Marketing Home Products

 

Despite some popular beliefs amid the barrage of negative media reports, the luxury housing market remains strong. The majority of today’s high-end consumers aren’t in danger of losing their homes. In fact, luxury homes, and the products installed in them, continue to buck the bleak housing trend. The wealthy are relatively unaffected by the housing slump as they remain unscathed from sub-prime mortgage issues and interest rate fluctuations. In Manhattan, for example, the housing recession shows few signs of plaguing the city’s elite.

From a similar perspective, a recent article in Business Week  reported that today’s well-known luxury brands are experiencing steady growth. Some of the most popular luxury brands like Louis Vuitton, Marc Jacobs, Donna Karan and Gucci, all reported 2007 sales increases and expect the 2008 market for luxury goods to continue to surpass historic global growth trends.

Despite a sunny outlook, continuous negative media reports surrounding the condition of the U.S. economy and overall housing market, have today’s luxury consumers putting away their credit cards. This calls for adaptive marketing tactics to boost consumer confidence.

In my last blog, I discussed the idea of ‘perceived’ versus ‘real’ value. With the nervous condition of today’s luxury consumers, focusing on ‘real’ value is more important than ever in the high-end market. This makes for all the more reason to appeal to consumers’ emotional side.

Below are some key marketing tactics essential to maintaining a luxury brand in today’s state of affairs.
 
- Relevant emotional connections -
The key word here is relevant. Design ads with the consumers’ emotional and lifestyle aspirations at the forefront. Tell a story that resonates with your target audience. Advertising isn’t just crucial to enhanced brand awareness, but also allows consumers to connect with your product on a higher, more personal level.

- Evolve the brand -
The luxury brands that have succeeded for decades are constantly re-inventing themselves. (Burberry, Cadillac, Tiffany, Channel, etc.) To appeal to luxury consumers, it’s not just about creating a price point or clever brand name, but instead, you must fit into consumers’ ever-evolving lifestyles. High-end consumers will pay a premium for any number of product benefits. Remember, it’s all about appealing to their expansive lifestyle views that allows the product and brand to adapt to change and style preferences of your audience. Again, relevance here is key.

- Know what makes consumers buy -
Price/value relationship, product and brand reputation, and store/dealer reputation are essential in creating and maintaining a luxury brand. Additionally, word-of-mouth (especially of those within one’s social circle), articles and reviews in magazines and newspapers, advertisements, the Internet and the overall impression will be key influencers.

- Develop a strong brand relationship with consumers -
Consumers must feel connected to the brand itself. A generic prescription drug may work better than a known name brand, but if it’s relatively unknown throughout the marketplace, consumers will purchase one that remains fresh in their mind and one they may have a pre-established relationship with. Having a consumer connection via customer testimonials, strong media reviews, compelling advertisements, and a well-designed and user-friendly Web site, will enhance the relationship among the brand and the luxury consumers its targeting.

- Balance performance and the way the product makes the consumer expience luxury -
Every consumer ‘experiences luxury’ differently. There must be equilibrium between uniqueness and exclusivity. The bulk of luxury consumers do not buy a product because others don’t have it or can’t afford it. They buy it because of the way it makes them feel–special and unique. Even if a product has a wealth of performance peaks, it must convey a customizable experience that connects with the consumer in order to sell. For example, a high-performance kitchen faucet may create the feeling of being a professional chef while preparing a family meal. A luxury steam shower may create the feeling of basking in one’s own personal sanctuary or create an intersection with holistic healing. Whatever the story, the brand must tell it.

- Luxury brands stand strong -
This fact remains. Despite the negative reports, there is a large luxury consumer base in which to tap. Today’s nervous consumers need to feel a “new comfort” connection with their luxury brands. The most important aspect of marketing to today’s luxury consumers is to keep their emotions at the forefront of all marketing and branding initiatives.

Looking for more tips on luxury branding? Email me at sk@kleberandassociates.com.

 

As part of Kleber & Associates’ (K&A) extensive media contact program on behalf of our clients, the K&A Public Relations team travels to the front door of prominent media publications at least four times a year to deliver a unique brand contact experience by showcasing client products and to update the editors on the latest industry trends.  Because the value of PR is reliant upon strong relationships, the K&A Media Tours program is vital to the continued success of our clients’ programs.  

Kicking off 2008, the first K&A Media Tour sent a team of account executives to Chicago, Ill. for roundtable discussions with the leading editors in the home and commercial building marketplace. The K&A team held a ‘show and tell’ with editors by bringing the K&A client’s product to the national offices of numerous residential design and construction and commercial building publications.  Our PR specialists capitalized on the opportunity to campaign for K&A clients to the over 15 editors and writers they met face-to-face with during the tour. In the meetings, the agency team also discussed the industry’s most recent trends and walked away with secured earned media coverage for client products and services.

While in the Windy City, our Account Executives met with the editors of Reed Publications including Professional Builder, Professional Remodeler to name a few of Reed’s prolific industry publications. The team went on to meeting with the editors at BNP Media, home of PM Engineer, Plumbing &Mechanical, and Reeves Journal. The final stop was at the iconic Chicago Tribune, where the K&A team got a personalized tour of the newsroom with one on the Tribune’s true veteran writers in addition to presenting a host of client products to the home editorial team…

In each case, the K&A team found themselves in front of a captive audience, eager to learn more about the products brought to the show and tell.  This engaging, intimate “behind the scenes” collaboration enabled a further solidification of our fervent relationships with the media.  As a token of K&A’s appreciation for each of the journalist’s time, and as a sign of K&A’s ongoing commitment to green initiatives, recycled totes including recycled paper journals, media kits, and a Starbucks gift card were given to each media person in attendance.  

This first media tour of 2008 was a momentous success! The media visited were truly appreciative of the timeliness of the meeting with K/BIS is just around the corner and of the wealth of product information and industry knowledge disseminated by the K&A PR team. We look forward to our second quarter media tour, which will send us to Washington D.C., to meet writers and editors from Hanley Wood.

Look for our next industry report—live from K/BIS, along with much more!
Want more home related news and housing and marketing trends? Check out Steve Kleber’s weekly blog posts. To contact Steve Kleber call 770.518.1000 or email sk@kleberandassociates.com.

 

A product’s price tag defines its value—at least that’s what recent studies have found.

According to a wine test conducted by researchers at the Stanford School of Business and California Institute of Technology, a wine’s taste is perceived to improves as its price increases. A similar test using prescription pain relievers found the same result (perhaps not so surprisingly) of higher prices creating the impression of an increase in pain relief.

The studies
Eleven male Caltech graduate students who said they liked and occasionally drank red wine were recruited for the bottled wine study. They were informed they’d be sampling five different wines to study the effect of sampling time on flavor. Only three wines were actually used—two were given twice with different price tags. The wines were given in random order, and the students were asked to focus on flavor and how much they enjoyed each sample. The participants said they could taste five distinct flavored wines (even though there were only three) and added that the wines identified as more expensive tasted better, as reported by ScienceDaily.

In the case of judging prescription pain relievers, investigators had 82 men and women rate the pain caused by electric shocks applied to their wrists, before and after taking a pill. Half the participants were instructed that the medicine described as a newly approved prescription pain reliever, was priced at $2.50 per dose. The other half of the group were instead told that the pill had been discounted to 10 cents. Both were placebo pills. More than eight in 10 of those using the expensive pills reported significant pain relief, compared with 61 percent on the cheaper pills.

‘Perceived’ value
There is a medical explanation for ‘perceived’ value provided by one of the doctors and the lead researcher in the prescription pain relievers’ study. “When you’re expecting pain relief, you’re secreting your own opioids. When you get it on discount, you doubt it, and your body doesn’t react as well.”

Similarly, in the bottled wine study, the part of the brain that experiences pleasure will become more active when the drinker thinks he or she is enjoying the more expensive vintage.

Other studies have also shown that pill size and color changes people’s perceptions of effectiveness. In one, people rated black and red capsules as “strongest” and white ones as “weakest…” while rating larger pills as “strongest” and smaller ones as “weakest.”

Think about ‘perceived’ value in terms of the electronics industry. Today, size is known to create the opposite effect. The smaller and slimmer the product the more “perceived value” in terms of performance and advanced technology. Over the years we’ve seen computers, phones and iPods designed to become smaller and smaller. Even the movie “Zoolander” starring Ben Stiller and Owen Wilson pokes fun at tiny electronics as portrayed by the miniature phone as Ben Stiller’s necessary accomplice in order to “be cool.”

So, are the participants in the above studies really experiencing pleasure, or, do they just think they are because they are anticipating it? Due to perceptions about quality positively correlating with price, scholars argue that people might expect an expensive wine to taste better and a prescription pain reliever to work better than a cheaper version because of their need for anticipation.

Even if heavy price tags increase the ‘perceived value’ of a product, this factor isn’t inspiring most of today’s level headed consumers to dutifully swipe their credit cards. And here’s why.

‘Real’ value
It’s not all just about the price tag and ‘perceived’ value. A product must appeal to consumers’ emotions. In order to sell the product, the price must justify the cost, and that’s where marketing comes in.  People do not buy a prescription pain reliever because it is merely the most expensive on the shelf. Consumers purchase prescription pain relievers in order to create a better life, pain free. In this example, price and pain reduction play supporting roles. Having a fuller, better life remains the primary motivating factor for their purchase because the brand connects with the consumer, emotionally.

It’s the same thought-process behind most of today’s luxury brands. Price justification via brand name and reputation will allow consumers to connect, subsequently encouraging them to buy. According to Pamela Danzinger’s (Unity Marketing) white paper titled The Six Myths of Luxury Branding, “luxury consumers buy luxuries because they want to and this desire is emotionally driven and right-brain controlled. Justifiers are left-brain reasons that give consumers permission to buy luxuries. And the brand justifies the purchase because it confirms the product is of outstanding quality…will last a long time…will be in style for years to come…is worth the price tag…will be admired and noticed by people in one’s social circle that matter.”

‘Real’ value is the ‘real’ motivating factor
Although a higher price can help increase a product’s desirability, utilizing marketing to increase brand name, brand reputation and a healthy price/value relationship, will not only increase a product’s ‘perceived’ value, but also its ‘real’ value. This translates ultimately into sales.

K&A represents many “aspirational” brands where price is but one of many factors positioned to help influence and create desirability. Check out next week’s blog for more information about marketing to the luxury consumer. For more information about how to market your luxury brand, email me at sk@kleberandassociates.com.