The Management of Luxury

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1 The Management of Luxury A practitioner's handbook Benjamin Berghaus, Gunter Muller-Stewens and Sven Reinecke A KoganPage ONDON PHILADELPHIA NEWDELH

2 CONTENTS The contributors xiii Preface xxix PART ONE The Luxury Market 1 01 The market and business of luxury: an introduction 3 Giinter Miiller-Stewens and Benjamin Berghaus Introduction 4 The luxury market 5 Luxury management 18 Research in luxury 36 Sources of the contemporary luxury research stream 41 Notes Classifying luxury and prodigality 61 Michael Jacket Introduction 61 Classifying luxury and prodigality - a proposal 63 Historical examples 64 Cycles of acceptance 67 Conclusion 69 Notes Exploring luxury consumer behaviour 71 Prokopsis Theodoridis and Sofia Vassou Introduction 71 The notion of luxury 73 Consumer motivation 76 Conclusion 79 Key points 80 Notes 80

and prodigality 61 Michael Jacket Introduction 61 Classifying luxury and prodigality - a proposal 63 Historical examples 64 Cycles of acceptance 67 Conclusion 69 Notes 69

3 04 Identity-based luxury brand management 83 Klaus Heine, Michel Phan and Vera Waldschmidt Introduction 84 The concept of brand identity 85 The functional component of the luxury brand identity 87 The emotional component of luxury brand identity: creating symbolic meaning 91 The case of Mont Charles de Monaco 94 Conclusion 95 Key points 97 Notes 97 PART TWO Luxury Brand Strategy Public luxury representatives 101 Michael Breazeale, Christopher R Long and Daniela Ott Introduction 102 What research tells us 103 Practical implications of our findings 107 Conclusion 110 Key points 111 Notes Curating the creative genius in luxury firms 113 Charles Aaron Lawry and Sabrina Helm Introduction 114 Succession management 115 What is curation? 116 The art of curation 117 Conclusion 122 Key points 123 Notes 124

luxury representatives 101 Michael Breazeale, Christopher R Long and Daniela Ott Introduction 102 What research tells us 103 Practical implications of our findings 107 Conclusion 110 Key points 111

4 07 Arts meet luxury brands 127 Carsten Baumgarth, Nicole Lohrisch and Olga Louisa Kastner Introduction 127 Literature review on branding and arts: a snapshot 129 Typology of arts-luxury brands collaborations 131 Conclusion 139 Key points 140 Notes Luxury as societal mentor 143 George Panigyrakis and Eirini Koronaki Introduction 143 Pillars of cultural cultivation 146 Conclusion 152 Key points 155 Notes Preserving luxury exclusivity through art 157 Claude Chailan and Ivan Valek Introduction 158 Analysis 159 Interpretation 166 Conclusion 169 Key points 170 Notes Brand charismatic legitimacy and marketing of adoration 173 Delphine Dion and Eric Arnould Introduction 174 Charismatic legitimacy 175 The marketing of adoration 176 Staging charismatic legitimacy in store 177 Conclusion 180 Key points 181 Notes 181

Key points 155 Notes 156 09 Preserving luxury exclusivity through art 157 Claude Chailan and Ivan Valek Introduction 158 Analysis 159 Interpretation 166 Conclusion 169 Key points 170 Notes 171 10

5 11 Digital media in monobrand stores 183 Marcus Schogel and Timo Tischer Introduction 184 Digital media applications in monobrand stores 185 The luxury brands' perspective - key challenges 192 Conclusion 196 Key points 197 Notes 198 PART THREE Luxury Business Strategy Gravity shift from West to East 201 Philip Beit, Fabian Sommerrock and Alexander Gaus Introduction 202 The Chinese economy - a major success story 202 Luxury market size and structure 205 Luxury consumers - brand recognition is crucial 208 Marketing 214 Conclusion 217 Key points 218 Further reading The Chinese market: entry modes 221 Rui Wang, Kaibin He and Yue Wen Introduction 222 Pre-WTO market entry strategies ( ) 223 Post-WTO market entry strategies ( ) 226 Conclusion 231 Key points 231 Notes Entering the Chinese market 233 Rui Wang, Kaibin He and Yue Wen Introduction 234 Pricing strategy 234

6 Marketing communication strategy 236 Channel strategy 239 Product adaptation strategy 242 Conclusion 243 Key points 243 Notes Managing brand extensions in the luxury industry 245 Klaus-Peter Wiedmann, Christiane Klarmann, Nadine Hennigs, Stefan Behrens and Alexander Stigelski Introduction 246 Conceptualization 247 Results and discussion 253 Implications for management practice 255 Conclusion 256 Key points 257 Notes Luxury brands enter the online market 259 Elisa Arrigo Introduction 260 The internet and luxury brands 261 Online opportunities for luxury brands 266 Conclusion 270 Key points 272 Notes Competing as a luxury SME 275 France Riguelle and Didier Van Caillie Introduction 276 Strategic issues for luxury SMEs 276 Conclusion 283 Key points 284 Notes 285

Conclusion 256 Key points 257 Notes 258 16 Luxury brands enter the online market 259 Elisa Arrigo Introduction 260 The internet and luxury brands 261 Online opportunities for luxury brands 266

7 18 Insisting on luxury to survive 287 Michael Reinhold and Emil Annen Introduction 287 Leica 288 Luxury strategy 292 Leica brand management today 296 Conclusion 302 Key points 303 Notes Managing price fluctuations of raw materials through innovation 305 Anne-Flore Maman Introduction 306 High jewellery: a specific industrial sector in luxury 307 Price fluctuations in raw materials 312 Innovation as the solution 315 Conclusion 320 Key points 322 Notes The Counterfeit Timer 325 Anne-Flore Maman and Camille Depigny Introduction 326 The framework: The Counterfeit Timer 327 The supply/offer side 329 The demand side 334 Conclusion 338 Key points 338 Notes Acting on luxury counterfeiting 341 Ludovica Cesareo and Alberto Pastore Introduction 341 A new framework: company strategies and actions 344

312 Innovation as the solution 315 Conclusion 320 Key points 322 Notes 323 20 The Counterfeit Timer 325 Anne-Flore Maman and Camille Depigny Introduction 326 The framework: The Counterfeit Timer 327

8 Conclusion 356 Key points 357 Notes 358 References for Table Luxury brands as employers 361 Verena Batt and Benjamin Berghaus Introduction 362 Drivers of luxury employer attractiveness 363 Implications 368 Conclusion 374 Key points 375 Notes The impact of luxury brands on employees 379 Benjamin Berghaus and Sven Reinecke Introduction 380 Luxury brand impact on behaviour 381 Connecting the motivation structure to psychological theory 383 Conclusion 389 Key points 390 Notes 391 PART FOUR Luxury Responsibility Heritage of luxury and responsibility 395 Duane Windsor Introduction 396 Affluence and luxury 397 Conspicuous consumption and the affluent class 398 Philanthropy and taxation of affluence and wealth 400 Voluntary responsible luxury 402 Conclusion 404 Key points 406 Notes 407

9 25 Luxury organizations and responsibility: a toolbox 409 Farah Montesa and Rene Rohrbeck Introduction 410 Defining the levels 412 A toolbox for advancing corporate sustainability 415 Guide to a responsible company 418 Conclusion 420 Key points 420 Notes Luxury organizations and social responsibility: a case study 423 David S Waller and Anurag G Hingorani Introduction 424 Luxury brands and CSR 425 Moet Hennessy Louis Vuitton 426 Implications 434 Conclusion 435 Key points 436 Notes 436 Index 438

Notes 421 26 Luxury organizations and social responsibility: a case study 423 David S Waller and Anurag G Hingorani

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