Collector’s Mindset

By Christopher Zoukis

Collectors are everywhere. People collect anything and everything imaginable. In his book, No B.S. Marketing to the Affluent, Dan Kennedy relates how he bought an antique gambling machine for $8,000. Car Collectors gather together in cities like Las Vegas to bid on classic cars. Some of the cars go for hundreds of thousands or millions of dollars. A woman in Northern California collects Barbie Dolls. She never takes them out of their original boxes, and exhibits them in a custom-built room in her house. Knife Collectors pay thousands for handcrafted custom knives and swords.  Image courtesy bloggingitwell.blogspot.com

In one sense, collectors are aficionados. For they are passionate about whatever it is they collect. In another sense, aficionados and collectors are different. Aficionados buy to enjoy and satisfy their passion. So do collectors. But collectors go one step further. They obtain pleasure from the act of ownership. Once they own an item, they do not want to give it up. Rather, they want to continually add similar items to their “collection.”

For example, a Ferrari aficionado buys the latest model to drive it. He wants to enjoy the way it handles and accelerates. He wants to show it off and be seen in it. The Car Collector buys a Ferrari to add to his collection, which may be composed solely of Ferrari’s, different examples from different eras. Or his collection may include many different types of cars. He may drive them, but his real intent is adding to his collection.  

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Buzz Marketing

By Christopher Zoukis

The problem in marketing to children is how to make and impression on them, how to stand out. Children are bombarded by so much advertising that marketers have to find a way to avoid mediocrity. One way to do this is through “buzz marketing,” which is to utilize the most popular children to create “buzz” about a luxury product. The company provides popular kids with the product, asking them to wear it or use it. In other words, these popular kids are being asked to provide “street-cred” or “coolness” to the product. It is a form of viral marketing and is very effective, because it is easily translated to texting or twittering, and social networking sites.  Image courtesy lushbling.com

Another avenue for successful marketing of luxury products is school. For example, Apple computers are supplied to the computer labs at elementary schools. Apple not only exposes children to its products, but adds to its reputation as a “caring” company. Justice, a luxury brand of children’s clothing, sponsors educational programs at schools. These programs provide elementary students with the opportunity to see and handle exotic animals. Since elementary students are at an age when they are very “animal aware,” the program connects with them emotionally. This connection carries over to the sponsoring brand.

Of course, the internet is an extremely effective method of marketing to children. It is part of their culture, which means they have never known anything else. The internet is part of their daily lives. Children spend hours online without any supervision. Added to this is the fact that most parents have no understanding of how much marketing occurs on websites for children. These websites provide the perfect matrix for creating and building brand loyalty. The most vital factor of online marketing to children might be this: it is easy to track and collect data for future marketing to the same children.

Music, movies, and video games are luxury products that all children grow up desiring. Marketing campaigns on television, radio, and the internet are very effective in targeting young people.

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Richie Rich Kids

Image courtesy funonline.inBy Christopher Zoukis

Last year, over $2 billion was spent on marketing to children, according to MediaChannel, which is a non-profit media monitor. MarketResearch.com estimates the direct buying power of children to be around $60 billion per year. This money will be spent on food, candy, video games, clothing, sports, and electronics.

There are 24 million children in the United States between of 6 and 11, which is 8% of the total population. According to the U.S. Census, children will account for 24% of the total population by the year 2020. And all these children are internet savvy. In fact, the internet is their medium of choice. In 2007, 57% of children age 11 or younger were online. Twenty percent of them have computers in their bedrooms. More than 5 million children between the ages of 6 and 17 have their own websites. At the present juncture, the most internet-savvy children are in New York City, Miami, Washington D.C., Philadelphia, and Tampa, Florida.

Children between the ages of 8 and 14 spend $6.9 billion per year on cosmetic products for their hair and skin. According to the Food Industry Council, children between age 5 and 14 control $10 billion worth of food and beverage purchases, and directly influence an additional $20 billion spent on the same items.

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Pushing The Right Buttons

By Christopher Zoukis

Pawsible Marketing (PM), a marketing firm specializing in luxury pet marketing, believes that quality is the driving factor in luxury pet products. PM forecasts that the retailing sector of luxury pet products will see massive growth in not only brick and mortar stores, but in online stores. The biggest retailers will begin offering luxury products to customers that want even greater luxury and “green” products. PM also sees new companies jumping onto the luxury pet products bandwagon. Most of these new companies will “feel” their way along, because they have no previous experience in the pet market segment.

According to PM, boutique stores will focus more on luxury pet products to niche markets. If their niche market is lucrative enough, and if their marketing is effective, these boutique stores will be acquired by larger companies seeking to expand their offerings.  Image courtesy crystal-fox.com

Green products and services will prove to be a key niche market. Affluent pet owners are concerned about pet foods and products with potentially harmful constituents. So they will seek out and patronize foods, toys, clothing items, medicines, and other products that are pet friendly.

PM also sees affluent pet owners seeking health insurance for their pets. These owners will respond to marketing targeted to the health of their pets, including alternatives such as pet massages, pet acupuncture, pet chiropractic care, pet hydrotherapy, pet nutrition, pet herbs, and pet homeopathy. In other words, now is the time to carefully plan marketing and promotional campaigns in these areas.

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Camp Bow Wow

By Christopher Zoukis

Rismedia.com (RM) reports that ever-increasing spending on pets indicates a need for more high-end pet services, such as pet spas, day cares, gourmet pet food, and luxury grooming salons. According to RM, groomers offering luxury services cannot keep up with demand. Image courtesy campbowwow.com

Petco offers polo shirts for cats and dogs, along with pet shoes and lifejackets for owners who take their pets sailing. Pet groomers in Tampa, Florida make more than $100,000 per year and believe the grooming business is recession-proof. The American Pet Products Manufacturers Association (APM) agrees, forecasting that affluent pet owners will spend $3.2 billion on grooming services, which includes pedicures.

Camp Bow Wow, which is located in Tampa, markets itself as a “Doggy Day Camp and Overnight Camp.” The camp offers climate-controlled accommodations, classical music at night, and webcams. The webcams make it possible for owners to check on their pets, using their computers at home or work.

Just Dogs Gourmet sells customized hand-decorated doggie-treats. They also offer pet sunglasses, which sell very well.

Healthcare for pets has burgeoned from a $7.1 billion industry in 2001, to an estimated $14 billion in 2010, according to the APM. And more than 1 million pets are now covered by health insurance. And Tampa lawyer Jennifer Dietz specializes in pet law. She handles numerous pet-injury lawsuits and sets up pet trusts.

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Pampered Pooches

By Christopher Zoukis

People love their pets. In fact, more than 80% of U.S. pet owners refer to themselves as “pet parents,” and 31% of women say they spend more time with their pet than their husband or partner. Sixty-three percent of the U.S. population owns a pet. Those pet owners will spend an estimated $50 billion on their pets in 2010. Image courtesy epamperedpets.com

The rich have money to spend, and they do not hesitate to spend it on their pets. Dog country clubs and luxury kennels, which are now called “hotels,” cater to the pets of wealthy owners. These luxury facilities offer pedicures and parties for pets, charging $300 to $400 dollars per night. There’s a church in Chicago that offers special religious services for pets. They even offer “pet blessings,” where an ordained pet minister lays hands on one’s pet. And most luxury hotels now offer “pet packages” so the rich can vacation with their pets. Such packages provide dog and cat walkers, day care facilities, pet parties, play-dates, grooming at pet boutiques, and special counseling sessions, where pets meet with pet psychologists and trainers.

Marketing and selling luxury products to affluent pet owners is big business. Where to start is the question? Lisa Johnson, who is the author of Mind Your X’s and Y’s offers four tips on how to market luxury brands and products for pets.

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The Arcane Art of Influencing People

By Christopher Zoukis

Forbes reports that the next big luxury purchase among rich, single men may be the $12,500 leather belt, which has a 14-karat gold buckle and princess-cut diamonds. Why? Because as Todd Rauchwerger of J.W. Cooper says, “Besides a watch, most men don’t wear a lot of jewelry. They’ll wear a $20,000 or $30,000 watch and a $3000 or $4000 suit and a 25-cent belt buckle. Why not wear a belt buckle that goes with the rest of the wardrobe?”

The Luxury Institute (LI), a research firm in New York, did a study of rich, single men in the U.S. The LI discovered the average net worth of these men to be $2.7 million. They had an average income of $270,000 and held 45% of the aggregate annual income in the U.S. There are 4.5 million men in this category in the U.S., according to LI. They live what LI calls the “360 degree luxury lifestyle,” which means they are rolling in money. They know the difference between value and price. This means they want value and will pay top-dollar for it. In other words, they want luxury goods and services.  Image courtesy getf.org

Sellers of luxury goods and services wishing to target rich, single men have to be flexible, altering their products and marketing to target this segment.

For example, Thomas Cook Select, a luxury travel company, offers holiday travel packages classed as Premium or Luxury. Many of these packages are targeted at rich, single men. In recent years the average age range for this market has dropped from 45 and over to 25 and over, bringing about an avalanche of growth and opportunity. Many of the packages cater to rich, single men who prefer to vacation in a place where there are no children, because they want a quiet and relaxing experience.

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Tall, Dark, Handsome, and Affluent

By Christopher Zoukis

Traditionally, the marketing of luxury products and services has targeted older men, because they had the money. Things are changing. Not only are women being targeted more and more, but young rich single men are a growing market that is often neglected.  Image courtesy zillowblog.com

In their book, The Affluent Consumer, Michman and Mazze state that the singles market accounts for $600 billion in spending power. Of course, the number contains both male and female singles. Nevertheless, the number is impressive. According to Michman and Mazze, wealthy single men spend their money on dining out, alcohol, transportation, entertainment, tobacco, and retirement investments. They spend more on housing than any other segment of the wealthy, are educated, fashion conscious, and pursue their hobbies intently. They are more likely to indulge themselves than any other segment of the rich or ultra-rich.

Teasley, a Manhattan-based firm that specializes in data analysis to improve marketing, did a survey to find out where single, rich men live. The results were published by Cathryn Conroy under the title of Top 10 Cities to Find Rich, Single Men.

Here they are:

San Francisco Bay area, including Oakland and San Jose.

Anchorage, Alaska.

Washington D.C. and Baltimore, Maryland area.

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Exclusivity, Experience, and Esteem

By Christopher Zoukis 

At the beginning of 2009, Forbes reported that 30% of “wealthy” people owned more than one residential property. Breaking this number down even further reveals that 30% of the rich own two or more residential properties, and 37% of the ultra-rich own three or more residential properties. The majority of these second, third and fourth homes were purchased for $500,000 or more, and many of them for more than $1 million.

This means that rich and ultra-rich customers are spending money on their homes almost constantly. What are they buying? According to the 2012 Luxury Brand Status Index survey (LBSI), which identifies the top brands that are truly luxurious, the two primary categories in which the rich are making luxury purchases are home appliances and bathroom fixtures. The reason for this is because the rich regularly modernize their kitchens and bathrooms.  Photo courtesy online.wsj.com

Those participating in the survey were asked which luxury home appliance brands deliver the best combination of quality, exclusivity, experience, and peer esteem? Wealthy participants rated Wolf, Viking, and Sub-Zero the “Best of the Best” out of 20 brands that were mentioned. In response to the same question about bathroom fixtures, Hansgrohe, Showhouse by Moen, and Franke were rated tops out of 16 luxury brands.

The individuals surveyed ad an average income of $345,000, and an average net-worth of $3.2 million. Over 63% owned two or more residential properties. Based on participants’ responses, LBSI concluded that true luxury reflects a combination of design, quality, craftsmanship, and especially service. Successful luxury brands are “radically creative innovators.”

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High End Crazy: Luxury Real Estate

By Christopher Zoukis

How does one go about marketing luxury real estate to affluent customers? The first challenge is the size of the group of potential buyers. The more luxurious the property, the more it costs. This means there are fewer people who can afford it. Which, in turn, means that mass-marketing techniques will not work for luxury real estate.  Photo courtesy activerain.com

Usually, mass-market real estate agents try to appeal to customers who already exist. If they do not already exist, the agent tries to create a market for the property. With luxury properties, however, the agent must “go where the market is.” This allows the agent to connect with people who are actively looking for million dollar homes.

The simplest method to connecting with wealthy real estate seekers is by listing the property on luxury real estate websites. These websites already attract individuals in the market for expensive properties. One tip to remember when going this route is to be sure the listing site is international in scope. Think globally, because rich investors do not limit themselves geographically.

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