Designing a (luxury) service!

What has been missing throughout this blog, will be my final post for the assignment.

It is all about creating and developing a service. People may not realize that products and services differ in a huge way. The biggest challenge for companies when they sell (luxury) services is making people pay for something intangible.
Important aspects to know about services:
- You can't stock services
- Once you delivered it, it's gone.
- Services are intangible
- Customers are co-designers of the service, it is an inter-relational exchange.

However, like in the normal marketing mix, the service marketing mix has the 7P's as well.

- Product: These services are the products. They are all about heterogeneity. Not 1 service is exactly the same, nor is the why the service is being experienced.
Most of the time, a service doesn't stand alone on its core product. There are facilitating as well as enhancing services around it. This is being shown by the Flower Of Service

All the elements if the flower are assuring that a service has to be as unique, convenient and good as possible to fulfill the needs of the customers.
It should work as a checklist.




- Price: A service offered to the clients are free or to be paid. The core of the service often is at a cost (hotel overnight, for example). Any of the other complementary service for the checklist is optional/free in the price of the core/.... It depends on how the company, offering the service, wants to position itself towards their clients.

- Promotion (Marketing Communication): Like mentioned before in the blog, the marketing communications have to be in line with the DNA of the brand. Choice of channels, choice of colors, music, emotions,... All these elements have to match the brand values and image

- Place: Place can be both the organization's place, or the customer's place or a random place

- People : The people aspect could one of the most important factors of the service mix. People make or break the service since a service always, ALWAYS involves interaction. Friendliness is not hard to show and can the experience for customers going from: 'It's ok', up to 'Woow, AMAZING'

- Processes: Blueprinting the service, online possibilities, self-service technologies...

- Physical Evidence: If a service is being performed away from the consumers home, in a hotel or shop for example, the environment is important. 5 senses are being stimulated, willing or not. Keep that into account!

If any of my loyal readers are willing to set up a service, keep in mind this post. Let the service match the brand DNA and values, like I made my Tiffany Service matching the current brand values and image.


And NOW...

If any readers wanting some tips concerning luxury brands, do not hesitate by contacting me on :
vic.dresen@gmail.com

It has been a pleasure writing to you

Criterion, Luxury on Piccadilly

Last day of class we brought a visit to the restaurtant Criterion on Piccadilly Circus.
Having one of the highest footfalls in London, it is still hidden away from the tourist. No advertisement, no screamy billboards, nothing to attract attention.

The picture on the left shows the entrance of the restaurant. Situated on Piccadilly Circus, literally thousands of people walk by the restaurant without even realizing that there is a restaurant.






But once you enter the restaurant, you WILL be amazed by the interior. The sober the exterior, the more beautiful and richness the interior is.
The set of following pictures illustrates this.

 The dining hall.  

 The bar

Dining hall again

The ceiling, which exists out of pure gold and precious and semi-precious stones.













Like every brand and service provider, they also need to have an USP (Unique Selling Point) to differentiate themselves from the competition.
Criterion's first and main USP is this extraordinary interior. The ceiling, the room, the bar,... everything lives and breaths class and luxury. People come to lunch and dinner to see this interior.

However, to be a premium luxury restaurant and luxury brand in general, there is more to it than just looking good!
One of the aspects that makes luxury luxury, is the heritage and history. Criterion made good use of its heritage and history and you can see it in some 'subtle' placements in the  restaurant and the restaurant's environment.

Sherlock Holmes and John Watson memorial wall inscription. The have visited the bar 1881.

A book with signatures and notes, all throughout history

Reference on their menu

First Page on their website













Another aspect why luxury brands can charge a price premium, and that is linked with the heritage, is telling a story. This makes people relate to the brand and giving them an 'excuse' to pay more.
The owners of Criterion also thought about this and they indeed are telling a story.
First of all with the heritage and history, also with the former and famous visitors.
But what was remarkable as well, was that even the promotional menu had a story around it. Every course was related to history and the period of Queen Victoria, like the apple and pear Sausage for example.

When talking about services, it is of biggest importance that the staff has the expected level as well. I haven't been to the restaurant for lunch nor dinner, but the way the staff was handling phone calls, handling us pleasantly surprised me.
The kitchen staff was really nice as well. We met headchef Matthew Foxon, who gave us a tour around the kitchen and interesting talk about the way the kitchen works.

Matthew is being promoted as a chef by Criterion. This is another aspect for luxury brands. A luxury brand focusses on handcraft. By promoting Matthew, they try to sell this craftsmanship to the customers.

Like mentioned above, Criterion is applying a lot of different aspects of luxury. Heritage, storytelling, craftsmanship, environment,... all these elements are contributing to the status of Criterion as a luxury restaurant.

The only thing that is missing in this post, is the analysis of the food. I haven't got the opportunity yet, but that will come. (one day)


Later

Vic

Sustainability

The new trend for Luxury Brands is Sustainability.
According to many specialists in the sector, it is the new hype of CSR and charity events.
But what is sustainability?
Is it the way you treat the employees? The way you product? What happens with the products after they served their time? Sustainability is all about these issues.

Luxury brands have the responsibility of ensuring the same future for next generations as well. Because luxury brands are as precious as the earth itself!

What are sustainable goods? Goods like jewelry, sun glasses and watches are goods that can be a sustainable since the lifecycle of the products can be really long.

Patek Philippe made their USP of being a watch that is so sustainable that it is actually a watch that will be passed on towards next generations

Loro Piana is another brand that carries sustainability really high in their values. They use Vicuna fibres, while keeping them alive and breading them since they were almost extinct!




Some brand are really holding the values of sustainability in their 'hearts' and their DNA. On the other hand, almost all brands are doing it right now.
Do they really mean it, or do they just do greenwashing? Do they just go with the flow, as if it was a new fashion trend?

An industry that is under heavy criticism from sustainability point of view is the transportation industry. Cars, aircrafts, boats,... have a huge carbon footprint on this planet. A way to counter this criticism is being innovative and finding techniques to lower pollution. New fuels et all, are being tested when we speak by almost every single car manufacturer.

But why is the sustainable suddenly so popular? Due to the economical crisis, climate change and other worldwide events, people are getting more educated about the world problems. They suddenly start caring and they expect brands to do it as well!

The biggest wake-up call for the brands was the WWF report on luxury brands and their scores on sustainability. Not a single brand scores higher than a C+.
This raised questions out of the audience and society, so that luxury brands had no other way than changing the way they act.
This raises another ethical question: Do brands do it because of their brand values, or because of the value for their shareholders?

Raising awareness for sustainability nowadays is also done on worldwide events like the FT Business of Luxury Summit 2009, Beyond Green.

Later

Vic

Student Brand Extension Ideas

Yesterday, we have had the workshop of groups of 7/8 students each and they has to sell their ideas!

My group existed of Dana, Fleur, Lara, Nina, Ramla, Sonia and myself.

The Ideas


Dana:

Dana used Prada as a brand to achieve an extension for. She did propose Prada to make a make-up line. She felt that Prada already has a lot of products to complete the 'Prada-woman', except for make-up.






Fleur

Fleur took Manolo Blahnik as a brand and proposed them to make a hat-line.






Lara

Lara's Idea was launching a hotel for Hermes, in collaboration with Vertu and luxury car brands. The location would be at the lakes in Italy or Swizterland.






Nina

Nina proposed for Louis Vuitton bed linen










Ramla

Ramla had the idea of making a Louis Vuitton television in co-oporation with Sony.









Sonia

The last idea during my presentation group was Sonia. She proposed LVMH to buy an island in Brittany, the north-east of France, to build an resort on it as vacation resort. By invitation only!




My own idea you have already read during the previous posts in this blog. I won't go any deeper into it again.

Later

Vic

To model or not to model

Last class we have had a very interesting discussion about the use of models in campaigns and advertising.
What makes a company chose for supermodels and celebs, or the normal people on the street as subject and endorsers for their brand?

The choice is all about the dilemma of going for a recognizable face or for a credible person.
Some brands wishes to be a brand of the people.

Dove has made their decision on using 'real women' for the advertising campaigns. By using there women, they want to convince other women buying Dove, because the women showed in the ads are credible. They are 'just like them'.


This happens, when a brand wants to be on the same level as their customers.



It is doubtful that this approach will work for any luxury brand. Luxury brands have the intention of not being among the 'normal' people, but the brands want to have the image of being above the people.
The better option for luxury brands is using endorsees that people can aspire to. This fits the brand image better as well. No luxury brand wants to be amongst the people.

L'oreal, for example, almost always uses celebrity endorsement.
The company uses it for people to aspire to them.











Again, the choice for using normal people, super models or celebrities has to fit the brand image and brand DNA, just like everything else the brand does.

Later

Vic

Tiffany Brand Extension

Ok, the subject of my essay is called:

Tiffany Love Consultancy


Continuing on the theory of previous post, this will be a product development.
I am proposing Tiffany to design a consultancy service to arrange 'love' affairs. This is a new product/service that will be launched in the market they already operate in: Product Development!

The details of my proposition:
3 main aspects to the consultancy service
- Wedding Planning Service
- Honeymoon Planning Service
- General Romance Service

The wedding planner service could be anything, varying from location search, to cake selection and security. Everything you can think of you might  need during the wedding can be booked and executed by this service.

Honeymoon Planning Service is a travel agency-styled service that makes the honeymoon a vacation with stress and with exclusive things to do. From booking the hotel and tickets, up to airport pickup by limo and exclusive dinner reservations can be made by this part of the service.

General Romance Service can be booked just to make reservations in restaurants or limo pick-up.

More details are in the report, so I am not going to put my all my brilliant ideas on this blog ;)

I feel that by offering these services, Tiffany could enhance their Brand Values of Love, Romance and Care and become the ultimate 'Love Jeweler '. Therefore, this extension might just be able to work out great for Tiffany.

Later

Vic

Brand Extensions

The assignment for Managing Luxury brands was inventing a brand extension and saying why it would work.
Before I post a summary on my finished project, I am going to give an overview on how Luxury brands can extend.

There are 2 possible ways of extending a brand.
The first way is extending following a verticall model, or the pyramid model

This model describes how brands can go upwards or downwards, concerning their brand stretching.
Important for a brand is that they realize that any movement on this pyramid will affect the image towards the 'original' brand.



A good example to apply towards this pyramid extension is Armani. Armani started as a Luxury Brand, with a Couture line (the Griffe) but during the years they have let themselves slip down the Pyramid, introducing Armani Jeans (Upper-Range) and Armani Exchange ( the Brand). This have had an crucial impact on the image of the brand. It went from an Italian Luxury Brand image, towards an High-street brand image. Eventually, his profit has dropped and there will be a possibility of Armani getting into trouble.

The other way of extending, is using a horizontal model. This model can be best explained, using the Ansoff Growth Model

This model focusses more on other products or markets, instead of downgrading or upgrading.

There are 4 different possibilities in Ansoff's matrix.







Market Penetration: Using existing models in existing markets. The goal of this growth strategy is being aggressive in the existing markets by trying to get more market share, trying to sell more and make more profit.

Market Development: Using existing products in new markets. The best example I can give you are nose strips. This was originally intended to stop snoring. Now, new markets did open: Sportsmen are using it as well. ( Just a simple example)

Product Development: Using new products in existing markets. This is what Apple did when launching their Ipad. They launched a new product, on the markets they already operate in.





Diversification: Launching new products on new, and mostly unknown markets. This is the most risky extension a company can do. At this moment, I do not have a good example of diversification.



What I will do with Tiffany, is a Product Development. More to come.

Later

Vic