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consumer behavior related to luxury goods essays
china luxury market essay
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In 2005, Ernest & Young published a report on Chinese luxury market stating China has become the world’s third largest consumer of high-end fashions, accessories and other luxury goods and accounts for an estimated 12% of global sales (Young, 2005). Along with other similar reports on the booming growth of the Chinese economy and the luxury market in particular, many of the luxury brands originated from Western countries such as France, Italy and United Kingdom has already tapped into the market, those who haven’t already has plans for it are starting to do so. Although many reports have expressed the importance of the Chinese luxury consumption, large disparities exist; some say China accounts for 12% of global sales, some say 8% (Young, 2005; Movius, 2005). According to Zhu & Wang(2005), although inconsistency in data exist, most reports come to similar conclusion that China is the third largest luxury market and it is expected to grow and become the first in 2015 (Sachs, 2005) with the amount of consumers rising from 175 million to 250 million in 2015 (Young, 2005).
The future of the Chinese luxury market is undoubtedly promising, however it is important to realize that the current market is in fact smaller than imagined and the size still remains limited, with only 3% of the global sales took place domestically in China while more than half of the total sales happened abroad (Movius, 2005). Luxury brands that have placed their focus highly on emerging market due to the continued growth of the luxury industry should be aware of the fact and hence develop responsive marketing strategy instead of transferring the same traditional strategy from the western world (ChinaDaily, 2011). As the market is far from mature (Anestis et ...
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...e hand, this could preserve the brand identity and maintain similar quality of service; however, they have ignored one important need of their customers, which is customization (Okonkwo, 2007).
Although several studies have looked at how cultures affect consumer behaviour in China, none have adequately compared it with other countries Invalid source specified., moreover, most have looked at the issue from the customer’s perspective by analyzing the motivation behind enormous consumption (Wong & Ahuvia, 1998)Invalid source specified. (Gao, Norton, Zhang, & To, 2009). Only few have evaluated established marketing strategies with cultural analysis, those who have done so only focused on segmentation and positioningInvalid source specified.. In this essay, luxury brands’ perspective will be used to analyze how culture influence on existing marketing mix employed.
Today we can see an increasing demand of luxury goods sold worldwide. A great deal of that is from emerging market such as china. It is a race amongst competitors to gain market share in those regions before others do. The challenge arises when it comes to properly marketing, distributing and selling in these new markets. To accomplish these feats Coach will have to turn to its resources and capabilities (see Appendix
China hasn’t operated with an aristocratic social group since the Han Dynasty (Global Security). The equality that was encouraged during the communist regime blocked the development of an elitist culture within China. However, communism is being glossed over in favor of capitalism, Chinese aristocrats, powered by the recent boom of the economy, are on the rise. China lacks a long established aristocratic culture due to it’s communist past, and as a result, its nouveau riche look elsewhere for examples of elitist culture. Compared to China’s nouveau riche, who are not from traditionally wealthy families, long established European elitist cultures, or the “old money”, are prestigious. These upper classes, such as the Victorian high class of the 1800s are seen as prestigious because of their strict social conduct and total control of society and politics (Bayley). The acceptance of China’s nouveau riche among these long established elite “old rich” cultures requires emulation of the cultural and social norms. “The realities of the Victorian age are seen to be with significant historical resonance to China’s modernization process” (Li). The Victorian era holds the perfect stanford of taste for Chinese aristocrats. For Chinese nouveau riche women, emulation of 19th century Victorian Era elitist culture is the ultimate show of status, through patterns of consumerism, appreciation of Western art, and focus on classic etiquette.
Choose several countries to enter that is suitable for the luxury market and in order to develop the strategy of the company
By learning from its defeat in Germany, Walmart has been able to make progress in its strategy to expand into the Chinese market, which also has a substantially foreign political and cultural environment. Along with its financial capability, advanced supply chain management capability, and information technology capability, Walmart adapted its business strategy to align itself with the local taste. For example, Walmart sources about 95% products locally and hires Chinese citizens to manage its stores. Due to the heavy pollution and poor safety management, Chinese customers are concerned about the quality of products made in China. Walmart developed private label brands priced 10%-40% cheaper than national brands which positively impacts Chinese customers by providing them with high quality products and low prices. (2015, Wal-Mart And China: A Story Of Missing Customer Trust) Currently, Walmart is the third largest retail chain in China, and plans to open 115 brick-and-mortar stores between 2015 and 2017. (2016, Wal-Mart talks Up China Commitment) Walmart also plans to push up its e-commerce business to leverage its huge global product network. But even then, to ensure its future growth in China, Walmart needs to continually monitor its multicultural
For the past several decades, globalization has been a hot topic and it also anticipates every aspect of the world to connect each other. Likewise, globalization also allows consumers to have more access to catch up with updated fashion. The advantages of globalization bring a new philosophy called fast fashion, which holds quick response time and enhanced design in fashion apparel industry. In this paper, I will deliver By exploring all the aspects of each system, I will conclude the reason why fast fashion becomes the mainstream of the fashion apparel industry, and use one particular brand, Zara, as an example to discover the impact on consumer behavior in detail. Finally I will make some comments on the future of fast fashion and what luxury brands will react to this circumstance……..
“Despite worldwide softness in the sale of luxury goods, LVMH has cemented its position as the world’s largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide” (Hazlett C. 2004). That is why in its mission they state to represent the most refined qualities of Western “ art de vivre” all around the world. Their objective is to be the leader in the luxury market, continuing to transmit elegance and creativity. This poses some major challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to achieve it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why.
For Burberry, it recently closed 17 and opened 18 stores in Dubai, London, Moscow, New York, Seoul and Tokyo. Its various channel of distributions like retail, wholesale and licensing can help to expand those opportunities to the company. However, it seems that Burberry rely too much in Chinese market both in region or as tourists with approximately 30% of its sales in Chinese market (Financial times 2016). As mentioned in PESTEL, if the Chinese market experience the decline or political issue, it will significantly influence the sales and performance. Moreover, the company is also trying to attract the young generation for future
Kapferer, J., & Bastien, V 2009, The luxury strategy: break the rules of marketing to build luxury brands. London: Kogan Page.
Mooij,M de.2004.Consumer Behavior and Culture: Consequences for Global Marketing and Advertising. Sage, Thousand Oaks, CA.
Dubois and Czellar (2002) refer to luxury brands as those goods that can offer comfort, beauty and refinement. On the other hand, a prestige brand is referred to as a brand that has achieved a definitive level of accomplishment, either in the quality or performance. O’Cass a...
-Status symbols: Sophisticated customers who value the distinctive, exclusive collection seem to value the corporate-branded version of luxury. –Philip Martiz, chairman of the board
Mandarin Oriental Hotel Group is a luxury hotel line which owns and manages hotels and residences (linkedin.com, n.d.). They currently have 45 hotels and 15 residences and are steadily continuing to grow (Mandarinoriental.com, n.d.).
...specific, the prices of leather goods, accessories, watches, jewelry, shoes and ready-to-wear of Louis Vuitton dropped by seven percent in 2008. Besides, Fujii takes some actions to face the challenges. For example, he sets an Internet business to follow the world trend and to enlarge the distribution channel. Also, he increases the product line to cover the children clothes and enlarges the market by opening stores in mid-size and small cities. Since Japan is still a developed country with wealthy families, the Japanese luxury market would still be a healthy and attractive market for Louis Vuitton and these challenges could be overcome in large extent.
In an article called Cultural Factor Highly Influences On Consumers & Their Buying Behavior – In Indian Context, the basic characteristics of culture are described:
The high pressure luxury brand industry has evolved over the last few decades from a small and selective to a multibillion dollar arena offering significant potential and growth opportunity for the luxury brands that compete within its realm. With many luxury brands competing for over $225 billion (The Economist, 2009) in revenue each year it is easy to see how strategy plays an important role.