Explore The Value Behind The Low Cost Manufacturing Of Luxury Goods

Recently, Italy luxury brand Gucci has been exposed to the market price of 1000 euros handbags, the assembly price is only 24 euros, the news caused strong reaction in the market.

Before this news, there was also anecdotal rumour that "LV mass production cost is only about 200 yuan".

For the market to question the voice of Gucci's profiteering, Gucci China customer service explained that 24 euros is only the cost of production and assembly, but in fact, the real cost of a bag is much higher, including the cost of high quality leather raw materials, product packaging, logistics and pportation, and sales channels.

Before that, LV official customer service responded to the same question: "customers buy luxury goods for reasons such as products, quality, technology and brand history. These factors can not be compared with ordinary tens of dollars of bags."

Despite the official response, many media appealed: consumers should spend rationally and pursue the return of prices.

But the author believes that for the rumor of "LV bulk manufacturing cost is only about 200 yuan", the market should not blindly criticisms, because the cost of a brand's product is not only the cost of production, but also includes many inputs such as marketing cost, pportation cost, design cost, management cost and tariff.

I understand that an enterprise in Guangdong has done the foundry for the world's top luxury brand Armani. The production cost of a garment is only about 500 yuan, but the selling price abroad is 800 to 900 euros.

Seeing such a huge profit margin, the company intends to create its own brand, but in marketing, creative design, consumer awareness and product positioning bring great difficulties to enterprises.

Therefore, the author believes that when the market takes a negative attitude towards luxury goods pricing, should it be considered as a local brand, why do we need to think about the current situation? Why do these foreign leather brands naturally set such a high price? Where are they "high"? Why can't we?

As we all know, to maintain a luxury brand, the quality of products must be excellent, and the leather materials and hardware must not be careless.

But compared with it, in order to establish and maintain brand awareness and reputation, the marketing cost of luxury brands is even higher.

In addition, the best talents in the industry, such as designers and managers, as well as artisans, are all high costs.

Lu Xiao, assistant professor of marketing department of Fudan University School of management and director of luxury and brand management expert, director of luxury and luxury management in Fudan Italy, China, believes that a consumer wants to decipher the price of luxury goods from the consumer product itself, which is especially wrong.

In Lu Xiao's view, besides the most basic manufacturing costs, R & D costs, marketing expenses, sales expenses, management fees and exchange gains and losses, there is also a very important brand premium.

Brand premium mainly depends on the psychology of consumers, how tall the brand is in the minds of consumers, and the premium of products can soar to high.

"Even if the quality of some brand packages, the design is LV,"

The price is less than their 1/3, and I still want to buy LV and Chanel for several times.

It can be seen that consumers purchase these luxuries not just to a handbag, but they may like the brand personality created by a luxury brand over the years. They may be attracted by the deep historical and cultural accumulation of a luxury brand in the past century, or the sense of honor that luxury cards can bring to them.

As Switzerland's top watch watches CEO says, "time is the least important function of watches."

Then domestic

How far is it to enter the ranks of truly international luxury goods? Pan Xiu, a long-term expert on luxury consumption, has made three suggestions on the establishment of a luxury market in China. First, we must do a good job of product quality and highlight the brand culture on the basis of quality. If even the Chinese people do not recognize the quality of products, how can they be extravagant? The second is to maximize the added value of culture and the added value of brands to the products. Third, building luxury brands takes a long time and requires a lot of accumulation.

A domestic

Experts evaluate China's luxury brand foundries that Europe's so-called pure handicraft can be achieved in many factories, even better than that of European workers.

Indeed, China's leather handcraft has entered the world's first-class level, but it is undeniable that China's leather brand is still too young.

The young people here not only refer to the concept of time, but also have several hundred years old brand and old brand than the history of China. More importantly, we should calm down and study the superiority and inferiority of our own brand in the centenary brand persistence, and then proceed to the established goal.

I believe that when we do it again, we will not be so pale.