Marketing of Luxury Goods .

Abhishek Saha
Pavan Singh
What Are Luxury Goods

 Products which are not necessary but which tend to make life more pleasant for the
consumer. In contrast with necessity goods, luxury goods are typically more costly and are
often bought by individuals that have a higher disposable income or greater accumulated
wealth than the average.
 Luxury products have more than necessary and ordinary characteristics compared to other
products of their category, which include their relatively high level of price, quality,
aesthetics, rarity, extraordinariness, and symbolic meaning.
Need For Luxury Goods

 Global demand for luxury goods is strong and rapidly growing, with over $200 billion in annual
sales each year. Consumers purchase these goods for a variety of reasons, among them because they
convey a sense of status, wealth, and exclusivity
 According to a 2014 paper published in the Journal of Consumer Psychology, people don’t
necessarily buy luxury brands because of their snob appeal. In fact, tests showed that people were
more likely to feel interested in luxury brands after performing a task that gave them a feeling of
accomplishment than after performing a task that made them feel snobbish and superior to others. 
 However, the same study also found that once people actually own a luxury product, it tends to give
them a feeling of snobbish pride, as opposed to the pride that comes from accomplishment.
Moreover, the study showed, when people see designer labels, they tend to think of the wearer as
snobby rather than accomplished. So, even if people buy luxury goods mainly as a way to reward
themselves for their accomplishments.
Target Audience for luxury brands (India)

 Despite the economic slowdown across the world, the size of the global luxury market is
estimated to be around $2 trillion.
 Indian consumer scenario
The Indian consumer has been divided into five different classifications.
 While the top most of the pyramid, or the elite class, is just 4 percent of the overall
population, the absolute numbers are far too attractive for any luxury brand to ignore. These
numbers are expected to grow from current 10 million to 26 million households by 2025.
 India is home to the fourth-largest population of millionaires in the Asia-Pacific region
 Indian luxury retail trends: Tier 1 cities
The key spending on luxury products is pre-dominant in the metro cities.
In 2015, Delhi ranked first in spending most on luxury brands, followed by Mumbai (2nd),
Ahmedabad (3rd), Pune (4th) and Bangalore (5th).
 However, spending on luxury goods has spread much beyond and across tier 1, 2 and 3 cities.
 Indian luxury retail trends: Performance drivers
1. Value-conscious consumer: India essentially has a value-conscious consumer base. New
trends in this direction are :
  Pre-owned luxury: Pre-owned luxury is a fast-catching trend. BMW, Mercedes and Audi have
showrooms for sale of pre-owned cars.
  Rent and experience: There are sites that offer rent-a-luxury product or service. The consumer
wants to lap it up since it works completely well with their changing mindset as well as pockets.
 2. Customization: With the increase in consumer desire for exclusive products, luxury brands
such as Zegna, Tom Ford and Corneliani are adopting bespoke services as an ultimate expression
of luxury for the UHNIs
 3. Increasing digital influence, or Digi-lux, the new mantra: Luxury brands were weary of
making their products available online as it erodes the exclusive element from the luxury product.
But they are realizing the importance of online not for commercial viability and to connect better
with their consumers.
Globalization impact on Luxury Goods
How Luxury Brands Help Our Society

 IT Does not, We need to delete this slide

Arguments In Favour of Luxury Goods
1. Freedom of Consumption: People by nature are of independent view. If any restriction is placed on him for anything, he will
not like and relish it. Those who have means cannot tolerate such restrictions and it is not proper and desirable to put restrictions.
2. Increase in Employment: Production of articles of luxury relates employment and is good for the trade and industry of a
country. If thus renders a social service, besides providing enjoyment for some one.
3. It Increases Social Prestige: Those who use luxury goods their social status goes high. Such people will not like the
restrictions on the use of luxury goods when they can afford to use it.
4. Encouragement to New-Inventions and to Economic Progress: The desire for luxuries acts as a stimulant to new
inventions, new labor-saving devices and new types and modern qualities of goods. It thus helps in having technical and
industrial progress.
5. Encouragement and Development of Arts and Crafts: The production of luxury goods add to the skill of the workers.
Luxury articles require art and skill to produce them.
6. Transfer of Wealth: Expenses on luxury goods transfers wealth from the rich to the working and other useful members of the
society who badly need it and make a more profitable use of it. This transfer of wealth is good for society, as it brings about a
more even distribution of wealth.
7. Beneficial to Society and End of Monotony: The use of luxuries is beneficial to society which makes people refined, cultured
and up-to-date. Use of different types of luxury ends the monotony of life.
8. Increase in Government Income: Government imposes more tax on luxury goods and this is a good sources of income to
government.
9. Population Control: Those who wants to lead a luxurious life favour less children and more comforts. This view helps in
population control.
Arguments Opposing Luxury Goods
Arguments given in favour of luxury have not been accepted by various economists and people living in the
society. Their use cannot be accepted because of the following reasons:
1. No-maximum Social Advantage: No maximum social advantage can be acquired by the production of
luxury goods, because only a handful number of people will be benefitted by its production.
2. Social Dis-satisfaction: Luxury goods are used only by few people in society in India. Majority are not using
it so great dis-satisfaction prevails among people.
3. Unequal Distribution of Wealth: There is great unequal distribution of wealth because luxury goods are not
made in cottage industries and there is bad effect on such industries.
4. No Increase in Employment Opportunities: Luxury goods are demanded by small number of people and its
production takes place in factory where one cannot increase number of workers without demand and work is
done mostly by machine.
5. No Encouragement to Art and Crafts: At present there is reduction in the production of artistic goods
because luxury goods are being produced in factory by machine which reduces art and crafts workers.
6. Poor Class May Face Misery: By the production of luxury goods, producers are getting more profit therefore
production of essential articles for poor class is going down. Thus, the price of these articles is static or
sometimes goes up. No reduction in price as less production takes place.
Is Luxury Goods bad

 Arguments written in favour and against the luxury can be studied carefully and we can
come to this conclusion that both sides have got some weight and we cannot ignore the
importance completely. But to conclude it can be said that the use of luxuries articles are
harmful and waste. Therefore, nothing can be considered as a luxury or as a necessary for
ever and for every person. It all depends upon situation, circumstances and environment.
So there should be “Necessaries for all before luxuries for any..
Future of Luxury Goods

 Despite geopolitical insecurities and recession fears, 2019 turned out to be a year of decent growth
for the luxury industry which reached an estimated $1.4 trillion globally.
 online sales continued to gain market share globally, with affluent consumers increasingly
influenced and enabled by digital channels.
 Newness and nowness: responsive personalization :Throughout 2020, affluent consumers will
increasingly expect adaptive services and experiences to fit their changing needs. Luxury brands
will work on delivering real-time, personalised experiences and seamless convenience with the
support of technologies such as facial recognition, sensors and smart objects
 The devil is in the data :  luxury brands will leverage behavioural data to offer more personalised
content. To create a complete customer view, luxury brands will draw connected data from across all
customers’ touchpoints – physical and digital channels.
 Unboxing is the new storefront : In 2020, packaging will increasingly play an important role to
deliver premium experiences to luxury ecommerce.
Case Study-
What was Luxury Goods before?
Today is a Neccesity today.
 How much the customer is willing to pay, 5Lakh air ticket while he can get the same for 80K.
 In 2000 mobile phones and cars were luxury only few could afford,but now it's become a
necessary for your daily …but in today world luxury means having something that can be
bought be rich only….
 In 2008 people are more interested in creating a image than fullfill their need. I have a friend
who uses iPhone but don't know how to use iTune….I know someone who can't afford to have
3meals in his last days of the month but still buys Armani's and Gucci …just to show off.
 Bcz in today's social media world everyone need attention…. everyone wants to keep their
status and what's better ways than buying stuff which only few can afford?
 Luxury is not an option anymore…it became a need for their status and style.
 Luxury is possible ONLY after basic necessities are satisfied. Since many people's basic
necessities are met, they begin to focus on getting luxuries. Expressing ourselves and proving
ourselves better are in the most basic nature of humans. So consequently, having luxury in
itself becomes a need. And needs are given most importance to. So therefore, luxuries are
getting even more important.
 http://www.businessdictionary.com/definition/luxury-goods.html
 https://en.wikipedia.org/wiki/Luxury_goods
 http://www.economicsdiscussion.net/human-wants/luxury-goods-arguments-in-favour-and-
against/13570
 https://www.statista.com/outlook/21000000/119/luxury-goods/india#market-revenue
 https://mediaboom.com/news/target-audience-for-luxury-brands/