Literature Review on "Need of Swarovski's Customer in the Digital World"

Literature Review 17 pages (5507 words) Sources: 25 Style: Harvard

[EXCERPT] . . . .

Swarovski's customer in the digital world.

The review of the literatures reveals that marketing and promotion strategies that Swarovski could employ to achieve market advantages. The study reviews the literatures on experiential marketing for luxury brand, emotional brand engagement and IMC (Integrated Marketing Communication). The literatures are also reviewed to explore the Swarovski brands, which assists in enhancing the greater understanding on the strategy the company could employ to promote its brands in the competitive market environment.

Overview of Swarovski

Swarovski is an international company having brand synonymous to ingenuity, technology and poetry. The company has developed a speciality and supreme mastery in precision cutting making it to become the world leader in genuine gemstones, and stones. Over the century, Swarovski has inspired creative trends in jewelry and the company draws its richness from Central Europe where Swarovski's name stands for quality, creativity, and workmanship. Swarovski was established in 1895, and over the century, the company has achieved superior level and perfection in the creative products. The company has also set creative trends in broad spectrum of designs, which include jewelry and fashion, as well as lighting and interior design. Swarovski globally recognized brand has made the company to record a consolidated turnover of €2.52 billion, and Swarovski brands comprises of Swarovski Crystallized that consists of jewelry, watches, accessories, and crystal objects. Swarovski Enlightened also comprises of synthetic or genuine gemstones. Swarovski Optik comprises of high quality precision optical equipment. (Swarovski 2010). Despite the success that Swarovski has achieved over the years, one of the biggest challenges facing the company is the internationalization of the crystal components. Typically, the company is facing stiff competitions in the international business environment, and to offset this problem, Swarovski's management has realized that a successful global marketing campaign is the strategy to gain high end.

The review of the literatures aims to provide the needs of Swarovski's customer in the digital world. It is essential to realize that Swarovski needs to take the advantages of "emotional brand engagement, experiential marketing for luxury brand and IMC (integrated marketing communication)" to achieve global competitive market advantages.

Overview of Swarovski Brand

Swarovski is known globally for its precious-cut crystal, and Swarovski vision is to achieve growth, excellence for consumer, and innovation with passion for the brand. For a very long time, Swarovski did not develop a unique brand identity for its product, and branding was not the core objective of the company strategy. However, in the contemporary competitive business environment, the growing competitions from the cheaper Chinese products has made Swarovski to suffer market decline, Swarovski needs to build a strong brand to differentiate itself from the market environment. Swarovski Nadja, Swarovski's Vice President reveals that the company needs to develop a hard communication strategy to communicate the company unique brand identity. Based on the company brand objective, Swarovski has developed a Magical Brand through mystery, genius and awe. The company uses the groundbreaking technology associated with genius to create quality product that could be valued by customers. Typically, Swarovski uses imagination to create innovative and aesthetically unique product for customer. An important Swarovski's brand is Swarovski ELEMENTS, which are the premium brand for the high quality and finest crystals manufactured by the company. Swarovski brand is unmistakeable, and the features of Swarovski brand is embedded with highest levels of quality made with the benchmark of craftsmanship and precision.

With Swarovski ELEMENTS, Swarovski has been able to immense the company in the world of jewelry, fashion, accessories, lighting and interior design. The precious ingredients created by the company are designed with "MADE WITH SWAROVSKI ELEMENTS" label that serves as a certificate of product authenticity. The label denotes that the products are made with genuine Swarovski ELEMENTS comes alive with originality and beauty. Typically, Swarovski ELEMENTS is made up of crystalline semi-finished products and loose crystal, which the company has inspired in the accessories, fashion and jewelry for many years. Swarovski also integrates Swarovski ELEMENTS in the design pieces, which include architecture, home decorations, light design, and interior fittings.

Swarovski CRYSTALIZED is another Swarovski brand that comprises of timeless and glamorous jewelry piece. Swarovski CRYSTALLIZED is an exclusive accessories and jewelry collections of created stones and precisely cut genuine gemstones.

Despite the unique brand that Swarovski has built for itself, one of the biggest challenges that the company is facing is the internalization of its crystal components. Thus, management intends to react with the changing market conditions and develop offensive marketing strategy that could assist the company to achieve both short-term and long-term growths. Some of the marketing strategies that Swarovski could employ to achieve market advantages is the combination of "Experiential marketing for luxury brand, Emotional Brand Engagement and IMC (Integrated Marketing Communication)."

Experiential Marketing for Luxury Brand

Perceived value has been identified as a significant predictor of consumer satisfaction. In the case of luxury brands, consumer pay higher price for a product to achieve both hedonic and utilitarian value from the purchase experience. Typically, consumers purchase luxury goods to satisfy their expectation of social significance as well as the quality associated with the products. The hedonic and utilitarian value derived from the luxury goods such as diamond, precious stones and jewelry is positively linked to satisfaction. (Song, Hur, Kim, 2012). However, Fionda, et al. (2008) argue that the concept luxury is typically related to the symbolic function which operated at individual and collective level and the functions of luxury is referred as status of symbol. With reference to the production level, luxury refers to the excellent quality, distinctiveness, high transaction value, craftsmanship, and exclusivity. "The core characteristics of luxury product involve: exclusivity, premium prices, image and status which combine to make them more desirable for reasons other than function." (Fionda, et al. 2008 P. 349).

The luxury brands possess the attributes of quality, innovative and unique products. The iconic coveted products are the features of luxury brand products. The iconic products are typified by their quality, authentic, and exclusive characteristics. These products often epitomise the brand DNA or brand signature because they portray high personality, which subsequently increase their relevancies in the current market. The components of exclusivity and rarity associated with the luxury brands are considered significant since luxury brands are characterized with limited production. (Bruce and Kratz, 2007).

On the other hand, Uche (2009) argue that luxury has been built on certain principle that could neither be ignored nor compromised. The luxury principles require thorough understanding before adoption of a business practice. Typically, luxury goods are built on the intricacies and output that are different from the traditional goods and services. Within the past societies and civilization, luxury goods were linked to the royal families, nobles and aristocrats. Their consumption was stamped with superiority to maintain distance class from the lesser privileged. In the Roman Empire, the class distinction is associated with the color of shoes. Although, such class distinction has disappeared in the modern society, however, the core role of luxury goods remain unchanged. Luxury remains the form of indirect stratification as well as ascertaining position in the society. (Kliatchko, 2001). It is essential to realize "the aura of scarcity adds to the appeal of luxury brands. Managers can sustain the exclusivity of the brand through advertising, endorsement, controlling distribution and price, and producing limited editions lines." (Fionda & Moore 2008 P. 351). To enhance market advantages for luxury brand, the environment, which the luxury products are presented, is very crucial for luxury propositions. Marketers need to use the luxury stores that convey the sense of splendour, and the splendid architecture to enhance shopping experience of wealthy customers. The luxury experience and environment is typical of showcased in the flagship stores located within the capital city or the metropolitan environment. "These stores typically enjoy significant financial investment, and are considered crucial to a brand's marketing communication process and reputation and as a support for the wholesale business." (Fionda, & Moore 2008 P. 351).

Marketing communication is an effective tool to increase brand awareness of luxury fashion brand, and marketing communication employs combination of marketing tools, which include advertising, fashion shows, PR (public relations), celebrity endorsement, and direct marketing. Marketers often consider direct communication to enhance luxury brand awareness in order to develop relationship with customers. Some brands invest in catwalk shows, which place greater importance in fashion element. (Kliatchko, 2005).

Part of the marketing tools for luxury items is brand signature that refers the item as designers' styles, handwriting or brand DNA. Each is considered as luxury fashion brand that shows a clear signature of whole collection. In a number of cases, iconic products have closer connection to their heritages as well as epitomising the brand signature. Premium price technique is another technique to enhance marketing strategy of luxury brand, premium price is used to develop the luxury status of the brand, and the priced not only reflect the hand-made product, the price also reflects the attributes of the quality associated with luxury brand. Typically, the premium price creates barrier to… READ MORE

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