I. Introduction Flashcards
1
Q
Quote JNK
A
- Luxury is an industry for which excess of demand is a problem
- Growth in luxury is a fragile concept but a mixed blessing
- Ultimate goal is abundant rarity
2
Q
3 Luxury perspectives
A
- Shared concept of luxury (Most important)
- Luxury as Economic Sector
- Luxury as a Business Model
3
Q
The shared concept of luxury
A
- Rare/ Hedonic/ High quality objects and services
- Price far beyond functional value
- Source for self-reward and image lift
- Leads to = Status/ Distinction
4
Q
Luxury as Economic Sector
A
- Unique business model with specific strategy and stringent rules
- Precise managerial implications
- Main industries = Cars/ Hospitality/ Luxury goods account for more than 80% of total market
5
Q
Luxury attributes
A
- Inspiration (Art)/ Heritage/ Multisensory/ Quality of quantity/ Iconic
- Privileged/ Exceptional/ Elevated/ Rare/ Exclusive
6
Q
Luxury general
A
- Luxury results of creating a big gap and is the business of elevation
- Gap must be managed to maximize desirability
- The greater the inaccessibility the greater the desire
- Manage distance & rarity/ Nurture the dream
- Ultimate goal is abundant rarity
7
Q
Luxury basic equation
A
- High visibility > Restricted Access
- High Awareness > Low Penetration
8
Q
Luxury definitions
A
- Luxury is the ordinary of the extraordinary people and the extraordinary of ordinary
- Luxury = The inaccessible life of the happy few
- A Luxury = Needlessly expensive item but very desirable
- My Luxury = Intimate (Private)
- Owning Luxury = Accumulating material goods
- Experiencing Luxury = Buying new experiences
9
Q
Two faces of Luxury
A
- Sociological = 1. Representing social stratification (Schichtung)/ 2. Social marker (Unterscheidungsmerkmal)
- Psychological = 1. Giving pleasure/ 2. Giving dream of exception/ 3. Hedonistic and cultural
10
Q
Luxury Hierarchy
A
- Absolute = Product is essential/ Feeds symbolic value/ Awareness is key/ Restricted access/ E.g. Jewelry, Cars, Yachts
- Aspirational (Aufstrebend) = Selective retail/ Strong symbols/ Limited series (Rarity)/ Awareness role/ More access (than absolute?)/ E.G. Restaurants, Ready-to-wear
- Accessible = Not really luxury/ Competitive pricing/ Industrialized processes/ Access as communication/ E.G. Perfumes, Cosmetics
- Example Armani Pyramid = From top to bottom/ Armani Giorgio Armani, 1. The Griffe/ 2. Luxury/ 3. Upper-range/ 4. Licenses
11
Q
Luxury as creators light
A
- Brand expenses the aura (Licht) of the creator
- Charismatic legitimacy based on personality of brand founder or artistic director (no longer e.g. chefs or perfumer)
- Maintaining aura = 1. Mythologizing founders/ 2. Luxury flagship stores through sacralization (Verheiligung)
12
Q
Luxury as a social marker
A
- In the past signal of rank/ Now consequence of social stratification (Also creates it)
- Western World = Creates sense of differentiation/ Owning means distinction and elite culture/ Penetration dilutes privilege
- Emerging Countries = Creates sense of belonging/ Owning unknown brand means risk
13
Q
Why confusion between premium and luxury
A
- Zone of price overlap between premium and luxury = Luxury may be cheaper than premium
- Luxury is relative = Luxury in some markets can be premium in other markets
14
Q
Premium vs. Luxury
A
- Premium = Create objectively best product of category/ Fame through comparison/ Features developed to satisfy consumer needs/ Checking market response before launch
- Luxury = Refuses comparison/ Is superlative/ Features developed by creator/ Goods are not tested/ Shape future tastes
- Luxury is not more of premium but something totally different = Premium is measured in Functional value & Price
15
Q
Why confusion between fashion and luxury
A
- Both play key role in social life
- Both express need to be different
- Until 19th century fashion belonged to luxury world because only upper class could afford it
