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Luxury myths that affect brand equity

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Luxury brands must steer clear of myths that prevent them from developing, reveals US-based luxury research and ratings firm Luxury Institute.

The Three Luxury Myths Killing Your Brand Equity white paper, released earlier this year, highlights three biggest myths that luxury brands encounter, along with solutions to overcome them:

  1. You must choose one area of focus among product leadership, operational excellence and customer intimacy: The reality today is that luxury brands have to perform incredibly at all three; if not, the brand will be highly disadvantaged
  2. A luxury brand must be organised as a hierarchy in order to be effective: A successful brand does not work on a machine model, but an organic one, according to Luxury Institute. A brand must have a balance of adapting processes to achieve healthy growth, while remaining true to itself
  3. Sales professionals are anonymous and robotic transactors: Employees of the brand should be seen as ‘internal customers’. Sales professionals are there to create a positive customer experience and build long-term relationships. If they’re not treated well or respected in the right manner, this may not happen and the brand will inevitably suffer

“These myths are preventing many luxury brands form achieving significantly better sales and profit growth and could potentially drive many established companies out of business,” the report adds.

As the global population of affluent consumers grows, according to Luxury Institute, the luxury industry is set for a new era of evolution. However, these myths could prevent established brands from achieving high sales and profit growths, thereby driving them out of the market.

 

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