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When is everyone having your product a bad thing?

When you are a luxury brand.

The next thing people might be wondering is, “aren’t luxury product expensive?  how is everyone buying them?”

To answer this, we have to take a step back and look at marketing.  Lots of people think marketing is just advertising.  Advertising is one part of marketing.  Abstractly, marketing is everything that goes into getting the product/service into the customer’s hands.  When you push the art of marketing further you get to branding (i.e. brand image).  Branding can be described as the “persona” of the product/service the company wants to portray.  Why will some people pay $5 more for a plain white t-shirt with a swoosh or an alligator on it than one without the logo?  The t-shirts are likely to have been made in similar factories, made from the same materials, and have similar levels of workmanship.  Branding!

Branding goes beyond saying a product is “good” or has “quality” and that the company “cares about its customers” etc.  Branding pushes marketing to a level that makes the product/service alive.  Excellent branding is one of several reasons Apple now has a market capitalization of $700 billion.  How does a company make a product “alive”?  This is a very complex answer but in short, having a consistent image that is portrayed through the unison of the product/service itself, advertising, sales price, customer service, and distribution channels.  Alexander Chernev’s Strategic Marketing Management goes into excellent depth on the various components of branding.

Michael Kors in Fresno, CA.
Image from http://fresnobeehive.com/archives/29400

So going back to the original question “when is everyone having a product a bad thing?” is what luxury handbag maker Michael Kors is facing now.  When everyone has your purse, then the exclusive element of its luxury image is weakened.  How is everyone getting your purses?  Through your distribution channel.  Michael Kors used to just sell their goods in their 231 stores.  However, after their 2011 IPO, they tripled their store count to 703 in 2014.  Although Michael Kors is enjoying high profits now, if it continues to sell in every market, it may fall into the same category as Liz Claiborne.

Wowza!

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That’s more than most small businesses make a year.  Nonetheless, go big or go home right?  Targeted advertising is most effective and efficient but if your target is the general US population, then few places match the Super Bowl for exposure.  This is why you won’t see wealthy but relatively niche players such as hedge funds advertise while companies like Anheuser-Busch InBev, Pepsi and Chrysler spend a lot of money.

sb advertisers

Whasssap!!!

Budweiser is not a great beer and Bud Light Lime is a terrible Frankenstein experiment gone wrong of a concoction.  However, one thing that Anheuser Busch more than makes up for its lack of delicious libations is its creative marketing and branding.  What is branding?  See my article on the Redbull Flugtag.

In its 150 year history it faced Prohibition, economic Depression and Recessions, and acquisition.  Nonetheless, it is still going strong despite of new ownership.  There’s a great 2 minute video summarizing Budweiser’s interesting history.

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