SALLER LOOKS TO LUXURY

Published: 23 July, 2008

By Jack Hibberd

Trading up, consolidation, the new consumer' and changing demographics were the central themes covered at the Marketing Society's inaugural Drinks Forum, Liquid Inspiration', held in London last week. Syl Saller, global brand innovation director for industry giant Diageo, made an early impact with a bullish presentation on the future of trading up' and luxury brands. Consumers are increasingly willing to pay 200% more for premium goods. This is one of the few modern trends,' she said. She argued that luxury is becoming increasingly democratised as consumers pick and choose which luxury brands are important, citing: consumers' increased disposable income (three times the level of 1950); the increased buying power of females; an improved global supply system which would free up capital; and a decreased propensity to save for future generations as the driving forces behind the trend. It's a case of somebody flying with a low-cost airline and then staying in a five-star hotel. "New luxury" is not niche "Old luxury" was within the reach of one to two per cent of the population's buying power; "new luxury" is within the reach of 40%.' Saller urged delegates to shatter the price-volume demand curve' and attack the category like an outsider to succeed', but warned that emotional benefits are no longer enough. Consumers are demanding functional benefits as well.' Other well-received presentations included Martin Glenn, of PepsiCo UK, on the dangers to the soft drink market in the UK, and marketing guru' Sergio Zyman, chief executive of consultancy the Zyman Group and former marketing director for Coca-Cola. Zyman urged delegates to renovate before you innovate' and concentrate on building consumption among core consumers before winning over new consumers. New consumers are expensive to win and keep', he argued, and concentrating on turning occasional consumers into heavy consumers' is an often overlooked approach.

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