Upon the task of identifying an area of study as the topic for this dissertation, the author began by identifying areas of interest to them as well as bringing in ideas from work placement.
As the degree area is in marketing and design, this was the initial starting point. Marketing is defined by Gronroos (2009 pg 351) as ‘customer management' which should relate the values of the customer to company uses to create value-in-use. Saren (2007 pg 11) goes on to state that ‘marketing is not just economic activity. It drives the consumer society, a culture of consumption'. Although marketing as a whole subject is often debated over and the definition changes according to the stance point the reader takes, the above definitions were the two that most clearly aligned themselves with the author. From identifying how the author themselves view the broad term ‘marketing' this allowed for specific areas of interest to be indentified within the discipline.
Branding is a relatively new area of study within the marketing stream. Although brands have been around for centuries and well established brands are somewhat of a constant in modern culture, the area as an academic study is considered young in relation to marketing and advertising as a whole. Branding is defined by Cambridge online dictionary (http://dictionary.cambridge.org/define.asp last accessed 13/02/10) as ‘the act of giving a company a particular design or symbol in order to advertise its products or services'. As a definition this encompasses on a general scale the activities encompassed by branding and gives the reader a broad term to identify with. However on a more personal scale, the author of this research has strong beliefs in brands and brand values. Brands represent the consumer as an individual and it is the belief of the author that particular brand choices are indicative of the type of person the consumer is. Strategic Direction (2002) points out that brands have become a tool in ‘simplifying the decision-making process for buyers' and as competition and duplication have become common practice in the market place it is important for the consumer to have some brand beliefs and characteristics to identify with.
This viewpoint forced the author to think about the sort of brands they themselves buy into and how they control their identity through purchasing these brands. Sarens (2007 pg11) use of ‘culture of consumption' as above further reinforced this mindset. Consumption of goods is a vital activity in the authors lifestyle and therefore it is a simple extension to take this sort of behaviour and apply it to the research topic. As mentioned above the author began to examine the purchases they make and concluded that the most recent significant purchases made prior to this research paper were items from ‘luxury' brands. One of which was also purchased over the internet. Only significant purchases were analysed as necessities such as deodorant are not really an area if interest to the author. ‘The notion of luxury has become so central to contemporary consumption and communication activities that is has generated a whole literature related to it' states Chevalier et al (2008 pg vii). The luxury sector therefore is a viable area to read into and research as there if literature to back it up and therefore the author decided to stick with this route.
Luxury goods defined by Cambridge online dictionary (http://dictionary.cambridge.org/define.asp last accessed 12/12/10) are defined as ‘expensive things....which are nice to have but not necessary'. This term is very basic but as above helps the reader to identify with the area of study. Danziger offers that ‘Luxury brands essential role is to perform luxury fantasy fulfilment for the consumer' (2005 pg xvi). As an extension of this idea the author found a comprehensive list of ‘status brands' defined by brand strategists Tan and Saynt. Under this classification, 48 brands are recognised as brands which through association increase the consumer's status in an environment. The brands identified all have positive connotation with status and are often related to popular figures. Although this definition helps to encapsulate the effect of luxury brands, the author felt this definition could be ignored somewhat as it does not hold any academic or other backing. It is simply opinion of the two authors. Furthermore given that any consumers feeling of status and worth are subjective then this list of brands would be subject to change depending on the view point.
IMP Group is a company which operates in several different market places but which aims to provide quality services to all its customers in each of these markets. In 2002 they held their annual conference which in that year was concerned with the ‘cross-cultural exploration of global brands and the internet'. In this paper, several definitions of luxury brands were discussed. Nueno and Quelch (1988) define luxury brands as ‘those whose ratio of functional utility is low while the ratio of intangible and situational utility to price is high'. Scroeder et al (2006 pg 67) offer that luxury brands ‘represent what is ultimate in quality of products and services, they are endowed with considerable goodwill attached to their mostly immaterial added values'. Hopefully, this basic selection of definitions helps the reader to see that the concept of luxury brands is elusive as pointed out by Schroeder et al (2002) who goes on to ask ‘Where does luxury stop and upper range end?' (pg 68).
In order to find a definition that could encapsulate ‘luxury' in its entirety, the decision to look elsewhere other than academic view was taken. In this area, the author found that academics tended to disagree over one term which could be used to describe luxury and this is due to their definitions being based on an idea rather than fact. InterBrand is a brand consultancy operating internationally who work with some of the world's leading brands. In 2008, they published a white paper which outlined 15 luxury brands according to fiscal activities and three other factors; authenticity and conviction, iconic status, and global activity. The author decided to use this list of luxury brands and there classification status as the report is based on facts rather than opinions. Fiscal activity is something which cannot be faked or disputed. The list of specific brands as identified by InterBrand will be included in the appendix.
After the author had outlined that the luxury area was one to research the next step to identify the specifics; who, what and where to research, what has already been done and where is the gap? Upon reading around the area there was one specific area which continually emerged. Luxury goods and the internet. Reading in this area brought up the article ‘Luxury branding on the internet: lost opportunity or impossibility'. This article presents the idea that luxury brands are not successfully marketing themselves on the web and therefore are not reaching their potential in the current market place. This article was issued in 2003 when both luxury brands and e-commerce were in a different stage to where they are now. This article also dramatically helped shape this research project.
The area of e-commerce was interesting to the author as it particularly links to the work placement completed in 2008 by the author. This work placement was conducted at an IT solutions company whose worked included getting established companies onto the internet in order so they could do commerce over the web and reach consumers they previously could not of done. E-commerce is defined as ‘consists of the buying, selling, marketing and servicing or products or services over computer networks' (Pankaj 2005 pg vii). E-commerce is seen to be where most or all companies are heading to if they have not already and an internet presence is considered a necessity as the internet plays such an important role in modern culture.
The link between e-commerce and luxury goods has in the past been somewhat minimal due to the contradiction of ideas between the two. One of the key values of e-commerce is that is gives access to all, allowing free flowing communication between the consumer and company and allowing distance to be a irrelevant factor in purchasing goods or services. One of the prominent values of luxury brands however is elitism; creating distance between the common consumer and the goods creates the luxury factor and makes them desirable to the consumer. Through allowing mass marketing and in sense allowing anybody to be able to feel connected to the product, aren't luxury brands fighting with themselves and their own self image?
Several years ago, the author undertook a project at secondary school which meant they had to find images of luxury products. At this time luxury brands had in internet presence but the website acted more like a brochure, the products could be viewed but there was no purchase function or even direct addresses of stores. However, when looking at the websites of the 15 brands defined by InterBrand, all have an online purchase facility and many have emails, customer help lines and interactive features which enable the consumer to feel connected to the brand. Even with the rise of e-commerce does this not go against the values and traditions of the brand?
This research provided the author with research aims and title as follows;
Creating prestige on the net: mass marketing of luxury brands
From concluding this research the author aims to identify the future course of marketing from mass brands as well as identifying how successful their current processes are. From seeing this from both consumers and professional's point of view, the luxury brands can be critiqued.
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