The challenges of luxury brands’positioning on social media

Written by  Chengmin Zhang

Introduction

Nowadays, the rapid growth of social media not only makes great impact on people’s daily life, but also presents both opportunities and challenges for marketers. The revolution of transmission is set to take off these years. Compared with traditional medias such TV, newspaper or billboard, social media is provided with much more transmissibility and interactivity, which leads Luxury brands that used to focusing on traditional marketing activities start to market the brands through social media. According to the result of a survey conducted by the Luxury Interactive conference's research team, in 2012, 78% of marketers for Luxury Brands increased the additional marketing expenditure on social media, and 73% declare they are willing to spend extra money on this new marketing channel in 2013. (Alston , 2012) It is obvious that social media has become a new marketing approach for luxury brands to communicate with their customers. Correspondingly, 80% of consumers express they would like to take advantage of social media as a source of luxury brands, although they might not be the final consumers of certain luxury brands. Therefore, how to use social media effectively has become a critical problem should be tackled by marketers of luxury brands immediately.

Purpose

Luxury Brands are commonly regarded as costly products which normally consumed by wealthy person, celebrities, or elites, while social media is normally known as its specific characteristic of popularization. It seems not appropriate for unique luxury brands to utilize popular social media as its publicizing platform. Therefore, the aim of this paper is to explore how luxury brands build distinguished images through social media marketing so that they can be closer to mass targets and sustain the extraordinary brand profile simultaneously.  

Research question

What should Luxury brands do to keep in step with brands’ original position when communicating with the customers through social media.

Theoretical framework

The definition of Social media

Social media is a new communication platform where people can share their ideas, express their own views, make personal comments on any matters and build online relationships with others. The main representing forms of social media include text, image, video, audio, and communities. Social media, such as Facebook, Twitter, YouTube, have become powerful social tools that are available to everyone in any circumstance to communicate online. Furthermore, for companies of all size, social media is an attractive place where customers and consumers of firms are congregating, which makes it possible for companies to reach their targets timely and effectively, (Scott, 2007) because marketing within social media is a two-way process instead of one-way dimension, namely, traditional marketing is more about transferring messages to customers, but perceptions can be received and exchanged by utilizing social media.

Social media boosts brand awareness, creates brand loyalty and also speeds word-of-mouth marketing through the way of building relationships with existing and potential customers. (Gunelius, 2011) Social media has become more and more important for branding and marketing activities because it has changed the way people act on each other. The marketers should take return on investment (ROI) into consideration when operating marketing activities. It is not just about the tangible sales or market share but intangible brand recognition. (Glen, 2007)

Difference between Brands and Luxury Brands

The American Marketing Association (AMA) defines a brand as “a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sellers.” Chernatony and McDonald alleged brands are valuable assets that perceived by customers. As a successful brand, it should offer customers unique added values that differentiated from other competing products or services. Besides, a brand associated components should be appropriate, coherent and appealing to customers because it can help companies boost external customer relationships and internal profits. (Smith & Zook, 2011:32) Brands focus on identity-orientation and customer-orientation, which means companies use brands to identify their products or services, and make deep impressions on customer minds. (Heine, 2012)

Luxury brands is defined as perceptions and images in customers’ mind that are associated with desired values and favorable images, such as a high degree of price, quality, rarity, aesthetics or other non-functional associations. (Heine, K. 2012) The classical theory purposed by Veblen named “conspicuous consumption” argued people would like to spend more money on acquiring luxury products or services in order to display their economic capabilities and social statues in public. (Corrigan, 1997) Instead, some customers prefer to pay a higher price for functionally equivalent products so as to display their status and wealth. It seems the ratio of intangible utility to price of luxury brands is higher than its functional utility. (Nueno & Quelch, 1998) When talking about the symbolic role of possessions, Richins suggested that Luxury brands can reflect someone’s success and be imitated by others (Richins, 1994) because consumers who purchase particular brands can send meaningful signals to others about what kind of person using this brand. (Han et al, 2010) Therefore, brand performances in social media partly depend on whether marketers understand the targets and its roles. (Singh & Sonnenburg, 2012)

The inherent exclusivity of luxury brands

Luxury brands is a self-contradictory item for marketers who intent to both selling as many luxury goods as they can, and asserting the exclusiveness and rarity traits of luxury products. Dubois purposed a theory named rarity principle that implies the prestige of a brand will be destroyed if too many people have it, which means marketers of luxury brands should keep the balance between increasing brand awareness and controllable sales volume. On one hand, luxury brands continue to remain elusive instead of mass consumption owning to its high price, on the other hand, it also need to be widely desired by the public.(Radón, 2012)

An empirical example

In the last ten years, luxury brands have moved into digital world, especially 2012, there are an increasing number of luxury brands focusing on social media marketing. The growing number of followers on Facebook is the prime example of such phenomenon. As a luxury goods giant, Burberry is a typical example because it is the first and most successful luxury brands who promotes its brand through social media, including Facebook, Twitter, YouTube, Instagram, Google+, Chinese Sina Weibo, and the like. The recent statistics illustrates the Facebook fans of Burberry has exceed 14 millions. In 2009, Burberry created a new social website (Artofthetrench.com) jointly with Facebook to promote its brand. The site feature users sending in pictures of themselves wearing Burberry, and the users are also welcomed to share their brand relative stories with others, which makes it possible for Burberry to connect the targets precisely by social media.(Phan et al, 2011) Although this kind of user-generated content(UGC) marketing strategy caused by social media can help the company build a better web presence, get full images, increase brand visibility,(Liu & Rogerson, 2012) the buzz on social media is also inevitable due to different customer experiences. It will be a challenge for luxury brands to control self-tailored images on the uncontrollable social media, for example, imagine a picture of luxury dress just show up besides a funny face of a friend. Moreover, the number of real targets of luxury brands is much less than that fans on social media, therefore, another challenge for Luxury brands using social media is how to be expected by general public, accepted by existing targets and recognized by potential customers.

Discussion

It is not possible for luxury brands to be widely consumed or accepted by mass population, even social media utilized by many companies. There does existing certain distances between luxury brands and normal consumers. It is quite important for Luxury brands to consider how to make customers get involved in its branding activities on social media, and experience dignity and respects from luxury brands as well. In order to both satisfy different customer needs and defend noble brand characters, the marketers for luxury brands firstly need to discern the preference of customers, for instance, which social media platform the customers converged and what they want psychologically, and then making that seems far off. Taking Rue La La as an example, people cannot access to the products categories on the website without private profiles, while the Facebook of Rue La La provides people opportunities to get close to this luxury brand through issuing products information and discount that only can be attained by memberships on its official websites. Social media thus has become a lure for Rue La La that makes people compete for attention. The best proof of this is over 3 hundred thousand followers of its Facebook.

Secondly, the purpose of adopting social media should be clarity. The main objectives for marketers of luxury brands to use social media are nothing but profits, marketing communication and customer relationship management (CRM). (Breuer & Brettel, 2012) However, as mentioned before, increasing sales volume by mass consumption is not desirable for luxury brands because it will erode the brand image. However, the content of luxury brands on social media is vital for communication. The marketing communication of luxury brands on social media is currently enjoying an upsurge in micro films. Comparing with traditional advertising, micro films can response more fully to brand values and culture. In 2012, many luxury brands such as Cartier, Dior, LV, and Chivas have started to shoot micro movies so as to promote their brand images precisely. The more views those micro films received can positively relate to diffusion. (Hoffman & Novak, 2012) As long as these micro films have been identified, it will be a great opportunity for luxury brands to carry out further marketing communication programs.

Social media is not an appropriate place for all the luxury brands to make customer relationship management which is more applicable to high-end service industries, i.e. luxury hotels. Luxury concept has been interpreted as the significance it brings to customers’ life rather than merely brand’s status or expense. Luxury brands should consider two-way conversation with the targets to be a priority.(Helstab, 2012) Four Seasons is the first luxury hotel that use social media to better serve its customers through creating independent Twitter accounts and Facebook home pages for every branch hotels. People can follow all the hotel news on Twitter, share and compare hotel experiences on Facebook, find moving images and resorts worldwide on YouTube, and check room availability on apps.

In addition, how to measure social media ROI of luxury brands properly is another problem should be tackled by marketers. They should emphasis on analyzing the relationship, emotion and cognition between consumers and luxury brands, rather than merely counting the rigid index, i.e. number of fans or comments.  When luxury brands first utilizing social media for marketing activities, marketers worried about whether they should change their unique styles to adapt to the public. But it has proved to be unnecessary because social media has become a good platform for luxury brands to tell the brand stories and give emotional depth to the customers by co-creating brand performances with them. (Singh & Sonnenburg, 2012) For example, all the contents posed by Burberry on the social media are to highlight its brand DNA of British descent. Moreover, Tiffany starts to tell its brand stories on social media and conducts a new campaign called “What Makes Love True” that encourages anyone to upload their love stories. The emotional connections can thus building brand loyalty for existing targets and fostering brand awareness for potential customers.

Conclusion

In short, marketers for luxury brands should make clear position and strict management of the premium products or services when they utilizing social media as marketing and communication platform. It is obvious the worship of sales growth has its limitations for luxury brands in social media. Marketers should make great efforts on improving marketing communications and customer relationships rather than pursuing mass consumption. Comparing with sales promotion, storytelling on social media thus would be a decent option for luxury brands to maintain brands upscale position, conveying distinct brands value and culture to existing and potential customers. 

Reference

Journals:

1. Breuer, R. & Brettel, M. (2012), “Short- and Long-term Effects of Online Advertising: Differences between New and Existing Customers,Journal of Interactive Marketing, 26, 155–166

2. Gunelius S, (2011), “Building your brand with social media, five steps to establishing a credible online presence for your small business”. Viewed 3rd February, 2013

3. Glen, D. (2007), “Opinion piece: social media: should marketers engage and how can it be done effectively?” Journal of Direct, Data and Digital Marketing Practice (2008) 9, 274 – 277.

4. Hoffman, D.L. & Novak, T.P. (2012), “Toward a Deeper Understanding of Social Media”, Journal of Interactive Marketing, 26, 69–70

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11. Radón, A. (2012), “Unintended Brand Endorsers' Impact on Luxury Brand Image,” Intemational Joumal of Marketing Studies, Vol, 4, No, 1, The Swedish School of Textiles, Universify of Boras.

12. Singh, S. & Sonnenburg, S. (2012), “Brand Performances in Social Media”, Journal of Interactive Marketing 26, 189–197.

Books:

1. Corrigan (1997) Sociology of Consumption. Sage

2. Heine, K. (2012) Luxury Brand Management, Technische Universität Berlin, ISSN: 2193-1208, www.luxury-brand-management.com.

3. Scott, D.M. (2007), The new rules of Marketing and PR: how to use Social Media, blogs, news releases, online video, and viral marketing to reach buyers directly. 3rd edition.

4. Smith, P.R & Zook, Z. (2011) Introduction to branding, Marketing communications: Integrating with offline and online with social media. 5th ed

Websites:

Alston, M. (2012) 78% of Luxury Marketers Spent More on Social Media in 2012 Than 2011, Luxury Interactive,

http://finance.yahoo.com/news/78-luxury-marketers-spent-more-141500809.html