“A kingdom, in fact, where the notions of demand and preference leave place to those of desire and unsubstitutability. Our Best Global Brands study shows how it can play a prominent role in virtually any competitive sector, in combination with other drivers of demand. In luxury, because brands are the reason why consumers choose those goods and services, they are the engine of the entire business model. They are responsible for most of the value created by their companies.”
The Luxury Kingdom refers to brands that have established themselves as Luxury brands with brand loyal consumers. In most cases these luxury brands do not succeed because of factors like distribution, functionality, or even price. “These brands defy the basic microeconomic relationship – up goes price, down goes demand. Luxury is where demand is virtually immune to price increases.”
The rise of individualism has also led luxury to be about much more than simply communicating one’s status to others. Luxury has now changed from mere obsession to something nearing more the concept of experience, expanding its focus from products to the wider pleasures of life.
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