The importance of the brand in the luxury products sector

By John Dudovskiy
August 18, 2012

brandKotler (1997) defines a brand as a name, sign, symbol or design or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

By creating brand image and name, retailers, especially luxury brand companies which target upmarket customers usually differentiate their products, hence charge higher prices. Hall et al (2007) also supports Kotler (2007) and states that when promoting the brand image and name, retailers should be aware of the specific market segment they are targeting as luxury brands usually tend to focus on niche market.

Lancaster et al (2002) also mentions about the importance of strong and popular brands as a key to a long term and consistent success in the future. They state that successful branding is derived when the company can associate or create a personality of the brand and when customers can not imagine their lives without those brands or these brands become an active part of their lifestyle.

Gilbert (2003) further illustrates the importance of the brand as by associating it to emotions and experiences. He states that an individual’s awareness of the world is made up of experiences, learning, emotions and perceptions or in other words cognitive evaluations of such experiences. This image obviously creates an individual’s preference and motivation towards products as it will provide a pull effect resulting in different demand schedules. Therefore, he defines a success of brand as not what thet company outs in it, but how the customers perceive it and associate it to some of their emotional and cognitive evaluations.

The strong positive brand is very important in the developed and highly competitive markets. Therefore, the UK is an example for a marketplace where the existence of a strong positive brand image of luxury products lead to successful market positioning, hence leading to being able to focus on niche market or serve specific market segment. This is due to the fact that the UK retail market, especially clothing and luxury clothing markets are almost saturated which indicates that market growth is very slow. This leads to luxury product companies competing with each other for their existing customers. Hall et al (2007) also state that the UK luxury clothing companies should focus on the recognition of their brand names and images if they wish to survive and prosper in this highly competitive market.

Luck (2008) also supports the importance of brand image recognition and promotion in the highly competitive and mature markets such as the UK. He states that as the marketplace becomes mature, there is a need to rise above the mass and confusion of competing offers. Therefore, he says that brand, if managed properly, can confer individuality that is something different among the crowd.

Pickton and Broderick (2005) indicate that the role of brand is one of the most importane factors in order to reach a luxury level of ordinary products. They state that a product is an ordinary product if it does not have a strong brand image. However, an ordinary product can be turned into a luxury fashion product if it achieves positive and strong brand recognition. They support their statement by pointing out to the fact that luxury fashion brand products such as Burberry, Dior, Gucci, Louis Vuitton and Prada have relatively very low manufacturing costs, however, majority of their costs relate to the advertisement and promotion costs, which indeed pays off due to strong brand recognition of these products leading to charging high prices.

Kotler and Keller (2006) also support the fact that luxury fashion brands should invest heavily into the promotion and recognition of their brand images and names if they wish to be able to charge premium prices for their products. They state that if luxury fashion brands manage their brands properly, they can even make their products not only luxury, but also a necessity in order to be in certain social status. Their statement can be supported by the trend in Japan where 94% of women at the age of between 18-25 have Louis Vuitton bags. This indicates that the desire to have these luxury brand products tend to have turned into necessity rather than luxury.

Hackley (2009) states that the most successful luxury fashion brand products do not only focus on relatively small market niche, but also they extend their brand by focusing on relatively larger market segment. This obviously leads to higher sales and more profitability, hence satisfies the definition of effective marketing.

In the case of the UK luxury fashion products sector, the competition is very high due to market saturation. Therefore, companies experience slow growth and declining returns. Each company therefore attempts to defend its market share by differentiating their products from the general crowd in the market. In majority cases, this is done by focusing and creating a strong brand image in the marketplace (Hall et al, 2007). Therefore, the role of brand, its advertisement is very crucial for luxury fashion products.

Gilvert (2003) states that the role of the brand should enable the organization to the following:

  • Build stable, consistent and long-term demand based upon increasing brand name strength
  • Build and hold better and higher margins than the companies that have weaker and less recognised brand images and names
  • Differentiate themselves through creating associations, individual identity and cognitive links between the brand, company and the customer that can endure over long periods of time and which may allow brand stretch
  • Add values that make customers come back and do repetitive purchases, thus leading to customer loyalty and relationship marketing
  • Protecting themselves against aggressive competitors by strengthening barriers to entry
  • Transform themselves into companies that are attractive to work for and deal with
  • Negotiate with suppliers form a position of an improved strength

Gilbert (2003) further points out to the fact that when companies are building their brands in the luxury fashion products sector, they have to ensure that every contact and element within the company should ensure a sustainable long-term brand as a strategic direction. He warns that a focus on short term profitability may adversely affect the recognition and promotion of the brand of luxury fashion products in the long-term.


  • Hackley, C, 2009, Advertising and Promotion: An Integrated Marketing Communications Approach, SAGE Publications
  • Kotler, P & Keller, K, 2006, “Marketing Management”, twelfth edition, Prentice-Hall
  • Luck, D, 2008, CIM Coursebook Assessing the Marketing Environment, Butterworth-Heinemann
  • Lancaster, G, Massingham, L & Ashford, R, 2002, “Essentials of Marketing”, fourth edition, McGraw-Hill
  • Pickton, D, & Broderick, A, 2005, “Integrated Marketing Communications”, Pearson Education Limited, Harlow


Category: Marketing