“Strategic Segmentation in the Luxury Market: how customer knowledge enhances brands' notoriety and success through personalized marketing strategies”

Abstract

In recent years, the luxury industry has undergone significant transformation and expansion, mainly driven by shifting consumer preferences and the rise of digital technology. In order to maintain competitive advantage in this landscape, luxury brands need to adapt and place customers at the center of their strategies. This thesis investigates the crucial role of consumers in the luxury sector, with a special focus on how classifying them into distinct groups, known as segmentation, can help create tailored marketing plans. With luxury consumers becoming more varied and connected through digital channels, it's becoming vital for brands to step away from old-fashioned marketing methods and embrace a more personalized approach.

For these reasons, the concept of "customer knowledge" is not merely seen as an added value or an auxiliary aspect for businesses. Instead, it's positioned at the heart or the central hub of the company's operations. This means that understanding customers — their preferences, behaviors, and needs — is perceived as a primary driver behind most company decisions. In this context, "functional core" underscores the essential role that customer knowledge plays in shaping business strategies, influencing product development, and guiding marketing efforts. The premise is that businesses that place customer knowledge at the center of their operations are likely more aware of market demands and better positioned for success.