Luxury brands Essay

Whenever you switch on the television, or flip through the pages of magazines, you are bombarded with celebrity news and reality shows that touch your inner needs to feel beautiful, important and recognized. Those gorgeous people in advertisements tell you that their lifestyle and material possessions like clothes and accessories can make you beautiful as well, and help you to be part of their world. All you need to do is to buy the right fashion brands by the right designers. Then you start to crave for the Louis Vuitton bag or the Chanel glasses. Soon you are hooked by the luxury. Fashion has always played a significant role in the history of the great civilizations. With the clear differences between social classes the consumption of luxury was limited to the elite classes. The nineteenth century marked the beginning of the luxury goods sector and the start of many of the highly valuable luxury brands that we know today, e. g. Gucci, Hermes, Cartier and Louis Vuitton in France, Burberry in England and Bvlgare in Italy. Nowadays, the luxury fashion sector is the fourth largest revenue generator in France, and one of the most remarkable sectors in Italy, Spain, the USA and the emerging markets of China, Russia and India. The luxury industry has increased impressively having a huge growth in demand. The luxury consumer is powerful. Consumers have much choice in products, shopping channels and pricing of luxury goods. The aim of this study is to examine young people’s attitudes, i. e. their beliefs, feelings and purchase intentions, towards luxury brands. The author tries to find out what â€Å"luxury† means to young people, what influences their consumer decision-making, and on a small scale, young adults luxury brand awareness. 3 defining factors of luxury: Luxury is nonessential: Luxury is desired, not needed. In luxury you are at your best. It makes your life richer and more worth living. Luxury is â€Å"hard to get†: Its availability is restricted by high price, by small series, by exclusiveness. If you are allowed at all to try and get it, it demands an effort, a sacrifice. Luxury is superb, inspiring feelings of wonder and excitement: It represents an outstanding achievement, it is a divine experience. You cannot but admire the people that created it. You are so charged up that you must share your experience with others. What is Brand? A distinguishing symbol, mark, logo, name, word, sentence or a combination of these items that companies use to distinguish their product from others in the market. Once a brand has created positive sentiment among its target audience, the firm is said to have built brand equity. Levels of brands:- Signature brands – These are the most expensive brands in their category. They are personal creations, one of a kind, signed by a highly acclaimed authority or by an artist of supreme status (an outfit created by Tom Ford) Supreme brands – These are products that are produced in limited series, often hand crafted (a Rolls Royce Phantom 101EX car, the service at Tiffany & Co. , or a night at the Ritz Hotel in Paris). High End brands – High quality mass production (from a BeoCenter2 music system by Bang & Olufsen to G Collection chocolate pieces by Godiva). 6 P’s of luxury brand marketing. Performance:- Performance refers to the delivery of superior experience of a luxury brand at two levels – first, at a product level which must satisfy the functional and utilitarian characteristic as well as deliver on its practical physical attributes and, second, at an experiential level i-e the emotional value of the brand the consumers buy into – beyond what the product is to what it represents. Pedigree:- Many luxury brands have a rich pedigree and extraordinary history that turn into an inseparable part of the brand’s mystique which isbuilt around the exceptional legendary founder character of the past. Paucity:- over distribution of luxury brands can cause dilution of luxury character. Hence, many brands try to maintain the perception that the goods are scarce. paucity is more promotional in nature such as the limited editions or the special series to generate artificial desire and demand. Public figures:- Public figures or celebrities have traditionally been employed as one of the marketing mix in luxury brand advertising and they still continue to grab attention, credibility and impact. This strategy attempts to remove the appearance of â€Å"selling† while still promoting the product by making it seem as a part of the celebrity’s lives, thereby positively affecting the consumer’s attitudes, brand value and purchase intention. Public relations:- plays an enormous role in image proliferation of the brand, thereby subtly influencing public opinion. PR is used to generate buzz and convey brand news. Pricing:- Consciously or subconsciously, consumers tend to generate a mental luxury stature or image with the price range that the brand operates. it is important for luxury brands to price themselves right as setting the price lower than consumer expectation and willingness to pay can potentially harm the brand value. Five steps to build a luxury brands Identifying a niche segment:- Luxury brands are built on the premise of offering high symbolic value to a very selective segment of consumers who are more focused on high status associations than the underlying price. As luxury brands are substantively different from other brands. Positioning based on high levels of differentiation:- As global brands strategize their competitive moves, they are likely to either follow a cost leadership strategy or a differentiation strategy. luxury brands should aggressively differentiate their brand experience. luxury brands are characterized by high levels of customer loyalty, that define their identity and powerful associations. Emphasizing symbolic value:- The most important element is the brand’s ability to create and communicate symbolic value for its customers. Symbolic value means the extent to which the brand is perceived by the customers. Creating perceptions of exclusivity:- All luxury brands strive to create a sense of exclusivity for their customers. Perceptions of exclusivity can be created by unattainable price, limited geographic availability, barriers to possession, or even limited supply. It enables the brand to sustain its positioning in the face of extreme external shocks such as heightened competition, regulatory shocks or even recession. Uncompromising delivery on superior brand promise:- Successful brands are those that create supportive organizational and operational structures that facilitate the implementation of strategies to deliver on promises which involves multiple dimensions in the case of luxury brands. they also will need to project consistency and continuity at every possible touch point. Objectives of the study:- To examine consumer’s motives for buying luxury brands. To identify the factors influencing the consumer’s at the time of purchasing luxury brands. To measure the level of satisfaction or dissatisfaction among the people with their preferred luxury brands. To examine consumer’s preferences towards celebrity endorsed brands in comparison to premium brands. Need of the study:- It has been observed the growth of Luxury market is growing by leaps and bounds. The world has become a very small place in terms of geographies and global distance is getting shorter and shorter every day. Modes of communication have increased considerably and hence people have exposure to varying products available at a premium cadre across the globe. Hence it becomes imperative to design and market. Luxury brands that have a universal appeal and can take on the needs and aspirations of people across the globe. Review of Literature:- (Hansen & Wanke, 2011) Luxury is highly desirable, but affordable only to a few. Luxury is often described as something being of excellent quality, which means that the ingredients or components of a luxury product are exceptional and superior to what is found in ordinary products. (Dubois & Kapferer, 2010) were among the first to recognize the importance of international luxury products and brands in academic literature. (Dijk, 2009) Luxury brands is the kind of goods for which demand increases as income rises, and goods that have a high income elasticity of demand. (Silverstein & Fiske, 2008) Brands are important when creating an individual style, especially when talking about shoes, clothing, watches, fashion accessories, spirits and cars. Brands send messages to friends, lovers and potential employers about who a person is or would like to be. (Danziger, 2005) Luxuries are the extras in life that make it more fulfilling, more rewarding, more comfortable, more enjoyable†. She further suggests a definition for the concept, which states that luxury is â€Å"that which nobody needs but desires†. (Vickers, 2003) It has been remarked that luxury goods are higher in the psychological, social and symbolic dimension, while non luxury goods score higher in the functional value. (Dubois & Czellar, 2002) have also explored the relationship between the concepts of â€Å"luxury and â€Å"prestige† as applied to brands by means of an interpretative analysis of in-depth consumer interviews. The results indicated that prestige can be achieved independently of luxury in many categories. At a symbolic level, consumers can interpret luxury as the symbol of brand prestige. (Dubois, Laurent & Sandor Czellar, 2001) published a consumer report analyzing complex and ambivalent attitudes to luxury. Again they conducted two studies. The first study was a consumer-based exploratory analysis with usual qualitative interviewing methods. Research Methodology:- Research is an intensive study in a particular field to achieve at a better conclusion of a problem. Research Methodology is a systematic way of solving the problem. 1) Research Type:- Type of research used is Descriptive Research. The purpose of using the descriptive research method is to acquire accurate, factual, systematic data that can provide you with an actual picture of the data set that you are reviewing. 2) Research Design:- The research design is the basic framework or a plan for a study that guides the collection of data and analysis of data. It includes how data is to be collected, what instruments will be employed, how the instruments will be used and the intended means for analyzing data collected. 3) Data collection method:- a) Primary data:- Questionnaire: These are designed to collect information which consists of relevant questions about the respondent’s attitude and consumer preferences. It is semi-structured, has a combination of close and open ended questions. A sample of 100 will be chosen. The survey will aim at young people under the age 20-30 in Ludhiana. b) Secondary data:- Information that has been previously gathered for some purpose other than the current research project. Information gathered from research journals, books, internet and articles. 3)Sampling:- When some of the elements are selected with the intention of finding out something about the population from which they are taken, that group of elements is referred as a sample, and the process of selection is called Sampling. 4) Sampling Unit:- A single section selected to research and gather statistics of the whole. Limitations:- A major limitation of the project is that it lacks broader exploration on consumer perception and purchasing of luxury products and its relationship with local products. This study has a homogeneous sample and its analyses and tests can only be applied to present luxury consumers. The sample size for both, quantitative and qualitative research might be seen as a further limitation of this research impacting the extent of generalization and should be increased in future research. This would also allow for a better differentiations to gender, age and/or income groups and for higher levels of R-square explanation. The positive relationships between purchasing of luxury goods and the need of uniqueness, symbolic/status consumption and identity indicate that most of the people want to avoid similarity, but, at the same time, they want to possess the status symbols that are consumed to symbolize personal and social identity.