« Tasty temptations | Main | Escalate your adverts! »
To market luxury goods, don’t sell to the wealthy
By Ann Williams | May 8, 2008
Yup. You read the headline correctly. If you are selling products and services considered to be mainline “luxury goods”, your target market is not necessarily the wealthy; your target market could well be those who want to appear wealthy. There is a difference - and you ignore it at your peril.
The person driving a 4×4, BMW 7-series or even a Porshe around the security estate where they have their home, is probably not as wealthy as the casual observer would think. It is much more likely that if they lose their jobs, their business folds, or the interest rates go up by two percentage points, that they are only two or three bond payments away from having to have to sell their property/ies and the bank carting away their car/s.
A large study was done over many years in the USA to find out who the wealthy in American society were and what kind of lifestyles these people led. The results were a startling surprise for the researchers who expected these people to be professionals living in Trump Towers. The story and summary of the research became a bestseller by the title of “The millionaire next door”.
They found that the average dollar multi-millionaire was a self-made business person who lived a very average middle-class life, had a medium-sized home, a family sedan (think Toyota Corolla here) or pick-up truck if needed, drank Budweizer beer and generally wouldn’t dream of buying luxury goods. (How do you think they became wealthy in the first place!) The only part of their lifestyles where the wealthy differed considerably from their ‘want to appear wealthy’ counterparts is that they make sure that they gave their children the best education their money could buy.
The ‘want to appear’ wealthy section of society are usually high income earners - who are spending their money faster than they are making it, but have very little value.
Why I have included a summary of this study in this blog entry though, is because we in South Africa are not only following this trend, but with a new generation of high-income black professionals, we have more and more people in our society who feel the ‘need’ to appear to be wealthy. So, it’s open season for luxury goods sellers in SA!
The implications of this are that if you want to sell luxury goods, you need to realise that it is not about providing value for money - it’s about weaving the story of appearances. (And about making sure that you can offer long-term payment plans as well as having a good repo company in your corner to ensure that you can at least get back as much of the value of what you are selling as possible if the purchaser defaults.)
© Ann Williams
Topics: Strategy |
Comments
You must be logged in to post a comment.