Why do high-end brands sell products at a much higher price?

Have you wondered why luxury fashion brands sell products so expensive? The article will discuss some marketing factors that boost brand awareness and add value to products while also reflecting on the selling price.

My friend forwarded me an article about the fashion products sold at a too high price. The author works as a sourcing and producing specialist in New York, so she knows pretty well about the actual cost of a product between the retail price after mark-up pricing. That is why she thinks luxury brands put the price a bit unreasonable. From a product manager’s view, I partly agree with her. But more elements impact the retail price from a marketer’s point of view. Here is to focus on marketing tools to add value to products.

*[Mark-up: Mark-up is the difference between the selling price of a good or service and cost. It is usually counted by a percentage of the cost to cover other costs from business and make a profit.]

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Fashion is not just about some clothing but also includes art, music, architecture, film, etc. It is about a lifestyle and aesthetic. 

“Fine feathers make fine birds.” People show their self-expression and social status by what they are wearing. A fashion brand’s concept can help them see, imagine, and connect who they are. So mostly, a good marketing strategy sometimes is more important than the product itself. 

I separate four general marketing tools fashion brands use to build brand awareness and for people to see their uniqueness from other competitors. They may also be why you get a more expensive shirt from them than from a supermarket.

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The advertising campaign is a crucial part of influencing a brand identity.

A fashion ad campaign is a set of advertisements to achieve a particular goal, such as creating brand awareness, launching new products, and driving sales. And a fashion campaign offers more feelings through its images to connect with its audiences, to offer them dreams or inspiration for a lifestyle.

So brands spend a lot of effort to create the atmosphere of campaigns. Usually, a project can include many people such as project planners, creators, producers, marketers, photographers, make-ups, models, stylists, etc. 

Shooting can also separate into a studio and location shooting. Usually, a studio is an easy and valuable way for a campaign because you need a simple staff like a photographer, model, make-up, etc. Nowadays, even some people can use mobiles to take amazing pictures. A location shooting is sometimes a nightmare. There are too many outside situations like the weather that you can’t control. Therefore, it costs much more than shooting in a studio—for example, more staff, working days, and types of equipment.  

Place digital advertisements, and an impression now determines a brand’s visibility on the internet.

When you have the good and feel images of your product and brand, you need to let people see them. Besides putting ads in fashion magazines like Vogue, Elle, Cosmopolitan, etc., the cost is usually too high for small brands. So, the most efficient way currently is to put it on the internet. 

However, an impression still influence whether your brand can be seen or not. Unless you are a famous brand, most brands have to place advertisements on the internet or social media. Here are some common ways to place digital ads.

1. Google Ads: When you are a nobody, it can be an efficient way to let you jump out from thousand of search results. Google offers a space on the top of the search page when customers search for businesses like your brands. If you put the correct information to reach the need of your target customers, your website can appear first. The cost usually counts per click.
2. Social Media: When people scroll through social media, they can see suggested posts by ads. These platforms will show your ads by the algorithm to reach your potential customers. Most fashion brands use Instagram often because people get used to searching for image ideas on this platform. And Tiktok is a quick growing one. This short video platform attracts young people also who like more interaction. 
3. Email: An old-school style, but now get back to the public. For fashion brands, it can offer more details about a brand’s story or make some private sales to provide a special and unique shopping experience to their loyal customers.

No matter what your ad strategy is, besides costs for these digital platforms, it includes people who place ads and monitor results for you.

PR Events: who doesn’t like a party?

Even now, people can do anything and everything on the internet. Fashion shows are open to the public, and you can easily access their latest collection on your mobile. But after two years of isolation, consumers are eager to re-connect with people. They are back to stores to feel actual services from people and experience the feeling of goods.

Therefore, even some predictors thought the fashion week show would die, but it doesn’t. Just brands can use multi-way to connect online and offline. No matter a small presentation for buyers, a private cocktail party for VIPs, or a fashion show held beside the coast for guests from everywhere online and in person. Fashion events can be straight to interact with their target audiences and get a response. 

So the cost of holding an event depends on which type and scale of the event. It can include types of equipment for the place. Hiring a PR team and crew is on-site to service guests. A fee for renting a place can be a restaurant, gallery, or anywhere. You may also need to prepare gifts for your guests, food and catering. These should all calculate into your event budget.

Influencer collaboration is an efficient way to build connection and trust with niche markets rather than a celebrity endorsement.

In recent years, consumers have more power to choose what they want to see. They prefer to see what is attractive to them and make them feel more in a community. They also become sceptical about the information in traditional ads on TV shows or in magazines. 

Compared to it, influencers show more of their reality and already have built trust with their community. By working with these various content creators, brands can reach more potential audiences and build trust with them. Also, compared to the cost of a celebrity endorsement and place in fashion magazines like Vogue or Elle, etc. An influencer campaign may be more efficient and cost less budget for small or medium fashion brands. These are a few common ways of working with influencers.

1. Free PR gifts: The most common way can see in the make-up industry. Gifting free products lets influencers share their user experiences to make customers more confident to purchase. Also, they can help to boost your brand visibility on social media.
2. Content creation: Usually, let these digital creators borrow your products to put into their content creation. It is a bit like brands letting stylists borrow their clothing for some shooting. In this case, brands may save on PR gifts, especially for those who have high-price products. For influencers, they can try the latest items and create more various topics for themselves.
3. Endorsement: Some mega-influencers are now becoming another type of celebrity. They have millions of followers and have more impact in some areas. They sometimes get more attention, just like a superstar. So if brands want to work with them, you may need to go through with their agency, make a contract, and pay an endorsement fee.
4. Revenue sharing: some influencers can drive their audiences to purchase. By offering them part of revenue sharing, they may push more to their audiences and make better sales results. They are sometimes like your online sales assistant or distributor.

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To conclude, these marketing costs are not directly reflected in the selling price, but they take considerable parts to impact the selling results. Some people argue that they should focus more on their products than spend energy and expense on these marketing tools. So some brands even use no marketing strategy as their marketing strategy to cut product expenditures and offer customers better deals. 

Eventually, I asked a question that friend who had worked as a fashion PR specialist. ” How much was the most expensive event you ever had when holding events for fashion brands?” She told me a cocktail party cost a couple of thousand and a million dollars just for some equipment for a fashion show. Then I told her, “in this case, you should know why they sell goods at a much higher price.”