Life Style Marketing

Marketing to Gen X: The Importance of Authenticity

Recently an automotive manufacturer asked what trends would have the greatest
influence on the premium-priced market in the next decade. Our response was (a)
the shift from the Boomer Generation to Gen X and (b) the increasing importance
of authenticity as a brand attrbute.

In many ways the two trends are correlated. Gen X places great importance on
authenticity. I think it is related to their need to validate trust they place
(sparingly) in anyone or anything. Being authentic inherently requires a
consistency between a person's inner character and external behavior. The same
could be said of a brand: It must walk it own talk. And it should not attempt
to "put on airs" or pretend to be capable of something it cannot do
really well.

In the automotive sector than have been a few classic cases of a brand not
being authentic. The experience of the Jaguar brand under Ford Motor Company
specifically comes to mind. (Hopefully this can be overcome under Tatta.) Or
what General Motors did to Cadillac a decade ago. A current question is how
Mercedes is handling SMART. Or maybe that question has already been answered.

Toyota was very intelligent when it launched the Lexus brand. It knew that
"Toyota" as a brand at the product level would never see seen as
authentic luxury. It also knew that for "Lexus" to be an authentic
luxury brand it would have to "walk the talk" at every step in the
business process, from product design through distribution, sales and service.
It set up an entirely new franchise next work of very limited (i.e., exclusive)
scope and has held its dealers to the highest standards of performance.

But Lexus was for Boomers. We are waiting to see if Toyota is as successful
with brands it is launching aimed directly at Gen X.

Critical Success Factors for the Luxury Market

What are the factors critical to success in the luxury market? How does a luxury brand different itself from a "mass" brand? What does a "mass manufacturer" trying to move up-market need to worry about? This one-pager summarizes key factors to which senior management should attend.(http://www.premiumknowledge.net/assets/files/pdf/Luxury_Market_From_an_economist_POV.pdf)

Improving Marginal Pricing in The Luxury Market

It has recently come to our attention that economists, marketers and business planners working with luxury brands may not have a method for forecasting (with confidence) the range of marginal price increases possible for their specific product or service.

The difficulty in developing these estimates has been the lack of a comparable quantitative metric for measuring the marginal utility (i.e., intensity of desire) of these offerings to an affluent consumer.

in light of this understanding we realize that one of the applications of Premium Knowledge Group's existing research is to provide just such a metric by the use of mean scores for "Personal Drivers" of consumption (which are the basis for PKG's research). Since PKG has a historical data base of millions of transactions by several million affluent consumers we are able to project AT AN INDIVIDUAL OR AGGREGATE LEVEL the intensity of desire for consumers across a range of product and service categories.

In one application of this method (for a cruise line) we were able to identify that LifeStyle segment of the population which had already demonstrated price elasticity. Because the analysis is based on our scheme of LifeStyle segments we are able to provide the names and addresses of prospects who share that LifeStyle. For more information about how LifeStyle can help you improve your pricing power contact richard.baker@premiumknowledge.net.

Income and Wealth Inequality: What are the Marketing Implications?

http://www.pbs.org/newshour/rundown/2011/09/a-broader-view-of-americas-wealth-ineqaulity.html

Recent stories regarding the inequality of wealth (and income) in the U.S. should have profound impact on marketers. Putting aside the issues of social policy, more specific attention must be paid to marketing to the affluent versus marketing in general. The affluent buy for very different reasons than the "mass" population. And they buy in different ways

For some time this blog (and our website www.premiumknowledge.net) has pointed out that the most significant variable in the affluent consumer's decision to purchase is the semiotic (social signaling) content of the good or service. That is, the consumer asks him/herself "Does the article communicate to others (and reinforce for me) the identity that I want in this society?" Notice we use the word "identity" as distinguished from "social status" or "image."

To the person whose identity is heavily rooted in "personal frugality" it is important that the article convey (and reinforce) this image. This person will not buy a Rolls Royce motor car or a Hermes scarf even for an impossibly low sale price. It's not about price, it's about symbolism.

Likewise the individual whose identity is heavily rooted in being (and being seen as) affluent will buy a luxury car or designer purse instead of something more functional and less expensive in either category. Again, it is not about price. it is about symbolism.

Based on our research the top 25% of households (those with at least $100,000 in income) place great emphasis on the social signals that their purchases convey to themselves and others. We have identified 10 different sets of these values and identified the impact each set has on product preferences, pricing, channel selection, service expectations, etc by category (i., automotive, finance, travel, apparel, etc.). Again, these differences are WITHIN the top 25% who are responsible for the vast majority of profitable sales for today's mechant. In today's economy, instead of running sales and offering discounts to everyone, we recommend merchants understand the real value they are already offering to these afluent and price accordiningly.

For more information contact info@prmiumknowledge.net.

Revenue Per Email (RPE) and UNSUBSCRIBE rates

RPE is one critical measure for determining the success of a CRM campaign. In the long term there is an equally important measure: UNSUBSCRIBES. That is, what percentage of your customer base asks not to be contacted by future emails.

In a true cost accounting, a company would assign a value to each UNSUBSCRIBE. This figure would reflect the average future revenue potential of a customer. For example, if a company's average ecommerce revenue is $50.00 per customer and 10% of customers actually purchase in response to email, then each unsubscibe as a cost of $5.00. On a cumulative basis the cost of UNSUBSCRIBES can seriously erode the net revenues from CRM campaigns.

One of the great aspects of PRI-STAT LifeStyle messaging is that it reduces the percentage of UNSUBSCRIBES by almost 50%.