Great (and proven) quality appears to lie at the heart of an unequivocal premium brand definition – but there is clearly also a role for expressing this, through price, packaging, image or even channel and in-store theatre. Care and attention on shelf also mark out a premium brand for many and poor housekeeping, or sloppy merchandising, can go a long way towards undermining a premium brand’s cachet.Although ShopperCentric uses this as an argument for broadening distribution and offering occasional price promotions, it runs counter to the strategy that has supported many premium brands year after year. IMHO, price promotions and discount retailing are more likely to undermine a status brand. Making the luxe brand more affordable and more available would probably detract from rather than enhance its desirability.
I think the chief executive of Montblanc, a well-known upmarket brand, would also argue against discounting. In a recent interview, he said his 'high-end products are targeting a smaller group of customers and we are able to reach out to them in our own boutiques and through special interest magazines and digital media'. In other words, proper targeting is essential.
He also said: 'Quality, sustainable value and timeless elegance have their price'. His target market appreciates the value of a Montblanc product and is willing to pay for it. Why discount? What marketing objective would that serve?
And remember, luxury brands have so far been largely (but not completely) recession-proof. The chief executive of PPR, which owns Gucci and other luxury brands, says his brands 'are a shield against price pressure and a weapon in which to enter new countries'. So the strong upmarket brand needn't discount because it delivers value to those who understand the quality and status of the offering.
With so many status-conscious consumers demanding brand-name goods in developing nations, turnover is generally strong, especially for products that are unique or produced in limited quantities. Here, discounting might damage the image of exclusivity and the perceived status because making the product affordable makes it more ordinary and less of a status symbol.
