The Meaning Of Luxury Brands Marketing Essay

Published Date: 23 Mar 2015

A brand for which a greater part of its products are luxury goods is termed as a luxury brand or prestige brand. It may also constitute certain brands whose names are affiliated with luxury, high price, or high quality, though few, if any, of their goods are presently estimated as luxury goods.

For example, in 1970s and 1980s the Gucci brand aimed at widely licensing their brand but unfortunately it was a noxious attempt and it did not do well. But in today's era the Gucci brand is now majorly sold in directly-owned stores.

In the early 2000s, Burberry over-licensed its brand which led to the deterioration and devaluation of its brand image, thus reducing its cachet as a brand whose products were consumed only by the elite.

Louis Vuitton, the brand with the world's first designer label comes from LVMH (Louis Vuitton Moet Hennessy) which is the biggest luxury good producer in the world with over fifty brands. The LVMH group made a profit of â‚¬ 2 bn on sales of €12bn in 2003. Other market leaders include Kering (former PPR) after it purchased the Gucci Group and Richemont.

In order for a brand to be defined and termed as a true and genuine ''luxury'' brand, it has to get an endorsement from the members of LVMH, Kering (former PPR) or Richemont.

In economics, 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 increases proportionally less than income.

Luxury goods are often equivalent with superior goods. The nature of luxury goods is that they have high income elasticity of demand, which means that as people become bounteous & wealthier, they will indulge profusely in the purchase of luxury goods. This also means, however, that if there is a downfall in the income of the consumers, then its demand will also drop.

Income elasticity of demand is not consistent with respect to income, and may change sign at various levels of income. This means that a luxury good may become a normal good or even an inferior good based on different income levels. For instance, if a wealthy individual stops purchasing excessive amount of luxury cars for his automobile collection in order to start collecting airplanes instead, then in such a case, the luxury car would be termed as an inferior good.

Based on design, quality, durability or performance, plentiful manufactured products acquire the status of "luxury goods" as they are exceptionally superior to the comparable substitutes. Thus, virtually every section of goods available on the market today includes a subset of similar products whose "luxury" is marked by better-quality parts and materials, solid construction, stylish appearance, increased durability, better performance, advanced features, and so on.

Accordingly, these luxury goods might retain or enhance the fundamental functionality for which all items of a given section are primarily designed. There are also commodities that are perceived as luxurious by people in general because they play a role of status symbols; such goods tend to signify and indicate the purchasing power of those who acquire them. These items, while not necessarily being better (in quality, performance, value or appearance) than their less pricey substitutes, are purchased with the main reason of displaying wealth or income of their owners. These kinds of goods are the objects of a socioeconomic phenomenon called conspicuous consumption and often include luxury vehicles, watches, jewelry, designer clothing, yachts, as well as huge residences, urban chateaus, and country houses.

The advertising expenditure for the average luxury brand is 5-15% of sales revenue and it builds to about 25% with the consideration of other conveyance for example advertising, events, public relations and sponsorships.

In the overall times, the comprehension of a brand has been basically connected with customers and identity orientation. Accordingly, brands are acknowledged as images in the minds of the customers and other target groupss, which are outlined and executed by companies to recognize, build and establish their products.

Luxury brands are enormously linked with their fundamental products .The constitutive characteristics of luxury products leads to the following definition:

"Luxury brands are regarded as images in the minds of the consumers that comprise associations about a high level of price, quality, aesthetics, rarity, extraordinariness and a high degree of non-functional associations."

1 "Defining luxury: the conundrum of perspectives". Beta.luxurysociety.com. Retrieved 2010-08-09.

The chief feature of the basis of luxury brands are the highly recognizable brand identity and the superficial

individuality among a strong and substantial customers patronage which leads to accelerated sales.

Precious stones,

gold, silk and silver are components that generally are defined as luxury within the fashion

industry. Products that have a high aesthetic appeal and value, exceptional quality and are

identifiable through a special design, logo or a brand name are identified as luxurious items.

Examples of brands that are characterized as luxury brands are Louis Vuitton, Christian

Louboutin, Yves Saint Lauren, Calvin Klein, Hermés, Prada, Mulberry, Chanel, Bottega

Veneta, Burberry and Gucci.9

These brands are those that became transformed from small-sized businesses

into billion dollar brands that are now accessible on main streets in the cities and in the airports.10

The

common characteristic among luxury brands is that they are exceedingly linked with handcrafted products

by superior artisans, advanced design and exorbitant items, such as leather, watches,

champagne and jewelers. At the end of the 1990s it was evaluated that there were less than

500 luxury clients in the world. Designers were not able to make the necessary profit that

was needed to stay on the market and they disappeared. Some individuals stated that the entire

luxury era was over, but many had faith as they stated that it was the fairytale everybody

wanted.11

Products as perfumes was the starting point in the diversified market and it was accompanied by

other accessories such as, pens, lighters, key rings and watches. High prices, that make the

luxury pieces inaccessible to numerous individuals, went hand in hand with the rarity and the

sophistication. Luxuries remain out of the majority even though it has a wide appeal, but it is

predominantly the super-rich European consumers who are the purchasers of these brands.12 It was

only accessible for the super elite previously, like royal families and other people in the upper

class. In today's society, In today's social norms, there is a huge change in the luxury market and the consumers

define luxury in diverse ways.13

The luxury sectors have developed in a remarkable way in terms of

economical facts in the last thirty years. Luxury sales are thriving where there is superior economic growth due to the

emergence of the new-rich people.14

12 Ibid

13 Kristy, W. (2008)

14 Kapferer, J-N. (2006)

1.2- Concept of Luxury Brand

The concept of luxury has been present in numerous forms since the starting of civilization. Its role was just as significant 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 basically constrained to the elite classes.

All through the course of history the conceptualization of luxury has shifted as per social infrastructures and budgetary and political factors of a given time. The primary guideline nonetheless, of what has chiefly been acknowledged luxury is that it is beyond everyday necessities, in some ways unnecessary, often exaggerated and superfluous.

Therefore, the demonstration of luxury is often claimed as a pronounced and deliberate contrast to existing social norms and patterns of behavior and it is not amazing that it has often been subject to severe moral and ethical criticism:

"No other moral or social issue is as unclarified as that of luxury, and what behaviour toward it can be considered to be well befit" (Kambli 1890 preface, cit. in Valtin 2008: 248).

Etymologically, the term luxury derives from the Latin luxusandluxuria both referring to the deviation from the normal measure (Valtin 2008: 248).

Classical Christian theology narrowedluxuria, lecheryorlustmainly to the sexual context giving the idea a profoundly negative meaning - even considering it as one of the seven deadly sins (Newhauser 2007: 239) 

In Europe in the 17th and 18th century moral and philosophical doctrines underlined the negative connotation of luxury and used the term to describe the immoderate consumption of the dominating social classes.

Nobility was considered to use luxury as a means to express power and to mark the social difference between their class and the rising bourgeoisie.

Luxury was associated to excessiveness, swank and outrageousness despising and condemning it as immoral and indecent (Lasslop 2005: 472).

The industrial revolution of the 18th and 19th centuries brought about the advance of mass production leading eventually to the growing prosperity of a larger part of the population.

Formerly inaccessible products became more affordable, and a gradual change towards a more positive attitude to luxury ensued. The accessibility of luxurygoods entailing the "secularisation of luxury" assured that these goods wereincreasingly valued and associated with good taste, intelligence and elegance

1.3- The History of Luxury Brands

Creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing are the main competences or attributes with which a luxury brand is often associated.

When a consumer owns a product with these mentioned attributes it does not merely give them a satisfaction of owning pricey items but also an extra-added psychological benefits like

esteem, prestige and a sense of a heightened status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these high priced items.

The luxury sector targets its products and services at consumers on the top-end of the wealth spectrum. These self-selected elite are price insensitive and choose invest their time and money on clothes and accessories that are plainly opulence and extravagant rather than necessities. For these reasons, luxury and prestige brands have for centuries commanded an unwavering and often illogical customer loyalty.

Many luxury and prestige brands such as Louis Vuitton, Burberry and Chanel were launched in the nineteenth and early twentieth centuries; this was the period where a system of stringent social class system was followed and the society was governed by the royalty and aristocracy. During this era, designers like Christian Dior, Louis Vuitton and Guccio Gucci designed clothes, luggage and leather goods solely for the honorable men and ladies of social order. Their work was an artistic expression that took several weeks & sometimes months to produce and this was all a part of the "luxury and prestige" experience. During this period, dressing from head-to-toe in one brand was a benchmark and social norm.

In the present 21st century environment, the story is different. The luxury scene has changed due to several factors. Firstly a mass class of wealthy people have emerged throughout. At the beginning of the century, luxury consumers constituted a petit segment of the population who all looked the same. However, in the last three to four decades an enormous amount of wealth has been accumulated by individuals due to various economic, social, and technological advancement.

Secondly, there has developed an ocean of luxury brands and this has affected the high entry barrier that the industry guarded for centuries. Luxury consumers now have the privilege of having more choice as compared to before.

Thirdly, the accelerated growth in the field pertaining to digital, information and communications technology has given consumers more variety in luxury product offering, easier access to view the choices & decisions and lower expenses in particular on the Internet. This has enabled the consumers to become more individualistic, experimental and bold to blend luxury and high-street fashion in one outfit; something that their mothers and grandmothers would have regarded a taboo in the past.

The result of this change has led to the concept of "trading-up and trading-down." The new wealthy mass class who are enjoying their ability to trade up to acquiring luxury products practice trading-up. Exchanging down is the act of blending the utilization of luxury brands with fashion brands. This practice is also popularly called "the democratization of luxury. Therefore, it is no longer an astonishment to find a wealthy celebrity wearing jeans from H&M, earrings from Chanel, shoes from Coach, a shirt from Zara and a bag from Louis Vuitton.

Luxury consumers have unconsciously unconsciously structured a platform for fashion brands to stand side by side with luxury brands. The so-called fashion brands such as H&M, Zara, Mango, Gap and TopShop are redefining their branding and promoting techniques to reflect a "luxurious" appeal to the buyer. As a result of this, for the first time in their history, luxury brands are confronting rivalry from the "lesser" mass fashion brands that are progressively edging into the lives of luxury consumers. Luxury brands have always had well-defined territories along which they operate and there has never been any question that they hold the strings in determining their consumers' behaviors until now.

The mass fashion brands are portraying that they have comprehended the language of individualism and differentiation and have the capacity to offer the luxury customer alternatives to their luxury items or complimentary products at better price. They have additionally improved modern operations systems to rotate off their items in an short time. This has empowered the mass brands to move on from "mass" to "mass-premium" brands, as they like to be referred. While they are still exotic consumer brands, they are no longer low-end or middle-end brands. They have comprehended that it is no longer an issue for a young opulent Duchess to mix and match a £50 some pants from Zara with a £3,000 sack from Vuitton and a £5,000 J12 watch from Chanel, and they are misusing this development. This heads off to state that the luxury bag or watch alone is not solely needed to empower the customer to satisfy their esteem needs.

Another factor that has empowered the fashion brands as premium brands is the control & administration of the marketing mix strategies to be alike to those of the luxury brands. An ordinary example is the introduction of limited edition clothes and accessories by high street brands such as the UK's Marks and Spencer's or the recent wave of high advertising expenditure in fashion magazines like Vogue and Harpers & Queen, which were beforehand the sole domains of luxury brands. Viweing a TopShop advertisement next to Chanel or Hermes advertisement in Vogue undoubtedly does something to the mind of the consumer.

Additionally, the mass-premium brands now open in the best areas in fashion capitals of New York, Paris, Milan and London. They now act and talk as though they are truly the high end brands that set the trends. They have gotten aggressive in their way of conveyance and communication to their target customers, who are largely luxury consumers.

Another example is the teaming up of incredible luxury design planner and Designer of the House of Chanel, Karl Lagerfeld with H&M to outline and design a limited edition ladies' wear collection in November 2004. This collaborative venture might have been unthinkable ten years ago.

The crucial questions are:

Are luxury brands now mass brands like fashion brands?

Are fashion brands becoming luxury brands?

Where can we draw the line between luxury and fashion brands?

According with industry masters, luxury and prestige brands for example Rolex, Louis Vuitton and Cartier represent the most elevated type of craftsmanship and order an staunch consumer loyalty that is not influenced by trends. These brands make and set the seasonal trends and can offer a commodity for £20,000 and another for £200 to diverse customer groups. They are additionally proficient in pulling their customers with them wherever they go.

Premium marks are those marks such as Polo Ralph Lauren, Calvin Klein and Tommy Hilfiger that try to be luxury and prestige brands however their marketing mix strategies are more similar to a mass market, yet a luxury mass market. Certain specialists additionally call this group mass-premium brands while others have termed them mass-luxury brands and yet certain others imply them as high-end brands. This class has perhaps seen the greatest changes from the consumer and aggressive rivalry from worldwide fashion brands like Zara and H&M.

Fashion brands on the other hand are those that dress the masses. A recent evolution brought about by competition has created a meaningful change in the fashion brands category. Brands like Zara, H&M and Gap can no longer be considered as merely fashion brands, in almost the same situation as any high street fashion as they have raised their offerings and strategies. To distinguish themselves from the mass-design brands, they now imply themselves as Premium Fashion marks. They are playing an important role in the trading down phenomenon of the luxury consumer.

The distinction between luxury brands and fashion brands is not only in the aspects of product quality and pricing but also applies to availability and exclusivity of the items. Fashion brands are for the mass market,whether they are of high quality or not. Luxury brands are for an authentic narrow market and are demarcated high quality, differentiation and precision in product design and manufacture. A brand is either a luxury brand or it is not. If a brand does not set out to focus and target on the high end market, then it is not easy to become a luxury brand.

So what brands are the true luxury brands? Heritage and tradition have dependably played an indispensable part in this sector. This is the reason for why that the industry is highlighting the contrasts between luxury and prestige brands, premium brands and fashion brands. The traditional perspective of luxury has been influenced by the recent changes in the consumer landscape. Regardless of this, the true luxury and prestige brands for example Louis Vuitton, Chanel, Hermes, Cartier, Rolex and Gucci, remain unflinching and not bargaining their core values and persistently influencing their consumers' thinking, albeit a more mass consumer base. These brands have techniques & strategies that address the challenging paradox of the amalgam exclusivity and availability and to appeal to many while appearing to be right for only a special few.

ANATOMY OF MARKET

GROWTH OF LUXURY BRANDS

In the preceding few years the sale of luxury goods has been increasing rapidly throughout the globe. As per counts by corporate advisors Bain &Company, sales of luxury brands in 2006 stood at EUR 159 billion, up EUR 13 billion on the past year. Verdict categorizes the business to some degree differently: according to its study Global Luxury Retailing 2007, the world wide luxury market had an estimated volume of EUR 263 billion.

The maximum market share of the luxury markets accounts for Europe, which is at 38 percent. The history of the most crucial luxury businesses are found in Europe; Italy and France to be more accurate.

However, in the years to come, the countries that will have a major boom and growth of the luxury market will be that of the Asia-Pacific region and Middle East.

There has been a rise in the purchasing power of individuals world-wide.

According to the reports published by World Health Report in 2007, the number of rich (HNWIs − high net worth individuals) and their assets have proceeded to grow − especially in the newly developing countries. This is the backdrop to the positive prospects in the luxury market.

The big luxury brands are some of the strongest brands world-wide.

There has been a rise in the brand value of luxury brands. The most highly and largest luxury brand is Louis Vuitton. It consolidated its seventeenth place in the global league table of the 100 best brands with a considerable increase of 15 percent in its brand value.

Chanel, Hermès, Cartier, Prada and Burberry also enjoyed double-digit increases in 2007.

Luxury is defined by affluent and wealthy purchasers as something that is the best in design, value, quality, craftsmanship and service - which are all consolidated into a remarkable experience that is truly appropriate, both practically and emotionally.

Most individuals consider luxury items as fine custom tailored suits, clothes, accessories & footwear, however, luxury items might be simply about anything from automobiles, luggage, furniture, watches, vacations and just about anything.

As luxury customers have become more diverse and keen, more brands have started to offer bespoke services.

Accounting 40% of worldwide sales, men's spending on luxury additionally grew practically twice as quick as women's' in 2011 and is continuing to do so. The luxury brands wish to capitalize on that trend.

In the past, small tailors have been known to offer the best bespoke services paying most attention to the customer, however the big brands have been taking note and coming around. Gucci included a broad new made-to-measure service for suits and shoes. Pal Zileri offers made-to-measure bespoke suits. Recently, Brioni revealed that 40% of its sales come from its bespoke items, sewed by hand in the Southern Italian town of Penne. MARK / GIUSTI has a bespoke service committed to designing and manufacturing exceptionally designed packs for their most fixed and recognizing customers, and Prada started customizable eyewear and accessories few years ago to test the bespoke market sector slowly.

While the economy around the globe is still brittle, luxury spending still takes place. For the wealthy, the experience is as vital as the final product - and bespoke services will continue to grow.

The most recent international luxury brands to declare a slower pace in extension of retail are Gucci and Louis Vuitton with fewer stores; in the case of Vuitton even "freezing" expansion in certain markets. Recently, analysts articulated that the reason for Louis Vuitton's slower growth in 2012 is due to immense brand exposure.

In case of Gucci, the company stated that it will concentrate on mushrooming and renovating existing stores, much like its sister brand within the PPR Group (recently Kering), Bottega Veneta. Both Gucci and Bottega Veneta decided to open in Milan recently which will be their largest store worldwide, and their aim would be to target the solid number of rich tourists from Asia, Russia and South America.

Though not formally confirmed, Prada Group (Prada and Miu Miu) has also dimmed its pace in international expansion.

Additionally, Italian luxury menswear house Ermenegildo Zegna also appears to have tacitly diminish the amount of its new openings planned for 2013.

Geographically, China is no exception with regards to opening new stores, numerous luxury fashion brands taking a more conservative approach. Certain brands for example Gucci and Bottega Veneta have as of recently opened men's only stores in China -other major brands are likely to follow, especially Dior and Ralph Lauren.

Chanel has likewise taken same approach,concentrating on broadening and refurbishing flagship stores instead of opening new ones. It appears that the more windows a brand would open,the more accesible it would appear to the customers, both in developing and developed markets. Louis Vuitton's strategy to open two "categories" of stores - Maison ones (larger and with added services) and regular stores appears to have been exceptionally ineffectual, leading to further perplexity among the luxury buyers.

In spite of the recent cash injection from its new Qatari owner, Valentino too is taking a more wary approach, concentrating on expanding more its Red Valentino line, particularly in shopping malls and remaining more preservationist in its main line. The house will additionally concentrate on revamping various stores in the U.S. and Europe, which do not show the new interior design concept of the brand.

The luxury fashion brands which are doing great and are successfully expanding its retail globally with numerous stores lined up to be open in 2013 are viz Michael Kors (who will also be soon launching a beauty collection of color cosmetics and body-care including fragrances), Tod's Group (Hogan), Tom Ford, Brioni (acquired in 2011 by PPR) and Salvatore Ferragamo..

The growth in the luxury market has greatly expanded the availability of luxury goods to a wider audience of consumers. Luxury goods have also become more affordable to a wider range of consumers than ever before, as personal incomes rise in a number of emerging markets, such as the Middle East, China, Russia, or India and luxury marketers offer up less luxurious product lines at more reasonable prices. Where once an individual had to travel to Paris, London, New York's 5th Avenue or Rodeo Drive to shop the luxury leaders' stores, today one can find the same luxury brands in malls across the country. And if its not available at the local mall, one can go online and find an incredibly wide selection of the top luxury brands to shop and have delivered at their door.

Thus luxury "class" today is going more "mass", as more and more people of moderate means reach up for their personal luxury indulgence. Luxury is no longer confined to just the upper class ─ as in many emerging markets, everyone feels entitled to luxury.

2.2 2013 Luxury Industry Predictions from the Experts

2012 was another dynamic year for the luxury business. China authoritatively overtook the United States as the world's largest consumer nation of luxury merchandise for the first time. Rich investors in Asia and the Middle East gobbled up European luxury brands, and reinvigorated inactive heritage brands.

In Argentina, receiving stock was delayed due to the retail sector charging huge amounts of duties, taxes and customs.

Luxury brands are now exiting markets that do not depict growth. There has been a massive vanishing of luxury brands from Argentina due to its unfavorable import taxes and restrictions. Likewise, many luxury brands are delaying entry into India because of its lack of retail space, which limits scalability/demand.

Such barriers which were regarded as small hurdles during optimistic times to gain access to potential new markets, are now cause for many brands to reassess and rationalize their ideas for expansion.

In 2011, the number of outlets of the major luxury brands increased by 21%; in 2012 it shrunk to 9%; and it is expected to fall further in 2013.

MARKET CHARACTERISTICS & MARKET SIZE OF LUXURY BRANDS

Luxury goods are acknowledged to be products at the highest end of the market in terms of quality and cost. Classic luxury merchandise includes haute couture garments, accessories, and luggage. Numerous markets have a luxury segment which includes automobiles, wine, bottled water, tea, watches, jewelery and chocolates.

Luxury does not only imply to products. Luxuries can also be services. Hence, a luxury brand includes both tangible as well as intangible products.

For instance, hotels providing a seven star service to its customers will be categorized as a luxury service.

A luxury brand should have certain characteristics about it. These are briefly mentioned as follows :-

• Price: The brand offers commodities which belong to the most expensive products of their category.

• Quality: The brand offers everlasting highest top-of-the-line products, which won't be discarded even after long usage or deformity, however rather repaired and which frequently even grow in worth as time passes.

• Aesthetics: The brand is always classy, superior and chic. Whenever and wherever the brand is perceived, it epitomizes a world of elegance and top-notch.

• Rarity: the luxury brands keep their production limited and try to often not reveal their high sale numbers. The brand plays hard to get and is not available at all times or places.

• Extra-ordinariness: The brands have a mind and style of its own and its products are usually dignified and peculiar.

• Symbolism: The brand believes in "the best from the best for the best"; its appeal fills the room and it has its unique representation.

MARKET SIZE -The luxury goods market has been on an upward climb for numerous years. Apart from the setback initiated by the 1997 Asian Financial Crisis, the industry has performed well, especially in 2000. In that year, the world luxury products market - which incorporates drinks, fashion, fragrances, cosmetics, watches, accessories, baggage, handbags - was worth near US$170 billion and grew 7.9 percent.[5]

The greatest segment in this class was luxury drinks, including premium whisky, Champagne, Cognac. This area was the one and only one that suffered a decrease in quality (-0.9 percent). The watches and jewelry segment demonstrated the strongest performance, increasing in worth by 23.3 percent, while the clothing and accessories section grew 11.6 percent between 1996 and 2000, to US$32.8 billion.

North America is the biggest regional market for luxury products: unlike the 2.9 percent development encountered by the Western European market, the North American market achieved growth of just under 10 percent. The top ten markets for luxury goods accounts for 83 percent of the business sector, and incorporate Japan, China, USA, Russia, Germany, Italy, France, UK, Brazil, Spain, and Switzerland.

In 2012, China surpassed Japan as the world's largest luxury market.[6]

5 ^ "The World Market for Luxury Goods." Global Market for Luxury Goods. Nov 1, 2001, March 5, 2007.

6 ^ "China bans television ads for bling". Retrieved February 15, 2013.

MARKET TRENDS OF LUXURY BRANDS

Globalization, consolidation and diversification are the three predominants in the luxury goods market. The reason why globalization happens is due to the rise in the availability of goods, excessive existence of the luxury brands and a boost in tourism.

When there is a growth of enlarged companies and ownership of brands across various segments of the luxury products, its termed as Consolidation.

Examples are LVMH, Richemont, and PPR, which govern the market in areas ranging from luxury beverages to fashion and cosmetics.

The main challenge facing luxury brands in 2013, remains as same as prior years. They have to achieve the right balance between protecting the exclusivity that defines luxury, and making the brand experience accessible open to a wider audience.

Also, luxury brands need to keep up with digital marketing while still clutching their legacy and craftsmanship aspect.

The implications will fluctuate from brand to brand, however it is possible to identify five clear trends for luxury strategists

Marketing to the Millennial generation:

Like an individual, every generation also has its own values, attitudes and characteristics. Millennials are defined as the American teens and twenty-somethings who are making their way to the adulthood stage. Their distinguishing qualities are the absorption and adaption of technology and social media into their faily lives, as well as bold confidence in themselves as well as the future.

The primary attribute of the millennial era across the globe is that they are always "connected" 24x7.

In India also it has been seen that these same-age group individuals from various backgrounds have demonstrated tremendous power in impacting opinions, by networking through their different social platforms like Twitter, Facebook and so forth. For marketers, the development of e-commerce planned by numerous Indian companies is dependent upon targeting to this generation. 2013 will see a planned emphasis by luxury marketers to focus on this group in skilled and novel ways.

The era of today is very open to shopping online as well as offline and can be changed into loyal patrons through social networking if done so rationally. The luxury brands are now aiming to target them not only through advertising strategies but also through new product launches which appeal to their tastes.

2. Unified approach to media planning:

The fundamental trend to acknowledge is an extensive and unified media arranging. Luxury advertisers need to grasp that the new young luxury brand shopper is altogether different in not only their choice of products and but also in their choice of media. So it's essential to draft a media mix based on the diverse set of shoppers for the same brand. Marketing strategies have to ensure there is a good mix of both traditional marketing as well as digital marketing (social media).

Luxury brands like Ralph Lauren and Cartier have utilized this unified marketing approach extremely well by focusing on wealthy clients by means of distinctive marketing strategies. It's important that on every stage, brands captivate current as well as potential customers. Promoting through magazine advertorials is altogether different than sending them e-mailers or connecting with them through Facebook yet all avenues must be explored depending on the target clients.

3. Providing a richer product experience through mobile medium, RFID, shotcodes and augmented reality an essential channel of marketing in 2013

In 2013 it will be important to include convenience and accelerate on the mobile medium into the overall marketing approach of luxury brands. Mobile phone apps have become and continue to become a norm and necessity. This is because the affluent customers have been actively utilizing their mobiles to study products and its features, purchase them and like to connect with brands. And now, with the introduction of tablets- another media rich with display features has opened up giving luxury advertisers another system to showcase their commodities and market in an interactive way.

Not just this, the coming years will see the progression of the physical store by joining it together with the digital media to provide an improved reality experience which is certain to astound, impress and guarantee that the customers keep coming back for more.

Burberry has already taken measures towards this and has wonderfully managed to incorporate both in their flagship store in London which offers full length screens which convert into mirrors when required, entertaining and captivating components like electronically arranged 'digital rain showers' timed to happen, along with multi-media content, for example a catwalk clip of your item will be played when placed near a mirror.

4. E-commerce

A brand like Tony Burch has been selling more online than through its stores.

E-commerce will be adopted as a major marketing strategy for many luxury brands. Markets like India and China will have e-commerce developing promptly. E-commerce is beneficial to the brands as they can reach out to vast number of customers in small towns and cities where their stores are not located but where luxury shoppers exist.

There are online sites like Elitify.com, Nordstrom.com etc who have hand-picked highly sought-after products from various brands all around the world for their consumers, so if there is a particular Gucci Loafer that a customer is eyeing for or that smooth business pack from Brussardo that an individual wants to gift to someone, it can be done so by simply logging onto the site.

Expounding on the same Amit Rawal, Founder and CEO www.Elitify.com states: "We are bullish about the growth of luxury market in India. Currently it is small but growing steadily. In general though there is a huge appetite in this country for luxury / premium products and if the e commerce players can successfully deliver a great customer service experience, then online procurement of these products will become a strong phenomenon considering the fundamentals that are fueling the e commerce growth."

5. Customer relationship Management

It's an known fact that an efficacious luxury brand is not only an exclusive product- its an amalgam of high-end products and also extraordinary service. In the current year ie 2013, the target would be on customer service not just through extraordinary store experience but also through other marketing platforms.

According to Anita Kataria from "The Right Address" a luxury home décor store, that sells brands like Moser cystal and Bernardaud porcelain--Customer Relationship Management is an area that one needs to sparkle the most in when referring to Luxury Brands.

It is crucial that every client is made to feel out of the ordinary, which not many brands do when dealing with their clients; they need to make their experience be a special one and should make the customer feel out of the ordinary. To construct a great client base, one has to develop their own procedures of pleasing their customer

There are three fundamental zones one needs to focus on- A complete know-how on the brands that are represented by training the staff well, winning the trust of the clients and having a pleasant personality and showing oneself in a cheerful manner to every single client with colossal amount of patience. Direct interaction with customers on a personal level would be a nice approach to a healthy customer relation.

Since luxury purchasers demand special services, brands moving to mobiles must decipher how to use apps to strengthen their relationship with the client. Loyalty programs and early access to sales are few ways that aid in building and maintaining customer relationships through digital media.

CHAPTER 3. MARKETING CONCEPT & CONSUMER BEHAVIOR

3.1 SEGMENTATION OF LUXURY BRAND MARKET

Market segments can be divided by any feature, with wealth being the most common feature. Based on the characteristic of wealth the market segment has been split into three classifications- premium, middle and price markets.

The premium segment is at the top of the tier and it consists of those individuals who can afford the luxury brands. This group has more money as compared to other categories of people and is also the smallest group. This group comprises of middle-class individuals and families and they can afford mass brands. This group is the biggest of the three therefore the brand that appeals to them is widely available to the masses, hence the term mass brand.

The next segment is known as the middle market segment and it includes individuals that can afford commodities and services which are normally not much preferred by the top group and which the last group aspires to afford.

The last group, ie the price market segment includes groups that cannot afford luxury or mass brands. They shop for value brands. Value brand lures those individuals who do not have much wealth and have to select commodities for their value (i.e. price) over their quality. This does not mean that this group cannot purchase quality products but overall, they must relegate their purchases to generic, value brands.

Even though the mass brand is the biggest classification brand, it is beginning to weaken because of the middle market being able to afford luxury brands.

For printing associations and numerous different industries, this means that the products need to be more superior in quality while keeping the price low. This also means that they can start promoting luxury commodities to a bigger middle market consumer.

Luxury brand advertisers need to quit thinking and targeting only the affluent population and rather try to understand the various cultural aspects, lifestyles and spending habits at different levels.

The different areas of the world in which the wealthiest people dwell is changing drastically and brands need to plan their marketing campaigns and retail stores accordingly. Brands likewise need to comprehend who the affluent individuals in these countries are and why they spend.

In 2007, the three largest areas in terms of the amount of wealthy individuals were the United States, Western Europe and Asia-Pacific.

Since then, there has been an enormous decline in the number of millionaires in Western Europe. As of now, around the range of 28 percent of millionaires reside in Europe.

In the coming years, Asia-Pacific will begin to take a greater share of where the affluent population is based.

3.2 LUXURY BRANDS & DEMOGRAPHICS

Luxury Goods resides of premier branded fashion wear, fragrances, jewelry, cosmetics, leather goods and watches. Demographic data supports that there is no longer a narrow, homogenous group of luxury goods consumers but rather a broad range of consumers - particularly young consumers - selecting luxury goods for a variety of reasons with a willingness to move easily to other brands. Demographics are the statistical element of marketing used to recognize population segments by particular characteristics. All the choices made by business owner in regards to development in the marketing plan are affected by demographics. Demographic information consists of geographic area, gender, income, race, age, and education level. It also constitutes of marital status, number of children, shopping habits, and other information about consumer characteristics. Demographic information is collected by several sources, including the Bureau of Labor Statistics and the U.S. Census Bureau who publish their Consumer Expenditure Survey. The luxury goods market in the Middle East saw a growth of 10 to 15% in 2011 to 2012, chartering the region as the 10th largest luxury goods market in the world as stated by the Bain & Company, the leading advisor to the global luxury goods industry. The report also unfold that luxury goods market worldwide revenues will grow by 7% in the final 3 months of 2012 when compared to the same period in 2011. Asia-Pacific sales, driven by China, are projected to grow by 18%, while America's probability of revenue rising is 13% by the end of 2012. Europe will approximately halve versus last year, expected to grow by 5% this year. Bain surmises that the market will grow, in real terms (i.e. using constant exchange rates) by 4 to 6% per year between 2013 and 2015, pushing the market to between €240 and €250bn by the middle of the decade. Chinese consumers have further revamped the luxury market, with growth in domestic sales and continued aggressive spending as tourists. Greater China has overtaken Japan as the sector's second market, after the United States of America. Chinese consumers now make half of the luxury purchases in all of Asia, and nearly one third of those in Europe. Globally, one in four purchases of personal luxury goods comes from Chinese consumers. Accessories have become the mainstream category in personal luxury goods. For the first time, leather goods and shoes have become the largest seller of the market, now at 27% of sales. The division is seeing increasing levels of male spending, and interest in higher quality. Tourists now account for 40% of global luxury spending. As tourism and luxury spending become more tightly associated, the experiential dimension of luxury consumption becomes more and more critical for the brands. The future of luxury brands is interesting. Looking at demographics, it seems like China is the place for the next several years along with smaller Asian countries as well as Brazil, Chile and Uruguay in Latin America. Longer term, the demographics seem to weigh more towards India. The population is huge but, unlike China, it will remain young. There will be plenty of workers supporting the old folks, which will not be true in China down the line. Do not be surprised if the LVMHs of the world start opening shops for their premiere brands in India a few years from now. No matter what happens in the global economy in the next several years, you can bet that many of the high quality products will find new customers in large numbers.

CHAPTER 4 - COMPONENTS OF MARKETING IN LUXURY BRANDS

4.1 Marketing Strategies for Luxury Brands

In September, the spotted Spring-Summer Fashion Show Week opened in Paris. Many wait for watching the numerous luxury brands shows, for example Chanel, Alexander McQueen, and Christian Dior and so on. It is glorious and prominent event in the luxury retail industry every half year and numerous individuals are holding up to see what the brands are heading off to introduce to them this time. The half-year in between the two major fashion weeks is related to the first marketing strategy in this industry.

These brands majorly use fashion shows as one of their critical marketing campaign strategy.

They never quit attempting to get clients' attention. They have diverse sorts of fashion shows all the year round. A couple of weeks before the grand fashion show, they might hold the haute couture fashion shows. And two months prior, they might hold other fashion shows about vacation fashion.

Since it is spotted everywhere- internet, newspapers, tv, magazines etc, this way they continue to get clients' attention.

Internationally, they have four fundamental fashion shows, which are in New York, Paris, London, and Milan. Lately, they also have other places for example Shanghai, Los Angles, Tokyo, and so on. to hold fashion shows for some other less famous brands or do repeat fashion shows in these places.

The editors of fashion magazines, photographers and other media report immediately in every fashion week.

This leads to the brand names being repeated again and again during the half year until the next grand fashion show week.

Apart from the massive fashion shows they hold, they too use other marketing strategies to lure clients, for example showing up in the TV series, films and advertise in the high-end fashion magazines. In any case the strategies vary in distinctive zones as the differences in customer behaviors.

In the western market, where consumers tend to consume more rationally, the advertisers mainly utilize TV series movie or the recently fashion street snap of well-known people as a means of marketing.

In the commercial for Hermes in the movie Transformer 3, in which the female minister uses a beautiful Hermes handbag, individuals who want to be like that female minister will have the urge to purchase the same or at least a similar handbag.

In the same way, when individuals see their favourite celebrities om the street snaps in a certain look, they are likely to purchase the comparable look as them.

In this way, they give careful attention to the aspects and utility of a certain product than brand fame. And that is a part of the reason why recent years, there are a large number of fashion houses emerging in the western nations and becoming more popular. Individuals are attempting to discover the inside value of an item and find something in common with their own personality.

But the scenarios are completely different n the Eastern countries, for example China, India and other developing nations. The advertisers for the most part depend on the vast fashion magazine ads as means of promotion. The basis maybe pertaining with the history and social background of these countries where most of them had the risk of being exploited. They purchase the luxury product as means to depict their social status.

So there is a trend, particularly among the younger generation, that they want to buy a luxury produc when they start to work as a sign that they are financially independent, even it might take all their starting up salaries. So greater the brand name is, more well known it is in these countries.

Therefore, advertisers use high-end fashion magazines and additionally certain magazines which are famous among the younger generation to do the marketing.

Last but not the least, there is another sort of interesting advertising technique existing in the luxury business. It is not a marketing campaign started by the enormous names, yet they do help to advertise the products of these brands.

As said before, there is half year between the fashion shows and the real seasons. That means, there is a gap in between this time period and this gives opportunity to so-called high street brands to outline some similar products. These brands essentially include Zara, H&M, Topshop and so on. That is because the big names' fashion shows set benchmarks or the styles of certain products depicted in the fashion shows and act as an inspiration for these high street fashion brands.

They might manufacture similar products, which have fashion trend elements. And these brands launch the new look much sooner than the big brands. So individuals who see the collection may think about a certain enormous brand and this does a certain impact of advertising the item. The point when the colossal names and this has an effect of promoting the product. When the big brands finally release their new products for the public in a half years time, the customers might be already familiar with the products and know precisely what products they want to purchase. In this way, the Luxury brands don't have to do other related marketing, and those high street brands have already done the marketing for them.

Be this also holds an issue that will clients purchase the luxury names products when they have already bought the similar products of the high street fashion brands?

Not all the clients who are into vogue can bear to buy the products the colossal brands offer. Those high end brands are in style and cheap to buy.

Those who like fashion and has limited budget may just buy those products instead of saving money for an luxury brand product.

It might have the issue of losing clients during the gap of fashion show and products arrival in stores. And the most pivotal, they can purchase the latest fashion in time!

This assembly of consumers who wait for the new products are the target group the brand may need to mostly keep focus on: Have enough disposable money, can afford expensive prices and have brand loyalty.

So it a half-way strategy, it just depends onto which segment the brands want to reach in a certain market.

4.2 PILLARS OF LUXURY BRAND MARKETING

THE 8 P'S - PILLARS OF LUXURY BRANDMARKETING:

1.PERFORMANCE:

Delivering deluxe experience of luxury brands refers to performance. It is done at two levels - product level and experimental level.

At product level, the brand should satisfy its functional characteristics and also provide its practical physical qualities like craftsmanship, precision, high quality, unique design, extraordinary product capabilities and technology & innovation.

At experimental level, the brand has to take care of the emotional value of the consumers.

For instance, Rolex is a symbol of heroic accomplishment, Tiffany is a hallmark of love and beauty.

PEDIGREE:

A large number of luxury brands have a rich pedigree/ background and extraordinary history that automatically make the brands impression immense.

This impression is generally constructed because of the legendary founder of the past, which leads to pivotal part of the brand story and brand personality.

So, when consumers purchase Cartier or a Chanel product - it is not merely due to the product performance

factor, but also because subconsciously they are motivated by the brands rich lineage, heritage and the years of mastery. Coco Chanel started her business in

1913 and within a few decades,

became a revolutionary couturier. Gucci opened the doors of its own museum in Florence to

celebrate the completion of the house's 90th-anniversary jubilation.

PAUCITY (scarcity):

Many brands try to maintain the perception that their commodities are scarce as over -revelation and distribution of luxury brands can lead to dilution of luxury trait. For example, - Burberry diluted its brand image in the UK in the

early 2000s by over-licensing its brand, thus reducing its image as a brand whose products were consumed only by

the elite.

Gucci is now widely sold in directly-owned stores, as it had a nearly crippling attempt to widely license their brand in the 1970s and 1980s.

Another variety within this is the "customization of luxury good", e.g. Garson

USA custom made a diamond-encrusted Mercedes SL600 for Prince Al-Waleed bin Talal of Saudi Arabia in 2007.

PERSONA:

The persona of a luxury brand is substantially an aftereffect of its unique consistency towards its buyers and the brand communication through its advertising.

The visual brand identity catches the brand's personality, character & emotional values in a nutshell. The distinct and consistent nature prompts brand imagery. The brand identity conveys its brand color(s), the other outline components like icons, the interestingly identifiable design, branded environment as well as the tone-of-voice.

Although the luxury brands visual identity is a homogenous factor, the more dynamic and diverse factor is advertising.

One of the recently new trends inside luxury brands is the utilization of the long advertisements or the short film videos to produce interest among the online audience.

This helps the brands in bridging the gap between the print media and the fast evolving masses online. This has proved to make an impact on the viewer within a matter of few minutes as thy can have a concise comprehension of the brand image or the story that the brand is attempting to pass on or essentially announcement of the new collection.

Eg- The short-flash-videos at Montblanc website focuses on its craftsmanship legacy.

Louis Vuitton created a 3-minute thematic video for its 'journey' campaign.

http://youtu.be/NQlueM5ETYU

A one-and-half minute video by Tiffany & Co. focuses on promoting gifting during holidays. http://youtu.be/BacfKM3876g

PUBLIC FIGURES:

Celebrities or public-figure have been always hired by the luxury brands for the purpose of advertising and they still continue to garner attention, trustworthiness and

impact.

Public figures include music personalities, film stars, sports personalities, royal families and sometimes even the designer themselves.to music temperament, from games dispositions to imperial families and even the fashioner themselves. At the same time since celebrity endorsements are no longer exclusive to luxury space and broadly utilized (and ill-used) crosswise over mass classes, it take a diverse importance regarding luxury brand endorsement.

There's a unique contrast in the way celebrity role is made, executed and strategically used.

Unlike traditional advertising which vastly uses print media, less in-your face advertising tools are utilized like accessorization or dressing stars for their walk down the red carpet, invites to special events,product placements within movies.

This method endeavors to uproot the appearance of "selling" while

still promoting the item by making it appear as a part of the celebrities lives, hence, positively affecting customer's attitudes, brand esteem & purchase intention.

Example, Chopard has been official partner of the Cannes Film Festival since last 14 years, showcasing and premiering their collection by accessorizing celebrities on the red carpet.

The Lebanese singer and UNICEF goodwill ambassador Nancy Ajram was Cartier's special guest at the Cartier International

Dubai Polo Challenge held in Dubai, UAE

in 2010.

Omega have sponsored the James Bond

franchise since 1995 - earlier with Pierce

Brosnan and now with Daniel C.

Long-form-commercials / short-films have also made use of the celebrity-factor. Chanel for instance created 3-

minute short film with actress Keira Knightley who replaced Kate Moss in its ads for its Coco Mademoiselle

fragrance. Other previous faces of Chanel have included French star Catherine Deneuve and Nicole Kidman, who

depicted Chanel No. 5.

Similarly, as a part of their 'core values' campaign, Louis Vuitton used their website as the online medium to

showcase their celebrity endorser's journey, their story to bring to life how the brand has been promoting the art of

travel and inspiring legendary journeys.

PLACEMENT:

The retail branded environment in luxury branding is everything about uplifting the purchaser's brand experience.

Beginning from the decision of store location, the chain of touch-points consumer interacts, the sales associates presentation is important in making a distinguished indulging experience.

Luxury shoppers have ended up being more demanding and discriminating. They are looking for a more professional and knowledgeable assistance. Presently, luxury brands are increasingly investing into training methods for their sales staff.

Another important point to note in the placement factor is that it is not restricted to the physical environment where the brand retails, it expands to all the environments or customer touch-points that the brand associates itself with.

If luxury is about environment and aesthetics, then Vogue, Harper's Bazaar, Instyle, Vanity Fair etc give that supplementing environment and feel for luxury brand to advertise in print media.

Rolex links itself with more than 150 events in tennis, sailing, golf, motor sport,

cricket, football etc that have more mass following.

PR (PUBLIC RELATIONS):

PR in luxury branding plays a colossal part in expansion of the brand. It is also utilized to pass on other supporting messages and traits of the brand which can't be particularly expressed in advertising.

At a strategic level, PR is used to produce buzz & pass on the brand news (like the fashion weeks, sport events etc)

PRICING:

Pricing plays a quite enormous part in the way customers see

luxury brands. Consciously or sub-intentionally, customers create a mental luxury stature or image with the price range that the brand has.

Hence, it is critical for luxury brands to price themselves right - as setting the value lower than the consumers expectation and readiness to pay can possibly damage the brand value, while the reverse can potentially not given enough support for customers to go ahead and buy.

The pricing technique in luxury brands gained importance in the recent past not just due to the challenging economic environment, but due to the more informed and exposed buyers who are more critical and demanding, for whom premium pricing without substance doesn't suggest luxury.

The luxury-brands should therefore justify their price by prudently merging the 7P's mentioned above, and consequently maintaining their higher perceived value.

The sales promotions are also handled differently by luxury marketers. While few have abided to discounts and sales, most others play it by adding more worth to the purchase such as a gift with a purchase made, multiple item discounts, no shipping and handling charges by online retailers, gift certificates for the next purchase etc.

Luxury brands likewise utilize the channel of luxury retailers like Harvey Nichols, Saks 5th Avenue who keep annual sales by offering them marginally lower costs.

Another path utilized by luxury brands is by creating an extension into a secondary line with comparatively lesser price like Giorgio Armani's -Armani Exchange, Roberto Cavalli's -Just Cavalli, Prada's - Miu, Alexander McQueen's -McQ lines.

KEY LEARNINGS & TAKEOUTS:

Overall, the key to luxury brand advertising bubbles down to the following points:

• The luxury brand should perform at an experiential level simultaneously and not just on product excellence.

As luxury customers advance, a premium value and pricing of these brands is vital.

• As pedigree factor is crucial pertaining to the mastery or lineage, it is equally pivotal to generate continuous dynamism and relevance through the persona, PR & public-figure factor.

• Luxury brands must continue to keep up a certain level of exclusivity and stature with the paucity and the placement factor.

The 8 P's of luxury brand marketing can provide a comprehensive system to luxury marketers. The 8 P's may not be a "universal methodology", yet it displays a strong analytical "tool box" to audit and influence the brand potential.

CHAPTER 5 : SOCIAL MEDIA & DIGITAL MARKETING

5.1 How Luxury Brands Are Using Social Media Marketing

Prior to understanding how are luxury brands are utilizing social media, its worth asking if they actually require it in the first place? Some may debate that as per their definition, luxury brands are about eliteness. Whereas, social media is all about reaching the greatest group of customers possible. So, the two dont really seem to be related to each other.

However, on a closer inspection it is discovered that social media is what you make of it.

While the most followed brands on Facebook consist of likes of Coca-Cola, Oreos and Starbucks, that isn't to state that social media and luxury are mutually exclusive.

following are 2 illustrations of how luxury brands are successfully utilizing social media to further bolster their brands.

Burberry: The social media early adopter

Burberry has unquestionably left no stone unturned with its utilization of social media - from Facebook and Twitter to an official presence on Chinese microblogging website, Sina Weibo. The fashion brand has likewise been specified as a social media early adopter, speedy to go where its clients are, as was the case with Instagram, long before it became mainstream.

Burberry's social media use was witnessed last September with the revelation of its 2012 collection on Instagram and Twitter right before it hit the runway. The show was likewise livestreamed on Burberry'sYouTube channel.

Since then, Burberry's following has developed to over 800,000 on Twitter and over 11.6 million on Facebook, while its YouTube channel has gained over 12 million views.

Burberry is doing commendable as it is the most followed luxury brand on Facebook as well as the fashion brand with the most "likes" on its posts.

With Facebook starting its timeline