Development of Luxury Products: Montblanc

Development of Luxury Products MontblancDissertation subjecta. Montblanc. Its development in the extravagance diligence OKb. The Montblancs trademark extension in the highlife industry OKc. Montblanc grade from a work high life cross off to a global sumptuosity brand2. Dissertation issue / key questiona. Did Montblanc, a specialise prodigality brand in the writing instrument segment, extend its perceptual ensure of extravagance brand to its other product categories? OKb. Has Montblanc, a specialised high life brand in the writing instrument segment, been successful in extending this perception to its other product categories?3. Literature reviewa. Definition of lavishness* polar sends of view* Key words/ fancys (to be tested in the survey)b. Definition of lavishness brandc. Concept of diversification dodge* Objectives* Types* Drivers to be successful (consumer perception / reaction)* Performance (to which extent)* Montblanc strategical diagnosis (SBU)d. Brand e xtension Luxury brand perception* (How to measure it? Consumers reaction)4. The questiona. Key question stub a specialised extravagance brand extend its perception of luxury brand to other product categories? The case of the Montblanc brand.Today, is Montblanc a global luxury brand ( non anymore a specialised luxury brand)? Therefore how was it possible? Well know reputation in its core business (for prime(a), diethylstilbesterolign, social status) and the choice of neighbouring segments.b. Hypothesis Montblanc is today an realized global luxury brand. Montblanc is a drop dead example of a successful brand extension. How was it possible? (Reputation, tradition, quality, Montblanc extended its way of doing business based on quality and style bordering to its out stand reputation in its historical core business)5. The look intoa. Objective To prove that Montblanc has been able, in a relatively short time, to shape a global luxury brand.6. The investigate method actinga. Wh ich is the information to be collected in order to answer the issue discussed within our work and to ensure the hypothesis? the consumers perception of the Montblanc brand (the only boss) and the point of view of the Montblancs managers (figures on diversification mix, and resources allocated)b. How to collect the data (survey, interviews)?c. Which is the pitch of the research? Luxury sector, Montblanc and its major(ip) competitors in jewellery / watches / leather categories, luxury brand current and potential consumers.Becker, Howard S. (1998), Tricks of the trade, How to think just cozyly your research while youre doing it, The University of Chicago Press.7. Analysis of the research findingsa. Analyse and certainize the collected data as usually it helps identify some factors that may answer our issue, although ofttimes these elements be not completeb. Criticise the research method and its limits (limited sample)8. Conclusiona. Buyers of Montblanc products (not only writi ng instruments) confirm the hypothesisb. Buyers of only Montblanc writing instruments to gain tradition in watch and jewellery segments requires times although a nifty quality but not impossiblec. Montblancs managers sincere results so far.Recommendationsa. Montblanc has to go on investment in its diversification schema because failing in doing so would be highly risky for its brand perception among the final consumers. Could Montblanc extend its perception to other product categories? Not right now paltry resources and request to be definitively established as a luxury brand in key categories such(prenominal) as watches and jewellery.Write* la problmatique involves the key question, the hypothesis of the research and the elements / factors which will help to develop the chosen subject.This first recrudesce includes the interpretation of the subject, the review of the literature (plus bibliography), the question, the hypothesis and the method of the research other than the action plan.* closing dissertation develop the different topics without any linking dowerys, add these linking parts, further develop underestimated parts and cut what is useless. Add the table of contents, bibliography, appendix, etc.Executive Summary* The research and its Interest* The key question and the hypothesis* Research method* Major findings* Conclusion* RecommendationsThe purpose of this research paper is to investigate if and how a specialised luxury brand screw extend its perception of luxury brand to other products categories. Being the luxury industry so wide of dimensions, the research worker decided to counseling on one specific brand Montblanc.This choice permitted to closer define the pitch of the analysis in order to carry out a received and feasible research that might prove the success of the diversification strategy pursued by the Montblanc brand. Montblanc re bewilders, indeed, an interesting case study to show how the diversification strategy can be an effective as welll to increase the luxury brand perception among the final guests.Montblanc, market leader for what concerns the writing instruments, has been striving during the last few years to definitively become a global luxury brand. To do so, Montblanc entered many different segments of the luxury world, such as leather, watches, fragrance and eyewear in the last 90s and the plate jewellery at the scratch line of the 21st century. Moreover, a couple of years ago, Montblanc stepped forwards into the fine jewellery business which is seen as the critical step in its strategic development to attain the safe status of global luxury brand.In order to verify how the Montblanc brand is viewed and perceived in its competitive environment, the researcher adopted both a quantitative and a qualitative research method.On one hand, a customer survey consisted of XXX questions was developed. This survey submitted to actual and potential customers had the objective to impartially inves tigate the customer perception of the Montblanc brand.On the other hand, in-depth interviews with some Montblancs managers were carried out. The interviewed, who represented different levels of the Montblancs management, allowed the researcher to gain a full picture of the Montblanc brand and its strategic movements. Moreover the direct comparison with the Montblancs management was outstanding to identify on which resources and competences the final recommendations could be based.For practical purposes, this study can be divided in five major parts1. the first part outlines the study and the key question of the research paper2. the entropy part concerns the review of the literature as regards the following points the comment of luxury and of luxury brands, some approaches to measure the brand perception / the reasons why people buy luxury goods (status-laden or conspicuousness-laden), and the diversification strategy. This part will be concluded with an in-depth analysis of the Montblanc brand3. the third part gives a fulfilling view of the undertaken research with particular tending to the objective, the hypothesis and the research method4. the fourth part covers the relevant findings coming from the analysis of the research results5. the last part presents the conclusions of the study and the researchers final recommendations to the brand.The theme of the research paper Luxury and the Montblanc brand gives an important insight of the key realizes at the core of the work.In first position one finds the term luxury whose essence and exposition are almost fuzzy. It is the reason why, this work will examine some important findings coming up from the literature so wide in this respect, at the end of which some major traits of the definition of luxury will be underlined. Especially, the literature review will cover the organic growing of the definition of luxury all along the recent history. To be discover that, the pee of luxury will be excessively i nvestigated in the survey submitted to the final customers and besides in the interviews to the Montblancs management and other practitioners of the luxury industry. This research, carried out by exploring both the customers and the professionals point of view, enriches the research itself and helps to get a good understanding of the major characteristics emerging straightaway about this fascinating concept. To be clarified that this study, counseling on the Montblanc brand, is related to a part of the luxury market such as the accessories, jewellery and watches segments.The south part of the theme of this study is represented by three words the Montblanc brand. This recalls two topics. The first one refers to the term brand. By revising the literature, a definition of brand will be proposed. In this respect, there are not important doubts and we will briefly comment the definition of brand recently provided by Jevons (2007). Nevertheless, some issues may arise for the definiti on of luxury brand which is obviously related to the construct of luxury. The side the Montblanc brand as a whole, moreover, puts the attention on the leader German brand whose unmistakable star logo is worldwide the icon of quality and go pastlence. As previously said, the researcher chose a specific brand to be able to concretely study the fundamental question of his research paper that will be clarified in the next lines.To be noticed that the two parts of the theme title luxury and the Montblanc brand are tied up by the conjunction and that underlines the strict link amongst luxury and the Montblanc brand. Nevertheless, this link requires a further consideration because it can be misleading if not misunderstood.Which is the real mean of this linkage? There are no doubts that Montblanc is a luxury brand but is it a specialised luxury brand or a global luxury brand?This question is strictly machine-accessible to the core issue of this master thesis. More precisely, the driver question is if a specialised luxury brand can extend its perception of luxury brand to other product categories.In order to answer this key issue, the researcher chose to study a well-known brand which has been pursuing a diversification strategy to become a global luxury brand. The construct of diversification strategy will be explained from a literature point of view. Moreover, an in-depth analysis of the Montblanc brand and its strategic business areas will be undertaken by applying some tools learned during the studies at the ESCP Europe especially during the modules of strategy and of strategic diagnostic. This becomes fundamental to mend understand in which kind of diversification strategy Montblanc is engaged and to give a wide knowledge to the reader about the brand itself.To conclude, herein the reasons why the student chose this theme for his master thesis. There are three major reasons bringing to this choice.The first one refers to the luxury world. The construct of lux ury, albeit widely analysed in the literature, remains somehow mysterious. Today, the definition of luxury is strongly evolving mainly due to the economic uncertainty mostly caused by the financial crisis of 2008. Therefore, although the probability to uniquely define luxury is very low if not nil, the challenge to better understand what luxury is/means/represents/is perceived nowadays represents to the researcher a great topic of interest. His interest in luxury is also nourished by the will to work in this sector in the upcoming future. This surely stems from the professional experiences made by the student as part of his studies within companies (Montblanc and Concord) operating in the jewellery, watches and accessories segments. Indeed, during these experiences, the student was impressed by this world rather mysterious where the care of the smallest detail makes a huge difference.The second reason concerns the Montblanc brand. The researcher had the chance to work for five month s at Montblanc International, at the Headquarter in Hamburg within the Jewellery Category Department, and for three months at Montblanc UK, in capital of the United Kingdom within the Retail Department. During this extremely positive experience, the student discovered in-depth this fascinating brand, from its tradition to its vision, from a strategic and more operational point of view. Surely the experience own(prenominal)ly gained at Montblanc became highly reusable in the development of the research and mainly in the analysis of the brand and of its strategy. Moreover the ongoing meetings/interviews with the Montblancs management had a double advantage. On one hand, it enriched the content of the study and on the other hand helped the student maintain the contacts with a firm that is at the top of his personal ranking of his employment research.The third reason concerns the strategic aspect behind this theme. Indeed, the diversification strategy pursued by Montblanc offered to t he student the possibility to develop this construct practically used/abused by luxury brands to extend their perception of luxury and, as a consequence, to finally increase their revenues. The diversification strategy has often been the object of strong discussions, mainly for what regards the results of pursuing this strategy and the ways of implementing it. This work has got the objective to rationalise the different types of diversification strategy and to investigate this theoretical concept on a concrete case study, thanks to the study of the Montblanc brand. This research will focus on the key factors of success or failure standing from the analysis of the diversification strategy pursued by Montblanc.Did Montblanc, a specialised luxury brand in the writing instrument segment, extend its perception of luxury brand to its other product categories?This key question gives a stricter view on the content of this research paper. This study will focus on the strategic development o f a specialised luxury brand as Montblanc was/is in the writing instrument segment since its origin. In detail, the research has got the purpose to investigate how the Montblanc brand is nowadays perceived from the final customers. The findings coming up from the customer survey will help the researcher evaluate if the Montblanc brand is still perceived as a specialised luxury brand or if its image has developed to the status of a global luxury brand. The customers responses represent indeed the most authorized feedback to assess the degree of success of the diversification strategy pursed by Montblanc in the last years which has brought the brand to operate in relevant luxury segments such as leather, watches, fragrance, eyewear and jewellery next to the historical business area of writing instruments.At a second point in time, the customers responses will be compared with the Montblanc managements point of view in order to verify if some discrepancies exist. This step is importa nt to get a full picture of the Montblanc brands standing.Then, after an accurate presentation of the research, the student will point out the major findings in order to draw his conclusions about his study. The conclusions will include the major factors of the diversification strategy pursed by Montblanc to extend its perception of luxury brand to other segments in the luxury industry, in addition to the worlds of improvement coming out of the research.Finally this research paper will present the students recommendations which will take into account the strategic objectives standing out from the interviews with the Montblancs management and also the Montblanc brand perception outlined by the customer survey.In the next pages, the student will study, by starting from the literature review, some key concepts at the core of this research paper which include* the definition of luxury and its evolution* the definition of luxury goods* the definition of brand and of luxury brands* brief ly the different approaches to measure the brand perception among the final customers. the reasons why people buy luxury goods (status or conspicuousness)* and the presentation of the diversification strategy the objectives, the different types, the advantages and the drawbacks, the risks, and the key success factors.The literature review, as said, will be completed by the contextualisation of these constructs to the Montblanc brand. At this stage the Montblanc brand will be studied in order to give all the required basics to launch the following research.In order to better define the constructs at the core of this research paper that will give the background of the following research, an in-depth literature review will be made. Four major concepts will be discussed thanks to the support of different literature material which includes insights from books, articles, management and fashion websites and personal references in terms of power point presentations, excel documents and exce l files.The activity of research consisted mainly in going through the databases accessible from the Intranet at ESCP Europe in order to directly access to a wide range of reference material.The definition of luxuryThe first part of the literature review regards the construct of luxury. Luxury has always been a central field of research. Indeed its specific characteristics have attracted the interest of the researchers all along the history. However, albeit the meaning of luxury is widely discussed in the literature, researchers did not come up with a commonly accepted definition of this construct. For sure, it is not possible to uniquely define luxury. Simply, the words do not seem to be able to describe what luxury means. In this respect, the literature leaves this concept shrouded in mystery.This research paper will face the definition of luxury by going through different steps. At the beginning some different definitions of luxury will be put forward by touching its literal and economic meaning, and also by exploring some philosophical and social interpretations. Then, an interesting brief explanation of the etymology of the term luxury will be presented. Afterwards, the history of luxury will be outlined before immersion in more detailed considerations regarding the notions of old and new luxury. At the end of this first part, the student will show the latest development of the luxury construct by getting important insights from the practitioners point of view founded in articles related to the luxury world.Literal definition of luxuryWebsters Revised Unabridged Dictionary (1913) Anything which pleases the senses, and is also costly, or difficult to obtain an expensive rarity.12Economic definition of luxuryMason (81) Un produit est considr comme luxueux si llasticit de la demande par rapport au revenu est suprieure 1.Philosophers definition of luxuryPaul Iribe (1932) Luxe besoin qui commence o finit la ncessit.3Voltaire (1694-1778) Superflu chose trs n cessaire. Jaime le luxe et mme la mollesse.Rousseau Le luxe doit tre rejet car il est contraire aux exigences de la nature.Sociology researchers definition of luxuryBourdieu (79,84) Comme tout acte de consommation, lachat dune marque de luxe est un moyen daffirmer sa position sociale, de faire croire un changement de position ou prouver un changement de position sociale. botch dpend du rle que lindividu joue ou pense jouer au sein de son groupe de rfrence.Baudrillard (68) Laccs au luxe est dtermin par une volont sociale de se distinguer, de se dmarquer ou bien encore de saffilier un groupe. Suivant le groupe social auquel la personne se rfre, le luxe aura une signification diffrente.Maffesoli (96) Lanalyse du luxe par le prisme des classes ne prend pas en compte le resserrement des individus autour de groupes restreints, de tribus. La consommation devient alors un plaisir personnel et intime, sans volont ostentatoire.Management researchers definition of luxuryGutsatz M. (96) Le l uxe comprend deux niveaux de reprsentation. Le premier niveau est matriel, il comprend le produit et la marque (son histoire, son identit, son savoir faire unique, le talent). Le second niveau est psychologique. Il sagit de reprsentations qui nous sont propres, influencs par notre milieu social et les valeurs de la marque.Roux E. (91) La marque de luxe se caractrise par une valeur ajoute symbolique, imaginaire ou sociale qui la diffrencie des autres. La marque de luxe correspond ainsi aux besoins symboliques que le consommateur peut ressentir (par opposition aux besoins fonctionnels ou de varit).Laurent G., Dubois B. (95) Le luxe est subjectif, personnel et perceptuel. Si lon cherche dterminer les attributs caractrisant un produit de luxe, 6 dimensions apparaissent Une qualit suprieure et perue, un prix lev, une slectivit et une raret des produits et de la distribution, un pouvoir attractif important un savoir faire certain et la non ncessit.Practitioners definition of luxuryCoco Chanel Le luxe est le contraire de la vulgarit.Boucheron A. Le luxe est une mayonnaise constitue de diffrents ingrdients. Si lun dentre-eux manque ou est mal dos, la mayonnaise tourne. Le luxe est un concept et non un produit.4Jean-Louis Dumas-Herms, historic Chairman and CEO of Herms 5Just by analysing these few definitions of luxury, one can notice the compulsory subjectivity of this concept. It stands out that luxury has got a close linkage with pleasure, rarity, exclusivity, quality, high price tag. Economists define luxury as something which is unnecessary, statement which would be probably argued by some studies on the consumers reasons to buy luxury. For someone (Rousseau) luxury should even be avoided because it is not a primary need of the human being.Luxury is something that belongs to the inner part of each individual but it can be also highly other-oriented. By wearing or experiencing luxury items, an individual expresses his own personality and can show his social s tatus and position in the community.The fact is that luxury is probably a bit of everything, a perfect trade off of mated concepts. This makes luxury a kind of mystery.After this round-up, the study will briefly present the etymology of the term luxury before briefing touching the historical evolution of luxury.Etymology of word luxuryAccording to Dubois, Czellar and Laurent (2005) the English term6 luxury is derived from the Latin luxus, which, according to the Oxford Latin Dictionary, it signifies soft or extravagant living, (over-)indulgence and sumptuousness, luxuriousness, opulence luxus also means sensuality, shininess and its derivative luxuria is extravagance, riot etc. Merriam-Websters Dictionary defines luxuriance as something characterized by richness and extravagance, often tending to excess.The word luxury is also often semantically associated with lux the Latin word for light therefore, luxury carries connotations of brightness. It is glittering and, in addition, it is something visible.The evolution of luxuryUntil the Middle Ages the writings point out that luxury was the reflection of the religious mystery that drives the human being to go beyond himself driven by an offer or a sign.But the heyday of luxury is without any doubt the Renaissance (15th and 16th century), flourishing period for literature, art and science. This period reflects the explosion of luxury, vogue of the ostentatious architecture coming from Italy. At that time, luxuries are pocket items belonging to the aristocracy and the court. During the Renaissance luxury becomes the prerogative of the bourgeoisie.During the 18th and 19th century luxury remains exclusive of the lite. The 20th century signs an important step in the evolution of luxury. Mainly after the Second World War luxury becomes almost conformist, not extravagant or eccentric. In the 80s, the focus is on the luxury consumer in this time, younger period discover luxury thanks to the accessories. At the end of this decade, there is the boom of luxury for what concerns the distribution head development. The major players widen their reach by exploiting the markets where they are present and even by entering new markets. At the beginning of the 90s, the crisis that hit also the luxury industry, pushed to rethink the concept of luxury that gained a higher spiritual/moral meaning in addition to the impeccable quality.7Old-luxury vs New-luxuryWith the 21st century, new terms about luxury are emerging in the practitioners literature. For the purpose of this research paper, in the next few lines some considerations will be made on the expression of old luxury in opposition to new luxury in order to clarify their meaning.Some practitioners argue that old luxury is about the good itself and is defined by the company, in opposition to This seems to trace a clear line between the two concepts old luxury is about the material thing, it is about stuff. Instead, new luxury is about experiencing.Nowada ys, it seems evident that old luxury cannot anymore survive. The high quality of luxury products is assumed by consumers who are looking forward for something more. In our time, luxury is increasingly defined as those special qualities, features and attributes intrinsic to a product and that go beyond the item itself. According to Ms. Danziger (2008)9, the product itself does not anymore create personal fulfilment.Today, luxury is in the eye of the beholder and the consumers perceptions are not anymore, exclusively depending on the exceptional quality of luxury products and on the high price tag. This does not mean that the materialism is not important but only that consumers are eager of experiences. Therefore, as a consequence, a interruption from product-centric to consumer-centric point of view becomes inevitable to attract luxury consumers.The needed clarification of old luxury and new luxury concepts will become also useful when the study will discuss the definition of luxury brands and in the research of the consumers perception of the Montblanc brand which will lead to the students recommendations at the end of this research paper.At this point, it becomes interesting to see how the todays definition of luxury has evolved in the light of the recent events occurred in autumn 2008 which had an important impact on the entire economy and, therefore, also on the luxury industry.Todays definition of luxury ppt vale, crisis, bling bling, tradition, According to Yeoman and McMahon (2005), luxury is incredibly fluid, and changes dramatically across time and culture10. This opinion becomes very much clear by thinking if the meaning of todays definition of luxury is the same definition of luxury of just eighteen months ago.Today it is even harder to give an accurate definition of luxury. After the financial crisis, culminated with the bankruptcy of some key players in the real estate and banking industry which caused a chain reaction hitting all the other sector s, the perception of luxury has surely changed, at least to a certain extent. This critical point merits further considerations and, therefore, it will be investigated in the following research at the core of this study.In the next lines some leaders opinions in luxury will be presented. Some of these thoughts were collected in a surreptitious in-depth research carried out at the beginning of 2009, supplied by Montblancs management. They will introduce the students point of view about the sharp evolution of luxury meaning in the last months.Herein, some comments about the change of luxury construct in the last year.S. Toledano, Dior Compulsive shopping, its over.M. Nieto, Baume Mercier Price sensitivity is coming back fiercely.C. Binkley, The Wall road Journal Its bling overJ. Rupert, Richemont During a recession, Im sure consumers will choose solid values.B. Pavlowski, Chanel Dont neglect any aspect of the product quality.R. Palti, Le Nouvel Economiste Many markets are pure(a) and there is an increasing number of offers proposing the same service. Finding what will best meet the clients expectations is no easy task. And yet, in these days of economic, financial ( lack of confidence) crisis, there is not a single company that can afford not to satisfy its clients, even just to sell.B. Arnault, LVMH11 post-recovery customers will not only place a particular emphasis on values like quality and craftsmanship, but also on exclusivity and commitment to social and environmental responsibility.D. Dion, Sorbonne University Luxury has to return to its exclusive and extraordinary roots.B. Fornas, Cartier We are witnessing a return to true luxury and high end luxury products, which Cartier symbolises.JC Biver, Hublot When there is a crisis, it is necessary to get as close as possible to ones clients to better understand them, to reassure them and to make in due time the right decisions.S. Toledano, Dior There should be both empathy and connivance between the brand an d the client.A. Ahrendts, Burberry Even though the overall market may become difficult, I think that retailers and customers are always open to a new in advance(p) idea or a new exciting concept.Jeffry M. Aronsson, Donna Karan luxury is attention to detail and quality backed by superior service.12B. Pavlowski, Chanel One should keep investing in creation.D. Peters, Jewelers of America Selling in challenging times is not about product and its not about price. Rather, its about people and relationships, and the quality of the customer experience.J. Taylor, Harrison The definition of living well is changing. There is a desire to not stand out. If youre laying people off, you dont want to buy a Ferrari.S. Geary, Mulberry In the coming months, the mood will be against that blind consumption.A. Arnault, LVMH The collection focused on elegance and discretion and used materials that were noble but not too visibly noble.Giorgio Armani Those who deliver what they promise to their customers, and bear their customers in mind, will survive the current economic climate.After this round-up, some further considerations have to be made. At our time, some relevant trends can be observed in luxury. These trends have an important impact on todays interpretation/ perception of luxury.Increasing of price sensitivity is one of them. In time of crisis, luxury sector is one of the most negatively affected due to the nature itself of luxury products. According to Maslows pyramid, luxury products do not belong to the first steps of the human beings needs (phy