welcome to luxury marketing

Welcome toLuxury Marketing

Dr. Satyendra SinghUniversity of Winnipegs.singh@uwinnipeg.ca

www.uwinnipeg.ca

History of Luxury

King and Queens always appreciated beauty/luxury

1010 BC – 100 BC King David/Solomon, Queen of Sheba1150 BC – 700 BC Egypt, Greece800 BC – 500 AD Etruscan Empire and Roman Fashion450 AD – 1500 AD Byzantine Empire

15th – 16th Century Italian fashion1600 – 1750 Baroque fashion1715 France 1828 Modern luxury fashion21st Century Democratization of Luxury

Charles Frederick Worth -- 1838

Luxury is passion

Product Line/LengthBag, Shoes, Belts…

Product BreadthHand bagEvening bagWeekend bag…

Product DepthVariety of hand bags in this category…

Luxury: Design vs. Modernity

LamborghiniFerrariAston-Martin

???You decide

BMWMercedesLexus

MorganBentleyRolls Yoyce

Modern

Design

Traditional

Comfort

Luxury is Dream

Creates social gap Exclusivity

Sensory experience Feel, touch, smell

Vibrates your emotions feelings

Object of worship needs respect

Luxury is beauty You may suffer in the name of it, or for it

Dream Categories

Fashion (Apparel, bags, shoes, belt…)

Perfumes and cosmetics

Watches and jewellery

Eyeware

OtherRestaurantHotelsCarHome…

Semester at sea

Luxury Depends on

WealthWealthy >$.5m / yearAffluent > $.2m / year

StatusIncomeEducationOccupationWhere you live…

Luxury: Wealth vs. Status

DiscreetAuthenticFrenchSmall logo

RussiansEmerging markets

NicheCreatorsBritishHeritage

Need to proveCounterfeitPoor countriesBig logo

HI Status

HI Wealth

LO Status

LO Wealth

High Net Worth Individuals (HNWI)

People with $1m assets excluding home, car…

11m HNWI in 20113m in USA

3m in Europe

3m in Asia-Pacific

.5m in Latin America

.4m Middle East

.1 Africa

Luxury Industry

26m # of billionaire worldwide

↑ 7% more billionaires every year

$150b / year (People spend on luxury)↑ 20% sales growth / year

200-300 luxury brands

Major Luxury Groups

Louis Vuitton Moet Hennessey (LVMH) 30Louis Vuitton, Givenchy, Marc Jacobs, Fendi, Donna Karen…

Richemond (Switzerland) 15Cartier, Chloé, Montblanc, Lancel…

Gucci (Italy) 10Gucci, YSL, Sergio Rossi…

Prada (Italy) 5Prada, Miu Miu, Azzedine Alaia…

Levels of Luxury

Luxury or prestige Lifestyle setterBulgari, Hermés, Hugo Boss,…

Premium Aspire to become LuxuryHI Calvin Klein, Tommy Hilfiger,…MI LaCoste, Furla,…LO Zara, GAP, …

Fashion Changes quicklySeveral

Characteristics of Luxury

HistoryHeritageCulture Message

InnovationHigh PriceHigh quality material

Differentiation Value creation

Luxury Differentiation

Porshe Craftsmanship, proof or expertise, engineering, aesthetic

Ferrari Red color, unique sound, make 8000 only per year, F1, 100 yr of exp

Ducati Red motorcycles

Hermes Kelly and Birkin bags

Harley Davidson distinct sound

Lamborghini Monster of technology

Rolls-Royce like living room, wood

Value Creation

Elegance not only perfume, but also bottle

Handmade gold, diamond, watches, bags,…

Rarity animal skin, silk, make clients wait

Made in Europe

Precision in craftsmanship….

Gucci Jackie

Gucci la pele Guccissima

Shows mrf process

Hermés Cap Cod -- Craftmanship

ChloéMaterial

Creativity and Innovation

British History – typical lines

Ferrari: red, speed, precision, power0nly 8000 per year

18 hours of single craftsmanship

Rolls Royce – 2600 hrs, wood, living roomx10 Ford’s price

Bathroom in Flight

Bar in Flight

Bicycle – Lightest