Luxury as is the case with most abstract notions has a somewhat floating and mercurial character. It has undergone considerable changes during the last centuries (Kapferer 2008; Lasslop 2005; Valtin 2008) and there are good reasons for supposing that the concept will be subject to changes in the future as well.
Luxury finds its expression in tangible products or services and there is a huge industry which caters to the needs of those who can afford the ultimate in price and quality. We will try and analyse the ways and means with which luxury goods succeed in finding or defending their position in this highly competitive market (Strauss 2011: online).
In order to better understand the concept of luxury in our time it is useful to highlight some historical and economic factors which have contributed to the shaping of our present-day perception without attempting an in-depth historical or sociological analysis.
Table of Contents
1 INTRODUCTION
1.1 An Approach to the Concept of Luxury
1.1.1 Historical Development of Luxury
1.1.2 The Relativity of Luxury
1.1.3 Target and Outline of Work
2 LUXURY PRODUCTS AND BRANDS
2.1 Delimitation of Luxury Brands
2.2 Luxury Brands and the Economic Context
2.3 The Luxury Brand Customer
3 PERSONAL AND SOCIAL FUNCTIONS OF LUXURY
3.1 Personal Functions
3.2 Social Functions
4 SPECIFICITIES OF THE LUXURY INDUSTRY
4.1 Market Characteristics
4.1.1 Company Size and Competition in the Market
4.1.2 Financial Characteristics
4.1.3 The Worldwide Luxury Market
4.2 Counterfeiting
4.2.1 Economical and Reputational Damage
4.2.2 Customer Behaviour
4.2.3 Countermeasures
5 CHARACTERISTICS OF LUXURY BRAND MANAGEMENT
5.1 Product
5.1.1 Handcraft and Quality
5.1.2 Innovation and Design
5.2 Price
5.2.1 The Challenge of Fixing the Price
5.2.2 Price Elasticity
5.3 Place (Distribution)
5.3.1 Characteristics of Distribution Channels
5.3.1.1 Flagship Stores
5.3.1.2 Franchise Shops, Specialist Dealers and Department Stores
5.3.1.3 Duty Free Shops and Outlets
5.3.1.4 Internet
5.3.2 Management of Distribution Channels - Artificial Shortage
5.3.3 Point of Sale and Customer Touchpoints
5.4 Promotion
5.4.1 Communication Strategy
5.4.1.1 Heritage and Country of Origin Effect
5.4.1.2 Social Responsibility and Sustainability
5.4.2 Communication Channels
5.4.2.1 Classical Media
5.4.2.2 (Sponsoring of) Events
5.4.2.3 Celebrity Endorsement
5.4.2.4 Company Website and Social Media
5.4.2.5 Product Placement
5.5 The Interaction of the Four Ps: Managing a Luxury Brand
6 CONCLUSION: THE FUTURE OF LUXURY
Objectives and Topics
The primary objective of this thesis is to analyze how luxury brands distinguish themselves from standard market offerings, maintain their market position despite economic challenges, and successfully implement luxury brand management strategies. It explores the unique interplay between product quality, selective distribution, pricing models, and emotional communication.
- Historical and socio-economic context of the luxury concept
- Personal and social motivations driving luxury consumption
- Specificities of the luxury industry including market competition and the impact of counterfeiting
- Strategic management of the luxury marketing mix (Product, Price, Place, Promotion)
- Future perspectives and the evolution towards intangible and digital luxury experiences
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1.1.1 Historical Development of Luxury
Throughout the course of history the conceptualization of luxury has varied according to social developments and economic and political circumstances of a given time (Lasslop 2005: 472). The basic guideline however, of what has mostly been considered luxury, is that it is beyond everyday necessities, in some ways unnecessary, often exaggerated and superfluous (Sombart 1992: 85). Thus, the demonstration of luxury is often seen as a pronounced and deliberate contrast to existing social norms and patterns of behaviour and it is not amazing that it has often been subject to severe moral and ethical criticism:
“No other moral or social issue is as unclarified as that of luxury, and what behaviour toward it can be considered to be well befit” (Kambli 1890 preface, cit. in Valtin 2008: 248).
Etymologically, the term luxury derives from the Latin luxus and luxuria both referring to the deviation from the normal measure (Valtin 2008: 248).1 Classical Christian theology narrowed luxuria, lechery or lust mainly to the sexual context giving the notion a severely negative meaning - even considering it one of the seven deadly sins (Newhauser 2007: 239) (cf. Figure 1).
Summary of Chapters
1 INTRODUCTION: This chapter introduces the mercurial nature of luxury, its historical shift from moral criticism to a positive status symbol, and outlines the thesis's focus on analyzing successful luxury brand management.
2 LUXURY PRODUCTS AND BRANDS: This chapter explores the pyramid model of branding, the relativity of luxury based on economic contexts, and the unpredictable, hybrid behavior of modern luxury consumers.
3 PERSONAL AND SOCIAL FUNCTIONS OF LUXURY: This chapter details how luxury goods serve both internal needs like self-fulfillment and external status-driven needs like conspicuous consumption.
4 SPECIFICITIES OF THE LUXURY INDUSTRY: This chapter examines the market structure, high break-even points, and the significant impact of counterfeiting on brand reputation and consumer behavior.
5 CHARACTERISTICS OF LUXURY BRAND MANAGEMENT: This chapter analyzes the four Ps (Product, Price, Place, Promotion) in the luxury sector, emphasizing artificial scarcity, selective distribution, and emotional marketing.
6 CONCLUSION: THE FUTURE OF LUXURY: This chapter provides an outlook on the future of the industry, questioning whether the trend is shifting from material possession toward intangible, individual experiences.
Keywords
Luxury management, Brand personality, Conspicuous consumption, Counterfeiting, Marketing mix, Exclusivity, Artificial scarcity, Luxury customer, Brand identity, Emotionalization, Flagship stores, Selective distribution, Luxury industry, Consumer behavior, Sustainability
Frequently Asked Questions
What is the fundamental focus of this thesis?
The work explores the specificities of the luxury industry and the management strategies required to maintain a successful luxury brand in a highly competitive market.
What are the central themes discussed?
Key themes include the historical and subjective definition of luxury, the functions of brands, the influence of economic conditions, the challenges of counterfeiting, and the nuances of the marketing mix.
What is the primary research goal?
The thesis aims to analyze how luxury brands distance themselves from ordinary brands and to draw conclusions regarding successful requirements for luxury brand management.
Which scientific methodology is applied?
The work utilizes a theoretical and analytical approach, synthesizing existing literature, models, and industry reports to evaluate luxury brand performance and consumer behavior.
What topics are covered in the main section?
The main section investigates the Four Ps (Product, Price, Place, Promotion) and explores how luxury companies manage brand identity through heritage, storytelling, and selective distribution.
Which keywords define this work?
Core keywords include Luxury management, Brand identity, Exclusivity, Artificial scarcity, Counterfeiting, and Emotional marketing.
How does the "Democratization of Luxury" impact brand management?
It creates a challenge for brands to balance accessibility and high demand with the need to maintain an aura of exclusivity and "dream value," which is essential for luxury status.
Why is counterfeiting considered a "proof of success"?
As noted by Kapferer, counterfeiting can be viewed as an indicator of a brand's health and desirability, demonstrating that the brand has achieved a level of iconic status worth imitating.
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- Lucie Scholz (Autor:in), 2011, Brand management and marketing of luxury goods, München, GRIN Verlag, https://www.hausarbeiten.de/document/187819
