Marketing Luxury Brands: Appealing to the Luxury Cognoscenti

Luxury brands are becoming affordable to an increasingly large group of people, as the economies of countries like China and Russia create many more wealthy and affluent people. Even in the USA, the number of millionaires has increased dramatically in recent years. What does this influx of nouveau riche do to the traditional luxury market? The same thing that happens in other markets: it forces further market definition and segmentation. As nouveau riche across the globe revel in their new-found purchasing power and rush to release their pent up demand for luxury brands, many of the already established luxury consumers are seeking refuge from these hoards and their often ostentatious consumption of luxury goods and services. Many of those established luxury consumers are attracted to luxury brands that convey “being in the know” rather than just “being able to” afford it. Luxury marketers can appeal to this group of “luxury cognoscenti” by enabling consumers to differentiate themselves on the basis of the depth of their knowledge, by providing even more exclusivity, or by showing that they are at the forefront of a new definition of luxury. Brands that are already appealing to the luxury cognoscenti include Tesla Motors (environmentally friendly luxury sports car), American Express’ Centurion Card (by their invitation only), and Raffles Hotels & Resorts (transcending the standard formula for a luxury hotel experience).