Luxury Goods: No Sign Of Slowing
LUXURY GOODS: NO SIGN OF SLOWING
Discussion question :
a)
The word “luxury” is ambiguous, in the sense that the perception of luxury is subjective. A poor person with less than $1 each day to survive on would think that a proper dinner is luxury while the CEO of a MNC would consider five Ferrari cars as luxury. Thus, everything could be luxury depending on the circumstances, experiences and features of an individual. Chevalier and Mazzalovo (2008) define a luxury brand as a brand that is selective, exclusive and contributes an emotional and creative value to the customer. They set three criteria for a product to be considered luxurious; it needs to have an artistic dimension, be the result of craftsmanship and it needs to be international. Regarding the artistic aspect, the product must be perceived as a refined object, almost like a work of art. In the aspect of craftsmanship, the object should be designed in a way that the consumer wants to believe that it is unique and produced directly from the creator’s workshop, even if it is in fact an industrial product. To be international implies being present in major fashion cities in the world such as Paris, Milan, New York, Tokyo, London etc. When customers travel to these cities, they will notice whether or not the brand is established. If a brand is not present, the customers would assume that it is less appreciated.
Based on the article, the reasons why there are no signs for the sales of luxury goods to slow down, are most likely due to the rapid change in the social lifestyle, attitude and demography of the people in China. The plausible consumers of luxury goods in China, which consist both of the wealthy and the very wealthy households, are growing at an unforeseen pace. The wealthy comprise the upper middle class; a section with a yearly household income between RMB 300,000 (MYR 150,000) and RMB 1 million (MYR500,000). The very wealthy are defined as those with a yearly household income of more
Discussion question :
a)
The word “luxury” is ambiguous, in the sense that the perception of luxury is subjective. A poor person with less than $1 each day to survive on would think that a proper dinner is luxury while the CEO of a MNC would consider five Ferrari cars as luxury. Thus, everything could be luxury depending on the circumstances, experiences and features of an individual. Chevalier and Mazzalovo (2008) define a luxury brand as a brand that is selective, exclusive and contributes an emotional and creative value to the customer. They set three criteria for a product to be considered luxurious; it needs to have an artistic dimension, be the result of craftsmanship and it needs to be international. Regarding the artistic aspect, the product must be perceived as a refined object, almost like a work of art. In the aspect of craftsmanship, the object should be designed in a way that the consumer wants to believe that it is unique and produced directly from the creator’s workshop, even if it is in fact an industrial product. To be international implies being present in major fashion cities in the world such as Paris, Milan, New York, Tokyo, London etc. When customers travel to these cities, they will notice whether or not the brand is established. If a brand is not present, the customers would assume that it is less appreciated.
Based on the article, the reasons why there are no signs for the sales of luxury goods to slow down, are most likely due to the rapid change in the social lifestyle, attitude and demography of the people in China. The plausible consumers of luxury goods in China, which consist both of the wealthy and the very wealthy households, are growing at an unforeseen pace. The wealthy comprise the upper middle class; a section with a yearly household income between RMB 300,000 (MYR 150,000) and RMB 1 million (MYR500,000). The very wealthy are defined as those with a yearly household income of more
References: Chevalier, M., & Mazzalovo, G. (2008). Management et marketing du luxe. Paris: Dunod. John, B. C. (2012, October 5). China 's multi-millionaires mapped: where do the wealthy live? Retrieved April 27, 2013, from http://www.guardian.co.uk/news/datablog/interactive/2012/oct/05/money-china-multimillionaires-regional-breakdown-beijing KPMG. (2008). China 's luxury consumer: moving up the curve. Retrieved April 24, 2013, from http://www.kpmg.com.cn/en/ virtual_library/Consumer_markets/ChinaLuxuryConsumers.pdf Lu, P. (2008). Elite China: luxury consumer behaviour in China. Singapore: John Wiley & Sons. Luxury Institute. (October 2009). White Paper: Wealth and Luxury Trends, 2010 and Beyond. Stuart, & Solomon. (2003). Marketing: Real People, Real Choices. Prentice Hall.