Rethinking Prestige Branding

Secrets of the Ueber-Brands

Wolfgang Schaefer, JP Kuehlwein

• Publisher: Kogan Page
• Year: 2015
• ISBN:
  9780749470043
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Marketing
• Index: Marketing

What makes someone covet a Kelly bag? Why are Cirque Du Soleil or Grey Goose so successful despite breaking all the conventions of their categories? What does Gucci's approach to marketing have in common with Nespresso's? And why do some people pay a relative fortune for Renova toilet paper or Aesop detergent even though they hardly ever 'advertise' and seem to have none of the 'functional performance advantages' conventional marketers would seek to demonstrate? Prestige brand experts JP Kuehlwein and Wolfgang Schaefer have dedicated themselves to studying what drives the success of prestige brands. Rethinking Prestige Branding collects their insights.Uncovering the secrets of why and how some brands are created more equal than others, Rethinking Prestige Branding includes over 100 case studies from Apple and Abercrombie & Fitch to Tate Modern and Tesla. Rather than re-telling brand success stories or re-hashing long-standing marketing principles, it takes readers on a colourful journey behind the scenes of today's marketing pros. This book will fascinate marketing professional just as much as those who are simply curious as to how premium brands tick.

PART ONE Rethinking prestige branding

When we started this book, our goal was fairly easy and straightforward: share our insights and learnings on how prestige brands function, how they are being built and what makes them secure in their comfortable position on the upper end of their categories, relatively sheltered from price sensitivity. Now, almost four years later and after hundreds of expert interviews and a countless number of case studies things are not so clear-cut anymore, largely because the parameters of prestige have become increasingly blurred: What defines prestige brands today and what distinguishes them from their non-prestige counterparts? Does prestige the way we know it, or used to know it, even still exist? Or is the concept completely outdated? Have we all ‘traded up’ (Silverstein and Fiske, 2003) to the point where there’s no difference anymore and everything is prestige – or nothing? Where the attempt to classify prestige vs other brands seems totally futile, where luxury has ‘lost its lustre’ (Thomas, 2007) and become completely subjective?

We think not. The concept of prestige will always exist as it is baked into our human need for distinction as well as aspiration. But it’s time to take a closer look again. It seems we are in the midst of a big shift in how this need for prestige manifests itself, which role brands play in this and how. We, that is the marketing world and all of us partaking in it – professionally or privately – are seeing old rules and behaviors still present but new ones starting to take their place. Classic categorizations like ‘luxury’, ‘premium’ or ‘mass’ are in flux and new, only recently ‘inaugurated’ ones like ‘masstige’ or ‘super-premium’ are almost on their way out again. We are living through times of change, creating and experiencing a lot of unclarity and contradiction in our market- and branding-dominated worlds – but also enormous excitement and intrigue.

Based on all the analyses we did and all the conversations we had – and confounded not the least by our daily experience as practitioners – it seems there is a new kind of prestige emerging. And in its wake there’s a new kind of marketing taking hold, new mantras and mechanisms that are becoming common ground, a new language that seems to be establishing itself. Of course most of these changes are less revolution than they are evolution, but many of them are yet a revelation. There’s a healthy mixing and merging of the tried and true with the new and breakthrough, partially enabled only recently through new technologies or driven by a generally evolving marketscape and consumer consciousness. The prestige rules, while by no means all reinvented are being reshuffled and redefined. Which is why we thought it important to revisit them.

Modern prestige brand founders (clockwise from top left): Johan Buelow (Lakrids), Lindsey Boyd and Gwen Whiting (The Laundress), Benoit Ams (Smith & Norbu), Maria Sebregondi (Moleskine), Adam Lowry and Eric Ryan (method)

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Courtesy of the respective brands

All this is spearheaded by new brands appropriating patterns and strategies that until not long ago pertained exclusively to prestige or, as Jean-Noël Kapferer, one of the leading thinkers in this area would argue, only true luxury brands and their categories (Kapferer, 2009). But, there are also established luxury or premium brands acting in less expected ways, rethinking old musts with aplomb and venturing into previous no-go areas with gusto – like social media for instance. And that makes for a rather motley crew, living and breathing prestige in very modern ways – decidedly cross-generational, as some players are centuries old where others are newly minted, and enthusiastically cross-border, as they are growing in categories and at price points as diverse as possible. Which is why we coined the new term Ueber-Brands: their prestige is way beyond traditional notions and expectations and they set new standards for this very old concept that take our hearts and minds and their markets on a journey into the future. They are a cut above the rest, in standing but also in the way they guide our thinking – in a word, they are ‘Ueber’.

What defines these brands, what unites them and how they build their business and their success is what this book is all about – culminating in the seven principles of modern prestige or Ueber-Brands and case studies featuring brands from long-established and rarefied Hermès to popular behemoth Red Bull, from small but high-minded Aēsop via activist Patagonia to rather fun and funky MINI or Freitag and others.

But before we get into the details of what we really mean by Ueber-Brands and what are their commonalities despite all their differences, we will first set the stage – if ever so briefly. This is what these following introductory pages are all about.

First we will lay out some of the key socio-economic and technical dynamics that are driving this change in our approach to prestige. ‘The Times They Are a-Changing’ maybe a somewhat pretentious or even preposterous title given the adoration that Bob Dylan and his anthem still command, but as we’ll see, the changes we are going through seem to be little less profound than the ones in the sixties, when the human rights movement shook up our societal order.

For all readers that are not so versed in the evolution of our marketing world and the concept of brands, we will go through ‘A Brief History of Branding’, showing how what were once merely markers of quality have developed over the past century to become beacons of our culture and bellwethers of our collective myths.

Finally, in the third chapter, we will lay out some of the defining qualities of this ‘New Kind of Prestige’ that we see emerging: the three key dimensions of Ueber-Brands and how they enable their stellar position – from the importance of mission and myth to the new balance between connection and exclusion to their need for truth. We’ll give you an overview of what constitutes modern prestige and how this new world is appropriating and remixing a lot of what used to be classic luxury strategies. And we will explain why it thus felt very apt for us to also re-appropriate an old term because it is of new-found relevance: ‘What We Mean by Ueber-Brands’.

Welcome to Rethinking Prestige Branding – a quick tour of the dynamics that are driving and changing our marketing world and particularly our notions of prestige and how this leads to a bunch of new prestige rules and a new breed of brand for the 21st century: the Ueber-Brand.

The times they are a-changing

When Bob Dylan wrote his anthem of change in 1964 we were truly on the brink of a new societal order with the rise of the human rights movement and all that it entailed in terms of equality and the core values of our Western world. Whether the shifts we are currently experiencing will be anything as seismic as the ones in the second half of the last century remains to be seen. But one thing is already clear: where we were then talking mainly about the Western world we are this time looking at the entire globe.

A lot has been written about the global economy, our increasingly connected cultures, the digital revolution, how the world is getting smaller and flatter (Friedman, 2005) and what all this means for us people and the way we live, love and shop. We don’t have the faintest ambition to go into depth on any of these issues – and neither would we have the authority to – but we feel it’s important to at least remind ourselves of the key aspects that are shaping the way we interact, with each other as well as with the brands and products around us. Look at the major dynamics that have altered our economies as well as our behaviours – at least in brief. Because only then will the changes and new stratagems we discuss further on with regards to prestige brands make sense.

We see nine mega-trends relevant and noticeable in the context of our attitudes towards brands and marketing in general and prestige in particular.

Where’s the magic?

More and more of us are recognizing that science can’t answer all of life’s questions and are starting to re-embrace the blurry lines towards mystery and magic. We understand that what we call truth may change from time to time, depending on the latest research, or may shift from culture to culture and certainly from person to person. We realize that our realities are to a large degree constructed, not just shaping but also depending on our world-view. And we grasp that despite all our best efforts in nano- and neuro-science there are still a lot, if not most of the important things, beyond our reach. On top of this, religion has been in decline for such a long time that strongly held and shared beliefs have become few and far between, at least in the Western world, which naturally leads to an overall loss of security and comfort and a vacuum of values.

All this has been fertile ground for a re-emergence of interest in the spiritual, mythical and magical. In New York for instance there is a burgeoning magical cabaret scene, complementing the well-established esoteric schools and institutions. Buddhism and yoga as ‘spirituality-light’ have become a cliché. And we’ve all enjoyed the magic-mystery tales of Harry Potter and Dan Brown’s secret science and society thrillers. In an age of change, instability and little truths, we are yearning to rediscover what’s beyond the obvious, what’s behind it all and what’s at the core, holding everything together. In other words, we are trying to reconnect our physical worlds with their metaphysical counterparts. And this is where myths, and more specifically brand myths come into play. Brands have become something akin to heroes in our contemporary culture. They are fixtures, not unlike those mythical figures in Greece, Rome or Egypt: things that we use to find orientation, direction, guidance. They are models in a lot of ways – supra-models so to speak – potentially linking us with higher powers and truths while very much being concerned with our earthly delights.

Culture, commerce – unite!

What once were polar opposites have become entangled in an ever-closer love affair. The spheres of culture and commerce aren’t so much fighting any more as they are recognizing their mutual interest and their interdependencies. Here money and might, there praise and applause. Of course, the two have been mating ever since the time of the Medici, but their embrace has become tighter and more passionate than was imaginable even a few decades ago. There’s hardly a prestige brand that doesn’t act as patron saint to the arts and barely an artist or cultural arbiter that hasn’t toyed with a commercial player. And, as Dr Clotaire Rapaille, the author of bestseller The Culture Code, pointed out in an interview with us, cracking that code and becoming part of a society’s culture is key for a brand to achieve a superior market position and eminence. Since then, the importance of cultural resonance beyond individual relevance has become even more crucial in brand building. This is especially true now that all brands have to become their own medium, creating content beyond the products they provide for us to connect with them and each other in happily engaged shopping communities (see also a brief history of branding on page 11).

Capitalism, evolved

Just as commerce and culture seem to focus more on commonalities than differences lately, so have our capitalist system and our ethical one as a whole. We are still largely living in a shareholder world where the Milton Friedman concept of profit as singular focus of an enterprise rules, but there are a lot of cracks appearing in this concept. And more and more companies are using these cracks to make a business, one that is not solely profit driven but is also people conscious – environmentally aware, socially considerate and ethically minded. Many economists already see the re-emergence of stakeholder capitalism as opposed to the all-prevailing shareholder one. As Paul Polman, CEO of Unilever said: ‘I do not work for the shareholder, to be honest; I work for the consumer, the customer… I’m not driven and I don’t drive this business model by driving shareholder value’ (The Economist, 2010).

Some call this new frontier ‘Humanistic Capitalism’. Personally, we like to think of it as ‘Enlightened Capitalism’, a capitalism that is being reborn together with our culture and our worldview as they were during the Renaissance. Where making money isn’t something to frown upon but neither is it something to glorify in and of itself. Where profit has to serve a purpose and greed is not good unless it does good – more than merely filling someone’s pockets. Where creating value is not the opposite of having values and where any enterprise has to really undertake something worthwhile, something that is bigger than simply sustaining itself. As we will see, there are many very successful examples of this – creating a whole new kind of prestige and outstanding Ueber-Brands.

Consumerism, re-rooted

The craft brewery craze of the 1980s has grown into an ever-increasing part of the beer market, putting the giants under pressure and realizing a CAGR (compound annual growth rate) of almost 14 per cent in the United States alone from 2009–11 (Demeter, accessed September 2014). You can see the same trend in pretty much any category from chocolate to detergents, food to fashion, liquor to liquorice. It’s partially what Michael Silverstein and Neil Fiske announced in their 2003 break-out hit book Trading Up. We are, certainly in the established markets, migrating to ‘augmented’ goods, replacing mere functional benefits with experiential ones and standard products with more refined and expensive ones, if for no other reason than that we can afford to. But there is more to it. It’s not just our consumerist craving for better, bigger, more. Actually, it’s the opposite that seems to be at work lately: consumerism re-rooted or re-booted. Most of us have had so much that we are finally discovering that less can really be more.

We are replacing quantity with quality, and in this we are showing a new, deeper concern and a more demanding attitude. We are looking for integrity and sincerity in what we buy, beyond quality and reliability. We are more drawn towards what is philosophically called the essence rather than meaningless iterations of it. We want the real thing, not just anything, which is why everything handmade or personally produced with soul and substance is on the winning side. And this is not just a matter of refinement and price, of ‘trading up’. Very often it’s actually the opposite: it’s about ‘trading down’, down to the local, the simple, the unrefined but raw and ‘true’, as any green market can show you. Some see this already as a reversal of roles, where now products are becoming differentiators of brands rather than the other way around (Warc, 2013). We feel this is taking it too far, but a re-balance or re-calibration of product and brand relations is certainly happening.

The limits of money

Another aspect of consumers ‘trading up’ and the world of luxury bending over backwards to acquiesce to our desires and their shareholders’ demands for growth, is the fact that price as a defining factor is losing importance. In an age of ‘affordable luxury’, where pretty much anyone can and will have bits and pieces of high-priced brands, the distinguishing power of affordability has been eroding. As Dana Thomas put it ‘luxury lost its lustre’ (Thomas, 2007), at least if it was a luxury whose value was primarily based on its cost. Pricing many ‘out’, so that few can feel ‘in’ doesn’t work so well anymore. Even if a lot of luxury brands have started to course-correct and ‘re-tighten the reins’, there are simply too many people with too much money to create a sense of exclusivity and aspiration simply by pricing up and out. Ever...