In the world of positioning strategy, brands strive to separate themselves from competitors while creating interest from consumers in the products. Built from a long-standing marketing principle that consumers remember three brands in a category, Al Ries and Jack Trout discussed the idea from a positioning standpoint when they explained in their famous book "Positioning: A Battle for Your Mind" that if you couldn't be one of the top two brands on this "ladder", you should get on a different ladder. From a positioning development view, at Brand Engineers we look at this same situation and recommend client brands implement 'category-based' positioning. Either way, the idea is the same ... compete where your competitors aren't.
If you look at the Michael Kors, Kate Spade, and Tory Burch brands, they all compete in the low-end of the luxury market. These self described "bridge-brands" or "affordable-luxury" brands have been booming as consumers who desire to splurge on themselves look for ways to buy luxury brands without breaking their banks. The products these brands sell aren't cheap, they're just considerably cheaper than the luxury brands many of their consumers just can't get to like Chanel or Neiman Marcus. Part of the success of brands like Michael Kors has been the ability to separate from the luxury category or, in the terms of Ries and Trout, Michael Kors created a new ladder that they stand on the top of.