What Are Masstige Products and Why They Matter

Introduction

It’s common knowledge that in fashion we’re never simply selling a product, we’re always selling a dream. This is true, to some extent for all fashion markets, but it’s especially true for those brands in the luxury segments of fashion: haute couture and pret-a-porter.

In order to access these segments, fashion brands have to invest massive amounts of money to build strong, high-value associations allowing them to develop a high-profit markup associated with high brand equity.

However, if we look at the fashion markets we can quickly realize that something is not quite right. The brands at the top of the pyramid have strong prestige and value, but they are accessible to only a limited segment of affluent customers who can actually afford these products.  This can be an issue, as you may ask yourself if it is really the case to build a highly prestigious brand if you are going to access a profitable, but a very niche market.

Initially, high-luxury brands developed what we call ‘diffusion lines’, or the famous ‘white labelsto engage a wider audience, but a high volume market is much below that price point.

Fashion companies realized that if they wanted to monetize the high perceived value of their brands they needed to approach the problem from a different perspective, with new tools, capable of fully tapping into their brand’s equity and market potential.

This is how masstige (mass-prestige) products were developed.

Masstige products are commodities (most often in beauty, fragrance, and eyewear categories) that are sold at premium prices because their perceived value is enhanced by luxury brand names. Luxury brands license their brand to interact with broader segments of users, through products that serve as gateways to the brand.

Sounds simple right? Well, it is not rocket science, but there are a few things that we may want to look into to fully explain how this strategy is developed. To help you navigate our post we’ve broken it down into different aspects of masstige products.

  1. Main Masstige Product Categories
  2. Why Are Masstige Products So Strategic?
  3. How Licensing Allows to To Take Advantage of Untapped Brand Equity
  4. Conclusions

1. Main Masstige Product Categories

Now that we’ve clarified the topic, we can explore some of its more interesting aspects.

First and foremost, not every product category is a good fit for masstige. Masstige products are in fact usually created in the beauty, eyewear, and fragrance categories. This is because these categories complement main product lines and enrich the brand experience without creating any overlap or conflict between the main collections and the line extensions.

  • Eyewear, in particular, is a particularly popular category, as the brand is very visible, allowing the product to build brand awareness. In the fashion industry, two Italian manufacturers are very popular as eyewear manufacturers: Luxottica and Marcolin.
  • Beauty products are also a very popular category and the French L’ Oreal is a globally recognized organization for creating beauty and makeup products sold with high-luxury brand names.

Of course, other product categories can be used for line extensions, for instance in the context of hard luxury (watches, jewelry), but it’s probably safe to say that the two mentioned above are the most typical.

Great, now that we’ve clarified what product categories are usually part of masstige extensions, let’s delve into the strategy that companies adopt to fully leverage them, and grow their markets.

2. Why Are Masstige Products So Strategic?

Masstige products are very useful for a variety of strategic reasons. In order to look at some of them in an orderly manner let’s take a look at the list below.

  • Industrial Manufacturing. First and foremost, masstige products are industrially produced. In haute couture and pret-a-porter no product is ever involved in economies of scale (this is also what makes them very exclusive). High-end brands can therefore establish a collaboration with a manufacturer who will develop the products using manufacturing plants that are highly specific for the typology of product developed and create a number of items which allows achieving economies of scale, because of the extension of the distribution channels. This shows how a masstige product is not simply a product is more of a large-scale business model, which premium brands are able to access in parallel to their vertically integrated selective distribution strategies.
  • Premium Pricing and High Margins. As discussed in the previous paragraph masstige products allow for a potentially high margin, as the brand license allows to sell at a much higher price point an item that would otherwise be considered undifferentiated. In this case, too, luxury brands access a unique opportunity, as their collections, despite being still priced expensively still need to account for high production and distribution costs which potentially still eat a sizeable part of the revenue.
  • Entry-level Experiences for Customers. At a more strategic level, we need to consider how masstige products can help develop a broader customer base by offering customers the opportunity to enter the ‘brand dream through products they can afford. Not all customers may go on to buy main collection items, but still, some of them may develop the earning potential, or the disposable income necessary to become loyal haute couture customers.
  • Allowing Unexpected Cross-Segment Collaborations. Sometimes, brands from different sectors can find unexpected synergies by looking into how brands that are apparently very far from each other can develop a common strategy. A popular example of this can be represented by the partnership between Chanel and Karl Lagerfeld. In the trade-off between the brands, Chanel was able to develop an innovative strategy towards building relationships with H&M customers that could then buy its masstige products line and grow more attached to their brand.

Great, before moving on to the conclusions, let’s talk for a minute about how licensing makes ‘the magic happen’.

3. How Licensing Allows to Take Advantage of Untapped Brand Equity

Licensing is the perfect tool to set up your masstige product agreements. What licensing allows you to do is create what in essence is a manufacturing contract, where the intangible assets connected to your brand are managed in complete awareness of their marketing potential.

In this model, the licensor (the brand owner) agrees with the licensee (the manufacturer) to produce items that will bear the licensor’s name, but that the licensee can distribute through its own channels. The revenue obtained by the sale will be kept by the manufacturer (as the product belongs to himher) but at the same time, the licensee will need to pay to the licensor a fee (usually a royalty fee) to repay the extra perceived value generated by the brand’s reputation and prestige.

If you’re interested in knowing more about licensing as a tool to create synergies between licensors and licensees, we recommend checking out this resource: How Licensing Works in the Fashion Industry.

4. Conclusions

There you have it. Now you’re officially an expert on masstige products. These products may are an excellent tool to monetize your brand, but it’s important to realize that at the same adopting these strategies may come at a cost. 

If a brand decides to over-exploit its brand equity, it will dilute it, as a lot of its inherent value is connected to its scarcity and exclusivity. If a brand does not take into consideration the supply of product it is bringing to market and provides an excessive, it will impact their demand.

In this sense, as we discussed in this post, creating line extensions and masstige products needs to be something that fits into a clear and thought-through brand positioning strategy. Take your time to think about the long-term effects of monetizing your intangible equity, and make sure you choose the products that better complement the experience your want to deliver to your customers. 

If you’re interested in reading about masstige products and licensing, you’ll find below more articles on this topic, to help you understand the subject from a fully rounded perspective.

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