||Is Luxury Still Luxurious?
||Institute of International Business
Because the market of luxury goods has been growing and changing at unprecedented pace since 1990s, there are new definitions of luxury and many researches in conspicuous consumption. The purpose of this study is to combine those new definitions of luxury in recent studies with practical phenomenon. The study classifies luxury brands into different groups by product price and store number, including classic luxury, low-price luxury and democratized luxury. The data of every brand’s revenue from 2008 to 2013 is used to compare every group’s performance. Finally, this study explains luxury development nowadays and provides some suggestion to different groups.
Luxury market has been growing up quickly these years, especially in China. In 2013, 47% of total luxury goods revenue in the world was from China because the purchasing power of Chinese luxury consumers were raising, including those from high level and mass markets. It leads democratization of luxury and diversity of luxury brands. At the same time, some popular brands with loud product have decreases in revenues, while other brands with quiet product have increases in revenues stably. According to previous researches, expensiveness and scarcity play important roles in luxury goods, so the study classifies 30 luxury brands by the two factors to find the reasons that different performances of different brands in this prosperous market.
Through hierarchical cluster analysis, those 30 brands are classified into three groups, classic luxury, low-price luxury and mass luxury. Next step is to collect those brands’ revenues from 2008 to 2013. The finding is that classical and low-price luxury brands have better growth rates than mass luxury brands in this period. Finally, according to Keller(2009), marketers of luxury brands face some challenging tradeoffs in their marketing. Three of the notable tradeoffs are as follows: (1) Exclusivity vs. Accessibility. (2) Classic vs. contemporary images. (3) Acquisition vs. Retention. We collect information of those brands’ marketing strategies to understand different groups’ managers’ decisions on facing the tradeoffs and make some suggestions.
MATERIALS AND METHODS
At first, we have 50 luxury brands from a list, top 50 most searched for luxury handbags brands, made by Digital Luxury Group. Because we need those brands store numbers and product price to represent the factors, scarcity and expensiveness, after deleting 20 brands which have no information about their store numbers or product prices, we have 30 brands in the end. Since the phenomenon is in China, we collect those brands’ store numbers in China on official websites, their most searched products on Taobao and official prices in China of those products on brands’ official websites. Then we use hierarchical method and Ward’s method to classify those brands, and we predict there will be four groups, classical luxury, low-price luxury, mass luxury and non-classical luxury. Classical luxury brand has fewer store numbers and sells higher-price products. It has long history and exclusive, expensive and scarce images. Low-price luxury brand has fewer store numbers and sells lower-price products. It has short history and provides high perceived prestige but reasonable price products. Mass luxury brand has more store numbers and sells higher-price products. It is traditional luxury brand and goes to the mass market now. Non-classical luxury brand has more store numbers and sells lower-price products. It provides products with low price and good quality.
RESULTS AND DISCUSSION
In our results, there are three groups, classic luxury, low-price luxury and mass luxury. In fact, Coach is the only brand in the non-classical cluster and it explains that there are few brands that adopt these kinds of price and store strategies, so we do not discuss about this cluster.
Then, we collect their revenues from 2008 to 2013, and we find that classical and low-price luxury brands have better growth rates than mass luxury brands in this period. After analyzing their marketing strategies, we have three propositions as follows:
Proposition1: For classical luxury, the products they sell are expensive, limited supply, handmade and logo-free. They adopt slow growth strategy; have great brand stories; target high-end market and allocate resources toward existing customers.
Proposition2: For low-price luxury, they adopt affordable luxury position and target mass market; use digital marketing and social media to build relationship with customers; make brand images young and contemporary; focus on product innovation, expansion and localization
Proposition3: For mass luxury, they pursue a wide product range, including high and low price products; emphasize visible logo; target both high-end and mass market; take proactive approach to expansion, especially in emerging markets; have much brand history; use digital marketing and social media to access young customers.
Our theory contributions are that we redefine “luxury” by classifying luxury brands into three groups and we find that scarcity is more important to a luxury brand than price setting. In terms of managerial implication, we suggest that when managers face the tradeoffs, they should make decisions based on what group the brand belongs to. Brand position is also very important to their images and consumers and it should be clear.
第一章 導論 1
第一節 現象 1
第二節 文獻小結及缺口 3
第三節 研究目的 4
第四節 研究貢獻 5
第五節 研究方法 5
第二章 文獻回顧 6
第一節 奢侈 6
第二節 奢侈品的稀少和昂貴特性 7
第三節 新奢侈 8
第四節 奢侈品現況與奢侈品消費者 10
第三章 研究架構與方法 13
第一節 研究設計 13
第二節 資料收集 13
第三節 研究架構 20
第四章 資料分析與結果 23
第一節 集群分析 23
第二節 銷售額資料與分析 32
第三節 各集群策略分析 36
第四節 各集群策略推論 43
第五章 結論與建議 45
第一節 結論 45
第二節 理論貢獻與實務意涵 45
第三節 研究限制與建議 46
附錄一 各品牌銷售額資料來源 56
附錄二 匯率換算 61
Danziger, P. (2005). Let them eat cake: Marketing luxury to the masses-as well as the classes: Kaplan Publishing.
Fiske, N., Silverstein, M., & Butman, J. (2003). Trading up: The new American luxury: Portfolio.
Kapferer, J. N. (2006). The two business cultures of luxury brands: New York: Routledge.
Thomas, D. (2007). Deluxe: How luxury lost its luster: Penguin.
Twitchell, J. B. (2003). Living it up: America's love affair with luxury. New York: Simon and Schuster.
彭傳新. (2010). 奢侈品品牌文化研究. 中國軟科學, 2, 69-77.
盧曉. (2012). 國際奢侈品牌中國高端消費市場進入模式分析. 財貿經濟(8), 105-112.
Amaldoss, W., & Jain, S. (2005). Conspicuous Consumption and Sophisticated Thinking. Management Science, 51(10), 1449-1466. doi: 10.1287/mnsc.1050.0399
Catry, B. (2003). The great pretenders: the magic of luxury goods. Business Strategy Review, 14(3), 10-17.
Dubois, B., & Paternault, C. (1995). Observations: Understanding the world of international luxury brands: The" dream formula.". Journal of Advertising research, 35(4), 69-76.
Grossman, G. M., & Shapiro, C. (1988). Foreign counterfeiting of status goods. Journal of Economics, 103(1), 79-100.
Han, Y. J., Nunes, J. C., & Drèze, X. (2010). Signaling Status with Luxury Goods The Role of Brand Prominence. Journal of Marketing, 74(4), 15-30.
Hennigs, N., Wiedmann, K.-P., Klarmann, C., Strehlau, S., Godey, B., Pederzoli, D., . . . Oh, H. (2012). What is the Value of Luxury? A Cross-Cultural Consumer Perspective. Psychology & Marketing, 29(12), 1018-1034. doi: 10.1002/mar.20583
Hökby, Stina, and Tore Söderqvist. "Elasticities of demand and willingness to pay for environmental services in Sweden." Environmental and resource economics 26.3 (2003): 361-383.
Kapferer, J. N. (2012). Abundant rarity: The key to luxury growth. Business Horizons, 55(5), 453-462. doi: 10.1016/j.bushor.2012.04.002
Kastanakis, M. N., & Balabanis, G. (2012). Between the mass and the class: Antecedents of the “bandwagon” luxury consumption behavior. Journal of Business Research, 65(10), 1399-1407.
Keller, K. L. (2009). Managing the growth tradeoff: Challenges and opportunities in luxury branding. Journal of Brand Management, 16(5-6), 290-301. doi: 10.1057/bm.2008.47
Mason, R. (1984). Conspicuous Consumption: A Literature Review. European Journal of Marketing, 18(3), 26 - 39.
Nunes, P. F., Johnson, B. A., & Breene, R. T. (2003). Selling to the moneyed masses. Harvard Business Review, 82, 94-104, 188.
Okonkwo, & Uché. (2009). The luxury brand strategy challenge. Journal of Brand Management, 16(5-6), 287-289. doi: 10.1057/bm.2008.53
Silverstein, M. J., & Fiske, N. (2003). Luxury for the masses. Harvard Business Review, 48-59.
Truong, Y., McColl, R., & Kitchen, P. J. (2009). New luxury brand positioning and the emergence of Masstige brands. Journal of Brand Management, 16(5-6), 375-382. doi: 10.1057/bm.2009.1
Truong, Y., Simmons, G., McColl, R., & Kitchen, P. J. (2008). Status and Conspicuousness – Are They Related? Strategic Marketing Implications for Luxury Brands. Journal of Strategic Marketing, 16(3), 189-203. doi: 10.1080/09652540802117124
Tynan, C., McKechnie, S., & Chhuon, C. (2010). Co-creating value for luxury brands. Journal of Business Research, 63(11), 1156-1163.
Veblen, T. (1899). The theory of the leisure class: An economic theory of institutions. New york: Macmillen.
Worcliel, S., Lee, J., & Adewole, A. (1975). Effects of supply and demand on ratings of object value Journal of Personality and Social Psychology, 32(5), 906-914.
Zhana, L., & He, Y. (2012). Understanding luxury consumption in China: consumer perceptions of best-known brands. Journal of Business Research, 65(10), 1452-1460.
人民網. (2005). 熱點財經：奢侈品時代真的來臨?國人到底有多闊. Retrieved September 15, 2005, from http://finance.people.com.cn/BIG5/1045/3696524.html
人民網. (2013). LVMH古馳業績增速下滑 奢侈品牌“以退為進”. Retrieved April 15, 2013, from http://finance.people.com.cn/BIG5/n/2013/0415/c1004-21132476.html
人民網. (2014a). 中國奢侈品消費“轉型” 無Logo品牌大受歡迎. Retrieved January 26, 2014, from http://lady.people.com.cn/BIG5/n/2014/0126/c1014-24233721.html
人民網. (2014b). 奢侈品消費在華遇"極寒" 春節期間同比下降57.8%. Retrieved February 10, 2014, from http://politics.people.com.cn/BIG5/n/2014/0210/c70731-24316663.html
今日新聞. (2011). 精品永不褪色 香港股市IPO又來了. Retrieved April, 2011, from http://mag.nownews.com/article.php?mag=1-26-5047
今日新聞. (2013). 驚！2013年全球近半奢侈品 大陸人買走. Retrieved November 15, 2013, from http://www.nownews.com/n/2013/11/15/1020638
淘寶網. from http://list.taobao.com/itemlist/market/nvbao2011a.htm?cat=50072734&sort=coefp&sd=1&viewIndex=1&as=0&atype=b&style=grid&ppath=14067173%3A109101&same_info=1&isnew=2&tid=0&_input_charset=utf-8
華夏經緯網. (2013). 中國人買走全球近半奢侈品 土豪消費文化漸轉變. Retrieved November 22, 2013, from http://big5.huaxia.com/xw/zhxw/2013/11/3628422.html
Adams, S. (2014). Inside Hermès: Luxury's Secret Empire. Forbes. Retrieved August 20, 2014, from http://www.forbes.com/sites/susanadams/2014/08/20/inside-hermes-luxury-secret-empire/
BBC NEWS. (2008). In quotes: Yves Saint Laurent tributes. Retrieved June 2, 2008, from http://news.bbc.co.uk/2/hi/europe/7430825.stm
Conforti, G. (2010). Bottega Veneta Adds Value for the Higher-End Consumer. Fashionscollective. Retrieved August 24, 2010, from http://fashionscollective.com/FashionAndLuxury/08/added-value-for-the-higher-end-consumer/
Cook, K. (2013). Demand For Affordable Luxury Sends KORS Stock Soaring. Forbes. Retrieved February 8, 2013, from http://www.forbes.com/sites/zacks/2013/02/08/demand-for-affordable-luxury-sends-kors-stock-soaring/
Digital Luxury Group. (2012). World Luxury Index Handbags. from http://www.digitalluxurygroup.com/intelligence/research/
Fashion United. (2013). Prada growth spurred by Asia and US. Retrieved August 9, 2013, from http://www.fashionunited.co.uk/fashion-news/fashion/prada-growth-spurred-by-asia-and-us-2013080918240
Fibre2Fashion. (2012). Furla Fashion Marketing Philosophy. Retrieved 2012, from http://fashiongear.fibre2fashion.com/brand-story/furla/marketing-philosophy.asp
Go To Meeting. (2014). Stories of Strategic Business Leadership from the World's Top CEOs. Retrieved November 11, 2014, from http://www.gotomeeting.com/online/meeting/hd-video-conferencing-resources/documents-reports/stories-of-strategic-business-leadership-from-the-world-s-top-ce - .VMfeMUtKlDm
Harjani, A. (2012). Prada to Benefit as Chinese Buyers Turn 'Sophisticated'. CNBC. Retrieved May 23, 2012, from http://www.cnbc.com/id/47515441.
Hart, R. (2010). Dior announces future strategies while revenue up 16%. Fashionmag. Retrieved July 28, 2010, from http://us.fashionmag.com/news/Dior-announces-future-strategies-while-revenue-up-16-,115605.html - .VMfgH0tKlDl
Holson, L. M. (2013). What Does Tory Burch Want? The New York Times. Retrieved August 21, 2013, from http://www.nytimes.com/2013/08/22/fashion/what-does-tory-burch-want.html?pagewanted=all&_r=0
Hutzler, K. (2012). Gucci leads luxury industry with shoppable video strategy. Luxury Daily. Retrieved February 10, 2012, from http://www.luxurydaily.com/gucci-pushes-luxury-industry-with-shoppable-video-strategy/
Indvik, L. (2011). How Social Media Helped Kate Spade Become a Global Brand. Mashable. Retrieved November 29, 2011, from http://mashable.com/2011/11/29/kate-spade-ceo-craig-leavitt-interview/
InsiderFMM. (2009). Hermes Luxury Marketing Strategy: Don’t Give Way To Masstige. Retrieved November, 2009, from http://insidefmm.com/2009/11/hermes-marketing-never-discount-hermes-birkin-kelly-handbags/
Jing Daily. (2011a). LOUIS VUITTON’S “BIG STORE STRATEGY” SPREADS AS BRAND READIES CHONGQING FLAGSHIP. Retrieved August 18, 2011, from http://jingdaily.com/louis-vuittons-big-store-strategy-spreads-as-brand-readies-chongqing-flagship/
Jing Daily. (2011b). SECOND-TIER STRATEGY: LOUIS VUITTON LAUNCHES IN ZHENGZHOU. Retrieved February 8, 2011, from http://jingdaily.com/second-tier-strategy-louis-vuitton-launches-in-zhengzhou/
Jing Daily. (2012a). AS CHINA’S LUXURY MARKET EVOLVES, WHO’S WINNING AND WHO’S LOSING? Retrieved October 1, 2012, from http://jingdaily.com/as-chinas-luxury-market-evolves-whos-winning-and-whos-losing/
Jing Daily. (2012b). IT ALL STARTS IN SHANGHAI FOR SAINT LAURENT PARIS. Retrieved SEPTEMBER 25, 2012, from http://jingdaily.com/it-all-starts-in-shanghai-for-saint-laurent-paris/
Jing Daily. (2013a). GOING LOCAL: HOW LOUIS VUITTON PROMOTES ITS ALMA HANDBAG IN CHINA. Retrieved January 15, 2013, from http://jingdaily.com/going-local-how-louis-vuitton-promotes-its-alma-handbag-in-china/
Jing Daily. (2013b). LOUIS VUITTON CHINA STRATEGY GOES LOGO-HEAVY IN SECOND-TIER MARKETS. Retrieved June 10, 2013, from http://jingdaily.com/louis-vuitton-china-strategy-goes-logo-heavy-in-second-tier-markets/
Jing Daily. (2013c). LOUIS VUITTON’S BEIJING OPENING HEAVY ON CELEBS; LIGHT ON LOGOS. Retrieved July 29, 2013, from http://jingdaily.com/louis-vuittons-beijing-opening-heavy-on-celebs-light-on-logos/
Jing Daily. (2013d). PRADA EXPANDS INLAND AS GREATER CHINA PROFITS SLOW. 2013, from http://jingdaily.com/prada-expands-inland-as-greater-china-profits-slow/
Jing Daily. (2013e). SHANGHAI COUTURE EVENT SHOWS DIOR BANKING ON SLOWER GROWTH, “STEALTH WEALTH” CLIENTELE. Retrieved April 3, 2013, from http://jingdaily.com/with-shanghai-couture-show-dior-banks-on-slower-growth-stealth-wealth-clientele/25071/
Jing Daily. (2013f). WHAT BURBERRY IS DOING RIGHT IN CHINA. Retrieved May 22, 2013, from http://jingdaily.com/what-burberry-is-doing-right-in-china/
Jing Daily. (2013g). WHAT GUCCI’S NEW TIERED MODEL COULD MEAN FOR CHINA’S LUXURY MARKET. Retrieved February 21, 2013, from http://jingdaily.com/what-guccis-new-tiered-model-could-mean-for-chinas-luxury-market/
Jing Daily. (2014). HOW PAUL SMITH STANDS APART IN CHINA’S ULTRA-COMPETITIVE RETAIL MARKET. Retrieved April 15, 2014, from http://jingdaily.com/how-paul-smith-stands-apart-in-chinas-ultra-competitive-retail-market/
Kotter, J. (2012). Burberry's Secrets to Successful Brand Reinvention. Forbes. Retrieved February, 2012, from http://www.forbes.com/sites/johnkotter/2013/02/26/burberrys-secrets-to-successful-brand-reinvention/
Lamb, R. (2012a). Dolce & Gabbana direct-links to ecommerce via restyled YouTube page. Luxury Daily. Retrieved May 17, 2012, from http://www.luxurydaily.com/dolce-gabbana-sparks-ecommerce-through-restyled-youtube-page/
Lamb, R. (2012b). Tod’s taps social media, print marketing to launch capsule collection. Luxury Daily. Retrieved September 11, 2012, from http://www.luxurydaily.com/tod’s-chooses-social-media-print-marketing-to-launch-capsule-collection/
Lazarus, N. (2014). Kate Spade’s CMO: ‘The Customer Has a Voice and So Do We’. PRNewser. Retrieved March 6, 2014, from http://www.mediabistro.com/prnewser/kate-spades-cmo-the-customer-has-a-voice-and-so-do-we_b87097
Loeb, W. (2013). Kate Spade Is A Brand Ready To Boom Around The World. Forbes. Retrieved March 22, 2013, from http://www.forbes.com/sites/walterloeb/2013/03/22/kate-spade-a-brand-that-will-grow-globally/
Luxury Insider. (2013). MICHAEL KORS LEADS BRAND STRATEGY AND MARKETING INITIATIVES IN 2013. Retrieved December 26, 2013, from http://www.luxury-insider.com/luxury-news/2013/12/michael-kors-leads-brand-strategy-and-marketing-initiatives-in-2013
Marketing Magazine. (2014). Furla makes big marketing push. Retrieved December 19, 2014, from http://www.marketing-interactive.com/furla-makes-big-marketing-push/
McCarthy, J. (2013). Chanel is 2013 Luxury Marketer of the Year. Luxury Daily. Retrieved December 31, 2013, from http://www.luxurydaily.com/chanel-is-2013-luxury-marketer-of-the-year/
Miller, G. (2013). Tory Burch’s Not-So-Secret Secret Weapon: The Customer Experience (and Technology). Upstream Commerce. Retrieved October 18, 2013, from http://upstreamcommerce.com/blog/2013/10/18/tory-burchs-not-so-secret-secret-weapon-customer-experience-and-technology
Morgan, C., & Ng, M. (2013). Furla set for SS2014 launch in Cannes as it unveils new Changi location. The Moodie Report. Retrieved October 2, 2013, from http://www.moodiereport.com/document.php?c_id=30&doc_id=36853
Raghavendra, N. (2012). Eraldo Poletto to launch “affordable luxury” with Furla in India. Economic Times. Retrieved October 17, 2012, from http://articles.economictimes.indiatimes.com/2012-10-17/news/34525462_1_furla-italian-brand-mumbai-s-palladium
Roberts, A. (2012). Burberry Lags Luxury Peers as Buyers Won’t Pay for Plaid. Bloomberg. Retrieved September 14, 2012, from http://www.bloomberg.com/news/articles/2012-09-13/burberry-lags-luxury-peers-as-buyers-won-t-pay-for-plaid
Roberts, A. (2013a). Building Luxury Brand Loyalty via Exclusive Experiences. Bloomberg. Retrieved January 31, 2013, from http://www.businessweek.com/articles/2013-01-31/building-luxury-brand-loyalty-via-exclusive-experiences
Roberts, A. (2013b). Longchamp Outpaces Vuitton by Sticking to Value-for-Money Luxury. Bloomberg. Retrieved October 2, 2013, from http://www.bloomberg.com/news/2013-10-01/longchamp-outpaces-vuitton-by-sticking-to-value-for-money-luxury.html
Roberts, A. (2013c). LVMH to Adjust Vuitton Strategy Amid Stable Leather Sales Growth. BloombergBusiness. Retrieved January 31, 2013, from http://www.bloomberg.com/news/2013-01-31/lvmh-full-year-profit-increases-13-on-gains-in-u-s-and-asia.html
Robinson, D. (2014). Mulberry aims for ‘affordable luxury’ after failed move upmarket. Finanacial Times. Retrieved April 17, 2014, from http://www.ft.com/cms/s/0/ac989f7c-c607-11e3-ba0e-00144feabdc0.html
Sanderson, R. (2011). Bottega Veneta expands with bags of ambition. Financial Times. Retrieved April 15, 2011, from http://www.ft.com/intl/cms/s/0/37fff53c-6789-11e0-9138-00144feab49a.html?siteedition=intl - axzz3Q2nSokRH
Sanghvi, V. (2013). Rude Fashion: what makes Chanel the best fashion brand there is. Hindustan Times. Retrieved May 18, 2013, from http://www.hindustantimes.com/brunch-stories/rude-fashion-what-makes-chanel-the-best-fashion-brand-there-is/article1-1062053.aspx
Shea, E. (2013). Longchamp teases fall campaign via social media. Luxury Daily. Retrieved September 4, 2013, from http://www.luxurydaily.com/longchamp-teases-fall-campaign-via-social-media/
The Business of Fashion. (2012). Tory Burch Says Work Hard, Think Long Term and Be Patient. Retrieved September 10, 2012, from http://www.businessoffashion.com/2012/09/first-person-tory-burch-says-work-hard-think-long-term-and-be-patient.html
Verner, A. (2013). Made-in-England : How Mulberry has kept its English roots. The Globe and Mail. Retrieved August 10, 2013, from http://www.theglobeandmail.com/life/fashion-and-beauty/fashion/full-english/article13609802/