Marketing Luxury Products and Services in Tough Times: How Different Luxury Segments Are Responding to the Crunch

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Marketing Luxury Products and Services in Tough Times: How Different Luxury Segments Are Responding to the Crunch

In Anticipation of the Election and Holiday Season - Facing U.S. and Global Uncertainty: What Kind of Year Will 2009 Be and What Are Luxury Marketers Doing To Cope?


Generously jointly hosted by JG Black Book of Travel and Promenade Magazine

With special thanks to Nina Diefenbach, Vice President for Development and Membership and Brad Kauffman, Vice President and General Manager of Merchandise and Retail, The Metropolitan Museum of Art


Keynote Speaker: Edwin A. Finn Jr., Editor & President, Barron's and Chairman & Editor In Chief, Smartmoney, New York

Panelists:
o Peter B. Carzasty, Founder and CEO of Geah, Ltd, & Founder, VP, Business Development, ActiveCause-the Social Giving Network™
o Jena Gardner, President, JG Black Book of Travel
o Kathryn A. Korte, President & CEO, Sotheby's International Realty, Inc.
o David McCown, President, Air Partner Inc.
o Federico Mennella, Managing Director & Head of Lincoln International, New York - An international, integrated mid-market M&A advisory firm
o Dennis Pinto, President, Micato Safaris


From oil and gold to stocks and houses, prices these days are heading in one direction. But in the context of the increasingly tight credit crunch, declining prices can race toward dreaded deflation.  At issue is a "systemic deleveraging," or the paying down of massive debts this country has accumulated in recent decades. That's a naturally deflationary force, and one set to "go on for years inside the U.S." some have predicted.  Price slashing by some chains by as much as 40 percent, losses of major retailers reported for one major retail of some $37 million, and the "news" continues.

The once seemingly-recession-proof luxury sector is now under siege and it's no longer just the aspirational customer that's pulling back.  It's the buyers of couture products and services.  Double digit losses for third and perhaps fourth quarter are more and more common.   And it's no longer possible to say that "Despite Tough Times, Ultra-rich Keep Spending" as was the case in April of last year.

The haunting question remains "When times get tough, will the smartest and richest still spend money?" And how will the most innovative luxury marketers change their strategies to persuade them to do so?

After years of media and consumer enthusiasm and unabated growth of the luxury market and luxury spending, the pendulum seems to be swinging the other way: FROM the fascination, even obsession with the explosion of the luxury market and top consumers' (the 3.2 million in the U.S, with liquid portfolios of $1,000,000 or more AND the considerable community of aspiration/ symbolic buyers - those with household incomes in the $250 - $500k range) seemingly limitless spending and growth TO rampant predictions of recession and gloom and even global collapse.

As the divide between the merely wealthy and the ultra wealthy widens how will this affect the current luxury market and how will 2009 unfold?  What are the smartest brands doing to offset hard times?  How are they changing their marketing spenditure?  Is there light at the end of the tunnel and when?

We will open with an overview of the economy and retail sector by Barron's CEO Ed Finn, followed by insights from each of our panelists.

About Our Keynote Speaker:

Edwin A. Finn Jr.

Ed Finn is editor and president of Barron's, the influential financial title published by Dow Jones, with responsibility for its growing print, digital and conference operations. He is also chairman and editor in chief of SmartMoney, The Wall Street Journal Magazine of Personal Business, co-owned by Dow Jones & Company and Hearst Communications, Inc. Besides running SmartMoney magazine, he oversees www.SmartMoney.com, its licensing business and its custom publishing operations.

Ed has served as a keynote speaker alongside Louis Rukeyeser at The Money Show conferences. He has also spoken at the annual Investor Relations Awards and appeared on CNBC to comment about the overall state of the economy.

Career
•    Late 1970s, managing editor of the Southbridge (Mass.) Daily News and assistant managing editor of the weekly Blackstone Valley Tribune 
•    1980, first joined Dow Jones as a national copyreader for The Wall Street Journal in New York
•    1981, moved to the foreign desk as an editor in 1981
•    1984-1985, worked for the Journal's Dallas bureau as a banking and finance reporter 
•    1986, joined Forbes magazine as a senior editor, covering international business and finance
•    1989, became assistant managing editor 
•    1990-1992, editor of American Banker, a daily trade newspaper
•    1993, rejoined Dow Jones as managing editor of Barron's
•    1995, named editor of the magazine 
•    1998, assumed additional responsibilities as president of Barron's
•    2000-2001, also served as Barron's publisher while maintaining regular responsibilities as editor and president

Ed earned a bachelor's degree in English and political science from Tufts University and a master's degree in international banking and finance from Columbia University's School of International and Public Affairs.

About Our Panelists:

Peter B. Carzasty

Peter B. Carzasty is Founder & CEO of Geah, Ltd, and Founder, VP, Business Development – ActiveCause-the Social Giving Network™. He has more than 25 years experience as a cultural advocate and specialist in institutional brand identity for clients in the profit and non-profit sectors. His work has included the development of strategic alliances between business and cultural institutions for the creation of greater global visibility, brand loyalty and expansion of mutual core competency. While a Vice President at The Kreisberg Group, his corporate work has included team development on programs for Rolex, Warner Bros, Mattel, and in particular, Sara Lee Corporation’s Millennium Gift to America – a philanthropic initiative consisting of the corporation’s divestiture of its $130 million art collection and donation to museums nationally and internationally.  Its national success was instrumental in Sara Lee’s awarding of the National Medal of Arts Award from President Bill Clinton.

Peter has most recently founded and currently heads Business Development for ActiveCause – The Social Giving Network™ (www.ActiveCause.com).  ActiveCause is the first Social Responsibility Platform (SRP) to bring together individuals, corporations and nonprofits to form vibrant, self-activating communities. As a new marketplace for connecting nonprofits and benefactors, ActiveCause lets users conduct research on, and do business with, nonprofits and socially responsible corporations. The latest innovations in social media and viral marketing have been combined with commercial partnerships and a directory of more than 1.5 million nonprofits to strategically drive and facilitate charitable transactions and cause awareness on a massive scale. ActiveCause’s beta launch occurred on October 20th as part of a new partnership with RecycleBank (www.RecycleBank.com). Together, ActiveCause and RecycleBank have created a one stop sustainability and social responsibility solution.

During his tenure as Director of Publicity and Public Relations at the Brooklyn Academy of Music, Peter was the co-creator of "Arts Day U.S.A." involving 45 arts organizations nationwide, campaigning for Senate approval of the reauthorization of the National Endowment for the Arts. For three years, he was Adjunct Assistant Professor for Brooklyn College’s highly regarded MFA program in Performing Arts Administration and he has lectured extensively on media and public relations.  His publications include: Public Relations Career Directory “Performing Arts Public Relations: Life Backstage” and Architecture in Practice: Is It All About Image? (Case Study), in addition to being profiled in the 2008 release of the Managing the Creative Process:  Performing Arts Management.  Mr. Carzasty currently serves on the Board of Directors of the Philharmonic Orchestra of the Americas, served on the board of directors of Danspace Project in Manhattan for eight years, and is an advisor to Yellow-Paint.com   He holds a MFA degree from the City of New York, Brooklyn College and a BFA from Emerson College, Boston MA.

Jena Gardner

JG Black Book of Travel, founded by industry icon Jena Gardner, is the premier travel services provider known for its global portfolio of exclusive and unique travel products.

Turning a Lifelong Passion for Travel into a Thriving Enterprise and Giving Back to the World Along the Way

NEW YORK (August 6, 2008) — "Your eyes are so much more open when you travel," says Jena Gardner, founder and president of JG Black Book of Travel (JGBB, www.blackbook.travel), the premier travel services provider renowned for its global portfolio of exclusive and unique travel products. "It's an enlightening and rewarding activity, one that has shaped my life in so many wonderful ways." It is the edifying quality of travel that inspired Ms. Gardner to build a company that gives consumers access to the most authentic and distinctive experiences around the globe. She first caught the travel bug as a child on a family road trip from her Phoenix home through the Deep South and Washington, D.C., with her father and mother. She was completely enthralled by the stories, sites and sheer transformative power of immersing herself in new places. Despite her modest beginnings growing up in Arizona and Montana, Ms. Gardner diligently saved for a trip to Europe while in college, and several years later embarked on a life-changing African safari. She was captivated by the kindness of the people, the warmth of the culture and the overwhelming beauty of the landscape and wildlife, which motivated her to embark on a career that would ensure travelers feel enriched wherever they go. She has since visited more than 60 countries and values each experience for its own unique ability to expand her horizons and enhance her life.

A licensed CPA with an extensive background in luxury hotel management, Ms. Gardner has spearheaded sales and marketing efforts for Ritz-Carlton and Triple Creek Ranch, an acclaimed Relais & Châteaux property in Montana. In these capacities, she gained important insights into the luxury market and the travel preferences of affluent consumers. That insider perspective, coupled with her own passion for exploring the world, provided the foundation for JG Black Book of Travel. Founded in 2002, the company has rapidly grown in size and prestige, and now represents a roster of world-class hotels, resorts, villas, estates, private islands, tour operators, cruises and yachts.

"I want to give a voice to those experiences that make travelers feel intimately connected to a place," she said. "Luxury today is all about finding the extraordinary—really getting deep inside a destination—with an emphasis on comfort and those exceptional flourishes that add substance to a trip." Ms. Gardner's own travels have touched her so profoundly that she now sponsors eight children globally, providing support to four youths in Africa orphaned by the AIDS epidemic and four girls in Thailand who survived the sex trade. She corresponds with each child regularly and has met all of the African children, one of whom she is sending to college.

"I feel that social and corporate responsibility is the engine that powers change in our world," she added, noting that companies invited to be part of the JGBB portfolio share her ethos. "And I believe that travel makes individuals more tolerant, informed, and caring by inspiring us to cross social, economic, geographic and cultural boundaries."

One of Ms. Gardner's proudest achievements is her role as co-founder of the Bodhi Tree Foundation (www.thebodhitreefoundation.org), a non-profit organization dedicated to supporting environmental and humanitarian efforts related to travel and tourism sustainability. JGBB, a premier sponsor of the foundation, and its collection members have pledged to raise funds for select grassroots charities through their unique relationship with affluent and influential consumers. Named for a universal symbol of enlightenment, the Bodhi Tree Foundation will help preserve and nurture the world's treasures so that generations to come may enjoy those experiences that mean so much to travelers.

"Travel has been one of the greatest influences and pleasures in my life," Ms. Gardner said. "And it's my dream to protect the sites, environments, people, and cultures that make the world so fascinating to explore."

In addition to her altruistic works, Ms. Gardner's keen understanding of the affluent travel market has made her a sought-after industry consultant and speaker at such prestigious events as the Fortune Luxury Summit, Deutsche Bank Internist Convention, Hospitality Sales & Marketing Association International (HSMAI), and the Luxury Portfolio SUMMIT. She is a member of numerous marketing, travel, and executive associations, including the Global Business Coalition, Women Presidents' Organization, Forbes Executive Women Board, Virtuoso Hotel Committee, Luxury Marketing Council, HSMAI, International Women's Forum (associate), and 41-74 Club of New York (for influential women in travel). Ms. Gardner graduated with honors from the University of Montana's School of Business Administration.

Kathryn A. Korte

Kathryn Korte was named president and chief executive officer of Sotheby's International Realty, Inc. in November 2006. In this role, she oversees the management of 48 brokerage offices and over 2,300 sales associates. Sotheby's International Realty, Inc. is a member of the NRT LLC family of companies, the nation's largest residential real estate brokerage company. Korte was also named a regional senior vice president for NRT LLC.

Korte began her real estate career in 1984 at Sotheby's International Realty in its Manhattan brokerage division. She was appointed to Director of Administration for Sotheby's International Realty in 1989 with responsibility for managing the Human Resources department and the company's Brokerage and Affiliate Administrative Services.

From 1992 through 2005, she served as senior vice president and brokerage manager for Sotheby's International Realty's Manhattan brokerage division. During her tenure, Korte was responsible for nearly tripling profits while increasing sales volume to over $1 billion. Further growth was achieved during this period with the opening of two additional offices in Soho and the Upper West Side of Manhattan.

Following NRT LLC's acquisition of Sotheby's International Realty, Inc. in 2004, Korte transitioned into the Corporate Division in 2005, serving as executive vice president and chief operating officer of the Eastern Region, consisting of 23 brokerage offices located within seven markets on the East Coast. During this time, Korte oversaw new acquisitions for Sotheby's International Realty, Inc. in Cape Cod, Massachusetts, and Westchester County, New York, which was its largest. Significant initiatives Korte spearheaded during this time included management and business restructuring in the Hamptons, Greenwich and Westchester; office expansions in Soho, East Hampton and Bridgehampton; orchestration and implementation of educational training for agents on Sotheby's International Realty, Inc.'s value proposition and listing presentation strategies; and branch manager training on agent development and recruitment strategies to assist them in hiring top producers and upgrading third- and fourth-quartile agent populations.

Korte is a member of the Westchester Board of Realtors and the Real Estate Board of New York (REBNY). She served on REBNY's Inter-Firm Committee from 1992 to 2004 and on its Board of Directors in 2003 and 2004. She is a member of The Luxury Marketing Council in New York. Korte graduated with a B.A. in Political Science from Franklin & Marshall College. She completed The Wharton School CEO Series – Leadership Program in 2005.

David McCown

David McCown is President of Air Partner Inc. (www.airpartnerusa.com), the US subsidiary of Air Partner plc. Air Partner was founded in 1961, and has 210 aviation professionals located in over 22 offices across 4 continents.  A publicly traded company on the London Stock Exchange, Air Partner arranges private air charter solutions for corporations, governments and individuals around the globe.  In addition to being the only company to hold a Royal Warrant as Supplier of Aircraft Charter to Her Majesty Queen Elizabeth II, Air Partner's clients include the US and British governments, Fortune 500 Corporations, celebrities and sports teams. 

With over 100 flights being arranged on average every business day, the team is equally accomplished at organizing business jets to fly CEO’s and celebrities around North America and Europe as it is co-ordinating 70 large passenger jets to move 10,000 delegates to a major product launch.  The company's Emergency Planning Division operates the only integrated corporate air evacuation service available today. Clients have priority access to a wide range of aircraft suitable for rescuing corporate employees from the world’s hotspots to points of safe haven, with procedures assured through intensive military-style pre-planning.

David has over 12 years' experience in the private air travel industry.  During these 12 years, David has served several companies in various capacities including Vice President of Business Development, Head of Business Jet Charter Sales, and Vice President of Marketing. 

David also founded AirCharterNet, developer of the first online reservation system for the business jet travel industry, which was later acquired by a leading US air charter company.  Prior to this, David spent several years in the Banking industry, with Bank of America.  David holds an MBA from SDA Bocconi, a leading European business school in Milan, Italy.

For more information visit www.airpartnerusa.com.

Federico G.M. Mennella, CFA

Federico Mennella is a Managing Director and Head of Lincoln International’s New York office (www.lincolninternational.com).  Mr. Mennella is currently advising a number of private, family controlled and public companies in the US and abroad in a variety of situations, concentrating on food, beverage, consumer products, luxury goods and retailing companies. Mr. Mennella also heads the Firm’s Fairness Opinion and Special Committee Advisory Practice.  Prior to joining Lincoln International, Mr. Mennella was a Managing Director and Partner at Peter J. Solomon Company in New York City, with responsibility for the Firm’s consumer products, industrial and chemical investment banking activities.  Until 2002, Mr. Mennella co-headed JP Morgan’s Global Consumer Products practice, having also headed the bank’s Global Chemical and general Industrial Mergers and Acquisitions (M&A) practices.  Prior to joining JP Morgan Chase, Mr. Mennella served as Head of US M&A at Deutsche Morgan Grenfell (DMG) in New York, and worked as a senior investment banker at Lazard in New York and Frankfurt. 

Mr. Mennella also worked at McKinsey & Co., Spears, Benzak Salomon & Farrell, Oppenheimer & Co. and Arthur Andersen and Co. in New York.

Mr. Mennella has had extensive consumer goods and luxury transaction experience, exemplified by his advising Corning in the recent sale of Steuben Glass to Schottenstein Stores Corporation and representing John Hardy Ltd. in the sale to management and 3i.  Other transactions include representing Philip Morris (now Altria) and Kraft in the $18.9 billion acquisition of Nabisco, Interbrew (now InBev) in the acquisition of Labatt, Inc. and ITT Sheraton in the acquisition of CIGA hotels. Mr. Mennella also advised companies such as Barilla, Beiersdorf, Benetton, Campbell Soup, Constellation Brands, Coty, Chalone Wine Estates, Colgate, Dean Foods, Del Monte Foods, DSM, Fortune Brands, General Mills, Omni Hotels, PepsiCo, Procter & Gamble, and Sara Lee in a number of assignments, including strategic advisories, divestitures, mergers, acquisitions, and fairness opinions.

Mr. Mennella holds a BA degree, cum laude, from Yale and an MBA degree from Harvard Business School.  Mr. Mennella is a Chartered Financial Analyst and is a member of the New York Society of Security Analysts.  He lectures regularly on M&A matters at the Tuck Business School at Dartmouth College, and has held seminars at Harvard, Georgetown, Yale and Cornell Business Schools.

Mr. Mennella is on the Board of Directors of Hovione, a leading privately owned pharmaceutical fine chemical company based in Lisbon, Portugal as well as of the New York Society for the Prevention of Cruelty of Children in New York.

Dennis Pinto

Dennis Pinto, Managing Director, Micato Safaris

Dennis Pinto represents the second generation of Pintos at Micato Safaris.  In 1982, Dennis established the New York office of the safari outfitter his parents founded in East Africa some forty years ago.

A graduate of Stanford University, he was in banking for several years before the irresistible lure of the family’s hospitality business brought him back to his original calling. 

At Micato, he expanded the company, launching tour operations in India and South Africa, and co-founded Micato’s nonprofit arm, AmericaShare, dedicated to the support of orphaned and vulnerable children in Africa.  A longtime proponent of responsible tourism and educational travel, Dennis has served on the Boards of The International Ecotourism Society and the Educational Travel Conference, among others.  He was also responsible for Micato’s successful acceptance as a founding member of Adventure Collection, a prestigious group of travel companies dedicated to quality adventure travel.
 
Micato Safaris has won numerous awards under Dennis’s leadership, recently winning the World Travel Market Award, Travel Age West Editor’s Pick, Porthole cruise magazine’s 2008 tour operator award, and was named one of Condé Nast Traveler’s World Savers.  Most notably, Micato has won a sixth consecutive title in 2008 as The World’s Best Tour Operator from Travel + Leisure magazine, the crown jewel of travel awards.
 
When not in Africa riding camels, tracking leopards, or sidestepping wildebeests, Dennis resides in New York City with his wife, Joy Phelan-Pinto, and their two young safari enthusiasts.

About The Metropolitan Museum of Art

The Metropolitan Museum of Art is the largest museum in the Western Hemisphere, and the world's most encyclopedic art museum under one roof.

Founded in 1870, its permanent collections, housed in 17 curatorial departments, embrace more than two million works of art spanning 5,000 years of world culture, from prehistory to the present, from every part of the globe, in all artistic media, and at the highest levels of creative excellence.

www.metmuseum.org

About PROMENADE

Since 1934 PROMENADE Magazine has provided its readers with the best of Manhattan - Dedicated to New York’s Most Affluent Visitors.

For visitors to the best hotels or residents of the finest buildings, the newly-designed PROMENADE offers the most elegant jewelry, chic fashion must-haves, great restaurants, the city’s best apartments, not to mention the
most up-to-date guides to shopping, theatre, Broadway, museums, galleries, dance, opera, sightseeing and some of New York’s best-kept secrets.
Our content reaches three million readers every issue, readers who are highly educated, well-traveled and cultured, with the means to increase your business. So, bring your clients to the world of PROMENADE…reaching the right audience since 1934.

promenademagazine.com

About JG Black Book of Travel

JG Black Book of Travel, founded by industry icon Jena Gardner, is the premier luxury travel services provider known for its global portfolio of exclusive and unique travel products.

Invitation-only collection members - distinctive hotels, resorts, villas, estates, private islands, tour operators, cruises and yachts - are vetted based on uniqueness, authenticity, the highest level of service and a dedication to corporate responsibility. Its partners are diverse in location and style but share unforgettable character and allure, each delivering a completely captivating travel experience.

www.blackbook.travel/