How Ladurée’s brand recipe supports a premium price

[This is latest post from the brandgym’s special advisor, my nephew Teymour Bourial, an INSEAD-trained marketer who has worked at L’Oréal, Saatchi & Havas. He’s also running a start-up in his spare time, having won funding in several pitch competitions.]

Ladurée is a world-famous French luxury bakery with a flagship store on the Champs-Elysées and boutiques in different cities, including London. They are especially famous for their macarons. And these macarons are not cheap: a box of 8 pieces costs €20, take-away. At this price you might expect the company to be a niche business, selling only in small volumes. In fact, they sell more than 15,000 pieces every day. Its an example of a “mass prestige” brand.

How do they manage to pull this off? I suggest the answer likes in the brand’s magical marketing recipe.

1. Their brand is built on a great story: Ladurée was created in 1862 in Paris and is said to have created some of the very first salon de thés in the city. The holding that bought Ladurée in 1993 constantly pushes that story to legitimize the brand. Their whole marketing reflects that chic spirit, from store design to collaborations with Louboutin.

2. They focus on a single core product to push the rest of their offer: Brands often need star products to reach iconic status (think Burberry’s trench coats, McDonald’s Big Mac…). Ladurée uses the macaron in this regard. It allows them to easily convey their brand identity, creating a brand platform off which they can stretch and cross-sell other products (that range from cakes to cosmetics)

[Note from the editor: Ladurée cosmetics feels like a slightly bonkers bit of brand stretching!]

3. They offer an immersive retail experience that conveys exclusivity: The magnificent chandelier, the gilding on the ceiling, and the baroque paintings on the walls really make stepping inside Ladurée’s shop on Champs-Elysées a great moment. Especially as you usually have to queue outside for 30mn prior to do so. They could serve you faster. They really could. But that would damage how desirable you perceive their products to be and miss out on the power of “social proof”

4. Premium pricing: Here’s the thing about their prices. They’re high enough for you to expect, assume (and even feel) great quality, yet they’re low enough for pretty much anyone to afford the experience. That way, they get high prices/high attainable market.

The one watch out with the Ladurée brand is that it does appear to rely heavily on emotional “sizzle”, with some real question marks on the product “sausage”. The macarons are made in a huge factory in Switzerland’ and frozen after production to be sent to Ladurée. The recipe has some strange sounding ingredients including calcium orthophosphate, xanthin and sulphurous anhydride.

In conclusion, Ladurée shows how to build on an authentic brand truth to create an immersive brand experience that supports a premium price. However, the lack  of product distinctiveness is a worry and feels like a negative PR story about to happen!