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DIGITAL MARKETING AND ITS INFLUENCES ON THE PERCEPTION REGARDING PRODUCT VALUES AND LUXURY BRANDS ADRIAN RAZVAN JOANTA (RUSAN), PH.D. STUDENT MARKETING MARWA BEZZAOUIA, PH.D. STUDENT MARKETING Abstract For many years, the world of deluxe products had been accessible only to an exclusive and selected public. There had been created an impression that it was impossible for an outsider to gain access to this world. Specialists in the field of deluxe products had created almost Utopian worlds, where clients could enjoy the quality, history and legacy of deluxe products. In our day and age, more and more researchers are trying to explain and find the determining factors in the consumption of certain products and services in the premium group. In the context of social, political and economic changes that took place recently, deluxe products have kept an important trait: their salience for social recognition. Marketing strategies have also changed recently to a great extent. From small family businesses or local entrepreneurs, deluxe brands have expanded rapidly at a global level, but at the same time they maintained the most important functions and traits: excellent quality, impeccable service, history a.s.o. Key words: luxury products, online, mobile 1. INTRODUCTION The last two decades were marked by a major change in terms of how the topic of deluxe is approached by marketing specialists. There is a major emphasis on the strategy of communication, which is sometimes even stronger than the product strategy (irreproachable quality of product). This approach proved to be a real success in terms of sales and profit margins in the period that followed immediately after and the traditional features of deluxe products took a secondary position. The trend followed in this field was that of accessible luxury, so that the average or low income public could also access this range of products. The deluxe brands took advantage of the desire for and the interest in premium products of the medium social stratum and they created brand extensions and communication channels specifically for the education of this potential public. The strategy was considered more efficient than a promise of unique and exclusive experiences. After 2008 and the well-known worldwide economic recession, the long term efficiency of this strategy was again brought into question, given that low and average income people were the first to give up deluxe procurements. On the other hand, deluxe traditional consumers remained loyal buyers and thus ensured a constant increase in this industry. A conclusion was thus reached that the safest business model for a deluxe manufacturer would remain to exploit conventional values and unique experiences that come together with the purchase of such a product. It is important to analyze both marketing strategies for deluxe products, those destined for traditional consumers as well as the strategies concocted for the consumer group having a lower income, the group of new-comers in terms of customers. There were thus asserted the strategy of brand extension, together with the launch of limited edition products at dramatically higher prices, as exclusively accessible to a certain narrower consumer segment. The marketing strategy must be defined and conceived with accuracy in order to satisfy both client groups. The balance point can be synonymous with a huge success, and a lack thereof can determine the manufacturer's bankruptcy in the least favorable scenario. Not only a change in business plans and selling strategies applied by deluxe manufactures have generated larger revenues for the latter, but also the influence and the potential of emerging countries, particularly the countries in the BRIC group and of the regions in South-East Asia. Together with the passing of time and brand expansion strategies becoming mature, deluxe manufacturers have had to deal with new business and communication environments. In the last decades there has appeared the idea that classical marketing methods are not enough when there is a want to develop and grow a deluxe brand. Recent technologies have an important say in terms of communication channels for deluxe brands. The means of communication dedicated to manufacturers in the deluxe industry, that lead to results in a long term, are no longer efficient in the current background of fast and high volume of information exchanged via the Internet. Today, the Internet eases communication, services and experiences offered on-line by deluxe brands. Nonetheless, many companies in the deluxe industry have had a slow reaction to new changes, some of them being still in a germinal stage in terms of entering the virtual space. The main argument of reluctant companies is that the digital world is far too 65 impersonal and somewhat improper to the exclusive environment promoted by deluxe brands. The trump cards of deluxe providers: exclusivity, exceptional experience, human contact and post-sale services do not, at a first glance, resonate with on-line media. Still, in order to keep in touch with the target public, deluxe manufacturers must implement innovative strategies. 2. DELUXE INDUSTRY TRENDS: ON-LINE MEDIA AND MOBILE MEDIA One of the determining factors in the rise of the deluxe industry at a global level is the phenomenon of democratization and of influencing consumers prone to deluxe consumption. At the moment, we are dealing with a natural evolution of deluxe products, from the environment of social upper classes transferred to the public at large. Social elite usually opens the public appetite for a certain trend, that is later on reinterpreted and adapted to the needs and possibilities of most of the population. This is due to deluxe manufacturers who are trying to expand a brand in order to attract more clients. A natural question that comes to mind is that if the public at large can really afford the luxury to own luxury. Deluxe brands claim they offer exclusiveness with their services. Traditionally, it is considered that deluxe objects are created by the most skilled craftsmen and manufacturers. Still, it is found that more and more manufacturers have opened production units in countries with cheaper labor and do not keep the entire production chain in the scope of deluxe. One example can be the Hermes brand which has outsourced the sewing of certain scarves to a company in Mauritius. Louis Vuitton, with an annual turnover of 3 billion dollars in leather processing has recently announced the opening of a shoe factory in India. Armani has Chinese laborers. It can be thus found that for reasons of cost efficiency, more and more manufacturers choose to transfer production in countries that have a tradition in processing fabrics, at very low costs at the same time when compared to European labor. Deluxe products are defined as goods whose use or display brings along respect for their possessor, beyond all functionality (Vigneron & Johnson, 2004, p. 486). Still, Okonkwo (2010) states that the definition of luxury has been linked rather to a service provided than to goods themselves. Thus, a product cannot be called a deluxe product unless it offers a service that turns it into an ultimate experience (Kapferer & Bastien, 2009), and the offered experience is what distinguishes deluxe brands from common ones (Vickers & Renand, 2003). That is why, it is important to concentrate on experiences offered by deluxe products, as well as on the status granted by their use. Deluxe goods are dedicated to well-off people, most of which are on-line purchasing enthusiasts (Okonkwo, 2005). Nonetheless, the market for deluxe products finds itself under ongoing changes and, most recently, it is no longer exclusively dedicated to high society. A good example is China, where 64% of the people aged between 20 and 45 years, belonging to the middle class, with a monthly pay of 1,500 dollars, are willing to pay consistent amounts of money for a famous brand from watches to hotels, which generates an awareness on the deluxe product market. Recently, deluxe brands have started to use digital technologies to reach mobile phone users. Users access the Internet via their mobile phones more than they do with their personal computers and, for this reason, mobile phone users have become a market that needs to be exploited (Dunlap, 2012). Moreover, mention must be made that the number of smart-phone users is on the rise. Only in 2011, 85% of them were using mobile applications (Frank, 2011). In addition, in order to build solid relationships via digital media, a business must know the needs of clients it addresses (Bishop, 1998). Nowadays, consumers of deluxe brands are intelligent and they can easily distinguish deluxe products from those belonging to other categories, they know how to gain information and have access to each detail related to deluxe brands via the Internet, they are cosmopolitans and they expect to have novel experiences generated by the use of a brand on-line, off-line and in varied locations (Okonkwo, 2010). On-line consumers of deluxe brands have high expectations (Okonkwo, 2005). Moreover, they exert an influence on the position other consumers take in respect to deluxe brands, they are hard to satisfy, they share their personal experience with a deluxe brand product in on-line media, they are less loyal to a deluxe brand and are rather attracted to experiences offered in on-line media, they are deluxe brand enthusiasts, they expect luxury to find them and they consider that the relationship they have with deluxe brands should be conducted under terms they impose (Okonkwo, 2010). Deluxe brands are closely linked to a positive image of the brand (Miller & Mills, 2012) and must offer the clients an exclusive image so that they can project a social status through them. Exclusivity is one of the main items on the market of deluxe products and a lack of this component can lead to a decrease in brand value. However, in order to gain a larger profit, many brands tend to lay aside their exclusive component so that they can be accessed and desirable for an as large as possible number of clients (Kapferer & Bastien, 2009). Changes in methods for the production and distribution of deluxe brands, as well as the expansion of their market, are leading to a perception that these brands are less exclusive, which is a threat against their genuineness. A challenge for deluxe products still remains that to become as visible as possible for their clients or for the market on which they conduct their activity, with a concurrent success at managing to maintain the exclusivity component, without exaggerating with media or publicity exposure (Okonkwo, 2007). It is a subtle equilibrium because the more a brand is perceived as more rare, the more its products are perceived as more valuable. 66 Keeping the brand image is a challenge when it comes to goods manufactured by famous brands, because brand dilution can be undermined, which is a perverted effect of popularity (Kort, Caulkins, Hartld, & Feichtinger, 2006, p. 1364). That is why choosing the channels of communication must be made very carefully (Geerts & Veg-Sala, 2011). In order to prevent brand dilution, Amaldoss and Jain (2005) advise deluxe manufacturers to use only exclusive channels to make their promotions and stock available known. Although the specialty literature does not recommend to use the Internet as a tool to promote deluxe brands, because this is how a brand image and its value are diluted (Curtis, 2000; Geerts & Veg-Sala, 2011), Okonkwo (2007) advocates the contrary, id est that using the Internet as a means of promotion can help deluxe brands become more known and, at the same time, it helps consumers know a brand better. Likewise, Kapferer and Bastien (2009) suggest that using the Internet as a means of communication is essential and it will not become a problem for deluxe brands as long as they don't sell on-line, because the on-line sale cancels the possibility of a personal relationship with the product. 3. MOBILE APPLICATIONS FOR DELUXE BRANDS One of the most influential types of publicity through mobile phones (Bellman et al., 2011), mobile applications, are used as strong marketing techniques to promote brands (Rohm et al., 2012). Mobile applications, also known as applications for smart-phones, are programs that run on mobile phones and execute specific tasks for mobile phone users (Mobile Marketing Association, 2008). Mobile digital technologies, such as iphone applications are more and more used for promotional purposes, because they are strong channels for communication and for brand image confirmation (Okonkwo, 2010). Forecasts show that, in 2016, 44 billion mobile phone applications will be downloaded worldwide. The number of mobile phone users is on the rise (Nielsen, 2013) and, therefore, they have become a platform to communicate brands (Kim et al., 2013), as well as for professionals working in advertising (Bellman et al., 2011). As opposed to the other forms of mobile marketing (SMS, MMS), mobile phone applications are nonintrusive. The reason is connected with the fact that users perceive these applications as services provided by mobile phones (Chen et al., 2005; Wang, Lin, & Laurn, 2006). Therefore, using this type of publicity, mobile applications are an ideal means to educate people with new classes of products (Bellman et al., 2011). Nysveen et al. (2005) highlight two mobile applications. They are classified according to purpose (for example, for payments) or experience (for example, for games). Mobile services that are oriented toward a clearly defined purpose are based on their utilitarian benefits and on their perceived usefulness, whereas mobile services focused on experience are oriented onto satisfaction of pleasures and are used as a source of entertainment. Bellman et al. (2011) also suggests two types of customized applications for mobile phones: dedicated to experiences (games) or informational (that help to solve problems), the latter aid in gaining information that is useful in influencing the intent to purchase. Both authors agree as regards the applications offering experiences, emotions, but informational applications can also be deemed as applications that can be used to achieve a precise goal. Therefore, users that employ applications destined to obtain information are driven by the same intentions as those who use applications serving to achieve a certain purpose. Both entertainment and perceived utility are important factors that influence the decision of consumers to use mobile phones (Nysveen et al., 2005). 4. DELUXE ATMOSPHERE The power of deluxe brands has been built with the aid of design and quality, together with the experience offered by stores that merchandise them (aesthetics, admiration, use of senses, interactivity and customization) and the message conveyed (Okonkwo, 2005). Due to a lack of human contact, in the past, the experience in on-line media was rather negative than positive (Okonkwo, 2007). Recent developments of the Internet have offered deluxe brands the opportunity to transform customer experience in on-line media into a positive and interesting one. In addition, by using methods that customize or change the product depending on customer preferences, there is also a possibility to use Deluxe atmosphere to create a more pleasant experience when using a deluxe brand. A concept first released by the consultants at French Luxe Corp, Okonkwo (2010, p. 121) defines Deluxe atmosphere as a prestigious atmosphere that the site of every deluxe brand aims to have both on-line and off-line. It is a combination formed by the words deluxe (lux in French) and atmosphere. The role of deluxe atmosphere is to create a splendid universe in virtual media for a brand that consists mostly in imitating the unique style, the identity, signature and codes that the brand uses in its off-line experience. Deluxe atmosphere plays an important role in on-line marketing for deluxe brands because it reinforces the image of a brand via a memorable experience offered when accessing the site, it facilitates pleasant experiences due to communication via the human senses, it creates a high level of attractiveness for on-line media, it generates intimate relationships with customers and it guarantees that users will remember the site (Okonkwo, 2010). 5. EXPERIENCE MEDIATED BY MOBILE PHONES 67 Marketing destined to promote deluxe products becomes more complicated. Among the challenges that deluxe products have to face there is also the one to offer an experience that lives up to the standards of life of their consumers (Atwal et al., 2009). An experience linked to the brand is one of the factors that influences a brand's identity. Consumers expect a brand to offer them an experience that would engage their senses and go straight to their heart; an experience that would delight them or provoke their curiosity, something truly authentic. (Schmitt, 2009, p. 417). In truth, consumers choose brands that offer them exclusive and unforgettable experiences (Zarantonello et al., 2010). Brakus et al. (2009, p. 53) defines the experience with a brand as subjective, an interior response of the consumer (sensations, feelings and cognitions) as well as behavioral responses elicited by stimuli that are linked to the brand and that are part of a brand's design, identity, communication and environment. A brand must ensure that promises made are in agreement with consumer experience (Chernatony & Riley 1998, p. 438). Deluxe brands need to be perceived as flawless, perfect, which aspect is connected to product quality, as well as to experiences offered through a service. Managers of deluxe brands believe that offering a positive experience in on-line media is an important quality (Okonkwo, 2010). That is why, in order to offer a positive experience, deluxe brands must create an atmosphere that is propitious in on-line media as an extension of experiences offered off-line, that would mesmerize consumers (Okonkwo, 2010). Ha and Park (2005, p. 440) define the on-line experience as a positive exploration of the consumer (for example, integration in a web community and partaking in events) and perceptions (the variety and uniqueness of exhibit, presentation, display) offered by accessing a site. 6. CONCLUSIONS Lately there has been noted a different dynamics on the deluxe market, which requires an appropriate research in specialty literature. Through time, it has been shown that certain aspects in defining luxury have changed, but the experience, the expertise of manufacturers, a personal approach and services to customers have remained dominant in the industry of luxury. A significant research made by Bain & Co in 2014 shows an increase of luxury product sales through the media and mobile networks in the past 11 years. In 2005, the total sales were around 1,7 billion Euro and just 1% of the sales were made online. In 2009, the percentage increased to 2%. In 2014, the total sales in the luxury products area were around 12,20 billions Euro and 5% of the sales were made online. According to the research, the market was growing in the last few years and the increase of the luxury products business was a significant one (around 24% between ). The media gained more power and influence and became an important factor that can influence the consumers purchasing behavior of modern luxury products. 7. BIBLIOGRAPHY [1] Amaldoss, W., & Jain, S. (2005). Conspicuous consumption and sophisticated thinking. Management Science, 51(10), [2] Atwal, G., & Williams, A. (2009). Luxury brand marketing-the experience is everything! Journal of Brand Management, 16(5), [3] Bain and Company, Luxury Goods Worldwide Market Study Fall-Winter 2014 [4] Bellman, S., Potter, R. F., Treleaven-Hassard, S., Robinson, J. A., & Varan, D. (2011). The Effectiveness of Branded Mobile Phone Apps
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