Luxury Business Strategies Midterm

Absolute Luxury

craftsmen / tailors, high end value reflect and support percieved value, exclusive distribution

Accessible luxury

large scale / mass production, accessible pricing, selective distribution

Connoisseurs

knowledge of brand’s history and product’s characteristics

Enthusiasts

faithful to the brand, in line with brand values

Logophiles

veblem effect and need belonging

Occasional

motivated by pleasure, luxury is a reward

Veblen goods

luxury goods whose demand increases with their price, ex cars, fine wines, luxury watches, high end jewelry

Conspicious consumption

widespread especially among lower income groups, projects false wealth, masks socioeconomic realities

4 main distribution channels

retail, e-commerce, wholesale, travel retail

B2B model

before 2008, lower operational costs and reduced financial risks but there may be hidden costs and limited brand control over pricing, customer experience, and visual merchandising and brand storytelling

Luxury business in 2009-2019

Growth of travel retail, elective reduction of wholesale POS

Luxury business during COVID

global disruption —> ecommerce surge

Luxury business during 2022-2025

ecommerice plateau, direct to consumer push, omnichannels became standard, rise in influencers

Luxury

An industry that conveys culture and identity, combine tradition and modernity, craftsmanship, history, and innovation

What are the rich looking for?

Main expenses → philanthropy, art, real estate

Reject mass market luxury and embrace uniqueness

Conspicuous consumption

imitation of upper classes, to show off

Hedonistic consumption

experimental luxury, personalisation + ESG

Conspicuous

societal status, vertical vision

Connoisseurs

prestige and elegance, horizontal vision

Transclasses

individuals and groups who do not clearly situate themselves in a defined social class

Dominating class

wants to keep its position by using a distinction strategy, defining and imposing for the rest of society, the good taste and the legitimate

Traditional bourgeoisise

business and factory owners

New bourgeoisie

private companies to managers

New money (HNWI and UHNWI from emerging countries

conspicuous ascetism of heresy

Singularity

objects, practices and lifestyles that allow individuals to distinguish themselves and assert their unique identity

Desingularization of luxury

massification of products, brand outreach, counterfeiting and imitation

Consequence of desingularization of luxury

loss of exclusivity, commodification of luxury, search for new forms of singularity

Consumer behavior

the study of individuals, groups, or organizations and the process they use to select, secure, use and dispose of products, services and experiences

Social factors influencing buying behavior

different levels of belonging, friends and family, position and status

Individual factors influencing buying behavior

age, gender, education, social status, lifestyle, personalization

Psychological factors influencing buying behavior

motivation, perception, learning, beliefs, attitudes

Cultural factors influencing buying behavior

sum of total learned beliefs, values, and costumes that serve to direct the consumer behavior of a society

Situation factors influencing buying behavior

why did i buy it? for me? for someone?

Marketing strategy

in order to satisfy their clients, brands must understand:

when and how to contact them

what their needs and expectations are

what is their perception (image) of the brand

what influences them?

Understanding the elusive customer

need recognition → information search → evaluation of alternatives → purchase decision → post-purchse behavior