How does a Luxury Brand Extend to Masstige?

Luxury brands traditionally target a narrow and exclusive range of high-value customers. These customers operate at the top end of the consumer market spectrum, and so are willing to invest in unique, well-crafted products and services which have a premium price tag. Part of the appeal of luxury brands to high-value customers is the sense that the product they are buying is only available to a very small and select group of individuals.

However, since the beginning of the 21st century, increasing numbers of luxury brands have been extending their market share downwards, into the “masstige” market. A masstige positioning strategy is  very innovative and effective because it combines a successful prestige positioning with a broad appeal but with little if no brand dilution. Such a strategy has made some of the new luxury brand owners the largest firms in their industry in terms of revenues.

In terms of perceived prestige, new luxury brands are substantially closer to traditional prestige brands than middle-range brands. However, in terms of price, they are substantially closer to middle-range brands than traditional luxury brands.

Typical masstige brands include Coach, Godiva, Starbucks and Victoria`s Secret . Although these brands are not luxury brands, they still rate higher than middle-market brands on the major dimensions of luxury products. For extending to Masstige brands it is important to concentrate especially on creating symbolic benefits and prestige; they care very much about shine and therefore also about design. Zara exemplifies the idea of selling taste and style to the masses, which is accomplished by imitating the design of luxury brands for their clothing, stores and advertising.  A mass-prestige-business in the mass/middle-class market reduces the level of rarity and can only be achieved with reasonable prices, which, in turn, requires a compromise on quality, extraordinariness and aesthetics.  However, Masstige brands successfully differentiate themselves from middle-range brands by their prestige and from luxury brands mainly by their reasonable pricing. The products from luxury fashion brands are about three times more expensive than masstige products, which, in turn, are about twice as expensive as middle-range products. While there is only a relatively small difference in prestige between luxury and masstige brands, the latter were indeed perceived as being much more prestigious than middle-range brands.

In extending a luxury brand to a Masstige brand, it is important to link the masstige product with your luxury brand, as this is what generates the appeal to customers who are seeking a sense of luxury at a reduced price. However, it is also important that the masstige product that you offer isn’t linked too closely to the luxury version of your product. Because luxury products rely on a sense of exclusivity, there must be a clear divide between the benefits of your luxury product and your masstige product. If not, you may damage your luxury brand, as it will be watered down by the low price point and mass availability of its masstige cousin, causing you to lose luxury buyers as your brand gains masstige customers.

Pricing is the best way to create a clear divide between your luxury products and your masstige offerings. If you wish to extend your luxury brand downwards by developing a range of masstige products, it is essential that you create a ladder of benefits which are attached to each price point. For example, the Mercedes dealership  has extended downwards by creating a clear ladder of benefits offered at multiple price points.

Whereas a standard mass market car dealer’s most highly priced car may be three or four times the cost of its lowest, with a luxury brand such as Mercedes, a luxury car may cost ten times the cost of the masstige offering. For example, compare the C230 sports coupé, which retails for $26,000, and the Maybach 62 at $350,000. While the C230 still has a Mercedes badge, which carries with it the prestige of the brand, it is clearly differentiated from the luxury of the Maybach 62. In this way, your premium customers will not lose faith in your brand or its products.

When making the transition from luxury to masstige, it is important that you ensure that any masstige products you offer stay true to the authentic story and image of your brand, so that you can maintain the emotional buy-in from old and new customers.