Luxury market - Kushal Chowdhary

MINOR PROJECT

Study on the Growth of Indian Luxury Market

Submitted by:

C.S Kushal Chowdhary

Sweta Das

Sushant yadav

Ruchi Sharma

Rashmi Nandal

Sudip Kumar Chokshi

Garima Tiwari

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ACKNOWLEDGMENT

We are grateful to our Faculty Mrs. Nethravathi for the constant

support and guiding us throughout this Project and providing us her

valuable inputs for its successful completion.

This Project is done to study the growth of Indian Luxury Market

which has a potential growth in India.

Lastly we would thank all the group members who are associated

with this project.

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Signature of the Project Guide

TABLE OF CONTENT

S.NO TOPICS P.NO

1 Executive Summary 4

2 Objective of the Project 5

3 Getting to Know Luxury 6

3 Introduction to Luxury Brands 7-9

4 Difference Between Regular and Luxury goods 10

4 Characteristics of Luxury Industry 11-13

5 Indian Luxury Market 14-15

6 Growth of Indian Luxury Market 15-24

7 Affluent Consumers of Luxury 25-26

8 Existing Players in Indian Luxury Market 32

9 Potential and Promising Growth of Luxury Market in

India

33-37

10 Presence of Most Purchased Luxury brands in India 38-59

11 How Luxury Brands can enter Indian Market 60-61

12 Taxation and Duties affecting Luxury Mkt 62

13 Porters Five Force Model 63-64

14 SWOT 65

15 Major Problems affecting Luxury Industry 66-70

16 Marketing Research 71-81

17 Findings 82-83

18 Suggestions 84

19 Conclusion 85

20 Annexures 86-88

21 Bibliography 89

EXECUTIVE SUMMARY

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Around two decades ago no one could imagine that a luxury market

would exist in India. But over the years with the change in the

demographics of the Indian consumer and with higher disposable

income available, the luxury market in India has indeed emerged as

one of the fastest growing markets in the retail segment.

It was very interesting to study the luxury market in India because it is

a new sector and not much research has been carried out on the

same. Through this report we have tried to give an estimate of the

luxury retail market in India, how much it has penetrated and also

how much it is likely to grow. Also we have tried to specify various

factors which are crucial for the success of luxury brands in India.

While doing out research on this project we have come across many

new findings. The role the Indian market plays in the global scenario

and the position of India vis-à-vis other countries. Also we learnt

about the duties and legal requirements for this segment. We have

tried our best to cover the various aspects that are involved in luxury

retailing through this project and it has indeed been a great learning

experience.

OBJECTIVE OF THE PROJECT

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OBJECTIVE:

To study the Current Scenario and the Growth of Indian Luxury

Market

SUB-OBJECTIVE:

Opportunities of International Brands to enter the Indian Market

Analyze the Luxury Brand Awareness in the Indian Market

Reasons behind people going for Luxury Brands

GETTING TO KNOW LUXURY

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Luxury, derived from the Latin word luxus, means indulgence of the

senses, regardless of cost.

Luxury denotes:

1. Something that is an indulgence rather than a necessity.

2. The quality possessed by something that is excessively expensive.

Luxury is something that everyone wants but nobody needs, its an

area of huge comfort and the best of the best.

“Luxury speaks a level of exclusivity, unusualness”

A luxury brand or prestige brand is a brand for which a majority of its

products are luxury goods. It may also include certain brands whose

names are associated with luxury, high price, or high quality, though

few, if any, of their goods are currently considered luxury goods.

The luxury sector targets its products and services at consumers on

the top-end of the wealth spectrum. These self-selected elite are

more or less price insensitive and choose to spend their time and

money on objects that are plainly opulence rather than necessities.

For these reasons, luxury and prestige brands have for centuries

commanded an unwavering and often illogical customer loyalty.

INTRODUCTION TO LUXURY BRANDS

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Luxury brands have often been associated with the core

competencies of creativity, craftsmanship, precision, high quality,

innovation, & premium pricing. These product attributes give the

consumers the satisfaction of not only owning expensive items but

the extra-added psychological benefits like the esteem, prestige and

a sense of a high status that reminds them and others that they

belong to an exclusive group of only a select few, who can afford the

pricey items.

The luxury sector targets its products and services at consumers on

the top-end of the wealth spectrum. These self-selected elite are

more or less price insensitive and choose to spend their time &

money on objects that are plainly opulence rather than necessities.

For these reasons, luxury and prestige brands have for centuries

commanded an unwavering and often illogical customer loyalty.

Luxury has never been something easy to define, yet this mystery

concept is something highly desired by one & all alike. We look at

delving deeper into this mystery and aura of luxury goods by way of

comparing them against ‘regular goods’ as well as highlighting the

characteristics of the luxury industry. But before beginning with that,

lets first attempt to understand some common terms associated in the

world of high end goods:

Luxury and prestige brands such as Rolex, Louis Vuitton & Cartier

represent the highest form of craftsmanship and command a staunch

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consumer loyalty that is not affected by brands. These brands create

and set the seasonal trends and are also capable to pulling all their

consumers with them wherever they go.

Premium brands are those brands like Polo Ralph Lauren, Calvin

Klein and Tommy Hilfiger that aspire to be luxury and prestige brands

but their marketing mix strategies are more attuned to a mass market,

albeit a luxury mass market. They also termed as mass-premium

brands or luxury brands.

Fashion brands on the other hand are those that address the

masses.

LVMH (Louis Vuitton Moet Hennessy) is the largest luxury good

producer in the world with over fifty brands, including Louis Vuitton,

the brand with the world's first designer label.

Luxury brands are businesses.

- The business is about understanding the consumer – and managing

the balance between exclusivity and accessibility.

- Luxury brands take the elements they feel passionate about, add

design then develop it and present it to the customers that exceed

their expectations.

A luxury good is a product at the highest end of the market in terms of

quality and price. Classic luxury goods include haute couture items

such as clothing, accessories and luggage. However, many markets

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have a luxury segment including for instance, cars, wine and

chocolates.

Such brands share characteristics like consistent premium quality, a

heritage of craftsmanship, a recognizable style or design, a limited

production run of any item to ensure exclusivity, an element of

uniqueness and an ability to keep coming up with new designs when

the category is fashion-intensive.

Keeping it simple and realistic, luxury is anything and everything that

you may truly desire; it can be short lived or a life long desire – it is

‘your’ emotional connect and reward that allows it to appear as

luxury.

DIFFERENCE BETWEEN

REGULAR GOODS AND LUXURY GOODS

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Source: Luxury Marketing-Samit Khanna IIM-A

CHARACTERISTICS OF THE LUXURY INDUSTRY

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1. Luxury means different things to different people

Luxury has no certified origins. But luxury branding is said to have

taken birth in the west with the appearance of high-end brands. To get

an insight into what luxury today means to different Americans, we

take a look at the table below, compiled by American Demographics in

2003, to understand how to develop target strategies for various

segments.

2. Luxury is a product category in itself

This can be best explained by the fact that both an expensive watch

and an artwork can be considered to be luxury items. Therefore, all

luxury marketers are not just competing in their ‘ technically

defined’ product categories (like manufacturers of refrigerators

compete amongst themselves) but for the wallet share of luxury

goods in total.

3. The meaning of luxury had changed

Luxury has moved from its ‘old’ meaning of ownership (also known

as conspicuous consumption - Conspicuous consumption is a term

used to describe the lavish spending on goods and services that are

acquired mainly for the purpose of displaying income or wealth

rather than to satisfy a real need of the consumer. In the mind of a

conspicuous consumer, such display serves as a means of attaining

or maintaining social status. Invidious consumption, a necessary

corollary, is the term applied to consumption of goods and services

for the deliberate purpose of inspiring envy in others.

4. Aura is more important than exclusivity

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Exclusivity is something that cannot be ensured to a great extent

and neither is it the prime requirement of a luxury consumer. The

consumer bases his decisions on the relevance of the aura of the

brand to his fulfilment or actualization needs.

5. Classification of luxury consumers

SRI Consulting Business Intelligence places consumers in 3 groups

according to what luxury means to them :

Luxury is Functional – these consumers tend to buy luxury

products for their superior functionality and quality. Consumers in

this segment, the largest of the three, tend to be older and

wealthier and are willing to spend more money to buy things that

will last and have enduring value. They buy a wide array of luxury

goods, from artwork to vacations, and conduct extensive pre-

purchase research, making logical decisions rather than

emotional or impulsive. Messages that highlight product quality

and are information-intensive are powerful with this group

Luxury is Reward – These consumers tend to be younger than

the first group but older than the third. They use luxury goods as a

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status symbol to say “ I’ve made it! ” They are motivated by their

desire to be successful and demonstrate this to others. Luxury

brands that have widespread recognition are popular, however

they don’t wish to appear lavish or hedonistic in their appearance.

They want to purchase “smart” luxury that demonstrates

importance while not leaving them open to criticism. Marketing

messages that communicate acceptable exclusivity resonate with

this group.

Luxury is Indulgence – This group is the smallest of the three

and tends to include younger consumers and slightly more males

than the other two groups. Their purpose for luxury goods is to

lavish themselves in self-indulgence. They are willing to pay a

premium for goods that express their individuality and make others

take notice and are not overly concerned with product longevity or

possible criticism. They enjoy luxury for the way it makes them

feel, therefore have a more emotional approach to purchases.

They respond well to messages that highlight the unique and

emotional qualities of a product.

INDIAN LUXURY MARKET

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LUXURY is no stranger to India. The erstwhile maharajas and princes

led a life of opulent splendour. The only way to be apart of the elite

was to be born into it. The lifestyle was also associated with hunting,

polo and other games of the rich. New money could never get into

this circuit.The aspiration was always there. But the princes operated

in a different league altogether. The era of the self-made millionaire

was yet to arrive. So small possessions, or copied fashion designs

with a few geegaws thrown in, became the height of luxury. An

achiever of the 1970s could only get by with a good foam mattress —

no Omega, Rolex or BMWs. This trend saw a shift, a gradual one, in

the 1980s. Luxury began creeping into upper class homes through

small things and symbols. The colour TV came in, the humble pen

was elevated to a Parker, successful self-made people began to be

featured in magazines. The concept of luxury as a reward for

achievement gained acceptance, though royalty and the aristocracy

continued to remain the benchmark of the elite. The real change

came in the 1990s when more people started making more money.

There was a sudden explosion of colour and things and objet D'arts

began to appear. In order to gain access to luxury and class one

could just go out and charge it. What contributed to this shift? India

opened up to the world. The liberalization process brought more than

high economic growth rates. It showed the people what was possible.

In the process, it has altered mindsets. The IT revolution, and the

consequent demand for Indian brainpower, has created a whole new

breed of wealthy global Indians. At the other end, an increasingly

open economy has created new business opportunities, which has

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resulted in a slew of new, extremely successful first generation

businessmen. They are millionaires. They spend. They sport Vertu

mobiles. But they may not even be comfortable with English. All of a

sudden, wealth is no longer the preserve of the elite.

THE GROWTH OF INDIAN LUXURY MARKET

The Indian is growing day by day as people are spending money on

luxury items. A couple of years ago – weeks in the case of the

Porsche-he bought every single item abroad, spending hard earned

foreign exchange ,lining up at the vat refund counters at airports. But

not any more, the world’s most prestigious luxury brands are

expanding their footprint in India, almost as if discovering a new

world. Moreover, it is not just the luxury brands, there are also luxury

plus for those who have the cash to splash on products with the

cachet of exclusivity.

In today’s deluxe India, the children of your domestic staff are

wearing Levi’s and lee. For the brand conscious and trendy, it has to

be Swarovski encrusted seven of all mankind jeans, specially made

for the Indian market. We can look more into the qualitative as

quantitative insights of the luxury market with context to India.

EXPOSURE TO THE WORLD OF

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LUXURY AND FASHION

Fashion Weeks

Two big fashionista gatherings

- Wills Lifestyle India Fashion Week

- Lakme India Fashion Week

• Aim to make India a global fashion destination

Indian Designers

Increasing visibility in the global fashion arena

- Rina Dhaka’s creations appeared in Marie Claire

and Vanity Fair

- Anamika Khanna,Manish Arora showcase their

work at the Paris Fashion Week

Fashion Magazines

Play an important role in generating awareness

of luxury products from a global perspective

• Face association: ‘Bollywood Celebrity endorsments’ to create hype

QUALITATIVE INSIGHTS

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1. According to a study by American Express,‘Inside the Affluent

Space ’, the mindset of the Indian consumer is a desire to prove that “

I’ve Made It ”. This can be related to the luxury categorization which

is based on the fact that luxury is seen as a reward, both for

achievements in life as well as showcasing these achievements to

others.

2. The Luxury Marketing Council Worldwide has established a

chapter in India, with the aim of promoting luxury in India. Their task

will also be to build synergy between various luxury brands interested

in India by way of sharing of consumer insights as well as best

practices.

3. Even the Asian region is not uniform in its preference for luxury in

terms of need fulfillment .Therefore, it becomes important to delineate

the needs of the Indian consumer from the other Asian regions to

target them better. This agenda gains importance because many

Indians look at acquiring luxury from places such as Hong Kong,

Tokya, China etc.

Eg. It is interesting to note that Singapore consumers are more of

connoisseurs compared to Hong Kong consumers who want Talk-

Value from their luxury goods.

4. Hindustan Times has been at the forefront of driving the luxury

revolution in India by organizing two Indian Luxury Conferences in

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the last 4 years. To add to it, it also brings out a monthly supplement

of luxury goods available in India, thereby creating awareness for the

luxury brands.

Quantitative Insights

1. As far as quantitative estimates are concerned, there will be

135,000 millionaires (in US dollar terms) in India by 2009.

2. The affluent market is set to grow at a rate of 13% in India, and

by 2009, there will be approximately 1.1 million affluents here.

3. The wealth potential of India’s affluents was to the tune of US$

203 billion as of 2005.

With income levels going up, customers prepared to buy such

brands are growing in numbers. According to an NCAER Household

Income Survey, in 2001-02, there were 20,000 families in India with

annual incomes of more than Rs 1 crore. By 2005, the number

increased to 53,000. By 2010, India will have some 1, 40,000

crorepatis. Retail management company KSA Technopak estimates

the market for luxury and high-end clothing in India at Rs 1,000 crore

and for accessories at another Rs 1,000 crore.

It is not just the big

Indian cities like

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Delhi, Mumbai and Bangalore where the rich are located. A small

town like Nagpur had nine millionaires in 1995-1996. By 2001, that

figure increased to 425, with a growth rate of 91 percent. A high end

luxury brand like Ermenegildo Zegna, whose customers include Bill

Clinton, Pierce Brosnan, Shah Rukh Khan and Al Pacino, recently

made a presentation in Ludhiana and Jalandhar.

Source: www.pallasweb.com

Increased product knowledge and brand awareness are translating

into greater consumer confidence an important catalyst for luxury

consumption in a fast-emerging market. Luxury brands are now

following the Indian consumer, expanding their sales operations.

According to a study by the Discovery division of Mumbai based O&M

advertising; India and China are beginning to contribute in a big way

to the global market for luxury products. This global market was

estimated at approximately $69.4 billion in 2003 and is expected to

grow 50 per cent to reach $140 billion by 2010. A Technopak study

puts the Indian luxury market at around $444 million. According to the

World Wealth Report 2005 published by Capgemini and Merrill

Lynch, “the so-called BRIC nations - Brazil, Russia, India and China

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— continued to emerge as an economic force and create wealth in

the process.” In fact, China is expected to slow down and its

neighbours are likely to feel the pinch. “One exception is India,”

qualifies the report. In terms of numbers, O&M says there were

61,000 high networth individuals (HNIs) in India in 2003. The World

Wealth Report puts HNI growth in India at 14.6 per cent per annum,

nearly double the global rate.This is likely to be much higher. More

than the numbers, it's the attitude that has changed. Indian

consumers have shown a pronounced desire to consume. Instead of

making yearly trips abroad to shop.

It is, thus, the emergence of mass affluence combined with

aspirational mindsets and lifestyles that are helping to stimulate

consumer demand. The rapid growth of the Indian middle class

means that a larger number of consumers are able to afford luxury

goods than ever before.

How & why Luxury market is Booming in INDIA?

o India ranked first for the fifth time, on the Global Consumer

Confidence Index – June 2007, conducted by The Nielsen

Company.

o Indians were judged the world’s most optimistic consumers,

with high financial confidence about their income for the next 12

months.

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o Higher disposable incomes, easy availability of credit and high

exposure to media and brands has increased average

propensity to consume considerably over the years.

o India ranked first for the third consecutive year, on the Global

Retail Development Index – 2007, conducted by AT Kearney

across 30 emerging economies. India is ranked as the most

preferred retail destination for international investors.

o Modern retailing outlets are increasingly matching up to global

standards and witnessing intense competition.

o Organized retail sector is estimated to grow by 400%, in value

terms, by 2007-08.

o Increasing number of domestic and international players are

setting up base and expanding their business to tap the

burgeoning market.

o Fastest Growing Economy is one of the biggest reason for

the growth in Indian luxury market:

o • Two-thirds of India’s population is under 35 years of age and

more than 60% of the population will be in the working age

group (15-60) till year 2050.

o • The median age of 23 years, opposed to the world median

age of 33, sets the emerging young India apart

o • India is home to about 20% of the global population under 25

years of age.

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WHERE'S THE MARKET- THE PRESENT SCENARIO

Source: IMD World Competiveness Yearbook 2006

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PRESENCE IN HOTEL

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LUXURY MALLS IN INDIA

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AFFLUENT CONSUMERS OF LUXURY

The new generation affluent Consumers are:

CEOs and other senior professionals

(in their thirties and early forties)

Entrepreneurs in new businesses

Returning "prodigal children"

Actors and models

Franchisees, and small and medium Retailers

In terms of population percentage, it may seem minuscule. The

seriously rich and affluent represent just 1 per cent of the entire

population, but with a base of one billion people, it still adds upto 10

million high end customers, a substantial number in any market.

They are what is being termed Global Indians, the ones who are

traveling abroad at the drop of a barbour hat. They are acquisitive,

brand conscious and, above all they want the best and they want it

now. If they can buy in their city so much better.

Source: IMD World Competiveness Yearbook 2006

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TOP DRAWS

The five top purchases of the affluent Consumer

Watches & Jewellery Apparel & Accessories

Electronics Wines & Spirits

Personal Care Automobiles

Source: India Luxury Review-2007,A.T-Kerney

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THE EXISTING PLAYERS IN THE INDIAN LUXURY

MARKET

JEWELLERY:

The top Luxury Jewellery brands in India today

Cartiers SA is a French jeweller and watch manufacturer that is a

subsidiary of Compagnie Financière Richemont SA. The corporation

carries the name of the Cartier family of jewelers whose control

ended in 1964 and who were known for numerous pieces including

the "Bestiary" (best illustrated by the Panthère brooch of the 1940s

created for Wallis Simpson), the diamond necklace created for

Yadavindra Singh the Maharaja of Patiala and in 1904 the first

practical wristwatch, the "Santos." Cartier SA is headquartered in

Paris. Jacques Cartier (of cartier family) visited India in 1911 in

pursuit of fine pearls. He also persuaded a number of Maharajas to

reset their jewels using Cartier designs. The necklace, created for the

erstwhile Maharaja Bhupinder Singh of Patiala by the House of

Cartier in 1928 is one of the most expensive pieces of jewellery ever

made.

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The world famous jeweler was back in India in 1997, when the curbs

on luxury goods imports were eased, with its watches, pens and

eyewear. The jewellery has had to wait. Cartier retails its jewellery

only through exclusive boutiques. The company is now shopping for

the right real estate in Delhi and Mumbai.

De Beers is coming to India now for its EBO, its already present in

MBO’s. The world’s largest diamond trader is about a year away from

starting an exclusive outlet here in India. For De Beers, India is a key

market. Almost 10 per cent of its global retail business or around $7

billion comes from India. The company has been doing research on

the Indian market. The firm conducted a study along with Ledbury

Research, according to which the growth of millionaires in India has

been at the fastest pace in 2007.

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CLOTHING:

LVMH or Moet Hennessy Louis Vuitton S.A is a French holding

company and one of the world’s biggest luxury goods conglomerates.

It is the parent of around 60 sub-companies that each manage a

small number of prestigious brands. The group was formed after

mergers brought together champagne producer Moet et Chandon

and Hennessey, a leading manufacturer of cognac. In 1987, they

merged with fashion house louis vuitton to form the current group.

LVMH owns several famous brands in India in various product

categories such as :

Wines and spirits (Dom Pérignon, Moët & Chandon, Veuve, Clicquot

and Hennessy),

Perfumes (Christian Dior, Guerlain and Givenchy),

Cosmetics (Bliss, Fresh and BeneFit),

Fashion and leather goods (Christian Lacroix, Donna Karan,

Givenchy, Kenzo and Louis Vuitton),

Watches and Jewellery (TAG Heuer, Ebel, Chaumet and Fred).

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AUTOMOBILES:

More than 5,000 luxury cars were sold in 2006, up from 3,000 cars in

2005 and just 1,000 in 2004. Both financiers and companies like

BMW India believe that the market will hit 10,000 units by 2010. Over

80,000 millionaires in metros and mini-metros have fuelled increasing

demand for these vehicles priced at Rs 20 Lakh and above. Car

loans have also come up with competitive equated monthly

installments (EMIs) to attract the common individual with big dreams.

Top of the line marques like Mercedes-Benz, BMW, and Audi are

now available at an EMI very close to those of premium cars like

Honda Accord, Toyota Corolla, and Hyundai Sonata. In the volume

car market, 75% of all sales are financed, while 60% of luxury cars

are financed.

Given the global economic conditions, the worldwide passenger car

market is expected to witness a 10% fall in sales. However, India’s

luxury car market outperformed other Asian countries in sales last

year by rising 40%.

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TOP 10 LUXURY CARS IN INDIA

MERCEDES BENZ E CLASS

VOLVO S 80

BMW 5 SERIES

AUDI A 4

BMW 3 SERIES

MERCEDES BENZ C CLASS

VOLKSWAGON PASSAT

TOYO TA CAMRY

SKODA SUPERB

NISSAN TEANA

LUXURY CARS AWAITED

MODEL COMPANY

Evolution X Mitsubishi

Minis BMW

AMV8 Vantage Aston Martin

Brooklands coupe Bentley

C30, C70 Volvo

Hummer General Motors

Lexus LS 460 Toyota

Cruse Chevrolet

Source: www.luxurycarwheelsindia.com

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SOME MORE THE OTHER LUXURY BRANDS PRESENT IN INDIA

T2 Gucci

Fendi Chanel

Jimmy Choo Versace

FCUK Bvlgari

Burberry Mango

Moschino Lapidus

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POTENTIAL OF LUXURY MARKET IN INDIA

Source: www.UnityMarketing/luxurymap .com

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PROMISING GROWTH OF LUXURY MARKET IN INDIA

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Indian luxury market to touch US$ 452 million

A recent luxury trends report from Ledbury Research advises

companies to start focusing on India. They are estimating that the

number of families with annual incomes of more than $230,000 will

have more than doubled from 20,000 in 2002 to 53,000 by the end of

2005 and will grow to 140,000 by 2010. By way of comparison, the

UK has 400,000 families at this income level currently.

Luxury car makers are pouring in to woo the nouveau riche (Audi,

BMW are the most recent entrants). A recent article in the Christian

Science Monitor talks about how the luxury product makers are trying

to tap the lavish spending that occurs around the wedding season by

timing their new product introductions, market promotions etc.  An

average Indian wedding ($34,000) costs almost 30% more than the

average American wedding ($26,327), with rich Indian families

spending as much as $2 million dollars.

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Indian luxury market may boom to US$ 30 billion by 2015

Luxury is all set for an unprecedented flourish here as the

Indian consumer has overcome the guilt pangs associated

for ages with indulgence. The size of the luxury market in

India is estimated at around $3.5 billion, and what’s best,

given the right impetus, it could easily leapfrog to $30-billion

by 2015.

Indians are lapping up luxury assets, services and goods

with voracious appetite, according to a comprehensive

survey done by AT Kearney for The Economic Times.

Indians splurge $2.9 billion on luxury assets (essentially

private jets and luxury homes, cars or yachts and art),

spend another $953 million on luxury services and top it

by buying luxury goods worth $377 million.

Source: www.indianluxuryreview-2007,A.T Kerney

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Some facts and figures assisting the market growth

The market for luxury products in India is estimated to be

worth half a billion US dollars as of 2005, growing at a

rate of 20% p.a

India has the world’s third largest consumer class (122

million individuals with purchasing power).

Personal consumption is 67% of GDP in India; only the US

is higher at 70%.

1.2 million Indians are “extremely rich”, with an estimated

83,000 having net assets of over US$ 1 million (19.3% p.a.

increase).

Super-deluxe brands like Porsche, Chanel, Louis Vuitton, Rolls-

Royce, Rolex, Bvlgari and others have entered the market in 2006.

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PRESENCE OF SOME HIGH PURCHASED LUXURY BRANDS IN INDIA

HUGO BOSS – The name denotes success, perfection and a style

that transcends international borders. This German luxury fashion

group is a well established menswear brand for the last 80 years; the

company was started in 1923.

Key initiatives of the company

Started women wear in 1998.

Started shoes/accessories in 2003.

Presence in India

2003 - Entered India through franchisee partner, Bin Hendi

Enterprises of Dubai and launched its first store in the Oberoi hotel,

Delhi.

2004 - Launched one more store in Mumbai.

2005 - Launched 2 more store in Bangalore and Mumbai.

But at the present there are only 3 stores in India, one of the Mumbai

store has been shut down. The company has invested Rs.25crore

approx. in these stores in India.

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Product Portfolio in India

Uniform presentation of products through-out the world and effective

marketing measures support the strong image of the HUGO BOSS

brands and the Company. Hugo Boss has brought two premium lines

to the country: Boss Black and Boss Orange and the product

category is only for men in India. Hugo Boss's Indian customers

preferred sportswear and this comprised a large percentage of its

sales.

Product Range – Ready to wear, Footwear’s, Belts, Handbags, other

accessories.

BOSS Orange

BOSS Orange offers casual collections for men and women who

enjoy dressing in style and wearing surprising looks. Unusual

materials, bold colors and beautiful details appeal to a clientele that

delights in experimentation.

BOSS Black

The women’s- and menswear collections in the BOSS Black line offer

versatile fashion ranges with a rich array of elegant "modern classics"

in business-, leisure- and formalwear: perfect looks that satisfy the

most sophisticated tastes.

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Price Points

Men shoes Rs.13000-35000

Belts Rs.5000-15000

Wallets Rs.8000-15000

Ready-to-Wear Rs.15000-35000

Employees Remuneration in India

The sales executives get 15000 p.m. + incentives.

The store manager gets 35000 p.m. + incentives.

Positioning in Delhi

The 1,350 square foot store showcases the Hugo Boss menswear

collection in the 5 star Oberoi hotel in Delhi and has been set up next

to Louis Vuitton, in order to give the ideal positioning and to get the

right profile of customers.

Challenges Faced in India

Understanding the market and the consumer behavior.

Understanding the right location because consumer behavior in

the high end market is not easy to predict.

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Marketing Strategy

Global advertising campaigns.

Do a lot of sponsorship activities both in sports and arts. In

sport they have been the oldest sponsor of F1 racing for the

past 25 years. They also sponsor tennis and golf.

Advertising

They do not use TV for fashion, but they use it for perfumes

which are handled by Procter and Gamble. TV doesn’t make

sense for fashion.

They use a lot of print media in the big global fashion

magazines and newspapers. Print is a very big medium for

them around the world.

Taking into account the worldwide publicity which includes

sponsorships, events and advertising, they spend 8 per cent of

their net sales on advertising and promotions.

In India the franchisees invest in bill boards and magazines.

Expansion Plans

The company has plans to launch Hugo Boss stores in

Chennai, Hyderabad and Kolkata in future. The brand intends

to focus on expanding in the Indian market only through

franchises and thus do not intend to enter the Indian retail

market at the moment through any joint venture.

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LOUIS VUITTON

Moët Hennessy Louis Vuitton (LVMH) is a french holding company

and the world's largest luxury goods conglomerate. It is the parent of

around 60 sub-companies that each manages a small number of

prestigious brands. The group was formed after mergers brought

together champagne producer Moët et Chandon and Hennessy, a

leading manufacturer of cognac. In 1987, they merged with fashion

house Louis Vuitton to form the current group.

The company was founded in 1854 in Paris, soon established itself in

London, but remained a handmade, luxury traveling bags brand for

seven decades before its diversification into bags and other leather

goods.

As of December 31, 2006, LVMH operates approximately 1,859

stores worldwide.

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Key Initiatives

1997 - Ready-to-wear was launched.

2003 - Watches were launched.

Presence in India

2003 – Launched first store in Delhi.

2004 – Launched second store in Mumbai.

LVM has picked 51% in Mumbai’s LV Trading (LVT India), which has

two stores in the country’s financial capital and Delhi. It had entered

into a distribution agreement with LVM to sell Louis Vuitton branded

products in India.

Challenges Faced in India

The lack of appropriate infrastructure their distribution is in

hotels but in the long term they can't limit themselves only to 5

star hotels.

FDI restrictions in retail, they are here to build presence for

luxury products.

High import duties.

Have little control over the client-tenant mix as there are limited

brands in this segment.

The fashion media in the country is in a nascent stage. The

media environment is unused to the luxury market. There are a

limited number and variety of lifestyle/fashion publications

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Expertise In

LVM specializes in manufacturing and marketing luxury products in

leather goods, ready to wear, shoes, watches, jewellery, textiles,

writing instruments, luggage, bags, sunglasses and accessories.

Louis Vuitton, which started as a luggage goods maker in mid 19

century, later diversified into other fashion and luxury products.

Product Portfolio in India

India does not have Louis Vuitton's entire range as yet, certainly not

jewellery, or ready-to-wear, two of its prime categories; it is because

store sizes are small, even as the company itself is gearing itself for

larger stores worldwide.

Product Range – Women shoes, men shoes, handbags, wallets,

luggage bags, watches and sun glasses.

Shoes are a big part of their collection and of course they go deeper

into certain lines such as open shoes. In some types of watches,

there are local preferences. But it is the same basic collection as you

see around the world.

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Objective in India

The objective of the company is generating a customer base

and building brand loyalty among Indian customers.

The company hopes to reach one million lifestyle consumers in

India, and offer them superior service and a truly Louis Vuitton

experience.

The company aim to increase the contribution of Indians to

Louis Vuitton's market share worldwide.

Louis Vuitton is not worried about local turnover while

formulating its expansion strategy

Pricing

The price positioning of Louis Vuitton is at a premium segment.

Majority of its leather products retail at Rs 25,000 upwards.

Women Hand bags Rs.18000-250000

Men Hand Bags Rs.60000-300000

Wallets Rs.12000-15000

Men shoes Rs.25000-75000

Women shoes Rs.25000-75000

Employees Remuneration in India

Sales executives – Rs.35000 p.m. (inclusive of incentives)

Store manager – Rs.50000 p.m. (inclusive of incentives)

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Marketing Strategy in India

The company has rolled out its global ad campaign in India.

They also promote the brand through local events to reach a

wider audience.

The company, made the opening of their Mumbai store coincide

with the 150-year celebrations of the brand Louis Vuitton. The

Chairman and CEO of Louis Vuitton, Yves Carcelle, came

down from France specially to host this event, which was a

tremendous success.

They plan to a do a `trunk show' where they will exhibit antique

trunks from Louis Vuitton's museum which showcases the

history and tradition of the brand. India and Louis Vuitton have

had a shared history, as the Maharajahs were some of the most

loyal `special order' clients of Louis Vuitton since its inception in

1854, and this event can showcase this shared tradition, and

re-introduce `special orders' to today's Indian customer.

They have unique business strategy where in they do not

believe in hiring any one person to represent the brand. LV

treats each client as its brand ambassador. Not just the

business strategy but it is also the philosophy these brands

follow that is interesting.

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Manufacturing

French luxury goods giant Louis Vuitton has set up its first Asian

manufacturing plant at Pondicherry through a 50:50 joint venture with

Dilip Kapur's Hidesign. The plant is expected to come up on a 30

acre plot within a year.

The move to set up a production base in India is crucial as the

company largely relied on Europe, and France in particular, as

customers took to the LV insignia in a big way.

Like LV, Hidesign stresses on artisan-driven, soft, supple leather

designs.

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VALENTINO

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Valentino Fashion Group is an Italy-based company active in the

luxury market of the fashion industry started in 1959 in Rome.

Valentino operates in 69 countries, with more than 1,250 shops, and

208 shops directly managed by the Company. Valentino Fashion

Group is headquartered in Milan, Italy.

In 2006, proceeds reached 239.5 million of Euro a 14.5% increase

over 2005.

Key Initiatives

1965 - Valentino is recognized as the top name in Italian Haute Couture.

1969 - Begins his Boutique line of clothes

1970 - Launch of his first Ready-to-Wear collections

1971 - Opening of the first menswear shop in Rome

1978 - Launch of the Valentino perfume at a gala evening in Paris

1996 - Valentino is named Cavaliere del Lavoro

2004 - Launch of V perfume which will be followed by V for men

Presence in India

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Italian couture brand Valentino opened its flagship store in Delhi’s

Shangri La hotel in 2006. The store is a product of a franchising and

licensing with Mafatlal Luxury (P) Ltd.

Product Portfolio in India

The store here is retailing brands such as

Valentino Garavani - positioned as a main line black label,

focusing on handbags, footwear, small leather goods, belts,

and other accessories for both men and women.

Valentino Roma - an easy-to-wear line of women's clothing in

the diffusion segment for a broad range of consumers in the

age group of 25-40 years, designed for all occasions.

R E D Valentino - that primarily addresses young and modern

clientele of up to 25 years and reinterprets the values of the

store in a fresh, contemporary manner.

Product Range - Ready-to-wear, handbags, footwear’s, small leather

goods, belts and other accessories for both men and women.

Price Points

Women Handbags Rs.25000-2,50000

Sunglasses Rs.11000-16000

Men Belts Rs.12000-25000

Women shoes Rs.30000-60000

Men Shoes Rs.31000 and abv.

Target Customers

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This brand targets high end customers with an age group from 15

years and above.

Strength

Its image of glamour, exclusivity and strong style make Valentino a

brand well known for the sophistication and elegance of its creations.

Store’s Concept in India

The new outlet - at Hotel Shangri La - is designed in pure Valentino

style, in keeping with the layout of Valentino stores worldwide with

signature pieces imported from Milan.

Expansion Plan in India

In 2007 they plan to open valentino store in Mumbai.

Valentino V/S Fratelli Rossetti

Pricing of Valentino is higher than Rossetti.

Its target customers are 15 yrs and above, which says valentine

is catering to all age group from teenager to adult due to its

glamorous and exclusive style. Whereas Rossetti mainly cater

to people in age group from 25yrs and onwards.

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DIOR

Established his main fashion house in 1949; Christian Dior New York,

Inc. Christian Dior remains a leader in the world of fashion after more

than 50 years. Yet Christian Dior has grown far beyond its high

fashion origins to become one of the world's leading luxury goods

holding companies, through LVMH Moët Hennessy Louis Vuitton, led

by Bernard Arnault. While Christian Dior continues to lend its name

and prestige as the parent company to Arnault's luxury goods empire,

it remains a tiny part of the company's overall sales. Christian Dior is

organized into two main divisions: Christian Dior Couture and LVMH.

With EUR 350 million in sales, Christian Dior Couture represents just

2 percent of the company's total sales of more than EUR 12 billion in

2001. Christian Dior operates a network of 130 boutiques around the

world.

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Key Dates:

1946: Dior launches his own fashion house.

1947: Debut of Dior's "New Look" line revolutionizes women's

fashion.

1948: Company launches Christian Dior Perfumes.

1950: Company begins licensing Dior name.

1958: Yves Saint Laurent becomes lead designer for Dior.

1990: Christian Dior acquires controlling share of Moët Hennessy

Louis Vuitton, founding the LVMH luxury goods empire; begins

cutting back number of Dior licenses.

1996: John Galliano as lead designer in order to revive Christian Dior

image.

2001: Hedi Slimane is named to create new men's fashion line;

company launches new retail concept, Christian Dior Haute Joaillerie.

Principal Competitors

Bulgari; Cartier; Chanel; Gianfranco Ferre; Gianni Versace; Gucci

Group; Hermès International; I Pellettieri d'Italia; LVMH Inc. (U.S.);

Montres Rolex; Puig Beauty & Fashion Group; Compagnie Financière

Richemont AG; S.T. Dupont; Tiffany & Co.

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Presence in India

In 2006 French fashion house Christian Dior announced its foray into

the Indian market under the franchisee run by khote family and set up

its first boutique in the The Oberoi hotel in New Delhi. Kalyani Chawla

is the brand ambassador and spokesperson of CDC in India.

Product Portfolio

The group's principal activities are the production and sale of:

Christian Dior Couture, Champagne & Wines, Brandy & Spirits,

Fashion & Leather Goods, Perfumes & Cosmetics and Selective

Retailing.

In India Dior sells a host of ready-to-wear apparels, leather goods,

shoes, accessories, cosmetics and sunglasses and all these

categories are for women through its boutique.

Footwear’s

Christian Dior Shoes are extremely durable and classy at the

same time.

The Christian Dior shoes for women are noted for their subtle

colors with designs that show the true feminine side of a

woman.

Christian Dior sneakers are just right for one’s daily walks

especially if one wants want to feel light and comfortable, and

not to mention that they are very affordable for anyone to have.

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Pricing

Prices of the products ranging from cosmetics, shoes, leather bags,

costume jewellery and dresses would be slightly higher in India than

in Paris and other Middle East countries due to the different tariff

regime and import duties.

Price Points

Hand bags Rs.19500-300000

Belts Rs.13000-20000

Women Shoes Rs.17000-55000

Women Apparels Rs.17000-1000000

Watches Rs.46000 and abv.

Employees Remuneration in India

Sales executives – Rs.15000 p.m. + incentives

Store manager – Rs.35000 p.m. + incentives

Target Customer

Christian Dior has engineered a remarkable commercial

breakthrough based on top quality, highly creative products that

appeal to a youthful, refined clientele. The company is undoubtedly

the biggest hit of today's fashion world.

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Objective in India

Focus would be to establish the brand in India rather than just making

profits.

Challenges Faced in India

Indians prefer to buy luxury goods in Europe or Singapore or

Dubai, as they feel that it is cheaper abroad.

Most Indians feel that the latest launches take a while to come

to India. After-sales service is also a major concern for people.

Marketing Strategy in India

A lot of promotion such as organising photo-shoots with lifestyle

magazines such as Cosmopolitan and Femina.

Making its latest international launches available in India.

Offering zero per cent finance schemes to make the watch

category more affordable for the Indian youth, Swiss watch

company LVMH Watches and Jewellery is going all out to reach

its niche target market.

DIOR at Luxury Mall- Emporio (Rated one of the best Luxury mall in India)

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HOW LUXURY BRANDS CAN ENTER IN THE

INDIAN MARKET?

FDI up to 100% allowed under the automatic route for cash and

carry wholesale trading and export trading and FDI up to 51% is

allowed, with prior Government approval for retail trade in ‘Single

Brand’ products. However, FDI in retailing of goods under multiple

brands, even if the goods are produced by the same manufacturer,

is not allowed under the current guidelines.

o Policy Framework

This route involves foreign company entering into a licensing

agreement with a domestic retailer or partnering with Indian

promoter owned companies.

o Strategic License Agreements

This entry route is widely used, with many international brands

setting up shop. There exists the master franchise route and the

regional franchise route for India entry.

o Franchisee Route

100% Foreign Direct Investment is allowed in wholesale trading

which involves building of a large distribution network.

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o Cash and Carry Wholesale Retailing

International firms can enter into agreements with domestic

players and set up base in India. Share of MNCs is restricted to

49% in this route.

o Joint Venture 

Company can establish its manufacturing unit in India along with

standalone retailing outlets. These are the available Routes for

Foreign Players to Enter the Retail Sector.

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How taxes and Duties are affecting growth of

INDIAN LUXURY Market?

o Steep import duties mean luxury fashion products are priced 15

percent higher in India than in their country of origin and a reduction

in rates will actually increase government revenue from their sales.

o We pay around 45 percent taxes to import our goods to India

and this affects the retail pricing of the product.

o The pricing of these items is almost 15 percent higher.

o The high duties apart, the fact that there is a flourishing market

in India for foreign luxury goods can be gauged from the fact that

brands like Kenzo are looking to ramp up their presence in the

country despite the global financial meltdown.

o Owned by LVMH, one of the biggest luxury groups in the world,

Kenzo has ready-to-wear, accessories and home furnishing lines. For

the moment, it has introduced only its men’s wear and accessories

sections and plans to shortly introduce a women’s wear line.

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PORTERS FIVE FORCE MODEL

5 FORCE HIGH MEDIUM LOWBuyers bargaining power

Suppliers bargaining power

Threat of new entrants

Threat of substitutes

Competitors rivalry

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COMPETITORS RIVALRY: HIGH There are limited brands as a result they are competing to cater

to the same audience. High fixed costs/high operational cost-winding up is difficult. Industry growth-increasing disposable income. Competition at all levels.

SUPPLIERS BARGAINING POWER: MEDIUM Limited number of suppliers at present but because of

tremendous market potential there might be more suppliers. Buying on the basis of consignment as a result loss marking is

reduced. Reach of the established suppliers(distributors) in terms of

networking is excellent as a result they can get a good offer from the manufacture.

BUYER BARGAINING POWER: LOW Lack of availability of large no. Of brands. Brand loyalty-cannot easily switch over to other brands. High prices and no discount offered by any retailer on such high

end brands. Product differentiation is high.every brands has its own image

in the minds of the consumer.

THREATS OF SUBSTITUTES: LOW There are no other substitutes for luxury brands.since it has

high brand value which cannot be replaced by any other brand.

THREATS OF NEW ENTRANTS : LOW TO MEDIUM (Depending on the Category) Government barriers –FDI limits High capital cost. Branding is very important. Difficult to set up a distribution network.

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SWOT ANALYSIS

STRENGHTS

1. Brand Name/Brand Ambassadors

2. Customer Loyalty

3. Quality

4. Global Presence

WEAKNESSES

1. Concentrated Market-only metro

cities

2. Government Regulations

3. High Prices

4. Percentage of target audience is

Less

5. Higher Operational cost-rents

OPPUTUNITY

1. Manufacturing the brands in India itself

rather than importing it

2. FDI Regulations

3. Gloabalization

THREATS

1. Fake branded stuff available in India

2. Available at cheaper prices abroad

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MAJOR PROBLEMS AFFLICTING IN THE INDUSTRY

1. HIGH TARIFF DUTIES

Luxury retailers have to pay multiple taxes to import their goods in

India. Various duties like custom duty, octroi, service tax etc make the

price of the product dealer in India when the same branded product is

available at a cheaper rate in other international markets. Hence

people traveling abroad prefer buying branded products from outside

rather than from India.

2. HIGH OPERATIONAL COST

The cost of operating a luxury outlet is high because the size of the

store has to be elaborated and also it has to located at a prime

location in major cities. Due to the image that is associated with

luxury products, the cost of maintaining the store is high because it

has to look upbeat all the time. At the same time these stores

normally situated in 5 star hotels or big shopping malls where the

rents charged are very high and hence the cost is further increased.

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3. LOW CUSTOMER TURNOVER

The number of customers who visit a luxury store is comparatively

lower than a regular store. Also the luxury store outlets are located

exclusively in certain areas and are sometimes not accessible by

everyone, this factor also affects the customer turnover.

4. LACK OF ADEQUATE SPACE

The luxury retail stores have to be located in 5 star hotels or malls,

because that is where the potential customers are most likely to come

for shopping, hence the feasible space available is very less.

5. DUPLICATION

There are a lot of duplicate products available in the Indian market.

Most of these products come from China. The same branded product

which is available for 25000 Rs. is available for 1500 Rs. When it is

not authentic. Though the quality of these products is not good, they

appear to be the same and hence people don’t mind buying them.

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6. LACK OF AWARENESS OF BRANDS AMONGST INDIAN

CONSUMERS

The Indian consumer is not very well informed about the various

luxury brands, only may be 5% of the population is well versed with

various foreign brands. The Indian consumer is not aware of the

quality standards that these brands possess and hence resists from

buying these brands as they find them overpriced.

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Limitations of the Government framework

o The luxury sector needs to be treated in isolation with other

retail sectors as the dynamics governing it are significantly

different in nature.

o To reach its potential, the Indian retail sector requires

significant capital, technology and best practices to bridge the

existing productivity gap and achieve scale in operations, which

are critical to the sector's success.

o One of the key steps towards facilitating the development of the

retail sector and in accelerating its growth would be to further

ease foreign direct investment in the sector.

o The constant back and forth on policy decision on retail at the

centre also acts as a dampener for luxury brands.

o The Indian tariff structure is high and that in itself is a huge

deterrent.

o India has one of the highest duties/taxes on imported luxury

goods, which drive the grey market and duty free purchases,

while the stringent regulatory environment impedes investment

by foreign brands.

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LUXURY BRANDS URGE RATIONALISATION

OF TAXES

o Dealers in luxury brands today urged the Government to

rationalise the taxation structure in the country so that luxury brands,

which were still largely purchased abroad, were available at globally

competitive prices to Indian consumers.

o Govt. should take legislation like Foreign Direct Investment (FDI),

Value Added Tax (VAT) and other duties into consideration in order

to help promote the sale of luxury brands for which there was a

sizeable demand within the country.

o To try to remove yet another hurdle to luxury sales in the country

i.e. the lack of appropriate retail space and High Streets, resulting in

them having to rent space in 5-star hotels at exorbitant prices.

o The 112% tax on luxury cars is a great barrier, Coupled with the

poor road infrastructure, it resulted in customers ending up with the

feeling that they were not getting value for their money.

o They said there was an emerging 97 million strong middle class

segment with a huge consumer mindset who believed in

demonstrating their wealth and wanted nothing but the best.

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Market Research

Research Objective:

To analyze the consumer’s preference and awareness of the

present Indian luxury market.

To analyze the awareness of consumers with regard to celebrity

endorsements and their attitudes towards it.

Management Objective:

To study the gender product preference of products pertaining

to luxury sector.

Sample Area: Upscale malls, Luxury Boutiques and Hotels.

Sample Size: 50

Research Methodology

Questionnaire (Hybrid) -Consumers

Inerviews -Retailers

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Data Collection

Q1) Gender

( ) Male ( ) Female

Q2) What brand comes to your mind first when you think of luxury?

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( ) Calvin Klein ( ) Versace

( ) Mercedes Benz ( ) Others

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0

2

4

6

8

10

12

14

16

18

Num

ber

Of R

espo

nden

ts

a.Family &Friends

b .Brand ?Designer Name

c Adverising d Others

Q3) What factors influences you in buying these brands?( ) Famiy & Friends ( ) Brand/Designer name

( ) Advertising ( ) Others

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18

11

15

2

New Paper &Magazines

Hoardings Television Others

Q 4) What Medium of Advertisement appeals you most for Luxury Brands? ( )Newspaper & magazines ( ) Hoardings

( )Television ( ) Others

Q5) Where do you prefer Buying Luxury Brands?

( ) Mumbai ( ) Delhi( ) Bangalore ( ) Abroad( ) Others

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Q6) Out of these which ONE product will you choose to buy a luxury brand?( ) Jewellery ( ) Clothing( ) Digital Accessories ( ) Time Wear( ) Cosmetics

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Q7) what factor motivates you to buy a Luxury product?( ) Attention ( ) Interest

( ) Desire ( ) Conviction

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Q8) You buy Luxury Brands that are endoresed by Famous Celebrities.( ) Strongly Agree ( ) Agree

( ) Disagree ( ) Strongly Diasgree

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Q9) Match the following Brands according to their Brand Ambassadors?

a.Tag Heur Amitabh Bacchanb.Ried & Taylor Sushmita Senc.O'lay Maharani Gayatri Devi

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d.De Beers Shahrukh Khan

Number of Respondents

Gender product preference

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FINDINGS

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Calvin Klein has the highest top of mind awareness with 36% of

the respondents followed by Mercedes Benz.

34% of the respondents feel that Mumbai is a shopping

destination for luxury brands followed by Delhi and then Bangalore in

the third place with 24% favoring it. And 10% felt that Abroad is the

shopping destination for luxury brand which is again good for our

domestic luxury market as people for seeling for these products and

brands in India rather than countries abroad for luxury products.

It brought out the product preference of the consumer. 16 out of

fifty respondents opted for Clothing as product they would buy in

luxury brands followed by cosmetics and then jewellery.

Attention was the highest motivation factor to buy a luxury

product followed by Interest which shows that the consumer

perception regarding luxury brand is becoming more positive. The

consumer now is gradually taking keen interet in knowing the

attributes of these products rather then going just for the brand name

but still majority opts for these luxury branded products to seek

attention.

Celebrity endorsements play a vital role in the buying behavior

of consumer in this is sector. 38% of the respondents agree that they

buy luxury brands which are endorsed by famous celebrities whereas

16% of the respondents “strongly disagree” to this statement.

The consumers are very much aware of the brands and the

celebrities as their brand ambassadors. 24 out of fifty respondents

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got two correct answers, 8 got all answers correct and 3 out of 50

respondents got all wrong and were unable to identify the brands with

their brand ambassadors. This shows that consumers in this segment

are becoming more aware of such brands endorsed by celebrities

and the marketers can use this promotional tool to attract more

consumers towards their brands.

We also found out the gender product preference through the

coding sheet. In clothing the ratio was same for both men and

women. 5 out of 22 male preferred time wear in luxury product

whereas in female it was 3 out of 28. In cosmetics it was 4 out of 22

men and 9 out of 28 women.

In the brand awareness associated with their brand

ambassadors we found that female were overall more aware of this.

Out of the total of 24 in two correct answers 15 were female and out

of the total of 11 in three correct answers 8 were female.

The luxury market in India is growing with a pace and the

reasons for growth were found out to be the following:

1. Higher disposable incomes

2. IT culture

3. Increased brand awareness

SUGGESTIONS

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Respect: Connect with luxury consumers as a selective target. Luxury

brands need to respect this point of difference in all interactions between

the brand and the consumer

Segment: Acknowledge luxury consumer subsets. Luxury brands need to

identify, differentiate and prioritise the most profitable subsets for targeted

strategies.

Insight: Identify what is important to the defined target. Motivations could

be based on personal and non-personal factors.

Connect: Brand interactions really matter. For example, respondents

cited that friends and family are an important influence on luxury

consumption

Experience: Establish emotional connectivity. Deep and meaningful

relationships need to be developed in order to win the soul of the luxury

consumer.

Indianness: Embrace and celebrate the Indianness brand. India has a

very powerful and unique identity, and this needs to be leveraged within a

luxury brand context.

Consistency: Adopt a truly holistic approach, to ensure that all brand

interactions, whether advertising or customer service, are consistent with

the brand positioning. Contemporary Indian society is challenging

traditional consumption patterns. The Indian consumer is ready to

embrace luxury consumption.

CONCLUSION

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The starting point for identifying successful Luxury brand strategies in

India has been established by identifying certain salient aspects of

luxury brands that remain constant as well as identifying the stage of

mindset of the Indian consumer towards these brands.

The focus is now towards ‘how many’ more luxury brands will enter

the market to gain a first mover advantage, which is of significant

importance in India. Apart from ‘how soon’, we primarily focus on

‘How will’ luxury brands cater to the mainly aspirational needs of the

Indian consumer.

A word of caution that goes for luxury marketers, irrespective of their

brands and geographical presence – The luxury consumer is always

looking for newer ways to satisfy his continuously changing needs.

Hence, the need to keep a close tab through insightful research is of

prime importance.

As far as India is concerned, given the rapidly accelerating affluence

of the masses, the scenario is set to witness a boom. The ones who

will be riding the wave will be the ones who have kept their ears open

to each and every word of their each and every customer. After all, in

the luxury business, no marketer can afford the luxury of treating its

consumers as a loosely bunched segment.

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ANNEXURES

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QUESTIONNAIRE

Q1) Gender

( ) Male ( ) Female

Q2) What brand comes to your mind first when you think of luxury?

( ) Calvin Klein ( ) Versace

( ) Mercedes Benz ( ) Others ( pls Specify)________

Q3) What factors influences you in buying these brands?( ) Famiy & Friends ( ) Brand/Designer name

( ) Advertising ( ) Others ( pls. Specify)________

Q 4) What Medium of Advertisement appeals you most for Luxury Brands? ( )NewsPaper & magazines ( ) Hoardings

( )Television ( ) Others ( pls Specify)________

Q5) Where do you prefer Buying Luxury Brands?( ) Mumbai ( ) Delhi( ) Bangalore ( ) Abroad( ) Others (pls Specify)________________

Q6) Out of these which ONE product will you choose to buy a luxury brand?( ) Jewellery ( ) Clothing( ) Digital Accessories ( ) Time Wear( ) Cosmetics

Q7) what factor motivates you to buy a Luxury product?( ) Attention ( ) Interest

( ) Desire ( ) Conviction

Q8) You buy Luxury Brands that are endoresed by Famous Celebrities?( ) Strongly Agree ( ) Agree

( ) Disagree ( ) Strongly Diasgree

Q9) Match the following Brands according to their Brand Ambassadors?

a.Tag Heur Amitabh Bacchan

b.Ried & Taylor Sushnita Sen

c.O'lay Maharani Gayatri Devi

d.De Beers Shahruk Khan

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BIBLIOGRAPHY

Articles

1. Eight things that every marketer needs

2. The changing face of luxury

3. The Psychology of Travel

4. How to build a ‘New Luxury’ Brand

5. The unmistakeable sign language of luxury

Books

1. The cult of the luxury brand

Websites

1. unitymarketing.com

2. hindustantimes.com

3. brandchannel.com

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4. Wikipedia.com

5. eluxury.com

6. Luxurymarketing/India.com

7. Forresterr.com

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