Download - How Consumers Perceive Luxury Brands - Integreon … Consumers Perceive Luxury Brands Grail Research
2 | Copyright © 2012 Grail Research, a division of Integreon March 2012
China is the world’s second largest market for luxury goods. While it is attractive due to size and growth, a combination of environmental, economic and cultural factors also make it challenging
Why Brand Tracking Studies are Critical in China
China is not a single homogenous market for luxury and is showing increasing signs of segmentation and differentiation
It has a wide range of consumer segments from aspirational middle class to mature/ sophisticated buyers
Counterfeit goods are widespread and readily available
• Endangering the association of luxury brands with quality
Upward economic mobility and extensive access to luxury products are driving the creation of a new set of luxury customers
Increasing exposure to luxury through travel, the Internet, and prior experience has led to rapidly changing attitudes and perceptions of luxury brands
Size and Segments
Rapid Changes
Counterfeiting
China Factors
Identify the right consumer segment
Recognize the differences and identify underlying commonalities – geographic and cultural trends in variation
Strong need for localization – brands need to reach out to consumers through relevant local messages/media while maintaining their global image
Quick response time and ability to react appropriately to changes in consumer perceptions and needs
Maintain exclusivity/brand uniqueness/desired image with limited control on the external environment
Brand Dilution
Challenges Faced by Luxury Brands
Luxury brands need to keep a
close watch on the pulse of
customers’ perceptions and
brand health
Brand Monitor® can help brands succeed in China
How to position offerings and cater to different segments?
3 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Unaware Aware • Top-of-mind • Unaided • Aided • Advertising Recall
Familiar • Not at all • Somewhat • Very
“Product” Associations
“Personality” Associations
Summary Beliefs
Set of tangible brand associations
Set of intangible, symbolic brand associations
Summary dimensions customers and managers can use to synthesize/interpret brand information and outline strategic choices, respectively • Stature • Affiliation • Scope • Differentiation
Brand Preference
Favorite brand Consideration set Purchase/usage intention “Attitudinal” relevance
Brand Presence (Familiarity)
A Brand is Built of “Rational” and “Emotional” Beliefs
About Brand Monitor® Brand Monitor® is based on a tested conceptual framework, which, in the last decade, has been used by more than 100 clients across the world
4 | Copyright © 2012 Grail Research, a division of Integreon March 2012
2012 Luxury Consumers Survey in China
Surveyed ~260 Chinese consumers about a variety of topics – from their motivation behind purchasing luxury goods to their perceptions of key luxury brands in China
Respondents were spread across 4 cities in China (Beijing, Shanghai, Chengdu, and Dalian), and were above the age of 18 years
Of the respondents, 15% were18-25 years old, 34% 26-35 years, 36% 36-45 years, and 15% 46 years and above
All respondents had shopped for a luxury brand at least once in the last 6 months and had spent more than CNY 5,000 (~$800) in the same period
As part of our brand tracker, we surveyed luxury customers in 4 cities across China to understand the current situation and consumer perception of a selected number of luxury (apparel and accessories) brands
5 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Traditionally, Chinese consumers have been aspirational and believed that owning luxury products demonstrates success and social status
The aspirational element, however, is decreasing with more consumers having a direct experience with luxury
Luxury as an experience – the feeling of reward and indulgence – is becoming more important than the “status factor”
This need for experiential luxury can be an opportunity for brands if they can provide such an experience in their retail stores and other points of contact with customers
Key Motivations for Luxury Purchase
40% 30% 20% 10% 0%
Others 8%
To impress others 14%
To express my individuality 20%
To relax/ relieve stress 21%
To stand out from the crowd 21%
To celebrate a success / big event 21%
To boost my confidence 26%
To cheer me up
To feel pampered
31%
Motivations Behind Luxury Purchase
36%
A large proportion of the consumers buy luxury products as a form of self reward, indulgence, and relaxation, and this seems to be a growing trend. The implication for brands is to deliver on this emotional experience rather than focusing on exclusivity and status enhancement
6 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Brand Performance/Product Associations (1/2) The changing desires of consumers is also reflected in their stated expectations of tangible attributes of a brand. Quality (comfort, fit, well-made) wins over other factors tested, such as exclusivity, uniqueness, and recognition from others
Chinese consumers are increasingly exposed to luxury goods through the Internet, international travel, and prior luxury purchase experience. As a result, they have become more discerning in their taste
Function over form: They choose brands to experience quality and comfort as demonstrated by their choice of brand performance attributes
Though affordability was mentioned as important (to varying degrees) by the majority of consumers, only a small percentage rated this as the most important factor. Given that those of the emerging upper middle class are also luxury consumers, affordability will continue to play a part in their brand purchase choice
The reputation of the brand continues to be an important criteria
Brands can focus on promoting their heritage and track record of craftsmanship to capitalize on these trends
Desirability of Performance Attributes
6.1
Comfortable
More affordable
Fits well
5.9
5.8
5.9
5.7
5.7
6.1
5.9
Well-made
Timeless
Stylish design
Suitable for work
Expensive materials
Brand not widely known
Exclusive
Current / en vogue
Unique
6.2
Discreet
Recognizable Brand
5.4
5.4
5.4
5.4
5.3
4.8
High-quality reputation
4.5 5.0 5.5 6.0 6.5
7 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Performance Attributes Perception Map
Brand Performance/Product Associations (2/2) We tested 10 key brands with consumers to understand their association of brand performance attributes. The distance between the brand and the attributes indicates how closely the respondents associate the trait with the brand
Ermenegildo Zegna is associated with several traits such as “Stylish design”, “Timeless”, “Well-made”, and “High-quality reputation”
Hermès is considered to be associated with “Well-made” and “Stylish design”
Prada is considered to be most associated with “Fits well” and “Timeless”
Brands perceived as the closest to meeting consumer expectations of being “More affordable” are Burberry and Coach
Polo Ralph Lauren and Armani are the least associated with the top 8 traits
Note: performance attribute association with brands tested only for these 10 brands
High-quality reputation
Fits well
Well-made
Stylish design
Timeless
Comfortable
Suitable for work
More affordable
Versace Hermès
Prada
Polo Ralph Lauren
Louis Vuitton Gucci
Ermenegildo Zegna
Coach Burberry
Armani
Performance Association Appeal Brand
8 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Brand Personality Associations (1/2)
6.1
5.1
Sexy Elegant / Chic
Fashionable
Reliable Relaxed
4.2 3.7
5.7
5.1
4.5
5.1
5.5
5.7
5.5
5.7
5.6
5.9 5.7
5.3 5.2 5.1
Practical / Sensible Glamorous
Celebrity Association Modern
Hedonistic / Opulent Sophisticated Western Style Cutting-edge
Feminine Traditional
Minimalist / Simple Demure / Understated
Young / Playful Masculine
Bold / Loud Irreverent
4.9 4.9 4.9
The most important personality (intangible) attributes consumers would like to see in a luxury brand are “sexy”, “elegant” and “fashionable”
3.0 4.0 5.0 6.0 7.0
Desirability of Personality Traits
Consumers strongly desire a brand to be elegant/chic, sexy, and fashionable, indicating a strong desire for haute couture fashion
Nearly half of all consumers feel appearing elegant/chic, sexy ,or fashionable is their most important reason for purchasing a luxury brand
Functionality: At the same time, a secondary set of attributes that are more functional and practical in nature emerge a close second to the previous group of attributes
It is interesting to note that there are no significant differences between the type of people (age, gender, income, or location) choosing “relaxed”, “reliable” or “practical” vs. “sexy”, “elegant”, or “fashionable”
9 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Performance Attributes Perception Map
Brand Personality/Product Associations (2/2)
Note: Personality attribute association with brands tested only for these 10 brands
Celebrity Association
Reliable
Glamorous
Relaxed
Practical / sensible
Elegant / chic
Fashionable
Sexy Versace
Hermès
Prada Polo Ralph Lauren
Louis Vuitton Gucci
Ermenegildo Zegna
Coach
Burberry
Armani
Personality Association Appeal Brand
Hermès and Louis Vuitton are closely associated with the most desired traits – “Sexy” and “Elegant/chic”
Gucci is strongly associated with “Relaxed” and is also associated with traits such as “Fashionable” and “Practical/sensible”
Burberry is strongly associated with the trait “Reliable”
Polo has the weakest associations with key personality traits
We also tested the 10 key brands to understand consumer association of brand personality attributes. The distance between the brand and the attributes indicates how closely the respondents associate the trait with the brand
10 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Stature and Trajectory
Meta Perceptions – Stature and Trajectory
5.97
Hermès
5.86
6.10
5.48
Ermenegildo Zegna
5.33
5.54
Burberry Versace
5.58
5.78
Armani
5.64
5.31
5.60
Gucci
5.50
5.65 5.82
Prada
5.54
5.86
Louis Vuitton
5.67
Polo Ralph Lauren
5.23
5.41
Coach
5.37
Stature
Mor
e R
eput
able
/Pos
itive
Cha
nge
Hermès is perceived by consumers as having the highest stature among the 10 key brands tested – an indication of its perceived quality and prestige. This is highlighted by its strong association with the brand attributes that consumers termed as most important (top 5): • Product attribute: closely associated with “well-made” • Personality attribute: closely associated with “sexy” and “elegant/chic”
It is also rated as having the strongest trajectory – the belief about how up-and-coming a brand is
Burberry, despite being perceived as of a higher stature, is also considered as less up-and-coming brand than Zegna and Coach. Burberry is most closely associated with the attributes of “affordable” and “reliable”, which may be partly responsible for this
Polo Ralph Lauren, which was not closely associated by consumers on the top 5 brand attributes (either performance/product or personality attributes), is lagging behind all other key brands on stature as well as trajectory
Trajectory
Hermès is seen by consumers as having both the highest stature as well as trajectory of all brands. Louis Vuitton, Prada, and Armani are next based on their stature, though Prada seems to have a slower trajectory than Armani
11 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Awareness and Familiarity (Top 10 brands)
Awareness and Familiarity of Brands
For brands such as Burberry, Valentino, and Coach, familiarity with the brand is higher than unaided awareness, indicating that a portion of consumers exist who are familiar with or own these brands, but are unable to recall it without prompting. The reasons could be: • These brands are popular as gifts, therefore consumers are more familiar with the brand • The brands’ advertising spend may be lower leading to lower spontaneous recall, though more people may be purchasing them
For brands such as Gucci or Hermès, the unaided awareness is high, but the familiarity of consumers with the brand is lower – not in comparison to other brands, but compared to their own awareness levels
13%24%
9% 4% 7% 4% 5% 2% 4% 7%
28%36%
43%
32% 28%24%
31%
11%30% 16%
48%
29%35%
49% 50%56% 44%
64%
42%
48%
90% 89% 87% 85% 84% 84%80% 77% 76%
72%
34%39%
34%26% 26% 28% 32%
10%
22%31%
0%
25%
50%
75%
100%
Armani Louis Vuitton Gucci Dior Chanel Versace Prada Alfred Dunhill Hermès Burberry
Aided AwarenessUnaided AwarenessTop-of-Mind AwarenessPC Very Familiar With/Own Brand
Armani, Louis Vuitton and Gucci have the highest awareness levels, with both LV and Armani (in that order) scoring the highest on top-of-mind awareness. Levels of familiarity with the brand are mostly related to the awareness levels with only a few surprises
12 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Purchase Intention
Coach
Polo Ralph Lauren
75%
71%
80% 60%
76% Ermenegildo Zegna
Burberry 76%
40% 20% 0%
67% Hermès
Armani 80%
Louis Vuitton 80%
Versace 81%
Gucci 82%
Prada 82%
Will buy Will Definitely buy
Likelihood of Purchase
Brands such as Hermès, Zegna and PRL that have lower familiarity also (not surprisingly) have fewer people that intend to buy the brand
Versace is among the few brands that have lower familiarity but are seeing a high percentage of people willing to buy
Another interesting case is Prada, which has relatively lower awareness and familiarity levels as compared to Armani, Gucci and Louis Vuitton, but has a high percentage of people willing to buy it
Though Hermès has the lowest percentage of people saying they are likely to buy it, the proportion of those that say will definitely buy is relatively high
Prada, Gucci, and Versace have the most people claiming they are likely to purchase the brand in the next 6 months. Louis Vuitton and Armani round off the top 5, though both these brands have a higher percentage of people saying they “will definitely buy” (as compared to the first three)
Likelihood of Purchase
13 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Uniqueness
6.0 4.0 2.0 0.0
Coach 5.1
Polo Ralph Lauren 5.2
Ermenegildo Zegna 5.2
Burberry 5.3
Gucci 5.5
Versace 5.5
Armani 5.5
Prada 5.5
Hermès 5.7
Louis Vuitton 5.7
1.0 3.0 5.0 7.0
Uniqueness
Though Hermès has the lowest percentage of people that are likely to purchase the brand in the next 6 months, it rates at par with Louis Vuitton in terms of uniqueness
In terms of different customer segments, Prada is considered as the most unique brand by people in the age group 18-25 years, while Louis Vuitton is considered most unique by people in the age group 36-45 years Brands such as Armani, Burberry,
Gucci and Polo Ralph Lauren are considered less unique by people in the 46 and above age group
Louis Vuitton and Hermès are considered the most unique brands compared to others. Prada, Gucci, Louis Vuitton, and Armani are considered more “unique” by people in higher income groups
Most Unique
14 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Favorite & Brand for Me
Favorite and Brand for Me
Louis Vuitton is the most favorite brand and Armani emerges as the brand people can associate themselves with
People in the age group 18-25 years associate themselves more with Versace and comparatively less with Armani, Zegna and Prada Brands such as
Burberry, Hermès and Versace are comparatively less associated with people in the age group 36-45 years
Although Louis Vuitton emerges as the overall favorite brand, Burberry is the favorite among females. Prada and Versace rank among the top brands people can associate themselves with, though only a few consider these as their favorites
6.0
5.0
4.0
3.0
2.0
1.0
7.0 20%
15%
10%
5%
0% Polo
Ralph Lauren
3%
4.8
Coach
5%
5.2
Gucci
8%
5.2
Burberry
11%
5.0
Armani
14%
5.3
Louis Vuitton
17%
5.1
Versace
6%
5.2
Prada
6%
5.2
Ermenegildo Zegna
7%
4.9
Hermès
7%
5.2
Bran
ds For M
e Favo
rite
Bra
nd
15 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Recommendation
Recommendation
Armani is the brand most likely to be recommended by people to their friends and family, closely followed by Louis Vuitton, Prada, and Versace. Gucci is less likely to be recommended even though it has highest amount of people claiming that they are likely to purchase it in the next 6 months
6.0 4.0 2.0 0.0
Burberry 5.3
Ermenegildo Zegna 5.3
Gucci 5.3
Polo Ralph Lauren 5.3
Hermès 5.4
Coach 5.4
Versace 5.5
Prada 5.5
Louis Vuitton 5.5
Armani 5.6
1.0 3.0 5.0 7.0
In line with their high awareness and familiarity, Armani and Louis Vuitton emerge as the brands that people are most likely to recommend to their family and friends
Though Hermès is perceived to have the highest stature and trajectory, it falls behind Armani, LV, Prada, and Versace as the brand most recommended by people
Though Polo Ralph Lauren ranks comparatively lower in terms of overall potential recommendation, it is the most recommended brand by people in lower income groups (Under CNY 400,000, ~$65K)
Among the higher age segment (46 years and above) Burberry is more likely to be recommended than Coach, Polo Ralph Lauren, and Gucci
Most Recommended
16 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Source of Information & Purchase Behavior
Most Recent Purchase and Source of Information
Louis Vuitton, Armani, Gucci, and Burberry are the most recently purchased brands , which is an extension of their status as the four most favorite brands. “Brand’s Official store” is the top source of purchase for luxury brand products, with magazines as the top source of information
7%
0% 15% 5%
7%
9%
12%
17%
5%
12%
5%
8%
8%
Coach
Burberry
Versace
Ermenegildo Zegna
Gucci
Armani
Louis Vuitton
20% 10%
Prada
Chanel
Hermès
More than two-thirds of the respondents refer to magazines as a source of information. Nearly one-third of the respondents use the internet as a source of information • Nearly 73% of the respondents
use the Internet only for browsing luxury clothing, while 27% use the Internet for both browsing and purchasing purposes
The lower and middle age groups (18-35 years) also prefer information from friends, whereas the higher age groups mainly concentrate on window shopping to gather information
Both males and females consider magazines and friends as their major source sof information
Most Recent Purchase
17 | Copyright © 2012 Grail Research, a division of Integreon March 2012
How will the Brand Tracker Support You?
What channels do our high-value consumers use to make their purchases? What do the channels tell consumers about your brand? What additional information do the channels need about
your brand?
Who are your target consumers? What motivates your target consumers? Where do your target consumers get their information? Where do we lose consumers along the “conversion
curve”?
Longitudinal
Consumers Channels
Competitors How has the market changed on a year-on-year basis? How are attitudes and needs changing? What can we learn from the trends and how do we forecast
key trends?
Who are their key customers? What is their value proposition? What can we learn from them? What are their strengths and weaknesses?
Brand Does the positioning of the brand in China match global positioning?
Does it need to be repositioned? How do we localize while at the same time remain international? Do consumer perceptions of our brand match our positioning and
marketing?
Using a robust approach, the Brand Tracker framework helps brands answer some key strategic questions
18 | Copyright © 2012 Grail Research, a division of Integreon March 2012
The Complete Brand Study is Available upon Request
Market Reports
Favorite Luxury Brand Clothing or Accessories Considered Luxury Brand Clothing or Accessories Intensity of Preference Behavioral Intention Recommended Luxury Brand Clothing or Accessories “Luxury Brand for Me” Unaided Awareness Awareness and Familiarity Charisma Experience Acceptability Satisfaction Recommendation Impact of Familiarity on Purchase Intention Stature Trajectory Uniqueness Association Appeal Brand Performance Associations Brand Personality Associations Perceptual Map Additional Questions Respondents Profile
Brand Reports
Armani Burberry Coach Ermenegildo Zegna Gucci Hermès Louis Vuitton Polo Ralph Lauren Prada Versace
The complete set of findings from our luxury brand study includes the following:
20 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Brand Scorecard These charts provide an overview of the luxury brand’s health
30% 20% 10% 0%
Favorite Brand 14%
5.6
5.3
5.4
1 2 3 4 5 6 7
Recommend to Family and Friends
Brand for Me
Purchase Intention
100%
0% Average
57%
37%
15% 4%
Highest
90%
48%
28% 13%
Brand X
90%
48%
28% 13%
30%27%
0%
50%
Recommendation Satisfaction
5.5
5.6
5.8
7 6 5 4 3 2 1
Affiliation
Trajectory
Stature
5.8
5.8
5.8
5.8
6.0
7 6 5 4 3 2 1
Elegant / chic
Reliable
Relaxed
Fashionable
Sexy
5.6
5.8
5.8
5.9
6.1
1 2 3 4 5 6 7
Well-made
Suitable for work / professional settings
More affordable
Fits well
Comfortable
Aided Unaided Top-of-Mind
Luxury Brand Preference Meta Perception
Performance Associations
Personality Associations
21 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Under performers
Over performers
Desirability of Attribute
(Mean Desirability on a 1–7 Scale)
Personality Desirability: When you think about the luxury clothing or accessories that you tend to buy, how desirable are the following brand characteristics? Personality Associations: In your opinion how well do the following properties describe this brand? Base your opinion on anything that you have seen or heard, or your overall impression of this
brand
Describes Extremely Well
Extremely Desirable
Gap Analysis — Performance Associations This chart shows how a luxury brand performs along key performance associations. Those furthest away from the diagonal line are extreme in their under or over-performance
Brand Performance of Attribute (Mean Rating on a 1–7 Scale)
4
5
6
7
4 5 6 7
High-quality reputation
Unique
Discreet
Only those that appreciate the brand can recognize it
Everyone can recognize the brand
Current
Exclusive
Fits well
Made of luxurious materials
Well-made
Stylish design Never goes out of style
Comfortable
Suitable for work
More affordable
22 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Desirability of Attribute
(Mean Desirability on a 1–7 Scale)
Personality Desirability: When you think about the luxury clothing or accessories that you tend to buy, how desirable are the following brand characteristics? Personality Associations: In your opinion how well do the following properties describe this brand? Base your opinion on anything that you have seen or heard, or your overall impression of this
brand
Describes Extremely Well
Extremely Desirable
Gap Analysis — Personality Associations This chart shows how a luxury brand performs along key personality associations. Those furthest away from the diagonal line are extreme in their under or over-performance
Brand Personality of Attribute (Mean Rating on a 1–7 Scale)
7
6
5
4
3 7 6 5 4 3
Western Style
Celebrity Association Hedonistic / Opulent
Reliable
Glamorous
Feminine
Masculine
Irreverent
Traditional
Relaxed Practical / sensible
Cutting-edge / avant garde Demure / Understated
Modern
Bold / loud
Elegant / chic
Sophisticated
Fashionable
Young / Playful
Sexy
Minimalist / Simple
Under performers
Over performers
23 | Copyright © 2012 Grail Research, a division of Integreon March 2012
Based on respondents who consider Brand X (n=xx)
Percent of Brand X Considerers Who Also Consider Other luxury brands*
Percent of Other luxury brand Considerers Who Also Consider Brand X**
6%
16%
16%
19%
19%
19%
20%
20%
33%
0% 10% 20% 30% 40%
Brand I
Brand H
Brand G
Brand F
Brand E
Brand D
Brand C
Brand B
Brand A
11%
18%
20%
21%
21%
24%
25%
25%
33%
0% 10% 20% 30% 40%
Brand I(n=xx)
Brand H(n=xx)
Brand B(n=xx)
Brand F(n=xx)
Brand E(n=xx)
Brand G(n=xx)
Brand C(n=xx)
Brand D(n=xx)
Brand A(n=xx)
Consideration Set These charts show who competes for the luxury brand’s customers and who the luxury brand competes with for customers
Consideration Set
For More Information Contact:
Grail Research [email protected]
Copyright © 2012 by Grail Research, a division of Integreon
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying, recording, or otherwise — without the permission of Grail Research, a division of Integreon