...The global market for luxury brands has experienced a dramatic growth over the last three decades, and the current demand for luxury brand products has grown enormously. Wiedmann, Hennigs and Siebels(2009, p. 627) stated that a luxury good: “brings esteem for its owner and enables consumers to satisfy psychological and functional needs”. This essay will argue that marketing theories: brand theories and the ‘four-P framework’ ( product, pricing, place and promotion) are applied to bring superior value to luxury brands. It will also identify the tangible and intangible resources that are utilized to add superior value to luxury brands, in comparison to low-priced products. An illustration will also be given regarding luxury and basic cosmetic branding. Finally, it will be argued that it is not ethical to charge high prices for products. Nowadays the consumption of luxury products has become so vital to the global economy and the high profile of luxury goods has built widespread awareness of brands in customers’ perception. It is claimed that a luxury brand is one that is selective and exclusive, and which has an additional creative and emotional value for the customer (Chevalier and Mazzalovo, 2008). Even if some consumers cannot afford to buy luxury brands, they are familiar with the name or symbol of some famous brands that are classified as luxuries. A brand name helps differentiate its products from others and makes it distinct from those of other sellers. Brand equity...
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...and the net income decreased around 15%. The customer traffic was declining and new customers were not buying Vera Bradley’s products anymore. After analyzing competitors, the industry, and the internal situation of the company, there are some recommendations that I would like to develop more in-depth to add those into a new strategic plan that can actually generate profit for Vera Bradley. RECOMMENDATIONS Recommendation 1: Decrease production of certain products on the existing line to have a limited amount of high quality handbags and accessories. Recommendation 2: Expansion of the distribution channels by opening new locations globally, especially Asia due to the growth in the luxury goods market there; and improving e-commerce. Recommendation 3: Make an improvement on their marketing strategy. Recommendation 1: Decreasing production of some products on the existing line to have a limited...
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...Analysing Bmw and the Automobiles Industry BMW – the Bavarian based luxury car producer is seen as one of the most prestigious, stable and admired companies in the world. By 2008 the company sold 1.2 million automobiles under its largest brand – the BMW. In 2001 it very successfully launched the new Mini which is the only brand kept after the failed acquisition of the Rover group with sales rising to over 230 thousand in 2008. In 2003 Rolls Royce was added to BMW’s portfolio and sold 1,212 units in 2008 – an increase of 53% compared to 2004 (BMW Annual Report 2008, pp6-7). The company has not only one of the strongest brands worldwide and exclusively high profit margins of 8 – 10% but since 2007 it has been the world's top seller in the premium class (Hawranek, 2008). Automobiles market in the 2000s The next chapter will investigate the main trends within the automobile market starting with a general overview, followed by wider analyses of the environment as well as investigation of the competition in the car market. General overview In the 21st century the car industry can be described as mature, highly competitive and very dynamic. Despite being considered as global, automobile industry constitutes of three major areas – USA, Japan and Western Europe which together accounts for 80% of total sales (Lynch, 2006, p698) as well as almost 90% of total output (Donnelly et. al., 2002, 31). New markets, such as China, South America and Eastern Europe are emerging; however, as Lynch...
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... Introduction The luxury goods may be are fatal temptation for each girl. In economics, luxury goods are good for which demand increases more than proportionally as income rises. It present a striking contrast to "necessity goods". As the demand of "necessity goods" are not related to income increasing or decreasing. On the other hand, Begin with 2007, global economy has been stumbling under recession. As known to all, financial crisis brought to United States economy slowing down and it has spread globally effecting all countries. Economic recession directly influenced on income level and employment. In addition, consumption levels have fall off drastically. Such two characteristic factors make me interested in the relationship between luxury brand and Economic recession. So I researched the ideas and found a few books which talked about the luxury brands in Asia under economic recession. The literature review will pay attention to a book on the cult of Luxury Brand, Impact of Personal Orientation on Luxury Brand Purchase Value, Shopper Behaviour in Recession and impulsive buying behaviour in recession. Radha Chadha is one of the most famous expert in marketing and consumer research in Asia. In the book of the cult of the Luxury Brand which presented the "lux- plosion" or the explosion of luxury brands in Asia. This book shows up the paradox of the luxury brands management in Asia market and tries to redefine the new age luxury brand...
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...Burberry In Beirut Souks “One Brand, One Company” “The brand is not this kind of cold, static name outside a shop or outside a building or on a piece of clothing. There are values and a culture behind it." Brand equity is a very valuable term to the British luxury brand Burberry: it lies in the famous checker pattern which is now Burberry’s trademark. Christopher Bailey’s wise words reflect the enterprise’s global strategy. But what did Burberry do to double its net income in just five years? Well, the secret is Britain’s most paid CEO, Angela Ahrendts. The hire of Angela in 2006 turned things around dramatically at Burberry’s headquarters: she understood Burberry’s core competences and its history; she understood the brand and the recent trends in the luxury sector. About Burberry Mission: To maintain the integrity and vitality of Burberry, while continuing to remain relevant to ever-changing markets and consumer tastes. (World Press, 2012) Vision: To be the first digital end to end company. "Our vision is that a customer has total access to Burberry, across any device, anywhere," says Angela Ahrendts. "They get exactly the same feeling of the brand and a feeling of the culture. Everyone can come to Burberry World and understand the journey that Burberry is on.” [ (SalesForce) ] Core Values: Protect, Explore and Inspire. The Business Strategy: It consists of the following steps; starting with “Leveraging the franchise”: market innovation and product excellence;...
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...glittering French multinational in Japan took place in Aoyama, one of Tokyo’s fashionable districts. A unique vision of luxury took shape when Louis Vuitton opened yet another new store inside Comme des Garçons on September 4, 2008, in the heart of Japan’s capital. The pop-up store situated on the prestigious Omotesando Street was an illustration of Louis Vuitton’s attachment to the Japanese luxury market. Yves Carcelle, chairman and CEO of Louis Vuitton, said, “This project not only brings a new meaning to luxury, but also speaks volumes about how the know-how and heritage of Louis Vuitton have always been perceived in Japan, including by its foremost designers. We are very proud to have been able to help Rei Kawakubo2 relive her memories in such an original and creative way.”3The Omotesando guerrilla marketing event reflected Louis Vuitton’s success in Japan. Louis Vuitton had been following an aggressive marketing strategy in the country, opening extravagant stores such as those in Ginza or Roppongi.Take a walk on Ginza’s main street, Chuo Dori, the centre of a paradise for shoppers, with longestablished department stores, such as Mitsukoshi, Takashimaya and Matsuzakaya. Continue through the high-end fashion street Namiki-dori. Stop. There it is. You have reached the massive flagship Louis Vuitton store. When Louis Vuitton, the world’s biggest luxury-goods firm, inaugurated its huge shop in 2002 in the district of Omotesando, Tokyo, hundreds of people were queued outside...
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...further established the signature style and distinctive identity of the Coach brand. Together with our licensing partners, we also offer watches, footwear, eyewear and fragrance bearing the Coach brand name. Marketing Environment Coach has many competitors but their top three competitors are Dooney & Bourke, Kate Spade and Michael Kors. Dooney & Bourke started in 1975 and is an American made brand; Kate Spade was started in 1993 and is also an American brand and lastly, Michael Kors which was started in 1981, is and American brand. Coach reaches a larger demographic compared too many of their other higher-priced competitors, such as Louis Vuitton, Prada, Gucci, Cole Haan and Dooney & Bourke, because Coach says that they are “affordable luxury”. These competitors are focused on a higher-fashion, higher income demographic than Coach is. Dooney & Bourke and Cole Haan also stress “accessible luxury” which makes them Coach’s key rivals. Coach continues to be one of the best recognized accessories brands in the United States, and is actually the leading American manufacturer and retailer of leather goods, accessories and apparel for women and men. The largest player in the United States luxury handbag market is Coach with 36% market share. Coach is the second highest-selling luxury handbag retailer in Japan with 17% market share. The company is retaining as well as attracting new customers and growing the company revenues due to the wide variety and different price points which enables...
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...Vision and Mission Vision: Aim to be the leading brand of leather goods and accessories in affordable luxury market Mission: Ensure that the Coach brand remains a premier, distinctive and easily recognizable brand by delivering a consistent message to the customer through communications (coach.com, global e-commerce sites and social networking sites) and visual merchandising while protecting the brand from counterfeit goods Objectives * drive growth and increase market share by expanding their distribution channels to reach local consumers in emerging markets and leveraging the global opportunities * multichannel distribution model and increase global distribution * improve same store sales productivity and increase sales of products targeted toward men * build market share in North America, Japan through the addition of new stores * Raise brand awareness and build market share in underpenetrated markets such as Europe, Asia and South America * Anticipate consumer changing needs by being “consumer centric” through the use of extensive customer research and surveys to innovate to create customer and shareholder value * matching key luxury rivals in quality and style while pricing the goods at 50 percent or more cheaper than competitors Strategic Objectives Business Level Strategy * Product differentiation – “accessible luxury brand”. It can defend against new entrants since they have to surpass proven products; they also mitigate buyers’...
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...Brand Name and the Quest for Success in the Luxury Sector All luxury designers strive to achieve long-term success. To put a label on a collection of products is to create a brand, but that label does not provide for definite staying power. Lucrative brands have gone beyond creating something pretty; an outstanding brand writes a story that the consumer believes and wants to buy into and the brand then becomes more than its product. Labels that grasp the importance of branding understand that they must be more than the watch or bag or scarf. The appeal of a brand must be in who the consumer becomes when he or she puts on or uses a certain product. Brand awareness widens when a high-end label creates and conveys a clear message or lifestyle that the consumer thinks he or she can attain through purchase. That is the art of branding. Branding convinces the consumer not to simply buy a product, but instead buy the brand as a whole. A stellar product does not stand alone—behind it must be something deeper, a message or a symbol which should represent or relate back to the identity of the brand. Within the luxury sector, where products are often an investment regardless of one’s socio-economic status, conveying an identity is crucial. If the consumer cannot see what he or she will gain from purchasing a $2,000 handbag or a $26,000 watch, there will be no sale, and the ship that is the brand will sink. John Goodchild and Clive Callow, authors of Brands: Visions and Values...
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...The Luxury Evolution Every generation redefines its definition of luxury. How they relate to it or reject it. From the “more generation”, to the X, we have seen everything from conspicuous consumption to less is more. Each generation also redefines its relationship to luxury. The evolution of social, political and economic factors is just a few of the major defining elements in any generation’s approach to luxury products. How a particular group defines luxury is often influenced by the preceding generation’s relationship to it. Is it a coincidence that the lean, Generation-X “less is more” philosophy of the 1990’s immediately followed the Baby Boomer’s conspicuous consumption ideals of the 1980’s. No business lives or dies more by the definition of luxury, than the Cosmetics Industry. From mass to class distribution to direct sell, luxury is the name, of the game. Revolution or evolution, defining luxury becomes the bete noir as the baton is handed to each new generation The Cosmetics Industry lives on its ability to provide luxury goods (No matter the definition) more than any other. It is imperative that we not Only understand how varying market segments define luxury and thereby consume it, but equally important that we can predict how fresh and upcoming markets will define their unique relationship to it. As an industry we must ask ourselves, are we open to deconstructing traditional definitions of what constitutes luxury? What new requisites will tomorrow’s...
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...CHAPTER 1 INTRODUCTION 1.1 Background of the topic In the early 1990s, the market of luxury goods had been increasing in sales. The Boston Consulting Group estimated in the year 2005 worldwide luxury product sales would be $ 840 billion (Truong, Simmons, McColl, & Kitchen, 2008). The reasons for increasing sales were the recovery of thw economy and quality and productivity were improving (Truong et al., 2008). From a few years ago up to now many countries in Europe have been affected by the economic crisis, the U.S. had a recession, and Asia (Japan) had an earthquake (Max Colchester, Wall Street Journal, July 29, 2011),(Melendez, 2011) Because of these problems luxury brand products should have been affected an lost sales in the world market. However, LVMH reported a 20% sales increase from the last quarter of the year, Gucci increased 22% in sales reported last week (Christina, 2012). This is the opposite of what we would have expected. The increase in sales of global luxury brand in the market shows the trend of current consumers which are younger than the older consumers of the past (Twitchell, 2002). More and more people buy luxury brands, not just working people but also students. 1.1.1 Asian demand for luxury product The Asia market has a high potential for growth and strong demand (Colchester, 2011).This is because the economy in Asia is good and has been getting better and better for many years. China, economic growth rate in 2011 was 9.2%,...
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...(“LVMH”) was formed in 1987 when Louis Vuitton, a leading luxury fashion brand, formed in 1854, merged with Moet Hennessy. Moet Hennessy had been formed in 1971 when Hennessy, a cognac manufacturer, merged with Moet et Chandon, a high end champagne producer. This formation of LVMH would signal the creation of one of the world’s most profitable and encompassing luxury goods conglomerates. In 1989, Bernard Arnault would enter the picture, become the major shareholder of LVMH and take up position as chairman. An entrepreneur and art admirer, Arnault had amassed a personal fortune in real estate and in other luxury goods markets before purchasing the majority share of LVMH. Under him, LVMH would grow exponentially, acquire even more brands, expand into new markets, and see unprecedented growth. By the late 1990’s to early 2000’s, the company would be posting net revenues in the billions of Euros, comprise some fifty sub companies, all of brand names synonymous with high end fashion and luxury, and have over 1,500 retail stores operating in every major market on a global level. LVMH became the parent company to some fifty sub companies across a variety of different product industries and types. All were owned by the same company, but most operated independently and, in some instances, were direct competitors of each other. Regardless, each company no matter how different had one thing in common; they all produced high end luxury products. LVMH operated five sub categories: wines and...
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..................................... 1 Current Issues ......................................................................................................................................................... 1 Marketing Analysis ............................................................................................................................................... 2 The Target Segment .................................................................................................................................. 2 The Positioning Strategy ........................................................................................................................... 3 The Product Strategy................................................................................................................................. 3 The Promotion Strategy ............................................................................................................................ 4 The Distribution Strategy .......................................................................................................................... 4 The Pricing Strategy ................................................................................................................................. 5 Marketing Conclusions ............................................................................................................................. 5 Financial...
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...it to the middlemen such as suppliers and retailers. The company has also increased the number of their Directly Operated Stores (DOS) as part of the defensive strategy of taking more control of the distribution process. The 2003 figure showed that DOS accounted for 61.3% of revenues compared to a much lower 32.5% in 1999. Its aggressive strategy accomplished through diversification and communication is also another of Gucci’s strengths. Gucci changed its strategy of carrying a single brand to branching out to a multi brand group. This strategy is also adopted by other conglomerates such as Louis Vuitton and Prada. Some luxury companies use the strategy of focusing only on one brand and add other business segments such as what Armani, Polo Ralph Lauren, and Versace did. Read on Discount Luxury Brands Big luxury brands offer discount and cheap luxury products under tough economic time. This strategy is done in order to allow the positioning of the brand in the industry to differ depending on the number of brands and the number of business segments the company wants to compete in. This is the idea behind focus (mono brand) versus diversification (multi-brand). Gucci Group has more than 10 brands, including Gucci, Yves Saint Laurent, YSL Beauté and Sergio Rossi. Weaknesses The weaknesses of Gucci include instability in management and financial base. The instability of its management can affect the group’s corporate strategy and vision. The financial base is weak and...
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...archive of this journal is available at www.emeraldinsight.com/0959-0552.htm IJRDM 33,4 256 The nature of parenting advantage in luxury fashion retailing – the case of Gucci group NV Christopher M. Moore and Grete Birtwistle Division of Marketing, Glasgow Caledonian University, Glasgow, Scotland, UK Abstract Purpose – Examines the application and nature of parenting advantage within the context of luxury fashion conglomerates principally as a means of understanding the synergistic benefits that accrue as a result of brand consolidation within the sector. Design/methodology/approach – Derived from company annual accounts, market analysts’ reports and other secondary sources, the paper delineates and evaluates the ten-year renaissance of Gucci brand from a company on the verge of bankruptcy to its emergence as the world’s second largest luxury group. Findings – Through the identification of intra-business group synergies, it is clear that the transference of brand management expertise and competence is the principal dimension of parenting advantage in the Gucci Group. Originality/value – From an examination of the Gucci Group’s brand management strategy, resource investments and business development activities, the paper proposes a model of the luxury fashion brand. This multi-dimensional model identifies the components of the luxury fashion brand, locates their inter-connections and illustrates how these collectively can provide and sustain advantage within this highly...
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