How to Target The Right Set of Customers For New Luxury Item?

How to Target The Right Set of Customers For New Luxury Item?

Someone asked " How to target the right set of
customers? ...We are working on this product which will be a consumer
electronic product but with a more design and fashion functionality rather than
tech..." then continued... "Price point is around 300-400 dollars
which makes it not a necessity but a luxury and not everybody will want to pay
for it, how do we convince people cheaply that they want to buy this 'luxury'
item?
Hi, first of all if you have a consumer electronic
product, never admit or mention that your product is not competitive at minimum
with other electronics. Consumers are not stupid, even those who are willing to
spend a significant amount of money will most likely not do it if is only
aesthetics.
Always assume your consumer is smarter than you and try
to over deliver.
Second, the price alone does not make it a luxury item. I
will give you an example to illustrate how a luxury item comes to be:
Ferrari as well as Bentley are hand crafted cars with
limited availability, their engines and raw materials might be better than the
mass produced BMW and have a long history of market satisfaction - meaning
they've been in business for many many years.

 

 

Consider Apple, their company started with the mission of
delivering consumer grade, easy to use, modification free computers. They
introduced heavy R&D into their machines and thus introduced fonts, paint,
click and point mouse and much more. Over time their quality became renown and
through their continued innovation, their computers were priced at a higher
range than others. But due to quality of both the hard ware and the technology
consumers don't really mind paying their higher price margins. This market
acceptance at a higher price helps make it a luxury because not everyone can
afford it and there are entry level, problem solving laptops and computers you
can buy if what you need is to simply have a computer.
 
Also, part of what makes their devices look and feel
somewhat luxurious is the fact that they are heavy, they are made of typically
single or coupled pieces of steel or some other alloy.
So with apple, you have dependable technology,
heavy-steardy feel, high price acceptance, limited quantities for long periods
of time after announcements, ongoing releases.
Apple's target market? Anyone who is willing to spend
money to stand out, have a product that is limited, industrial art oriented
consumers, graphic artists, music artists, any artist you can think of.
Generation Y and Generation X who grew up with the brand. Music lovers and
techies who enjoy the simplicity of technology and integrated functionality.
App lovers (socially engaged mobile users)
Original picture and story on digitaltrends.com
1/3 of the Beats weight is from the metal alone. You've been fooled! Not high end, but high marketing.
 
Now consider Beats, purchased by Apple. Beats is touted
as top of the line listening devices, however every professional grade testing
proves that Beats is competitive with your average $29.99 headsets. Much more
their headsets cost on average, including the packaging, only $16.99 -
something Apple must have loved because the Beats sell for average $200 a
piece. Apple has similar margins. However typical their sound might be, Beats
was able to leverage the founder's industry & network to get free unpaid
sponsorship from athletes and musicians, on top of that they promoted the
customization of their sets which people saw and replicated. On top of this
customization, as general consumer when you see your favorite athlete or singer
or celebrity using Beats, you're going to wonder where and how much? This
worked for Beats, because there are other "father-like" headphones
like Bose's who are priced about the same. Beats found a hole in the headphone
market and exploited it.
Another thing that Beats did (proven to work and not
alone) is that they added random pieces of metal to the headphones bands to add
weight to them. Because when we feel something heavy and steardy we often
assume is high quality packed with high quality stuff... in Beats case, It was
just metal to add weight.
Beats target market?
Those who are looking for hip, colorful, attention grabbing, status
touting headphones.

 

Finding a target market is key, since you didn't really
provide any detail of your product Is hard to give you direct help, but I hope
this helps you get sorted out and re approach your marketing strategy. Also
consider that pricing is a key marketing effort. Not everyone knows how to
properly price items, but what is most commonly done is take most direct
competitor and add 15% on top. Assuming that less than the competitor's price
already covers your costs and provides some profit.
Humberto Valle

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