Target Luxury

The relationship between Target and Nieman Marcus brought about a lot of questions when the collaboration was first announced in 2012. The mix between low cost and premium luxury branding gives many customers question marks. However, as seen in the class article, there are several circumstances where, if done properly, downward luxury brand extensions work. In the Target and Nieman Marcus venture, both parties saw benefits. For Target, it allowed them to give customers a sense of luxury. Customers who shop at Target look for low prices and value for their money. Offering them luxury brands would be allow them to get a little bit of that luxury. This is similar to the luxury car makers who brand entry level sedans. Luxury car makers like BMW and Mercedes Benz have entry level vehicles for those seeking a level of luxury. These vehicles are priced at the bottom, but still have the luxury brand and prestige. While Target gives customers a new sense of luxury, Nieman Marcus gains new customers in this relationship. Similar to Rolls Royce introducing the Ghost model, Nieman Marcus will target new customers when working with Target. Although this may prove to devalue the brand as it happened to the Mercedes Benz A class model. Nieman Marcus must not lose their premium pricing value.

This article discusses the venture as a big flop:

http://business.time.com/2013/01/02/epic-retail-fail-where-did-the-target-neiman-marcus-collection-go-wrong/