Harrods Hotel ?

So what could be a good brand extension ?

After analyzing Harrods DNA aswell as its emotional qualities (legendary, opulent, reliable)
We naturally thought about a Hotel brand extension...

Researches show that 2 elements are essential for a successful brand extension :

http://www.financialpost.com/Stretching+luxury+brand/906076/story.html

Firstly, the brand must have a high premium degree, which means being one of the top brands in its category. « The more the brand is coveted by consumers to begin with, the greater its cachet, and the higher its Premium Degree. »
(Leyland P. and Parent M., 2008)

And we can say that YES Harrods definitely enjoys that.

But this is not enough, secondly and most importantly, there needs to be a strong brand adjacency, or « the extent to which a luxury brand extension is symbolically consistent with the values embodied by the core brand. »

And YES again, "Hotel" and "Harrods" are matching.
Two main elements confirm a strong brand adjacency.

Firstly, as Harrods is famous for attracting tourists.
Secondly, as Harrods is famous for its service quality.

Harrod's DNA

The Brand DNA are the main elements that makes a brand unique and stand out from its competitors.

It is very important for a brand to be identifiable by the customer. Even for everyday consumption goods people are ready to pay more for a brand. As an example: Many clients will buy Coca-Cola and not Pepsi even if it might taste the same.

This little study proves it:

Coke vs. Pepsi

In a study from the group of Read Montague published in 2004 in Neuron,^[7] 67 people had their brains scanned while being given the "Pepsi Challenge", a blind taste test of Coca-Cola andPepsi. Half the subjects chose Pepsi, since Pepsi tended to produce a stronger response than Coke in their brain's ventromedial prefrontal cortex, a region thought to process feelings of reward. But when the subjects were told they were drinking Coke three-quarters said that Coke tasted better. Their brain activity had also changed. The lateral prefrontal cortex, an area of the brain that scientists say governs high-level cognitive powers, and the hippocampus, an area related to memory, were now being used, indicating that the consumers were thinking about Coke and relating it to memories and other impressions. The results demonstrated that Pepsi should have half the market share, but in reality consumers are buying Coke for reasons related less to their taste preferences and more to their experience with the Coke brand.

http://en.wikipedia.org/wiki/Neuromarketing#Coke_vs._Pepsi

And for luxury goods, this is even more true.
Clients buy essentially the experience and the brand rather than the product in itself.
This is why a strong and clear identity is so valuable for luxury brands.

Left is Zara, Right is Balmain...
With fast fashion, high street brands copy high end brands in less than weeks.
Therefore, luxury brands need to give more than just a product.
Quality is also very important. What is sure is that style is not enough today.

Harrods has a strong brand DNA. Everyone knows Harrods. People could directly identify the logo and associate values to the brand.

An introduction to luxury in design

The first course "An introduction to luxury in design" focused on the one million dollar question :
“ What is luxury ?”

Luxury brands communicate to their clients essentially via :

Experiences :

Stores, press, private events, online

Forms :

Fine materials, packaging

Essences :

Myths and dreams

Even though Harrods is essentially an intermediary reseller it is obviously also a brand.

Harrods is acting as a quality guarantor. Most people will think: "If it is sold at Harrods it must be good." And there is a reason why client go there and not somewhere else.

Moreover, Harrods is selling for a long time products on its own name. From food, to wines, gift or even fashion. This is the best evidence to prove that Harrods is not only a middle man but a brand by itself.

So how does Harrods communicate ?

In experiences :

The Harrods experience is probably the essential element. People and especially tourists often visit Harrods as a museum with no intention to buy anything. But they will not resist to buy a little souvenir as a teddy bear or a key holder.

They want to see the biggest and first department store in the world.
Each year more than 15 million people visit the store...

In form :

The Harrods green bag, the teddy bear, the Christmas lightings, the uniform doorman are all part of Harrods brand identity. People are expecting to see that when they come at Harrods.

In essence :

They are a lot of historical events that contributed to the Harrods myth. From its heritage to the tragically end romance between Lady Diana and Al Fayed's sun.

All those elements make Harrods a unique place to shop.
From a little affordable souvenir to the most expensive luxury product, every client can taste the "Harrods experience".

At the end of the session we discussed what where the emotional qualities of the luxury brand.

- legendary & eternal

- opulent

- reliable

would probably effectively describe Harrods personality.