How Luxury Prices Are "Luxurious"?

The high price strategy is always Luxury goods A means to maintain its high status. Generally speaking, the formula of product price can not be the basis of pricing for luxury goods. How exactly does a luxury price be priced? Every company has its own completely different pricing laws, and it is secret.

In fact, the cost of luxury goods is calculated: raw material + processing cost + luxury brand value + market public relations cost + channel cost + tariff and * * tax rate = actual sales price. The brand value of luxury goods costs has become an important one, while raw materials and processing costs are relatively low. Taxes and tax rates are also part of the price impact. The price of luxury goods is co founded by its brand positioning, scarcity and uniqueness, long history and legendary stories.

LV, Prada, Burberry and other international luxury goods cost price, even the salesperson in the store is not clear. The president of Italy luxury brand GUCCI said in an interview. LV The material cost of canvas bags is only 11 euros per meter. Louis Weedon responded by saying that luxury manufacturers are trying to maintain lower costs and avoid waste. But the high cost of transportation and other expenses make the cost of luxury goods high.

The whole production cost is about 20%. This includes not only the cost to the OEM manufacturer, but also the cost of accessories such as accessories after returning to the head office. The payment to the designer and the details of manual customization almost cost all the previous costs. However, not all brands spend 20% of their cost on design. Only about 30% of high-end clothing will work on design, while nearly 70% of high-end clothing is only "basic +LOGO".

If the FOB price of a package is US $1000, the cost of the package to China is between us $1360-1370. According to the pricing rule of agents, the price of the bag is about 4200 dollars. This package is sold in the domestic market. After 4200 US dollars minus 1370 US dollars, that is, 2830 US dollars, we also need to pay 17% of value-added tax in the domestic sales link, that is 481 US dollars. So the $1000 package tax is $851, equivalent to 20.3% of the price.

The most important part of the price structure of luxury goods is brand Value. The true value of luxury lies in brand, not in the product itself. In 1869, Egyptian Pasha (governor) Ishmael ordered a leather suitcase from Louis Weedon. In 1877, Russian crown prince Nicola and King Spain twelve became the users of Louis Weedon's products. Customizing boxes for the king has made Louis Weedon a truly world luxury brand. Consumers' demand for luxury goods is more of a spiritual satisfaction, and the luxury of 5 or even 6 figures has become a symbol of status.

The pricing of luxury goods is actually a psychological game between producers and consumers. Low key design, workshop production, limited customization. Luxury brands are painstakingly engaged in this series of labels, all of which make consumers feel mysterious.

Another reason for the high price of luxury goods in China is the mode of sales of domestic commercial property owners and retailers.

A brand retail agent wants to enter a department store or shopping center in the country. These commercial property owners and retail agents adopt the leasing mode of "guaranteed bottom rent or sales pull high". about Luxury brand In terms of sales, the percentage of sales is 20%-25% of sales. The pricing model abroad is "extra tax", that is, the price of goods that consumers see does not include tax price, and the price of the final payment is higher than the price tag. However, the domestic pricing mode is "internal price tax", that is, the price includes the tax price. In this way, as a department store takes the form of sales, the retailer's part of the tax to be paid to * * is also partly taken away by the department store. In order to avoid such a situation, the retailer will raise the amount of tax paid to the * * * in proportion according to the proportion.

In the current business environment, the promotion of luxury goods still needs a lot of promotion costs. This cost accounts for about 10% of the price.

Establishing awareness is the first goal of luxury brands in China. So far, almost all the top brands have been through the public relations company to complete the spread to enter the Chinese market.

Expert analysis

Brand value is the core of luxury pricing.

Unlike the sale of ordinary goods, luxury goods stimulate demand by increasing prices. It emphasizes the establishment of a sense of distance with consumers, which is beyond luxury. Price is not a problem in this industry. If the price is low, it will be cold. If the LV package price is 500 yuan, everyone's reaction must be the same: fake.

Luxury goods are unified pricing in the mainland, and cheaper on the other side of Hongkong is tax.

Luxury goods are not ordinary commodities, but prices vary greatly with the supply relationship. When the cost of luxury goods rises, prices will rise. Branding is more likely to be destroyed than sales.

The price of luxury goods itself needs marketing. In terms of pricing, luxury brands have special market price research departments. It collects sales data in a region, and even analyzes the changes in purchase psychology caused by price setting. For instance, China's current stage can be attributed to the conspicuous stage. At this stage, luxury goods begin to shift from mass consumption to mass consumption. Consumers buy luxury goods more often than they do.

Another big reason for the high price of luxury goods is to keep the market in a "semi starved state". Many luxury brands often make use of this characteristic of luxury goods to create a total amount of money. Classic Or limited edition products, so as to seize customers' thirst for scarce and unique products. This ingenious strategy can successfully raise the brand positioning and make the product always in short supply. Luxury goods that follow the "half starvation" marketing rule are actually "high cost = high profits".