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Welcome to Luxury Products

Welcome to Luxury Products. Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca www.uwinnipeg.ca/~ssingh5. History of Luxury. King and Queens always appreciated beauty/luxury 1010 BC – 100 BC  King David/Solomon, Queen of Sheba

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Welcome to Luxury Products

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  1. Welcome toLuxury Products Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg s.singh@uwinnipeg.ca www.uwinnipeg.ca/~ssingh5

  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 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

  4. Charles Frederick Worth -- 1838

  5. Avenue-de-Champs-lys-es-Paris

  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. You wish! Liya Kebede

  8. Swarovski Tangara

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

  10. 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

  11. 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 ….

  12. Gucci Jackie

  13. Gucci la peleGuccissimaShows mrf process

  14. Hermés Cap Cod -- Craftmanship

  15. ChloéMaterial

  16. Creativity and Innovation

  17. British History – typical lines

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

  19. 18 hours of single craftsmanship

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

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

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

  23. 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

  24. 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

  25. 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…

  26. 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

  27. 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…

  28. Luxury: Design vs. Modernity Design ??? You decide Lamborghini Ferrari Aston-Martin Modern Traditional Morgan Bentley Rolls Yoyce BMW Mercedes Lexus Comfort

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