The first step involves the understanding of the luxury market. The main three strategies that are pursued by these luxury brands in increasing their brand equity are premium, fashion and luxury. There is huge difference between these three strategies. In the short term, there is not much of change to the most basic customers (Davis et al. 1980). However, while managing the brands, there are some key differences. When implementing the premium or the fashion strategy, the style of classical marketing works very well. All aspects of marketing management need to be considered when implementing a luxury strategy.
The aim of the luxury strategy is to create the pricing power and highest brand value with the leverage of all singular intangible elements such as, prestigious clients, small series, craftsmanship, country of origin, heritage, time, etc.
The fashion strategy represents a business model that is totally different. In this strategy, time and heritage is not essential as being fashionable is the selling point of the fashion, which essentially mean a value that is very perishable.
The summary of the premium strategy is to get more by paying more. The goal in this strategy is proving, with benchmarking and comparison; that within this category, this is the best value.
The original development of the luxury strategy was with the purpose of defining the luxury market. It is related to this market, that the most efficient strategy is formulated. In the other markets, it is very rarely met this way, the brands such as, Nespresso and Apple has demonstrated their success there.
The positioning is at the heart of a brand strategy that will improve the brand equity. The positioning is related to UCCA (unique and convincing competitive advantage) and USP (unique selling proposition). The specifications related to the positioning are the cornerstone for every successful brand that is conveyed through the price, products and services, communication and distribution. The positioning is image that a consumer holds about a brand and then creates a preference for that brand. Therefore, an effective positioning is important to improve the brand equity.
For the experiential products, the conjunction of brand space, communication, elements of the products and the interaction among them make up the brand experience for the customers. The brand perceptions and the brand evaluation of the customers are formed on the basis of these interactions. These things are creator of brand equity in the mind space of the customers. The methods of experiential branding impacts various brand equity dimensions that must be considered carefully by the brand managers and the marketers when they utilize these methods. There are four elements of brand equity, with each of them providing experiential branding that can be effectively used: (a) differentiation; (b) relevance; (c) esteem; and (d) knowledge.