Everlasting luxury is the very seed of luxury as we know it today and in which the evolution of the customer and market has generated a whole series of open-ended questions. What are the implications of this change on the management of luxury products and services? Do the existing marketing tools still apply? And how does one go about founding and preserving a luxury brand? To this end this research sets out to investigate further and establish the boundaries of everlasting luxury, proposing possible answers to these questions.

1. Claudia Chiari
®

3. Everlasting luxury
The future of inaccessibility

5. Claudia Chiari
Everlasting Luxury
The future of inaccessibility
Editrice Le Fonti - Milano

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7. We live in an age when unnecessary things are only necessities.
Oscar Wilde, writer and poet
The problem today is the idea of democratized luxury
and I don’t believe that it is true luxury any longer.
Tom Ford, designer

9. PREFACE
Ever been in someones house or on company premises, in a bookstore or in
the library and peeked at the books on a bookshelf and then asked yourself
which one you would like to read?
You quickly realise that your brain is teasing you because even though you
know that you will never have the time to read all of the book you still feel
overwhelmingly compelled to pick up the book and start reading. That’s what
you are doing now!
Was it the title, the graphics, the topic that stimulated your curiosity or was
it something else? Whatever the reason you have undertaken a task that co-
uld end up being irrational, most likely inconclusive and worse, possibly worth-
less.
This manuscript is rational in approach, conclusive in the sense it is up-to-
date and since we are speaking of luxury, it has value. Incredibly though it is
about luxury that could become worthless because we squeeze out so much
value that it disappears. It is as if we love our heritage so much that we end
up destroying the very ideals it represents and possesses.
The author diligently asks what luxury really is and examines how luxury
moves from inaccessibility to mass luxury. Consequently several major que-
stions are raised about the management of a luxury brand, how customers per-
ceive luxury, the needs that are satisfied, the luxury scenario and relative mar-
keting, above all if, and should, a luxury product will stay inaccessible.
The author takes fashion as the role model and pinnacle of luxury but al-
so addresses other paradigms of luxury making this read equally applicable
for any type of luxury, from mega yachts to jewellery. This is perhaps the most
appealing aspect of the book for it demonstrates that intangibility and the ex-
periential need to live together for a true luxury product to remain luxurious.
Furthermore the book discusses the traits of luxury products, providing an
identikit of the three types of luxury known today: Mass, Intermediate and
Inaccessible luxuries.
Last and perhaps, foremost, the author proposes three new models that ad-
dress the positioning of luxury, its brand identity and accessibility.
The author suspects that in order for luxury to be protected and desired
we must tackle the question of accessibility and, where necessary accompany
vii

10. Everlasting luxury. The future of inaccessibility
our mass luxury product to its natural end, leaving true luxury inaccessible
and everlasting.
Prof. David Ward
Senior Lecturer in Business Studies
European School of Economics and Milan Politecnico
Milan, Italy
viii

11. ABSTRACT
Luxury was once upon a time only in the hands of the very few and wealthy
and therefore truly well out of the reach of the rest of society. It was also a
means of distinction and classification, a modus operandi for setting oneself
apart and hence the struggle was to ensure that this gap was maintained. Sin-
ce then luxury has evolved into a desire for being ‘part of’, or belonging to or,
as theorised by Maslow in 1943 it is direct consequence of mankind trying to
satisfy a need of affection, and to this one could also adjoin affiliation and af-
finity.
In the 21st century luxury evolved into several forms or stratum of sump-
tuousness, going from the original inaccessible luxury (as it is defined today)
to luxury for the masses in which the society of consumerism sets out to ele-
vate the customer to the lowest level of the luxury podium, that of mass lu-
xury. The latest trend is not just to ‘appear’ or distinguish oneself but to gra-
tify a psychological and emotional needs that stem from a pure experiential
value.
From the research conducted the echelon of society that seems to personify
this trend are the so called baby boomers, i.e. those aged between 40 to 60 years
of age, but more important is that the phenomenon is global. This has forced
radical changes in marketing policy and practise, especially for luxury and lu-
xury fashion goods. A brand, be it luxury or otherwise, is personified by a mix
of rational and emotional content.
A luxury brand cannot depart from rational and emotional, they must be
blended to match the very essence of the degree of luxury. In this way a pro-
duct that is classified as an inaccessible luxury will have a more emotional ra-
ther than rational flavour while a massified luxury will have more rationality
than emotionality. The bridge that links the two was found to be experiential,
represented today by intermediate luxury. Male baby boomers in particular
emphasise the search for self-actualisation (as described by Maslow), some-
thing emotionally rational and the cases of Tom Ford and Azimut-Benetti me-
ga yachts are major effigies of this today.
Tom Ford and the focused brief case study discussed herein, sets out to pro-
vide luxury clothing which is ‘emotionally rational’ with a strong emphasis
on authenticity and extreme personalisation. Ford interprets personalisation
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12. Everlasting luxury. The future of inaccessibility
not just in terms of the product of inaccessible luxury but also in everything
that is experienced with it, including the moment it is created, ordered and
worn. This pushes for recognition or the ‘it is who I am (and what you are not)’
implies social belonging yet social distinguishment, both at the same time, it
is the search for confirmation, consecration and completeness that open-up
new markets such as China and India for inaccessible luxury.
The Benetti group are the European leaders of their field and are witnes-
ses to the incredible growth of the mega yacht industry. Benetti is also emble-
matic of full customization, irrespective of price. Their diversification strategy
is not just about product diversification but also about setting themselves apart
from the competition, making them become the reference for inaccessibile lu-
xury in the mega yacht business.
The luxury market analytical tools available today, although tried and te-
sted, have several limitations including the need to evaluate a luxury market
that is changing and expanding and in which the customer is evolving too.
For this purpose three specific models have been created by the author and
discussed briefly in ‘Staying ahead of the competition…looking beyond the
conclusions’. The first explains the evolution of luxury versus the tangible and
intangible, the second and third express the emotional and rational to the de-
gree of inaccessibility and a spectrum of luxury.
In the first model inaccessible luxury and its characteristics remain immu-
ne and podium set while intermediate luxury sooner or later dissolves into
mass luxury that is then burn-out into the world of consumerism. The second
model depicts a spectrum of luxury and helps establish just where the brand
is located in terms of identity.
In the third model the inaccessibility of luxury is measured by the degree
or ratio of rationality and emotionality. The more a product is emotional and
experiential the more likely it becomes less rational, appearing almost frivo-
lous, meaningless and an exultation of rarity. Together with the final findings,
these models project the research even further and provide further under-
standing of the mechanisms that bring man to worship luxury, whatever its de-
gree of uniqueness.
x

13. CONTENTS
Preface vii
Abstract ix
Chapter 1 - Overview and Analysis of
the Fashion System & Luxury Market
1.1 The Meaning of Fashion 1
1.1.1 Modern Consumerism 2
1.2 Luxury Goods and their Characteristics 4
1.2.1 What does Luxury Mean? 5
1.3 The Consumer’s Behaviour 7
1.3.1 Motivation to Buy Luxury 10
1.4 The New Luxury Scenario 12
1.4.1 The New Needs of the Consumer 15
1.4.2 New High-End Customers 18
1.4.3 New Luxury Goods 21
1.4.4 What Makes a New Luxury Leader? 23
Chapter 2 - Marketing & Luxury Goods
2.1 The Marketing Concept 25
2.2 The Strategic Marketing Planning Process 26
2.3 The Marketing Planning Process 30
2.3.1 The Situation Analysis 32
2.3.1.1 The External Assessment 34
2.3.1.2 The Internal Assessment 37
2.3.1.3 Market Analysis and Marketing Research 39
2.3.2 Strategy Analysis and Choice 40
2.3.2.1 Assessing Growth Opportunities 45
2.3.3 Marketing Tactics 48
2.3.3.1 The Product Life Cycle’s Marketing Objectives 49
2.3.3.2 The Role of Marketing Communication 51
2.3.4 Marketing Controls: CRM 52
2.4 The Art of Luxury Marketing 53
2.4.1 Luxury Market Strategies 55
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14. Everlasting luxury. The future of inaccessibility
2.4.2 Luxury Marketing Mix 58
2.4.3 Luxury E-Marketing 60
Chapter 3 - Why Build a Brand?
3.1 Brand : Definition and Components 65
3.1.1 Brand’s Functions 67
3.1.2 Brand’s Competitive Advantages 68
3.2 Brand Equity Evaluation 69
3.2.1 Brand Equity Impact on Marketing 74
3.3 Brand Strategy and Implementation 75
3.3.1 Brand Extension 77
3.3.2 Brand Report Card 79
3.4 Luxury Brand Mapping 81
3.4.1 Brand Mapping Tools 83
Chapter 4 - Managing Luxury Goods
4.1 The Value of Luxury Goods 87
4.1.1 Luxury Target Market 88
4.2 Luxury Supply Chain 89
4.3 Luxury Brand Building 91
4.3.1 Luxury Brand Equity Model 92
Chapter 5 - Building a New Brand
5.1 Is Modern Luxury Really Luxury? 95
5.2 Tom Ford: An Example of Customer Oriented Brand 96
5.2.1 Customer Segmentation 97
5.2.2 A Functional Value Chain 98
5.3 Azimut-Benetti: Enjoying Unlimited Luxury 99
5.4 Conclusions 101
Chapter 6 - Staying Ahead of the Competition…
looking beyond the conclusions
Keeping Luxury Inaccessible 105
6.1 Tangibility of Luxury 105
6.2 Spectrum of Luxury: Linking Rational 106
and Emotional Value through the Brand
6.3 Brand identity of Luxury 107
xii

15. Contents
Appendix A George Simmel: the First Analysis of Fashion 109
Appendix B Giacomo Leopardi: Dialogue 111
between Fashion and Death
Appendix C Value Curve for the Typical Consumer Product 112
Appendix D From Marketing to Meta Marketing 113
Appendix E Getting into Consumers’ Heads 116
Appendix F From Input to Decision Stage 117
Appendix G Diamonds Online 120
Appendix H Tom Ford: the Man behind the Brand 121
Bibliography 123
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16. Everlasting luxury. The future of inaccessibility
Table of Figures
Figure 1.1 Maslow’s hierarchy of 5 needs 9
Figure 1.2 Model of consumer’s behaviour 10
Figure 1.3 The last 3 decades of luxury 12
Figure 1.4 The next decade of luxury 13
Figure 1.5 Relationship between human needs and personal income 16
Figure 1.6 Per capita income’s growing 17
Figure 2.1 Planning, implementation and control process 27
Figure 2.2 The Business strategic process 29
Figure 2.3 Value delivery process 30
Figure 2.4 Marketing control process 31
Figure 2.5 Marketing environment 32
Figure 2.6 Internal marketing 33
Figure 2.7 SWOT matrix 35
Figure 2.8 Porter’s Five Forces model 37
Figure 2.9 Porter’s value chain 38
Figure 2.10 Market definition 41
Figure 2.11 Common market segmentation variables 42
Figure 2.13 The four action framework 44
Figure 2.14 Value network option for market vs. Strategic segment 45
Figure 2.15 The strategic planning gap 46
Figure 2.16 Ansoff’s product - Market expansion grid 46
Figure 2.17 Product life cycle 50
Figure 2.18 Marketing mix strategy 51
Figure 2.19 Organization charts 52
Figure 2.20 Key success factors for luxury goods 55
Figure 2.21 Main objectives of luxury markets 56
Figure 2.22 Marketing function roles 57
Figure 2.23 Luxury goods’ price 58
Figure 2.24 Dior.com fashion show online video clips 62
Figure 2.25 Coach.com online avatar product video 62
xiv

17. Contents
Figure 3.1 Brand culture authors 65
Figure 3.2 The four components of customer value 67
Figure 3.3 Brand as relational area 69
Figure 3.4 The four components of brand equity 69
Figure 3.5 “Utility” approach to brand equity 71
Figure 3.6 Equity Engine by Research International 72
Figure 3.7 Equity Builder by Ipsos 72
Figure 3.8 Brand Asset valuator by Young & Rubicam 73
Figure 3.9 Brand Equity model by Kevin Lane Keller 74
Figure 3.10 Winning Brands by A. C. Nielsen 74
Figure 3.11 Brand value building 75
Figure 3.12 Brand and marketing impacts on sales 76
Figure 3.13 Brand strategy design 77
Figure 3.14 Brand equity goals 78
Figure 3.15 Clothing brand mapping 83
Figure 3.16 Interventions on image and purchasing behaviour 85
Figure 4.1 Consumerism’s effects 87
Figure 4.2 The categorisation of luxury 89
Figure 4.3 Competitive advantage 91
Figure 4.4 Brand-promise relation 92
Figure 4.5 Luxury goods’ brand equity model 93
Figure 5.1 Interior view of the Tom Ford store in New York 96
Figure 5.2 Steel Line Benetti 99
Figure 6.1 Luxury market shift 106
Figure 6.2 The spectrum of luxury brands 107
Figure 6.3 Brand identity 107
Figure A.1 Georg Simmel 109
Figure B.1 Giacomo Leopardi 111
Figure C.1 Value curve showing the contribution 112
of recycling technology
Figure D.1 The meta marketing framework 114
Figure D.2 Consumer driven innovation 115
Figure H.1 Tom Ford 121
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18. Everlasting luxury. The future of inaccessibility
Table of Tables
Table 1.1 Definition of luxury (USA data) 6
Table 1.2 Words that describe luxury 7
Table 1.3 Influencers on luxury consumers purchases 14
Table 1.4 Total HNWI estates 19
Table 1.5 HNWI in the world 19
Table 1.6 American luxury class 19
Table 1.7 Driving luxury by generation 20
Table 1.8 A new division of markets 22
Table 2.1 4Ps and 4 Cs 49
Table 2.2 Another “P” for luxury marketers 60
Table F.1 Example of IFE matrix 117
Table F.2 Example of CPM 118
Table F.3 Example of QSPM 119
xvi

19. Everlasting luxury is the very seed of luxury as we know
it today and in which the evolution of the customer and
market has generated a whole series of open-ended questions.
What are the implications of this change on the management of
luxury products and services? Do the existing marketing tools still
apply? And how does one go about founding and preserving a
luxury brand? To this end this research sets out to investigate fur-
ther and establish the boundaries of everlasting luxury, proposing
possible answers to these questions.
Claudia Chiari, born in Arezzo, graduated with a first-class
degree in Law from the University of Florence. She began her
professional career in one of Arezzo’s most important business
consultancy firms, where she is still on the Board of Directors.
Later she moved to London and completed an MBA, speciali-
sing in marketing, at the European School of Economics, an
environment in which she was constantly exposed to nationa-
lities and cultures from all over the world. There she experien-
ced first-hand the importance of cultural exchange and team
work that allowed her to evolve both professionally and individually. She learned
new skills such as working in multi-cultural teams, ‘glocal’ management issues,
decision-making, planning and communication styles.
Milan was the next stage of her professional development where she became invol-
ved in university and entreprenuerial projects. An initial predilection toward the
luxury sector was further intensified through the various seminars, conferences and
events that she took part in, with as much focus on editorial production and orga-
nisation as on magazines and web portals.
A passion for communication led her to expand her knowledge of the publishing
sector and in 2008 she was appointed as the editor and head of external relations
of Editrice Le Fonti, a leading publisher for the financial, legal and art sector in Italy.
She has recently taken on the role of sales and marketing manager in a German mul-
tinational company.
Here the young, dynamic and international environment is already offering her fur-
ther opportunities for professional development and consolidation.
€ 40,00