luxury brands and industries in step with lifestyles, values and attitudes of modern society and culture?

“Luxury is a necessity that begins where necessity ends” Coco Chanel

The display of luxury signifies individual power and achievements. The manner which people dress reflects economic, political, social standing and self worth. Christian Dior quoted “it seems to me that women and men instinctively yearn to exhibit themselves”. Luxury in the fashion industry is usually defined in elements as: silk, gold, silver, and precious stones. Luxury products are usually identifiable through exceptional quality and high aesthetic appeal and value, and often belong to the range of products which can be clearly identified either through logo, brand name or design elements. The central features of a luxury brand are: perceived exclusivity; well recognised brand identity; high levels of brand awareness and strong sales and customer patronage.

Many of today’s prestige brands were started a century or more ago, and usually one-person operating the brand. The products sold were handcrafted by skilled artisans, usually preserved for the aristrocratic world of royalty and old money. Today, many of these brands are run by corporations which have transformed these small sized businesses into thriving multi-billion dollar retail brands. Their products are easily accessible as they are readily available at retail stores found on main city streets, in
airports and outlet centers.

The luxury market has significantly changed since the days of ‘old luxury’ where it was once attainable only to the super elite. Louis Vuitton, Cartier, and Hermes founded in the 18 and 19th centuries, created products for the royal court until the fall of the monarchy. In the late 19th century where there was an incremental rise industrial fortunes luxury became the domain of old-money European aristocrats and elite American families. Luxury only once belonged to the upper class, and faking luxury was looked upon as a disgrace.

Today, the luxury brands have changed the manner in which people dress by aligning the socio economic system. Luxury is no longer focused on artistic integrity, and now based on profit levels. The quality of the goods are compromised to produce large quantities required due to high demand, fabrics aren’t as good as what they used to be , nor are the way that they are made. There are many trends which have contributed towards luxury brands to broaden its consumer range. As a result luxury have become easily attainable due to corporate strategies based on targeting the middle market, and expanding globally.

The luxury goods fashion industry is worth $157billion. The industry is involved with manufacture and selling of clothing, leather goods, silk scarves and neckties, watches, jewelry, perfume, and cosmetics. Sixty percent of the industry is controlled by thirty-five major brands, which include Louis Vuitton, Hermes, Gucci, Prada, Giorgio Armani, Hermes and Chanel.

Many luxury brands have formed strategic alliances with major corporate entities. Utlilising the parent advantage allowed the luxury companies access to greater access to resources. In 1999 Pinault-Printemps Redoute (PPR) acquired a 42 percent stake in Gucci, this strategic alliance facilitated Gucci to become a multi-brand known as the Gucci Group. (Moore, C & Birtwistle, G 2005) From November 1999 to July 2001 the company acquired equal or majority shareholdings in ten companies to form the Gucci Group NV, the world’s second largest luxury brand conglomerate. (Moore, C & Birtwistle, G 2005) Gucci focused on providing the skills and advantages as the parent company to its subsidiaries as a luxury brand. The four leading multi luxury brand conglomerates are Louis Vuitton-Moet Hennessey (LVMH); Gucci Group NV; Prada and Richemont Group (Chevilier, M & Mazzalovo, G 2008). These four companies’ dominate the global luxury brand industry, acquiring multi billion dollar profits. A study undertaken in 2004 revealed Japanese consumers account for 41 percent of the market, America 17percent, Europeans 16percent. These companies are expanding into India, Dubai, Russia, and China which is expected to be the world’s most important luxury market.

Globalisation has been a significant factor towards to increase in consumer demand towards luxury brands. Increased travel and greater technology such as the internet, and the media are all driving forces which has lead to increased consumer demand, and contributed towards homogonised customer needs. Expansion of luxury brands globally has significantly been driven by increase of wealth in emering markets, such as Asia and India. (Nueno and Quelch (1998). Furthermore due to recession of population growth in Europe, which holds a large percentage of sales of luxury brands, many of these brands are rapidly expanding their operations to cater to affluent Asian consumers who regard Western luxury brands as a statement of good taste (Nueno and Quelch, 1998).

Luxury brands are no longer targeted at the traditional middle aged consumer but are now recocnised that its most significant consumers are in their twenties. (Moore, C & Birtwistle, G 2005) Hence, marketing efforts particularly in Asia have been emphasied on attracting young consumers with a middle income. Such efforts include providing a “clear and effective brand message worldwide, in all areas of communication including: fashion shows and special events/advertising/public relations, visual display and internet web sites” (Moore, C & Birtwistle, G 2005)

Luxury brands are more attaintable globally due to increased distribution channels and marketing communications around the globe. For example, the strong Japenese economy and the increased levels of working females have contributed to an increase in percentage of all luxury brand sales. Vuitton’s initial step for globalisation by forming an alliance with a businessman in 1976. This relationship was formed to strategically increase market share among the upper class and the upper middle class. This alliance facilitated the company to sell its products directly to department stores without wholesaling,hence a franchise approach which was innovative for the industy at that time. Due to overwelming success Vuitton has lead the way into establishing its own store in Japan in 1978 and gained complete control ,and the other brands later followed.

Luxury brands are broadening their target consumer range by extending their brands to reach middle-income consumer’s throgh more affordable product ranges. Increased spending on luxury fashion goods are contributed by increased amounts of females entering the work force and their increasing incomes, as a result creating disposable income. Clothing and fashion purchase decisions are based on want rather than need (Jones and Hayes, 2002), as purchasing intentions in the fashion industry have transformed from a necessity to a luxury, “Luxury as standard”. This has enabled luxury brand corporations to reach a mass market of consumers to target their products towards by providing to consumers who are “trading up”.

Through intensive marketing efforts globally luxury goods are characterized by recognizable styles or designs as well as the visibly demonstrated self images and social status, consumer manifestations of uniqueness motivation may be exhibited by acquiring or wearing luxury fashion items, which may help individuals establish a unique personal identity as well as a unique social image. (Park, H & Rabolt N 2008) Recogning the strong relationship between advertising and marketing, companies increased their advertising efforts. In 2002, LVMH spent more than $1 Billion US on advertising, which was 11 percent of its sales. (Chevilier, M & Mazzalovo, G 2008) Heavy advertisement is delivered to consumers through print media, billboards, embassotors,major PR events, and sponsorships.

A study based in Korea aimed at determining luxury brand purchase intentions and its relationship with social related values concluded that positive relationships exist. (Park, H & Rabolt N 2008) The results concluded on conformity and the need for uniqueness, indicating that purchase of consumer goods by Korean consumers is attributed due to the symbolisation of the brand. The results showing that the influence of materialism, conformity, and the need for uniqueness on young Korean consumers' purchasing intentions toward global luxury fashion brands was positive while that of consumer ethnocentrism was negative reveals some of the driving forces behind the increasing demands for such luxury brands in Korea. (Park, H & Rabolt N 2008) Customer needs for uniqueness are fulfilled by luxury brands perciving products as scarse, which ables purchasers to differentiate themselves from others. Hence, consumers seek self and social image enhancements through utilizing the symbolic meanings of the products they purchase, and thus product categories, brands, and versions or styles are used for satisfying consumers' needs for uniqueness (Park, H & Rabolt N 2008)
As for the super rich, they still continue to purchase couture, and are willing to pay up to $100,000 for a evening gown. Many of these customers are treated in a premium manner, and are often given special prices as they often buy in bulk. Custom made products are a trend among this consumer segment, made from rare specialty materials. Their consumers come from huge fortunes and many come from China. They do not want to be identified wearing the same garments as what an actress may wear, but are seeking unique products which will differentiate themselves from others. In America, the super rich shop at Gorgio Armani, as the wealthiest 5 percent account for 47 percent of sales. Hence, luxury brands maintain their elite consumer segment by providing customerised services, maintaining an integral segment which accounts for significant sales for the companies.
Luxury brands have significantly adapted over time to reflect the values and attitudes of modern society and culture. These brands responded to trends in society and developed and implemented strategies to effectively meet them. Luxuries are no longer just attainable aristrocratic world of royalty and old money, but are easily attainable to many middle market consumers. Globalisation, developing economies, and the younger brand conscious generation are all significant drivers which have allowed opportunities for luxury brand corporations to broaden their consumer segments to reach a wider prospective market. Furthermore, many brands have diffused into more affordable product lines to attract the middle market, as a result, artistic integrity has been lost as many of the luxury products are no longer made with the finest materials or delicately handcrafted. Luxury brands will not be threatened of extinction if they continue to respond and evolve effectively to market trends, hence continuing to reinvent it self to maintain attractiveness to its consumers. However, they must be careful not to over saturate the market as it then will lose its scarce value, and tradition.
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Fashion 9.1 of 10 on the basis of 2001 Review.