Luxury vs premium brands

Luxury vs premium brands

How should you think of your brand when you have a product that costs a lot to use? Is an expensive product automatically luxury? How should we draw a distinction between luxury and, say, premium?

I thought it would be interesting to address this via a sector that most of us automatically associate with high living. The private jet market is a busy and dynamic sector, and one that seems to have a highly uniform view of where it is positioned and how it should communicate. That’s not surprising. In Europe, business jets are very much the transport of choice for luxury-focused consumers such as wealthy Russian entrepreneurs – and the marketing reflects that. Flick through any number of participant websites and the images and the brands quickly blend into a monochromatic deck of luxurious interiors, different models of jet either in the air or parked up, and, occasionally, happy looking people enjoying life. Put your hand over the brand and it’s almost impossible to tell one company from another. The messages too are generalised. There’s a lot of talk about comfort, privacy, time and deals. It’s a time-honoured way of talking to that market.

But, to revert to the question I started with, is a private jet automatically a luxury item? Can, and should, we draw a distinction between when a private jet is used to transport people for fun or recreation versus when one is used to move busy executives from one place to another?

The evolution of luxury

Professor Jean-Noël Kapferer has done a lot of work in the area of luxury branding, and in this presentation, he makes some fascinating observations about how luxury is evolving and what those changes may mean for how we position high-end products going forward. Luxury brands, he says, cater to the specific, global market of the haves. They are examples of consumption at its most obvious. They are displays of wealth that revolve around strong social cues such as social elevation, a sense of timelessness, priceless experiences and a strong hedonistic drive.

Luxury and premium are not a continuum according to Professor Kapferer

One of the reasons that consumers are confused by what constitutes luxury today, he says, is that many of the cues of luxury are making their way into the mainstream brands and onto the High Street in greater numbers and at far faster rates. This “democratisation of luxury”, as others have called it is, according to Professor Kapferer, motivated by the wish of consumers to aspire to a more luxurious lifestyle and their belief that they should be able to do so more ambitiously and more quickly as of right. The response of everyday brands to these consumer cues has consequently blurred the boundaries between luxury and other.

This, and the introduction of new ‘categories’ at the less affordable end of markets, has led marketers to see luxury as an elevation of premium. But Professor Kapferer cautions that the two should not be confused, and that premium is a more cautious and substantiated purchase strata than luxury. If luxury is about ‘irrational’ buying in order to endorse wealth and standing, premium is about paying more than most would normally, but – and this is critical – doing so for pragmatic reasons. So premium is about performance, price and rational investment based on how alternative approaches stack up in terms of time, affordability and convenience.

Segmenting luxury and premium

Neatly, for the purposes of our discussion, the different motivations for using a private jet divide cleanly between private use (which is more likely to be based on luxury motivations) and business use (which is more likely to be justified for premium reasons). This is not to say that both private and business users don’t borrow reasons from the other market to justify the purchase. What it does suggest though is that the private jet sector probably needs to segment its offerings more thoughtfully and specifically rather than continuing to sell its offer in such a uniform way.

For example, those wishing to engage with business users should probably focus more on how the decision to transport key executives benefits the business (and shareholders) rather than accentuating what those using the service get. And they should probably put more emphasis on why a particular brand’s offering suits specific sectors or circumstances. I have no doubt that many of these arguments come up in the sales process but they are not front and centre in the brand’s value proposition and not enough is being done in my view to make it clear why a business should choose a specific private jet brand over another. The power of a B2B brand comes from its ability to distinctly add value at a reduced level of corporate risk. Private jet brands should pay more attention to this.

Equally, those looking to engage with individuals should play up the luxury elements of what they offer as brands and how the choice of their specific brand endorses and reinforces all that the person has achieved in their life. Right now, many companies are still operating as participants.

By focusing their offers, segmenting their audiences and being very clear about their competitive differences, private jet brands have the opportunity to deliver more value-oriented views of their place in the sector and of the differences they can contribute as individual brands. Doing so will help them articulate both their role much more clearly. It will also enable them to cater much more flexibly to drivers beyond their control such as shifting economic circumstances. For example, with oil prices as they are now, some jet operators may wish to focus on premium audiences rather than luxury-level customers in certain parts of the world. They may even want to set up a separate brand to cater to that market. That way, they can draw on their current reputation whilst targeting new types and levels of sales.

Acknowledgements
Thanks to aviation branding expert Philippe Rouin of Branding Pass for his help in writing this article.

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