12. Luxury sets the price, price does not set luxury
Money does not do a worthy job of categorizing objects or stratifying them unless they have been culturally coded. This ‘anti-law’ means that luxury is what could be called ‘supply-based marketing’. That is why traditional marketing is in a state of confusion here: it is fully ‘demand-based’. In luxury, you first come up with a product, then you see at what price you can sell it; the more it is perceived by the client to be a luxury, the higher the price should be. This is the opposite to what applies in the case of a classic product or trading up, where the marketer tries to find out at what price level there is room for a new product.
There is one key consequence for selling: sales staff in a store help people understand, share the mystery, the spirit of places and objects, and the time invested in each item – which explains the price. Customers will be free to buy later.
Excerpted in part from: The Luxury Strategy: Break The Rules of Marketing to Build Luxury Brands by JN Kapferer and V. Bastien, in partnership with Kogan Page publishing.
Sponsored By: The Brand Positioning Workshop