Critical analysis of affected of economic crisis on the luxury brand market

Topics: Luxury good, Branding, LVMH Pages: 37 (10604 words) Published: October 20, 2013


Abstract
This thesis going analysis and critique characteristic of the luxury market and especially the clothing sector. The Author will realize research to understand the changes established by luxury brands during this period of economic crisis Fiscal. The economic crisis currently affecting all sectors, the objectives will be to understand the extent of the result of the luxury market but also the different techniques used to overcome this period. The Author makes a secondary data collection through books and newspapers articles, but also with numerous website of the world of luxury in order to obtain the most accurate information.

Table of content
I- Introduction………………………………………….…………………6 1.1 Rational………………………………………………………..………..…………..7 1.2 Aims and objectives……………………………………….……...………………...8 1.3 Research questions……………………………………………..……………....…..8 1.4 Theoretical framework…………………………………………………………...10 II- Methodology………………………………….………………………11 2.1 Choice of research………………………………………..……………………….12 2.2 Construction of design……………………………………………………………13 2.3 Scope of research………………………………………………….………………15 III- Literature Review…………………………………….……………..16 3.1 What is luxury?........................................................................................................17

3.1.1 Definition……………………………………………….………………..17
3.1.2 Relativity………………………………………………..………………..18
3.1.2.1 Economic relativity……………………………………………19
3.1.2.2 Cultural relativity……………………………………………..19
3.1.2.3 Regional relativity……………………………………………..20
3.1.2.4 Temporal relativity……………………..……………………..21 3.2 Luxury customer………………………………………………...………………..22
3.2.1 Customer behaviour…………………………………………………….23
3.2.1.1 The Veblen effect…………………………..…………………..24 3.2.1.2 The Snob effect……………………………..………………….25
3.2.1.3 The Bandwagon effect…………………………...……………26
3.2.2 Price………………………………………………………...……………26
3.2.3 Exclusivity …………………………………………………...………….28 3.3 Luxury brand……………………………………………………………...………28
3.3.1 Relationship Product/Brand……………………………………………29
3.3.2 Type of luxury brand……………………………………………………30
3.3.2.1 Luxury brand level……………………………………………30
3.3.2.2 Luxury brand awareness……………………………………...31
3.3.3 Marketing technique……………………………………………………33 3.4 Treat of luxury market…………………………………………………...………34
3.4.1 Crisis of the global economic crisis on the luxury fashion market...…34
3.4.2 Counterfeiting…………………………………………………………...36 3.5 Matrix……………………………………………………………………………...39 IV- Findings, analyses and evaluations……………………………………….48 4.1 Luxury marketing…………………………………………………………..…….49 4.2 Luxury customer………………………………………………………………….51 4.3 Price…………………………………………..……………………………………52 4.4 Advertising…………………………….…………………………………………..54 V- Conclusions and recommendations………………………………………..56 5.1 Conclusions……………………..…………………………………………………56 5.2 Recommendations…………………………………………………………………58 5.3 Limitations and suggestions for the further research…………………………..60 VI- References………………………………………………………………...........61

I- Introduction

 Luxury Market has been important parts of the global retail market as well an important part of the global economy. Bain & Company (2011) estimate the value of traditional luxury market including fashion, jewellery and Dinnerware line represents approximately € 150 billion to € 200 billion in 2010 which is an dramatic increase from estimate that the global luxury market was worth about $ 86 billion in 1990 (McKinsey & Co, 1990). Since the 1980s, the luxury market has been growing at ten per cent per year. The growth rate of luxury is much higher than the growth rate of the global economy, which makes the luxury industry, relevant and important economic factor in the economy McKinsey (2011). Larousse (2005 p. 762) states:

“Sophistication, which makes the splendour and comfort in the ways to live” The consummation of luxury by customers is due to the motivation to buy specific brands with quality...

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