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.

Signature of the Project Guide

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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 33-37

10

India 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 1. Luxury means different things to different people

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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 defined’

marketers are not just competing in their ‘

technically

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 Exclusivity is something that cannot be ensured to a great extent and neither is it the prime requirement of a luxury consumer. The

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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 prepurchase 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 status symbol to say “ I’ve made it! ” They are motivated by their desire to be successful and demonstrate this to others. Luxury

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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 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 Page 85

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 resulted in a slew of new, extremely successful first generation businessmen. They are millionaires. They spend. They sport Vertu

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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 LUXURY AND FASHION

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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 1.

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

Space ’, the mindset of the Indian consumer is a desire to prove that “ Page 85

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 TalkValue 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 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.

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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 Delhi, Mumbai and Bangalore where the rich are located. A small town like Nagpur had nine millionaires in

1995-

1996.

2001,

that

By figure

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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 — 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 Page 85

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. 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

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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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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).

AUTOMOBILES: Page 85

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%.

 TOP 10 LUXURY CARS IN INDIA MERCEDES BENZ E CLASS Page 85

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 SOME MORE THE OTHER LUXURY BRANDS PRESENT IN INDIA

T2

Gucci

Fendi

Chanel

Jimmy Choo

Versace

FCUK

Bvlgari

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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.

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.

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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 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).

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•

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

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

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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. 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

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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.

Price Points Men shoes Belts Wallets Ready-to-Wear

Rs.13000-35000 Rs.5000-15000 Rs.8000-15000 Rs.15000-35000

Employees Remuneration in India

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• 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.

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.

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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 Men Hand Bags Wallets Men shoes Women shoes

Rs.18000-250000 Rs.60000-300000 Rs.12000-15000 Rs.25000-75000 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 reintroduce `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

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

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Presence in India 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 Sunglasses Men Belts Women shoes Men Shoes

Rs.25000-2,50000 Rs.11000-16000 Rs.12000-25000 Rs.30000-60000 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 Belts Women Shoes Women Apparels Watches

Rs.19500-300000 Rs.13000-20000 Rs.17000-55000 Rs.17000-1000000 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.

Objective in India

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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?

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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.

o Cash and Carry Wholesale Retailing

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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.

How taxes and Duties are affecting growth of INDIAN LUXURY Market?

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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.

PORTERS FIVE FORCE MODEL Page 85

5 FORCE Buyers bargaining power Suppliers bargaining power Threat of new entrants Threat of substitutes Competitors rivalry

HIGH

MEDIUM

LOW •

• •

• •

•

COMPETITORS RIVALRY: HIGH

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• 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

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• High capital cost. • Branding is very important. • Difficult to set up a distribution network.

SWOT ANALYSIS

STRENGHTS

WEAKNESSES

1. Brand Name/Brand Ambassadors

1. Concentrated Market-only metro

2. Customer Loyalty

cities

3. Quality

2. Government Regulations

4. Global Presence

3. High Prices 4. Percentage of target audience is Less 5. Higher Operational cost-rents

OPPUTUNITY

THREATS

1. Manufacturing the brands in India itself 1. Fake branded stuff available in India rather than importing it

2. Available at cheaper prices abroad

2. FDI Regulations 3. Gloabalization

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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

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Q2) What brand comes to your mind first when you think of luxury? ( ) Calvin Klein ( ) Versace (

) Mercedes Benz

(

) Others

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

(

) Others

18 Number Of Respondents

(

16 14 12 10 8 6 4 2 0

a.Family & Friends

b .Brand ? Designer Name

c Adverising

d Others

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

)Television

(

) Others

18 15 11

2 New Paper & Magazines

Hoardings

Television

Others

Q5) Where do you prefer Buying Luxury Brands? ( ( (

) Mumbai ) Bangalore ) Others

( (

) Delhi ) Abroad

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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?

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(

) Attention

(

) Interest

(

) Desire

(

) Conviction

Q8) You buy Luxury Brands that are endoresed by Famous Celebrities. Page 85

(

) Strongly Agree

(

) Agree

(

) Disagree

(

) Strongly Diasgree

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

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a.Tag Heur b.Ried & Taylor c.O'lay d.De Beers

Amitabh Bacchan Sushmita Sen Maharani Gayatri Devi Shahrukh Khan

Number of Respondents

Gender product preference Page 85

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

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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

QUESTIONNAIRE Page 85

Q1) Gender (

) Male

(

) Female

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

) Calvin Klein

(

) Mercedes Benz

( (

) Versace

) 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 b.Ried & Taylor c.O'lay d.De Beers

Amitabh Bacchan Sushnita Sen Maharani Gayatri Devi 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 4. Wikipedia.com 5. eluxury.com 6. Luxurymarketing/India.com 7. Forresterr.com

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