Analyzing Thorstein Veblen's The Theory of the Leisure Class

Veblen views leisure time as a non-productive consumption of time (46). Wealth and consumption of goods desired by others makes one honorable. For him, lower class people cannot avoid labor and can only be regarded efficient in their work.

There is relatively no threat of substitution in the luxury goods industry. This is mainly because of the quality and price of substitutes, and the cost of switching to the consumer. The price of counterfeit goods that copy the luxury goods causes there to be a positive monetary cost in switching but there is a loss of prestige as luxury goods are characterized as having a persona, paucity, that are accompany by a performance of a quality product with unique design, extraordinary capability and innovation. There is no comparison between luxury goods and the

Luxury brands are actively responding to the latest economic downturn, said to be the worst since the Great Depression, racking their brains to escape the grips of the falling luxury goods market. Indeed, the hit to sales has been particularly bad as industrialized nations, traditionally the main luxury good markets, have suffered greatly. With luxury goods consumers having become more diversified by region, class and age, and an increasing number of luxury brand companies adopting professional management structures, luxury brands are approaching their

According to a study conducted by Brain & Company, the number of luxury consumers has increased dramatically from 90 million to 330 million over the past 20 years(Arpizio, no date). Since Roman Times, people have been using luxury items and they have become more prestigious and valuable over time than they actually are due to their unique and different marketing and advertisements. The extraordinary marketing methods of selling luxury brands include making the products scarce, touching consumers’emotions, using different kinds of advertising medium, having celebrities endorse their products, employing famous designers, and etc. Although those are all unique advertising strategies of luxury brands which are different from regular brands, the

The Tiffany & Company is introducing a new product line by the name of Tiffany 's Essentials. The line will offer authentic luxury designer handbags along the lines of Gucci, Chloe, Dior, Fendi, Prada and many more. As concept of luxury changes, marketers of high-end products are wrestling with the challenges of maintaining exclusivity while obtaining higher sales. Having a well-known name as Tiffany and Company we have no limitations to create luxury pieces for the luxury lifestyles. The following paper will emphasize our product, our target market and our marketing objectives as to how we will market our handbag using a vital marketing mix. It will also provide our major competition in both the diamond industry as well

In the case of outlet stores, brands are trying to sell their overstock, which has highly increased due to mass production. Not only is merchandise that was once available at a high-end boutique sold for a discount price, moreover some brands are producing some items solely for outlets (Edouard, 2006, 11). Assessing the six main facets of a luxury brand, which have been identified in a broad empirical study by Dubois/Laurent/Czellar and are considered to be global and most accurate, one can review the situation of the luxury market today. The six main facets are (Dubois/Laurent/Czellar, 2001, 8 ff.):

One of the competitive forces that have a great effect on industry attractiveness is the threat of new entrants and how hard it is to build up a brand name that can compete with the likes of Coach, Louis Vuitton, Dolce & Gabbana, and Versace. It takes deep financial pockets and great commitment to create luxury image with well-known brand and superior quality. Thus making it costly for new entrants to gain exposure and market share. Luxury items are known for their superior quality and to some people, the status that they carry. New entrants must build this status from the ground up, which can prove difficult without

The mid-level luxury handbag and accessories industry is slowly growing. This Industry relies on consumers having an ample amount of discretionary income to be able to purchase luxury handbags or accessories because this is a want and not a necessity. The PESTEL analysis showed that this industry should focus on economic and social principals for strategic significance for any future changes. Brand awareness is an important social factor because it allows buyers to recognize your brand and more people will realize who that specific company is. Brand awareness bring customers to a company because they want the latest trend from a specific company that is on the market. This can lead to brand loyalty which intern leads to repeat buyers over time. The external factors which have the greatest impact on this industry’s sales and margins is rivals from sellers and substitute products. Vera Bradley’s chief rivals in this industry are Coach, Michael Kors, and Kate Spade. There’s many more competitors in this industry that offer handbags and accessories that is why competition among rivals are tough because they are all competing for the same discretionary income from buyers. Substitute products are a factor also because people could be purchasing counterfeits or more luxury brands could be on sale and they are spending the same amount of money for a better product. The opposite could be happening buyers could be purchasing non luxury products just to hold their

Luxury retail is built on foundations of creativity, innovation, exclusivity, and craftsmanship. High-end, luxury stores invest heavily in the creativity in their products as well as their retail merchandising in their elegantly embellished stores to match its brand image. Exquisite showrooms with private booking is just one way to accommodate a serious buyer. Thus, it is logically paradoxical that the innate characteristics of luxury becomes open to the public with the internet. Furthermore, the difficulties in mirroring the physical experience into an online experience lies in the existing gap of strategies between the online versus the offline business applications. Our mobile phones, tablets, and computers may provide the composite mirage and manifestation of real world information, however, can websites transcribe the elegance of retail experience from the physical store online? Bridging a tactile versus non-tactile platform in order to generate a more seamless, multi-channel approach to retailing has been an obstacle for luxury retailers. According to a report published by McKinsey and Company, “fashion players are working hard to deliver a seamless, integrated shopping journey across touchpoints” (Mckinsey & Co., 2017). Similarly, in an interview by The Business of Fashion with 24 Sevres’ founder, Ian Rogers states, “you have to have the product, but you also have to merchandise the product in a way that brings people back because you’re an

Luxury goods serve a purpose that extends way beyond functionality and need. A bag that costs $15,000 or a pair of shoes priced at $500 does not necessarily signal that they perform better than goods priced significantly lower. The disproportionate prices of luxury goods reflect so much more than the eye can see, the history behind the brand, the story that it tells, and the scarcity and exclusivity it aims to achieve in the mind of the consumer. A premium brand, by contrast, can generally be described as a good that a customer pays more for because they are getting higher quality product. Luxury brands are not inherently inferior because they do not offer higher functionality. Sometime signaling the belonging to an exclusive group is important to a person, and thus worth the monetary cost. A premium product, though, is a good that people are willing to pay more because they believe they get more, whether that is higher quality or better performance. A customer does not purchase a luxury product because they know it will perform better, they purchase it because of the status and appearance that it signals to those around them.

When looking at the fashion industry, the luxury sector is very important in terms of its monetary sales volume, valued at approximately $252bn (€185bn) in 2011 (The Economist, 2011) and predicted to continue growing, albeit at a slower rate than it has been up until now (Jackson, 2015).

Opportunities: the changing preferences by middle class consumers towards luxury products create new opportunities for growth in both US and international markets.

Hermès’ retail strategy is designed to ensure both exclusivity and the highest perceived value. Hermès targets men and women aged 18 and up who are demand inelastic relative to price and are interested in purchasing high-end apparel, accessories, and other goods. Hermès positions itself as an ultra premium and highly exclusive fashion company doing everything they can to reduce access and to prevent brand dilution. While Louis Vuitton has 1,536 retail outlets (LVMH “2015 Annual Report”, 11), Hermès only has 307 stores (Hermès “2015

Luxury industry has always been the core aspect of a project that usually goes beyond production of just clothes or foot-wear. Luxury bags industry has also been ventured into though with some weaknesses, opportunities, strengths and threats just like any other fashion and luxury industry on the ‘trendiness’ dimension. The business had created its reputation on definitive designs in elegant styles, since its main customers are older women who approve of quality over fashion. From when it was first found, Coach’s business strategy on product is centered towards production of timeless, classic pieces. The argument in support of this

A myth eluding the luxury brand market for years has been that customers with their discriminating preferences and choices would not buy expensive goods online. They would opt for the personalized customer service and tactile shopping experience provided by the mono-brand brick and mortar stores. A major shift in this behavior of the customer had opened up doors for the luxury brands to capture a larger market share through e-commerce. Customers are not only willing to buy luxury goods online but are also comfortable with the undiscounted rates.