Luxury Marketing

Retail sector in India is growing. It is the fifth largest retail destination in the world. Currently share of organized retail in India is 4% and it is expected to reach at 22% levels in coming years. The growth of “mall culture” and growing disposable income with young population of country has facilitated this growth. Retailers are attracting customer to their stores with attractive visual merchandising, promotions and building affective supply chain network where by they can reduce their cost and benefit customers.

Luxury marketing in India has been evolved in last few years. According to a dictionary luxury is “the state of great comfort and extravagant living” or “an inessential, desirable item that is expensive or difficult to obtain”. The Luxury retailing is showing growth figures in the world and in India, also this trend is increasing. Luxury brands are about differentiation and exclusivity.
The luxury segment has been divided into an uber premium trend and a more enlarged trend. The enlarged luxury trend is about products and services that a lot of people at least in theory could afford. The uber premium luxury trend on the other hand consists of product and service offerings with super expensive prices. Products like the worlds most expensive computer mouse from Fabstuff, Malma-sion fatware by Christofe with handles trimmed with diamonds, Clive Christian’s Imperial Majesty perfume.

There are few but emphatic factors that strengthen the concept of luxury marketing i.e. Quality, safety and security, emotional branding, do-good factor, exclusiveness etc.

The demand for luxury brands has increased phenomenally in India. The demand for luxury goods is not limited to metros but small cities like Nagpur, Jalandhar and Ludhiana are becoming new hubs for luxury markets. This can be seen by the fact that Ludhiana has more number of Mercedes cars than in Mumbai. According to one survey number of families with annual income of more than $230,000 will be more than 140,000 by 2010. These numbers clearly boost the growth of luxury market in India.

Luxury is all about experience. Luxury brands earn profit on mass customization. Exclusivity is major thing that differentiates Luxury brand from other generic brands. Luxury goods are highly price inelastic. Within span of five years, the number of millionaires in India has increased considerably. This phenomenal change has increased the demand for luxury cars, bags, clothes etc. The other major reason is that now Indian consumers have an access to all the media — the Internet, magazines, television — they know exactly what the latest products are in the world; they are totally up to speed.

A Nielsen Global Luxury Brands study (Mar 2008) reveals that India has the third highest brand-conscious population in the world - with only Greece and Hong Kong ahead of it .According to an article from ibef India is the third highest buyer of Gucci products, the sixth highest for Calvin Klein, ninth for Diesel and tenth for Fendi. Calvin Klein (34 per cent), Gucci (25 per cent), Diesel (24 per cent), Christian Dior (16 per cent), and DKNY (10 per cent) are the top brands that Indian consumers spend on.

Most of the luxury brands coming to India adopt the strategy of opening store in metro cities, first in five star hotels. The strategy behind opening up in hotels is to target their main customers i.e. SEC A class people. After successfully launch of their brand they open more number of stores in country. Currently malls like DLF Emporio, UB Mall and The Cresent mall are specially meant for Luxury Retailing in the country.

Luxury retailing in India faces certain challenges like location constrain. In country like India, rising rentals at premium location put a break for the brands to set up store because sales figures are not so high. Another challenge is limitation of FDI. Then as number of higher class and brand conscious people grow in country luxury brands cannot escape themselves in setting up store in India. Even government is thinking to increase limits on FDI for single brand outlet. Thereby we can see a positive future for luxury business in the country.