welcome to luxury products dr. satyendra singh professor, marketing and international business...
TRANSCRIPT
Welcome toLuxury Products
Dr. Satyendra SinghProfessor, Marketing and International Business
University of Winnipeg
[email protected]/~ssingh5
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
High Net Worth Individuals (HNWI)
People with $1m assets excluding home, car…Affluent (Sub HNWI) .1m – 1mHNWI 1m-5mVery HNWI 5m-50mUltra HNWI >50m
13m HNWI in 2013 3m in Europe 4m in USA 3m in Asia-Pacific 2m in Japan .5m in Latin America 1m in Germany .4m Middle East .5m in China .1 Africa .5 in UK
Charles Frederick Worth -- 1838
Avenue-de-Champs-lys-es-Paris
Luxury is Dream
Creates social gap Exclusivity
Sensory experience Feel, touch, smell
Luxury is beauty You may suffer in the name of it, or for it
Vibrates your emotions feelings
Object of worship needs respect
You wish!
Liya Kebede
Swarovski Tangara
Characteristics of Luxury
HistoryHeritageCulture Message
InnovationHigh PriceHigh quality material
Differentiation Value creation
Luxury Differentiation
Porshe Craftsmanship, proof or expertise, engineering, aesthetic
Ferrari Red color, unique sound, make 8000 only per year, F1, 100 yr of exp
Ducati Red motorcycles
Hermes Kelly and Birkin bags
Harley Davidson distinct sound
Lamborghini Monster of technology
Rolls-Royce like living room, wood
Value Creation
Elegance not only perfume, but also bottle
Handmade gold, diamond, watches, bags,…
Rarity animal skin, silk, make clients wait
Made in Europe
Precision in craftsmanship….
Gucci Jackie
Gucci la pele Guccissima
Shows mrf process
Hermés Cap Cod -- Craftmanship
ChloéMaterial
Creativity and Innovation
British History – typical lines
Ferrari: red, speed, precision, power0nly 8000 per year
18 hours of single craftsmanship
Rolls Royce – 2600 hrs, wood, living roomx10 Ford’s price
Luxury Product or Dream Categories
Fashion (Apparel, bags, shoes, belt…)
Perfumes and cosmetics
Watches and jewellery
Eyeware
OtherRestaurantHotelsCarHome…
Luxury Depends on
WealthWealthy >$.5m / yearAffluent > $.2m / year
StatusIncome, Education, OccupationWhere do you live?Quality of residence…
Luxury: Wealth vs. Status
DiscreetAuthenticFrenchSmall logo
RussiansEmerging markets
NicheCreatorsBritishHeritage
Need to proveCounterfeitPoor countriesBig logo
HI Status
HI Wealth
LO Status
LO Wealth
Luxury Industry
+1500 # of billionaire worldwide (2014)
↑ 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, Hermes, Hugo Boss,…
Premium Aspire to become LuxuryHI Calvin Klein, Tommy Hilfiger,…MI LaCoste, Furla,…LO Zara, GAP, …
Fashion Changes quicklySeveral
Product Structure
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