Luxury Brand Positioning

By John Dudovskiy
August 18, 2012

Luxury BrandThe positioning of the products, namely the luxury brand fashion products which are designed and aimed at upmarket customers in the form of differentiated products may have several forms and varieties. This is to say that the luxury brand fashion products can be positioned in the market based on the usage or function of the product, price of the product, being a substitute product and many more.

According to Callen (2009) luxury brand fashion products may be positioned in the market as a substitute product to products. This is to say that even if there is already a product which is targeting the same upmarket segment, the new substitute product may be offered that adds some twists and changes to the product that may also create another niche market within the concentrated and niche market. Even though this marjet segment tends to smaller than the original market segment, it still can be profitable and worth positioning by luxury brand fashion products as the prices for the products will be too high compared to other market segments.

Alternatively, Hackley (2009) states that the price may be another focus when positioning the luxury brand fashion products. In the high street clothing industry, the top designer brands usually create their designs first, which is usually copied and launched to the market market by other mid-to-low market focusing companies. However, in some cases, a company in the mid-to-low market may launch a product that may trigger the luxury brand fashion company to launch the similar product to the upmarket as exclusive and unique product as some customers are willing to pay extra for the extra add-ons on the products. The author calls this as copying from midmarket and introducing it to the upmarket which usually have been successful in the high street fashion sector and it is also a common practise.

Klein (2007) explains the “price”  based positioning of the luxury brand fashion products by giving an example of focusing on the designers and colours which are usually focused by Laura Ashley’s English country patterns and United Colours of Benetton’s against an example of Gap ‘s understated American casual wear that all provide for brand differentiation.

However, as mentioned by Doyle (2008), registering a clear brand in the retail industry, particularly luxury brand fashion sector is becoming increasingly difficult and challenging for the companies in the sector. This is to say that the ever increasing competition, media costs escalation and negotiation between the designers, retailers such as high street giants adding extra complexity in the luxury brand fashion products to be positioned accurately and appropriately. However, the theorists also suggest that for luxury brand fashion products to maintain their brand and its identity is very crucial for their survival both in the short and long terms.

Therefore, Luck (2008) states that entering into the luxury brand fashion products sector is becoming more and more complicated given the fact that the market for this products in certain regions is becoming saturated. He mentions about developed countries as already saturated markets for the purpose of positioning luxury brand fashion products as this requires high costs due to high entry barriers into the market.

However, Lockstorm (2007) states that rather than focusing on the developed countries, new market entrants in the luxury brand fashion products are focusing on the developing countries such as China, Malaysia, South Korea in the Asian market which is considered to be very promising for this industry companies. This is to say that the demand for luxury brand fashion products are increasing rapidly due to the improving living standards and increasing consumer spending in the Asian markets which is a next market focus for majority well-established fashion products as well as new market entrants into this industry.

According to Gilbert (2003) the company focusing on positioning their brand in the market has to focus on the following equation:

Brand differentiation X Brand segmentation=Brand position

Even if this equation is a common way of differentiating the product first from other hundreds of product lines in the market and then placing it in the right market segment after identification which leads to a brand positioning, it still may have several issues if the brand is not differentiated properly or the market segment identified is not appropriate.

Baker (2007) states that when positioning the brand, the company has to identify the gap in the market which then will be targeted as a potential market segment for the company. However, in the case of luxury brand fashion products, companies usually focus on the colour, design if it is traditional or modern focused, size such as from zero to extra large and names. This is to say that some companies succeed in positioning their products and brands due to their unique colour which can be seen in the case of United Colour of Benetton’s, Burberry which achieved its successful positioning due to its cloths used in making its products.

Therefore, it can be said that when positioning the luxury brand fashion products, the companies have to identify the market segment which is saturated and not very competitive and differentiate their brands in order to suit into that gap in the market segment which leads to effective and successful brand positioning for the companies.


The risks of poor brand positioning

There are several factors that a company has to consider when positioning the brand in the market. If not positioned properly, it may face several risks which may lead to the failure of the brand. Therefore, Gilbert (2003) offers the following checklist for companies to consider if the brand has been established and positioned properly:

The brand and its products are apparent to the customer and offers real added value to them. This indicates that simply paying premium for the brand is not a fair strategy for the consumers as the brand and products behind it also should offer value to money to the consumers.

The brand is built upon real brand strengths which reflect performance potential. This indicates that the purpose of use and functions of the products behind the brand should also meet the requirements of the consumers. And the brand should be clearly differentiated from the rest of the competitors as when the brand name is heard, the consumers should imagine it as the only option for that specific purpose.

Moreover, the brad should also be achieved and defended if attacked by the competitors. Due to high competition in the luxury brad fashion industry, each brand in the market has to be unique in its sense of use therefore should be the best and only one in its specific market segment.

However, as mentioned by Lancaster et al (2002) a brand that is not positioned successfully with a fuzzy position or not offering a clear proposition is likely to be eclipsed or weakened by the stronger competitor. One of the examples of the weaker positioning is always cutting the brand’s prices which make it less different from undifferentiated products and customers in the niche market will not be willing to pay extra for the ordinarily priced products.

Other risks associated to brand positioning if not positioned appropriately can lead to the following risks:

The company may find itself in a position where it may find it difficult to compete with other stronger competitors if the market segment is not correctly found. This leads to the failure in the competition.

Or the company may find itself in a position where the demand for its products may be falling and other competitors already left the market due to ending life cycle of the industry. This also leads to the failure of the brand as it may not be able to generate the expected sales revenue or achieve higher profit margin due to falling demand.

Another risk to poor positioning is that the consumers may not know the distinct features and functions of the brand products as the communication about promoting the brand has not been successful as intended. This also creates confusion and leads to brand failure if not repositioned appropriately.

Therefore, it is recommended that when positioning the brand in the market, the company has to be aware of the changes in the external environment such as changes in the demand and customer preferences, trend in order to reflect them in the dynamic and competitive market.


  • Baker, MJ & Hart, S, 2007, The Marketing Book, Butterworth-Heinemann
  • Callen, B, 2009, Managers Guide to Marketing, Advertising and Publicity, McGraw-Hill Professional
  • Doyle, P, 2008, Value-based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value, John Wiley & Sons
  • Hackley, C, 2009, Advertising and Promotion: An Integrated Marketing Communications Approach, SAGE Publications
  • Klein, G, 2007, Strategic Marketing, GRIN Verlag
  • Lockstrom, M, 2007, Low-Cost Country Sourcing: Trends and Implications, DUV
  • Luck, D, 2008, CIM Coursebook Assessing the Marketing Environment, Butterworth-Heinemann

Category: Marketing