The first notion is that of perceived excellent quality. The mental association between luxury and quality is so strong that for some respondents, the two words are almost synonymous. For mass-market items, consumers have many opportunities to judge product or service quality, primarily through multiple purchase and personal consumption experiences. But how can they assess the quality of a luxury good or service that they buy and consume very infrequently, sometimes only once in their lifetime(Dubois, Laurent and Czellar 2001). However Louis vuitton and Gucci both companies comes under luxury industry and these both companies are high rated companies in the market for the luxurious brands.
Opportunities: Large Market for luxury goods and positive trends in emerging markets Trends that control the global luxury goods market are globalization, consolidation, and diversification (Tavoulari 1). Globalization is a result of the increased availability of these goods, additional luxury brands, and an increase in tourism. Consolidation involves the growth of big companies and ownership of brands across many divisions of luxury products. LVMH is one example, demonstrating to be one of the top luxury companies that dominate the market in segments ranging from luxury drinks to fashion and cosmetics. This growth in the luxury market has greatly extended the availability of luxury goods to a wider audience of consumers.
However, according to exhibit 4, the luxury goods market maintained strong growth during the recession. Moët Hennessy Louis Vuitton had problems with tourists mostly from China LVMH buying products from Europe and selling back in China to avoid the duty fees. Socio-Economic Moët Hennessy Louis Vuitton focuses on the higher end of the market. The market is made up of three segments: absolute, aspirational and accessible customers. LVMH focuses on the top two segments; absolute customers are individuals of ultra-high net worth who value brands that are based on heritage and tradition and aspirational customers who are celebrities with high net income.
The occurrence of free trade import and export can be done without the barriers to pay the duties from the businessmen. The growing of the economy will increases the demand of the goods and services. As the result, when the demand increases, the opportunity for businesses will increases and with the boost up of these matter, it will create more job opportunities to the people in the white collar and blue collar sectors. Besides that free trade encourages strengthen the development of a country’s institutions, in order to protect the country’s eco... ... middle of paper ... ...ate by others. The country should create more competition to bring more opponents into certain industry such as in technology industry, agriculture industry and automotive industry.
One of the primary goals of a market analysis is to determine how attractive a market is for potential entrance. Currently, more consumers want not only branded fashion but also branded homeware in order to express their identity (Posner, 2013) By analyzing the market one can adopt the strategy according to different global opportunities. According to E. Kasper ’’The high-end furniture industry recorded increasing growth due to the growing number of high net worth individuals, internationalization of consumer behavior and the growing influence of emerging markets.” (Kasper, 2006) In the emerging markets, real estate is booming and purchasing power is increasing continuously. Brand name luxury furniture is no doubt the next big status symbol. (Chinadaily.com.cn, 2014).
Firms also use brand extension to increase their profitability by extending the power of their brand image to other product lines. While powerful brands use their brand equity and exercise their muscle power to dominate the market they are also having to face with increasing competition from store brands and retailers who promote their own products. Ultimately the focus of all brands is to improve customer equity. From the consumer perspective, the price for value proposition of brands has to be considered. A brief overview of some of the important factors pertaining to brands and how they shape or affect consumer behavior would help us better understand the pros and cons of brands.
Conspicuous consumption refers to the ostentatious display of wealth for the purpose of acquiring or maintaining status or prestige. In Asia, luxury products convey the importance of status and face giving in Asian culture (Conspicuous consumption, org, 2014). Therefore, Luxury goods companies regard Asia as the area of greatest importance (Doran, 2014). The phenomenon of conspicuous consumption in China Recent studies have shown that the Chinese consumers care more about what brand the product is, than almost anyone else in the world. A Harris Interactive Survey of young Chinese and American adults in year 2011 found that 72% of Chinese respondents considered “brand name” to be an important factor when purchasing clothes (Siegel, 2013).
It is the business that has grown faster in Spain, due to its expand by almost all over the world offering original products with an intermediate price always keeping the latest trends. 1.1 MOTIVATION TO INTERNATIONALIZE Bimba & Lola is an international franchise chain, which continue its growth plan. This expansion suppose opening up markets more profitable and giving the possibility to increase the new ideas using innovative products. (Hollensen, 2007). Its ambitious international expansion plan, along with its many opening shops in the domestic market, has boosted the company to a high economic growth.
One thing to look for is for multiple manufacturers that have the same type of business and have a good standing in the economy. It’s a clue to the consumers that the quality of products and services will increase because of the competition. Each company will what the consumers business, in order to achieve that they have to have the best product or service on the market. Many companies will start to look overseas to expand their business, and when they do they help introduce new standards, new producers to the global market. They also help the consumers have more choice in what they would like.
The modern day Chinese society has revolutionized the luxury industry as the Chinese consumer is receptive to luxury brands unlike any other consumer in the world. As a society that is fueled by Urbanization, with a myriad of cities that are economic centers of the world, China is now a country that has made great strides through industrialization to become an influential leader with purchasing power that transcends beyond gender and age as younger consumers are aspiring for luxury products, in which companies worldwide are marketing their luxury products in order to appeal to the Chinese consumer who is enamored by quality despite cost. Beyond the depths of Communism, and governmental control the modern Chinese consumer has accessibility to earn higher incomes, provide for their families, enjoy leisure and have amenities that were once rare in a country that was once rural land. Now, with technological advancements and modernization of cities the Chinese consumer is able to live a lifestyle of luxury unlike the past, where luxury was once only possessed by those who were rich. Through strong family structures, and high educational standards, the middle class in China has gained strength in order to aspire for an improved lifestyle.