FAILURE OF LUXURY PRODUCTS IN INDIA

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INTRODUCTION
Since India has become the scene for the booming industries and growing market, a lot of importance has been given to the marketing of the goods and services produced by these companies. Thus, the businesses have now started focussing on brands and brand building apart from working on the quality and quantity of the services and goods. So, before we discuss about the exercise of brand building that has been adopted by various industries in India, we need to understand the meaning of a brand. y a brand what we mean is that, It is a collection of experiences and associations connected with a service, a person or any other entity. rand is the personality that identifies a product, service or company !name, term, sign, symbol, or design, or combination of them" and how it relates to key constituencies: customers, staff, partners, investors etc. Some people even associate brand with psychological aspects of human nature like thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on. This helps in generating the brand experience in the human beings who experiences the brand as it creates an image about the brand in the mind of the customer which is referred to as the brand image. rand image is the symbolic construct created within the minds of people, consisting of all the information and expectations associated with a product, service or the company providing them. #eople who are engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. The people have the brand awareness of a successful brand as they can easily recall and recognise the brand under different conditions and are able to link the brand name, logo, $ingle and so on to certain associations in memory. %s rands started growing in India, brand building strategy started playing a very imperative role in the success of any corporate. Today brand building exercise has become so important that the companies cannot succeed without the brands. &ompanies have to focus on their market mix and policies that promote their brand. The expanding role of brands helped in identifying and differentiating a product easier' while also providing the benefit of letting the name sell a second rate product. (uxury branding is a whole new ball)game altogether, both from the perspective of the marketer as well as the luxury consumer. It therefore becomes important to view it both in relation and isolation from the *regular+ goods marketing. (uxury brands have often been associated with the core competences of creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but the extra)added psychological benefits like 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 these 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 and money on ob$ects that are plainly opulence rather than necessities. ,or these reasons, luxury and prestige brands have for centuries commanded an unwavering and often illogical customer loyalty. (uxury has never been something easy to define, yet this mystery concept is something highly desired by one and all alike. -e 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. ut 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 .olex, (ouis /uitton and &artier represent the highest form of craftsmanship and command a staunch consumer loyalty that is not affected by trends. These brands create and set the seasonal trends and are also capable to pulling all of their consumers with them wherever they go. Premium brands are those brands like #olo .alph (auren, &alvin 0lein and Tommy 1ilfiger 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 are also termed as masspremium brands or mass-luxury brands. Fashion brands on the other hand are those that address the masses.

Characteristics of the luxury i !ustry

2. Luxury means different things to different people (uxury has no certified origins. ut 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 %mericans, we take a look at the table below, compiled by %merican 3emographics in 4556, to understand how to develop target strategies for various segments.

4. 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 $ust competing in their *technically defined product categories !like manufacturers of refrigerators compete amongst themselves" but for the wallet share of luxury goods in total. 6. The meaning of luxury had changed (uxury has moved from its *old+ meaning of ownership !also known as conspicuous consumption ) &onspicuous consumption is a term used to describe the lavish spending on goods and services that are acquired mainly for the purpose of displaying income or wealth rather than to satisfy a real need of the consumer. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status. Invidious consumption, a necessary corollary, is the term applied to consumption of goods and services for the deliberate purpose of inspiring envy in others" of ob$ects to the *new+ meaning of the experience 7 fulfilment derived from possessing a certain ob$ect. Aura is more important than exclusivity 8xclusivity 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. 9. Trading up % mass of wealthy people have emerged the world over, give rise to a large section of consumers who are now moving to luxury 7 premium brands, thereby creating greater business opportunity for luxury marketers. :. Emergence of luxury brands Sea of luxury brands have emerged giving a wide choice to consumers, in all segments of luxury goods. ;. Trading down

Today, fashion brands are giving luxury brands competition because of marketing mix and branding strategies, which make it acceptable to pair these two brands. This is something that was not practiced before. eg. -earing an %rmani shirt with a pair of <%# $eans

=. Factors at play In luxury marketing there is a subtle interplay between three factors that most strongly influence the luxury consumer to buy: product brand' dealer or store+s brand or service providers+ reputation' and price7value relationship >. Customer loyalty is more important that brand awareness .ather than focus on measuring the brand awareness of a luxury company, measuring customer loyalty is far more significant a metric regarding the success or failure of corporate strategy to connect with the luxury consumer.

Luxury i I !ia
To be successful in India, it is both necessary to gauge the financial potential as well as the mindset of the Indian luxury consumer. This will help in bringing forth the right product offerings to the Indian consumer as well as targeting them better. Qualitative nsights 2. %ccording to a study by %merican 8xpress, *Inside the Affluent Space+, the mindset of the Indian consumer is a desire to prove that ? !ve "ade t@. This can be related to the luxury categoriAation 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. 4. The Luxury Marketing ouncil !orldwide 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. 6. 8ven the %sian region is not uniform in its preference for luxury in terms of need fulfilment. Therefore, it becomes important to delineate the needs of the Indian consumer from the other %sian regions to target them better. This agenda gains importance because many Indians look at acquiring luxury from places such as 1ong 0ong, Tokya, &hina etc. 8g. It is interesting to note that Singapore consumers are more of connoisseurs compared to 1ong 0ong consumers who want "alk-#alue from their luxury goods

9. 1industan Times has been at the forefront of driving the luxury revolution in India by organiAing two Indian Luxury onferences in the last 9 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 nsights 2. %s far as quantitative estimates are concerned, there will be $%&'((( millionaires !in BS dollar terms" in India by 455C. 4. The affluent market is set to grow at a rate of $%) in India, and by 455C, there will be approximately 2.2 million affluents here. 6. The wealth potential of India+s affluents was to the tune of BSD 456 billion as of 455:.

Strate"ies for Luxury #ar$eti " i I !ia

There are conventional foundations for ensuring success of a brand and they are listed below in brief: 2. The brand must be #expansive$ -hich means it should be full of inno*ation opportunities for the marketer and in terms of satisfying the di*ergent needs of the luxury consumer 4. The brand must tell a story It is this story, of either heritage or performance or other aspects that goes on to build the aura of a brand over time. The story always accentuates the identity of the brand. 6. The brand must be relevant to the consumers! needs 3epending upon the mindset of the luxury class, it is imperative for a brand to satisfy those needs, whether they be for recognition or functional use etc. 9. The brand must align with consumers! values % brand that does not concur with the basic values of a consumer+s society has a small chance of succeeding because luxury items are forms of expression or identification for a luxury consumer. This makes it difficult for the consumer to adopt the brand in such cases. :. The brand must perform

Irrespective of which category the brand belongs to, a performance assurance is a must for the brand if it wishes to be in the e*oked set of luxury consumers, considering the price being paid for luxury.