High class brands put on an approachable face

29 July 2010 | By Lou Cooper

There used to be an unbridgeable divide between premium and mass-market products, but the recession has prompted many premium brands to tailor their offering to reach a wider audience. High-end supermarket Waitrose, for example, launched its own Essentials discount range last year to cater to consumers who are feeling the pinch.

Similarly, a number of low-cost ranges are now successfully competing in the premium arena as discerning consumers seek out products that look and feel expensive, but come without the hefty price tag.

Brands at both ends of the spectrum are trying to exploit this shift in consumer demand. One option is to sell a premium product, yet remain approachable. Premium chocolate brand Hotel Chocolat is trying to achieve this by selling its products in shops with a wider customer base.

The company has decided to side-step the “grande luxe” school of luxury that other high-end chocolate brands have bought into. Hotel Chocolat chief executive Angus Thirlwell says he has avoided an atmosphere of snobbery, elitism and astronomical pricing in favour of a more inclusive approach, which sees all sectors of society coming through the doors of its 41 UK outlets. “Our staff are very secure in their knowledge of chocolate, so when they’re engaging with our customers they behave naturally,” he says.

Hotel Chocolat distributes through its own channels to create the right ambience, says Thirlwell. The only partner the company has is department store John Lewis, which Thirlwell says shares similar values in terms of customer experience and ethics.

The brand has just launched a Purist Rare and Vintage range for “chocolate connoisseurs” that features some of the world’s rarest cocoa. But to make the range accessible to a wider audience, it is sold in smaller portions to keep the price down.

Thirlwell says the challenge is convincing customers that chocolate can be enjoyed in small quantities. “Anybody can afford to buy decent quality chocolate, it’s just accepting that less is more,” he suggests.

However, appealing to the masses with a premium product can be a risky business, says Bart Michels, managing director at brand development consultancy Added Value. “It’s a delicious temptation for brands to gain access to a greater pool of people, but the danger is that you alter your value proposition.”

Chocolate connoisseurs, for example, might be reluctant to buy products that anybody can get their hands on. Michels says: “You take the product into a space where it’s no longer performing at the level it needs to in order to attract the right customer, or you’re priced to a level where you’re accessing consumers who would put off your core users.”

But Thirlwell isn’t worried that making the Hotel Chocolat brand more accessible will alienate its upmarket clientele. “If anyone feels uncomfortable going into one of our shops because they see a relatively ordinary person buying our decent chocolate, it’s more of a problem for them than for us.”

Toiletries brand Anatomicals has gone for a different approach in its aim to be both premium and mass market. It is using a bold brand identity to transcend market divides.

A strong brand story is essential to appeal to an upmarket customer, says Gary Marshall, the brand’s managing partner. “Anatomicals feels like a cool product and a product can seem cool whether you are a Harvey Nichols customer or you shop in Morrisons, for example.”

Upmarket distribution channels and quirky packaging help Anatomicals reach a discriminating audience, says Marshall, but the price point is low to retain mass-market appeal.

“When we launched six years ago it was in Harvey Nichols. We very much have the look and feel of a niche brand, but from the offset we wanted to be extremely accessible with regards to our pricing. Consumers are a lot more savvy now. We didn’t want to con them with incredible mark-ups,” explains Marshall.

The company is looking to expand and is trialling its products in 70 Asda stores. “We’re not readily available across the UK at the moment,” says Marshall. “We are in discussions with various distributors because there is demand for it,” he claims.

However, Added Value’s Michels warns that companies must be careful when increasing distribution. “The way in which a brand goes to market is critical. You can instantly gain access to a wider pool of people, which changes your business model.”

Expansion into new markets should never be at the expense of the brand, adds Martin Brown, creative director at brand consultancy Wolff Olins. “Achieving growth should be about enriching your brand, not just chasing new profit streams.”

While Anatomicals is widening its distribution to sit comfortably on shelves in both luxury and mass retailers, mass-market toiletries brand Baylis & Harding, which is distributed in mainstream retailers such as Tesco and Superdrug, has a premium feel and is often compared with more expensive rival Molton Brown.

The recession has prompted many premium consumers to downgrade to cheaper products, says Vickie Johns, business development manager at Baylis & Harding. “People are cutting back on the luxury products that they used to buy, but nobody wants their friends to come round to their house and think they’ve downgraded to a value brand.”

Expensive-looking packaging helps Baylis & Harding products appear more expensive than they are. Fragrance is also key, says Johns. “We work really closely with fragrance houses to ensure that we’re matching trend fragrances or classic fragrances.”

However, Brown at Wolff Olins warns that the practice of brands straddling different markets does not work for all products. “True luxury is often about rarity and people in the know. It can be a bit more exclusive.”

Added Value’s Michels agrees that the concept of affordable luxury is easier to implement in certain sectors than others. “If I buy a Mulberry wallet, I’m fairly certain that I won’t be seeing loads of other people with the same product because it is still relatively unobtainable. If I did see lots of people suddenly carrying Mulberry wallets, it would make me feel differently about the brand overall.

“However, I wouldn’t really care if lots of people were eating the same chocolate as me. It changes between sectors because the performance of the product and its emotional story has a different relationship with its core users.”

The success of a brand branching out into other markets also depends on the role it plays in a consumer’s life. “Some things are very special, while other things are everyday,” says Michels.

The current economic climate has opened up possibilities for everyday categories and products to be both premium and mass market, he argues. “I think the ability to be more accessible, both in terms of price and product, gives brands access to a whole new market.”

Michelle Feeney, chief executive at self-tanning brand St Tropez, agrees. “Whereas traditionally you would say you were a mass-market or a premium brand, you can now exist in both positions.” (See viewpoint, below)

As more consumers demand premium products that don’t cost the earth, marketers must rise to the challenge of making their brands exist authentically in both premium and mass markets.