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Consumer Behaviour Group project Consumer of luxury goods

08/06/2011

Martin Margiela: A discrete but renown fashion designer

First collection in 1988 A brand that makes no marketing. No one ever sees Martin Margiela, the founder Minimalist spirit: from the creations to the corners
Jewels

Flagrance

MMM

Ready to wear

Haute couture

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A quick overview of their creations

Theoretical model

Consumer of luxury goods

08/06/2011

Consumption drivers Individual dimension

Uniqueness
Indicator of the exceptional exclusivity and scarcity of a luxury product or service E.g. Limited edition

Hedonism
Capacity of a luxury product to satisfy an emotional desire for sensory gratification E.g. Advertising based on sensory pleasure

Differentiation Feel privileged

Excitement of buying Pleasure of consuming

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Consumption drivers Financial dimension

Price
Financial indicator of the value (quality, exclusivity) of a luxury product E.g. Hublot One million Big Bang watch

Level of prestige External objective indicator

Materialism
Capacity of a luxury product to satisfy a need for possession E.g. Vast range of products within a collection

Need for possessing Possession as a signal of status

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Consumption drivers Social dimension

Prestige
Symbolic sign of membership to a reference group provided by the possession of a luxury product E.g. Owning a Sunseeker boat

Status affirmation Bandwagon effect

Conspicuousness
Indicator of elitism and wealth linked to the possession of a luxury product E.g. High visibility of the brand and its logo

Influence of reference groups Social luxury value perception

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Consumption drivers Functional dimension

Quality
Superior performance of a luxury product or service E.g. Handmade luxury products

Brand reputation Sine qua non attribute?

Usability
Superior functional values of a luxury product or service E.g. Highly equipped car

Consumers needs Products properties

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Prism
Individual dimension Hedonism Price Financial dimension

Uniqueness

Materialism

Usability Quality Functional dimension Prestige

Conspicuousness

Social dimension

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Consumer profiles
Individual dimension
Hedonism Price

Financial dimension

Connoisseur
Uniqueness

New Rich
Materialism

Usability

Conspicuousness

Expert

Snob

Functional dimension

Quality

Prestige

Social dimension

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Methodology

Consumer of luxury goods

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First Steps : developing the research

Defining the aim of the study
Identify MMMs consumers Establish their profile Understand their reasons for buying Define their relationship to the brand
Inside Maison Martin Margiela Group interview with 2 employees of MMM Paris (PR and marketing assistants). Defining the brand identity and the consumers profile. Helped us to build the lifestyle part of our questionnaire

Elaborating the research

Secondary Research : no use of preexisting data Primary Research : exploratory / descriptive research Thus the elaboration of a survey. 1st round of testing : friends and family 2nd round of testing : teachers feedback
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Advanced Steps : implementing the research methods

Collecting the data through the online survey
Google Survey - Possibility of integrating scale questions - Results provided with graphs - Quick and free - Limits in the formulation of the questions

Administrating the questionnaire to the right sample

Convenience sampling : ESCP Students, family and friends - ESCP students : general income above average / social status and interest in fashion / future potential consumers of luxury goods - Family and friends : social background / center of interest Judgmental sampling : acquaintances who would know the brand or be familiar with the luxury goods in general. In the end, this sample provided most of the answers we collected.
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Final Steps: delivering the study

Collecting the answers
Spreadsheet provided by Google Survey with the results listed

Interpreting the results through rigorous analysis to deliver the final report
Final step of the methodology Core interest of the Group Project

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Results analysis

Consumer of luxury goods

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Our survey in numbers

67
76%

persons answered our survey

35

of our respondents bought a luxury product during the last 12 months

respondents who knew Margiela consider themselves as fans

29

respondents knew MMM

MMM consumers bought an average of products, whereas the average of luxury products bought by the average respondent was

1.6

1.2

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Luxury goods consumer

Hedonism

Uniqueness

Materialism

Usability

Price

Quality

Conspicousness

Prestige

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Maison Martin Margiela consumer

Hedonism Uniqueness Materialism

Usability

Price

Quality Prestige

Conspicousness

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Typical luxury goods consumer

Hedonism Uniqueness Materialism

Usability

Price

Quality Prestige

Conspicousness

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Qualitative analysis
Respondents, who knew Maison Martin Margiela have following characteristics: - They are fashion connoisseurs, 79% of respondents said they have a strong interest in fashion - They are interested in arts and the creative sector as a whole, 83% reported they keep informed about new trends appearing in arts - They are not sensible to advertising, 69% said advertising had no impact on their buying decisions - They prefer traditional retail channels, only 17% reported they would buy an MMM product on the internet - Brand identity is very important to them, 52% reported brand identity is as important to them as the product itself

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Word clouds
Our respondents perceive Maison Martin Margiela as:

They dont perceive it as:

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Competition analysis
Most of the respondents who knew Maison Martin Margiela, also knew the following brands
30 25 20 15 10 5 0 Rick Owens Raf Simons Ann Dries Van Noten Demeulmester Jil Sander 9 12 12 18 27

Managerial recommendations

Consumer of luxury goods

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Current situation

Diesel Group

MMM

A shift in decision making

The acquisition of MMM by the Diesel Group has lead to various changes in management style: Martin Margiela, creator of the brand retired, leaving MMM in the hands of the new investor This resulted in an increased focus on economical performance Diesel decided to implement a strategy aiming at increasing customer awareness. The first step was to launch a perfume in collaboration with l'Oreal, that would address a broad audience Diesel also recognised the need to target specific customer segments. An example is the campaign against AIDS, MMM launched in 2003
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Awareness
Awareness is low: although we targeted our respondents, only 43% knew MMM

Low awareness can be considered a strength of the company: words like mysterious and independent are associated to MMM

Awareness

Awareness is difficult to raise as 69% of MMM consumers said not to be sensitive to advertising

Our research showed that the competitor with the highest consumer awareness was Jil Sander. MMM could pursue a similar strategy: - Hire a young, creative and trendy designer (Raf Simons) - Increase Co-branding efforts, in order to avoid damaging the MMM brand while improving perception among the broad public (example of J+) - Sponsor edgy personalities in the sector of arts to take advantage of the interest of the target group in the this domain
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Loyalty and quality

Consumers loyalty is good, with an excellent brand image: compared to the average luxury goods consumer, MMM consumer buy more products 76% of those who knew the brand considered themselves as fans

How to make it even better?

Creating a community of consumers. Buying MMM is a privilege, and customers have to feel it. Creating a blog commenting on latest trend could be well inspired

Therefore, MMM should advertize more how much they focus on quality (our research showed that MMM consumers value quality as much as uniqueness and hedonism) Use of noble fabric: mostly organic Made in France and Italy Experience in fashion

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Distribution & targeting

The distribution strategy of Maison Martin Margiela is currently focused on its stores. Moreover, an e-boutique was just launched allowing customers to buy products online Our research has shown that customers associate MMM with a certain shopping experience. Hence, only 17% would buy MMM online

Our recommendation
Our survey showed that it is essential to customers to experience the MMM atmosphere. As stores are still very scarce and their success is based on their exclusiveness, a solution would be to create small buying universes that could be integrated in different environments: - Art fairs - Pop-up stores - Galleries Internet is still an area, where MMM has to improve. A website that would be more user friendly could certainly increase the interest of its costumers

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Limitations

Consumer of luxury goods

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Limitations and difficulties

The Brand
Maison Martin Margiela appeals to real fashion connoisseurs, which significantly increases the difficulty to gather relevant answer from part of the sample.

The Sample
ESCP students in spite of their income and social status do not constitute the core audience for luxury goods. Few are those who can actually afford to buy those products on a regular basis. As a result, we had to share the survey with a very large number of contacts in order to obtain our results.

The Questionnaire
The online survey presents strong limits (depth of the analysis, low response rates, no follow-up).

The Time
Due to schedule conflicts and lack of organization, we did not have enough time to conduct field studies that would have helped us obtain more diversified results.