Welcome to Luxury Products

1. Welcome toLuxury Products Dr. Satyendra SinghProfessor, Marketing and International BusinessUniversity of WinnipegCanadas.singh@uwinnipeg.cahttps://abem.uwinnipeg.cahttps://www.abem.ca/conference

2. History of Luxury King and Queens always appreciated beauty/luxury 1010 BC – 100 BC King David/Solomon, Queen of Sheba 1150 BC – 700 BC  Egypt, Greece 800 BC – 500 AD  Etruscan Empire and Roman Fashion 450 AD – 1500 AD  Byzantine Empire 15th – 16th Century  Italian fashion 1600 – 1750  Baroque fashion 1715  France 1828  Modern luxury fashion 21st Century  Democratization of Luxury

3. High Net Worth Individuals (HNWI) People with $1m assets excluding home, car… Affluent (Sub HNWI) .1m – 1m HNWI 1m-5m Very HNWI 5m-50m Ultra HNWI >50m About 15m HNWI 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

4. Charles Frederick Worth -- 1838

5. Avenue de Champs-Élysées, Paris Taunje-lije

6. 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

7. Gucci Jackie

8. Gucci la peleGuccissimaShows mrf process

9. Hermés Cap Cod -- Craftmanship

10. ChloéMaterial

11. You wish! Liya Kebede

12. Swarovski Tangara

14. Characteristics of Luxury History Heritage Culture Message Innovation High Price High quality material Differentiation Value creation

15. 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

16. 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 ….

17. Creativity and Innovation

18. British History – typical lines

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

21. 18 hours of single craftsmanship

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

23. Hotel with private jet for guests

24. www.SemesterAtSea.org

25. Bathroom in Flight

26. Bar in Flight

27. Apartment in Flight

28. Bicycle – Lightest

29. Luxury Product or Dream Categories Fashion (Apparel, bags, shoes, belt…) Perfumes and cosmetics Watches and jewellery Eyeware Other Restaurant Hotels Car Home…

30. Luxury Depends on Wealth Wealthy > $.5m / year Affluent > $.2m / year Status Income, Education, Occupation Where do you live? Quality of residence …

31. Luxury: Wealth vs. Status HI Wealth Discreet Authentic French Small logo Russians Emerging markets HI Status LO Status Niche Creators British Heritage Need to prove Counterfeit Poor countries Big logo LO Wealth

32. Luxury Industry +1500  # of billionaire worldwide ↑ 7% more billionaires every year $150b / year (People spend on luxury) ↑ 20% sales growth / year 200-300 luxury brands

33. Major Luxury Groups Louis Vuitton Moet Hennessey (LVMH) 30 Louis Vuitton, Givenchy, Marc Jacobs, Fendi, Donna Karen… Richemond (Switzerland) 15 Cartier, Chloé, Montblanc, Lancel… Gucci (Italy) 10 Gucci, YSL, Sergio Rossi… Prada (Italy) 5 Prada, MiuMiu, AzzedineAlaia…

34. Levels of Luxury Luxury or prestige Lifestyle setter Bulgari, Hermes, Hugo Boss,… PremiumAspire to become Luxury HI  Calvin Klein, Tommy Hilfiger,… MI LaCoste, Furla,… LO Zara, GAP, … FashionChanges quickly Several

35. Product Structure Product Line/Length Bag, Shoes, Belts… Product Breadth Hand bag Evening bag Weekend bag … Product Depth Variety of hand bags in this category…

36. Luxury: Design vs. Modernity Design ??? You decide Lamborghini Ferrari Aston-Martin Modern Traditional Morgan Bentley Rolls Royce BMW (???) Mercedes Lexus Comfort