Luxury Marketing is the art of pampering customer’s senses and ego – overtly, so the world notices. Price is no real objective, as for many the greatest luxury is showing the world prices don’t matter to them. The Theory of Giffen Goods can also be applied to the luxury segment because of their exclusivity. Luxury fundamentally revolves around experiences and service. Luxury marketing is becoming particularly important in emerging economies like India, where the new rich want to announce themselves and the old rich want to separate themselves. Luxury Brands
Leading Brands of the World aims to effectively communicate the unique essence that is embodied in every brand to those in the brands target audience. A prominent shift that is taking place in luxury markets today from 'Old world luxury charm' to that of 'New world luxury charm' reflects the challenges that luxury brand marketers could face if each luxury target segment is not correctly addressed. Each market differs in cultural, rationale, sociological & emotional values and understanding these emotional value ties to that of a sentimental purchase is vital for successful brand penetration.
Old world luxury charm is deep rooted in the attributes, qualities and features of the product whilst 'New world luxury charm' is defined by the consumer who focuses on the experience of luxury deep rooted in the goods and services they purchase and not in the ownership or possession of the product itself. So 'New luxury' is about the experience of luxury while 'Old luxury' is about the product itself.
All luxury segments such as property, auto, apparel and accessories, manufacturers are reporting enthusiastic sales this year. The reason is simple — the uber-rich consumers’ boisterous lapping up of products and services that command a premium.
The 8 P’s of Luxury Marketing
1.Performance: The delivery of superior experience of a luxury brand at both levels – product level and experiential level. 2.Paucity: Over-revelation and distribution of luxury brand dilutes luxury character. 3.Persona: The visual brand identity captures the brand’s personality, mystique and emotional values. 4.Public Relations: PR in luxury branding plays an enormous role in image proliferation, thereby subtly influencing public opinion. 5.Placement: The branded environment is all about heightening the customer’s experience and amplifying the aura of the brand’s essence. 6.Personal Touch: Luxury branding is all about establishing and enhancing ‘emotional connections’ with discerning luxury consumers. 7.Pedigree: Many luxury brands have a rich pedigree and extraordinary history that become an inseparable part of the brand story. 8.Public Figure: The role of public-figures or celebrities endorsement can be observed to be more skewed towards the aspiring and accessible luxury brands.
Luxury Market in India:
With a growing millionaire base in India, the luxury market is growing annually at around 35% CAGR (ET, 10th Aug, 2008). The World Wealth Report, 2008 states that the high net worth individual (HNI) growth was highest in India for 2007 at 22.7 %. The growth in the luxury segment ensures that even new brands keep stepping in from time to time on home turf.
Source: Capgemini Lorenz curve analysis, 2008
According to a survey done by KSA Technopak, it is estimated that 1.8 million households in India spend about $10,000 per year on luxury or premium goods and services. The number adds up to a market potential of about $18 billion for 2007. The gestation period for the global luxury industry in India is expected to be much shorter at 5-8years as compared to China’s over 10years.
Source: KNA Technopak*Estimated
India Luxury Trends, 2006 divides consumers for luxury goods into 4 categories: Luxuriated: Source of affluence is largely traditional and inherited wealth. Most importantly, they have high levels of exposure and awareness to world class...