Glossary

Lifestyle brands

On principle, lifestyle brands follow the heartbeat of the times. They accompany consumers through various life stages and situations and give them the opportunity to express their lifestyles.

What is special about a lifestyle brand?

Lifestyle brands are not limited to certain product groups, but offer a range of products and services revolving around the world and identity patterns of consumers. Initial successful concepts are the range expansions of H&M and Zara into home textiles.

There are examples in the luxury segment as well: Mont Blanc extends its line to include watches and jewelry, Armani sells luxury furniture and Hermés designs the interior of the Bugatti Veyron. Byredo – the epitome of a lifestyle brand – makes not only perfume but also leather handbags, blankets and combs.

The managers of lifestyle brands – but also of brands that want to become one – often have to deal with the art of brand extension. They should have clear answers to the following questions:

1. Clarify the prerequisites:
   Does it fit the brand to become a lifestyle brand?
   Or is it wishful thinking rather than reality?
2. Know the customers' desires:
   Do you know your target customers inside and out?
   Do you know their lives' reality?
3. Anticipate trends:
   What new movements do you see on the horizon?
   What will be relevant to your customers in the future?
   How can you satisfy their future needs coherently with your brand?
4. Take the risk of dilution seriously:
   Are you aware of the limits of your brand?
   What extension can you not put across credibly?
5. Watch the style:
   Was the brand style consistently and continuously developed?
   Were you able to build trust?

Love Brand

So-called "love brands" – also sometimes called "lovemarks" – are brands that exert such strong attraction on consumers that they are not only preferred over other brands but are actually "loved". Typical love brands are for example Nutella and Haribo.

In his book "The Lovemarks Effect", published in 2004, Kevin Roberts proposes the theory that there are three primary factors that make a brand a love brand:

• Mystery: Does the brand tell a story? Does its storytelling inspire the consumer and even seduce him to dream?
• Sensuality: Can the brand be experienced with the senses? Does it have its own sound, a typical look, or a certain feel?
• Intimacy: Can the customer build an emotional relationship with the brand through empathy, passion, and devotion?

Consumers often remain loyal to their love brand for years or even all of their lives. They generously forgive mistakes. This is based on a deep relationship of trust between fan and brand. They are also immune to price increases – the high level of personal identification with the brand core values is more important than a price advantage. Apple is a great example of this: Real Apple fans are willing to spend more than 1,000 Euros for new models – even though it is common knowledge that the manufacturing of an iPhone costs not even a third of that amount.

But caution is advised: Unlike unconditional love between two people, the love between fan and brand is an egotistical one. Those who do not offer true added value, stand apart with an individual brand character, and fail to provide a positive customer experience, will never reach the status of love brand.

Luxury Brands, Premium Brands

Premium and luxury brands are brand systems characterized by performance leadership in their segment and by an outstanding, product-specific basic and additional benefit.

Premium und luxury brands can assert higher prices for their products and services than brands with similar tangible functions. The feature "high price", however, is a result of the peak performances and excellence which premium and luxury brands deliver consistently and without compromise.

Premium brands like Swarovski, Nespresso, or Mercedes stand out because of their relative performance leadership and product specific basic and additional benefits.

First, the products and services of luxury brands have to produce world records and excellence, over a long period of time and at the highest quality standards. Second, luxury brands have to satisfy the desire for elevated status. A luxury brand cannot compromise – either in terms of its own performance or regarding price. That means that luxury brands need a high degree of discipline, for instance in their sales departments or in their brand positioning and brand development.

Luxury brands have to be exclusive in terms of their price, their availability, and their brand communication. If they get greedy and fail to adhere to this principle, they quickly run the risk of becoming ordinary – and ordinariness is the greatest enemy of any brand.

Hermés has been credibly at the top of the performance pyramid with first-rate peak performances such as the use of the finest leather, superior craftsmanship, and European manufacturing. Hermés is extraordinary, unique, and exclusive: Classics like the Birkin Bag or the Kelly Bag are in high demand despite their stiff prices of €7,000 and up. Even those who are willing to dig deep into their pockets can't be sure to get their hands on one of the bags whenever they want.

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Study: Luxury brands: The idea of luxury in different countries