Stealing Affluent Branding, Fair And Square

by Layton Han, Oct 26, 2011, 7:52 AM

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There was a great cartoon in The New Yorker magazine back in 1999 when Ford bought Volvo cars. It was the first of the ill-fated American car moves to co-opt luxury brands. The cartoon showed a well-heeled couple at the breakfast table. The man was reading a newspaper with the “Ford Buys Volvo” headline. Caption: “Do you think Velveeta will now buy Brie?”

More than a decade on, marketing to affluent customers is in a transitional phase. Instead of mass brands buying up luxury brands to gain access to the affluent segment, affluent brands are co-opting mass-marketing tactics. Any company can learn a lot from this transition, and digital marketing is the perfect vehicle for executing these practices. Let’s take a look:

Focus On the Intangibles: BMW, one of the standard bearers for affluence, has changed its marketing mix and messaging. According to several automotive industry reports, BMW has implemented a different marketing mix to sell cars to different socioeconomic segments, aggressively emphasizing premium segments. It is building on intangibles. Rather than going hard on the sheer luxury and high-ticket for the cars, its new marketing focuses on quality and performance because BMW builds those attributes into its automobiles.

BMW initiated the goal of segmenting the premium market by optimizing the fit between the purchasing behavior of consumers and the marketing mix to maximize sales to that segment. Responding sensitively to unique values and purchasing behavior enabled BMW to transcend intended performance. Purchase behavior, customer attitude and segmentation are not the province of luxury brands. Aggressive and precision-oriented digital marketing can be automated consistently, and it’s validated by a brand like BMW.

Focus On Experience: Luxury travel brands Emirates Air has a lot to lean on. They pick customers up at home, take them as far through security as the airport will let them and then put them in a first class compartment that shame more than a few college dorm rooms. However, look at its UK campaign from earlier this year. It’s a partnership with VisitBritain. It features press and online activity that will run in China, India, UAE and Singapore. The campaign targets 35- to 55-year-old international travelers. Its aim is to exploit "high-quality service" and "authentic, one-off experiences", which are available in the UK. The experiences are the key here. Not the luxury image or the in-flight bedrooms. And notice how strictly targeted the customer segments are. Again, not strictly the province of luxury brands.

Pick The Right Associations: The third example of transition I noticed from following the NFL. This week Mercedes Benz signed a ten-year deal to sponsor the Superdome in New Orleans. The building is a symbol of one of the nation’s most indelible images of poverty from the 2004 devastation of Hurricane Katrina. But Mercedes isn’t looking at this as a philanthropic deal at all. It’s branding. The high-profile events and the success and stature of the building's primary tenant -- the Saints -- are expected to help the marketability of Mercedes-Benz, which has plans to unveil a new fleet of automobiles that cater to a wide-ranging audience. Said Mercedes CEO Ernst Lieb at a press conference announcing the deal: "This is tremendous for us. We are basically looking at, 'Where are our customers, where are we today selling our cars,' and we have cars starting at $31,000. And down the road, you will see that we are going to go a lot more forceful into that segment, even below $30,000, which means many of the 73,000 people who are going to come in here for the games actually can afford a car like this."

So, no, we're not saying Velveeta will buy Brie. We'll leave the mergers and acquisitions to the finance people. But marketing people are merging strategies from affluent brands and taking new directions to reach affluent customers. It doesn't matter how expensive an idea is. It only matters that it works.  

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