Product Management in the Luxury Sector – Market Research & Pricing (Lecture Notes)

Flashcards covering key concepts from the lecture: product management roles, development cycle, market knowledge, pricing, costs, margins, and case studies.

What is the goal stated for launching the right product in this course?

Launch the right product, at the right time and at the right price, with the right launch package.

What are the key stages of the Product Development Cycle?

Market/Competition & Offer Analysis; Development Milestones Follow-Up & Prototypes; Studio Brief; Development Brief; Retail Launch & Follow Up; Price & Margin Validation.

What is the purpose of 'MAP YOUR COLLECTION / YOUR GLOBAL OFFER' in analyzing your offer?

To identify untapped opportunities.

What are the three steps to analyze your offer as outlined in the 'How to Analyze Your Offer' section?

Map your collection/global offer; Look at trends and competitors; Analyze sales over the last year.

What is the Market Knowledge Methodology step 1?

Know your market: identify trends, size, growth, room for more products, and whether you can disrupt existing players.

What should you define when evaluating a product launch according to the Market Knowledge Methodology?

Your objectives: image or business

• Price positioning 

• Design direction 

• Technical characteristics 

• Business/image stakes → elevate, expand, or consolidate 

How is COG defined?

COG=Cost(rawmaterials+manufacturing)÷(RetailPrice÷1.2)%

How is Margin percentage calculated?

Margin % = [(Retail Price / 1.2) - COG] ÷ (Retail Price / 1.2) × 100.

What are the typical COG percentage ranges by luxury category?

Perfumes & Beauty: -10% to 12%; Leather Goods: -15% to 20%; Watches & Fine Jewelry: -20% to 25%.

What does 'Pricing Power' refer to?

A product's ability to command higher prices due to market position, brand power, and perceived value.

What does 'Know Your Positioning Within the Market' mean in the methodology?

Are you a Leader or a Contender?

What is meant by 'Define Your Client' in the Market Knowledge Methodology?

Define who you are targeting with the product and how; understand what your clients look for when buying.

How do you determine if your product is a novelty or an existing market standard?

Assess whether the product introduces a new concept, feature, or innovation (novelty) or if it aligns with products already widely available (market standard).

Why should you analyze products already existing at your price point?

o understand the competitive landscape, gauge customer expectations, and determine if your pricing aligns with perceived value.

What should you compare about competitors’ products?

Features, quality, performance, and any differentiating attributes to see if your product offers comparable or superior value.

Why is it important to consider if competitors could easily replicate your product?

If replication is easy, your competitive advantage is fragile, making differentiation and protection strategies essential.

What does knowing whether you are a leader or a contender help with?

It guides strategy—leaders may defend market share and premium pricing, while contenders may need aggressive positioning, innovation, or cost advantage.

Why should you understand the cost breakdown between raw materials and manufacturing?

To identify profit margins, optimize production costs, and make informed pricing or scaling decisions.

What are the tangible factors for princing & margins?

• Cost of manufacturing  

• Marketing cost  

• Cost  of raw materials  

• Competition vs. Positioning  

• Respect of margins targets 

What are the intangible factors for princing & margins?

• Brand image  

• Trends  

• Perceived value of the brand  

• Pricing power  

• Expected price  

• Sence of scarcity