Marketing and Sales: you can spend your money but it won't buy love

Given the US brands foisted on the rest of the world - Ralph Lauren, Tommy Hilfigger, Calvin Klein etc., there's a startling comment in the Neilson report: asked which of a list of luxury brands they would buy if money was no object, 35% of Americans said they would not buy branded product. But it was the Norwegians and the Dutch who poo-pood the idea of buying brands regardless of cost with approaching 50% of respondents failing to be impressed.

But it's not the only surprise in the survey.

Nielsen's Advertising Information Services says that Christian Dior, Chanel, and Louis Vuitton says that spent a combined total of more than USD2.6 million in 2007 - in Malaysia alone. That gave each of them growth as against 2006 of more than 50%. But it still didn't lift Dior or Chanel into the top three coveted brands, proving that ad spend doesn't always translate into brand love.

Our publishing company undertakes research into financial crime for various publications and group services and if our own Group's ad hoc approach to brand survey can be relied upon, we saw more growth in Von Dutch branding than the two venerable design houses: our approach is rather more direct than customer surveys - what are the brand counterfeiters producing? The answer, in relation to bags, is predominantly LV and Gucci. Indeed, apart from on the streets, they also monitored spam - and there both Gucci and LV bags are heavily featured - few others are ever mentioned.

In relation to watches, the top counterfeit brand remains Rolex but Breitling is catching up fast and Cartier is gaining in popularity.

Nielson's survey also reveals important regional differences. Latin America favours brands that are perhaps regarded as old hat in much of Europe and Asia Pacific: Giorgio Armani, Calvin Klein and Yves St Laurent are the favoured few.

In the Philippines, a mobile phone is a must - and more consumers there than anywhere else said they would like to buy a "designer" mobile phone: Prada and LG, who joined to produce a stylish phone last year must be gratified by that - and the Nielson finding that 35% of global consumers have the same desire. In China, however, a higher percentage want a branded computer. So sorry, HP and others, your name just isn't good enough any more. Acer's Ferrari range, however might be just the ticket. And the figures: Philippines branded mobile and China branded computer - both 74% of respondents. Bling Kerching.

“The appeal of the luxury designer brand continues to grow – a luxury brand is simply something that consumers, especially those in emerging markets, are willing to pay a significant premium for” says Patrick Dodd, President Europe, The Nielsen Company.

According to the Nielsen survey, twenty five percent of global consumers said they thought designer brands are of significantly higher quality than other products, and sixty percent said that people wear designer brands to project social status - when the craze for designer stuff took off in Hong Kong twenty or so years ago, we used to call the victims "badge jockeys" for they would wear anything so long as it had someone's name written on it.

While quality is certainly a key factor for buying luxury brands - it’s not enough. A luxury brand needs to sell its core brand values within its image; the “image” that is reflected in this design and lifestyle is what consumers are prepared to pay a premium to buy into.

Calvin Klein, Ralph Lauren and Diesel top rankings for designer brands currently bought by global consumers. These brands are the most accessible and affordable to what Nielson terms "first-time luxury brand consumers." From perfume to underwear and a basic t-shirt, these brands offer a “designer” cache at a fraction of the price. These brands also understand “It’s important to embed the brand values in smaller items to initially attract the consumer,” said Dodd, “because when the consumer has more disposable income, they will upgrade within the same brand to more expensive items.”

Overall, the survey showed, Gucci remains the most coveted brand. But in Japan, Hermes showed strongly, along with Burberry perhaps demonstrating that there remains a market for the understated.

Nah! Not with the designs companies have come out with in the past decade which have increasingly pushed the brand into visibility on the product itself. Interestingly, perhaps the most popular LV bag we see carried in business and first class aircraft cabins these days in the black with very subtle markings that one really only sees if one looks. Not everyone wants to scream "look what I've got" after all.