Brand Status And Marketing Strategy Of Value Preservation And Increase Holdings Of Luxury Goods

< p > in the wave of luxury price rising every year, the reasons given by various brands are usually "cost factors".

For a commodity, the price rise caused by the rising cost of materials or manpower is the most justifiable excuse.

Then, is the cost factor of luxury really necessary and justification for the rise of luxury goods? < /p >

< p > first, let's roughly estimate the cost of a luxury product.

The gross margin of luxury goods companies is usually around 65%, which sounds very good, but this is only in line with shareholders' expectations.

This data means that a $3500 handbag can cost about $1225 from production to market.

In the early stages, there are many factors that will affect the final price of goods, such as the cost, design, manufacture and order fulfillment of raw materials.

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< p > after entering the retail channel, another huge expenditure can not be saved by the brand -- the expensive store cost.

Earlier media reports said that the shops in the Bund, Shanghai were too expensive to force Armani to take part in a number of big international cards. After investigation, it was confirmed that the withdrawal of big cards was not much related to rent.

Therefore, the big card has never been soft at all and has never been bad money. The premise is "we increase the price every year".

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P, of course, there is also a huge cost that can not be ignored, that is the overwhelming Marketing -- those glossy magazine covers and outdoor advertisements all means a lot of money.

The "black and black bottle" of Lancome, the essence of the luxury cosmetics, which was once "skinned", was exposed. Its advertising and promotion cost accounted for 31% of the selling price of the product. That is to say, the essence of buying this bottle of 1080 yuan is actually 334.8 yuan to pay for its advertisement.

Many people are outraged by this. But if you think about it, if it is not a series of advertising bombings and models for the fashion magazines, who will believe in the myth of "little black bottle"? As a brand, 31% of the advertising cost is also worth it.

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< p > here, we must emphasize that the increasingly expensive and scarce raw materials have indeed become a factor in the rising prices of products.

According to Allendale, a market research firm, the price of the main raw materials of leather goods beef cattle increased by 7.3% in the US in 2013. Cotton prices have risen to an unprecedented level in the past few years since the economic crisis.

Due to the pressure from China, cotton prices have reached a high level of US $93.08 / tonne in June this year, an increase of 13 percentage points over the same period last year.

The world's two largest fashion groups, Louis Vuitton and Hermes, have invested in the Australian crocodile farm to ensure that they make expensive leather handbags for high-end handbags, and Kering also bought a crocodile leather factory in France in March this year for similar reasons.

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< p > the rise of labor cost is also a cause that can not be ignored.

According to the statistics of China's National Bureau of statistics, in 2012, the wages of private manufacturers, which had many brands for foundry, rose by 14%.

According to a report released by the United Nations International Labour Organization (ILO), the average monthly wage of Asia as a manufacturing center has doubled in the past 10 years, and has also increased by 15% in the manufacturing intensive Africa and Caribbean region.

The data from the organisation for economic co operation and development show that the pressure of labor costs is not only manifested in these emerging economies, but also in France's labor costs.

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< p > the most typical event is that in April, after the collapse of the garment factory building in Rana square, Bangladesh, the North American retailers, including H&M, Primark, C&A, Tommy Hilfiger, Calvin Klein, Zara and, and so on, signed a security agreement to improve the working environment and safety condition of the garment processing personnel in the country. Although many brands rejected the agreement, the trend of the industry management that they raised was not to be underestimated. Brand dealers would need to invest more money in improving the production environment and the treatment of workers, and the cost increased.

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< p > luxury "inflation" reason discount temptation "/p".

< p > luxury brands, such as Hermes and LV, claim that they never discount, but most luxury brands choose "goods".

As we all know, even the 10 yuan store with a "jump sale" is definitely profitable. Your big 50 percent off cards are also creating profits for businesses, which is another reason for the high price of luxury goods.

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People who are concerned about the luxury goods industry will find that in recent years, before the arrival of the discount season at the end of each year, some famous international luxury brands will quietly raise their prices, and the price increase will not be too small. P

After the price increase, the discount is really perfect, so in fact, in front of the price increase, all the discount is just "playing the hooligan".

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< p > however, this is already an unwritten rule in the luxury industry. Most consumers will lose their mind when they see "On Sale". "No matter whether the price is not discounted, the price increase is a foregone conclusion. When is it not to rush?"

For some brands, meeting consumers' expectations of price promotions is one of the reasons for rising prices (to ensure profit margins after price cuts).

People love discounts, brands need to clear stocks, but the premise is that they still need to ensure that they can create enough profits for brands, and at the same time, they have the effect of reducing the cost of warehousing.

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< p > New York retail consultant Robert Burke said: "brands are most afraid of products that are too obvious for seasonal elements because they are easily outdated."

Although some luxury brands such as LV and Hermes, they claim that they never discount.

However, retailers usually offer some off season products for sale and dispose of inventory.

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< p > you just need to see that the spring products that sell more than 70% discount in department stores and boutiques can understand that consumers need only a little strategy and a little patience. A pair of high-heeled shoes with a season of $1400 can be bought at a low price of 300 dollars.

"Only those who need to always be at the forefront of fashion will always consume full price products, and more people will actually be more willing to wait for the discount."

Ellen, a journalist with the high cost discount culture, said.

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< p > industry insiders also say that mid year discount is the interlude of luxury marketing. Increasing prices and constantly expanding new stores are the main theme of brand development.

Giorgio Armani, a luxury goods company in Italy, announced last June that it will add another 100 to its 289 stores in mainland China.

Germany's Hugo Boss AG said last May that it will have nearly 150 stores in mainland China in the next three years.

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< p > luxury buyers told reporters, "the price of luxury goods has been an annual example. The key is to see the different price points of each price increase.

Besides, how to maintain the brand status and marketing strategy of luxury goods without increasing prices?

But there are also some market participants who doubt that if price increases and discounts are carried out at the same time, this is only one of the means of brand game.

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< p > in the final analysis, luxury goods, though still precious, rare and unreachable, are the selling points of their brands, but the collectivized business mode has already determined the goal of "benefits first".

Discounts can further expand their consumption groups, raise their prices, guarantee their brand status and have enough profit margins at discount.

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