A market can be called a luxury market when the products that are sold as part of this market satisfy several criteria such as being excellent quality, have a price perceived that is very high and that the product is a rarity. According to a research firm called Brain and Co, the luxury market has been grew positively between 2003 and 2004. Its growth was between 5% and 7% in the 2004 – 2005 period. In order to understand these developments, it is important to analyze the opportunities in this market.
It is important to know that the luxury market is leaning toward being democratized; one's income does not explain everything anymore. Earlier the luxury goods were reserved for prime customers, very few people could afford to buy them but now it is directed to a wider customer base even if the products that are provided for this larger customer base is often casual. According to the Risc Institute, more and more Europeans are buying products of luxury brands. Their motivation to purchase them is based mainly on a desire to differentiate themselves from others. But everyone knows that if a product is qualified to be luxurious, it is rare. Therefore, when an individual buys this type of product he/ she can be pretty sure that very few other people possess it and this satisfies the individual's need for differentiation or his need to stand out from the crowd. The fact that companies are highly individualistic is the first opportunity in this market.
Luxury homes have realized the potential that young people could be considered as consumers. This members of this market segment seems to be spending most of their money on clothing, footwear, fragrances and accessories, as most of them live with their parents and do not have any other needs.
Tags: luxury goods, luxury goods market, the Chanel mark
[...] This was proven by a study that focused on the launch of a cosmetics brand. They took into account many of the opinions of the consumers and recorded all that did not please them. This study proved that its marketing strategy needs to be developed and that it is too narrow and unusual for the consumer to connect with it. Chanel's distribution strategy also needs to be attended to as their distribution channels are few and this makes their products difficult to purchase. [...]
[...] Their communication strategies target the female consumer, and represent the brand as feminine as they only have female models. Using men in their advertisements is very rare or even making advertisements to cater to the men is rarer, this needs to change as they are starting to develop collections for men and so need to make sure that men feel involved. Chanel is also not very popular in terms of its marketing strategy. It does not utilize the usual marketing rules and the consumers feel quite lost. [...]
[...] This members of this market segment seems to be spending most of their money on clothing, footwear, fragrances and accessories, as most of them live with their parents and do not have any other needs. These youth are a target market and must be focused upon by the professionals of the luxury market. It is this market segment who most often, seek to differentiate themselves from others. They are often described as ‘dreamers' and gold luxury is associated with ‘dreaming' or by buying a luxury product, the youth is becoming a part of their dream. This target market has a large potential and is all the more interesting to operate upon. [...]
[...] The weaknesses of Chanel Despite the fact that Chanel is well established on the luxury market and that it has many customers, the brand still has a number of weaknesses. The brand must realize that it is not the only one on the market and so must adapt quickly to stay ahead of its competitors. In fact, In the fields of perfumes and cosmetics as well as for jewelry, the brand does not have a very good position when compared to its competitors who seem to be attracting more consumers to their collections. [...]
[...] Russia and China are countries whose citizens love luxury goods, the consumption level of thee goods in these countries are high. The luxury market in China on average has annual growth rates that ranging between 50% and while Russia is becoming the fourth largest market because the amount of money that is being spent on luxury goods has almost tripled in the last five years. With the internationalization of this market, another phenomenon was created: Concentration of the market. This is also an opportunity for the luxury market. [...]
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