Forty-four percent of affluent consumers consider Louis Vuitton to be overrated, whereas 17 percent feel the same about Lexus, according to a survey by the American Affluence Research Center.
The "Fall 2013 Affluent Market Tracking Study #24" also notes that 18 percent of respondents have owned or experienced products from Louis Vuitton in the past five years, compared to 33 percent who have owned or experienced products from Neiman Marcus.
"Luxury marketers should understand and appreciate that the affluent need to be educated about the quality and value that their brand offers to the affluent consumer," said Ron Kurtz, president of the American Affluence Research Center, Atlanta.
"It cannot be taken for granted that the affluent recognize and embrace the features, quality and value of luxury products and brands," he said. "In earlier research, we found only the wealthiest 1 percent of U.S. households have an understanding of the price points and brands of luxury products.
"This is understandable because over 80 percent of all millionaires are self-made and were not raised in families with exposure to luxury products and brands."
The Fall 2013 Affluent Market Tracking Study #24 is based on responses from 327 men and women who met the minimum net worth requirement of $800,000. Seventeen luxury brands were included in the survey.
This is the 24th in the series of twice-yearly surveys that focus on the 11.4 million households that represent the wealthiest 10 percent of all U.S. households, based on net worth as determined by The Federal Reserve Board.
Household names
After Louis Vuitton, the brands with the highest overrated percentages include Gucci, Prada and Hermès.
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Four Seasons, Ritz-Carlton and Lexus all received low overrated numbers that hover around 20 percent.
Automotive brands such as Lexus and Mercedes-Benz received the highest familiarity scores in the survey, which may indicate stronger marketing tactics.
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Four percent of respondents said that they had owned or experienced Breitling in the past five years, which was the lowest number in the survey.
Breitling for Bentley
Affluent consumer attitudes toward the economy rose into neutral territory with an index of 93 on a scale of 200, up 22 points from the year-ago period.
American Affluence Research Center’s The Fall 2013 Affluent Market Tracking Study #24 also found that the index for future business conditions dipped two points and the index for projected change in the stock market remained constant at an index of 106 (see story).
"Much luxury marketing is done with visual imagery rather than product information,'" Mr. Kurtz said.
"This is not sufficient to educate and attract the approximately 50 percent of the affluent who lack experience and familiarity with the 17 luxury brands in our research," he said.
Status seekers
The study also asked respondents to determine perceived target audiences among options that include “status seekers,” “quality oriented,” “style oriented,” “wealthier,” “younger” or “like me."
The majority of brands were perceived to appeal to status seekers and to consumers wealthier than respondents.
"The main reason for considering a brand to be overrated appears to be lack of experience or familiarity with the brand," Mr. Kurtz said.
"If people have experienced the brand or feel knowledgeable about the brand, they are less likely to consider it to be overrated," he said.
"When they lack experience or familiarity with the brand, they tend to consider it to be overrated and appealing to status seekers.”
Final take
Joe McCarthy,editorial assistant on Luxury Daily, New York