How do we define ‘luxury’ for a marketer?

For any product/ service which has become a success, the natural progression is towards becoming a luxury product which becomes a source of pride or show-off for the user. This helps the company charge a premium for that particular product. The important question is that what can be defined as a luxury? Is it a tangible or intangible quality?

Luxury can be categorized in three types- accessible, aspirational and absolute. As we go from accessible luxury to aspirational luxury, the product/ service qualities become tangible and intangibly high, the price increases, the premiumness increases, the promotion becomes more focused and the distribution becomes exclusive.

As the name suggests, accessible luxury means the product has just the right amount of differentiation to charge a premium. Accessible luxury is for a product which a person normaly uses quite often. The consumer uses this accessible luxury to just satisfy his materialistic wants. E.g. a lower middle class family going to a multiplex once a month to watch a Rs. 200 per ticket movie is accessible luxury or in terms of a FMCg product, buying a Hide & Seek biscuit over a Parle G.

Aspirational luxury has the highest number of products falling in this category. This is for the upper middle class who have the means to continuously increase their standard of living. They are the most materialistic in nature. E.g. a family renovating their house with a decorative false ceiling and having a refurbished modular kitchen which is done once a decade. This type of luxury works best for consumer durables, cars, apparels, vacations and hospitality. E.g. a dinner at a five star hotel once a fortnight or a branded jeans like Levis or branded shoes like Nike, Reebok or Woodland. Slightly higher on the aspirational radar would be brands such as Mercedes or BMW.

Absolute luxury is absolutely absolute. There is no comparison. Very few own it. Very few dare to think of it. A Rolls Royce or a Private jet like the Gulfstream. Designer apparels by internationally acclaimed designers such as Dolce Gabbana or designer shoes by Jimmy Choo. Absolute luxury is difficult for brands to achieve if it has fallen ever in aspirational luxury let alone accessible luxury category. Absolute luxury show set the user distinctly apart from the crowd.

Finally, as we go from accessible to absolute luxury, the tangible part decreases and the intangible part increases in value.