What Do Luxury Brands Actually Sell?

When you hear the word luxury, what comes to mind first? For some, it might be a luxury car, while others might think of a high-end purse or piece of clothing. Although at first glance the answer to the question seems easy, upon a closer look, the picture becomes more complex.

 

Luxury has no clear definition. According to the luxury market expert Klaus Heine’s research, luxury is a relative concept that depends on whom you ask. The idea of “luxury” takes on distinct meanings for different people and circumstances. What is considered luxury in one context might be seen as ordinary in another.

 

Functionality Spectrum

That is not all, though. It is important to note that relativity also shows that luxury is not defined purely by price or function. It sits on a spectrum between necessity and excess. 

 

Professor Carter Mandrik, a specialist in Marketing within the department of Business Administration at AUBG, spoke on the topic. He mentioned that “In luxury branding, the brand image is not based on functional or even experiential needs – it is almost entirely about self-expression, symbolising who you are and what you want to be like.”

 

Luxury goods are usually not purchased for their practical use. What they carry is a symbolic value - status. Purchasing a Chanel purse does not have much to do with the quality of the bag itself, but everything to do with what it says about you. 

 

Pagani cars are one of the most high-end sports automobiles. When creating the brand in 1992, Horacio Pagani wanted to showcase the art of sportscars and he developed the hybrid between transportation and art. That legacy lives on as nowadays, as the price of one Pagani car starts at $2 million. It is a jewel for the eye, a trophy that shows taste and sophistication.

 

Luxury brands go beyond just selling high-end products - they sell an identity.

 

Buying into a Lifestyle

Luxury brands sell to you “the good life.” As Professor Mandrik went on to explain, “Luxury branding doesn't make concrete claims. Instead, it shows images of beautiful, wealthy people living luxurious lifestyles.” 

 

That is what stimulates consumers to purchase (luxury) goods. The imaginary life that is being advertised is the product, not the object itself. 

 

Professor Mandrik also mentioned a quote he says describes this type of marketing: "As the founder of Revlon said, 'In the factory, we make cosmetics. In the store, we sell hope.”

 

Rarity as a Product

Another very important aspect of the luxury goods market is rarity. Brands deliberately limit the quantity of products, locations where they are sold, and who has access to them. Taking for instance, the brand Hermès with its extremely recognizable Birkin purse. 

 

The experience they have created for consumers is all intentional. The distance and “work for it” attitude contribute greatly to the brand’s identity. The company wants to see loyalty and dedication from its buyers. 

 

Clients are the ones who choose whether you get a Birkin or not. That is how Hermès has managed to set itself apart from all other luxury brands -  by being exclusive.

 

Another great example is Disney’s Club 33 - an exclusive and extremely difficult to get into “private society.” People wait up to 15 years to become a member, followed by extremely high fees and strict rules they must follow in order to maintain their membership.

 

The Dark Side

Heine's research goes on to highlight that the concept of luxury is often “blurry” and shaped by individual and cultural interpretations. Therefore, brands need to build a connection and reach their customers through branding, visual identity, and the experience they sell. 

 

This is tightly connected with the psychological effect and tactics used. After all, it is not about the product you buy, but the whole experience and how that makes you feel. 

 

This further taps into what human beings seek: admiration, relevance, and social recognition. Professor Mandrik also touched on this aspect of the topic: “People naturally want to look good, be accepted, and be admired”. Therefore, luxury brands take advantage of this “weak spot”, turning it into a gold mine. 

 

Brands adapt themselves to certain markets and audiences in order to sell their product in the most appropriate way. An advertisement for YSL Libre’s perfume varies in different countries. 

 

In Bulgaria, you will see a simple ad on television, while in London, you will see double-decked buses and skyscrapers. Luxury marketing catches the attention and makes a product look so appealing that it's hard to resist buying it. 

 

Validation and worth can be stamped on a shirt and sold for $500.

 

Analyzing consumer behavior and luxury goods branding inevitably reveals the dark side of this chain. “This type of marketing tends to bring out the worst in people, driving social class separation and materialism,” Professor Mandrik said. 

 

He also expressed his disapproval of signaling social status by displaying a brand, rather than through meaningful actions or contributions to society. This affects people’s understanding and perception, it changes and crushes values. People fail to credit the power of luxury brand marketing, however, we have all fallen under its spell in some way.

 

 

Edited by: Jani Ormanova and Hary Dikov 

 

This article was brought to you by AUBG Daily's title sponsors: 

• United Bulgarian Bank (Member of KBC group)

And

• BG MARKET