Class 1 Flashcards
1
Q
Levels of Product Offering
A
- Core (the need/want the product satisfies)
- Actual (attributes that combine to deliver core product benefits)
- Augmented/Potential (additional consumer services/benefits built around core and actual product)
2
Q
Luxury Stats
A
- Local vs. Tourist sales
- Segment effects
- Currency effects
- Role of Covid and lockdowns
- Quantitative easing (QE) and crypto effects
Energy prices - Supply-chain issues
- Geopolitical tensions impact growth per category and region
- Business cycle effects
- Effect of “dematerialisation”7second-hand luxury/shift to experiences
3
Q
Challenges to luxury
A
- Democratisation/Masstige
- Lipstick effect
- Compensatory consumption/mood regulation
- The luxury dilemma
- Consumer fatigue
- Logo fatigue
4
Q
Key trends in luxury
A
- Experiences grow
- De-ownership orientation and collaborative consumption
- Digital channels
- Pressure to grow vs. pressure to remain true to luxury roots
5
Q
Luxury consumption is increasingly:
A
- Experiential
- Casual
- Digital
- Value sensitive
- Local
- Demanding
6
Q
Key considerations going forward (for luxury)
A
- Improve customer experience
- Offer local variants
- Stores become museums
- Capitalise on importance of storytelling
- Authenticity
- Facing high demand and abandoning rarity (the luxury dilemma)
- Growing sales yet remaining to true to DNA and creating perception of scarcity
- E-commerce
7
Q
Luxury transformation factors
A
- Economic development
- Demand-side forces (higher real incomes; Boom in certain regions; cash windfalls, loans and discount retailers and QE, easy credit; change in role of women and family structure)
- Supply-side forces (economies of scale in production; technology advancements; market sophistication; maison acquired by large groups and managed “professionally”)
8
Q
Retail points become
A
- Museums
- Servicescapes of consumption
- Create an environment of scarcity
- Storytelling
9
Q
Managerially controllable drivers (types) of value
A
- Authenticity (DNA)
- Exquisite craftsmanship and artistry
- (highest) Quality
- Rarity
10
Q
Veblen: 2 needs (or motives) behind conspicuous consumption
A
- Invidious consumption (consumers try to distinguish themselves from those of lower classes)
- Pecuniary emotion (consumers try to emulate the behaviour of classes above them, and benefit from status gain)
11
Q
Marshallian-School Economists belief
A
- Rational/functional demand: there are some qualities inherent in every good that constitute the good’s called “primary utility”
- Irrational/non-functional demand: portion of demand for a consumers’ good which is due to factors other than the qualities inherent on the commodity
12
Q
Harvey Leibenstein (1950)
A
First person to attribute the high prices of luxury goods to “external effects of utility” (secondary utility)
13
Q
Duesenberry (1949)
A
- Before 1949 it was assumed that consumers’ decisions were taken in isolation and independently of those of others
- Duesenberry introduced concept of social comparison through “relative spending” or “relative consumption”
- “An individual’s utility from any given level of consumption depends not only on the absolute level of spending, but also how that spending compares to that of others”
- Demonstration effects
- Secondary utility: relate to socially comparative or psychological spending
14
Q
VP and CV
A
- Value Proposition (VP): set of (real or perceived) benefits that satisfy those type of needs
- Customer Value (CV): the net sum of (real or perceived) benefits minus (real or perceived) costs
15
Q
Fundamental (abstract) forms of customer utility/value
5 (+1) umbrella forms of CV
A
- Economic or financial value
- Utilitarian value (primary utility)
- Hedonic value (secondary utility)
- Symbolic or self-expressive value (secondary utility)
- Psychological (comfort)
- New emerging types of values
