Intro to Innovation

 Definition of Innovation: introduction of something new: new method, idea, or device

 Luxury has 4 value concept dimensions:
o Financial: exclusivity
o Functional: best in class
o Individual: for me
o Social: for others

Luxury in the 21st century:

 Democratization
 Increase in spending power
 Globalization: global markets
 Communication: knowing cultural richness and possibilities. Social choices based on
belonging
 The non-return effects

Managing Brand Identity

 Positioning from Mass to Luxury

o Niche
o Luxury
o Prestige
o Masstige
o Mass

N
ic
h
e
Luxury
Prestige
Masstige
Mass
  Distribution: numbered, weighted, quality
 Value for money: product quality vs price
 Design: exclusive vs everyday collection

 Definition of Brand Positioning: the process of positioning your brand in the mind of
your customers. More than a tagline or a fancy logo, brand positioning is the strategy
used to set your business apart from the rest
 A Brand is always a mix of functional and emotional connections Define the Brand
Positioning provides direction for all the business decisions related to the Brand, from
the 4 Ps to sales strategy, customer service, logistics and communication.

1. Target customer:
The primary audience to whom the brand is designed to appeal

 Purchase motivators: (specific occasion, special moments, celebrate events)

 Problem solving what are the solutions you offer to their problems
 Behavior habits & influencers on their buying decision

2. Brand essence:
The heart and soul of the brand, the emotional connection

 Heritage: the intrinsic Brand history. It adds instant credibility & comprehension over
the Brand: craftmanship, quality/design, founder, Country of Origin, Cultural reference
 Beliefs and value system: the core values of a Brand. It can never be compromised not
even due economic reasons

3. Brand promise:
A promise of relevant differentiating rational benefits. Covers the product-related consumer
associations

 Quality: craftsmanship & raw material

 Aesthetics: the style & search for uniqueness
 Scarcity: low convenience
 Functionality: reason behind the product
 Extraordinariness: that extra mile that luxury offers
 Worth/Value: perceived value vs price

4. Brand personality:
Adjectives that describe the brand as if it were a person. It is what takes the functionality and
price of the table
Benefits:
 Address consumer benefits in a unique way
 Creates emotional connection
 Flexibility for growth beyond products

Brand Architecture
 Definition of Brand Architecture: the way a company organizes, manages, and markets
their brands. It must align with and support business goals and strategies

1. House of brands

 The product is the focus as primary brand

 Focus on what each of them do better
 Risk: confusion & high budget demand
2. Branded house

 The Company is the focus as primary Brand

 Positive side: quality stamp, same budget, same customer
 Risk: cannibalization & reputation crisis

3. Hybrid Model

 Combination of both strategies

 It creates a mix of strategies with different roles for different brands
 Hierarchy – 3 different levels
  Brand extention
 2 ways of pushing a Brand extension: Brand extension and brand stretching
 One of the major factors of constant Luxury growth
 Expansion of product offering
 Brand’s owned store expansion

1. Brand extension:

The brand implements its luxury strategy into a new territory. The company controls the whole
process, it is expensive and time consuming
Examples: Cartier jeweler to watches, LV luggage to leather goods

 Deductive: new categories related to the brand core associations


 Inductive: new categories out of the core Brand associations
o Ferrari cars and Ferrari clothing

2. Brand stretching:

The brand enters new segments using the premium or fashion strategy. It is a basic case of
licensing
Examples: Hermes with perfume, LV with RTW

2 stretching models:
 French:
o Controlled extensions avoiding licensing
o Strict rules of the luxury strategy
o Preferably on directly operated stores
 Italian:
o Creation labels & sub-labels
o Licensing possibility
o Different POS to each brand
o Complexity digital management
Brand Extension Success Factors:

 The more intangibles the more it can be extended

 Controlled and limited licensor model
 The higher the symbolic universe the higher its extendibility
 Each line/sub-brand must maintain core values of the brand
  Brand extension offers a lower risk on damaging the brand
 It must help to build the Brand universe at the POS

Brand Extension Risks:

 Lowering the Brand creativity or perceived and actual quality

 Relocation of the licensor factories & loss of customer service quality
 Loss of Brand control, internally and at the distribution
 Excessive distribution on accessible products & Brand fragmentation

Creativity
Definition of Creativity: the tendency to generate or recognize ideas, alternatives, or
possibilities that may be useful in solving problems, communicating with others, and
entertaining ourselves and others

Why do we need to be creative?

1. Need for novel, varied, and complex stimulation

2. Need to communicate ideas and values
3. Need to solve problems

Creativity test:
To be creative, you need to be able to view things in new ways or from a different perspective.
Among other things, you need to be able to generate new possibilities or new alternatives.
- What else your product can be?
- New/unusual usage?
- New purpose?
- New communication?

The 3 components for effective creativity

What limits our creativity?

 Environment: space can motivate innovative thinking

 Creative attitude - Cognitive bias: beliefs, judgments, comfort
Analytical vs Creative: Possibility vs Difficulty

Creativity techniques: brainstorming, SCAMPER, Disney brainstorm,

NUF test
 Brainstorming: group discussion to produce ideas or solve problems
 SCAMPER method:
Disney creative method

3 phase method: only one role per phase

The Dreamer: Why not?: Subjective & enthusiastic - Create the most fantastic and inspiring
ideas possibles. No filter. Just wonderful, raw ideas.
The Realist: How? Pragmatic - Plan how Dreamer ideas would be implemented. Re-examine, re-
worked into something more practical.
The Critic: The Critic (Challenge): Judges & provokes - Find reasons why this idea wouldn’t work.
If it survives, it’s something worth working on.

DOT voting:

Benefit
• Useful when you have a large group of people who need to work together to build consensus
and converge on options

Instructions
1. Review all items that were generated to ensure a shared understanding.
2. Give each person 3 or 5 dot stickers.
3. Have everyone place one or several dots beside the option they like best.
4. Look for clusters with the most dots or “Hits.” The clusters with the most “Hits” are the
options that should be worked on first.

NUF test: New, Usable, Fisible

Protecting your IP
 Intellectual property is a business asset. It helps set apart your business versus your
competitors. It also provides a stream of revenue, which you deserve to be
compensated for since these are your creations. It makes good business sense,
 therefore, to protect your IP and restrict others from copying, using, selling, or
distributing, and profiting from it without your consent.
 Intellectual property (IP) covers any original ideas, designs, discoveries, inventions, and
creative work produced by an individual or group

What can be protected?

 Trademark: words, letters, personal names, logos, shapes, colors, sounds and their
combinations
 Design: Three dimensional features, such as the shape of an article, or two-dimensional
features, such as patterns
 Patents: An original solution to an existent technical problem. It is the right to exclude
others from doing certain things with your invention. Patents are strictly territorial
 Utility models: technically fewer complex inventions or for inventions that have a short
commercial life
 Copyright: protects literary and artistic creations, such as poems, novels, music,
paintings, or films.

How does it work?

Create confidentiality, non-disclosure or licensing contracts for employees and partners

• A non-disclosure agreement (NDA)
• Confidential disclosure agreement (CDA)
• Proprietary Information Agreement (PIA)
• Secrecy Agreement (SA)
Implement security measures

• Setting up password protection for all computer networks

• Encrypting data, especially since files are shared within the company’s it system
• Using virtual private network access (vpn)
• Establishing wi-fi protected access 2 (wpa2)

Where to protect?

 World Intellectual Property Organization (WIPO) Website

Managing Innovation: Process

How to search brand IP database?

 WIPO website

10 types of Innovation
The Ten Types framework provides a way to identify new opportunities beyond products and
develop viable innovations
Business model-centric innovation: Configuration

 Profit model: how to make money

 Network: how to connect with other brands to create values
o Partnerships
o Collaborations
 Structure: how to leverage your resources and your assets
o Google encouraging employees to spend their time working on what they think
will benefit the company
 Process: how to use more effective methods to do your work
o Lean production
o Process standardization

Platform-centric innovation: Offering

 Product performance: how to develop features and functionalities to differentiate your

product
o Spotify playlists
 Product system: how to create complementary products and services
o Apple products

Experience-centric innovation: Experience

 Services: how to support and amplify the value of your product offer
o Amazon prime, prime video
 Channel: how to deliver your offers to customers and users
  Brand: how to represent your offer and your business
o Stella McCartney: vegan, environmentally friendly
 Customer engagement: how to encourage compelling interactions with communities
o Starbucks

Technologies and Production Processes

Supply chain: the steps it takes to get a product to the customer

In which category should we include luxury?

Decisions to be made:
Manufacturing Processes

Production Processes

 Four major points for the evaluation of each product

Technological revolution that is impaction directly on the Fashion Industry:

 Supply chain optimization

Information systems to help ease cross-functional communication and collaboration within a

company. These systems not only help prevent errors and reduce the time and cost of
production, but they also enhance the relationship between the producer and the consumer.
it’s essential for designers to recognize and adhere to consumer demands.

 Accurate data analysis

 Mass customization
 3D Design printing

A key innovation in the fashion world. This technology has helped improve the design quality of
products while meeting customers where they are in their preferences of style, color, etc. It
serves as a tool to help minimize waste and prevent error in the product creation process. Not
only that, but the brief time investment needed to 3D print a collection allows fashion brands
to deliver high quality, customized products in a timely manner.

 Artificial intelligence

Accurate decisions due to data analysis tools and techniques. The emergence of artificial
intelligence has allowed these fashion brands to learn from prevailing customers, solely looking
at the buyer behavior. The collection, organization, and analysis of this data is a fundamental
tool for businesses to further reduce the gap between what is being produced and sold.
Understanding the analytics and insights behind trends and sales is a key component to
increase the overall growth rate of smart fashion brands.

 Robot designs on manufacturing floor

 Virtual reality

How is Luxury adapting to this new speed-to-market?

 Updating production processes

 Breaking down internal silos
 Leading with data

How does craftmanship fit into this?