Are you GREEN?

Are you GREEN? We Green!

I was surfing through the internet doing my homework, searching for a luxury brand who performs low in the area of sustainability, when I stumbled across this interesting website http://www.wegreen.de/en/.

WeGreen is a searchengine providing information about sustainability. Based on Sustainability Footprint, WeGreen provides information regarding how ecological, social, and transparent companies, products or brands are. WeGreen collects all substantial, factual and credible ratings about the Corporate Social Responsibility (CSR) of companies, then analyze that information objectively in the Sustainability Footprint and present it in the website (WeGreen, 2011). It helps consumers choosing a brand or product that is ethical and sustainable, beneficial to themselves and society as a whole. Through the main page of WeGreen, users can just type in the name of the company/brand they want to know and get the information regarding how sustainable those brands are.

The score is ranked mainly as Red (not sustainable), Yellow (average sustainable), and Green (very sustainable) light. The score is done by 'Rank a Brand', the non-profit organization aiming to educate consumers with information that enables them to consume in more responsible and sustainable way. Basically, Rank a Brand conducts a research on webpage of each brand manufacturer, collecting information available on corporate website regarding; climate policy, protection of the environment, and working conditions and human rights. The evaluation is based upon a shortlist of 16 criteria of how a company is performing in relation to these sustainable topics.

Yves Saint Laurent is one of the luxury fashion houses that doesn't perform well in sustainability and CSR, and is badged as red-light company. Yves Saint Laurent is currently owned by PPR Group. It offers fashion clothing, shoes, bags, accessories, cosmetics, perfumes, for example. Yves Saint Laurent is world-renowned and popular among fashionistas and consumers. However, the brand neglects to put importance on the area of sustainability, ethical conduct, and CSR within its brand as it is one of the most crucial aspects every brand needs to pay attention to. Yves Saint Laurent complies with only 4 out of 16 criteria as followed;

 PPR corporate website, owner of Yves Saint Laurent, has partially mentioned about a policy for the company to minimize, reduce, or compensate carbon emissions. It is stated as one of the 7 CSR priorities, a common framework for each brand within the company to utilize in their own way. However, these matters are not mentioned in Yves Saint Laurent's website and there is no clear explanation of how Yves Saint Laurent does in this area. Also, Yves Saint Laurent performs none of the criteria based on environmental policy. However, it performs 3 out of 8 criteria regarding Labour conditions/ Fair Trade.

As it is obvious that Yves Saint Laurent currently focusing on fashion aspect only, I strongly suggest that Yves Saint Laurent should do more in sustainability. It should launch Green product line, featuring various of its signatured products such as Muse bag, pump shoes, suits, dresses that are manufactured based on organic products, no leather used, in ethical and sustainable way only. Percentage of sales will be donated to charitable environmental organizations (Fairtrade Foundation, FETA etc.) and conduct research on more sustainable technologies as a way to give back to the society as a whole. Consumers will also feel that they are consuming sustainable products, saving the world and supporting the Green concept at the same time, providing them with more incentives to consume luxury products and not feeling guilty.

In order for any company to become successful in doing business, it has to pay attention to various aspects ranging from producing quality products that meet with consumers needs to offering the best service in store. However, nowaday brand needs to focus on environment and sustainability as well in order to win the heart of consumers as loyal ones. Wouldn't you think that if Yves Saint Laurent does Green products, you wouldn't definitely want one? I personally believe so.





Bibliography
1. WeGreen (2011). Available at: http://www.wegreen.de/en/ (Accessed 3 April 2011)
2. Rank a Brand (2011). Available at: http://www.rankabrand.org (Accessed 3 April 2011)
3. PPR (2011). The 7 CSR Priorities. Available at http://www.ppr.com/en/commitments/7-csr-priorities# (Accessed 3 April 2011)
4. GucciGroup (2011). Code of Business Practices: Ethic Guide. Available at http://www.guccigroup.com/documents/2009/Business_Practices_English.pdf (Accessed 3 April 2011)
5. PPR (2011). Corporate Social Responsibility. Available at http://www.ppr.com/sites/default/files/download/PPR-Engagement-Publi-RSE_Point_d_etape_ndeg2-2009-EN.pdf (Accessed 3 April 2011)

ECO-Everything

We all know that sustainability, ethical conduct, and CSR within any brand are indispensible nowadays. Brands employ these strategies differently especially in luxury brands as their special obligations to do so since they have more potential margin and capitals to utilize. Consumers are now demanding for products made in environmental-friendly way and they are willing to pay more for Green products, knowing that they are doing good deeds back to the earth. On the contrary, brands are using this as a rational for customers to pay for high-price goods. Many world-renowned brand names are increasingly focusing on this area but one of the brands that perform it well is Stella McCartney.

Stella McCartney, famous British designer, launched her own fashion house under her own name in 2001 and it now becomes widely-known all over the world. She is also known for her environmental-concerned and considered a pioneer in fashion industry with her commitment to help protecting the nature as much as possible; strongly supporting PETA and her personal philosophy as a strict vegetarian. She doesn't use fur or leather in any of her design and states her point of view clearly to the world. No animal policy is always elaborated in her products.

Stella McCartney demonstrates her core value of going Green in various ways. In 2007, she unveiled her unique product line, CARE by Stella McCartney, a luxury certified organic skincare, formulated with 100% organic active ingredients and 0% petrochemicals or silicones (Sephora, 2011). The products are ranging from cleansing milk made with lemon balm and apricot to green tea and linden blossom floral water. Stella McCartney expresses her personal principles through the products. Sustainability and ethical conduct are embedded in the design of her products.

She is also concerned about many other environmental issues. The impact from the use of meat and its by-product causes environmental problems. According to many studies by UN's Food and Agriculture Organization and NGOs, meat production process is responsible for 18% of all manmade greenhouse gases, which is 5% more than global greenhouse gas emissions from transportation. The animal leather making for clothing causes many pollutions and solid waste as well. These surprising facts raise environmental concerns regarding human reliance on meat. Therefore, Meat Free Monday campaign was founded by Paul, Stella, and Mary McCartney to raise awareness of climate-changing impacts from meat production and consumption. It promotes human to consume less meat and consider tasty vegetarian alternative instead.

For Stella McCartney's bags and shoes, they are manufactured from organic, synthetic fibres, woven, non-leather materials in which require hand-made execution by skilled artisans. With this attempt to use only non-leather materials, Stella McCartney faces more difficulities in manufacturing processes & production techniques, sourcing textiles and higher costs than other brands, for example, since the work is 70% by hand, it costs the brand up to 70% more to produce a pair of shoes than any other brand. However, the prices are never marked up for this. Stella McCartney embraces the slow fashion concept where goods are made by hand and meant to last for decades. These are the core values that the brand consistently adopts. 

Moreover, the company approaches sustainability in its use of Ecotricity, electricity from clean forms of power like wind, in all Stella McCartney's stores, offices, studios and even Stella's own house. In 2009, Stella McCartney Ltd recycled 2,563 kilograms of paper and 1,408 of plastic. More than that, Stella McCartney shipping bags are made from corn, exclusively invented for the brand, and 100% biodegradable without polluting the nature within one year.

If you are one of the environmentalists, you might probably be one of Stella McCartney's fans, but if not, would any of these make you interested in this brand? There is a high chance it would work that way since it starts to get my attention already!



“Green and fashion runs the risk of becoming a trend, and trends pass,”

No one knows if sustainable luxury will last or it's just another come-and-go fad. What everyone knows is that the world needs to be healed and pampered, just like human as well.

Bibliography

1. StellaMcCartney (2011). Available at: http://www.stellamccartney.co.uk/ (Accessed 30 March 2011)

2. Sephora (2011). Care by Stella McCartney. Available at: http://www.sephora.com/browse/brand_hierarchy.jhtml?brandId=5856 (Accessed 30 March 2011)

3. Wikipedia (2011) Stella McCartney. Available at: http://en.wikipedia.org/wiki/Stella_McCartney (Accessed 30 March 2011)

4. Kahn, J. (2009). Luxury-Goods Makers Embrace Sustainability. Available at: http://www.nytimes.com/2009/03/27/business/worldbusiness/27iht-sustain.html?adxnnl=1&adxnnlx=1302268940-K4jRzrPpddpvlo6q7ZlAbQ (Accessed 30 March 2011)

"The Designful Company"

I was assigned to read this interesting article, The Designful Company, by Marty Neumeier, President of Neutron and I found it very useful, rasing many issues in the world nowadays that I would like to share.

"Innovative and distinctive brand expresses experiences that rivet minds and run away with hearts."

In order for any brand to be perceived as above quote, it has to emphasize on one essential factor in its business; design. In the past with Industrial Age thinking, a company usually focuses on reducing price and inventing high technologies to help master that. Now, the importance is shifting towards the concept of customer experience, eco-sustainability, social responsiblity, and the use of design. Today, innovation won't work without emotions. Brand won't perform well without its meaning. A new business model must be embraced.

To compete with others, brand needs to differentiate itself by means of design and innovation. Design itself is considering a powerful tool with its abilities to pinpoint potential trends in the future, invent something unique, build connection with customers, for example. The world is now focusing on Design Thinking.

Design is moving up to become key factor indicating success of a brand. Creativity is inevitable as a drive for economic growth. Every detail of a company can exploit benefits from design one way or another since design is now moving forward from tangible products to processes, systems and organizations as well. It empowers a brand with the ability to attract customers and sustain them as loyalty ones.

Moreover, there are 2 more components defining business success; brands and their delivery. Brand that employs design as differentiation tool and a way to enhance customers' satisfaction tend to become more successful  and irreplaceable in the market. Their profits margin is really high, for example, Googles, Apple. Besides, doing so with agility fulfills everything. A brand needs to be open-minded, active, innovative, and receptive to new ideas in order to sustain its competitive advantage at the forefront.

Last but not least, eco-sustainability or going green is widely accepted all over the world. Any company needs to show that they care for the nature, for the earth, for the welling being human being. Customers are not only looking for quality products, but also a good feeling towards themselves for consuming guilt-free affluence products and doing good deeds to the society at the same time. There are various ways to show sustainability to a brand such as reusable materials, reducing pollutions, waste reduction, CSR activities, but the question is how far a brand could go in doing so, especially in a case of luxury brands?

As the world is paying attention to sustainability and benifits back to the environment, there are growing concerns over the effects it might have on luxury brands and consumers experience. How can a premium brand be sustainable and at the same time remain stylish? Luxury brands are about quality, craftsmanship, emotions and also exquisite experiences. On the other hand, almost every brand does realize the importance in this sustainability issue and try hard to go along with the trend. However, with eco-everything, will it destroy luxury brands' image and what they stand for? In many countries nowadays, for example France, has passed out a new law limiting the use of packaging to only protect a product while tremendous amounts of luxury brands use packagaing as a way to deliver beyond-expectation experiences and offer more to customers. It is a controversial area here but for luxury brands, all they need to do is to maintain its consistency in delivering sumptous product/service while paying back to the nature as well. The world needs to see the proof that eco-luxury is possible, isn't it?

  


Bibliography
1. Neumeier, M. (2008) 'The Designful Company', Design Management Review, 19 (2) pp.10-15
2. Hildebrandt, S. (2009). Sustainablity: Luxury Brands' Friend or Foe? Available at http://www.brandpackaging.com/Articles/Feature_Articles/BNP_GUID_9-5-2006_A_10000000000000693202 (Accessed 29 March 2011)

Design Process

"A business plan is a roadmap and design offers an exciting journey." 

In order to be different, one must be creative. Within luxury, it is even more critical that people think creatively. In the past, profitability, maximum sales, practicality are amongst the most important criteria for brand management. Now, design plays crucial role in branding and differentiates good brands from others.

So, what is good design? Design is a subjective matter and depends on individual's preference. Good design can derive from creativity, quality, convenience, durability, functional, ergonomic, uniqueness, personality, timeless, flow with trends & fashion, practicality, craftsmanship, simplicity, and many more. People might have different opinions and viewpoints of what constitutes a good design, however, these are basic criteria for one.

What are the elements in design process?

- Design brief

- Market research

- Brainstorming ideas

- Surveys

- Prototyping

- Internal approval

- Testing

- Test launch

- Visuals

- Actual prototype manufacture

- Stylisation

- Budget constraints

- Materials

- Legislation

- Logistics

- Economy of scale

- Licences

- Graphic communication

- Authenticity

To conclude, 5 things that usually happen in design process are investigation, discovery, ideas, refinement, and production. What design thinkers have to balance are exploration & expliotation, invention & administration of business, and originality& mastery.

So ... are you a design thinker?

S.F. Energy Drink

Finally, with my intention to do Ferrari's brand extension, S.F. Energy Drink has come to life!! With abundant back up supplies of Ferrari, the brand has decided to launch its own energy drink which can help the brand closing a gap of the current products. S.F. Energy Drink not only sustains the image of Ferrari brand as a luxury energy drink/ sports drink but also completes the magnificent sports product line of the parent brand.

S.F. Energy Drink, in which the name stands for Scuderia Ferrari racing team, offers unique and convincing competitive advantage (UCCA) by creating sensory of Ferrari branding. Ferrari’s core value will be emphasized on S.F. Energy Drink by visual form of authentic Ferrari design with the purpose of creating brand recognition and brand recall.

S.F. Energy Drink is a luxurious energy drink that induces exclusivity by its intangible assets and perceived quality of iconic Ferrari symbol. Whilst other competitors concentrate on sales through mass distribution channels with low price, S.F. Energy Drink targets at a niche market.

S.F. Energy Drink will be exclusively distributed only selected premium outlets; Ferrari stores, Ferrari racing event, Grand Prix and Ferrari Driving Academy. The price of S.F. Energy Drink is higher than other available energy drinks in the market as a result of its design cues, luxurious brand positioning and brand image, great taste and finest production process.

There are 3 available packages; Large bottle, Small bottle, and Sporty bottle respectively as belowed images.

This sporty packaging  is specifically designed for athletes who look for comfort and convenience. With its easily-open cab on top and clip at the back of the bottle, drinkers can attach S.F. Energy Drink to its sportswear while exercising, providing ease at hand, high quality product with renowned brand image of Ferrari passing to customers.

How would it be like if you already have a Ferrari car and you can enhance your aspirational lifestyle with this luxurious S.F. Energy Drink? Or what if you cannot afford a car but you can still be a part of Ferrari family, being socially accepted by your peers and regarded as a trendsetter? S.F. can give you all of those!!!

Customers relationship is the optimum goal!!

Managing customers satisfaction and retention is necessary for any brand, especially in service sector. The customer relationship process has one fundamental goal; maximising the life time value of customers which will lead to future flow of new profit discounted back to the present that can be attributed to a specific customer. Basically, it means that if the customers are satisfied with the quality of product/service, there is a higher tendency that they will continue using the brand and become loyal customers eventually. However, in order to manage this efficiently, brand needs to realise that not all customers are equally and as profitable as others. Targeted customers must be identified so that brand can devise strategies to enhance possibility. Good relationship also starts with a good fit between customer needs and company capabilities. The process starts by identifying who we are, who we are targeting and who we should be serving. Especially in luxury market, brands have to be selective and emphasize the importance of serving a well-chosen portfolio of carefully chosen segments and taking great care to build and maintain their loyalty.

There are 4 types of customers based on the concept of relationship with customers.



1) Platinum constututes a very small percentage of the customer base but contributes a large share to the firms profits. They are not price sensitive but expect the highest service levels. According to Pareto's famous principle of the 80/20 rule, 20 percent of customers account for 80 percent of sales (Tracy, 2009). Therefore, the company needs to focus on managing those 20 percent efficiently. They are very committed to the brand.

2) Gold has a larger number of clients than the platinum tier but they contribute less profit. They are more price sensitive and slightly less committed to the brand.

3) Iron provides a customer base and can give companies the economies of scale; reduction in cost per unit as a result of an increasing level of production (Investorwords.com, 2011). So, they are important since the company can build and maintain a certain capacity level and they are marginally profitable.

4) Lead tends to generate low revenues but requires same level of service and high management costs as others.

Furthermore, it is a strategic philosophy of operating a business to focus on keeping current customers and improving relationships with them rather than investing in acquiring new customers. The aim is more on retention and enhancement of customer relationships. Now, the question is what make customers loyal to a brand? What are the drivers leading to customer loyalty? These are example of answers we got from class discussion;

- How the brand make you feel?

- Delivering positive experience

- CRM programmes

- Well-trained & well-mannered staffs as the face of the brand

- Never critisize customers' taste and choices

- Go the extra miles

- Staffs always leave their personal problems behind when they are on duty

- No yawning!

- Perfect fit between brand personalities and customers' taste

However, how do customers evaluate the services? Services can be difficult to evaluate before purchase since it is considered an intangible product. Customers tend to worry about the risk of making a purchase that subsequently leading to disappointment. There are 3 criteria used to make an evaluation; search, experience, and credence attributes. Srinivasan & Till (2002) suggested that

"Prior to trial, brand name increases consumers’ perception of experience and credence attribute performance evaluations. However, brand name is found not to affect consumers’ perception of search attributes. Trial of the brand is found to reduce (and not eliminate) the advantage branded products have in enhancing consumers’ perception of experience and credence attributes."

One key point is that companies must have effective service recovery strategies for resolving problems and dealing with disgruntled customers when the level of satisfaction is below expectation.  

From my personal experience of good service, I thought about my dinner at Claridge's, one of the luxury prestigious hotels in London, a while ago.

It was my best friend's birthday and I booked 2weeks in advance for dinner at The Reading Room. I made reservation online and I received prompt response from the hotel staff. I did make a query that it was supposed to be a surprised birthday dinner and I asked them if there's any complimentary gift they could provide. They responded quickly offering a complimentary special dish. On that day, they had everything ready and they asked me privately who the birthday girl was. The atmosphere was perfect, warmy and cosy, not like any other stiff worldclass restaurants. Other customers seemed to relax and enjoy the moment. Some were having a business meeting and the staffs wouldn't bother and let them take their time. The staffs were all attentive and taking the best care for all customers, in the mean time, they gave enough space and respected the privacy of customers. I enjoyed my meal very much and with its high-quality of service, I intend to go back again surely. This could be an example of luxury brand with its mission to deliver the best service consistently.

It is doubtlessly why Claridge's maintains its good customer relationships and gains more loyalty customers, including Paul Smith whom I personally met there over the dinner and one of the big fans of this luxury yet cosy restaurant.

Bibliography

1. Tracy, B. (2009). Eat That Frog!; 21 Great Ways to Stop Procrastinating and Get More Done in Less Time. San Francisco: Berrett-Koehler Publishers.

2. InvestorWords.com (2011). Economy of Scale. Available at: http://www.investorwords.com/1653/economy_of_scale.html (Accessed 27 March 2011)

3. Srinivasan, S. and Till, B. (2002). "Evaluation of search, experience and credence attributes: role of brand name and product trial", Journal of Product & Brand Management, Vol. 11 Iss: 7, pp.417 - 431. Emerald Insight Collection [online]. Available at: http://www.emeraldinsight.com/journals.htm?articleid=857799&show=abstract (Accessed 27 March 2011)

Who said money can't buy love?

I was flipping through Vanity Fair when I noticed one plain simple advertisement, black background with red heart-shape magnet in the middle with the tag line "Narrow the Field". It made me interested what this ad was all about. Then, I saw the name "Gray & Farrar". Without the description, I wouldn't know what the brand offers.

Gray & Farrar is an excellent example of luxury service brand. It is the ultimate matchmaking service where only the most eligible single people are accepted as clients. The success of its service is a result of its success of selection criteria and premium quality of service. Also, Gray & Farrar states firmly that it is certainly not right for everybody, reflecting its core value of exclusivity and luxury. Luxury brand is surely not for everybody.   

It is renowned for being ultra exclusive, personal and client-based, one of the world's best kept secrets, and customers' privacy and confidentiality issue is at the forefront of what they do. There is no internet and computer used in their business but only hand-written blue or pink folders are kept safely as a database for security reasons. Gray & Farrar service aims at millionaires and billionaires who have loads of money but lack of love.

Gray & Farrar has its headquarter located in the area of Berkeley square, Mayfair, London, with business operating internationally as well in Geneva, Brussels, Monaco, Milan, Paris, Hong Kong, Los Angeles, and New York. It is owned by Virginia Sweetingham who just recently has her daughter joining, Claire, and they work with a team of professional executive matchmakers. Operating the business for 23 years, they make a fortune from providing romance for those rich love-starving clients. The fee ranges from GBP 10,000 upwards and limitless depending on the bespoke service they are offering. The high price is an indication of Gray & Farrar and clients' commitment to find the right person

They currently have 750 male and 750 female client base, wealthy but single people who are ready to commit and look for loyalty and trust. The median age is around 40 years old with the youngest at 22 and oldest at over 70 years old. The service is not just a casual dating. The most challenging thing is to find the right and compatible partner for clients, providing them with a chance to getting to know new people and enter different social circles in a dignified way. 

One of its interesting elements is the brandname "Gray & Farrar". I personally think it follows the mantra of luxury brands in choosing the name for its business. Normally, brand name often captures the central theme or key associations of a product in a very compact and economical fashion. It is an effective shorthand means of communication because it is closely tied to the type of product in consumers' mind (Keller, 2003). However, for luxury brand, it tends to use fashionably distinctive name or human's name, mostly founder or designer, as a brand name. With Gray & Farrar, the owner didn't want to use their own name and neither the cheesy name that has something to do with matchmaking service. Sweetingham looked through the phonebook and picked two common surnames, Gray and Farrar, as the name of the business. It is the most suitable name as it has nothing involving what they do, subtle and discreetly. They believe the name reflects privacy and sensitivity, reducing the customers' awkward shame and embarrassment in approaching for help.

The requirement and criteria of the service can be extremely fascinating, specific brief that requires bespoke service. One key tool that Gray & Farrar has is the world's lists of most beautiful and available men and women at hand and their expertise. Believe it or not, Gray & Farrar performs successfully in 90% of their matchmaking.

"We can't deliver chemistry. We offer fate and chance. We stage, we don't script." - Sweetingham      

According to ABIA (Association of British Introduction Agencies), UK dating statistics show that 52% of men and 48% of women have used the internet to find a date. It is clearly now that as the world is moving forward and people have all kinds of products and services to serve their needs, it is easy to use money to buy satisfaction, even for love. With dating service on the rise and luxury business growing continuously, Gray & Farrar is one good example of luxury service brand well-performed in the market, with the right positioning and tactic it employes in order to be successful.

It made me think of the movie Indecent Proposal and the old cliché of money can't buy love. Well, in the era of 20th century, I have to agree there is almost absolutely nothing money can't buy, including the big word, L-O-V-E! 

Bibliography

1. Keller, K. (2003). Building, Measuring, and Managing Brand Equity USA.: Pearson Education.

2. GrayandFarrar (2011). Available at http://www.grayandfarrar.com/en/go/welcome (Accessed 14 March 2011).

3. Copetas, A. C. (2011). Lonely Billionaires Roam Globe for Luxury Love Therapy. Available at http://www.bloomberg.com/news/2011-01-19/lonely-billionaires-roam-globe-seek-luxury-love-therapy-a-craig-copetas.html (Accessed 13 March 2011).

4. BanburyGuardian (2006). Love on Offer to Lonely Hearts. Available at http://www.banburyguardian.co.uk/news/love_on_offer_to_lonely_hearts_1_587753 (Accessed 14 March 2011)

5. Musafer, S. (2011). The Price of Finding Love: How Much Would You Pay? Available at http://www.bbc.co.uk/news/business-12017394 (Accessed 13 March 2011).

6. Toffsworld (2010). Gray and Farrar, The Ultimate Matchmaking Service. Available at http://toffsworld.com/lifestyle/dating-agencies/gray-and-farrar-the-ultimate-matchmaking-service/ (Accessed 13 March 2011).

7. Association of British Introduction Agencies (2011). Available at http://www.abia.org.uk/ (Accessed 14 March 2011). 

8. The Internet Movie Database (2011). Indecent Proposal Memorable Quotes. Available at http://www.imdb.com/title/tt0107211/quotes ( Accessed 14 March 2011).    

Servicescape

What is servicescape?

Servicescape or service environment is about the style and appearance of the physical surroundings and other experiential elements encountered by customers at the service delivery sites.

Lovelock & Wirtz (2004) stated that the surrounding and atmosphere affect buyers behaviour in threee crucial ways;

1. Message-Creating Medium - Symbolic cues to communicate the distinctive nature and quality of service experience
2. Attention-Creating Medium - To make the servicescape stands out from other competing establishments and to attract customers from target segments
3. Effect-Creating Medium - Colors, textures, sounds, scents and spatial design to enhance the desired service experience and/or to heighten an appetite for certain goods, services or experiences.

These help the brand  to create its distinctive image and unique positioning. Servicescape is a part of value proposition.

Moreover, there is another important fundamental model of how people respond to environments which is called "The Mehrabian Russell Stimulus Response".

Source: Lovelock & Wirtz (2004)

The model explains that the environment, its conscious and unconscious perception and interpretation, influence how people feel in that environment. Feelings, rather than perceptions or thoughts, drive behaviour which typically are 'approach' or 'avoidance'.

The Russell Model of Affect also elaborates different types of emotional responses to environments.

Source: Lovelock & Wirtz (2004)

Emotional responses to environments can be described along two main factors; pleasure and arousal. Pleasure factor depends on the level of how people like or dislike that partucular environment. On the other hand, arousal factor depends on its information loads.

Furthermore, there are 4 interesting roles of servicescape (CollegeofBusiness, 2011)

1. Package: a visual metaphor for the intangible service. It is similar to product's package but on the contrary, it is the wrap of service. It is the first impression of the service, predetermination of its intended image in customers mind which provokes a particular sensory or emotional reaction.   
2. Facilitator: aids the performance of the persons in the environment, both customers and service employees, to get the most out of the opportunity and perform best in their role. It can also establish efficient flow of activities.
3. Socializer: assists the socialization of the employees and customers, conveying expected roles, behaviours, and relationships.
4. Differentiator: helps differentiate a firm from its competitors and also one area of service from others. Additionally, it can  signal the market segment that is the targets for service offering.


After that, we had in-class group activity regarding this subject area and we chose a luxury brand to work on around the concept of servicescape.

Our group chose Cartier. We discussed about Cartier boutique's environment. We all agreed that it has pleasant environment with elegant interior design based on the mix of modernism and heritage. It plays  classical music as a background ambience, building more enjoyable shopping atmosphere. Drinks are always served for customers who visit the shop. Corporate colours, which are red and gold, are used simultaneously and consistently to convey its strong concept of passion. Besides, Cartier always focuses on its quality products, suitable as a gift for celebration and special occasions, and uses storytelling to enhance its brand heritage and craftsmanship, with its long history of serving royalties and its 'King of Jewellers' position.

It is obvious now that for service segment, employees are one of the most important factors that determines the performance and quality of the service. Especially in luxury brands, it is necessary to have standardized training and high quality staffs which represent the brand. Good employees should be passionate and knowleadgeable in what they do, interested in the brand itself, be able to provide information, empowered, caring and understanding. Their personality should match with the brand, have good image and behaviour, employ good interaction and communication skills, look clean and appealing, well-groomed as they are the face of the company.

Service culture empowers employees to solve customer problems. It is supported by a reward system based on customers satisfaction. However, in order for employees to perform well, they have to love and be happy with their job.Winning the heart of the employees is what the company has to do first. For employees to fully appreciate their job, they must be allowed more latitude in dispensing their duties, leading to the concept of empowerment.

Empowerment is the process of enabling or authorizing an individual to think, behave, take action, control the situation and make decision on the most effective way. It allows employees to make faster decision making process which in turn increases productivity, enhances the service experience and improves performance. Nevertheless, not everyone likes the idea of empowerment. It can have negative effect on the employees since it can be stressful with big responsiblities to do everything on their own as well.

Too much power and control isn't always good, isnt it?




Bibliography
1. Lovelock, C. and Wirts, J. (2004). Services Marketing: People, Technology, Strategy (5th edition), London: Prentice Hall.
2. College of Business (2011). Chapter10: Physical Evidence and the Servicescape. Available at http://cob.jmu.edu/reidrd/Slides/Chp%2010%20Servicescape.PDF (Accessed 13 March 2011).

Waiting to be served!

There are millions of products available for customers nowadays depending on what they are looking for. Product can be classified into physical good, service, retail store, person, organization, place or even idea (Keller, 2003)

What is service?
Services are economic activities offered by one party to another, most commonly employing time based performance to bring about desired results in recipients themselves or in objects or other assets for which purchasers have responsibility

Service is considering a big player in the market these days especially in luxury business. Customers are looking for excellent, beyond-expectation service to serve their unfulfilled needs. There are different levels of service involved in different business categories.

There are four main characteristics of a service
1.) Lack of ownership: service cannot be owned or stored for later usage like products. It is used for only a specified period of time.

2.) Intangability: service is intangible and cannot be held or touched like a substance. However, the experience customers get from that service is measurable and do affect brand perception and feeling towards the brand

3.) Inseperability: service cannot be seperated from the brand itself or service providers. It is produced only at the point of purchase.

4.) Perishibility: service lasts for a specific time and cannot be stored for later use. It is produced and used almost simultaneously

With its unique characteristics and nature, services need the extended elements of the marketing mix (8 P's)

• Product elements
• Place and time
• Price and other outlays
• Promotion and education
• Physical environment
• Processes (systems used to assist the organization in delivering the service)
• People
• Productivity and quality

After the lecture, we all were assigned to think about any service and elaborate on its element of 8 P's. Our group chose to work on Movida which is one of the popular luxury clubs in london.

We believed that for luxury clubbing business, product elements are the most important thing to consider in the marketing mix. Due to its highly competitive market, each club needs to differentiate itself by what it is prominently offering to clients; quality alocohol products and great music, followed by place and time, physical environment, productivity and quality, price, people, process, and promotion respectively.  

Lastly, because of the intangibility factor that mainly affecting the way customers form their evaluation towards the service, there are 10 recommendations for improving service quality (Keller, 2003)

1. Listening: understanding what customers are looking for and expecting from the service

2. Reliability: most important dimension of service quality

3. Basic service: deliver what you are supposed to do and keep your promises

4. Service design: develop a holistic view of the service

5. Recovery: encourage customers to complain and respond promptly

6. Surprising customers: offer beyond expectation services

7. Fair play: always be fair

8. Teamwork: maintain employees' motivation and capabilities for standardized services

9. Employee research: do research with employees to see what the problems are and solve them

10. Servant leadership: inspired leadership throughout the company and excellent corporate culture

Remember, customer is still always right!

Bibliography
1. Keller, K. (2003). Building, Measuring, and Managing Brand Equity USA.: Pearson Education.

FERRARI: Not just a car anymore!!!

What comes to your mind when talking about Ferrari? Definitely, for most people, it would be about luxury Italian sports car. Ferrari is a world-renowned brand founded in 1929, with its prestige and high reputation in premium quality, craftsmanship, its distinctive red colour, speed, affluence, glamour and so on.

Ferrari, although known for its sports car, is not only about automotive because it has wide product ranges in hand as well, including, menswear, ladieswear, accessories (shoes, sunglasses, caps,ties, belts, gloves, umbrellas etc.), leather goods, home & bath accessories, office items, electronic & hi-tech gadgets, mobile phones, fragrances, watches, sport equipment (ski, bike, skateboard, surf etc.), collectible items, toy models, kids range and many more. It was very surprising for me when I looked at its online store because I didn't even know some of those product lines existed.

So, here comes the brilliant idea for my project!!!

This is my current perception towards Ferrari brand (and I think for almost everyone else as well)

To begin with, I think everyone thinks about its distinctive red colour when it comes to Ferrari with its shiny flashy and coolest sports car. For a person, it would surely be Enzo Ferrari, the founder and the face of the company with his great vision and success. The house Ferrari would live in is Casa Ferrari in Maranello, Italy's secret capital as a hometown for Ferrari. For the drink, Ferrari would enjoy drinking double dirty dry martini, giving a little bit of sophisticated, bad boy image women always fall for. And most of all, Ferrari is doubtlessly about power, speed and racing as it is strongly related to Formula 1 racing.

As it is obvious that Ferrari is such a strong and established brand in the market, I chose to do brand extension, as in a case of well-known brand extending to unfamiliar market for my project. It is a wisely strategic way to leverage a brand with extension, using its fame and reputation to enter and create advantage in another product category (Aaker, 1996).

Aaker (1996) also suggested that for the brand that is currently operating very well, extension will be the best option because of its existing brand's associations, perceived quality, and prominent awareness. The rationales behind are that it would be an exploitation of the firm's current assets applying to new market and new product line, and also reduction of cost and risk of entering new business.

Therefore, I propose "S.F. energy drink by Ferrari", world's first luxury energy drink ever!!!

I believe it would be a great move for Ferrari to extend its line into something new and exciting. The market for energy drink is still quite small compared to other markets, especially for luxury one which I could think of none. It will help attracting new customers because the barrier of entry price is decreased and that offers a chance to be a part of Ferrari brand for those who cannot afford other product lines which are more expensive. Its brand image will be more hip, energetic and sensational, engaging more with x-treme sports but still playing around the concept of power and speed.

For Ferrari's brand image after brand extension, the colour will still be red but in a wildly agitated way. The person will be Fernando Alonso, one of the most famous F1 drivers by Ferrari, who represents cool athletic image with great success. The place would be Rome's Lottomatica arena which ties in very well with the concept of energy drink and sports. The car that S.F. would drive in is definitely Ferrari. For the drink, it must be energy drink, in which the concept design of logo, branding and packaging will be revealed later on.

I hope this sounds exciting in a way and stay tuned for more!

Bibliography

1. Aaker, D. (1996). Building Strong Brands London: Simon & Schuster UK.
  

Are you my soulmate?

How to create a brand especially luxury one? It is simple yet very difficult question to answer. Building luxury brand needs special practice as it doesn't fall on normal marketing strategies. The first thing you need to have is differentiation and uniqueness of the brand. In Endorsement & Sponsorship class, we talked about characteristics that define luxury brand. Well, any luxury brand must have exclusivity, quality, craftsmanship, high price, selective distribution, high-end promotion and advertising and so on. However, emotional attachment is inevitable criteria as well because people consume luxury products not only for its tangible aspects, but also for the emotion it will bring. Luxury brand sells the dream along with high quality product. Living the dream is what consumers nowadays are looking for.

Brand identity is another important point. In order to become successful luxury brand, it must have distinctive brand identity, what it essentially is and where it stands, in which brand needs to position itself clearly and deliver it consistently to customers. One key to successful brand building is to understand how to develop a brand identity, to know what the brand stands for and to effectively express that identity (Aaker, 1996).

I found an interesting concept for building luxury brand by Philippe Mihailovich, professor of luxury brand management in France, that I want to share. Basically, he said that building a brand on storytelling is not working anymore. Luxury brand cannot be built from only one story or else it would be like building a prominence of an artist based on one piece of art. Luxury brand is all about the artist himself, his beliefs and values, techniques, materials used, and emotional touch-points. To build luxury brand name is like human relationships. It needs to create personal emotional bonding with its customers or to become their soulmate!!

Mihailovich (2009) suggested 12 steps to build luxury brand as if building a love story, to obtain long lasting relationships between customers and the brand.

Step 1: You're gorgeous                                      >> The rules of immediate attraction
Step 2: Getting interested                                     >> Showing and declaring receptiveness
Step 3: Getting to know you                                >> Where you are from / Where you live
Step 4: Who's in your past?                                 >> Your history / How you got here
Step 5: Meet the family and friends                      >> Liking those closet to you
Step 6: Are we right for each other?                    >> Let the head has its say
Step 7: Can I trust you?                                      >> I need to rely on you
Step 8: I want you                                              >> Consuming passions
Step 9: Soulmates                                              >> We share many values
Step 10: I love your touch                                  >> A personal touch throughout
Step 11: I love you                                             >> I'm commited happily and totally engaged
Step 12: Happily ever after                                 >> Constant desire / Lasting memories

These steps portrait the journey of the brand through time from the very beginning of introduction to the point of becoming favorite brand in consumers' mind, in comparison to having a relationship with someone right from getting to know, gaining trust, and loving wholeheartedly.

In class, we all had a group task to create one luxury brand and present the mood board to class. Our group came up with a private jet service for celebrities and sports personalities called 'Jetsetter'.

From the mood board above, it showed core brand identity and brand personalities, along with emotive qualities it brings to customers very clearly and deliberately. Jetsetter plays around the word 'deluxe, quintessentially & prestigious'. Its corporate colours are black and silver which simplify the luxury and classy image. It embeds the emotinal qualities of being exquisite, stylish, exclusive, comforable, classy and private to satisfy the need of those who appreciate a discreet yet luxury service.

Another group came up with a new, expensive champagne targeting at younger audience. It plays with the purple colour because purple represents joy, fun, and cheerful to attract young generation. Purple as corporate colour helps differentiate itself from other competitors because people normally think about black and gold when it comes to champagne. It relates itself to Christian Louboutin shoes as being seductively sexy and use Mary-Kate Olsen as celebrity endorsers. They are perfectly matched as a face of the brand and can engage younger crowds to consume this champagne brand in an attempt to be like the Olsen.

Another example is boutique hotel for wealthy singles called 'The V'. The hotel has exclusively 42 rooms and has partnership with Vertu, offering VIP concierge service to guests. It features all Philippe Starck design, has famous japanese restaurant, luxury spa, fitness, cinema, members only club. It emphasizes excitement, freedom, romance, passion, exclusivity, and glamour. The V offers everything you want to serve your luxurious desire at any time.

Now, it's time for you to consider creating one luxury brand on your own! It's not as difficult as it sounds!





Bibliography
1. Aaker, D. (1996). Building Strong Brands London: Simon & Schuster UK.
2. Mihailovich, P. (2009). Haute Luxe: Building Your Luxury Brand Love Story. Available at: http://luxurysociety.com/articles/2009/11/haute-luxetm-building-your-luxury-brand-love-story (accessed 26 February 2011)

"The Perfume Diaries"

Inspired by the lesson about packaging few week ago, in which we discussed in class about perfume industry and how it has evolved through time, it made me think about 'The Perfume Diaries' exhibition I went to at Harrods around 5 months ago and I wanted to share to those who missed it.

I heard about it when I first arrived in London and I, as one of the perfume lovers, was really looking forward to it.  'The Perfume Diaries' was curated by world-renowned fragrance authority Roja Dove, Professeur de Parfums and the author of The Essence of Perfume, whom we all had a chance to meet in person when he came as a guest speaker at Regent's College. The exhibition portraited the fascinating chronicle of perfume from ancient era to present time. It showed the evolution of perfume decade by decade and walked through the history behind it. I was enchanting by it!

Francois Coty, French perfume manufacturer once said,

"A perfume needs to attract the eyes as well as the nose."

Perfume is one of the things that packaging plays crucial role in it. Not only the scent has to be adorable, but also the flacon needs to be captivating as well. Packaging in perfume industry has evolved through time until the point that sometimes the bottle itself costs more than what is inside.

The exhibition began with how perfume was produced in an ancient time. It showed how ancient perfumes look like, how to manufacture it, showing all the tools and perfume handbooks in the old days, which were rare things to find nowadays.

Roja Dove himself has selected fragrances from all over the world, featuring all important brands in the industry, which made an impact on perfumery and influenced the society, people and the way in which we wear perfume nowadays. Also, original artwork, sketch designs, vintage advertising visuals, fashion costumes were displayed along with rare flacons up to modern perfumes these days.

Moreover, the exhibition played on the way in which perfumers were influenced by the society and more importantly, how fashion and trends have always inspired the scent and packaging design of perfumes. It is obvious when you look at the history and trends of fashion at that specific time, there is always a linkage between fashion and bottle shapes. Many fashion brands have its own perfume line to enrish its clothes and fashion accessories. Christian Dior said,

"This is why I became a perfumer, so that all my dresses would appear simply by opening a bottle."

I suddenly love this perfume 'Attimo' by Salvatore Ferragamo, not by its scent actually but by its design and story behind. Attimo was inspired by historical multi-coloured round shaped wedge shoes made for Judy Garland in 1938 specifically. This is a good example of how fashion plays important role in perfume industry and packaging design as well.

Another great example is 'Vivara' by Emilio Pucci. Mr.Emilio Pucci, famous Italian designer, is always known for his unique designs around prints and colours in fashion industry. However, in 1966, he decided to extend its line to perfume as well and launched the notable perfume, Vivara, which embodied the iconic Pucci print named Vivara into it.

I have to admit sometimes I choose a perfume firstly by its flacon which attracts my eyes right from the very beginning. Then, the matter of scent and smell come after! What about you?

Source: The Perfume Diaries exhibition at Harrods, 28 Aug - 2 Oct 2010