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Luxury Brands Must Be Willing To Spend Money In China.

2013/5/27 18:59:00 11

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with the limited amount of money to hang up the appetite of consumers, Rolex never discounted the unsalable products and re entered the market after several years, and stores were cheaper than advertisements.

luxury market has gone through the cold winter of 2012. In the first quarter of 2013, from the first quarter of the big luxury group, the luxury market did not appear to be like spring.

the first quarter earnings report released by luxury group LVMH group in 2013 showed that sales in the quarter were 6 billion 950 million euros, an increase of 6% over the same period last year, and the increase was far less than 25% of the same period last year.

Among them, the first quarter sales of its main departments, fashion and leather goods departments increased by only 0.4% over the previous year, reaching 2 billion 380 million euros, becoming the lowest growth rate of the Department since the financial crisis in 2008.

Sales of jewelry and watch Department fell 1% to 624 million euros.

and its rival Kering group also suffered the same tragedy. In the first quarter, Kering revenue increased by 1%, rising 3.1% to 2 billion 364 million 700 thousand euros under comparable circumstances.

Among them, the luxury sector grew by 4.5% to 1 billion 523 million 400 thousand euros in the first quarter.

in the face of the phenomenon that China's market has slowed down the growth of global luxury goods, the two major groups have said they will slow down the pace of opening stores in China, and focus their efforts on improving product quality and innovation.

Less than P, it is worth mentioning that, as early as 25 years ago, Chanel was thinking about how to slow down the growth rate.

25 years ago, Chanel slowed down its growth rate /p >

"when I was consulting with Chanel 25 years ago, they once asked a question: how can we slow down the growth rate?" IMD Dominique Turpin, Dean of the Lausanne School of international management, told financial weekly.

when other brands in the world want to accelerate growth, only Chanel wants to slow down.

It is such a mysterious Chanel family manager who manages such a distinctive luxury company in a unique way of thinking.

if the rapid growth of Chanel at that time, the strong demand for Chanel would be reflected.

"But they feel that if the demand is too large, they will bring some drawbacks to the brand."

Turpin told reporters, "just like today's LV bag, when you walk on the streets of some big cities in China, you will see many women's hands will carry a LV bag, so it seems that the LV bag has lost its original uniqueness."

so at that time, Chanel launched several limited edition women's bags to ensure that only a very small number of consumers can get it, maintain its uniqueness and rarity, and only in this way can we better consolidate the brand image.

Less than P, however, the smartest aspects of the Chanel family are more than that. The Chanel No.5, which began selling in 1921, has become one of the world's best selling perfumed fragrances.

"the first feeling that many people think of Chanel No.5 is that it is the perfume that my mother, even my grandmother used."

Turpin said, "for such a long perfume, what Chanel family needs to do is to keep Chanel brand forever young and attractive for consumers."

since 1954, Chanel No.5 has always used female spokesmen, such as Marilyn Monro and Niicole Kidman.

But who is the spokesman for Chanel No.5 now? The man named Brand Pitt.

They cleverly use the world's recognized "handsome guy" to catch people's attention.

Turpin humorously said, "do you think Marilyn Monroe's endorsement fee is cheaper? Will Brand Pitt's endorsement fee be cheaper? Of course not, the Chanel family has to pay twenty million yuan a year, but if you don't take it out, the legend of Chanel No.5 will probably be drawn."

increase sales, then reduce production first > /strong > /p >

"the best way to increase brand sales is to reduce production. If the product is in short supply, then the sales volume of products will naturally increase."

Turpin told reporters, "at this point, Rolex has done very well. Some of the brands of the brand have limited production, but consumers are willing to spend 6 months or even 1 years to look forward to it.

Because of this, this watch becomes more valuable.

Turpin once visited Rolex's factory. He found Rolex locked all the unsalable watches into a huge safe.

A few years later, when these tables were re sold on the market, it became a hot sale.

"P", and these big brands will not be discounted because of bad sales, they usually only put the product off the shelf and stay.

as we all know, apart from its design, workmanship and place of production, luxury consumers are more interested in the culture of a luxury brand, that is to say, the feeling of a luxury can become an additional product of the brand in many cases.

For luxury goods, brand managers also play an emotional card for consumers.

Therefore, once the discount is made, it is easy to change the image of the brand in the minds of consumers. Once the negative emotions are created, the development of the brand will come to an end.

Turpin gives a very classic example -- Pierre Cardin.

"The brand has been on the decline because he labeled too many things on Pierre Cardin's label.

Of course, Mr. Cardin is not married and has no offspring, so he has been struggling to make money.

But for Pierre Cardin's inheritance, we had to ask a question mark.

dialogue .

IMD Dominique Turpin , Dean of Lausanne International Management College, Switzerland.

"enter China must be willing to spend money" /p >

M=Moneyweek D=Dominique Turpin

M: what do you think luxury goods need to invest in China after entering China?

D: if you want to start a big brand, you have to open your wallet.

The president of Yu Bao table opens more stores in Beijing, China, because if a good location is chosen in Beijing, it will cost about $800 thousand a year to rent a shop.

And playing a billboard costs 100 thousand dollars a month.

Can you imagine? Opening a store is cheaper.

Because stores are available for people to buy, and advertisements are only for people to see, so they usually choose to open stores.

But the huge investment in advertising is the key to keeping the brand in China.

Therefore, we must be willing to spend money.

M: what do you think of the negative impact of some counterfeit goods circulated in China on luxury brands?

D: China is still a small part of the people who really can afford luxuries so far, and the reason why they buy "Shanzhai" or "counterfeit goods" is that they really want to have a real luxury.

This desire to have luxury goods has not changed.

Therefore, once China's total production class grows in the future, the potential for consumption will be unlimited.

For every luxury brand, they will fight the defensive measures against counterfeit goods and maintain brand image.

Therefore, the development prospect of luxury brands in China is very good and has a long-term development attitude towards China's luxury market.

P > M: how will the sales decline in the face of LV and GUCCI, and how to recover the image of luxury goods?

D: the Swatch group and the Lifeng group, which take the main watches, are undoubtedly the biggest winners of the Swatch group, because the product line covered by the group is very comprehensive, from top-level watches to low-end watches.

It is like the public, and there are Audi, Porsche and Rolls-Royce under the public.

But many people do not know that these brands belong to the public, so the wider the product line he covers, that means he has more opportunities for development.

in fact, many consumers do not know that when they are shopping at duty-free shops at the airport, many of the fragrances and famous wines are selected by LVMH group. Even if one day, the brand of this group is decayed, and the impact on the whole group is not as big as it imagined, because it also has many brand support.

Moreover, LVMH group is very good at managing all levels of brand, so as to effectively disperse risks.