luxury goods

Topics: Goods, LVMH, Luxury good Pages: 5 (1407 words) Published: February 19, 2014
Factors that motivate customers towards buying decision of luxury product A survey of Chinese customer in China

Prepared by:
Zhang Yuwen (Grace)

Lecture by: Orlando R.Santos
Subject for: Research Methodology

President University
Bekasi-West Jawa Indonesia

Ⅰ Introduction
1.1 Background of Study
For luxury product and brand in the past three decades, Chinese market is unprecedented booming. From Pierre Cardin dominate early, later Louis Vuitton Illustrious, to each proliferation of luxury brands, the Chinese luxury high-end consumer tasted bud grow vitality and enjoyed the excitement noisy fanatical pursuit of luxury brands. While luxury product appears to be the public think that is only a small number of people can have the products, but according to the China's current level of economic development and consumer purchasing level has been able to provide basic guarantee for the development of the luxury industry.

Actually in the Chinese dictionary, the meaning of "luxury" is synonymous with "waste". And luxury goods in English is originated from Latin roots luxus, meaning is "strong reproductive capacity", this kind of description also expresses the luxury of the characteristics of "too much and waste". But in the modern society, the meaning itself has completed the transformation from negative to neutral. At the book "luxury brand management," zhouyun, P.2010 gives a board definition to luxury goods, which is luxury goods as a hope, a dream. Because it is the hopes and dreams, so it is demanding for the people, once people have can get intense pleasure and enjoyment, but also shows it is not the necessities of human life. At present, a very noteworthy trend is the concept of "luxury" of being extended outward. The concept of "new luxury" arises at the historic moment; the new luxury refers to are those goods and services that better than other similar products in the quality of goods, higher grade, better service, more fascinated customer. However, these products are not cheap, but that does not mean it too expensive to afford (Michael Silverstein, 2005). Such as Apple's IPOD, cell phone with new features, Swarovski, etc. In recent years, Chinese consumers have become the largest consumer group of luxury brands in the world (Husband, 2010). According to a new report compiled by HSBC, about a quarter of the world’s luxury purchases are now made by Chinese citizens, which means 25% of luxury goods. Go through the HSBC report it shows that in 2007, china only purchasing5% of luxury goods in the world. It’s increasing by 5% each years and the expert think the number of increasing will be more and more. The purchasing of Luxury goods was increasing by huge number and very fast speed. The increasing speed was similar with the China GDP growing (Bouee, 2012). Since 2000, the China economic GDP was increased a lot. China's gross domestic product stood at US$3.38 trillion while Germany’s GDP was USD $3.32 trillion for 2007. This made China the world’s third largest economy by gross domestic product. Based on these figures, in 2007 China recorded its fastest growth since 1994 when the GDP grew by 13.1 percent (Xin, 2009). The increasing economic was the most important reason to push Chinese buying Luxury goods. There are also many other factors that irritate people to buy luxury goods, owning luxury goods that means have a kind of culture. In China, there mainly are three luxury consumer groups in China: the rich flaunting fortune and manifesting identity, the young people gaining a sense of satisfaction and the bribers for mutual collusion and commercially "hidden rules."(Wood, Zoe, 2011). For luxury brands, they want to take advantage in the Chinese market; they must know more about China market and understand the Chinese consumer consumption. Only based on the understanding of Chinese people buying behavior, the luxury goods companies can make accurate and effective marketing...

References: 1. Zhouyun P.(2010). "Luxury brand management," 45-87
2. Michael Silverstein, P. (2005). Trading Up: The New American Luxury
3. Chadha, R., & Husband, P. (2010). The cult of the luxury brand: Inside Asia 's love affair with luxury. London: Nicholas Brealey International.
4. Charles Edouard Bouee.(2012) A brand awareness upgrade “Welcoming a new era in the Chinese luxury market”
5. "China revises 2007 GDP growth rate to 13%".Xinhuanet. 2009-01-15. Retrieved 2009-01-15.
6. Wood, Zoe. "LVMH 's 'remarkable ' Half-year Results Reveal Luxury Is Back in Fashion." The Guardian. Guardian News and Media, 26 July 2011. Web. 20 Feb. 2012.
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