In haze of financial crisis, some people fall down while some people make profit; some people feel danger while some people find opportunities. In good days, every acquisition or merge were significant. Now, either goods, property or brand is shrinking. Mergers and Acquisitions appear among luxury brands in the world.
Take an example Hong Kong famous watch group Peace Mark Holdings declared liquidation suffering from bank deflation policy in financial crisis. Chowtaifook bought Peace Mark 120+ international high-end watch sales stations, 200+ mid-price watch sales shops and movement making business in mainland China. Chowtaifook formally entered high-end watch market, selling high end watches like
Rolex and
Omega. Milus and Tianjin Seagull in its empire, in particular, draw great attention.
Back to the point, this article is going to sum up four tactics that famous
watch brands adopt under current financial crisis.
Cross-boundary management, Open Low-Prices Market
The cooperation between brand and brand or between brand and designer is named cross boundary management in fashion circle. In another word, the said cross boundary management tries to create products that appeal customers from both sides though the combination of each other’s influence. It brings not only new value but also generous commercial profits. That is why brands adopt cross-boundary management one after another in recent years
Luxury brands, because brand marketing, could not low themselves to enter low-priced market directly. Thanks to cross boundary management, those big designers who work for luxury brands can attract lots of customers in low-priced market. More brands launch one or more second lines to occupy mid and low market. At moment of financial crisis, this strategy means more extensive customer base and higher profits.
Recently, the limited edition products cooperated by Lane crawford and Alessander Mcqueen, Ksubi, Wiktor Rolf and Raf Simon are highly sought after. Now, the second round cooperation on limited edition products is on the way. Adidas now cooperates with American Designer Jeremy Scott. Sofia Coppola will design for Louis Vuitton.
Electronic Commerce
Traditional marketing channels always involve high-priced commercial center, lavish speciality stores and expensive advertisements which represent important percentage in luxury products amount Electronic Commerce, well , opens up a new chanel that make it possible to market at lower cost free from the limit of regions
Tag Heuer watches now can be ordered through its authorised online retailers tourneau and barmakian. Tag Heuer said, this initiated move made it the first luxury watch brand that provide on line secured shopping for its all luxury watch products. The joined retailers said it would greatly help Tag Heuer enlarge its business. As what LV North America President said, our electronic commerce plan would provide Tag Heuer customers with convenient on line shopping whose security and service could compare with their favorite retailers.
Network Promotion and Network Public Relations
The power of network are still expanding. More and more people start to use network. Mainstreams like print media and TV gradually face bottleneck after several decades development and suffer from influence-shrinking situation. Network, such a platform, are now at now at its now growth point and becomes an important method for product and brand promotion with increasing influence.
Network public relations emerge as network influence expansion required. It, making use of the quick transmit of network, propagate brand activities, commercial releasing and brand information in quicker speed and with lower cost to better. It becomes the important part of luxury goods marketing through intervening in those bad information and building up good brand reputation.
Rolex, Tudor and Vacheron Constantin made better achievement last year through lots of network promotions. Omega carried out full-range network public relations in sessions of 2008 Beijing Olympic to keep it leading status in China. Casio Oceanus gained quick exposure by network public relations that kept pace with its releasing..
Price Reduction and Discount Promotion
Luxury brands seldom use season or activity price reduction or discount promotion considering the brand images. The price reduction, in particular, may weaken brand base. Therefore they, most of time carry out flexible discounts through retail to keep the sales volume.
LV, No.1 in term of luxury brand value, declared to reduce the retail prices by 7% in average in Japan market in November. 2008 in hope of boosting the sales.
Chanel, No.3 in term of luxury brand value, declared price reduction as early as October 2008. The prices of most of products were reduced by 7% to 10%
Versace and Chloe followed suit soon. It was first time that luxury brands gave up the rule that product price may only rise but not reduce.
It is estimated that the profit of luxury brands may suffer the first slide down in recent years though the need of top-class brands still exist.
