![Page 1: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/1.jpg)
Welcome toLuxury Pricing, Promotion and
Distribution
Dr. Satyendra SinghProfessor, Marketing and International Business
University of [email protected]
www.uwinnipeg.ca/~ssingh5
![Page 2: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/2.jpg)
Hermes Birkinnamed after Jane Birkin
$9,000-$150,000
![Page 3: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/3.jpg)
Clive Christian’s Imperial Majesty$215,000 (16.9 Oz)
![Page 4: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/4.jpg)
![Page 5: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/5.jpg)
Patek Philippe$200,000
![Page 6: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/6.jpg)
Patek Philippe: $320,000
![Page 7: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/7.jpg)
Patek Caliber $5mMost complicated watch
X 2 Ferrari’s price!
![Page 8: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/8.jpg)
PricingPrice depends on
Positioning of the luxury; e.g., true luxury
Operating cost, custom duty, foreign exchange
Operating cost (retailing + staff) = 30%
Distributors need 60% margin (co-efficient 2.4-2.6)
HK, SP, Guam and Panama no custom duty
Duty-free shops 20% cheaper
EU (France) may be cheaper than EM (Brazil) due to custom duty yet buy in Brazil why
![Page 9: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/9.jpg)
PromotionLimited advertisement control and project image
Mass advertisement is not efficient for luxury goodsSome brands do not advertise in mass media ZaraSome countries ban luxury advertisements China
Window displaysTo create dream and desire Needs creativity and interactivityProduct merchandizing and communications
Name products after famous people Gucci’s Jackie Kennedy bag
Use of celebrities for promotion debatableLV/Furla… use celebrity as a brand ambassador
![Page 10: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/10.jpg)
Window Display
![Page 11: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/11.jpg)
Harrod’s window display: Creativity, dream
![Page 12: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/12.jpg)
Rolls-Royce at Harrod’s window
![Page 13: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/13.jpg)
LV: Jennifer Lopez
![Page 14: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/14.jpg)
LV: Uma Thurman
![Page 15: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/15.jpg)
Discount
No discount LV destroys old goodsWe cannot ↓ value Control image and supply
Loyal customers loyalty gift by invitation
Reason New wed, 1st baby, 1st degree, …
Outlet Shopping villageLa Vallée Village (France), Bicester village (UK)…
![Page 16: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/16.jpg)
![Page 17: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/17.jpg)
The Bus Tour
![Page 18: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/18.jpg)
Bicester village Shop
![Page 19: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/19.jpg)
![Page 20: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/20.jpg)
Selling Techniques
Trunk showsNext season’s collections are previewedheld in luxury store by invitation buyBurberry /Ralph Lauren outside
Pre-season showsCollections launched just prior to main season
Post-season showsBy invitation 50% off True luxury avoids this
Shopping lunchEat lunch in store (e.g., Fendi…) and then buy very selected few are invited
![Page 21: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/21.jpg)
Hilton in Sari
![Page 22: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/22.jpg)
Luxury Department Stores
25,000 square feet a place of worship
People like spending time or meeting there
Location is important customers avoid crossing river, railways, bridge…
They carry multiple brands
Department store are opinion leaders
![Page 23: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/23.jpg)
Sales in 2010 $150mMonday = 9,000 visitorsSaturday = 17,000
![Page 24: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/24.jpg)
France: Luxury Department Stores
Sephora
Galeries Lafayette
Boon Maché
Printemps
![Page 25: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/25.jpg)
![Page 26: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/26.jpg)
![Page 27: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/27.jpg)
UK: Luxury Department Stores
Harrod’s
Selfridges 2nd largest in London
House of Fraser
Canada: Holt Renfrew (10 stores only (very upscale): Toronto, Ottawa, Montreal, Calgary, Vancouver, Edmonton)
![Page 28: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/28.jpg)
![Page 29: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/29.jpg)
USA: Luxury Department Stores
Macy’s
Bergdorf Goodman, Barney’s
5th Saks Avenue stay as long as you wish
Nordstrom largest independent store
It has a loyalty program:2nd floor > $2,000/year (You should spend)
3rd floor > $10,000/year (Personal concierge service)
4th floor > $20,000/year (customers get fashion show ticket, can host private
party in store for their friends
![Page 30: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/30.jpg)
![Page 31: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/31.jpg)
Japan: Luxury Department Stores
Mitsukoshi
Isetan
Daimaru and Matsuzakaya
Takashimaya Most exclusive
![Page 32: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/32.jpg)
TakashimayaJapan
![Page 33: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/33.jpg)
Tsum Moscow
Dept Store
![Page 34: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/34.jpg)
Media Selection
15
![Page 35: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/35.jpg)
Luxury Retail Strategy…
Company Operated Store (COS)
Free standing flagship store (i.e. one door)
Non-COS
Franchisee
Distributor/Retailer
Bluebell, Dickson Poon Asians markets. Mercury Singapore markets
![Page 36: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/36.jpg)
Luxury Retailing Strategy
Company Operated Store (COS)
Rolex, Bréguet… prefer COS
Distributors
Perfumes and cosmetics
75% of luxury perfumes and cosmetics are sold through department store
![Page 37: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/37.jpg)
Perfume Distribution
Perfume store countries
Selling through small perfume shops
France, Italy, Germany
Department store countries
US, UK, Australia, Canada, Japan
![Page 38: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/38.jpg)
Kinds of Luxury Outlets…
Free standing, flagship COS
Shopping centre retail store
Rent + % of sales for common promotional activities
Outlet in retail park
with own entrance with parking, yet in mall
Must be destination brand extra effort justification
![Page 39: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/39.jpg)
Kinds of Luxury Outlets …
Shop-in-shop department store can be COSNo cash register, but brand’s staff and merchandise
Give % of sales to the store (but no rent)
Brand has its own identity and culture
LV Matsuya in Tokyo
Chanel Daimaru in Osaka (2 floors & own elevator)
Counter in a department storeStore does everything for you Merchandising, pricing, promotion, space allocation, organises activities...
Takes % of sales
Brand has no self identity and no control
![Page 40: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/40.jpg)
Kinds of Luxury Outlets …
Corner in a department store between shop-in-shop and counter in store
Brand pays its staff; but store takes title to the merchandise
So the Brand gets limited identity, but stores put many brands together to create a full spectrum of store image
Gents suit, perfumes…
Franchisee store can be COS3%-5% of sales, No investment
Franchisee must follow instructions and buy goods
Minimum sales are needed as guarantee
Chanel, LV, Hermes against franchising/licensing
![Page 41: Welcome to Luxury Pricing, Promotion and Distribution Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca](https://reader036.vdocuments.site/reader036/viewer/2022062517/56649ec15503460f94bcd82d/html5/thumbnails/41.jpg)
Kinds of Luxury Outlets
Factory outlets
Shop attached to your factory like shop-in-shop
Duty-free shops airports
Customers have $ in pocket and time in hand
# of flights passing through the airport
Destination, nationalities, type of travellers
Japanese smoke a lot – mild cigerettes
Americans like Whisky, Cognac (Hanessy and Martin)