Abstract
The global luxury goods market has today, reached a peak. “We estimate the market of new luxury products and services to be $400 billion, growing at an annual rate of 15 percent” says Silverstein.
According to Keane & McMillan (2004) “spending on luxuries (in Britain) has increased by 50% in the last decade, compared to a rise of 7% on basics.”
The concept of luxury has undertaken a huge transformation and it is still changing over time. It involves a constant shift of consumers' needs and wants. In fact consumers ask for consistent quality, innovative design and superior service.
Moreover luxury brands have to be more competitive and aware of customer needs. This implies that companies must adapt their brands by refreshing and extending their ranges, to offer more affordable products.
Is this evolution influenced by a change in consumer behavior, or the communication strategy of luxury brands?
In this assignment, we will study the market evolution of luxury products and services, and then analyze who the new consumers are, and what their expectations are. In the last part we will analyze the communication strategy of luxury brands.
Luxury isn't what it used to be. “Luxury used to mean very expensive products in limited supply, with great demand. Only a few people who had a lot of money or access could afford luxury items” (Klein, 2005). Luxury items were very expensive thanks to the quality, the features, and the specifications. These products were bought by comfortably off people who wanted the most.
“Luxury is more often than not defined as those special qualities, features and attributes that are intrinsic to a product”. (Danielle Veldre 2005)
Pamela Danziger (2004) argues that “old luxury was about things”. Danielle Veldre (2005) agrees and talks about “stuff”. Moreover Pamela Danziger explains that the new concept of luxury is a recent phenomenon that is more accessible, contrary to the old luxury which used to be a heritage brand, and affirms that “Heritage and prestige are the hallmarks of many luxury brands, some of which are hundreds of years old. The enduring quality of a particular luxury good can be part of its appeal, yet consumers – particularly young, fashion-conscious consumers – want a product that looks fresh and unexpected.”
