F. Scott Fitzgerald’s statement about the rich being “different from you and me” may not be quite so true anymore. With retailers such as Target bringing luxury to the masses via products from designers such as Michael Graves and Isaac Mizrahi, you don’t have to be rolling in dough to be able to add chic niceties to your life.

Indeed, as two recent books explore, the very concept of luxury is changing.

In Let Them Eat Cake - Marketing Luxury to the Masses as Well as the Classes, author Pamela Danziger argues that luxury today is often more about the experience of luxury rather than the status and prestige that (in theory) comes with luxury. We still love our possessions, but more and more people are viewing a luxurious life as one filled with life-enhancing activities and experiences. House & Garden’ s Editor-in-Chief Dominique Browning puts it this way in Danziger’s book: luxury isn’t only about luxurious goods but the luxury of time, of space, of quiet, of simplicity. Those things all come at a price, and consumers in many income levels are more and more willing to pay that price.

Drawing on findings from a two-year quantitative and qualitative study of the luxury market and also from interviews with executives at companies that are succeeding as purveyors of luxury items, Danziger offers very solid insights, presented clearly and with a good research- and/or data-based foundation. She covers it all, from the many facets of the psychology of luxury to specific sections on marketing luxury home products, luxury personal goods and luxury services.

There is much more to the idea of luxury than simply possessing expensive items. There are a whole host of accompanying psychological and emotional factors and Danziger’s book does an excellent job of detailing them.

Huge opportunity

Paul Nunes and Brian Johnson explore the luxury market from a different angle in Mass Affluence - 7 New Rules of Marketing to Today’s Consumer. They argue that there is a huge opportunity for marketers of all kinds to capture an untapped portion of affluent (and near-affluent) consumers’ incomes by rethinking and recasting the standard assumptions of what constitutes a luxury product or experience. They make some thought-provoking arguments over the course of three sections on product positioning, designing luxury-market offerings and reaching customers.

In a section on product development, they cite research findings in which affluent consumers say they often feel forced to choose between buying a product that meets their needs but is too expensive and one that costs less than they would be willing to pay but isn’t really what they are looking for. This unmet need, which the authors call a “middle ground,” provides opportunities for marketers in many product areas to raise the bar and change their positioning.

When considering these growth opportunities, rather than a me-too brand extension, try going for the gold, Nunes and Johnson say. “Executives should pick a substantially higher price point than their category’s current average (anywhere from two to 10 times higher is a good start) and then imagine what they could possibly offer, given the freedom to spend - on development as well as delivery - that those sorts of price points would give them. What unmet customer needs could be addressed, and what innovative approaches could be considered, if the company were expecting to make that kind of money from each sale?”

This of course is not a move made lightly - brand equity being the precious commodity that it is - but if done with care and foresight, this kind of bold step can bring sales and profits that more than make up for the development costs. They discuss the example of Gillette’s Mach 3 razor, which on its introduction retailed for an average price that was 35 percent above any other razor in the Gillette line and went on to capture 28 percent of the men’s razor market and persuaded consumers to increase their spending on a single pack of razors by 60 percent. Key to Gillette’s success is that the company didn’t abandon its more price-conscious customers but rather seized the chance to redefine the shaving experience and change consumer conceptions of what appropriate price points are for the category.

Money to be made

Clearly, there is money to be made in the marketing of luxury goods and services. But it’s not enough to create a product or service, add some cachet to it and hope that it takes off. You must understand what luxury means to your target audience, what messages they will respond to. If you are interested in finding out, these two books offer a wealth of information. 

Notes

Let Them Eat Cake - Marketing Luxury to the Masses as Well as the Classes (300 pages; $27), by Pamela Danziger, is published by Dearborn Trade Publishing (www.dearborntrade.com).

Mass Affluence - 7 New Rules of Marketing to Today’s Consumer (270 pages; $29.95), by Paul Nunes and Brian Johnson, is published by Harvard Business School Press (www.hbspress.org).