Welcome to Luxury Products Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada s.singh@uwinnipeg.ca https://abem.uwinnipeg.ca https://www.abem.ca/conference

History of Luxury King and Queens always appreciated beauty/luxury 1010 BC – 100 BC  King David/Solomon, Queen of Sheba 1150 BC – 700 BC  Egypt, Greece 800 BC – 500 AD  Etruscan Empire and Roman Fashion 450 AD – 1500 AD  Byzantine Empire 15th – 16th Century  Italian fashion 1600 – 1750  Baroque fashion 1715  France 1828  Modern luxury fashion 21st Century  Democratization of Luxury

High Net Worth Individuals (HNWI) People with $1m assets excluding home, car… Affluent (Sub HNWI) .1m – 1m HNWI 1m-5m Very HNWI 5m-50m Ultra HNWI >50m About 15m HNWI 3m in Europe 4m in USA 3m in Asia-Pacific 2m in Japan .5m in Latin America 1m in Germany .4m Middle East .5m in China .1 Africa .5 in UK

Charles Frederick Worth -- 1838

Avenue de Champs-Élysées, Paris Taunje-lije

Luxury is Dream Creates social gap  Exclusivity Sensory experience  Feel, touch, smell Luxury is beauty You may suffer in the name of it, or for it Vibrates your emotions  feelings Object of worship  needs respect

Gucci Jackie

Gucci la pele Guccissima Shows mrf process

Hermés Cap Cod -- Craftmanship

Chloé Material

You wish! Liya Kebede

Swarovski Tangara

Characteristics of Luxury History Heritage Culture Message Innovation High Price High quality material Differentiation Value creation

Luxury Differentiation Porshe  Craftsmanship, proof or expertise, engineering, aesthetic Ferrari  Red color, unique sound, make 8000 only per year, F1, 100 yr of exp Ducati  Red motorcycles Hermes  Kelly and Birkin bags Harley Davidson  distinct sound Lamborghini  Monster of technology Rolls-Royce  like living room, wood

Value Creation Elegance  not only perfume, but also bottle Handmade  gold, diamond, watches, bags,… Rarity  animal skin, silk, make clients wait Made in Europe Precision in craftsmanship ….

Creativity and Innovation

British History – typical lines

Ferrari: red, speed, precision, power 0nly 8000 per year

18 hours of single craftsmanship

Rolls Royce – 2600 hrs, wood, living room x10 Ford’s price

Hotel with private jet for guests

www.SemesterAtSea.org

Bathroom in Flight

Bar in Flight

Apartment in Flight

Bicycle – Lightest

Luxury Product or Dream Categories Fashion (Apparel, bags, shoes, belt…) Perfumes and cosmetics Watches and jewellery Eyeware Other Restaurant Hotels Car Home…

Luxury Depends on Wealth Status Wealthy > $.5m / year Affluent > $.2m / year Status Income, Education, Occupation Where do you live? Quality of residence …

Luxury: Wealth vs. Status HI Wealth Discreet Authentic French Small logo Russians Emerging markets HI Status LO Status Niche Creators British Heritage Need to prove Counterfeit Poor countries Big logo LO Wealth

Luxury Industry +1500  # of billionaire worldwide ↑ 7% more billionaires every year $150b / year (People spend on luxury) ↑ 20% sales growth / year 200-300 luxury brands

Major Luxury Groups Louis Vuitton Moet Hennessey (LVMH)  30 Louis Vuitton, Givenchy, Marc Jacobs, Fendi, Donna Karen… Richemond (Switzerland)  15 Cartier, Chloé, Montblanc, Lancel… Gucci (Italy)  10 Gucci, YSL, Sergio Rossi… Prada (Italy)  5 Prada, Miu Miu, Azzedine Alaia…

Levels of Luxury Luxury or prestige  Lifestyle setter Bulgari, Hermes, Hugo Boss,… Premium  Aspire to become Luxury HI  Calvin Klein, Tommy Hilfiger,… MI  LaCoste, Furla,… LO  Zara, GAP, … Fashion  Changes quickly Several

Product Structure Product Line/Length Product Breadth Product Depth Bag, Shoes, Belts… Product Breadth Hand bag Evening bag Weekend bag … Product Depth Variety of hand bags in this category…

Luxury: Design vs. Modernity ??? You decide Lamborghini Ferrari Aston-Martin Modern Traditional Morgan Bentley Rolls Royce BMW (???) Mercedes Lexus Comfort