study on luxury brands

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STUDY ON LUXURY BRANDS SUBMITTED BY: SHWETA SINGH

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Page 1: Study on Luxury Brands

STUDY ON LUXURY BRANDS

SUBMITTED BY: SHWETA SINGH

M/MFM/09/26

Page 2: Study on Luxury Brands

LUXURY

The concept of luxury has been present in various forms since the beginning of civilization. Its role was just as important in ancient western and eastern empires as it is in modern societies. With the clear differences between social classes in earlier civilizations, the consumption of luxury was limited to the elite classes. It also meant the definition of luxury was fairly clear. Whatever the poor cannot have and the elite can was identified as luxury. With increasing ‘democratization’, several new product categories were created within the luxury markets which were aptly called – accessible luxury or mass luxury. This kind of luxury specifically targeted the middle class (or what is sometimes termed as aspiring class). As luxury penetrated into the masses, defining luxury has become difficult.

In contemporary marketing usage, Prof. Bernard Dubois defines ‘luxury’ as a specific (i.e. higher-priced) tier of offer in almost any product or service category. However, despite the substantial body of knowledge accumulated during the past decades, researchers still haven’t arrived on a common definition of luxury. Many other attempts have been made to define luxury using the price-quality dimension stating higher priced products in any category is luxury. Similarly, researchers have used the uniqueness aspects of luxury too. Prof. Jean-Noel Kapferer takes an experiential approach and defines luxury as items which provide extra pleasure by flattering all senses at once. Several other researchers focus on exclusivity dimension and argue that luxury evokes a sense of belonging to a certain elite group.

LUXURY BRANDS

A luxury good is a good for which demand increases more than proportionally as income rises, and is a contrast to a "necessity good", for which demand is not related to income.

Luxury goods are said to have high income elasticity of demand: as people become wealthier, they will buy more and more of the luxury good. This also means, however, that should there be a decline in income its demand will drop. Income elasticity of demand is not constant with respect to income, and may change sign at different levels of income. That is to say, a luxury good may become a normal good or even an inferior good at different income levels, e.g. a wealthy person stops buying increasing numbers of luxury cars for his automobile collection to start collecting airplanes (at such an income level, the luxury car would become an inferior good).

Page 3: Study on Luxury Brands

TWO MAJOR DIFFERENCES BETWEEN LUXURY BRAND & MASS BRAND

1. Cultivate the emotional and the sensual in advertising to differentiate from mass-premium brands

Luxury advertising remains very different from other advertising, both in the message it delivers and the way it is delivered. The first thing to remember about advertising messages concerns the benefits expressed, which must always be emotional and sensual and never rational. Fauchon sells the gourmet experience, Hermes freedom, and Dior Kiss sensuality… but always reinforced by status and elitism.

The other strong differentiating feature of luxury is its capacity to invent worlds that are intimately linked to the brand more than to the product and that constitute very strong brand signatures. Some examples are the tribal world of Dolce & Gabbana, Dior J’adore’s pool of gold, or the sporting world of Tag Hauer. All the great campaigns tell simple, poetic stories that tempt people into the brand’s world.

2. Total art in advertising production is also key to differentiation

Luxury advertising stands out from other types of advertising in the way that advertising messages are delivered because of differentiation in execution. Particular care and attention give it a unique artistic dimension. The photos are works of art.

This is hardly surprising, considering the involvement of certain artists — especially photographers — and the imprint of the major luxury brands’ artistic directors. When Jean-Baptiste Mondino presents l’Air du Temps by Nina Ricci, or Jean-Paul Gaultier launches his classic perfumes, le Mâle and Fragile, or Heidi Slimane takes over the artistic direction of the campaign for Dior’s new men’s perfume, we know we’re dealing with luxury and not just fashion.

Star power is also raising the artistic bar as international brands seek world-famous spokespeople at the height of their talent. Matching stars with advertising campaigns, which began with the series of Chanel N° 5 campaigns, is becoming more widespread. Today, Chanel’s Couture’s image is associated with Nicole Kidman, J’Adore’s with Charlize Théron, Tag Heuer’s with Maria Sharapova, Givenchy’s with Liv Tyler, Versace’s with Halle Barry, Lancôme’s men’s line with Clive Owen.

Here, too, the need for differentiation is becoming imperative as mass-premium brands usurp the language of stars and further blur boundaries (Sarah Jessica Parker for the Gap, for example, or Stella McCartney for H&M). As a result, luxury brands have highly exacting standards for choosing their muses. They must not only be reassuring with well-known faces, they must be fundamentally distinctive. They must be living incarnations of the brand. Beyond simply illustrating the brand, luxury brand stars are the spirit of the brand and its creator. Nicole Kidman, a model of perfection, passion, and independence, is the spirit of Chanel as Inès de la Fressange and Carole Bouquet were before her. Halle Berry embodies the daring and independent spirit in Versace. The discerning audience of luxury clients has no trouble picking up on all these communication codes.

Page 4: Study on Luxury Brands

MAJOR LUXURY BRANDS IN INDIA

1. Louis Vuitton

2. Gucci

3. Chanel

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4. Rolex

5. Hermes

6. Cartier

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7. Tiffany & Co

8. Prada

9. Giorgio Armani

Page 7: Study on Luxury Brands

LUXURY BRANDS

PAST

Yesterday’s luxury was for the few. It was quite shallow and was desired because it separated from the masses. The luxury of today is a growing part of society (at least in the developed countries) and more people adapt to it every day. But what happens to the concept of luxury if everyone can take part in it? Is it a contradiction? In a world where with a mere mouseclick can buy a Guerlain perfume or a LV bag it is just not luxury any longer. Just something expensive, which isn’t necessarily the same thing. People that are born in the 80s and later will prefer to control their life and do what*s fun. It is most unlikely that they will accept an executive job: the hours too long, too little time to spend with family and friends.

Our PRESENTLERkeynote

PRESENT

The concept of luxury is undergoing a huge transformation as a response to the ever-changing world around us. Over the last few years, as a result of the on-going economy boom and increased awareness, we have seen an explosion of luxury goods. The luxury segment has been divided into an uber premium trend and a more enlarged trend.The enlarged luxury trend is about products and services that a lot of people at least in theory could afford. Even if it maybe doesn’t reach all the way to the luxury segment it is definitely a sign of our time! The uber premium luxury trend on the other hand consists of product and service offerings with super expensive prices. Products like the worlds most expensive computer mouse from Fabstuff, Malmasion flatware by Christofle with handles trimmed with diamonds, Clive Christian’s Imperial Majesty perfume or a clock from Zadora Timepiece are good examples of the trend. If we are talking about living an uber premium luxury life then Palm Jumeirah and The World Islands (among a lot of other island projects going on) in the Gulf region is the place to be. If you are obsessed with luxury products you can try out samples by entering exclusive communities like Fractional life or Limited Edition. Through renting they offer you to fly a private jet, drive a Rolls-Royce or swing around a limited edition bag from Gadino. The same goes with services. Today people pay a lot of money for door-to-door luggage delivery services like Flylite. Flylite even packs your clothes and dry-clean them if necessary. Other people dream of a membership in Quintessentially, world’s leading private members’ club with an irresistible package of offers, privileges and bespoke services. Another private members club called Casa Casuarina, situated in Gianni Versace’s former residence in Miami, has a membership price tag equal to a years salary for an average American. There are fairs as well that concentrates on uber premium luxury. Millionaire fair sticks out as world’s leading luxury fair and it is a glamorous spectacle with branches in Moscow, Amsterdam, Shangai and Kortrijk.

Page 8: Study on Luxury Brands

FUTURE

But people start to experience luxury as depthless and the expression is definitely in process to be redefined. We are spotting another more sophisticated pattern around the corner in the traditional luxury markets. “Overconsumption is no longer a signal of success,” as Chris Sanderson of Future Laboratory puts it. It doesn’t feel ok to buy unnecessary things when people are starving and the world is about to get overheated. It just doesn’t feel right. We see a new kind of responsible luxury that is evolving from the inside. It looks quite different from luxury as we know it today. But future luxury will not be all about consumption. It will probably be more about cultural experiences than material possession. More about sharingthan keeping. Unfortunately it will still not be available to all and every one. That’s the built-in nature of luxury. It makes us feel special, kind of selected. That’s why it is so important for us. Already as a small kid you want to be seen and be acknowledged. The future development of luxury will differ between mature and rising markets. As an example China and India are in the upstart of wealth creation and the traditional demand for luxury goods first has to be satisfied.