May 23, 2012
Louis Vuitton is the most valuable luxury brand in the world, up 7 percent on the list from last year, according to the BrandZ top 100 list from Millward Brown.
The French fashion house’s expansive product lines and its refusal to discount in times of a recession are what has made it the most-valuable luxury brand, coming in at 21 out of 100. Other luxury brands making the cut include BMW, Mercedes-Benz and Hermès.
“Louis Vuitton is the case study of a brand that has managed its products and image throughout the cycle,” said Mario Simon, managing director at Millward Brown Optimor, New York. “It is one of the few that has weathered the storm pretty well and has done well in terms of availability and is still considered an asset.
“It has not fallen into the trap of other brands, which is to overextend in order to gain share when things are not going so well,” he said.
“It also has a broad appeal – it is not intended only for the ultra-rich to exclude most of the market, but has the right balance between being ultra-premium and still appealing to a broader sect.”
The BrandZ Top 100 Most Valuable Global Brands study measures what consumers think about brands combined with financial data analysis, market valuations, analyst reports and risk profiles.
Brand power
Louis Vuitton’s 7 percent increase in brand value from last year’s report pushed it to the top of the list. Its value is approximately $25.9 million, according to Millward Brown.
The second most-valuable luxury marketer was BMW at the 23rd spot. BMW is valued at $24.6 million and rose 10 percent in value from last year.
BMW X5
Leather goods and saddlery label Hermès jumped up 61 percent to the 32nd spot on the list. It is valued at $19.1 million.
German automaker Mercedes topped off the luxury marketers at the 46th spot. It rose 5 percent in value from last year to $16.1 million.
However, other marketers did not fare so well.
For example, Gucci, Cartier, Hennessy and Moët & Chandon dropped in value by 14 percent, 9 percent, 8 percent and 8 percent, respectively.
In addition, Lexus dropped 7 percent in value from last year.
Heritage, quality craftsmanship and history are key factors for the success of luxury brands, according to the study.
Hermès spring/summer 2012
“Luxury is a treat for people, so as they are getting more income they are also spending more,” Mr. Simon said. “The first part has to do with income, which has an effect on other spending, and the economy today feels less risky than the economy felt a couple of years ago.
“However, it also has to do with a new way of thinking about how to spend, which is more tied to quality and long-lasting investment purchases,” he said.
Apple is fruitful
There were not many luxury brands on the list, but that is not because they are not doing a good job stylistically, per Mr. Simon.
The reason why other brands are taking the lead is because they have expanded their offerings into different sectors.
Mercedes GL
For example, the No. 1 most-valuable brand, Apple, has products in technology, mobile, music and retail. Therefore, its value is bound to be much higher, per Mr. Simon.
Luxury brands can up their value in a few different ways.
For example, some luxury fashion brands including Giorgio Armani and Moschino now have their own hotels. Glass-maker Baccarat is also dipping into the hotel market with a property expected to open later this year in New York.
High-end marketers need to engage and connect with consumers, since a core bond is one of the most important aspects of a luxury brand.
Baccarat hotel
“Luxury brands, less than other categories, do market research to understand what drives choices and what different segments are available for extension opportunities to build brands beyond narrow areas that they have built up to now,” Mr. Simon said.
“They need to manage brands not only from an artistic way, but from a business, professional and left-brain standpoint to understand the segments, the drivers for each of the brands and to build a business case for extension beyond the category," he said. "This can be very powerful to build super-brands."
Final Take
Rachel Lamb, associate reporter on Luxury Daily, New York
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