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How to Position Your Luxury Brand in a Foreign Market

An increase in wealthy foreign customers in places such as China, India and Brazil means many small businesses are looking to gain a foothold in these foreign countries. Here, marketing experts describe three universal attributes of luxury and suggest tips for a successful launch in the global market.

1. Craftsmanship

No matter where a luxury brand product is sold, customers expect it to be made of the finest materials and to be meticulously assembled, says Mickey Alam Khan, editor-in-chief of Luxury Daily, a New York-based trade magazine. "It has to be heads and shoulders over its competition," he says.

A major factor in whether a luxury brand succeeds in winning over foreign customers is the long-term relationship building power of its salespeople.

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French luxury brands, in particular, have a reputation for the highest quality because of tight controls over how products are made, Alam Khan says. But any international business can appeal to luxury buyers in any foreign country by emphasizing craftsmanship.

2. Exclusivity

Luxury products tend to have limited distribution, giving brands a way to stand out from the crowd. The definition of "limited" can vary widely, though, and it isn't necessary - or even desirable - to aim for a tiny foreign customer audience. For example, brands like Louis Vuitton are very large but still exclusive.

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"Aspirational young professional women are attracted not just by luxury products but also by high quality, premium-priced products," says Milton Pedraza, chief executive of the Luxury Institute, a New York-based research and consulting firm for high-end brands.

3. Service

When a luxury brand enters a foreign market, its stores can be the most important reputation builder for its products. A major factor in whether a luxury brand succeeds in winning over foreign customers is the long-term relationship building power of its salespeople.

"Your people are a huge component - they really are the brand ambassadors," Pedraza says. He admires the Italian luxury brand Bottega Veneta, which has stores in 38 countries, for their customer-centric culture.

Cultural Differences

Alam Khan sees subtle differences in luxury brand markets around the world. "The Chinese right now are in the market to consume," he says. "They'll be more receptive to products that are slightly flashier. Established markets, such as Britain, go with Old World, traditional luxury brands - something like a [Hermes] Birkin bag or Kelly bag."

Pedraza believes globalization is eroding these cultural differences, especially among young people. "There's a fallacy that you need to customize everything, including the customer experience, in terms of local culture," he says. "You don't need to localize as much for the culture of individual countries because the world is so seamless in communication and awareness."

Launch Strategies

These marketing experts agree that while luxury brands need to advertise when they enter a new market, subtler forms of communication, such as using a public relations agency to get magazine editors to write about the brand, are more persuasive.

An international business owner, for example, can wire a money transfer to China for a high-end PR agency's services, such as writing press releases, distribution and follow-up inquiries using a trusted online foreign exchange service.

"Traditionally, luxury brands have built equity through associations with figures in popular culture," such as movie stars, says Russell Winer, a marketing professor at New York University's Stern School of Business. Brands also are using social media more frequently, he says, for example, by nudging celebrities to post what they're wearing on Twitter.



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