Welcome to Luxury Marketing

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Welcome toLuxury Marketing

• Dr. Satyendra Singh
• University of Winnipeg
• s.singh_at_uwinnipeg.ca
• www.uwinnipeg.ca

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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

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Charles Frederick Worth -- 1838
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Luxury is passion

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

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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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Luxury is Dream

• Creates social gap ? Exclusivity
• Sensory experience ? Feel, touch, smell
• Vibrates your emotions ? feelings
• Object of worship ? needs respect
• Luxury is beauty
• You may suffer in the name of it, or for it

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Dream Categories

• Fashion (Apparel, bags, shoes, belt)
• Perfumes and cosmetics
• Watches and jewellery
• Eyeware
• Other
• Restaurant
• Hotels
• Car
• Home

Semester at sea
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Luxury Depends on

• Wealth
• Wealthy gt.5m / year
• Affluent gt .2m / year
• Status
• Income
• Education
• Occupation
• Where you live

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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
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High Net Worth Individuals (HNWI)

• People with 1m assets excluding home, car
• 11m HNWI in 2011
• 3m in USA
• 3m in Europe
• 3m in Asia-Pacific
• .5m in Latin America
• .4m Middle East
• .1 Africa

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Luxury Industry

• 26m ? of billionaire worldwide
• ? 7 more billionaires every year
• 150b / year (People spend on luxury)
• ? 20 sales growth / year
• 200-300 luxury brands

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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, Miu Miu, Azzedine Alaia

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Levels of Luxury

• Luxury or prestige ? Lifestyle setter
• Bulgari, Hermés, Hugo Boss,
• Premium ? Aspire to become Luxury
• HI ? Calvin Klein, Tommy Hilfiger,
• MI ? LaCoste, Furla,
• LO ? Zara, GAP,
• Fashion ? Changes quickly
• Several

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Characteristics of Luxury

• History
• Heritage
• Culture
• Message
• Innovation
• High Price
• High quality material
• Differentiation
• Value creation

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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

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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
• .

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Gucci Jackie
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Gucci la pele GuccissimaShows mrf process
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Hermés Cap Cod -- Craftmanship
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ChloéMaterial
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Creativity and Innovation
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British History typical lines
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Ferrari red, speed, precision, power0nly 8000
per year
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18 hours of single craftsmanship
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Rolls Royce 2600 hrs, wood, living roomx10
Fords price
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Bathroom in Flight
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Bar in Flight
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Bicycle Lightest