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LUXURY
Defining Luxury
The basic Gucci or LV ladies handbag is a canvas bag selling for $1000.
LUXURY
Defining Luxury
The emotionalism of luxury
Purchase of luxury items gives the buyer an immense amount of joy which surpasses the economic value of the product. it is bought to satiate an altruistic need and the joy of possessing a piece of extreme luxury is an end in itself.
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Defining Luxury
Characteristics
Luxury brands live in peoples hearts & minds Luxury brands have range Can be teamed with many products Luxury brands have permanence Dont go out of style/are classic
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Defining Luxury
Wealth & other forms of luxury
Luxury is most often associated with wealth & exclusivity. Other forms: Time, Experience, etc A recent US study (2000 affluent consumers by the CBC Research Centre remarkable similarity in perspective around the world largest chunk (44%): luxury is having enough time to do whatever you want and being able to afford it. Next chunk: life experiences and comfort, beauty and quality. Material products become just a tool or a toy for that greater life experience. Exotic luxury packages: A flight into outer space on the Virgin Atlantic? Cont :-
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Luxury Defined
Values of Luxury Rarity/exclusivity Highest quality Know how History, roots, dreams Rewards: pleasure, status Emotion, experience Custom made
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Luxury Defined
Luxury defined today
The maker of dreams. The luxury industry sells a share of a dream to the customer. Madame Laggard, French Trade Minister
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The Ethics of Luxury
Downside Opulent & decadent Materialist & consumerist Social segmentation & vanity Exploitative - $1000 LV bag in canvas Not essential Conspicuous consumption Upnside Need not be vulgar but sophisticated Aesthetic expression Social positioning more democratic than caste system Can be genuine pursuit of excellence Selling dreams/mystical experience
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Luxury Products & Services
Cars:
Jaguar, Mercedes Benz, Lamborghini, Rolls Royce, Bentley, Ferrari, Bugatti
Couture: Versace
Indian couture designers: Rohit Bal, Tarun Tahiliani May not include prt designs
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Luxury Products & Services
Accessories
Footwear: Jimmy Choo Handbags: Louis Vuitton, Aigner, Leiber, Hermes, Prada Small leather goods: Dunhill Watches: Piaget, Tag Heur Eyewear: Armani, D&G, Chanel
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Luxury Products & Services
Perfumes: Channel Jewellery & Gems: Cartier, Tiffany Writing instruments: Mont Blanc Luggage: Louis Vuitton Liquor: Henessy (vodka), Blue Label, rare wines Art Not Luxury: Mango
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International Powerhouses in Luxury
PPR (formerly Pinault-Printemps-Redoute), 1963
French luxury conglomerate Chairman: Francois-Henri Pinault Gucci, Yves Saint Laurent, Sergio Rossi, Bottega Alexander McQueen, Stella McCartney, Belanciaga Turnover: 18 billion euros
Veneta
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The Marketing of Luxury
Entry level items Under $250 Cuff links, scarves, fragrances, ties Bought by aspirational buyers. Investment Pieces Above $250 watches, apparel, figurines Bulgari Aviator sunglasses $330 Burberry Classic Trench Coat $1,184 Omega constellation Double Eagle $3,450 Hermes crocodile Kelly bag $30,000 Bought by regular luxury buyers.
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Luxury sales & growth
World turnover in 2007: $233 bil Powerhouses of luxury consumption USA largest, accounts for one third Japan China Europe
Growth in luxury markets North America Europe Asia Pacific 2% 12% 18%
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Luxury in Asia
Cult of the Luxury Brand
Inside Asias Love Affair with luxury Radha Chadha & Paul Husband
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Luxury model for Asia
Stage 1: Subjugation, desire based Stage 2: Start of money, India Stage 3: Show off, new rich, China Stage 4: Fit in, Conformity, Joneses, Taiwan/Korea Stage 5: Way of life, Japan, Hong Kong
India has gone from old money to new money India could be in top 5 consumers by 2025
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The story in India
Luxury is not new to India but the modern form is yet to evolve Branding Lasting customers relations Signature look Virgin market
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The story in India
Ermenegildo Zegna
First store opened at Crossrads in 1999. Closed in 2005 A 3000sqft store opened at Taj, Mumbai in 2007 Third store to come up at Emporio Have taken a 51% ownership in Indian operations
Jimmy Choo
Name now synonymous with luxury shoes for women Jimmy discovered, bought & guided by Tamara Mellon Accessories editor at Vogue Ten years later company valued at 185 million Halle Berry, Hilary Swank and Helen Mirren on Oscar night 60 stores across the world Launched India store through Murjani Group in Sep08 Located at Nariman Point, Mumbai Worn by Aishwarya Rai, Preity Zinta Internationally launching sunglasses, fragrances & handbags
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Louis Vuitton LVs association goes back to the Maharajas for luggage First store opened in 2003 at Oberoi Hotel, New Delhi Second store opened in Mumbai in 2004 Now opened at Emporio Staying away from apparel for India Have taken 51% stake
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Nielsen Survey on Luxury
Online poll in 48 countries covering 25,000 consumers International Gucci most coveted (one in five) Chanel & Calvin Klein tied for second place Followed by Louis Vuitton, Giorgio Armani, Christian Dior, Versace India 57% see labels as status symbols Most coveted; Gucci (41%) Calvin Klein (31%) Dior (26%) Versace (25%) Armani (22%)
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Promoters of Luxury in India
TSG International Marketing Pvt Ltd
The Sachdev Group Priya Chatwal & Charu Sachdev Brands: Lanvin, Alberta Ferretti, Jean-Paul Gaultier, Moschino, Stella McCartney
Genesis Colors
Sanjay Kapoor of Satya Paul fame Brands: Aigner, Canali, Kenzo, Paul Smith, Just Cavalli
Murjani Group
Gucci, Jimmy Choo, Calvin Klein, Bottega Veneta
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The Indian Luxury Market & Industry
Over one million luxury consumers Potential new customers: eight million With high disposable income Target audience: 22-55 years Currently worth: US$444mil/Rs2,400cr
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Retailing of luxury
The luxury mile
US: Fifth Avenue (NYC), Rodeo Drive (Los Angeles) Germany: Konigsallee (Dusseldorf) London: Bond Street
India
The Galleria (Mumbai) Gucci, Bottega Veneta, Jimmy Choo Emporio, Delhi UB City, Bangalore Taj Mahal shopping arcade, Mumbai Louis Vuitton, Zegna, Fendi Oberoi Hotel, Delhi Louis Vuitton Palladium (Mumbai) at Phoenix Mills
Set to open:
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Emporio
The first Indian luxury destination:
Officially inaugurated: Sunday, 30th Aug Developer: DLF 130 luxury brands Apparel: Dolce & Gabana, Canali, Louis Vuitton, Chistian Dior Jewellery: Cartier, Harry Winston, Leather Goods: Tods Men: Paul Smith, Armani Watches: Piaget, Chopard, Jaegar Indian designers: Rohit Bal, Tarun Tahiliani, JJ Valaya
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Issues facing luxury in India
Lack of appropriate space Adjacencies important nightmare McDonalds Started with use of hotel space Makeshift space in malls/markets Emporio perhaps the first luxury mall in India Expensive real estate Lack of trained manpower Specialized programs in Institutes Lack of Indian products & brands FDI restrictions
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Scope for Indian brands
Can you think of an Indian luxury brand?
Indias strengths: excellence in craftsmanship, heritage, business potential Some suggested areas: hotels & hospitality, spas, jewellery, meditation (Mahesh Yogi), art, Indian fashion
Acquiring Western brands: Tata acquires Jaguar from Ford in the UK Oberoi hotels: Rajvilas, Udaivislas, Amarvilas
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Luxury Education
Essec Business School, France Most prestigious international course in luxury One year MBA program since 1995 Student size: 30 IIM, Ahmedabad Tied up with Essec for new luxury program Student size: 9 International University of Monaco 10month MSC program in management of luxury goods & services cost: 12,000 euros Stern School of Business, New York Since 2006
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Luxury Education
Columbia University, New York Course in design & marketing of luxury goods HEC Paris & Tsinghua Univ., Beijing Six month module Pearl Academy, Delhi Luxury module as part of Fashion Marketing
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