Essay on What Makes A Luxury Good?

Essay on What Makes A Luxury Good?

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Introduction

A luxury good is something that, as ones income increases; the demand for an item or service also increases at a higher than proportional level, in contrast to necessity goods, in which demand increases proportionally with a decrease in income (Varian, 1992). Generally, luxury goods are seen as those at the highest end of the market, in terms of price and quality. Haute Couture clothing, accessories and luggage are considered to be classic luxury goods, although many markets have a luxury sector, for example Automobile, Bottled Water, Coffee, Foods, Jewellery, Sound Systems (HiFi), Tea, Watches, Wine and Yacht.

Kotler’s (1997) definition of branding is that: “A name, term, sign, symbol or design, or combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”. Another definition explains more roles within a brand: “A successful brand is an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely. Furthermore, its success results from being able to sustain these added values in the face of competition” (De Chernatony and McDonald, 1998).

The aim of this essay is to critically assess the role of branding in the development of international marketing strategies, with reference to how luxury brands may succeed on a global level. 
Luxury Branding Theories and International Strategy

Western economies are the where many luxury products have their roots and as such, with geography being one of the critical attributes that constitute luxury goods, along with history and quality, this suggests that the country of origin of...


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... of just having brand values, it should have brand beliefs, as this will create a stronger emotional connection with its customers. It should aim to go beyond having a logo, but rather a set of distinguishable icons and the brand’s points of sale needs to be somewhere that connects with its customers and becomes something of a pantheon among other retail outlets. Similarly the customer segmentation should have role reversal, so the customers want to buy their products. Luxury brands should instead of actively promoting their advantages over their competitors, never push the customers into buying their products, thereby offering mystique and letting the customers make the value creation. Lastly, a true luxury brand not only offers products but rather a way of life, allowing them to branch out over several product categories, into every aspect of their customer’s lives.

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