Marketing and Strategy Innovation Blog by Futurelab: Balancing Luxury, Tiffany Style

Luxury brands face a difficult challenge: they must be exclusive, and usually expensive, to maintain their elite status. At the same time, a brand that has extremely limited distribution may not be able to acquire or maintain the visibility in the marketplace that makes the product both recognizable and desirable.



A brand that is so limited in distribution that few have heard of it fails to create aspirational buyers who dream of owning it, and doesn’t communicate to others the status of those who DO own it. According to J. N. Kapferer and V. Bastien, authors of The Luxury Strategy, one way to create a balance between exclusivity and visibility is with “access products.”



Yesterday, I saw a full page newspaper ad (placed shortly before the celebration of Mother’s Day in the U.S.) for Tiffany Keys, a product of Tiffany & Co., that provided an excellent illustration of this strategy. The ad was largely white space, with an illustration of the key-shaped pendants. A single very short paragraph of text introduced the reader to mystery and excitement of the Tiffany Key line. Extremely brief product descriptions and prices could be found, but only in microscopic type at the bottom of the full-page ad. Even the store location was limited to the words “Austin The Domain” and a phone number, both in the same tiny font. (I suppose the implication is that if you qualify as a Tiffany buyer, you’ll know where they are.)

The purpose of access products, according to Kapferer and Bastien, is twofold. First, they provide an entry-level product for the “future faithful.” Those are the buyers who are unlikely to invest in the top of the line product now, but can be drawn into the brand experience with a less costly (but still high quality) product. Second, an entry-level product can satisfy what the authors call “day trippers” – casual consumers of luxury items and who don’t have strong brand loyalty.

In every case, it’s important to provide the same brand experience – the buyer must be made to feel they are a valued and respected customer whether they are buying at top of the line or the lowest-cost entry-level product. This is key in building brand loyalty and elevating the customer to higher levels of product.

The challenge is to make the entry-level products accessible and visible without cheapening the brand image. If buyers being to perceive that the luxury brand is primarily in the business of selling these comparatively inexpensive products, the brand will lose its luster and luxury status. The marketplace must perceive that the firm’s flagship high end products are indeed vibrant and an important part of the firm’s business. Keeping the high-end products visible (for example, by fashion shows, celebrity use, etc.) allows the firm to offer lower-end products without destroying the brand.

I think Tiffany does a great job with their minimalist ad – just three products are illustrated, one absolute top of the line, one middle of the road, and an entry-level product. Looking at the ad, one would have no idea that a gulf of over $6,000 separates two of the products, and that the least expensive one costs little more than dinner for two at a fancy restaurant. Only careful inspection of the fine print reveals that difference. (Of course, even the $175 price might be considered a bit extravagant for a small silver pendant, but it’s definitely accessible. Indeed, its status as a modest extravagance is part of the product’s cachet. Buyers of the $175 key are buying the iconic blue box far more than they are buying the best silver pendant one can find for that price.)

Kapferer and Bastien note that even Tiffany lost its way some years ago by overemphasizing its less costly products. This branding gaffe began to erode the firm’s luxury image, and the blue box began to lose its status as a symbol of the ultimate in fine jewelry. Tiffany management changed direction to limit geographic and product line expansion, and was able to reverse the negative trend.

One way Tiffany maintains its brand image is by controlling the retail environment for its products. If one saw the same $175 Tiffany key offered at a discount by a dozen department stores, it wouldn’t be the same product. Entry-level customers wouldn’t get the Tiffany retail experience, and they might begin to compare the product with even cheaper alternatives made by others. At that point, a Tiffany key becomes just an overpriced trinket with a fancy label.

For those Neuromarketing readers don’t spend their days promoting luxury brands, there is still much to learn here. Tiffany’s success includes elements that all marketers can study – setting the tone for an entire product line with a highly desirable (even if inaccessible to most buyers) is one. Controlling the customer experience even with the tradeoff of more limited distribution is another.

And, readers, don’t forget – Mother’s day is around the corner!Marketing and Strategy Innovation Blog by Futurelab

Futurelab: Facebook Visited Twice as Often as Google in the Workplace (and Why You Shouldn’t Ban Social Media at Work)

Employees are visiting Facebook more than any other site when they are at work, and twice as often as the second most visited site, Google. Research out this week from Network Box, a Managed Security Services company, shows that visits to the social network accounted for 6.8% of all workplace traffic in Q1 2010, exactly twice the 3.4% of all traffic that went to Google.

The research is based on analysing 13 billion URLs visited by a sample of workplaces in Q1 2010 and the company behind the research suggest that they underline the fact that IT Managers should be concerned about the amount of time employees are spending on social networks at work.

But the findings are not as clear-cut as this. And they should not be used to add weight to the misguided corporate policy of banning all access to social networks at work.
People are more likely to access Facebook out of work than in work

In March we saw Facebook become the most visited site in the US. With 7.1% of all web traffic (from workplaces, home and all other locations) going to Facebook. A smaller proportion of workplace traffic goes to Facebook than the average for all traffic. And, whilst we don’t have this data, we can infer that traffic from home must be much higher to average in this way.

People are visiting Facebook at work – but are visiting the site less often at work than out of work.
People are much more likely to visit other sites

By saying that Facebook is the most visited site from the workplace hides the fact that many many other sites are visited. In fact people are almost 20 times more likely to be visiting a site that is not Facebook. And because different people use the internet for different things to do different jobs it is unlikely that there are many websites that are common to them all. A law firm might ind that its employees spend the overwhelming majority if their time on legal journals and regulation websites, for example. But the sites visited in an Estate Agency or FMCG business would be very different. By aggregating all of these different people, doing different things in different industries there are likely to be very few common sites.

And let’s not forget that 6.8% of all web traffic is still quite small and could easily all take place during a lunch hour.
Social media sites are not necessarily bad

There is an assumption in some workplaces that social media and social networking sites are necessarily bad for employees. I have seen some internal social media policies that state “We should discourage employees from using social media”. This is dangerous and also denies the benefit that social media can bring to any organisation. Social media is becoming increasingly important for any business – wanting to work with and engage stakeholders, customers and even employees themselves online.

Social media can be scary – and even business needs to write a social media policy. But the basis of this should not be banning things but encouraging people to use things. Your employees are already talking about your company in social media, talking to customers and representing you. Whether you know it or not and whether you want them to or not. The best approach is not to ban people but to give them training. To tell them what is reasonable and what is not and to encourage them to represent the business appropriately online.

Firms don’t ban employees from talking to other people, answering the phone or responding to emails. But they do give them training on how to do these things and what they should, and shouldn’t, say. They should take this approach to social media and not one that bans things.
Most firms are anxious because they have no social media policy

Most firms are anxious about the amount of time employees are spending on social media sites for two reasons:

* They don’t understand what they are doing on the sites
* They have no policy to deal with it

The simplest thing any business should do is to write a social media policy, and to write one that encourages people to use and to represent themselves and the firm in social media in the right way. The policy should not ban, but should offer training. Employees are using social media already and talking about their employer the work that they do. They should be your best brand advocates online, but banning social media will not achieve this.

Research by Manpower earlier this year showed that 80% of firms have no social media policy. For me this is the biggest concern, not the amount of time people are spending on certain sites relative to other sites.
Does your firm not have a social media policy?

If your firm is one of the 80% without a social media policy then take a look at our previous posts on:

* Why every business needs a social media policy
* How to write your firm’s social media policy
* What to do once your firm’s social media policy is written
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