This action might not be possible to undo. Are you sure you want to continue?
Presented on: -08/October/2010 Venue: -Nehru Institute of management Studies
VIJAIYESH-R I-yr MBA KPR School of Business
Fashion marketing of luxury brands in international market:
Abstract: The main objective of the paper is to explore fashion marketing strategies of luxury brands. The objective is to bring advance knowledge on the fashion marketing of luxury brands. The luxury industry is relatively small in terms of the number of companies, but punches far above its weight both in terms of sales and more importantly, influence. The best design, the best materials, the best merchandising, and the best packaging occur in the luxury industry, and hence luxury brands frequently lead the way for the rest of the marketing world. Changing market conditions have bolstered the demand for highly competent fashion marketing professionals who can take up key positions in fashion marketing, Brand management and related areas. Facts about Indian fashion industry needs to take following steps to fulfill its growth potential like
Fashion marketing of luxury brands in international market:
Introduction: Luxury: Why has fashion always been attracted to and so closely associated with it? Examining fashion from the standpoint of luxury, this exhibition considers the relationship between luxury and fashion in different societies and eras, from the 17th century to the present, and explores new directions for the future. The growth of the industrial economy has brought a wealth of material blessings into our lives, but has also confronted us with some challenging global issues. Fashion marketing Fashion marketing is the application of a range of techniques and a Business philosophy that centers upon the customer and potential Customer of clothing and related products and services in order to meet the long-term goals of the organization. Fashion marketing concept
Levels of fashion
Luxury goods : “Luxury includes two levels of representation- material & psychological representations” Luxury + fashion brands marketing: ‘Characterized by exclusivity, premium prices, image and status, which combine to make customers desirable for trends & self-satisfaction’.
Luxury means different things to different people (American Demographics in 2003)
3-Different typical consumers expectations of luxury. 1. Accessible Luxury –for bachelor’s stage 2. Middle Luxury –Married with children’s 3. Inaccessible Luxury- Newly Married Couples (with no children’s)
Younger consumers dominate the demand for luxury goods and newer products and services are entering the arena. According to Hines and Bruce (2008) Fashion consumers expect innovation and constant change, luxury fashion shorter product cycles have been introduced and investment in innovation has been made to meet the demands of the fast changing fashion market. Fashion marketing process How marketing is done:
Luxury Brand Fashion marketing strategy: Six elements of luxury have been identified in fashion marketing by Dubois et al. (2001) as follows 1 Excellent quality 2 High prices 3 Scarcity and uniqueness 4 Aesthetics and polysensuality 5 Ancestral heritage and personal history
6 Superfluousness. Marketing Intermediates: Retailers-Retail consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail Agents-individuals who do not purchase or maintain inventory, but they usually solicit orders on behalf of manufacturer/exporter (also called principal) and get paid a commission (a percentage of net sales) Distributors-Distributors (also known as dealer, wholesaler or stockiest) are larger than commercial agents with better financial resources Wholesalers-Wholesalers frequently physically assemble, sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots Advertising agencies-a service business dedicated to creating, planning and handling advertising (and sometimes other forms of promotion) for its clients Fashion predictors: Companies such as the Paris-based organizations Peclers and Promostyl, France, and London-based Worth Global Style Network (WGSN) sell their predictions on styles, color and the market for the coming season or even further in advance for up to 18 months. Luxury Brand eye on Chinese market “An estimated 415,000 Chinese had more than $1 million in disposable assets in 2007;The spending power in China is spectacular", says Daisy Moon, assistant PR manager of Tiffany & Co China; Aged between 25 and 40 and living in developed regions, they are fashionable, mature, and passionate about lifestyle and quality, "Up to 170 million people, or 13 percent of the population, can afford luxury brands and the number will reach 250 million next year, according to the China Association of Branding Strategy. “Bain & Company predicted the Chinese luxury market would see growth of 20 to 35 percent in the next five years. The Ministry of Commerce says China will become the world's largest luxury market by 2014, accounting for 23 percent of global business. The Chinese market is so desirable that international luxury companies are speeding up their quest for a share.” INDIAN luxury marketing: Fashion Industry in India is in nascent stage at the moment and has great potential to make its mark on the world stage. Indian fashion has thousands of years of tradition behind it. India has a rich and varied textile heritage. Indian fashion industry got a big boost by the victories of a number of Indian beauty queens in International events such as the Miss World and Miss Universe. CATCHING UP Spending on luxury goods (per annum per affluent household) India $8,900
US $29,000 China $21,000
INCREASING NUMBERS The luxury space in India 1.6 million households; this number is likely to cross 3 million by 2010 Each household earns around Rs 45 lakh (about $100,000) per year The spend is about Rs 4 Lacs ($9,000) per year on luxury/very premium goods and services The number of households is growing at 14 per cent per year Source: India Luxury Trends 2006, Technopak
India vs. China: Who Will Win The Luxury Race?
Due to the number of potential customers in these two countries — with a collective population of more than 2.5 billion people — and the rapid development of domestic consumer cultures, the decision to home in on India and China is logical. But which country will “win” the luxury race, becoming — and, perhaps most importantly, remaining the top luxury market in the world? While the smart money rests on China, as the country surpassed the United States as the world’s second-largest luxury market this summer and is expected to surpass Japan for the top spot by 2015, India might be something of a dark horse. According to an India Info line article, luxury executives converged this week on Mumbai for Luxurion 2009, “India’s first Ultra Luxury Lifestyle Event,” to discuss the potential of the Indian market and whether the India/China luxury competition will be a marathon or a sprint for the top. From the article: “The Indian Luxury Market is estimated to be to be USD 4.35 billion and this forms only 2% of the global share. The growth of luxury markets is on the basis of GDP per-capita growth and the High Net worth Individuals (HNI’s) in a country. India will be the second largest economy by 2040. Factors like Consumer Attitudes, Real Estate, Regulatory Environment and Ecosystem are important for the growth of luxury market and these are improving in the country. India has 83,000 millionaires and every year 16,000 more are getting added to this. The main trigger behind Indians indulging in luxury is to flaunt status, and the consumers here are becoming aware of leading global brands in the space, but tend to be extremely value conscious. There is a sizeable population engaging in outbound travel and getting exposure to global luxury market. The Indian consumer wants not just to be pampered, but entertained, excited and Inspired by Luxury brands and
hence global players will have to look at innovative methods of reaching and engaging customers to succeed in the Indian market.” This article brings up an interesting point
Looking at projections of two factors — GDP and population — should give us a clue as to who could ultimately emerge as the clear leader in luxury sales. As the following graph indicates, while China’s GDP will outpace India’s well into the century, India’s population will become the largest in the world by around 2030 while China’s will plateau around the same time.
Indian fashion industry needs to take following steps to fulfill its growth potential:
Indian fashion industry needs to create global image. Large textiles players must develop linkages with small medium enterprise (SME) clusters. Such networks would be a win-win for textile players that can concentrate on demand creation and branding as well as for clusters that can focus on quality production. There is a large part of the novice designer community, possibly more talented, which remains obscure. Hence there is an urgent need to give exposure to young and budding designers. Global image. Large textiles players must develop linkages with small medium enterprise (SME) clusters Novice designer community, possibly more talented, need to give exposure to world class trends. This industry is in nascent stage, India has a rich and varied textile heritage.
SWOT ANALYSIS IN Fashion Marketing:
After defining your strategy you must use the information you have gathered to determine whether this strategy will achieve the objective of making your enterprise competitive in the marketplace. Two of the most important assessments are described below
Cost To Enter Market: This is an analysis of the factors that will influence your costs to achieve significant market penetration Profit Potential: This is an analysis of the factors that could influence the potential for generating and maintaining profits over an extended period.
WEBPAGES: http://www.jingdaily.com/en/luxury/india-vs-china-who-will-win-the-luxury-race/ http://www.chinadaily.com.cn/bizchina/2010-09/06/content_11257007.htm http://indiatoday.intoday.in/site/Story/10721/Aspire/Fashion+marketing.html www.abramsresearch.com (Abrams Research, Luxury Brands Survey & Report, May- 2009) BOOKS REFERED: Fashion marketing / edited by Mike Easey. — 3rd ed ISBN 978-1-4051-3953-3 (pbk. : alk. paper) 1. Fashion merchandising. I. Easey, Mike Fashion Marketing Contemporary Issues-Second edition by Tony Hines and Margaret Bruce Library of Congress Cataloging in Publication Data ISBN–13: 978-0-7506-6897-2 ISBN–10: 0-7506-6897-0