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Scm and Npd

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Submitted By ashredi
Words 1270
Pages 6
1. What is the Luxury goods industry?

Luxury goods are products and services that are not considered as a necessity and are associated with affluence. The industry is defined by the consumer goods positioned in the high end of the market.
Several products attain the status of "luxury goods" due to their design, quality, durability or performance that are remarkably superior to the comparable substitutes. "luxury" is marked by better-quality components and materials, solid construction, stylish appearance, increased durability, better performance, advanced features, and so on. As such, these luxury goods may retain or improve the basic functionality for which all items of a given category are originally designed.

The main characteristics:
A strong branding that relates to an exclusive and wealthy lifestyle.
High quality, especially in terms of design
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The luxury brand is perceived as being:
Exclusive – 82 %
High Quality -80%
Stylish -75%
Extravagant -65%

Lasting -55% and Expensive- 51%

2. Market Profile

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 increases proportionally less than income
Two Major Classifications: * Business Segmentation:

Apparel, footwear, automobiles, perfumes, Watches, etc

* Geographical Segmentation

Asia, (60%) Europe and USA

High income elasticity of demand - making a perfume more expensive can increase its perceived value as a luxury good to such an extent that sales can go up, rather than down

Negative elasticity of demand - 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

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