Managing Elite Brands Gains Appeal at B-School
Affluent M.B.A. graduates have long been prime marketing targets for Louis Vuitton, Tiffany, Prada and other luxury brands. Now, many of them hope to become the marketing managers for such upscale products.
Luxury brands are enjoying growing cachet in M.B.A. programs, as more students form luxury-retailing clubs to connect with potential employers and schools offer an array of courses and conferences exploring image and exclusivity, pricing, distribution channels and counterfeiting.
"Demand has risen within luxury houses for the strategic outlook and overall business perspective that an M.B.A. can bring to the table," says Michelle Liu, co-president of the Luxury Goods and Design Business Club at Harvard Business School.
With a strong local heritage for haute couture and other prestige products, European business schools have taken the lead in grooming M.B.A.s to manage high-end brands. The schools believe the luxury market, with its many idiosyncrasies, deserves dedicated courses.
"Luxury strategy is very different from the classical practice of marketing," says Vincent Bastien, who teaches a new luxury marketing class at HEC Paris. "It's about psychology and people's dreams, not just upscale prices and high quality. You advertise to enrich your image, and you never talk price because as with gifts, the price of luxury goods should be a secret."
At the International University of Monaco, M.B.A. students can choose from four luxury electives, and this fall the school will create a new master of science degree in luxury goods management. The M.B.A. programs at SDA Bocconi in Italy and IESE in Spain don't offer such an extensive specialization, but they do stage luxury-goods conferences that feature companies ranging from yacht builders to art auction houses.
While most schools are just discovering luxury, France's Essec Business School designed its specialized one-year M.B.A. in international luxury brand management a decade ago. It expects its "M.B.A. Luxe" program to grow from 30 students to 50 over the next few years and to expand its coverage beyond fashion and fragrance to include hotels, automobiles, real estate and fine art, as well as "affordable luxury" products such as premium coffee and ice cream. Essec's M.B.A. attracts older students and helps many of them make the transition from other industries. One graduate, for instance, moved from automotive product engineer to fashion-house marketer.
Essec students learn about the creative process firsthand, taking field trips to see Swiss watchmakers at work, champagne companies' vineyards and dresses being sewn by hand. "It's important for our M.B.A.s to develop the communication and teamwork skills to interact well with designers," says Anthea Davis, a career counselor at Essec. "They must understand that designers need to be let loose to create and can't be put in a box."
Business schools are beginning to see demand for luxury brand management skills in Asia, too, particularly for the burgeoning Chinese market. This fall, HEC Paris will join with Tsinghua University and the Institut Francais de la Mode to offer an advanced fashion and luxury management program in Beijing and Paris.
In New York where posh retailers abound, the luxury market also is alluring to M.B.A. students. Members of the luxury and retail club at New York University's Stern School of Business successfully lobbied for a specialized course this year taught by Greg Furman, chairman of the Luxury Marketing Council, along with industry guest speakers. "Students can be tremendous agents of change if they have the patience to understand the luxury culture and weave their way through the politics," says Mr. Furman. "Luxury has not been as savvy as packaged-goods companies and financial services in such things as database marketing and customer-relationship management."
Dana Dillon-Townes, who is interning this summer at L'Oreal, found the NYU class valuable because of its lessons about the importance of craftsmanship and emotional connections with customers. "There were also incredible networking opportunities," she says, "including a breakfast at New York's 21 Club with executives from Michael Kors and Dior."
A luxury retail and design class at Columbia University also boasts strong industry connections through the Luxury Education Foundation. Executives share their personal experiences and assign students consulting projects on such topics as improving Hermes's Web site, attracting younger shoppers to Saks Fifth Avenue and opening a Louis Vuitton store in Manhattan's "next luxury frontier."
"Companies are starting to realize the benefits of recruiting business-school graduates," says Ketty Maisonrouge, who teaches the Columbia course, "but students have to understand they won't make as much money as their colleagues in other industries."
Even so, a job in luxury marketing appeals to students because it combines their personal passion for status products with their financial and strategic know-how. Ainsley Hines, a Columbia M.B.A. student who enjoys fine wines and top-of-the-line fashion accessories, already has put her skills to work on a sales training project for Moet Hennessy and a portfolio of expensive, limited-production wines for an online retailer.
"The luxury market is attractive because it's generally recession resistant and seems to only get stronger," says Ms. Hines. "I'm fascinated by the psychology of why people buy luxury goods even when the overall economy is weak."