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- 10 May 2010
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The HAUTeLUXE™ series: Step 6 – Are we right for each other?

By approaching brand building like the stages of a love story, each extract from Philippe Mihailovich forthcoming book argues that luxury branding is more about human relationships, passion, desire, love, trust, family, kinship, honour and heritage than the mass market theories often used by companies today. The sixth in his monthly series sheds light on the etiquette of stretching your brand into new territory.

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Throughout these extracts we have insisted on the importance of building a one-to-one relationship with your client, just as in any long-term relationship. As in all relationships, both partners evolve and change over time, for better or for worse. Ideally they grow together, share positive experiences together and bond more closely. Brands need to keep moving and to keep adding to their life stories by bringing us new and exiting products or experiences season-by-season or year-by-year. Each new story sows the seeds of new legacy.

The first product or the best seller often forms the core of the brand’s reputation. Assuming the brand began in millinery, it may have to evolve into fashion for pleasure or to stay in business, as Chanel did, evolving later into perfume and even high jewellery. Today it’s almost an expected thing for a designer to do at some point to generate additional awareness and income. So how come Chanel hasn’t moved into lingerie? It’s been the fastest growing fashion category over the last ten years. Why is it not making menswear? These brand-stretching decisions cannot be taken lightly. Slapping your name on anything can often do more harm than good. If you love an artist as well as his/her work, how would you feel if that artist, who’s art you respect, stops and becomes a stunt man? Your whole relationship could change. It’s not easy to switch from one reputation to another.

Conventional brand theory suggests that if a brand stretches beyond it’s peripheral traits the brand runs the risk of introducing something ‘out of the brand’, representing high risk, most often leading to failure. Virgin is one of the few companies that has taken such risks and has mostly succeeded. It has been argued that Virgin has sown two cores, one for music the other for travel (1). As Virgin became an attribute-based rather than product-based brand, it made sense that the brand’s hot air balloon adventurer-founder would be someone who could own an airline. Today we accept Virgin as a credible brand for space flights. It’s all a matter of bridging the gaps in our minds so that we can accept and trust a brand in a new category. Had it not been for the personality of Virgin’s Richard Branson himself, it is doubtful that his airline would have succeeded. Not all brands can do that. A living griffe seems to have more right to break rules than do corporate managers controlling an established DNA brand.

Armani has stretched his reputation across many categories but all are design-related. A brand should always entrench its reputation somewhere before attempting to broaden its activities – as with a rubber band. To stretch, it needs to be fixed at one end first. Brand DNA begins with these fixed ends or roots and if those roots are undeveloped, the brand may not be strong enough to support any stretching. Where the brand’s expertise is seen to begin is often critical to the brand’s credibility and its ability to stretch further.

Traditionally, companies tend to consider line extensions on the basis of the line of business they’re in i.e. ‘stick to what business you are in’. If they work in the fashion business, they may naturally prefer to extend into textiles instead of hotels. Following this doctrine, Vuitton may have evolved from trunk making into coffin making. Nowadays, we consider what businesses a brand’s clients will accept their brand to be in (Fig 1). It all begins with reputation and what it is linked to and from there onwards the life of a brand can become infinite.

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Reputation

Reputation takes time to build but we should be aware of which elements can be called into play to do so. In his book Global Brand Strategy (2), Sicco Van Gelder identifies six key criteria that make up reputation: Pedigree, Quality, Endorsements, Origins, Promises, and Personality associations.

Pedigree brands are often connected to a region, a legacy or a founder. The pedigree implies to consumers that the brand has special qualities that cannot be matched in a specific category however Origin brands will have reputations that are not exclusive to a particular product or service category – what Switzerland brings to timepieces, chocolates, cheese, skin care. The reputations of Promise brands are based on attitudinal, behavioural or ethical promises by the brand, or at a minimum, the expectations that consumers are allowed to have of a brand i.e. the skin care line from Dr. Perricone supported by his book, The Perricone Promise or the values expressed by the brand such as social, environmental, lifestyle and attitudinal issues. Break these promises at your peril!

With Endorsed brands, the endorsement comes from a source specific to the category and differs from Personality brands based on celebrities. Endorsements that really add value to luxury brands are obviously media editorial recommendations or when the famous are understood to be customers or are seen to collaborate with the brand for good reason. The fit between the celebrity and the brand must make sense, for instance, ‘precision’ fits both Rolex and Tiger Woods. Celebrity endorsements could damage a luxury brand if the only reason is fame.

The brand’s attributes need to be nurtured and developed step-by-step, and each one can add another layer to the brand story and it is this that enables the brand to begin to stretch across market categories, but in every market that it enters, it must innovate. Respect must be maintained at all cost. Contemporary brands such as Kitsuné launched into music and fashion from birth because they felt like it, but they’ve innovated in each category. Concept store retailers are further examples. They can do anything from clothing to music to restaurants to hotels should they wish. What they are totally clear about is what they believe in. Their focus is clear.

These retail brands closely resemble magazines. The founders often act as editor, griffe as well as face. As brands, magazines tend to be amongst the most thought-through and focused. They are designed to attract a very specific well-defined market and have editorial dialogues that enable them to create an intimate bond with their readers. They cover whichever subject they wish, as long as it fits with the philosophy or ideology of their title, and they may change their content monthly to remain fresh. It is not surprising then to find that they too attract a cult following. It’s not surprising either to find today’s luxury brands producing their own media ‘content’ too.

Vision

To design a brand that will have an ability to stretch, it is always useful to consider the long-term vision of the brand from birth. A rough method of planning the elasticity potential of a brand based on its existing DNA, is proposed in Fig. 2.

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The Brand Stretching Matrix shown, is in reality, a simple model that can be used to question how far a brand’s reputation may stretch in the consumer’s mind. It is perhaps more useful as a tool for examining the extent to which the DNA of a brand may have to be adjusted in order to justify a line extension. The rings act to remind us where the brand’s expertise was born. It is worth noting that many leading fashion brands started with bags or moved very quickly from saddlery or trunks into bags. Vuitton, Gucci, Prada, Hermes, Bottega Veneta, Loewe, and Fendi for instance. Is it an advantage?

Note how, due to Dom Perignon’s champagne and monastic heritage the brand cannot readily stretch into areas such as fragrance or fashion with much credibility. Should it wish, it could probably extend into champagne bars and restaurants, and later perhaps, high-end luxury hotels. To stretch into fashion, Vuitton built on the reputation of Marc Jacobs and for ‘haute joaillerie’ the marque employed jeweller Lorenz Baümer. Renting reputations can help bridge gaps.

“Because we are jewellers, we have to overcome a certain amount of scepticism towards our watch-making creations,” said Maximilian Busser, MD of Harry Winston Ultimate Timepiece SA Geneva (2). “This gives us one more reason, not that we needed it, to create very innovative timepieces that separate themselves from the rest of the 200 year old house-hold names. We have lead this way since our first watch, the double retrograde perpetual calendar, and have created one watch-making world premiere every year since 1999. Our team now has the definite feeling that the world of connoisseurs is waking up to this fact” however the company does collaborate with timepiece talents such as Jean-Marc Wiederrecht and Francois-Paul Journe.

Costes, the luxury Parisian hotel and restaurant group has successfully expanded into a large network of restaurants and part of its success is not to apply their name to all. They simply publish a high quality magazine called Palace Costes, which lists the all their restaurants under the title, Le Club Costes. What’s smart is that its image is not cheapened by any overt visibility, unlike perhaps, Armani. The Costes brand has successfully earned its reputation on the world’s lounge music scene with its series of innovative DJ compilations and has also succeeded in creating trendy fragrance line based on a reputation earned through its signature hotel scent created by the renowned ‘nose’, Olivia Giacobetti.

The Source

Although our era has witnessed a trend towards specialised niche brands, it does not mean that the days of the broadly diversified brands are over but we should note that specialisation often implies a more focused promise, a specialist identity and thereby more respect and credibility. Pinel&Pinel is a fine example. Some believe that the more you expand, the safer it gets, meaning that you are less dependent on one market. Few stretched brands are ever market leaders of a sector. Under the direction of PPR’s Gucci Group, the jeweller, Boucheron is expanding its brand into sunglasses and even Vertu cellphones. It may eventually chase Bulgari down the hotel route.

To stretch or not to stretch depends totally on what your brand promise is. If your brand has been built on a philosophy or ideology, it may be more able to stretch across many product market categories without harming its integrity as its roots are linked to an ideological identity instead of a product-focused identity. For some reason it just feels more authentic when the founders such as Giorgio Armani and Richard Branson stretch their own brands than when new owners or licensees do so. Pierre Cardin confused us because we could not see the links between one category and another. Muicca Prada with her design links to Miu Miu and Prada did not.

In the final analysis, stretching sideways is not that complicated as long as you don’t lose your believers on the way. More difficult is to stretch your brand up-market. How easy is it to move from working class to upper class? Don’t miss next month‘s extract.

(1) Mihailovic, P. ‘Time to Scrap the Rules: Entering Virgin Territory’, The Journal of Brand Management, Volume 3, # 1, August 1995, pp22
(2) Van Gelder, S: Global Brand Strategy. Kogan Page (2005)

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Philippe Mihailovich

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Read The HAUTeLUXE™ previous publication in series:
Step 5 – Meet the Family and Friends
Step 4 – Who’s in your past
Step 3 – Getting to know you
Step 2 – Getting interested
Step 1 – You’re Gorgeous

For more details about the book or to view video interviews, see www.hauteluxe.net