Steven M Weinberg provides guidelines on launching new products in the social media and influencer age
In my nearly four decades of practice, I have been fortunate to have been involved in the launch of many new products and services, as legal counsel, brand consultant, business advisor or all three. As we all know, the world has changed dramatically over these many years, and while some basic principles apply to all product launches, the marketing of new products has become far more complex. This article briefly addresses where we were and where we now are in the launching of “luxury” products.
As a starting point, the launching of high end, expensive luxury products with brand names like Chanel, BMW, Philippe Patek, and Louis Vuitton exists in a world of its own. These are all well-established globally famous brands with teams of marketing experts and significant budgets, and often a celebrity spokesperson, with ready and able consumers globally — especially today with the significant increase in the number of global new millionaires and billionaires ready to purchase these brands. I recently was in the Seoul airport, which also is a mall for luxury brands, and I was taken by the long queues of mostly Chinese consumers who were excitedly purchasing these brands and had flown in solely for that purpose. The resources behind these brands also explains how a brand like Chanel could extend its brand persona recently to successfully attract a younger demographic.
This article instead is focused on launching new luxury products under new brands. My definition of “luxury products” is not limited to the classic definition represented by high end, expensive products. Luxury, after all, is a state of mind. It is the embodiment of personalized fantasy – what brands or products will fulfill the fantasy of belonging, or wealth, or identity, or any number of strongly desired, fulfilling psychological and emotional states. Thus, any aspirational product that fulfills a fantasy can be a luxury product. And, as discussed below, these desires have become highly personalized.
A stunning example of luxury brand fantasy fulfillment is Ralph Lauren. This famous fashion designer started out as Ralph Lifshitz, born to a middle-class Jewish family in the Bronx, New York. Very early on in his career, he envisioned capturing consumers in his own fantasy, changed his last name to Lauren and, as he stated: “Well, what kind of people play polo? … “Wealthy, cosmopolitan, chic, wealthy. I wanted to create a concept for the name.” He then successfully expanded that vision from apparel to every aspect of lifestyle – tabletop, bedding, furniture, luxury car interiors, etc. – creating an upscale world that quickly could satisfy the dream of so many to feel rich and pampered.
For most of modern (1950’s on) marketing history, we have experienced fantasy fulfillment as the touchstone of luxury brand marketing – expensive backdrops in ads, beautiful models and celebrities using the product, always in desirable, fantastical settings.
The desire by consumers to fulfill their own dreams of association with these brands, celebrities, and lifestyle has been compelling, endowing many brands with a transcendent persona. But sadly, it also has led to a global counterfeiting industry. As we all know, many consumers who cannot afford the actual luxury brand are entirely satisfied in purchasing a well made (and sometimes not so well made) counterfeit. Indeed, as a 2019 INTA study of Gen-Z (people born between 1995 and 2010) attitudes toward brands and counterfeits identified, a majority of the respondents in the 10 countries in the study stated they had purchased counterfeits in the past year (79%) and over half said that they would continue to do so. These conclusions (and the study has many more) have significant implications for all brands since it is reported that Gen-Z will be the largest consuming demographic globally starting in 2020, with an estimated $143 billion in annual spending power.
The Basics of New Product Launching – Primary Considerations
When in my consultant role to companies that want to launch a new product or service, I take them through this initial analysis: (1) what is the desired outcome sought for the product? (2) what consumer need(s) will this product fulfill? (3) if there is no identified need, what need can be created that the target demographic will embrace as a real need, and what fantasies can be explored to create that need? (4) what is the target demographic? (5) what does the competitive landscape look like and how can the product be differentiated? (6) in what country(ies) will the launch take place? (7) what is the budget? (8) can the product be sold at a price point resulting in a margin large enough to fuel all of the expenses and result in a profit? (9) will additional financing be required and how? (10) what is the target launch date, and why?
If the product is planned to fulfill a fantasy, i.e., be a “luxury” product, the fantasy must be clearly envisioned and powerfully articulated through images and words channeled to the target consumer in a way they will encounter and embrace it, and then purchase the product and recommend it to others.
Defining the target demographic is the critical element that drives all of the other considerations, including what brand to adopt and whether or not to invest heavily in the actual brand name. For example, for many Millennials (born between 1981 and 1996) and Gen-Z consumers, fulfillment of ethical and other specific needs may be more important than the brand name. The INTA Gen-Z study reported that over 80% of the respondents said that a brand name is not as important to them as how well the product fits their needs. This is consistent with other recent studies that show that consumers in these categories purchase based on factors they identify as being personally important: brands/products that they perceive as having high ethics, integrity and honesty, socially responsible, environmentally friendly and other socio-economic factors. Interestingly, because, as studies show, many Gen-Z consumers in the US and globally do not believe that they will ever be able to afford expensive luxury brands, they identify more with social responsibility than luxury, and thus will purchase products and brands that reflect these ideals, and for those who have luxury brand fantasies, are willing to purchase counterfeits.
How to reach these younger consumers in the US, interestingly, is not how expensive luxury brands typically have done so – traditional print and media ads and celebrities, according to a recent study, are not effective; most rely on friends and family, trusted website product reviews and social media influencers. With social media now part of their DNA – in fact, many anthropologists classify this group of people (actually, most of us) as “cyborgs” in that digital devices and particularly smartphones have become extensions of who we are as a species — and with much of their time spent in those environments, companies launching new products to these groups have to focus on effectively marketing in the most popular social media sites. These include, in most popular to least popular order for Gen-Z: Instagram, YouTube, Snap, Facebook, Twitter, Facebook Messenger, Pinterest, Tik Tok, Discord and Tumblr. However, when it comes to following influencers, male GenZers are most likely to turn to YouTube while females prefer Instagram. Another recent trend of increasing importance is the privatization of social channels , like Instagram Threads – allowing consumers to converse in private, and privately share their thoughts, including product and brand recommendations.
That said, brands still play an important role – the challenge is ensuring that the brand reflects the ideals and traits that these consumers find to be especially important. As a starter, the brand name selected should be one that will appeal to the target consumer and should have a certain cache – fun to say, easy to remember, and reflecting a suggestive or arbitrary relationship to the product or service.
The brand of course also must be available for use and registration everywhere the products will be sold, with some variation(s) available for domain names. Thus, the traditional approach to selecting, clearing and protecting brand names applies. One of the ongoing challenges to trademark lawyers is that many new companies balk at the expense of clearance, believing that checking a trademark register or doing a Google® or Bing® search of the name is all they have to do, and sadly launch their marketing on a brand they learn infringes a registered mark. Thus, a critical role we have to play as counsel is educational.
More important than the brand look and feel, however, is developing a brand persona that reflects the consumer target ideals, especially for Millennial and Gen Z consumers. Brands that post false facts, or support unpopular social causes, or allow themselves to depart from their personas, or secretly use private personal information without permission or for unpopular or detestable uses, will not succeed. Most Millennials and Gen-Z consumers will quickly abandon a brand that does not uphold its integrity in all respects. As one recent study found, trust is critical on “making things better, not just making better things.” For example, in the cosmetic and healthy food categories, there is now an emphasis on making the products “vegan” (plant-based). This trend is quickly extending into other product categories, including apparel, sneakers, and other “wellness” products.
Celebrities and influencers are held to the same standard, if not higher, than brands. It’s not enough that this important group of influencers satisfy government requirements, such as the new FTC Guidelines for Social Media Influencers. They must both use the product and make truthful statements about it. We represent many social media influencers, celebrity and non-celebrity, and educating them about the legal and social implications of their representations has become an embedded part of our counseling.
The importance of influencers for brands has generated some very interesting technology applications. By way of example, one of our clients, MagicLinks, has a series of tools that allow brands to match influencers and vice-versa and for sharing sales and other consumer data.
Focus testing plays a critical role in brand and messaging selection and execution. Making messaging mistakes after launch can be devastating and expensive. Thus, as important as is choosing a protectable and defensible brand name pre-launch is making sure that the brand, logo, packaging and messaging works for the target consumer and can sustain.
Finding the right “strategic partners” also is critically important for launching new luxury products. Marketing today is data driven and very complex. For virtually all new brands, launching on one’s own can be challenging if not impossible. Working with the right influencers, resellers, ecommerce sales and review sites, affiliate and social media marketers, co-branders, SEOs, and creating effective and relevant platform/channel-based marketing programs, crowd sourcing, and/or associating with a relevant charitable cause, can be critical to the success of any launch.
And our role in properly negotiating and papering these relationships reduces the already high risks tied to new product launches.
1 As published in Intellectual Property Magazine January 2020. © 2020 Holmes Weinberg
2 Steven Weinberg is a founding partner in Holmes Weinberg, PC, based in Los Angeles CA USA. He regularly is included in Best Lawyers in America, Southern California Super Lawyers, the TMR 1000 (top trademark lawyers in the world), and Who’s Who in International Business Law and the firm has been named a Best Law Firm each year since its founding in 2008. www.holmesweinberg.com.
3 “Gen Z Insights: Brands and Counterfeit Products” (2019, International Trademark Association).
5 There are many sources for this kind of information. I use emarkteter.com, advertisingweek360.com, business insider.com and similar sources
6 emarketer.com “Sources US Gen Z and Millennial Internet Users Trust When Deciding to Purchase a Product/Service” (Sept. 2019).
7 https://medium.com/the-mission/youre-already-a-cyborg-b95ead28f1be (quoting Elon Musk),
10 Hootsuite, Social Media Trends 2020.
11 https://www.ftc.gov/news-events/press-releases/2019/11/ftc-releases-advertising-disclosures-guidance-online-influencers. This new FTC guideline ads to its other related series of truth in advertising guidelines.