1. Welcome to Luxury Products
Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada

2. 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

3. 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 in UK

4. Charles Frederick Worth -- 1838

5. Avenue de Champs-Élysées, Paris
Taunje-lije

6. 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

7. Gucci Jackie

8. Gucci la pele Guccissima Shows mrf process

9. Hermés Cap Cod -- Craftmanship

10. Chloé Material

11. You wish!
Liya Kebede

12. Swarovski Tangara

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

15. 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

16. 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 ….

17. Creativity and Innovation

18. British History – typical lines

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

21. 18 hours of single craftsmanship

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

23. Hotel with private jet for guests

25. Bathroom in Flight

26. Bar in Flight

27. Apartment in Flight

28. Bicycle – Lightest

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

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

31. 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

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

33. 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…

34. 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

35. 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…

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