The luxury brand is a phenomenon with greater resonance and importance than ever, yet it is something that has been with us for a long time.
Indeed, one can generally say that the more illustrious the provenance of a brand, the greater is its appeal. The word ‘luxury’ is greatly overused and abused, for such is the sense of value, uniqueness and exclusivity evoked by it that everyone would like to be associated with the term, even when not exactly satisfying the standards implied.
The Mechanics of Luxury
What makes something truly luxurious is a rather poorly defined concept of desirability and privilege that we can’t readily quantify as much as we can sense it.
We would all agree that Bentley, Ferrari, Chanel and Dior represent luxury, but ask someone to establish a precise dividing line supported by a clear rationale and they will mostly struggle to do so.
Luxury is therefore all about an experience – an experience that makes those who receive it feel special. From an economic point of view it takes the utility derived from a product or service to the next level, extending well beyond need fulfilment and pleasure to the realms of the rare and beautiful – with all the implications this has for price elasticity of demand.
We prize experiences that are both pleasurable, regarded as being of quality and those that are rare. The measure with which the experience can be replaced or reproduced has an affect on its desirability, and therefore its price.
Naturally, not everybody can afford the greater luxuries, and in limiting consumption to a select few, the exclusivist cost factor reduces supply output and thereby further enhances both the sense of exclusivity, or luxury, and the accompanying price tag.
Acquiring ‘luxury’ status
Suffice it to say that if you find yourself in this position as the producer of a luxury good or purveyor of luxury services, you are certainly on to a good thing. Joining the club, so to speak, is certainly possible, but not easy.
Much of the aura surrounding luxury and privilege is woven into having a rich and illustrious past, as is reflected in the fact that many an exclusive brand will proudly indicate since when it has been in operation or been in commission to royalty…
Words Michel Cruz