Hakan Ozel, General Manager, Shangri-la Hotel Dubai
When we think of luxury, the focus point to consider is the brand itself. We cannot imagine luxury without brands. The brand is an integral part of luxury products and services as well as the dreams of the customers.
Customers have dreams, and brands make their dreams come true. Therefore, when people ask what a luxury brand is, often the reply is that it is the brand that makes people’s dreams come true.
Brands are important for business success. The goal of luxury management is to gain pricing power, which is the competitive condition that not only ensures high profits but allows the brand to grow while increasing the price. The intangible capital power of the brand, which is acquired through quality, creativity, and status, is the lever of this pricing power.
Intangible capital in this case are those fragile and valuable assets, which brands acquire with a strong foundation. In enterprises where commodity products and services are mass-produced, management is delegated easily, and brands can be sold to other companies easily. However, in luxury brands, it is the opposite; the product and service are linked to heritage, history, story, identity, creative talent, and majority of the time the vision of the families, as such cannot be transferred nor delegated easily.
Luxury is a luxury experience. Luxury products and services are the objects of the luxury brands. Only diamonds are luxury objects appreciated without brands – size and purity matter all the time. For everything else, there is no luxury without brands. Luxury brands go beyond the objects. It is created from the reputation made from its objects and its service within the social groups, which constitute the elite.
The brand is the social passport, both for the product and person. To be expensive is not enough to qualify as a luxury product; it must also be marked with a cultural symbol accepted as a social determinant.
This symbol is the brand when the brand itself has the reputation with the cultural and financial powers. In luxury, the brand comes first before the product. Most often, customers choose the brand first, then a product or service of the brand they chose.
Luxury brand is a brand first, and luxury second. It is not necessary to talk about the positioning. Luxury brands are powerful identities, which can reassure and seduce by the dream they create.
They offer a world of its own in which customers wish to dive themselves as the luxury customers dream to be a part of it. Luxury brand cultivates its uniqueness; it prefers to be loyal to an identity rather than continuously worry about superiority over an opponent or competitor. Even if the customers make the comparison to decide, the brand is not managed by seeking to compare itself to others.
Building a brand is building a unique, strong perception. In luxury, it must be inspired and inspirational. Identity of luxury brands contributes to building the identity of its customers themselves. Brands make the dreams of customers come true. In this equation, luxury brands play a very important role in consumers’ lives.