A brand is the sum of all the feelings, perceptions and experiences a person has as
a result of contact with a company and its products and services.This means that a company’s brand resides in the mind of consumers and that
the success and failure of a brand depends on its position in the consumer’s
mind. It also means that contrary to popular belief, a product (which is some-
thing manufactured in a factory) is not a brand. However, the product
becomes a part of the brand (the total experience), when it has been stamped
with the brand logo and transported to the store and displayed within the
unique store environment. It is this total package that consumers buy.
Products are easily outdated and can be copied by competitors and counter-
feiters but a brand is unique and timeless making it impossible to be imitated.
Also, a company’s corporate identity is not a brand but forms a part of the
brand.
The luxury goods industry uses branding as a core competence and recog-
nizes the important position of branding among consumers. For this reason,
the sector places an emphasis on branding and marketing strategy develop-
ment. These strategies are targeted at increasing the share of the brand in the
consumer’s mind through appealing to human emotions and psychology,
which are of course controlled by the mind!
Branding sustains attraction and influences consumers. A well-developed
brand is like vintage wine that increases in value with age and care and yields
long-term benefits. The rewards of branding are overwhelming but the
process of building a successful brand is a long, tedious and expensive exer-
cise that requires dedication and scrupulous management. However, the bene-
fits are sustainable and if carefully managed generate continuous returns. This
chapter provides insights into branding as a long-term investment therefore it
would be irrelevant for those seeking short-term branding benefits, which
cannot be found in this book.
Branding benefits
Before we go further into the interesting subject of branding, let’s take a look
at the benefits that branding brings to companies and their implications for
luxury brands.
Brands are assets to the companies that own them. This asset comes in an
intangible form and results in added financial and social benefits for busi-
nesses. To get a clear picture of the asset worth of brands for companies, let’s
take a look at the following illustration.
In 2006, Interbrand placed a brand value of US$17.6 billion on Louis
Vuitton, making it the most valuable brand in the luxury goods industry and
the seventeenth most valuable brand in any product category in the world.
This figure is exclusively attributable to the brand and excludes the
chapter 5 103the art of creating and managing luxury fashion brands