THE NATURE OF LUXURY: CONSUMER PERSPECTIVE

Presented by:Group 5Ekta AgarwalAbhinav SrivastavaKingshuk HalderLalit Singh RaoChinmaya Kumar GuptaVineet Kumar

AGENDA

IntroductionOverview of LUXURYUse of Critical Success Factors in Identifying Luxury productsAnalyze consumer profiles and personal perception of luxuryKey FindingsApplications in Indian context

INTRODUCTON

Market Size

• Present market size is USD 270 billion• Expected growth rate till 2020: 4-6%• China’s luxury consumption is 25% of the global luxury market

Luxury market

• Cars, Yachts, Wines & Spirits, Personal Jets, Clothing, leather goods, shoes, accessories, watches, jewelry, cosmetics and perfumes

• Products garner higher margin for manufacturers.

Key Attributes

• Higher Profit margin business• Single brand has more value than the company name. eg. Only 19 brands of Swatch

Group’s are considered as luxury products while it has basic range products also like flik flak.

• Product is measured upon its physical attributes, emotional attach and high quality.

Overview of LUXURY

Expert’s definitio

n of LUXURY

Comfortable Exclusivity

and Customizatio

n

Promising and

maintaining brand

experienceSuccess

Brand Aura

Desirability

Critical success factors of LUXURY• Delivering premium quality products in the line and along the supply

chain• Craftsmanship• Exclusivity• Marketing approach = Product excellence + Emotional appeal• Global brand reputation• Recognizable style and design• Association with country of origin• Elements of uniqueness• Superior technical performance• Creation of unique lifestyle for the customer

Contd..

Luxury has been separated into different categories. Different CSF with different categories are –

For a product type, 4 classes considered are – Mass/Bulk level, Premium level, Super-premium level and icon level

Prestige brands – increase in exclusivity and desirability Luxury market bifurcation – Exclusive goods and accessible lines Luxury product – Consumers less interested in product, but more in the image associated with

the product

Forms of NEW LUXURY – One form targets upper middle class, provides 3 types of products-

Other form classifies with 3 levels as below – Accessible Super Premium goodOld luxury brand extensionMerge large produce with prestigeAbsolute

luxury brands

Aspirational luxury brands

Accessible luxury brands

Key Findings Different perception of luxury:

“What Luxury is” depends upon the consumer For manufacturer, it is important to understand consumer response with the offering For consumer, awareness of personal preferences should be known

Shift towards the luxury experience A person can experience luxury even without purchasing anything, just by examining and

trying something. Eg. Window shopping at a Luxury mall Different motivation for different luxury products

Key Findings Different customer profiles reflects different attitudes towards luxury

Symbolic aspects Social aspects Technical aspects

Relationship between Personal and social aspects of luxury

The circle of luxury profiles

Application of CSFs in the Indian Context..