As Ranks Of High Net Worth Individuals Continue To Grow, Luxury Marketers Need To Adapt Creative Techniques For Chinese Market
A number of reports released this year have identified China’s millionaire class as one of the world’s fastest-growing high-net-worth demographics, outpacing nouveau riche in other emerging economies like India and Russia. With China’s massive economic growth over the past 30 years, and vast population size, this is no big surprise. Unlike their non-Chinese counterparts, this group of wealthy individuals – who are rapidly becoming among the favorites of luxury brands — present unique challenges for marketers who have become accustomed to emerging luxury consumers simply springing for the most expensive items regardless of brand outreach.
Today, an article in PR Inside delves into the still-undefined world of the Chinese luxury consumer — a consumer segment that attracts lots of press but little new insight or clarity. Since China’s wealthy population remains highly stratified, with sophisticated, long-time buyers concentrated primarily in coastal, first-tier cities and newer, first-time buyers spread throughout second- and third-tier cities as well as the odd frontier town, the Chinese market presents a difficult challenge for brand marketers. One-size-fits-all marketing strategies simply will not do in a country the size of China, and the message for Shanghai or Beijing’s consumers won’t translate to other regions.
As the article shows, marketers need to adopt diverse creative strategies that will address the disparate concerns and interests of as wide a swathe of the population as possible:
It takes a lot to build and a lot more to maintain a brand’s upscale image active in the minds of customers. And this is vital to the success of any luxury brand. There is no better and more cost effective way to build and secure that image than by regularly aligning with luxury events organized by equally luxury oriented organizations.
Take for example Richman’s International Millionaire Clubs. Its Charter Corporate Platinum Memberships is limited to just 100 globally, and is reportedly the world’s most expensive private club memberships. This particular class of exclusive membership offers much more that just one club membership with worldwide benefits not offered by any other club in the world. These memberships offer its holders exclusive rights to thirty years of corporate sponsorship rights to horse racing in China, arguably the world’s largest market for horse racing, and other international millionaire events, at no additional cost – a value probably far in excess of the cost of membership. Of course the club probably has other classes of members who don’t necessarily enjoy these free sponsorship rights.
Luxury brands could sponsor both international and country specific events like the Richman’s Inter-World Horse Racing, Polo, Motor Racing, Golf etc. Challenges. In addition to on site attendance, these events indirectly reach a huge world wide audience of both the rich and rich wannbes through extensive television and Internet coverage of the event – thus prividing sponsors with media coverage at no extra cost. It would cost a substantial fortune to purchase this amount of media coverage through advertisements.
The point is that apart from just media coverage, sponsorship is a unique platform that has exclusive, specific and strong personality traits in identifying with and influencing both directly and subliminally with the wealthy and the rich wannabes. Selecting events with qualities most similar to a brand provides a very powerful vehicle for drawing attention to, and sustaining the image of the brand. Additionally, the lifestyles of these events’ patrons – i.e. expensive, exclusive with limited access etc. will greatly reinforce related qualities of the luxury brand over time.
Luxury brands must seek to stand out among their competitors. Therefore, the atmosphere in which luxury brands engage their most committed customers must match the exclusivity of the brand and the lifestyle it seeks to represent. Properly planned and activated hospitality programs leave a more lasting impact on the biggest customers than image-laden ads in high-gloss limited-distribution lifestyle magazines – a medium that lifestyle brands have traditionally leaned on for years. In using lifestyle magazines, it’s probably more cost effective to pitch them on co-sponsoring events or subsidizing hospitality programs rather than straight advertising in them.
The New Rich. Are they different?: Old money is just that – it’s OLD. It has it’s established habits and favored brands. It’s entrenched and less concerned with peer pressure or living up to the Joneses. Sad but true…Old money is a dieing breed and worst of all it’s buying less and less. “To survive and grow, luxury brands need to market to the new rich.”
Unfortunately the very people who are responsible for marketing and maintaining the image of many established luxury brands have grown old with their brands. Old – but not necessarily in biological age terms… but in philosophical and mind set terms. What worked well before may not work as well anymore…and the lean and hungry competition is just around the corner
Luxury brand marketers deploy a wide variety of techniques to keep their brands firmly in the mindset of their customers… both current and in particular future customers. While public relations and advertising in selected media has been the mainstay, savvy marketers have also adopted special events sponsorship for decades… but mostly in name only.