Anybody who travels through Asia's cities cannot fail to notice the explosion of luxury brands on the street. It is impossible not to be impressed by the glitzy shopping malls packed full of flagship stores selling the latest items. But neither can one fail to notice the market stalls selling cheap fakes in many of the night markets and street corners, and apparently 'genuine' outlets.
The Cult of the Luxury Brand seeks to explore why such brands have played, and will continue to play, a central role in the Asian economy and why they have assumed cult status. The central thesis is that "luxury branded goods are a modern set of symbols that Asians are wearing to define their identity and position". This point is well argued within the book's three constituent parts, with equal weight given to political, social and economic factors.
The first section examines how and why the cult of brands has become so dominant. The authors develop a sound model against which to plot the adoption of luxury brands in Asia, but it is a shame that the book makes few comparisons with the evolution of luxury brands in the US and Europe.
It does not take into account the impact of over-exposure and the association of luxury brands with consumers who create a negative image. For example, clothing manufacturer Burberry has attempted to play down its trademark check design in the UK because of its popularity among the more yobbish elements of British life.
As luxury brands become everyday items, they can quickly lose their appeal and eventually die. The 'trickle down' product lifecycle that dominates fashion is well understood (and contested). How quickly do specific markets and luxury brands move through this cycle? The second part of the book looks at the major Asian countries and examines their position in this lifecycle. The big insight of the book is that there is a significant variation in each country, both in terms of the specific successful brands and the methods they have deployed in driving that success.
However, the authors claim that one can use the concept of a single Asian consumer, even though the countries within the region have adopted brands at different times. They point to the US to support their argument: the man from Tennessee may have had different tastes to the man from New York, they say, but the US consumer market as a whole was ready for branded luxury goods.
However, the difference in Asia is that countries have not developed an overall regional market at the same time. Therefore, it may not be the case that we can see a unified Asian consumer for such products at the moment. There may be such a development in the future when Asian economies are more aligned, but it is not there yet.
The last section of the book looks at the dynamics of creating and fostering a cult brand in Asia. The authors focus on the social networks, celebrity parties and endorsements, VIP customer treatment and fashion magazine tie-ins, as the key marketing tools. But again they do not make any comparisons with brand marketing methods in either the US or Europe.
The role of advertising in establishing cult status (which typically accounts for 10%-13% of sales) is dismissed as "providing background music". The importance of differentiated product quality is also explored, together with the growing acceptance of "genuine fakes" and the rise of locally developed Asian luxury brands.
All these phenomena reinforce the argument that the cult of luxury brands will continue for some years to come - but they also represent a challenge for any single brand. The pressure to develop sub- and super-brands that meet the aspirations of multiple customer segments, together with the challenges of how to protect a brand image and licence, will be the factors that determine how long the position of a cult brand can be maintained.
This book is an enjoyable read for anyone who wants to understand why luxury brands are such a dominant part of Asian society, but it may well disappoint those readers who expect to gain practical tips on how to develop cult brands in Asian markets. The real challenge for the European managers that typically run these brands is to go out there and get to know their target customers. The book provides a good bibliography and has an open and readable style. It is great background reading, but that's about all.
The Cult of the Luxury Brand: inside Asia's love affair with luxury Radha Chadha and Paul Husband, Nicholas Brealey, £20, ISBN: 1-90483-805-7.