Summary
This report seeks to explain the brand management strategies employed by firms in the luxury industry. It highlights importance of physical space in the luxury industry and explains the challenges facing luxury brand firms and possible solutions to those challenges. The report focuses its study on Bang and Olusfen Luxury Company explaining how the company promotes the brand image using its new design stores. Branding starts with the development of a clear brand concept and identity. The brand concept is then projected to the public through a brand personality and image. The public then develops perceptions and associations in their minds. These perceptions influence their future purchases. In luxury branding it is not always words that impress, but rather the physical evidence. Stores should thus be designed in a unique and creative manner. The company experiences challenges such as internet criminals, the ever changing market and the need to offer discounts. Such challenges can be dealt with through an online protection programs and promotions of the product.
Terms of References
Background of the Study
The study is based on Bang and Olusfen Company. The company deals with the manufacture of audio-visual products, telephones and television sets. The company has launched a new design store,- an effort to boost its brand image. The design of the new store customers can be able to hear the sound of the quality speakers. Moreover, the store is also composed of multiple stands which enables customers experience multiple sources of entertainment at the same time. The new design allows consumers to get experience with various products of the company.
Purpose of the Study
The study seeks to establish how the physical location influences the brand image of a company and how the company adapts to different cultures. It also seeks to explain how the company maintains its brand values are sustained through independent retail network. The report also explains the luxury brand management strategies, the challenges faced by luxury brands and possible solutions to those challenges.
Scope of the Study
The study is limited to Bang and Olusfen Company. The research based his research on Bang & Olusfen Company, explaining how the company promotes its brand image.
Overview of Bang & Olufsen Company
Bang and Olufsen is a Danish Company that deals with the manufacture of television sets, telephones and audio visual products. It was founded by Peter Bang and Svend Olufsen in 1925. Examples of products developed by Bang & Olusfen include car audios and the recent B&O play systems. The Company has done very well in the global luxury industry and its success is attributed to its luxury brand management strategies. According to Mr. Johannes Torpe (the creative director of B&O), luxury is in fashion and it is now found in almost every company. Other luxury brands include Louis Vuitton, Hermes and Gucci among others.
Luxury Brand Management Strategies
The journey of branding starts with the development of a clear brand concept and identity. The brand concept is then projected to the public through a brand personality and image. The public then develops perceptions and associations in their minds .These perceptions influence their future purchases (Okonkwo 2007, p. 5). Luxury goods refer to products which are not necessary but make life more pleasant (Okonkwo 2007). These goods are very costly and are, obviously, often bought by individuals with a lot of wealth .According to luxury experts Kapferer and Bastien (2009), luxury good should create very qualitative experience that is meant to last. The product is offered at a much higher price and offered with personalized accompanying services, and its distribution is controlled. Chevalier & Mazzalovo 2008, argue that a luxury good makes the beneficiary or the owner of the product feel more special with a sense of some privileges. New words have come up that all refer to the term luxury these include emasstige, opuluxe, premium, hyper luxury and many others (Kapferer & Bastien 2009).
A luxury company should have a strong name. It always has the name of the designer who must have done things in a different manner. Some bear the name of the founder (Chevalier & Mazzalovo 2008, p. 14).The Company Bang& Olusfen bears the name of the founders. Huseynov ( 2009), argues that the most important thing in luxury is being unique. Mr Johannes Torpe points out that luxury is an expression of creativity and uniqueness. A product should be the best of its own kind. The new store design is a great show of creativity. Creative director Johannes Torpe says that the customers will be able to see, hear and feel the Bang & Olufsen brand as well as play and interact with products.
Authors like Okonkwo (2007), belief that a luxury product should elevate the status of its clients. It is also important that a luxury product should be made difficult for clients to buy (Kapferer & Bastien 2009). When a product cannot be easily accessed then the desire goes up; therefore, for a product to be called luxury it should be made difficult for clients to buy. A series of necessary obstacles have to be established like high pricing and limited distribution such that a customer has to go through these obstacles before getting a product for him to feel that the product is unique and of high quality (Chevalier & Mazzalovo 2008).
Huseynov (2009), points out that advertising is also an important factor. These adverts are more emotional and sensational to differentiate it from mass premium brands. Some luxury brands are also utilizing social media in marketing products (Okonkwo 2007). Public figures have also been used to promote luxury brands. These public figures include film stars, music personalities and sport personalities (Chevalier & Gutsatz 2012).
It is important to note that managers should give guidelines on the development of products and ensure that quality materials are used (Chevalier & Mazzalovo 2008, p. 43). Creativity of people such as Johannes Torpe of Bang & Olusfen Company should not be controlled but the guidelines should be given.
Importance of Physical Location of a Luxurious Good
Physical location has become an important factor in luxury branding starting from the store location and the touch points in which the consumer interacts with the product. In luxury branding it is not always words that impress but the physical evidence (Chevalier & Gutsatz 2012, p. 50). Physical location refers to the environment in which the product or service is delivered. Customers make perception about products by basing on the sight at which the product or service is delivered (Hoffmann & Mani?re 2011, p. 141). Therefore, creation of a good service environment should be done in a proper manner to ensure that the customer makes repeated visits to the place.
Radha & Husband (2010,p. 10), argues that stores should, therefore, have qualified staff to handle customers in an exceptional manner that can provide superior services to its customers so as to leave a memorable experience in their minds and make the customers feel that the products offered are of high quality (Huseynov 2009, p. 30). According to Kapferer & Bastien (2009, p. 87), stores should be made very spacious to ensure easy movement of clients as they explore luxurious products of the company. Clients should be able to feel, hear and see and interact with the product. The environment should be luxurious and unique at the same time. In order for luxury companies to design unique stores that leave lasting impressions in customers, it must employ great artists and designers who have great innovative ideas.
The New Store Design of Bang and Olusfen Company
The new store design is a showcase of how companies can promote its brand image by using physical location of their products. The stores of Bang and Olusfen look very classic and unique in their own way. Speakers have been fixed on the wall such that there is much space for easy movement. The color scheme is a blend of many colors that comes out to be very attractive and bright. In his presentation Mr. Johannes Torpe the creative director of B&O Company explained the new design of their store in Copenhagen. The store is designed in such way it showcases all the brands of speakers. Customers can be able to hear the sound of the quality speakers and look at design of these speakers.
Inside the store there is a private area which is a place where customers can sit and view films on the flat screen technology whereby customers will experience multiple entertainment sources through the BeoLink integration system. When entering such place, the customers feel exceptional and unique. The store also has revolving walls and customers can switch from one entertainment point to another at their own convenience. The interior design of the store is done in way that the customer becomes curious as he moves inside the store. The stores are spacious, thus, allowing ease movement from one point to another, the store looks luxurious and comfortable and the customer perceives that the company deals with high quality products.
The new design of stores plays a major role in promoting the Company brand image. Everything about the new design looks wonderful and, thus, many customers would wish to be associated with B&O. The store will also attract new customers as they are curious to know what takes place in such inviting spot. Company products are developed to impress people different parts of the world. These products have, thus, been sold even as far as Africa, China and Asia without being modified to fit different cultures. Sometimes localizing luxury products in order to adapt to various cultures may lower a brand image, many luxury companies do not focus on product localization instead they focus on uniqueness of product and pricing. Their products can be sold anywhere in the country without being localized.
The Company is also keen on maintaining its brand values as it distributes its products to various parts of the world. Its brand values include passion, persistence and pride. In an effort to ensure that its brand values are maintained, the company ensures that the stores are designed uniformly in various parts of the world. The company also gives guidelines to distributors on how to deal with customers all over the world. Qualified staff is employed to work in the stores which secures maintenance of the brand values. Bang & Olusfen products are sold by 800 dealers in more than one hundred countries. Approximately 70% of these shops sell Bang& Olusfen products only.
The store sets out similar brands of speakers together allowing the customer to compare and decide which speaker is best for them. For example, the BeoLab 18 and BeoLab 19 speakers have been displayed together. The B&O play zone invites customers to play with these products. The similar brands with different specifications are displayed together in various stores, for instance, the BeoLab 18 has four inch woofer drivers and 160 watts amplifiers, whereas the BeoLab19 is made of subwoofers. Each of the speakers has wireless antennae.
Challenges Facing Luxury Companies
Despite many years of growth the luxury industry has been experiencing a number of challenges which include the rise of online shoppers, the dynamic nature of the market and understanding today’s luxury customer (Huseynov 2009, p. 45). In the past, luxury goods were designed for the elite and the affluent, however, today the situation has changed, consumers buy luxury goods in order to satisfy the need of impressing others and also to satisfy one’s self (Hoffmann & Mani?re 2011, p. 10). The concept of discounts has also discredited the brand image and value of companies. Studies have shown that giving discounts adversely affect the brand image but with the changing market scenario luxury brands have been forced to offer discounts in order to maintain their market share and presence (Chevalier & Mazzalovo 2008, p. 180).
According to Hoffmann & Mani?re, (2011,p. 56) luxury brands have to come up with different marketing strategies since their market is ever changing. It is also important to note that culture, politics and communication elements vary from one country to another, luxury brands have to come up with different strategies that fit different countries.
Another challenge to note by Okonkwo (2010, p. 110), is the fact that most companies are going online and marketing their products in the social media, however, the internet is full of counterfeit products and fake imitations. A single search of luxury brand will result into many alike products. This lowers the brand image of a product.
Solutions to the Challenges facing Luxury Company’s
The internet can be used to market luxury brands in order to ensure that criminals do not spoil the brand image of the company an online brand protection program should be developed. Global marketing should be done to promote the brand image. In an effort to build the brand image, Bang & Olusfen unveiled a campaign which was named “What Move You”, the campaign highlighted what separated B&O electronic products from other electronic products.
Conclusion
Bang and Olusfen Company has managed to maintain its brand image in the world. The quality products are also long lasting. It has received a number of awards due to its uniqueness, for instance, in the year 2012 the Beo play speaker won the award of best innovations. Brand management strategies are very important in ensuring success of luxury brand. The most important thing in luxury is being unique and creative. Advertising is also an important factor. Company adverts are more emotional and sensational to differentiate it from mass premium brands
Furthermore, physical location has become an important factor in luxury branding starting from the store location. In luxury branding it is not always words that impress but the physical evidence. Stores should, thus, be designed in a unique and creative manner. Bang and Olusfen Company has created its stores in a unique manner to ensure that the customer feels wonderful.
Challenges are inevitable, in every business the company experiences challenges such as internet criminals, the ever changing market and the need to offer discounts. Such challenges can be dealt with through an online protection programs and promotions of the product.