Hi everyone. In this clip I would like to investigate, the relation between products and product strategy and the brand strategy. Brands are important in any industry, because they carry values and meanings. But in fashion and luxury brands are key, are crucial, in order to deliver benefits. We said many times that we are competing in symbol-intensive industries when we talk about fashion and luxury. So we buy products, not only for what the product does, but mainly for what the product stands for, for the meaning. And meaning is given by brands. A brand can give a meaning through functional benefits: performance, safety, durability. Emotional benefits: status, fun, pleasure, coolness. So we will investigate this second level of meaning that are benefits given on a more emotional side and level. And then, we will investigate how the product strategy, can be formulated and implemented according to the different missions that brands have in the marketplace. Before doing that, let me talk a little bit about the different kinds of meanings that brands can deliver to the marketplace. According to a scale proposed by the American Professor, David Aaker, emotional benefits can be segmented into emotional auto-directed benefits. They do respond to a need, for a personal gratification of the individual. As suggested by Aaker, you can identify this category of benefits if you can answer the question: “when I buy or use this brand I feel…” A second type of benefit is the so-called hetero-directed emotional benefits. They meet the need of the customer to express its personality into social context. They answer the question: “When I buy or use this brand I am…” This is the typical field of luxury and fashion brands. There is a third kind of benefit introduced by Aaker defined as social. Social benefits are those that allow the person to express, more than just individual aspect of their personality, the membership to a certain lifestyle. Responding at the end to the human need of self actualization. Feeling part of a community, a group or a part of a society, sharing common attitudes, opinions, and interests. So, now I propose to you a classification of luxury and fashion brands as the result of the intersection between the kind of benefits they deliver, and the brand’s scope. What is the brand’s scope? The brand’s scope is the actual number of market segments a brand covers. A brand can have a narrow scope, when it actually specializes, let's say, in one target, for instance, just kids, or just youth; or just in one product category specialized by product, specialty brand in shoes or in apparel or maybe in sporting goods. So the brand can be specialize narrow scope, or it can cover a wider scope becoming more diversified. So if we cross on the vertical axis the scope of the brand from narrow to wide and on the horizontal axis the kind of benefits, as expressed by Aaker, emotional, self directed, hetero-directed, and social benefits, we are able to build sort of mapping landscape where we can position different brands, and actually these brands do deliver a different kind of identity to the customer with a different value proposition, and, at the end, a different product strategy. So, let's start by analyzing authority brands. Authority brands do have a narrow scope. Usually they are specialized, considered as real authorities in their business. They often focus on patents, innovation and distinctive styles or products. And they are also usually enriched by some experiential product benefits. Let's make an example. Consider an Italian brand, that now is part of a French group, that is Loro Piana. Loro Piana is considered to be an authority in adopting in their fashion products the best raw materials. Actually more than fashion, I would say that it is really a luxury brand. Authority in the best raw materials means that they are able to deliver the top in the market for instance in cashmere, where it’s the number one western manufacturer of cashmere and baby cashmere, a trademark that they developed, thanks to the direct relationship Loro Piana has with government agencies in China, and the fully owned operations they have in Mongolia. Icon brands. Icon brands are in the mapping delivering hetero-directed benefits on a wider product scope. Icons are religious signs; therefore, iconic brands are like entities, personalities. They become carriers of universal values and stories expressed through a wide range of products. What is the product strategy for icon brands? Products are usually very much recognizable defined by their iconic codes. Think about French brands such as Hermès, Chanel, Cartier. They made iconic products part of their strategy right from the beginning. Last but not least we have the so-called lifestyle brands. Lifestyle brands in the mapping is delivering social benefits with a quite wide range of products. First, What is a lifestyle? It's a way a person or a group lives, and this includes patterns of social relation, consumption, entertainment, and, last but not least, dressing styles. A lifestyle brand is a brand that clearly and deeply represents an individual of a group. Its way of living, the way he or she wants to look to other people. These brands are usually associated, in terms of scope, to a variety of products.