THE COMMODITIZATION OF PREMIUM

1
THE COMMODITI-ZATION OF PREMIUM
Demetrius RomanosDirector of DesignKaleidoscope
2
Premium pree-mee-uh m - noun - of exceptional
quality or greater value than others of its kind
superior a wine made of premium grapes.
3
Premium used to mean something
4
WHAT DOES IT ALL MEAN NOW?
5
It means that attributes that were once
associated with luxury items are now available,
even expected, by the masses.
6
High-end items influence the next tier down
1800
1200
1800
7000
7
And so on
8
Companies have saturated the market with products
that incorporate all the cues of luxury
9
however, being a Premium brand is more than
just having a collection of finishes, features
and performance specs.
10
A Hyundai that has all the same features as a BMW
is still a Hyundai. A value proposition must be
based on more than just price
11
These attainable aspirations fit with a new
nationwide expectation of living a lux life,
fueled by hometown nobodies turning into reality
stars, pubs being reborn as gastro emporiums and
2 quid becoming the cup of coffee norm.
Dylan Jones Editor in Chief GQ Style
12
(No Transcript)
13
(No Transcript)
14
(No Transcript)
15
SO, WHAT HAPPENED?
16
1
ACCESS TO INFORMATION
17
Luxury brands are no longer obscure or difficult
to obtain. You can learn about and buy almost
anything, anyplace, anytime.
18
(No Transcript)
19
Todays teens have grown up in the age of the
brand, bombarded and defined by name products and
intrusive and clever advertising strategies.
Alissa Quart Branded
20
2
OPTIMIZED INFRASTRUC- TURE
21
Over time stuff just gets easier, faster and
cheaper to make, source and distribute, which
oversaturates categories
22
The easiest way to accrue profit is to sell
more, so exclusivity has slipped away from
prestige and a new idea of mass luxury has
emerged.
Dylan Jones Editor in Chief GQ Style
23
3
BRAND ACQUISITIONS
24
Drive to gain category credibility led to
acquisition of dormant yet recognizable brands.

25
As the pace of business quickens and the number
of brands multiplies, its customers, not
companies, who decide which brands live and
which brands die.
Marty Neumeier Zag The 1 Strategy of
High-Performance Brands
26
DAVIDS GOLIATHS
27
1
DAVIDS The Innovators
28
Entered the market at top of premium tier
True Religion 300 Designer Jeans
29
High-end vessels for natural sustenance?
Sigg Leader in Premium Water Bottles
30
Luxury vehicle at OPP
Smart Customizable Ultra-Compact Cars
31
People Against Dirty
Method Designer consumableswith a purpose
32
Personalization drives scarcity
Freitag Messenger Bags From Truck Tarps
33
Student project or status symbol?
Bugaboo High-End Baby Strollers
34
Nokias version of a Ferrari
Vertu Mobile Phones Made Like Lux Watches
35
2
GOLIATHS Struggling To Adapt
36
Jaguar The fall of an icon
37
A luxury standard since 1922, Jaguar began to
lose integrity after Ford acquisition and
introduction of sub 30k X-Type in 2001.
38
Currently in divestiture process with India giant
Tata set to purchase Land Rover and Jaguar.
39
Jaguar will be spun off almost immediately.
Left Lane News March 2008
40
HOLY HERMÈS BATMAN, WHAT NOW?
41
So what happens when the good stuff gets watered
down? Where do you go next?
42
1/3 of Fortune 500 companies in 1994 are now
either bankrupt or were acquired
Chris Zook Unstoppable Finding Hidden Assets
to Renew the Core and Fuel Profitable Growth
43
In order to establish or maintain position in the
premium tier, one must adapt to the changing face
of luxury
44
and follow these 4 easy steps.
45

• Make Expensive Stuff
• Run Ads
• ?
• Profit!

46
1
Exclusivity/ Scarcity
47
Truly successful premium brands are founded on
Exclusivity and Scarcity, whether by price,
availability or both.
48
(No Transcript)
49
(No Transcript)
50
In this world of multiplying abundance, bigger
is not necessarily better. Less can in fact be
more.
Robyn Waters Trendmaster - Target
51
2
Authenticity
52
Know who you are, but dare to be different.
53
(No Transcript)
54
(No Transcript)
55
For me, basics are the new luxury.
Dov Charney CEO American Apparel
56
3
Brand Loyalty
57
Realize that you likely have none. Todays
consumer is looking for more than a name, they
need a connection.
58
Brands that connect emotionally with customers
and forge loyalty beyond reason transcend from
being just a brand.
John Moore Brand Autopsy
59
4
Everything Matters
60
Every touchpoint of a brand must communicate and
reinforce the equity behind it.
61
Some people will hear part of your message and
make an assumption about what your product does.
Other people will ignore that part and instead
focus on the way your logo makes them feel. And
a third group will ignore all that and just look
at the price.
Seth Godin All Marketers are Liars
62
Thanks!
For additional information please
contact Demetrius Romanos Director of
Design t) 513.766.1052 e) dromanos _at_
kascope.com Or visit www.kascope.com And
www.thegreenergrass.org