EDHEC Research: Storytelling fosters the dream value of luxury brands

An academic research published in Journal of Business Research this month advances the theory and practice of luxury brand advertising. It is co-authored by Jae-Eun Kim and Stephen Lloyd (AUT University, Auckland, New Zealand) and Marie-Cécile Cervellon (EDHEC Business School, Nice and Lille, France). Luxury clients (n=270) from three countries (France, Korea and Australia) were exposed randomly to global ads from luxury brands.  Through projective techniques, respondents produced narratives which were analyzed with thematic and text analysis. Results indicate that implicit messaging is effective in creating engagement through narrative transportation; however, when the message is explicit and straightforward, it impedes the transportation process and leads to lower engagement across cultures. The authors identify seven dominant themes in the narratives produced by respondents in relation to luxury ads: “1) Status aspirations; 2) Romance, seduction and porn-chic; 3) Involvement with a fantasy world or adventure; 4) Other-directedness; 5) Self-esteem, power and success; 6) Sensory world of beauty, nature, body and feelings; 7) Activation” (Kim, Lloyd and Cervellon, 2015).

“Narrative-transportation storylines in luxury brand advertising: motivating consumer engagement”, Journal of Business Research, 2015 

Download the article (if you are an EDHEC student, you have access through BU Vauban): http://www.sciencedirect.com/science/article/pii/S0148296315003392

Impact of Chinese Yuan devaluation on European luxury brands

During the week of August 11th, the Yuan was depreciated by 3% to 4% against US dollar.  This might impact Chinese consumption of luxury products in two ways: first, European imported luxury goods might become too expensive for the emerging middle class segment if the prices are not adjusted; second, the budget devoted to luxury goods by Chinese tourists in Europe might be depleted. Chinese clients represent up to 30% of worldwide sales for several European luxury brands.

For further discussion, find out the opinion of experts on this question by reading the following articles:

http://fortune.com/2015/08/11/china-devaluation-luxury-sales/

http://www.lemonde.fr/economie/article/2015/08/28/les-grandes-marques-du-luxe-au-revelateur-de-la-crise-chinoise_4739181_3234.html

LV Shanghai