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Sustaining a Competitive Advantage In the Fashion Luxury Market

A Case Study of Emerging Fashion Brands

Written by Paula Font

Paper category

Master Thesis

Subject

Business Administration>Marketing & Sales

Year

2020

Abstract

Thesis: New luxury goods market Luxury goods are a symbolic and fluid concept, which has no universal meaning, because it is constantly evolving in the ever-changing social and cultural context (Kauppinen-Räisänen et al., 2017; Makkar & Yap, 2018; Yeoman & McMahon) -Beattie, 2018). Luxury goods can be a concept, an idea, a business, or a department (Kapferer, 2014). Although luxury goods lack objectivity, academic research has traditionally associated them with conspicuous consumption (Makkar & Yap, 2017; Nobre & Simoes, 2019; Yeoman & McMahon-Battie, 2018), which belongs to the upper class in society Of individuals use it as a means to satisfy their needs for wealth, status, and power (Makkar & Yap, 2018; Yeoman & McMahon-Battie, 2018). The growth in demand for luxury goods in the past decade has hinted at its popularity (Yeoman & McMahon-Battie, 2018). According to Seo and Buchanan-Oliver (2015), this process is influenced by three main driving factors: cultural, social and external factors. Culturally, luxury goods are affected by events such as market globalization and economic empowerment in emerging countries. The social factors affecting luxury goods are the wealth improvement of the middle class and the growing interest of the new generation of customers (Kauppinen-Räisänen et al., 2017; Kim J.H, 2019; Yeoman & McMahon-Beattie, 2018). The external drivers driving the popularity of luxury goods are related to trends that mainly involve technological improvements (Kim, 2019; Seo and Buchanan-Oliver, 2015). All these events changed the concept of luxury (Yeoman & McMahon-Beattie, 2018), which broke the traditional conspicuous view (Kauppinen-Räisänen et al., 2017; Makkar & Yap, 2018; Nobre & Simoes, 2019) ; Roncha & Montecchi, 2017; Yeoman and McMahon-Beattie, 2018). This opens the door to new luxury goods recognized by academia (Allyev et al., 2018; Kauppinen-Räisänen et al., 2017; Roncha & Montecchi, 2017), contemporary luxury goods (Yeoman and McMahon-Beattie, 2018) Or modern luxury (Kapferer & Valette-Florence, 2016), where luxury has changed its essence and behavior (Kapferer, 2014). Traditionally, the concept of luxury is only related to a certain range of products and services belonging to a specific market. This market is academically defined as the luxury goods market, built on different market segments. One of these segments collects all personal goods, from watches and jewelry to fashion, perfume and cosmetics, and is labeled as a fashion luxury market (Makkar & Yap, 2018; Roberts, 2019). As interest in luxury goods rises, the luxury goods market continues to expand, and the target customer base continues to expand (Kapferer and Valette-Florence, 2016), who are moved by the new trend of setting preferences. 2.4.1 Fashion luxury goods and luxury brands According to Kim et al. (2018), luxury goods are products with high functionality and symbolic value, handmade from the best materials related to craftsmanship and quality attributes. In addition, since these products are distributed in limited quantities through dedicated retail channels, they are exclusive. According to García-Ferrer (2019), another definition used to define luxury goods is their difference from traditional products. Therefore, the prominent attribute is that luxury goods means a purchase process, which does not stem from the satisfaction of functional needs like traditional goods, but from the satisfaction of desires (García-Ferrer, 2019). In order to determine the specific categories of fashion luxury items included in the fashion luxury goods market, this article uses the Luxury Goods hierarchical model developed by Alleres (1990) (quoted from Jiang & Nagasawa, 2016 p.608). paper. As shown in Figure 4, the theory determines fashion luxury items based on three levels of scale: inaccessible, medium and accessible luxury items. The first level consists of extremely expensive products that are available on the market and only available to the elite. According to Roberts (2019), this type of luxury is considered a meta-luxury. The second level is related to the affordable products of the socioeconomic class, which Allers (1990) identified as the professional class. Finally, the last part of the hierarchy includes available luxury goods, which consist of affordable products that the socioeconomic middle class can purchase. These are commodities that serve the mass market to gain prestige and imitate the lifestyle of the highest social class (Jiang & Nagasawa, 2016). Through this hierarchical model, this article aims to emphasize that the fashion luxury market is no longer only identified by products that are only included in inaccessible luxury categories, so it focuses on the elite, but also by other market segments. Product identification (Jiang & Nagasawa, 2016). Although differences are reflected in the hierarchy. According to García-Ferrer (2019), in fashion luxury goods, consumers are willing to pay higher prices in exchange for products, but they are also willing to pay for their inherent added value. Therefore, financial (price paid), functionality (availability, quality, and uniqueness), personal or emotional (material pleasure and self-identity value), and social value (obviousness and prestige) need to match the needs that fashion luxury goods meet. Read Less