At present we are conducting an in-depth student survey for research purposes at Japanese elite institutions, meaning prestigious institutions such as Tokyo University, Keio, Waseda, Aoyama Gakuin, Hitotsubashi, Sophia University and Meiji Daigaku. The survey takes an in-depth look into brand perceptions, consumer behavior and the lifestyles of the future elites of Japan. As an incentive, the survey includes a lottery in which participating students can win a shopping experience.
This shopping experience will be conducted in Tokyo´s most popular shopping districts. Winning students can use the budget to purchase from any brand they chose. We will accompany and inquire them in further detail concerning their shopping behavior. The winner's IDs will be published on this blog on January the 7th, 8 o'clock in the evening.
As the collected data is enormous, it will take approximately 2 months to publish the first preliminary reports.
This is nothing short of genius. The beats are decent, the whole thing in Miyazaki style, cute enough for to hook every young girl, yet aesthetic and cool enough for older audiences. Playful and light, with a drop of fantasy here and clear references to Alice in Wonderland there. So here we get it, LV makes the Japanese version of Alice. Fantasy in this country is born through the brands on Omotesando, and in the end, all is shared over the city through your mobile phone. Symbolic exchange (yes, Baudrillard) through the screen. In the moment she has sent the pictures out to her friends, the fantasy became reality. And yet part of the dream stays only with herself. LV takes her on a trip. That young girl can now aspire to something, when she is older, she will be able to purchase into that dream...that is, if it is not damaged along the way by overexposure of Shibuya Gyaru who are not so much Murakami style.
[ comment start I wonder if someone shares my perception that the most distinct "Japanese culture" element in this clip is the moment when all her friends receive her message on their mobile phone (seeing scenes in Shinjuku, Shibuya, Suidobashi Tokyo Dome, in front of a juku/Japanese cram school with 進学 written on the window). I think this is a very accurate observation of youth culture and the way that their world revolves not only around their mobile phones but through the immediate possibility of sharing an experience and connecting to the world around them. This experience without her friends would be isolated, apart from the group, and not real. Sen to Chihiro from Miyazaki lets Chihiro experience her fantasy alone. Only her friends in the other world understand her. Very indidvidualistic, even western. But this here is different. You experience individuality through adhering to a group norm, share it with the community and get the feeling of setting yourself apart (always in the group) through staying ahead on a trend, that is again defined by group norms. It´s self-referential and presupposes changes implemented from the outside, external influences (for example in the form of a strong brand with authority, like LV). ] comment end
The sophistication of this advertisement is difficult to align with some of the customers that exhibit the brand openly. Yet, is it a contradiction? Misuse of a brand's image for subcultures not directly associated with the intended brand image, are not always bad for a brand. More thorough semiotic analysis of the media dynamic would be necessary. Yesterday I had a talk with a university student, highly eduacted, from one of the prestigious private big names, who told me something that made me think. When she entered University, she started a part-time job, and earned her own money. It was the first time that she thought about its value, and what she would like to spend it for. It was earned, and she started to question the value of just spending all that for a handbag from LV. It was not that she had less money than before, when she aspired to own one. It was that she saw no reason to make an effort to obtain it. As long as it was easy and without emotional investment from her side, she was willing to own a LV bag. The question is now how to give the brand enough emotional value in order to give them enough reason to make that effort.
What surpised me even more were the contradictory opinions of a university student and his girlfriend. She was convinced that her boyfriend would not like girls who own a LV bag, considering them to be less individualistic. Yet his opinion, if asked seperately of course, was that girls who carry such a bag are female and sophisticated. Wouldn't be the first time that couples have different perceptions about shared values. But it starts to interest me if you can align the images of male and female consumers in Japan, even from the same social segment, even university. I was wondering if the survey that I am about to conduct at the end of the month should also include male consumers and their image on certain brands. It seems to me that girls (especially highly educated ones who have the comfort of being able to lead a more independent professional life) are much more critical about the image of LV than their male counterparts.
I dont think a normal survey with both male/female participants who answer the same questions, would account for the complexity of the issue. What about doing it differently, by asking women for their perceptions on the brand and the (perceived) image it has on the other sex, while trying to find out the real image male consumers have of different female consumer segments carrying those famous bags.
I was asked by the Consulting Agency Agenda Inc. (an insight and thought-leadership partner for luxury brands) to comment on my conception of luxury in an interview. It can be accessed here. The interview was shortended for the blog, the full version can be read below. I have added additional comments and references into the text. [They are marked like this to make them distinctive from the main text body].
INTERVIEW WITH AGENDA INC., 03.11.2009 Helge Fluch is the founder of luxury consulting company Japan Access, and author of the influential blog, HNWI Marketing Japan. The focus of his Luxury Marketing Blog is to showcase his research philosophy around luxury brands, while his consulting company Japan Access offers very specialized services in the field of HNWI marketing and luxury marketing, with a focus on the Japanese market. Almost uniquely in the field he uses a range of sources to support his arguments; including Pierre Bourdieu, Baudrillard and other post-modern social theorists, and more contemporary references such as Currid’s Warhol Economy and Kapferer and Bastiens The Luxury Strategy. He also cites and recommends Japanese writers on luxury such as Tsuchiya Kochi, with his book “HNWI Marketing”, and Takahashi Chieko’s "The Seven Rules of Selling Despite a High Price. Luxury Marketing."
Recently, we interviewed him about his point of view on luxury and his work.
- What do luxury brands mean to you? Luxury brands embody something for which humans have striven for many ages, since the beginning of humanity. It is the desire to create something that is essentially more, transcendental, out of the ordinary, and not necessary for immediate survival. Yet all human societies develop something that can be called “luxury” even if there is not a value/price mechanism associated with it. Religious artifacts and relics can be considered a form of luxury. For me, luxury is essentially something social. It creates, as Kapferer and Bastien (2009) say, a social distance. Luxury does not exist without human interaction and it appears where human beings within a social context want to construct themselves a place within that society, in relation to others. By analyzing luxury brands we can learn a lot about the structure and values of a certain society. Without a profound understanding of the society in which the luxury market is taking place, any conclusion may be vague, ambiguous, or even completely wrong. My fascination for luxury goes beyond the mere social aspect. I adore excellence in all human endeavors, and luxury products - in my point of view - fulfill the human need, as mentioned above, to strive for something more than ordinary. I disagree with the notion that luxury is something “not necessary”. I think the human mind was made to create luxury items, and history proves me right. I would be very interested to see an exception to this rule.
- What do you think luxury brands globally can learn from Japan? Japan is in many ways a very special market. Around 40% of all luxury items in the world are consumed by Japanese consumers, inside and outside their own country. In Japan, we can see how a developing country - in which social structures are broken up and recreated within a very short time period - uses material objects that have certain value associations in the West, to substitute for social structures and class differentiations that have disappeared suddenly (Chadha and Husband 2006). To explain the way in which Japan has developed, though, we need more than that. Without understanding the history, the education system, the employment market, and the economical micro- and macro structures, no profound explanation can be found for the special role that Japanese consumers play when compared internationally. Louis Vuitton has proven how to define a market and how a brand can become unbelievably successful by basically creating the social rules within a country. Similar things can and are happening in China, Hong Kong, and Singapore, and, as a very young luxury market, India. What is happening now to LV, with sales decreases of over 10%, is part of the dynamic and can be very enlightening for the processes within other developing luxury markets. The dream equation, the difference between the perception rate and ownership rate, is a very fragile construct. Without a perceived limited availability, and by losing core customer groups, a luxury company can reach a market penetration that will become a problem for the aspirational value and the prestige of a brand. Basically, what luxury brands could learn from Japan is to thoroughly understand and research the social dynamics underlying luxury consumption in new markets, and not just to be delighted by record sales numbers, blind to the cultural processes underlying this success that might some day cause the brand to lose ground within the same market, or internationally. Success alone is not enough. You should know why you are so successful, and the risks associated with it. It strikes me what Yves Carcelle said at the opening of the LV flagship store in Omotesando in 2002:“This is not just a store, it is a statement.” Well, marketing experts should be sure to understand what exactly that statement will be on the long run. LV still sells immensely well in Japan, and we hope that the brand understands all the reasons for its own success. Only because you sell, does not mean you got all the variables right. In luxury marketing, brand value comes before shareholder value. So you have to think long-term. [ comment start The statement of Yves Cartell was printed in Zielenziger (2006): Shutting out the Sun, p. 150. The case of LV is interesting in many aspacts, as the cause and effects are often mistaken. LV is not just a logo that is overrepresented in the Japanese market, it is a brand with extreme overexposure that creates dynamics unseen in any market before. What happens in a society with over-emphasis of group-harmony and social consensus, where people go for saftey choices in order to adapt, or better, to not stand out. This can be considered a social experiment of before unseen extent. It can be argued that in most other countries a saturation effect would have led to an equilibrium much sooner than in the case of Japan. People interested in answering the question why? LV is so popular should read the following resources, which are all in Japanese (I am currently working on a summary of the articles that will be posted on this blog within the next 2 weeks): セオリー：有名ブランドの秘密 (the secret of famous brands)、theory2008 vol.3 KODANSHA Theory, リアル・リッチの世界II, ルイ・ヴィトンの法則―最強のブランド戦略 (The laws of Louis Vuitton. The Strategy of the Strongest Brand). See also my comments on the luxury report from McKinsey, and this article at Luxist.com. ] comment end - How do you see the future of luxury? I think luxury will become more diversified and will enter subcultures that we never thought would be susceptible for the concept. It will adapt a more international language of signs as the media will penetrate more and more of our daily lives, increasing the options for consumption tremendously. At the same time, losing sight of your own ethnicity and feeling lost in the global net of offerings will lead to a new-found importance for sticking to your roots, of preserving heritage. The real luxury companies of the future will be the ones that offer some form of legitimacy that goes beyond conspicuous consumption. Social dynamics that punish luxury companies for ignoring their own heritage take a long time. But they work anyway. The future for the growth of luxury brands lies in Asia, especially in China and India. As these societies discover not only the possibilities of consumption but also exhibit the highest growth rate for rich people in the world, luxury brands will inevitably look to achieve growth strategies there. The question will be whether they can avoid some mistakes made in Japan. Of course you could argue whether the developments in Japan can be called mistakes. They produced a lot of growth for luxury brands. But times are different now, and developments in the rest of Asia could produce unexpected outcomes globally.
[the following part was not printed on the blog of Agenda Inc.] - What are the beliefs that guide your work? As I work I question my own values continuously while adhering to a certain philosophy of thought that is both structured and flexible. I try as much as possible to include contradictions and oppositional points of view within my theories in order not to fall into the trap of oversimplifying in order to reach an intended outcome. If you would ask me to describe my way of thought in one sentence, I would be inclined to go for “creative destruction leading to innovation”.
1)Marketing is no science. Marketing is not about facts. It is about tendencies, probabilities, all of them with a time component, meaning, subject to sometimes rapid change. Marketing can be about trying to figure out an approximate future, not about discovering reality. No matter how sophisticated the research methods, the results are always ambiguous, never complete, subject to change, and open for interpretation. 2) In order to anticipate this approximate future within the relevant universe of the brand, it is essential to look out for possible developments in the market that are hard to perceive. Those “disruptive cultural movements/tendencies” are often situated within subcultures, lying dormant with a potential, until some combination of external and internal factors lead to a critical mass, to a tipping point that creates a trend. These trends can have profound influences on the whole market, change a whole industry or even lead to paradigm shifts in the way consumption is perceived. 3) For luxury companies, it is especially important to anticipate paradigm shifts within the value structure of people and the society at large. As luxury consumption is socially constructed, these changes affect all brands, if not immediately, then on the long run. 4) We want to uncover the underlying principles behind these paradigm shifts and the dynamics of disruptive tendencies. 5) We use these underlying principles to construct models that can be used to create strategies to counter the aforementioned disruptive tendencies and paradigm shifts. 6) We provide the contextual knowledge necessary to understand the phenomena in the market. Profound understanding of the underlying social gratification systems is needed for understanding and evaluating market phenomena. 7) For market segmentation to be effective, the marketing department has to have the ability to identify appropriate segments and to implement strategies to reach target groups. 8) By analyzing the subcultures/customer segments with a multi-level analysis, "areas of presence” are found in which the sub-culture/group is constructing their lives. Companies have to enter those spaces. To find these “areas of meaning” a combination of focus groups, interviews, media research, communication with CEOs from industry leaders in the luxury market, and theoretical reflection of basic literature is conducted. Focus groups alone could be very misleading. It would be naive to believe that customers exactly know what they want and why they do things. 9) All these insights are in need of continuous updates and critical reflection. Luxury companies should ask themselves if the people in charge of major marketing decisions are capable of understanding the respective culture and whether they are able to judge the validity of their own resources. The Japanese context provides companies with another challenge: the language barrier. 10)Most surveys exclude high net worth individuals. It is very hard to get access to the real rich opinion leaders, as they tend to not disclose their real intentions and motivations. Most can’t be reached in a direct way. The only method to get valid information from them is to enter their networks and establish personal contact with them. Japan Access has access to two companies offering concierge and other personalized services to a total of more than 10.000 high net worth individuals in the Japanese market. Japan Access takes on the role of an intermediary. We establish contact to the right experts and evaluate and explain their capabilities.
By making sure that results are interpreted in the right contextual framework, I am convinced luxury companies would not only be able to save a great deal of money, but would also be much better prepared to anticipate paradigm shifts and trends within the industry.
This posting will be clarified soon. The featured page from my notebook shows a dynamic within the Japanese fashion/apparel market.
Fashion and style magazines create styles, featuring certain brands which are sold in certain channels (as for example Marui Department Store, that features a lot of brands that are promoted in the magazine CanCam). Instead of only the brands being associated with a certain style, the department store is associated with a style/magazine that created/promotes it. This raises the interesting question, who are the girls who shop/buy/read the style of a certain department store (opposed to just a magazine).
If you take this one level higher (abstract) you end up with magazines promoting certain lifepaths that lead to a certain social mobility (or a style that thrives by the absence of the latter). All this is again connected to the division of labor, gender roles, and to the discrimination (in a western sense, if we take the cultural relativism argument seriously) of women in domestic life and the working place (but again, check please Office ladies and salaried men, for a more sophisticated account on gender division and labor in Japanese big corporations).
So, what really supports the high demand for fashionable clothing and "acceptable" outfits (also, at least not rejected) by the other sex, is the clearly defined and recreated gender roles. The ability of a woman to get a husband with a high paying job is treated like an asset that can be built up. But more on that later. I am working now on a model that allows the integration of my three-level luxury marketing model with the role of magazines and subcultures in Japan. It will support my argument that reading certain magazines can limit/enhace your choice of lifestyle paths (and therefore upward social mobility).
The question about the origins for extensive luxury consumption in Japan lead us to the basic questions about social stratification. We want to be upwardly mobile in society, we want to perceive the world around us as being open for everybody to climb the success ladder, should he or she just try hard enough. Things have to be fair in Japan, entrance examinations that guard the gates of "higher eduaction" are delivered in a tank to the most prestigious institution of them all, Toudai. I will not elaborate on that issue, as reality, like most of the time, is much more complex than this. The fact is that a handful of the most prestigious institutions (considering their reputation) are the entrance into the world of succes in Japan. Taking recent data from the magazine "President", the department of business administration at Keio University (商学部) produces by average the most CEOs and board members. As always, these stats should be enjoyed with utmost care. People now in their 40s and 50s, holding those prestigious jobs had been in university 20-30 years ago, in the 70s and 80s. Drawing a connection to the effect of those channels is possible, if only indrectly, by expecting a self-fullfilling prophecy (yes, Merton). In Japan this might not be so far from the truth.
If we take the following assumptions, 1) social gratification in Japan is heavily influenced by your academic credentials, 2) the glass ceiling in upper management for women really exists, then we come to the conclusion that upward mobility in such a society is for most women limited to one option: marriage, meaning getting the "right" husband, who is part of the new rich or has the potential to become one. As economic constraints of the last 15 years have led to higher income inequality, the fight for the smaller group of men who are able to provide a woman with a comfortable lifestyle, has become more severe. It is no longer the question of belonging to the middle-class with steadily increasing wages in life-long employment, it has become a struggle to not belong to the lower middle-class, or worse.
Taking this, the question is what do women do to be included in the race and to increase their chances. Magazines like CanCam who teach "mote" or the art of getting the right guy, and how to behave in standard situations of the dating ritual, promote pre-market tested styles that are able to guarantee high chances for opposite sex approval. This magazine can be taken seriously, being one of many of its kind, with over 500,000 monthly copies (including the sister magazine AneCan) being printed, probably not only read by one person, with word of mouth and people browsing contents within convenience stores adding to its effect. Let us not see it as a simple lifestyle magazine and shopping catalogue, but as a guide for social gratification. [ comment start CanCam has suffered heavily though, in the last few years. Within 3 years the volume has decreased by over 50%, leaving the question open whether girls these days believe that CanCam can really help them to find Mr. Right. It seems as if the CanCam days are over. The basic logic remains, though. It needs to be answered how Japanese girls are dealing with it now. ] comment end Cutting this argument short, let us take a look at what happens to a 22 year old girl in Tokyo when she enters the job market in an average clerical position, in a medium-prestigious company in the more central part of town. Not counting bonuses, her average salary in the first year will be around 170,000 - 220,000 Yen, if she is lucky. If she wants to live alone, an appartment in a not completely bad part of town (commuting below 1 hour one-way), including footwork, will cost (not counting key money and real estate agent fee) around 70,000 Yen, minimum, meaning a 1DK, 25 square meter charming home on the 6th floor somewhere near Kichijouji or Jiyuugaoka. She buys the fridge, the furniture, and is left (after heavy parental support), with less than 100.000 Yen a month, after her mobile phone bill and some other bills and health insurance are paid. This leaves her with, per day, around 3000 Yen, which is about 23 Euros. No going out, no shopping. Just plain living. If she is not on the career track, her perspectives are limited. If she is, her time will be even more so.
Now lets make this scenario a little bit nicer for the girl. She will stay with her parents who understand that in order to get the right marriage-material, she needs some backup. Suddenly, she has 100,000 Yen per month more to spend. The food is provided by her caring mom who can use the relationship to get over the separation anxiety. Assuming that this situation can't continue forever, the chances to get out of this deadlock in which no independent living is possible and salary increases are incremental (also on the long run if not on the career track), are increased by presenting yourself in the best light to adapt to social expectations posed on the female sex in respect to their appearance, accessories and manner of behaving.
My intention here is, of course, to sound cynical. How can a society function in which the first-year salary of most if not all jobs after university is basically never enough to lead an independent life that still grants enough time to find a partner.
Many women who decide to go on the career track face an interesting situation. Their salary in the beginning is somewhat higher, the bonuses more attractive. They will find out that what is lacking is time. And by living alone (if they do), their disposible income is very low, even after 2-3 years. The magical 30 years of age, which in Japan is referred to as the border to becoming a "make-inu" or loser-dog if not married by that age, is drawing closer and for most women promotion to high paying jobs is still a rarity. The strange outcome is now that women living with their parents, becoming so-called parasite singles, have more disposable income and more time for the dating ritual, including clothes and accessories, than their successful career-women counterparts.
At present we are conducting an in-depth student survey for research purposes at Japanese elite institutions, meaning prestigious institutions such as Tokyo University, Keio, Waseda, Aoyama Gakuin, Hitotsubashi, Sophia University and Meiji Daigaku. The survey takes an in-depth look into brand perceptions, consumer behavior and the lifestyles of the future elites of Japan. As an incentive, the survey includes a lottery in which participating students can win a shopping experience.
