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Email: [email protected]. Abstract: As some ... shows how champagne brands provide a benchmark in creating prestige. The lessons ... Biographical notes: Klaus Heine works as a Luxury Marketing Professor at. Emlyon Business ...
Luxury Research J., Vol. 1, No. 2, 2016

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Authenticity and prestige: what luxury brands could learn from the wine industry? Klaus Heine* and Michel Phan Emlyon Business School, East China Normal University, Room 206, Global Education Center, N.3663 North Zhongshan Road, Shanghai 200062, China Email: [email protected] Email: [email protected] *Corresponding author

Glyn Atwal ESC Dijon-CEREN, Groupe ESC Dijon Bourgogne, Univ. Bourgogne Franche-Comté, 29 rue Sambin, BP 50608, 21006 Dijon Cedex, France Email: [email protected] Abstract: As some centuries-old wineries are amongst the oldest brands in the world, they may keep some important marketing insights. The paper suggests that wineries are setting the benchmark regarding two essential characteristics that all luxury brands must fulfil to at least some extent: authenticity and prestige. While the luxury wine segment provides guidance on developing authenticity – the winemaker’s benchmark, the champagne segment provides guidance on creating prestige – the champagne benchmark. Based on literature analysis, the conceptual part of the paper discusses the meaning of authenticity and prestige. A case study on Château d’Yquem shows how winemakers have set a benchmark in creating authenticity, and a case study on Veuve Clicquot shows how champagne brands provide a benchmark in creating prestige. The lessons learned from the luxury wine industry may also be useful in many other industries. As an illustration, we apply the authenticity and prestige-building techniques to the fashion segment. Keywords: luxury; fashion; branding; brand-building; authenticity; prestige. Reference to this paper should be made as follows: Heine, K., Phan, M. and Atwal, G. (2016) ‘Authenticity and prestige: what luxury brands could learn from the wine industry?’, Luxury Research J., Vol. 1, No. 2, pp.177–190. Biographical notes: Klaus Heine works as a Luxury Marketing Professor at Emlyon Business School in Lyon and Shanghai. Since his doctoral dissertation, he specialises in luxury brand-building and especially in the identity of luxury brands. He combines applied-oriented research with teaching about luxury brand management and practical projects with various brands from luxury startups to the leading luxury houses.

Copyright © 2016 Inderscience Enterprises Ltd.

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K. Heine et al. Michel Phan is an Associate Professor of Luxury Marketing, Director of Liifestyles and Consumption Cluster and Director of MSc in Luxury Management and Marketing Program at Emlyon Business School. He has an extensive academic and professional experience in the luxury industry, both in France and in Asia. He was formerly the LVMH-Chaired Professor of Marketing at ESSEC Business School in Paris. He has also written numerous case studies about luxury brands, products and services. He is also a regular speaker at many international academic and professional conferences on luxury, and at many universities in Asia. Glyn Atwal is an Associate Professor of Marketing at Burgundy School of Business, France. His teaching, research, and consultancy expertise focuses on luxury marketing and strategy. He is a Co-Editor of Luxury Brands in Emerging Markets (Palgrave Macmillan). Prior to academia, he worked for Saatchi & Saatchi, Young & Rubicam, and Publicis.

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Introduction

Lucullus is the prototype of a connoisseur, the hero of refined hedonism, who was famous in ancient Rome for his marvellous evening events and his love for beauty, delicacies and all sensorial pleasures. Delicacies in ancient Rome included oddities such as nightingale tongues, camel heels and roasted ostrich, but of course also wine from one of the famous grand cru vineyards at the time such as Caecuban and Falernian. The rise of the Roman Empire goes along with major advances in winemaking, which influenced today’s major winemaking regions in France, Germany, Italy, Portugal and Spain (Weeber, 2003). And still today, a marvellous banquet is almost unimaginable without fine wine. However, there is hardly any other product category with such a large price range. While Haut Paulliac sold its 2000 edition at around US$20 a bottle, the neighbouring estate Chateau Latour – just 80 centimetres away – sells for around US$500 a bottle (Beverland, 2005). It is true that certain pieces of land produce better wines because of their unique soil, climate, or topography – but besides that, these huge variations in price rely in large part on differences in the reputation and symbolic value of the wine. This symbolic power is illustrated by an oenophile respondent of a German millionaire survey who daydreamed: “it is very fascinating to open a bottle of wine from 1912, which witnessed two World Wars – and when you imagine everything that has happened since that time…” (Heine and Phan, 2011). However, symbolic value of wine ultimately depends also on the marketing strength of the vineyards. As they represent one of the oldest luxury product categories dating back even thousands of years and as some century-old luxury wineries represent some of the oldest brands in the world, luxury wine brands are a core category in the luxury segment. For instance, the vineyard Staffelter Hof was founded in the year 862 in the Moselle Valley, Germany and is the world’s oldest still existing winery. At the same time, the luxury wine segment is still highly innovative and a double-digit growth market, especially because of the increasing thirst for wine in the BRIC countries. The aim of this paper is to show that the wine category is a nucleus of luxury marketing, which is often overlooked, but that the area of luxury marketing can be better understood by studying the strategies of luxury wine brands and that they provide much inspiration also for other luxury categories. Learning from the success of some of the

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oldest luxury brands in the world can help luxury brands to adapt to today’s challenges, and trends in the luxury market of the future. Based on case studies, we learned that the luxury wine category represents best the two major symbolic characteristics, which all luxury brands have to fulfil with to at least some extent: authenticity and prestige (see also Heine, 2012). These characteristics, essential for any luxury brand, present an opportunity for new emerging brands that wish to position themselves as ‘luxury’ and therefore gain access to luxury consumer’s recognition and desires. First of all, the paper will draw the attention of luxury marketers to the concepts of authenticity and prestige, which are deeply ingrained in human nature, through a case study of Château d’Yquem. It will show how winemakers have set a benchmark in creating authenticity. Secondly, through the lens of a case study on the champagne Veuve Clicquot, one will highlight that the wine category provides guidance for the creation of prestige and the implementation of a masstige strategy with the champagne-maker’s benchmark. Since they can also be useful to any brand that wishes to create brand authenticity and prestige, a discussion on authenticity and prestige-building techniques will follow, building from what one can learn from the luxury wine segment as well as the fashion and other industry segments.

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Authenticity and wine brands

2.1 The relevance of authenticity Global luxury sales are generated to only about 30% by family businesses, to about 65% by public equity and to about 5% by investment funds. This means that luxury became a marketing-driven big business. Today shopping on the famous luxury streets means to fund just a few major luxury groups. This is reflected also by the revenues of LVMH, which increased from about €2 million in 1987, the year of its foundation, to more than €28 billion in 2012. From the pressure of their new investors, professionalised luxury brands are trimmed for growth. However, despite masterful marketing this may not be endless, because of the golden maxim of luxury marketing: increasing sales volumes reduces rarity, therewith also the luxury image and as a consequence also the sales numbers, which means that the success of a luxury brand is the basis of its future failure (Dubois, 1992). While the professionalisation of the luxury industry reduces the authenticity of luxury brands, marketing academics note an increasing importance of authenticity to consumers in developed societies (Leigh et al., 2006), which goes along with the desire to escape commercialisation (Grayson and Martinec, 2004) and a search for meaning and for experiences that feel ‘real’ in response to growing instability, increasingly open societies and a perceived rise in corporate manipulation and guile (Beverland, 2005). Therefore, assuring authenticity is one of the central challenges of luxury brands in the future. However, despite its importance, only little is known in the marketing literature about how to create or enhance (luxury) brand authenticity (Beverland, 2005) and, although often used in the mass-market, it is still not recognised within the luxury industry as a success factor and crucial component of a luxury brand’s identity. This goes along with a lack of understanding of what authenticity actually is.

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2.2 Types of authenticity Something authentic is not a copy, but genuine, real, unchanged and of undisputed origin (Oxford Dictionary, 2015). However, consumers still differ in what they believe authenticity is. The prerequisite of creating brand authenticity is to understand the three major perspectives of authenticity: •

Pure authenticity covers “a continued commitment to traditions and the place of origin” [Beverland et al., (2008), p.7]. This means that a company had come up with a product long time ago and by preserving traditions, the product sold today has remained basically unchanged from the original. Grayson and Martinec (2004) refer to this understanding as indexical authenticity (index = measure), which relies on cues that are thought to prove a factual and spado-temporal link between the market offerings and ‘the real thing’. These cues for authenticity reinforce a perception of continuance of historic practices, including means and place of production, the use of traditional ingredients and product styling. Such cues could be, for instance, the design of the logo or bottle that looks old and as it had never changed. Even little details may undermine claims of pure authenticity, for instance, the presence of modern lighting, font types and colours in advertising.

•

Approximate authenticity: objects are authentic ‘if they approximate historical referents’, which relies on consumers’ mental pictures of how things ought to be [Beverland et al., (2008), p.9]. Consistent with this definition are those rather emotional cues that convey some ideas and feelings of history instead of factual links to time and place that may prove any historical connections. This means that a company had come up with a product a long time ago and by living traditions, the manufacturing process was modernised, the product has evolved, but the product sold today still resembles the original. Consumers seeking approximate authenticity tend to be more open to changes in traditional practices. They understand, for instance, that winemaking at the Austrian Abbey Neuburg was modernised, but still appreciate that this is the wine that was made by monks already 900 years ago. Grayson and Martinec (2004) refer to this understanding as iconic authenticity (icon = symbol), which relies on cues that are thought to resemble the typical character of ‘the real thing’.

•

Moral authenticity: consumers seeking moral authenticity are less interested in traditions, but instead in motives, means and ends – in brands that are genuine in their intent. Such companies create something because they deeply believe in it, not just because of some external demand or financial rewards. They are driven by passionate creators who are highly involved and love what they do. This automatically leads to very limited production so that the opposite of moral authenticity must be mass production. Similar to the concept of moral authenticity, Wang (1999) speaks of existential authenticity, which is grounded in postmodernism and refers to consumers in search of their authentic selves – for experiences (with luxury products or services) that make them feel in touch with both a ‘real’ world and with their ‘real’ selves. These experiences represent an idealised way of life and become romanticised as they contrast against the rationality of modernity (Leigh et al., 2006).

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As authenticity is not inherent in objects but only a perception, there is no ‘real’ authenticity. Instead, authenticity is “a socially negotiable concept that is relative, contextually determined, and ideologically driven” [Leigh et al., (2006), p.483]. Consumers can attribute authenticity even to fictional sites such as the residence of Sherlock Holmes. Therefore, carefully crafted marketing measures can enhance authenticity ‘to even the most sceptical consumers’ [Beverland et al., (2008), p.14]. Even the selection of CEO portraits on company publications influences the perception of authenticity (Guthey and Jackson, 2005). Peterson (2005) argues that end users have more of a voice in the process of authentication initially, but with the passage of time, however, when much of the detail is lost and the past is re-remembered, authentication relies more and more on the people who tell the stories and thereby simplify and re-imagine the past. For instance, since the great story-telling from a music manager, Hank Williams was labelled the most important country music artist by critics and historians, although he actually was not the most popular at his time. Consequently, luxury brands engage in ‘authenticity work’ [Peterson, (2005), p.1083].

2.3 Wine case study: Chateau d’Yquem Château d’Yquem is one of the world’s most famous vineyards and is a typical example of a luxury wine brand (along with other brands such as Chateau Lafitte, Chateau Latour, and Chateau Margaux). The history of the vineyard goes back to at least 1711. As stated on its webpage: “more than four centuries of history are summed up in the words ‘Château d’Yquem Lur-Saluces’ found on every bottle of Yquem”. Just as big parts of vineyards look back on a long history, the wine category seems to be naturally predestinated for a perception of pure authenticity. Many things at vineyards such as their old buildings, wine barrels, or tools give consumers easily an impression of something ‘old’, which is a critical cue for pure authenticity. Taplin (2006) observed that faced with newly emerging competitors, established wineries tend to place even greater emphasis on their centuries-old traditions, age and longstanding reputation as a means of differentiation. A wine’s credibility depends on the official classification of its ‘terroir’, which is reflected in the appellation system in France. A ‘terroir product’ (wine and other food products) guarantees the origin of a product from a specific region, but can also influence the ingredients and certain manufacturing characteristics. The concept of terroir is closely related to authenticity as it clearly represents commitment to traditions and the place of origin. Château d’Yquem earned the unique rank of Premier Cru Supérieur in the 1855 Bordeaux classification. Disregarding of the vineyards own history, the winemaking in the tradition of an old-established terroir is a way to achieve approximate authenticity. By providing codified limitations in terms of geographical and manufacturing characteristics, the terroir system is also a way to control supply. It creates natural (i.e., resource-based) and codified limitations, which means that they rely on man-made criteria in terms of geographical and additional manufacturing characteristics. Accordingly, Yquem wine can only come from the 188 ha of the estate and it is only sold in specialist wine stores (Reyneke et al., 2011). In addition, Château d’Yquem makes use of artificial limitations when, in a poor vintage (the last time was in 2012), the entire crop is declared unworthy of bearing the Château’s name and is therefore sold anonymously. The limitation of production is a prerequisite of moral authenticity and this goes along with a real

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commitment to quality and detail in wine picking and processing. At Château d’Yquem the grapes are harvested in several waves, only individual grapes being selected rather than the whole bunches; then, before it is sold, the wine is aged for three years in oak barrels (Beverland, 2005). Luxury winemakers such as Château d’Yquem are often faced with the dilemma of authenticity. Wineries represent some of the oldest brands in the world, which implies that they hold some marketing insights that made them successful over hundreds of years. Even more today, they have to professionalise their production, distribution and marketing in order to assert themselves successfully against growing competition. At Chateau d’Yquem changes were necessary to ensure that “the grande dame of the wine world […] doesn’t become more dowdy than dignified” (Iverson, 2014). However, as these changes may reinforce the consumer’s impression that they are more professional and commercial, they may become perceived as less genuine and natural. Therefore, although professionalisation is necessary, it may put at risk the winemakers’ moral authenticity and thus their success. To resolve this dilemma, they must play down their professionalism in the public eye and even appear as uninterested and distant from commercial interests. The study of Beverland (2005) suggests that wineries indeed downplay their real scientific and business expertise to appear above commercial interests – this is the major authenticity-building technique of winemakers. However, for many vineyards this is not just a communication technique. In contrast to many margin-driven corporate groups, many family-owned vineyards in particular just have a genuine intent and follow a long-term-oriented and sustainable business philosophy. Château d’Yquem is still a winery whose bottom line is not always measured in profit. For instance, although it would be cheaper, no external companies are managing its harvest, but a closely connected team. Some wineries also accentuate their family-owned and run status to differentiate themselves from vineyards professionally run by some big player. Such vineyards accept professional techniques for survival but concentrate above all on their products, family traditions and customer relations. This goes along with identity-driven brand management, which is reflected by a citation of a luxury winemaker by Beverland (2005): “I do not make a wine for a consumer. I make a wine that best expresses the vineyard and the vintage”. He seemingly rejects a strong market orientation, but is driven by what he deeply believes in and thereby creates a strong point of differentiation. Imagining the tasting room experience at a vineyard, and especially at Château d’Yquem, provides a mental prototype of moral authenticity. People arriving at Château d’Yquem are overwhelmed by this fairytale-like castle with numerous towers surrounded by wine fields and lavender gardens – and from the splendid salons featuring gilded chandeliers and 17th century paintings. They are shown around by the assistant cellar manager or meet men like Christophe Cabanieu, who represents the sixth generation of his family to work at Yquem. Visitors can feel the love and passion of these people for what they do. They may visit the barrel room with several hundred oak casks and the wine cellars with an incredible collection of even century-old bottles, collecting dust and character. In the elegant tasting room people are explained the characteristics of the different vintages and their array of tastes including prune and pineapple, apricot and passion fruit. Pierre Lurton, the general manager of the vineyard, explains that what they have in their glass is “the direct translation of this magnificent ecosystem, the climatology, landscape, and above all – I’d say – the ardor, audacity, and humility of the people who work here”. He believes that “it’s this human dimension which makes

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Château d’Yquem so sublime” (Iverson, 2014). Carefully orchestrating a tasting room experience creates lasting, positive memories and allows connecting emotionally to visitors, which should translate into stronger commitment, loyalty and repurchase (Nowak and Newton, 2006).

2.4 Implications for the luxury industry The different types of authenticity provide different ways for luxury brands to create authenticity. As it naturally requires a relatively long history, pure authenticity is highly associated with old-established brands, but may be out of reach for luxury start-ups. However, brands should make use of it if they have a historic potential. In order to create a perception of pure authenticity, it is common for long-established luxury brands such as Louis Vuitton, Chanel and Gucci to continually refer to the date and place where they were created and to the name and story of their founders (Peterson, 2005). A typical authenticity-building tactic includes staging exhibitions. For instance, in 2011 Louis Vuitton showcased its brand legacy with ‘Louis-Vuitton Voyages’ at the National Museum of China. Chanel provides a benchmark for its storytelling by short movies about the N°5 perfume, its famous customer Marilyn Monroe, the artistic director Karl Lagerfeld and the founder Coco Chanel. Her life and vision were explained in a very comprehensible manner with many facts and anecdotes in just three minutes. Almost like a piece of art, the film impresses with beauty and sophistication and a wealth of hand-drawn black and white animations that comprise a variety of Chanel brand symbols. By the use of brand storytelling in short movies, Chanel creates spado-temporal links between their current products and the ‘original’. In fact, there are probably not many luxury brands whose brand story is as well-known as that of Chanel. However, the component of ‘old’ that is naturally associated to many vineyards may be difficult to communicate for luxury brands that obviously need to be fashionable and modern. Gucci expressed some ‘old’ feeling with its 90th Anniversary Black and White Ad Campaign showing the early days of their Milan workshop and also with its timepieces’ Timeless Campaign where they took pictures from the Gucci archives and show, for instance, Veruschka in the ‘60s with Gucci logo-adorned bags. However, symbols of ‘old’ are still not widely used by luxury brands by fear of being perceived as ‘old-fashioned’. One of the central ideas of wine brands to express approximate authenticity is the concept of ‘terroir’ as explained above. For instance, traditional associations such as The Chambre Syndicale de la Haute Couture in France or The Savile Row Bespoke Association in the UK are dedicated to protect the practices and traditions in their fields. Besides old-established brands, members include also relatively new brands that use certain traditional craftsmanship techniques. For instance, Richard James (established in 1992) is a Saville Row member house and Lutwyche (established in 2000) is an associated member. Many luxury brands organise workshop shows in their stores or at other events where they portray their tradition by craftsmen who demonstrate their skills live in front of visitors. Another approach is exemplified by the Chinese luxury brand Shanghai Tang (established in 1994 and property of the Richemont Group) with their new ‘Imperial Tailoring Collection’, which relies on a reactivation of ancestral expertise and the legendary Shanghainese tailoring techniques. The idea of this principle of contiguity is to approximate authenticity by linking the brand with something authentic, in this case with traditional practices. Although these strategies can be found in luxury

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fashion, their potential seem not be widely recognised. Approximate authenticity is also highly associated with old-established brands, but even new luxury start-ups may develop approximate authenticity by tapping into some old tradition with these approaches. For instance, it was the case with Shang Xia, a Chinese luxury brand start-up that has tapped into ancestral traditional Chinese craftsmanship to create their products: eggshell porcelain making, combed cashmere felt, bamboo waving, etc… (Phan and Heine, 2013). In view of weakening authenticity, Louis Vuitton became a pioneer in applying authenticity-building techniques into the luxury sector. For instance, already in 2007 they started revisiting the brand’s heritage with their core values campaign that was designed to approximate authenticity by picturing authentic personalities such as Mikhail Gorbachev, Sean Connery and Michael Phelps. The principle of contiguity is used here by linking the brand with authentic people. With their Sofia and Francis Ford Coppola Campaign in 2008, they also allow their consumers to get a glimpse behind the scenes of their advertising shooting. The making-of captures Annie Leibovitz in action in the countryside outside Buenos Aires, where Francis Ford Coppola was filming a movie. With their making-of Louis Vuitton initiated a new marketing trend, which spread to many other luxury brands and even to mass-market brands such as H&M. However, a review of a recent Louis Vuitton making-of in Nudd (2013) suggests that these authenticity-building techniques are not working as initially thought: “somewhat comically, though, the making-of video has no interviews with the creators or any real insight into the making-of. It’s as though these fashion ads really do have nothing to say”. The tasting room, as a mental prototype of moral authenticity seems almost contradicting to shareholder value-driven and marketing-oriented brands such as Louis Vuitton. Besides their pioneering approaches in creating pure and approximate authenticity and their substantial investments in charity and art, a genuine intent may be their weak point in the eyes of many potential clients – and which is hard to achieve by marketing measures. In contrast, Dr. Hauschka cosmetics rely on non-marketing as it “whispers rather than shouts its benefits”, which “helps convey something meaningful and subtle to consumers” (Beverland et al., 2008). Similar to the passion of a vineyard, the passion principle is a key driver to moral authenticity. Passionate creators are motivated by the love of their tasks of making the products, rather than by the possibility of financial rewards. Passion promises to be a secret to success in luxury marketing, which is exemplified by a comparison of fashion event photos of Versace and Michael Kors on Instagram by the Instagram presence of Michael Kors – the spark ignites: “the guy is cool, he smiles – he genuinely smiles – goes to gigs, enjoys food, travels, meets cool people; you add beautiful pictures of items, creations, events, a hint of vintage, a drop of celebs and a healthy, overall feeling of playfulness and joie de vivre” Carr (2012). This may still result in a story similar to many others, but told in a different way – with passion. The passion principle refers to the idea that if someone (a luxury brand) is passionate about things (their products) then others (their consumers) will be too (Cialdini, 2009). All types of authenticity refer to information about where, when and by whom the products are made (Grayson and Martinec, 2004). When authenticity is an essential symbolic characteristic of luxury brands, then luxury products cannot be anonymous. In contrast to some mass-market brands, it is hard to imagine finding a ‘luxury’ product in some stores without these details. We would perceive them as being not authentic and thus not luxurious. Therefore, luxury brands can further enhance authenticity, for instance, by training retail staff in order to impress their customers with detailed know-how about the products they sell (Peterson, 2005).

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Prestige and champagne brands

3.1 The meaning and relevance of prestige Prestige is closely related to status, which refers to the relative position in the social hierarchy or in short ‘social standing’ (Oxford Dictionary, 2013). According to Weber (1946), the three p’s of social stratification include property, power and prestige (attached to one’s position in society). Prestige means “widespread respect and admiration felt for someone or something on the basis of a perception of their achievements or quality” and originates from ‘illusion’ and ‘conjuring trick’ (Oxford Dictionary, 2013). In other words, and similar to authenticity, prestige is not inherent in objects or persons but only a perception (‘a collectively held attitude’) and socially constructed (Shils, 1968). Common criteria influencing the perception of prestige include occupation, income, wealth, education, and lifestyle (Shils, 1968). It means that, for instance, the higher the income and wealth of a person, the higher her/his prestige and status. However, there exist also status-prestige inconsistencies, which apply, for instance, to Angela Merkel who has power and prestige, which increases her status, but relatively little property (compared to the tycoons of this world), which simultaneously decreases her status. The relevance of prestige-seeking behaviour can be highlighted by the fact that it was deeply ingrained in human nature by evolution. While in all other species social rank is determined by dominant behaviours alone (such as physical violence and threat), prestige forms an important component of how humans can improve their social standing. Henrich and Gil-White (2001) trace back the origins of prestige in human evolution and suggest prestige psychologies and behaviours were favoured by natural selection in order to adapt to the increased importance of the social transmission of skills and knowledge for survival. The psychologies of prestige could help to identify other individuals in one’s group who are successful, and they provide incentives to pay particular attention to the details of their behaviours and opinions, to maintain proximity to them, and to desire their friendship. Feelings of admiration and respect for a successful individual are linked with the desire to please this person. On the other hand, prestigious individuals receive various kinds of social benefits, which motivate them to tolerate the presence of admirers, and also possibly to actively teach or mentor them. The benefits of being prestigious – including influencing attitudes and behaviours of others – may have developed over time in a desire for prestige, which causes competition for prestige or admirers among skilled individuals (Dawson, 1988). Besides the competition for skills, an alternative strategy to attract admirers would be to advertise or signal one’s level of skills or knowledge to potential admirers. This could be done, for instance, with material goods, which could be referred to as ‘prestige goods’. For example, the feathers of a rare bird could demonstrate a good access to scarcity. Plourde (2008) suggests that over time “wasteful signaling of wealth and social status (sensu Veblen) probably tapped into signaling psychologies and behaviors already in place” (p.382). He believes that an increase in prestige competition and therewith also of the relevance of prestige goods is caused by: 1

increasing group size

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increasing complexity and/or number of skills and domains of cultural information – both factors are evident in modern societies.

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Already in 1913, Keasbey differentiated the utility of products into a use, prestige and exchange value. The prestige value “expresses the capacity of certain goods to contribute in this way to a person’s prestige”. To show there are products with prestige value, even without any functional value, Keasbey (1903) states an example of an American Indian who may have gloried himself with “the number of scalps that swing from his belt – not because heads and scalps in this detached state are of any immediate use, but because their possession adds to the warrior’s prestige”. Luxury brands have to possess and represent above all a high level of prestige as “the DNA of luxury is the symbolic desire to belong to a superior class” [Kapferer and Bastien, (2009), p.314]. Not only luxury brands but also a growing number of companies that implement a trading-up or masstige strategy (Silverstein and Fiske, 2003), and virtually any brand, can add some prestige value to their offerings in order to increase their utility for their target group and to make use of the basic human need of prestige. Despite its pervasiveness, the literature rarely deals with the techniques to create prestige.

3.2 Champagne case study: Veuve Cliquot Similar to the wine brands’ benchmark for authenticity-building techniques, the creation of prestige and the implementation of a masstige strategy (see below) should follow the footsteps of champagne brands. Champagne brands are true masters in creating prestige. Already in the 19th and early 20th century champagne became a necessary component of a bourgeois lifestyle and a sign of social distinction (Guy, 2003). Based on this heritage, champagne houses understand how to create prestige. According to its webpage, Moët & Chandon is very much about ‘seductive power’ and ‘magic’ (shine) and “more than ever before, the symbol of pleasure, grandeur and pure celebration”. On the one hand, champagne is considered to be the standard by which any sparkling wine is judged (Beverland, 2004a), but on the other hand, it is one of the categories most representative of the masstige strategy, driven above all by the LVMH group (Moet Hennessy and Louis Vuitton) with brands such as Moët & Chandon and Veuve Clicquot. As the term masstige suggests, LVMH champagnes are generally prestige for the mass. According to its annual report, LVMH was selling almost 60 million bottles of champagne in 2012. This product category is particularly suitable for a masstige strategy, because its prices are very high for an intra-category comparison with other sparkling wines, but still affordable for most people. So masstige brands cut back on other major luxury characteristics such as price, rarity and extraordinariness and, in that way, they make luxury-like products accessible to a vast majority of consumers. This leads to a ‘democratisation of luxury’, which is not entirely new in the wine segment. Back then in ancient Rome, wine was ‘democratised’ and was a daily necessity even for peasants and slaves (Weeber, 2003). LVMH champagnes (and other alcoholic beverages) can be found in many clubs, restaurants and even in most common supermarkets (Dollet and Matalobos, 2010). In contrast to many companies in other industries, champagne brands recognised the relevance of prestige. It is shown by research already decades ago that there is a recursive relationship between prestige and price/quality evaluations. While prestige may improve quality perceptions and lead to economic power in the form of higher prices, brands also use high prices to create a high quality and prestige image (Dawson, 1988). As prestige is also positively related to social power, mass media often refers to prestigious institutions such as Harvard when in need of expert opinion. Social power of luxury brands may

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affect the receptivity of salesperson’s opinions, expected satisfaction, or confidence in purchases (Dawson, 1988). However, Reddy (2010) suggest that the investment in prestige pays off as they found a positive relationship between a luxury brand’s perceived level of prestige and its profitability (as measured by gross margins). Masstige champagne houses such as Veuve Clicquot make use of various prestige-building techniques. First of all, they care very much about shine and therefore also about design. In all their brand communications they reflect the lifestyle and aesthetics of the upper class. In that way, they create symbolic products, which act as markers of a class and weapons in battles for distinction. The cultural capital of the upper class encompasses a broad array of linguistic competencies, manners, preferences, and orientations, which Bourdieu (1977) terms “subtle modalities in the relationship to culture and language”. Champagne masstige brands have internalised this distinctive cultural capital and portray the lavish and luculent lifestyle in high-gloss adverts with an aggressive communication strategy that aims at maximising awareness (Esteve and Hieu-Dess, 2005). The inspiration to add a great deal of glamour to champagne probably arose also from the experience of LVMH in fashion; already in the late 1980s they established wine and champagne labels in cooperation with its affiliated fashion label Givenchy (Ramaswamy et al., 2003). Veuve Clicquot end-of-year mailing to its customers illustrates typical masstige communication. It is a neatly arranged sales prospectus with six offerings directly linked to their online shop. The Yellow Label can be ordered for about €45 in a stylish yellow or rosé shopping bag or in metal boxes in design of a fridge, which keeps the champagne at the right temperature for up to two hours. Elaborate packaging is a major communication tool of masstige branding and in this case creates substantial additional value – a great entrée at a party.

3.3 Implications for the luxury industry Of course, prestige is especially important in social contexts and therewith when consumers are shopping for gifts – and this is for the benefit also of champagne brands (Dawson, 1988). The highlight of the mailing is a value package including six bottles and six champagne glasses for €240, which contradicts the taboo of discounts in luxury marketing (Keller, 2009). In contrast to Veuve Clicquot, Louis Vuitton strictly prohibits bargain sales and value sets, which are just a variation of a price discount (Nagasawa, 2009). Although luxury marketing principles recommend that luxury products cannot be developed in response to customer wishes (Dubois, 1992) champagne houses tend to be customer-driven trendsetters. For instance, Piper Heidsieck proposed champagne in smaller bottles (to be drunk with a straw) for individual consumptions, and Moet & Chandon developed its Ice Imperial champagne exclusively to be drunk with ice after observing fashionable people in glamorous beachside bars ordering champagne on ice (Passmore, 2011). Another strategy to ensure credibility includes co-branding – with someone who has prestige. For instance, Dior cosmetics and Château d’Yquem (both belong to LVMH) created together L’Or de Vie anti-aging cream, which gives Chateau d’ Yquem a fashionable and stylish touch. Another co-branding-like strategy is a membership in prestigious organisations such as Comité Colbert, the French luxury brands association. Besides Château d’Yquem, it allies five other wine brands, five Champagne brands and all together 75 French luxury houses.

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Conclusions

Authenticity and prestige are two essential symbolic characteristics of luxury brands that are increasingly important and that we know little about. Our case studies of Chateau d’Yquem and Veuve Cliquot champagne show how luxury wine brands develop authenticity and prestige. For instance, authenticity-building techniques include real commitment to product quality and detail and the implementation of identity-driven brand management (in contrast of changing or repositioning a brand to suit a particular consumer segment). Prestige-building techniques include, for instance, the use of the cultural code of the upper class as well as elaborate communication and packaging. Some very authentic brands such as Staffelter Hof can feel a little bit stale and unexciting (i.e., not so prestigious) and very prestigious brands such as Louis Vuitton may be perceived as shallow and money-driven (i.e., not so authentic). For many brands it seems hard to concentrate on both concepts simultaneously as they seem to reflect opposing poles. While authenticity means ‘real’, prestige originates from illusion (not being real) and refers to something shiny and showy. However, a luxury brand should not just be too authentic or too prestigious. As with the Chinese philosophy of yin and yang, authenticity and prestige require one another, and it is about the right balance between the two. Marketers should not attempt to maximise authenticity and prestige, but to find the right balance that suits best their brand’s identity. New emerging brands that wish to position themselves as ‘luxury’ could adopt this strategy and consequently convince consumers of their values. This in turn will increase consumers’ desires for the brands.

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