taken into account in the brand building process. These exploratory results provide insights to managers for their on-going efforts to keep their brands competitive.
Keywords: branding, brand building, luxury leather goods.
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Brand Building: Luxury Leather Goods Brands Anatomized
Extended Abstract Brand building is central to achieving differentiation in most economic sectors. This is paramount for luxury goods where customers buy a symbol as much as a product. The brand and its image are key factors for competitive advantage and brand building is a central competence for luxury goods companies. To build a brand, it is necessary to understand its dimensions. Fionda and Moore (2009) recently suggested that luxury fashion brands have nine dimensions: clear brand identity, marketing communications, product integrity, brand signature, premium prices, exclusivity, heritage, environment and service, and culture. This study replicates and extends Fionda and Moore’s (2009) findings in one specific luxury sector: luxury leather goods. Brands in this sector are among the most valuable in the luxury industry: for example, according to the 2010 ranking of Interbrand, Louis Vuitton is worth US$ 21.8 billion and Hermès, US$ 4.7 billions. Four traditional luxury leather goods brands are studied: Delvaux, Bottega Veneta, Hermès and Loewe. These brands are from four European countries: Belgium (Delvaux), Italy (Bottega Veneta), France (Hermès) and Spain (Loewe); Delvaux and Hermès remain independent players whereas Loewe and Bottega Veneta are part of a luxury conglomerate (LVMH and PPR respectively). Results show that the nine dimensions identified by these authors also apply to the brand building process of these brands: 1) clear brand identity - Its sub-dimensions are a global marketing strategy, brand values, emotional and aspirational appeal; 2) marketing communications - similarly to previous findings, this dimension includes direct marketing, fashion shows, advertising and public relations. We highlight the importance of the website and more globally of digital media; 3) Product integrity - quality, functionality and
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craftsmanship contribute to the luxury status of the brand. The sub-dimensions ‘innovation and seasonal products’ and ‘quality, functionality and craftsmanship’ are also identified as in Fionda and Moore (2009). Nonetheless, seasonal products are seen as less important to traditional luxury leather goods companies as they have many permanent products in their collections. One sub-dimension called “heritage products” is added for the permanent products; 4) brand signature - all companies have iconic products, a well-known creative direction, a recognisable product style and coherence of branding elements. Some of the studied companies also design products or service environments for other companies. Each company enjoys mutual benefit from the other’s image by combining their names. Furthermore, the companies display art in their boutiques and design products together with artists; 5) premium prices - their relevance is widely discussed in the literature. The case companies all have premium prices and none of them gives large discounts; 6) exclusivity limited editions and exclusive ranges are both sub-dimensions of exclusivity and relate to the accessibility and availability of the product; 7) history and heritage of the brand contributes to brand authenticity. For instance, brands like Hermès and Delvaux actively exploit their history and heritage; 8) environment and service - the brand experience is extended by superior service and flagship stores. The case companies did not all have shops with the same decor worldwide and therefore do not support Degoutte (2007), but they do support Keller (2009) by having full control over a large number of shops. They all offer superior services and their stores are located at important locations. The e-shop can be added to this dimension; 9) culture - according to Fionda and Moore (2009), culture refers to the expertise behind the brand. This expertise needs to be coherent and consistent across all levels in the organisation to ensure brand success. This research shows little evidence concerning this dimension. Despite its exploratory nature, this study contributes to the current literature in which luxury goods dimensions are investigated. The revised brand luxury framework provides a valuable
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overview of the dimensions to be taken in account when building a luxury leather goods brand. Moreover, five additional sub-dimensions are uncovered: website, e-shop, link with art, customization and workshop. Since the brand building process requires all the dimensions and sub-dimensions to be consistent and managed simultaneously, this revised version presents companies with an updated vision of the elements to be taken into account when building brands in this challenging and dynamic industry. Future researchers of this topic could use different research methods and select more case companies. An interesting research avenue would be a longitudinal comparison of how brands adapt after joining a luxury conglomerate. For instance, did the brand strategy of Loewe and Bottega Veneta change after their acquisition by LVMH and PPR? Answering this question could provide clues for independent companies as to how to differentiate and survive in an industry characterized by continuous consolidation, as demonstrated by the recent acquisition of Bulgari by LVMH. Otherwise, this study intentionally focused on European luxury leather goods brands. Do these results also hold for American based companies which according to Kapferer (2008) follow a different business model? Similarly, which dimensions are characteristic of newcomers? Hermès helped in the creation of Shang-Xia, a “made in China” brand. Which brand building process is suitable for these brands? What would be the country-of-origin effect?
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I. Introduction
Differentiation through brand equity is central to building sustainable competitive advantage. Achieving brand equity is possible only through a careful brand building process (Keller 2009). This is paramount for luxury goods where value for the customer is a consequence of functional, aesthetic and symbolic (self-esteem and social status) dimensions (Kapferer & Bastien, 2009). Indeed, luxury brands are one of the purest examples of branding (Keller, 2009). The brand and its image are key competitive advantages and create enormous value and wealth; without branding, luxury goods would not be as appealing and might not even exist (Okonkwo, 2007). Brand building is thus a central competence for luxury companies and the success of luxury conglomerates like LVMH, Richemont and PPR lies in their capacity to leverage brand equity across their brands. To build a brand, it is necessary to understand its dimensions. Fionda and Moore (2009) recently suggested that luxury fashion brands have nine dimensions: clear brand identity, marketing communications, product integrity, brand signature, premium prices, exclusivity, heritage, environment and service, and culture. We aim to study Fionda and Moore’s (2009) results in one specific luxury sector: luxury leather goods. Brands in this sector are among the most valuable in the luxury industry: for example, according to the 2010 ranking of Interbrand, Louis Vuitton is worth US$ 21.8 billion and Hermès, US$ 4.7 billions. Moreover, a luxury handbag is one of the main symbols of luxury as attested by the image of Louis Vuitton handbags or the “Kelly” handbag by Hermès. This sector is dynamic and different marketing strategies co-exist: Louis Vuitton’s collaboration with the Japanese artist Takashi Murakami revisited LV tradition and resulted in the multi-coloured handbag product line whereas Hermès remains loyal to classic leather handbags.
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This study uncovers the brand building process of four traditional luxury leather goods brands: Delvaux, Bottega Veneta, Hermès and Loewe. These brands are from four European countries: Belgium (Delvaux), Italy (Bottega Veneta), France (Hermès) and Spain (Loewe); Delvaux and Hermès remain independent players whereas Loewe and Bottega Veneta are part of a luxury conglomerate (LVMH and PPR respectively). The study adopts an exploratory approach aiming to replicate Fionda and Moore’s (2009) results and identify distinctive (sub) dimensions of luxury leather goods. This article is structured as follows: we first present the characteristics of a luxury fashion brand; we then describe the research method. The analysis of the brand dimensions of the four luxury leather goods is presented, followed by a discussion of the managerial implications and limits.
II. The Characteristics of a Luxury Fashion Brand
2.1 Clear Brand Identity Fionda and Moore (2009) believe that a global marketing strategy, brand values, emotional and aspirational appeal are the elements that define a clear brand identity. The authors found that products having a strong aspirational appeal are not solely bought because they are well crafted, but also for the prestigious image they generate, and for the fact that the owner of such goods possesses a piece of the brand’s heritage. They further state that brand values must be clear and should make the brand different and relevant within the current marketplace. To guarantee its future, the company must have plans to develop the brand through various investments. 2.2 Marketing Communications
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Powerful marketing communications are the key to building the image of the luxury brand. This image helps to create identity and to generate awareness (Fionda & Moore, 2009). The beauty and rare quality of the product must be communicated (Alleres, 2006). Other means of luxury brand communication are public relations, celebrity endorsement, events, direct marketing, sponsorship, fashion shows, blogs, press, the store as a communication tool and personal communication (Chevalier & Mazzalovo, 2008; Ghodeswar, 2008; Tungate, 2008; Fionda & Moore, 2009). 2.3 Product Integrity Product quality is objective and fragile (Lewi & Lacoeuilhe, 2007). A premium product aims at being flawless: not so a luxury product. Flaws can be seen as part of the charm and as a guarantee of authenticity (Kapferer & Bastien, 2009). Keller (2009) argues that the quality must meet or exceed the customer’s expectations and therefore the company must achieve flawless delivery of value. Fionda and Moore (2009) found out that quality is ensured by using the best materials and craftsmanship. Fashion companies have both traditional and innovative or seasonal products in their collection (Fionda & Moore, 2009). Creativity and innovation are seen as a key characteristic (Arnault, 2000 as cited by Fionda & Moore 2009; Alleres, 2006); innovation is a way to remain as a reference on the market (Lewi & Lacoeuilhe, 2007). Thus innovative products are needed to keep the brand fresh and exciting, while classical pieces reflect the brand’s heritage (Fionda & Moore, 2009). Furthermore, vintage reflects authenticity and incorporates nostalgia (Tungate, 2008). 2.4 Brand Signature Luxury brands can create recognisable styles, products and motifs (Sicard, 2006). All the products of a brand should be consistent and coherent. According to Fionda and Moore (2009), iconic products are central to the luxury product offering. These are typified by
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authentic, quality and exclusive characteristics and are aspirational. The appointment of highprofile fashion designers enhances the product’s appeal. 2.5 Premium Prices Expensive products cannot be defined as luxury products (Dubois & Czellar, 2002). Price is an essential part of the brand as it confirms the strategic positioning (Lewi & Lacoeuilhe, 2007). The price of luxury goods should be based on their aspirational value, not on their costs (Sicard, 2006). Luxury products have the highest price/quality ratio or premium prices; what matters are higher relative prices (Kapferer, 2008). Fionda and Moore (2009) identified that a high price contributes to luxury status and increases exclusivity. Luxury brands therefore give few discounts and markdowns (Keller, 2009). 2.6 Exclusivity Rarity and exclusivity are both seen as dimensions of a luxury brand. This can be translated into limited editions or exclusive ranges (Fionda & Moore, 2009). Sicard (2006) added the use of waiting lists. Chevalier and Mazzalovo (2008) mentioned the importance of nonavailability. While rarity might influence the buying intensions of Western consumers, it seems to be less relevant for Asian consumers (Phau & Pendergast, 2000). There is however some overlap between this dimension and the product integrity dimension. For instance, “innovation” and “seasonal products” are sub-dimensions of “Product integrity”, and “limited editions” and “exclusive ranges” are sub-dimensions of “Exclusivity”. However, most luxury brands (fashion or leather goods) have “seasonal products” which include “limited editions” and “exclusive ranges”1.
2.7 Heritage The long history of a brand adds to its authenticity and creates nostalgia and credibility as it relates to the history of the country-of-origin (Fionda & Moore, 2009), and becomes a source
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of comparative advantage (Urde, Greyser, & Balmer, 2007). Sicard (2006) refers to this as seniority, whereas Tungate (2008) refers to ‘plundering the past’. 2.8 Environment and Service Fionda and Moore (2009) identified the significance of the store environment and superior service. The environment and experience of the brand is showcased in flagship stores (Degoutte, 2007). Diamond (2006) writes that the physical environment must differ from that of the competition. Sicard (2006) adds the role of the studio and manufacturing plant. Further, control over the distributors, suppliers, manufacturers and licensees is crucial (Stankeviciute & Hoffmann, 2010). The choice of the distribution channel is very important as it reflects the brand’s values. The use of different distribution channels reinforces the brand’s notoriety (Lewi & Lacoeuilhe, 2007). Retail distribution is highly selective and controlled because of the highly targeted market segments involved and the need for exclusivity and prestige (Keller, 2009); the aim is to protect consumers from non-consumers (Kapferer, 2008). 2.9 Culture Internal and external commitment can be extended by investment in the company culture. Actors of both categories will support the brand (Fionda & Moore, 2009). The company also needs external commitment from its partners. Therefore the right choice of manufacturers and licensees is important (Fionda & Moore, 2009).
III. Methodology
An interpretive case study method has been chosen due to the exploratory nature of this research (Yin, 2003). This is in line with previous studies on luxury branding. For example, Beverland (2004) used this method to delve into the history of the brands arguing that each
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development is path-dependent and therefore detailed case histories are required. Fionda and Moore (2009) go further by saying that this method is necessary to understand how the unique history and heritage of each brand influence today’s decision making. These authors mention that there is a dearth of research towards luxury brand building and that case studies facilitate the conceptualisation of the luxury brand building process. Four companies were selected for this study: Delvaux, Bottega Veneta, Hermès and Loewe. Delvaux was founded in Brussels in 1829; it is the oldest fine leather luxury goods company in the world. Despite its established tradition, it is going through a critical period. Its choice of remaining a family owned company means it lacks the resources of brands belonging to luxury conglomerates. It realized that the emphasis changed from the product to the image and its challenge is to develop the brand without losing its particularities/specific characteristics (La Libre Belgique, 2007). Two in-depth semi-directed interviews were conducted with a Delvaux marketing manager in 2008 totalling 3 hours. The interview guide was constructed to explore the brand building process with questions focusing on Delvaux’s history, product development process, product management, communication, distribution and brand building process. These interviews constitute this study’s main source of primary data. Bottega Veneta, Hermès and Loewe were then chosen because of their similar historical positioning, that is, leather is historically at the centre of the company “savoir faire”. Another criterion for the choice of these four companies lies in their country of origin. Kapferer (2008) shows that two luxury business models evolved over the years: one originating in Europe, the other in America. These companies reflect the European model; they were established in the 19th century, except for Bottega Veneta (20th century). They are from continental Europe, distinguishing this study from Fionda and Moore’s (2009) which studied UK based companies. Given their situation as either independent players or part of a luxury conglomerate, they represent the current tensions of this sector. Point of sales visits and
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interaction with sales staff constituted another primary source. These visits took place in 2009 in stores located in Paris and the French Riviera. “Insert Table 1 about here” Secondary sources included press-coverage (e.g. Elle, Vogue and Women Wear Daily) and industry reports (Datamonitor and ATKearney) for the 2000 – 2010 period, as well analysis of company materials like press releases, annual reports and website communication. These four different data sources – documents, archival records, interviews and observations (Yin, 2003) ensure accuracy through data triangulation and are suitable for the exploratory objectives of this study. The interviews were transcribed and content analyzed along the other primary and secondary data sources. Similarly to Fionda and Moore (2009), the analysis was first conducted on a case-by-case manner and then in a cross-case basis.
IV. Results and Analysis
As observed in the companies’ communication, while Bottega Veneta, Delvaux, Hermès and Loewe all have the same positioning and can all be called traditional leather goods brands, they also differ. Over the years, the product categories offered became a point of difference as did the ownership structure and degree of internationalization. The presentation below is structured according to the nine dimensions of Fionda and Moore’s (2009) framework. Within each theme various sub-themes are identified based on the cross-case analysis. 4.1 Clear Brand Identity All brands have clearly defined brand values that form part of their identity. Creativity, craftsmanship and innovation are the most cited values. For example, Bottega Veneta has a special section of its website named “Hand of the Artisan” illustrating a retrospective of
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several models using the brand distinctive “knot”. Hermès portrays videos of handcrafted production along with innovative projects (e.g. the EC 135 twin-engine helicopters interior designed by Hermès). The company also claims that it sells such a large number of products because they make people dream. As such, it needs to provide an emotional appeal or fulfil part of the customer’s aspirations. Delvaux website states “The future? A question of tradition for the oldest fine leather luxury goods company in the world”. According to Delvaux management, the company adopts the same marketing strategy around the world and wants to continue to promote itself as a luxury leather goods company. Therefore Delvaux continues to emphasise its knowhow, craftsmanship, historic creativity and origins. Nonetheless, the company’s distribution strategy is slightly different because they mainly operate abroad through third parties such as department stores. 4.2 Marketing Communications All brands invest in marketing communications and especially in PR, direct marketing and advertising. They all present their collections by organising fashion shows. However, most companies do not resort to celebrity endorsement and the use of celebrities in advertising campaigns. Only Loewe uses celebrities in their advertisements (e.g. Stephanie Seymour and Amber Valletta); while Bottega Veneta and Hermès believe that their brand does not need a celebrity to create more awareness. Delvaux is thinking about starting up an ambassador program as celebrity endorsement is rather expensive. Fionda and Moore (2009) do not see the brand’s website as a major communication tool. However, all companies do have a website and see this as important. People can subscribe to newsletters, personalize the website, and discover the company’s universe and values. Tomas Maier sees the website as another store and therefore it must reflect the sensibility of the brand. He wanted the website to be like shopping in a Bottega Venetta store. The companies
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acknowledge the importance of social media. Hermès entered the world of social media by creating a page on Facebook and launching interactive websites; ‘www.jaimemoncarre.com’ and ‘www.voyagedhermes.com’. Delvaux regularly invites two bloggers whose blog is dedicated to the brand. Delvaux, as well as Bottega Veneta, Hermès and Loewe believe that one-to-one marketing is gaining importance and is thus investing in this; they also believe that direct communication with the customer on a personal level is becoming more important. Customers of Loewe wished to order new products before the actual launch. The company decided to send personal invitations to come to fashion shows organised in their boutiques. 4.3 Product Integrity Quality, attention to detail, hand-made and craftsmanship are emphasized by all companies in their communication. Quality is not only assured by the manufacturing of the goods, but also by the superior quality of the raw materials. Therefore, good relationships with suppliers were identified as being crucial. Hermès went further and even bought some of its suppliers. For example, Hermès bought atelier Gandit, located in Bourgoin-Jaillieu, that is specialised in printing on silk scarfs. To ensure quality, only a limited number of craftsmen may work on a handbag (one for Hermès, maximum three for Delvaux). Loewe has craftsmen with 40 years of working experience. To ensure the superior quality of the products, some companies started their own school or partnerships with schools to train leather workers and craftsmen. Hermès signed for example a partnership agreement the Abbé Grégoire School, located in the North of France. Creativity and innovation are recognised to be important. Innovation results in products created in different sizes, shapes, materials and colours. When it comes to leather goods, the product offer is divided into ‘heritage products’ (products that remain longer, years or decades, in the collection) and seasonal products. The seasonal products stay in the product
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offer for a few seasons and are characterised by a higher level of creativity and innovation. The collections are therefore balanced. Products must first of all be functional and therefore need to be adjusted over the years to match current social trends, transportation and lifestyle. Awards and prizes also contribute to product integrity. Hermès received a medal of quality for its work as a sadler in 1867. Delvaux and Loewe are recognised suppliers of the royal family and Delvaux makes use of this ‘award’ in its communication and logo. 4.4 Brand Signature Each of the four companies recognises the importance of a recognisable style and iconic products. Bottega Veneta says “when your own initials are enough”. The companies have iconic products. The Knot is the iconic product of Bottega Veneta and Le Brillant of Delvaux. Hermès sees the coherence of its style as one of its strengths. Loewe and Bottega Veneta employ creative directors and designers who have a proven track record (Stuart Vevers and Tomas Maier respectively). Hermès slightly differs from the other brands because one of the family members is the creative director. Nevertheless the company still has other designers working for it. Corporate packaging must be coherent with the company image. While not all companies have recognisable packaging, Hermès is one that does. Hermès, Bottega Veneta and Delvaux design on behalf of or in collaboration with other companies (e.g. cars, hotel rooms and bath tubs). Art which is linked to creativity, innovation and craftsmanship, is the most important value of the companies in this case. Hermès organises the ‘Prix Emile Hermès’, a design prize. Loewe has a foundation carrying its name that supports amongst other things, poetry, music, design and craftsmanship. Delvaux also links its name with art. 4.5 Premium Price
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Luxury products have premium prices. These are justified by the high manufacturing costs which are linked to wages in developed economies and the superior quality of materials. Hermès takes 2,5% margin on its bags as the company wants to keep its artisanal identity, whereas other luxury leather goods companies often take up to 10-15% margin. Evidence is found that Hermès and Delvaux give price reductions on a selection of products. They also organize outlet sales, but not in the shops. Delvaux products are sold twice a year during their outlet days, which are held at the headquarters. 4.6 Exclusivity The companies ensure exclusivity by carefully selecting their distribution channels as well as through limited production runs and waiting lists. Special editions and collectors’ items are made for special events. Loewe designed the Calle bag especially for the launch of the e-shop; Delvaux a transparent “le Brillant” in limited edition for its 180th anniversary. Furthermore, they offer customization. Customers can ask to personalize their product or order a tailormade one. For example, Loewe has a Made to Order collection – classical pieces that can be customized - and Bottega Veneta created luggage to fit the hold of a client’s private plane. The companies have their own distribution network and are therefore in full control of accessibility. 4.7 Heritage Except for Bottega Veneta, the companies have a long history dating back to the 19th century. All companies stay true to the strategic positioning of that time. Bottega Veneta once lost track and started to manufacture handbags with big logos, but reverted back to its original premium positioning under the creative direction of Tomas Maier and a strong management team. Brand authenticity is maintained more easily if the original strategic positioning is upheld.
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The company’s history is actively used by the brands. Hermès for example uses a horse carriage that refers to its beginnings in its logo, while Delvaux uses its founding year, ‘since 1829’ and the drawing of all product designs are collected in two books called the ‘Golden Books’. For its 180th anniversary, Delvaux produced a book and opened a museum at its headquarters. 4.8 Environment and Service Superior services, the store environment and control over these elements are seen as important. Flagship stores are seen as very valuable. Not only is the interior design of these stores chosen with care but the location is also of major importance. The companies, except for Delvaux who is more a national player, have opened stores in key fashion cities. These stores are characterized by their enormous surface area (e.g. the Bottega Veneta Rome boutique measures 4,320 square feet; its boutique in Tokyo’s Ginza District is about 10,000 square feet), their design by renowned architects (e.g. Peter Marino for Loewe) and the display of the entire collection. The Hermès boutique in Seoul also contains an exposition room for artists. The stores are not always standardized or fully operated by the companies themselves. Most of the case companies own franchise stores and some sell products through prominent department stores (e.g. Delvaux at Barneys) or specialist boutiques. Bottega Veneta’s retail concept is designed by Tomas Maier. Every element of the interior has been custom made. Bottega Veneta’s qualities – design, modern functionality, craftsmanship, the use of the highest quality materials – are reflected in the boutiques. Iconic elements include walnut tables, handcrafted vitrines and door handles sheathed in leather. The Milan flagship store, as well as the London store, has been updated to the signature store concept. Loewe recently decided to modernise the store concept of its 140 boutiques around the world with a view to unifying brand image.
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Companies in this case emphasize the importance of training their staff. Patrizio Di Marco CEO of Bottega Veneta said in an interview “our stores are our way to communicate and our sales staff must know our history, our techniques and workmanship, the materials and the crafts and transmit them to our customers” (WWD, 2007). Delvaux produced a brochure containing this information for newly hired staff and organises specific trainings for its sales personnel. Visits to point of sales and interaction with staff allowed us to verify their knowledge of the company’s values and products. Bottega Veneta, Delvaux and Hermès also offer a limited product range in their e-shops. After-sales service plays an essential role in offering superior service. Its main mission is to prolong the life of existing products. At Delvaux bags that are decades old can be repaired because all leather is stored in case it is needed for further repair. The workshops of Delvaux and Hermès are open to the public for guided visits. Corporate events can be organized in the Delvaux workshop in Brussels. 4.9 Culture Limited information was found regarding the internal and external commitment to the brand. Nevertheless, concerning internal commitment there is one example from Hermès. The company gives its craftsmen stock options. Concerning external commitment, a good relationship with suppliers was identified as being crucial to assure the high quality of raw materials.
V. Discussion Figure 2 presents a revised framework of the luxury brands applicable to traditional luxury leather goods brands. Results confirm Fionda and Moore’s (2009) framework at the dimension level whereas differences are found at the sub-dimension level. Specifically, five additional sub-dimensions emerge from the analysis: website, e-shop, link with art, customization and workshop.
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“Insert Figure 1 about here” The first dimension identified is a clear brand identity. Its sub-dimensions are a global marketing strategy, brand values, emotional and aspirational appeal. These findings are identical to Fionda and Moore’s (2009). Marketing communications are grouped in the second dimension. Similarly to previous findings, this dimension includes direct marketing, fashion shows, advertising and public relations. We highlight the importance of the website and more globally of digital media. It is also interesting to observe the use of online social media by luxury goods. All methods must cohere with each other and work together towards the common goal of creating awareness (Fionda & Moore, 2009). Product integrity refers to the third dimension. Quality, functionality and craftsmanship contribute to the luxury status of the brand. The sub-dimensions ‘innovation and seasonal products’ and ‘quality, functionality and craftsmanship’ are also identified as in Fionda and Moore (2009). Nonetheless, seasonal products are seen as less important to traditional luxury leather goods companies as they have many permanent products in their collections. One subdimension called “heritage products” is added for the permanent products. This is in line with Berg (2004) who noted that the leather goods sector more heavily relies on permanent offers than the ready-to-wear sector. Awards and prizes contribute to the image and the notion of the brand’s quality. However, these may not necessarily be seen as a sub-dimension as there is no evidence that they contribute significantly to the image of brand quality. The fourth dimension is brand signature. All companies have iconic products, a well-known creative direction, a recognisable product style and coherence of branding elements. Some of the studied companies also design products or service environments for other companies. For example, Delvaux teamed up with jewellery designers Wouters & Hendrix to create a transformative bracelet2, and Hermès with EADS to design the EC135 Hermes luxury
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helicopter3 and with Wally to design a futurist yacht4. Each company enjoys mutual benefit from the other’s image by combining their names. Furthermore, the companies display art in their boutiques and design products together with artists. Dereumaux (2007) writes that luxury products do not only want to sell their products but also an image that makes the difference. He goes further by saying that the image from the brand rests on both exceptional product quality as well as its relationship with art. Brands like Prada use art as a traffic builder by creating art museum-like stores (Lewis & Dart, 2010). Premium prices constitute the fifth dimension and their relevance is widely discussed in the literature. The case companies all have premium prices and none of them gives large discounts. This supports Keller (2009) who argues that excessive price movements harm the brand. Nevertheless, companies like Hermès and Delvaux organise outlet sales in which the stock of certain products is sold. These outlets do not generally take place in their boutiques, but in a different location. Limited editions and exclusive ranges are both sub-dimensions of exclusivity, which is the sixth dimension identified, and relate to the accessibility and availability of the product (Fionda & Moore, 2009). The companies have limited production runs, offer made-to-order or personalised products and Hermès has waiting lists. Okonkwo (2007) argues that personalising is a part of the customisation process and believes that it currently is one of the key requirements. The seventh dimension relates to the history and heritage of the brand and contributes to brand authenticity (Fionda & Moore, 2009). Brands like Hermès and Delvaux actively exploit their history and heritage. Environment and service constitute the eighth dimension. The brand experience is extended by superior service and flagship stores. The case companies did not all have shops with the same decor worldwide and therefore do not support Degoutte (2007), but they do support
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Keller (2009) by having full control over a large number of shops. They all offer superior services and their stores are located at important locations. The e-shop can be added to this dimension. Okonkwo (2007) writes that e-retail has become an indispensable complementary sales channel and is an effective tool for creating awareness. Nonetheless, many companies are scared that they will lose ‘exclusivity’ or ‘prestige’. Okonkwo (2007) identifies the offer of a limited number of products such as that of the studied companies in this context, but she does not make a case for this behaviour. The workshop creates customer value. Delvaux opens its workshop as does Hermès and visitors can see made-to-order products or expensive pieces being manufactured. Because of their tradition, these brands do not fit into the category of contemporary luxury companies without workshops identified by Sicard (2006). Culture is the ninth and last dimension. According to Fionda and Moore (2009), culture refers to the expertise behind the brand. This expertise needs to be coherent and consistent across all levels in the organisation to ensure brand success. This research shows little evidence concerning this dimension.
VI. Conclusion
As a whole, differences could be reported even within the group of traditional leather goods brands. According to Fionda and Moore (2009), the creation and development of a luxury fashion brand are path-dependent. Therefore a given company will put more weight on a particular dimension or sub dimension. Future researchers of this topic could use different research methods and select more case companies. An interesting research avenue would be a longitudinal comparison of how brands adapt after joining a luxury conglomerate. For instance, did the brand strategy of Loewe and
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Bottega Veneta change after their acquisition by LVMH and PPR? Answering this question could provide clues for independent companies as to how to differentiate and survive in an industry characterized by continuous consolidation, as demonstrated by the recent acquisition of Bulgari by LVMH. Otherwise, this study intentionally focused on European luxury leather goods brands. Do these results also hold for American based companies which according to Kapferer (2008) follow a different business model? Similarly, which dimensions are characteristic of newcomers? Hermès helped in the creation of Shang-Xia, a “made in China” brand. Which brand building process is suitable for these brands? What would be the country-of-origin effect (Ramchandani & Coste-Manière, 2012)? Which link with the broader company business model (Storemark & Hoffmann, 2012)? Another venue for future investigation is to better understand the brand building process. This study does present the dimensions and sub dimensions composing this process, but it does not present the dynamics of the process. That has been explained previously by Chevalier and Mazzalovo (2008), but further studies are welcomed specially tackling new luxury brands (vs. established brands). Despite its exploratory nature, this study contributes to the current literature in which luxury goods dimensions are investigated. The revised brand luxury framework provides a valuable overview of the dimensions to be taken in account when building a luxury leather goods brand. It evidences that five sub-dimensions should be taken into account: website, e-shop, link with art, customization and workshop. It highlights the importance of integrating website and e-shop management in this process. This is indeed a major area to be taken into account. In the watch industry, initiatives like the website ‘www.thewatchavenue.com’ present evidence of the potential use of digital media to enhance client interaction and build brand equity.
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Since the brand building process requires all the dimensions and sub-dimensions to be consistent and managed simultaneously, this revised version presents companies with an updated vision of the elements to be taken into account when building brands in this challenging and dynamic industry.
References Alleres, D. (2006). Luxe. Métiers et management atypiques (2nd ed.). Paris: Economica. Bastien, V. & Kapferer, J.-N. (2008). Luxe oblige. Paris: Groupe Eyrolles. Berg, J. (2004). Should a luxury leather goods brand diversify into ready-to-wear? Journal du Textile, downloaded at http://www.estin.com/publications/pdf/luxury_leather_eng.pdf. Beverland, M. (2004). Uncovering theories-in-use: building luxury wine brands. European Journal of Marketing, 38, 3/4, 446-466. Chevalier, M. & Mazzalovo, G. (2008). Luxury brand management. A world of privilege. Singapore: John Wiley and Sons (Asia) Pte. Ltd. Degoutte, C. (2007). Stratégie de marques dans la mode : convergence ou divergence des modèles de gestion nationaux dans l’industrie du luxe (1860-2003)? Entreprise et Histoire, 46, 125-142. Diamond, E. (2006). Fashion retailing: a multichannel approach (2nd ed.). New Jersey: Pearson Education. Dubois, B. & Czellar, S. (2002). Prestige Brands or Luxury Brands? An Exploratory Inquiry on Consumer Perceptions. Proceedings, 31st European Marketing Academy Conference Proceedings, Braga, Portugal. Fionda, A. & Moore, C. (2009). The anatomy of a luxury fashion brand. Journal of Brand Management, 16, 5/6, 347-363.
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Ghodeswar, B. (2008) Brand identity in competitive markets, Journal of Product and Brand Management, 17/1, 4-12. Kapferer, J.-N. (2008). The new strategic brand management: Creating and sustaining brand equity long term (4th ed.). London: Kogan Page Limited. Kapferer, J.-N. & Bastien, V. (2009). The specificity of luxury management: Turning marketing upside down. Journal of Brand Management, 16, 5/6, 311-322. Keller, K.L. (2009). Managing the growth tradeoff: challenges and opportunities in luxury branding. Journal of Brand Management, 16, 5/6, 290-301. La Libre Belgique (2007). Delvaux “commercial dans le sens noble du terme”, 29/11/2007, www.lalibre.be, Charlotte Mikolajczak. Lewi, G. & Lacoeuilhe, J. (2007). Branding Management: la marque de l’idée à l’action (2nd ed.). Paris: Pearson Education. Lewis, R. & Dart, M. (2010). The new rules of retail. New York: Palgrave Macmillan. Okonkwo, U. (2007). Luxury Fashion Branding. Trends, tactics, techniques. New York: Palgrave Macmillan. Phau, I. & Pendergast, G. (2000). Consuming luxury brands: the relevance of the ‘rarity’ principle. Journal of Brand Management, 8, 2, 122-138. Ramchandani, M. & Coste-Manière, I. (2012). Asymmetry in Multi-Cultural Luxury Communication: A Comparative Analysis on Luxury Brand Communication in India and China. Journal of Global Fashion Marketing, 3-2, 89-97. Sicard, M.-C. (2006). Luxe, mensonges et marketing. Mais que font les marques de luxe? (2nd ed.). Paris: Pearson Education France. Stankeviciute, R. & Hoffmann, J. (2010). The impact of brand extension on the parent luxury fashion brand: the cases of Giorgio Armani, Calvin Klein and Jimmy Choo, Journal of Global Fashion Marketing, 1-2, 119-128.
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Storemark, K. & Hoffmann, J. (2012). A Case Study on the Business Model of Chloé, Journal of Global Fashion Marketing, 3-1, 34-41. Tungate, M. (2008). Fashion brands: Branding style from Armani to Zara, (2nd ed.). London: Kogan Page. Urde, M., Greyser, S., & Balmer, J. (2007). Corporate brands with a heritage, Journal of Brand Management, 15, 1, 4-19. WWD (2007). Bottega Veneta’s new Rome home, 08/02/2007, www.wwd.com, Luisa Zargani Yin, R.K. (2003). Case study research. Design and methods (3rd ed.). Thousand Oaks: Sage Publications.
End-notes 1
We thank you one anonymous reviewer for bringing to our attention this point.
2
http://thewordmagazine.com/radar/embrace-delvaux-and-wouter-hendrix-collaboration/
3
http://www.eurocopter.com/site/en/ref/Overview_938-889.html
4
http://www.why-yachts.com/
Table 1: Data sources Company Delvaux Bottega Veneta Hermès Primary Data - In-depth interviews - Observation (point of sales visit and interaction with staff) Secondary Data - Press coverage (period 2000-2010) - Industry reports (period 2000-2009) - Company web site - Company press-releases
Loewe
x x
x
x
x
x x x x
x x x x
x x x x
x x x x
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Figure 1: Dimensions of a traditional luxury leather goods brand (revised Fionda and Moore’s framework)
Received Awards, Prices, …
Coherence
Heritage products Recognisable style Website
Global Marketing
Strategy
Innovation and seasonal products
Direct Marketing, Fashion Shows, Advertising, PR
Quality, functionality and craftsmanship
Marketing communications
Product Integrity
Iconic products
Design of other’s products/ services environment
Brand Signature
Art
Creative direction
Brand values
Emotional appeal/ aspirational
Clear Brand Identity
Premium Price TRADITIONAL LUXURY LEATHER GOODS BRAND
Culture
Internal Commitment to the Brand
Exclusivity
Environment and Service
Heritage
Controlled Distribution
History
Superior Service
Limited Editions
Exclusive Ranges
Customisation: Made-to-order and Personalisation
Flagship Stores
E-shop Fionda and Moore (2009) Workshop
- - - - - - - - Added in this study
