1. Welcome to Luxury Marketing
Dr. Satyendra Singh
University of Winnipeg

2. History of Luxury
King and Queens always appreciated beauty/luxury 1010 BC – 100 BC  King David/Solomon, Queen of Sheba 1150 BC – 700 BC  Egypt, Greece 800 BC – 500 AD  Etruscan Empire and Roman Fashion 450 AD – 1500 AD  Byzantine Empire 15th – 16th Century  Italian fashion 1600 – 1750  Baroque fashion 1715  France 1828  Modern luxury fashion 21st Century  Democratization of Luxury

3. Charles Frederick Worth -- 1838

4. Luxury is passion Product Line/Length Product Breadth Product Depth
Bag, Shoes, Belts…
Product Breadth
Hand bag
Evening bag
Weekend bag …
Product Depth
Variety of hand bags in this category…

5. Luxury: Design vs. Modernity
???
You decide
Lamborghini
Ferrari
Aston-Martin
Modern
Traditional
Morgan
Bentley
Rolls Yoyce
BMW
Mercedes
Lexus
Comfort

7. Luxury is Dream
Creates social gap  Exclusivity Sensory experience  Feel, touch, smell Vibrates your emotions  feelings Object of worship  needs respect Luxury is beauty You may suffer in the name of it, or for it

8. Dream Categories Semester at sea
Fashion (Apparel, bags, shoes, belt…) Perfumes and cosmetics Watches and jewellery Eyeware Other Restaurant Hotels Car Home…
Semester at sea

9. Luxury Depends on Wealth Status Wealthy >$.5m / year
Affluent > $.2m / year
Status
Income
Education
Occupation
Where you live …

10. Luxury: Wealth vs. Status
HI Wealth
Discreet
Authentic
French
Small logo
Russians
Emerging
markets
HI Status
LO Status
Niche
Creators
British
Heritage
Need to prove
Counterfeit
Poor countries
Big logo
LO Wealth

11. High Net Worth Individuals (HNWI)
People with $1m assets excluding home, car…
11m HNWI in 2011
3m in USA
3m in Europe
3m in Asia-Pacific
.5m in Latin America
.4m Middle East
.1 Africa

12. Luxury Industry 2000  # of billionaire worldwide
↑ 7% more billionaires every year
$150b / year (People spend on luxury)
↑ 20% sales growth / year
luxury brands

13. Major Luxury Groups
Louis Vuitton Moet Hennessey (LVMH)  30 Louis Vuitton, Givenchy, Marc Jacobs, Fendi, Donna Karen… Richemond (Switzerland)  15 Cartier, Chloé, Montblanc, Lancel… Gucci (Italy)  10 Gucci, YSL, Sergio Rossi… Prada (Italy)  5 Prada, Miu Miu, Azzedine Alaia…

14. Levels of Luxury Luxury or prestige  Lifestyle setter
Bulgari, Hermés, Hugo Boss,…
Premium  Aspire to become Luxury
HI  Calvin Klein, Tommy Hilfiger,…
MI  LaCoste, Furla,…
LO  Zara, GAP, …
Fashion  Changes quickly
Several

15. Characteristics of Luxury
History Heritage Culture Message Innovation High Price High quality material Differentiation Value creation

16. Luxury Differentiation
Porshe  Craftsmanship, proof or expertise, engineering, aesthetic Ferrari  Red color, unique sound, make 8000 only per year, F1, 100 yr of exp Ducati   Red motorcycles Hermes  Kelly and Birkin bags Harley Davidson  distinct sound Lamborghini  Monster of technology Rolls-Royce  like living room, wood

17. Value Creation
Elegance  not only perfume, but also bottle Handmade  gold, diamond, watches, bags,… Rarity  animal skin, silk, make clients wait Made in Europe Precision in craftsmanship ….

18. Gucci Jackie

19. Gucci la pele Guccissima Shows mrf process

20. Hermés Cap Cod -- Craftmanship

21. Chloé Material

22. Creativity and Innovation

23. British History – typical lines

24. Ferrari: red, speed, precision, power 0nly 8000 per year

25. 18 hours of single craftsmanship

26. Rolls Royce – 2600 hrs, wood, living room x10 Ford’s price

27. Bathroom in Flight

28. Bar in Flight

29. Bicycle – Lightest