“ Fashion marketing of luxury brands in

International market ”

Presented on: -08/October/2010

Venue: -Nehru Institute of management Studies

By
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:

Conclusion:

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.
References:

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