MINOR PROJECT

Study on the Growth of Indian Luxury Market

Submitted by:
C.S Kushal Chowdhary
Sweta Das
Sushant yadav
Ruchi Sharma
Rashmi Nandal
Sudip Kumar Chokshi
Garima Tiwari

Page 85
 ACKNOWLEDGMENT

We are grateful to our Faculty Mrs. Nethravathi for the constant

support and guiding us throughout this Project and providing us her
valuable inputs for its successful completion.

This Project is done to study the growth of Indian Luxury Market

which has a potential growth in India.

Lastly we would thank all the group members who are associated with
this project.

Signature of the Project Guide

Page 85
 TABLE OF CONTENT

S.NO TOPICS P.NO

1 Executive Summary 4
2 Objective of the Project 5
3 Getting to Know Luxury 6
3 Introduction to Luxury Brands 7-9
4 Difference Between Regular and Luxury goods 10
4 Characteristics of Luxury Industry 11-13
5 Indian Luxury Market 14-15
6 Growth of Indian Luxury Market 15-24
7 Affluent Consumers of Luxury 25-26
8 Existing Players in Indian Luxury Market 32
9 Potential and Promising Growth of Luxury Market in 33-37
India
10 Presence of Most Purchased Luxury brands in India 38-59
11 How Luxury Brands can enter Indian Market 60-61
12 Taxation and Duties affecting Luxury Mkt 62
13 Porters Five Force Model 63-64
14 SWOT 65
15 Major Problems affecting Luxury Industry 66-70
16 Marketing Research 71-81
17 Findings 82-83
18 Suggestions 84
19 Conclusion 85
20 Annexures 86-88
21 Bibliography 89

EXECUTIVE SUMMARY

Page 85
Around two decades ago no one could imagine that a luxury market
would exist in India. But over the years with the change in the
demographics of the Indian consumer and with higher disposable
income available, the luxury market in India has indeed emerged as
one of the fastest growing markets in the retail segment.

It was very interesting to study the luxury market in India because it is

a new sector and not much research has been carried out on the
same. Through this report we have tried to give an estimate of the
luxury retail market in India, how much it has penetrated and also how
much it is likely to grow. Also we have tried to specify various factors
which are crucial for the success of luxury brands in India. While
doing out research on this project we have come across many new
findings. The role the Indian market plays in the global scenario and
the position of India vis-à-vis other countries. Also we learnt about the
duties and legal requirements for this segment. We have tried our
best to cover the various aspects that are involved in luxury retailing
through this project and it has indeed been a great learning
experience.

OBJECTIVE OF THE PROJECT

Page 85
OBJECTIVE:

To study the Current Scenario and the Growth of Indian Luxury Market

SUB-OBJECTIVE:

• Opportunities of International Brands to enter the Indian Market

• Analyze the Luxury Brand Awareness in the Indian Market

• Reasons behind people going for Luxury Brands

GETTING TO KNOW LUXURY

Page 85
Luxury, derived from the Latin word luxus, means indulgence of the
senses, regardless of cost.

Luxury denotes:
1. Something that is an indulgence rather than a necessity.
2. The quality possessed by something that is excessively expensive.

Luxury is something that everyone wants but nobody needs, its an

area of huge comfort and the best of the best.

“Luxury speaks a level of exclusivity, unusualness”

A luxury brand or prestige brand is a brand for which a majority of its

products are luxury goods. It may also include certain brands whose
names are associated with luxury, high price, or high quality, though
few, if any, of their goods are currently considered luxury goods.

The luxury sector targets its products and services at consumers on

the top-end of the wealth spectrum. These self-selected elite are
more or less price insensitive and choose to spend their time and
money on objects that are plainly opulence rather than necessities.
For these reasons, luxury and prestige brands have for centuries
commanded an unwavering and often illogical customer loyalty.
INTRODUCTION TO LUXURY BRANDS

Page 85
Luxury brands have often been associated with the core
competencies of creativity, craftsmanship, precision, high quality,
innovation, & premium pricing. These product attributes give the
consumers the satisfaction of not only owning expensive items but the
extra-added psychological benefits like the esteem, prestige and a
sense of a high status that reminds them and others that they belong
to an exclusive group of only a select few, who can afford the pricey
items.
The luxury sector targets its products and services at consumers on
the top-end of the wealth spectrum. These self-selected elite are more
or less price insensitive and choose to spend their time & money on
objects that are plainly opulence rather than necessities. For these
reasons, luxury and prestige brands have for centuries commanded
an unwavering and often illogical customer loyalty.
Luxury has never been something easy to define, yet this mystery
concept is something highly desired by one & all alike. We look at
delving deeper into this mystery and aura of luxury goods by way of
comparing them against ‘regular goods’ as well as highlighting the
characteristics of the luxury industry. But before beginning with that,
lets first attempt to understand some common terms associated in the
world of high end goods:

Luxury and prestige brands such as Rolex, Louis Vuitton & Cartier
represent the highest form of craftsmanship and command a staunch

Page 85
consumer loyalty that is not affected by brands. These brands create
and set the seasonal trends and are also capable to pulling all their
consumers with them wherever they go.

Premium brands are those brands like Polo Ralph Lauren, Calvin
Klein and Tommy Hilfiger that aspire to be luxury and prestige brands
but their marketing mix strategies are more attuned to a mass market,
albeit a luxury mass market. They also termed as mass-premium
brands or luxury brands.

Fashion brands on the other hand are those that address the
masses.
LVMH (Louis Vuitton Moet Hennessy) is the largest luxury good
producer in the world with over fifty brands, including Louis Vuitton,
the brand with the world's first designer label.

Luxury brands are businesses.

- The business is about understanding the consumer – and managing
the balance between exclusivity and accessibility.
- Luxury brands take the elements they feel passionate about, add
design then develop it and present it to the customers that exceed
their expectations.

A luxury good is a product at the highest end of the market in terms of

quality and price. Classic luxury goods include haute couture items
such as clothing, accessories and luggage. However, many markets

Page 85
have a luxury segment including for instance, cars, wine and
chocolates.

Such brands share characteristics like consistent premium quality, a

heritage of craftsmanship, a recognizable style or design, a limited
production run of any item to ensure exclusivity, an element of
uniqueness and an ability to keep coming up with new designs when
the category is fashion-intensive.

Keeping it simple and realistic, luxury is anything and everything that

you may truly desire; it can be short lived or a life long desire – it is
‘your’ emotional connect and reward that allows it to appear as luxury.

DIFFERENCE BETWEEN
REGULAR GOODS AND LUXURY GOODS

Page 85
Source: Luxury Marketing-Samit Khanna IIM-A
CHARACTERISTICS OF THE LUXURY INDUSTRY

1. Luxury means different things to different people

Page 85
 Luxury has no certified origins. But luxury branding is said to have
taken birth in the west with the appearance of high-end brands. To get
an insight into what luxury today means to different Americans, we
take a look at the table below, compiled by American Demographics in
2003, to understand how to develop target strategies for various
segments.
2. Luxury is a product category in itself
This can be best explained by the fact that both an expensive watch
and an artwork can be considered to be luxury items. Therefore, all
luxury marketers are not just competing in their ‘ technically
defined’ product categories (like manufacturers of refrigerators
compete amongst themselves) but for the wallet share of luxury
goods in total.
3. The meaning of luxury had changed
Luxury has moved from its ‘old’ meaning of ownership (also known
as conspicuous consumption - Conspicuous consumption is a term
used to describe the lavish spending on goods and services that are
acquired mainly for the purpose of displaying income or wealth
rather than to satisfy a real need of the consumer. In the mind of a
conspicuous consumer, such display serves as a means of attaining
or maintaining social status. Invidious consumption, a necessary
corollary, is the term applied to consumption of goods and services
for the deliberate purpose of inspiring envy in others.
4. Aura is more important than exclusivity
Exclusivity is something that cannot be ensured to a great extent
and neither is it the prime requirement of a luxury consumer. The

Page 85
consumer bases his decisions on the relevance of the aura of the
brand to his fulfilment or actualization needs.

5. Classification of luxury consumers

SRI Consulting Business Intelligence places consumers in 3 groups
according to what luxury means to them :

• Luxury is Functional – these consumers tend to buy luxury

products for their superior functionality and quality. Consumers in
this segment, the largest of the three, tend to be older and
wealthier and are willing to spend more money to buy things that
will last and have enduring value. They buy a wide array of luxury
goods, from artwork to vacations, and conduct extensive pre-
purchase research, making logical decisions rather than
emotional or impulsive. Messages that highlight product quality and
are information-intensive are powerful with this group

• Luxury is Reward – These consumers tend to be younger than

the first group but older than the third. They use luxury goods as
a status symbol to say “ I’ve made it! ” They are motivated by their
desire to be successful and demonstrate this to others. Luxury

Page 85
 brands that have widespread recognition are popular, however
they don’t wish to appear lavish or hedonistic in their appearance.
They want to purchase “smart” luxury that demonstrates
importance while not leaving them open to criticism. Marketing
messages that communicate acceptable exclusivity resonate with
this group.

• Luxury is Indulgence – This group is the smallest of the three

and tends to include younger consumers and slightly more males
than the other two groups. Their purpose for luxury goods is to
lavish themselves in self-indulgence. They are willing to pay a
premium for goods that express their individuality and make others
take notice and are not overly concerned with product longevity or
possible criticism. They enjoy luxury for the way it makes them
feel, therefore have a more emotional approach to purchases.
They respond well to messages that highlight the unique and
emotional qualities of a product.

INDIAN LUXURY MARKET

LUXURY is no stranger to India. The erstwhile maharajas and princes

led a life of opulent splendour. The only way to be apart of the elite

Page 85
was to be born into it. The lifestyle was also associated with hunting,
polo and other games of the rich. New money could never get into this
circuit.The aspiration was always there. But the princes operated in a
different league altogether. The era of the self-made millionaire was
yet to arrive. So small possessions, or copied fashion designs with a
few geegaws thrown in, became the height of luxury. An achiever of
the 1970s could only get by with a good foam mattress — no Omega,
Rolex or BMWs. This trend saw a shift, a gradual one, in the 1980s.
Luxury began creeping into upper class homes through small things
and symbols. The colour TV came in, the humble pen was elevated to
a Parker, successful self-made people began to be featured in
magazines. The concept of luxury as a reward for achievement
gained acceptance, though royalty and the aristocracy continued to
remain the benchmark of the elite. The real change came in the
1990s when more people started making more money. There was a
sudden explosion of colour and things and objet D'arts began to
appear. In order to gain access to luxury and class one could just go
out and charge it. What contributed to this shift? India opened up to
the world. The liberalization process brought more than high
economic growth rates. It showed the people what was possible. In
the process, it has altered mindsets. The IT revolution, and the
consequent demand for Indian brainpower, has created a whole new
breed of wealthy global Indians. At the other end, an increasingly
open economy has created new business opportunities, which has
resulted in a slew of new, extremely successful first generation
businessmen. They are millionaires. They spend. They sport Vertu

Page 85
mobiles. But they may not even be comfortable with English. All of a
sudden, wealth is no longer the preserve of the elite.

THE GROWTH OF INDIAN LUXURY MARKET

The Indian is growing day by day as people are spending money on
luxury items. A couple of years ago – weeks in the case of the
Porsche-he bought every single item abroad, spending hard earned
foreign exchange ,lining up at the vat refund counters at airports. But
not any more, the world’s most prestigious luxury brands are
expanding their footprint in India, almost as if discovering a new
world. Moreover, it is not just the luxury brands, there are also luxury
plus for those who have the cash to splash on products with the
cachet of exclusivity.

In today’s deluxe India, the children of your domestic staff are wearing
Levi’s and lee. For the brand conscious and trendy, it has to be
Swarovski encrusted seven of all mankind jeans, specially made for
the Indian market. We can look more into the qualitative as
quantitative insights of the luxury market with context to India.

EXPOSURE TO THE WORLD OF

LUXURY AND FASHION

Page 85
Fashion Weeks

Two big fashionista gatherings

- Wills Lifestyle India Fashion Week
- Lakme India Fashion Week
• Aim to make India a global fashion destination

Indian Designers

Increasing visibility in the global fashion arena

- Rina Dhaka’s creations appeared in Marie Claire
and Vanity Fair
- Anamika Khanna,Manish Arora showcase their
work at the Paris Fashion Week

Fashion Magazines

Play an important role in generating awareness

of luxury products from a global perspective
• Face association: ‘Bollywood Celebrity endorsments’ to create hype

QUALITATIVE INSIGHTS

1. According to a study by American Express,‘Inside the Affluent

Space ’, the mindset of the Indian consumer is a desire to prove that “

Page 85
I’ve Made It ”. This can be related to the luxury categorization which is
based on the fact that luxury is seen as a reward, both for
achievements in life as well as showcasing these achievements to
others.
2. The Luxury Marketing Council Worldwide has established a
chapter in India, with the aim of promoting luxury in India. Their task
will also be to build synergy between various luxury brands interested
in India by way of sharing of consumer insights as well as best
practices.
3. Even the Asian region is not uniform in its preference for luxury in
terms of need fulfillment .Therefore, it becomes important to delineate
the needs of the Indian consumer from the other Asian regions to
target them better. This agenda gains importance because many
Indians look at acquiring luxury from places such as Hong Kong,
Tokya, China etc.
Eg. It is interesting to note that Singapore consumers are more of
connoisseurs compared to Hong Kong consumers who want Talk-
Value from their luxury goods.

4. Hindustan Times has been at the forefront of driving the luxury

revolution in India by organizing two Indian Luxury Conferences in
the last 4 years. To add to it, it also brings out a monthly supplement
of luxury goods available in India, thereby creating awareness for the
luxury brands.

Page 85
Quantitative Insights
1. As far as quantitative estimates are concerned, there will be
135,000 millionaires (in US dollar terms) in India by 2009.
2. The affluent market is set to grow at a rate of 13% in India, and
by 2009, there will be approximately 1.1 million affluents here.
3. The wealth potential of India’s affluents was to the tune of US$
203 billion as of 2005.

With income levels going up, customers prepared to buy such

brands are growing in numbers. According to an NCAER Household
Income Survey, in 2001-02, there were 20,000 families in India with
annual incomes of more than Rs 1 crore. By 2005, the number
increased to 53,000. By 2010, India will have some 1, 40,000
crorepatis. Retail management company KSA Technopak estimates
the market for luxury and high-end clothing in India at Rs 1,000 crore
and for accessories at another Rs 1,000 crore.

It is not just the big Indian cities like Delhi, Mumbai and Bangalore
where the rich are located. A small town like Nagpur had nine
millionaires in 1995-
1996. By 2001,
that figure

Page 85
increased to 425, with a growth rate of 91 percent. A high end luxury
brand like Ermenegildo Zegna, whose customers include Bill Clinton,
Pierce Brosnan, Shah Rukh Khan and Al Pacino, recently made a
presentation in Ludhiana and Jalandhar.

Source: www.pallasweb.com

Increased product knowledge and brand awareness are translating

into greater consumer confidence an important catalyst for luxury
consumption in a fast-emerging market. Luxury brands are now
following the Indian consumer, expanding their sales operations.
According to a study by the Discovery division of Mumbai based O&M
advertising; India and China are beginning to contribute in a big way
to the global market for luxury products. This global market was
estimated at approximately $69.4 billion in 2003 and is expected to
grow 50 per cent to reach $140 billion by 2010. A Technopak study
puts the Indian luxury market at around $444 million. According to the
World Wealth Report 2005 published by Capgemini and Merrill Lynch,
“the so-called BRIC nations - Brazil, Russia, India and China —
continued to emerge as an economic force and create wealth in the
process.” In fact, China is expected to slow down and its neighbours
are likely to feel the pinch. “One exception is India,” qualifies the

Page 85
report. In terms of numbers, O&M says there were 61,000 high
networth individuals (HNIs) in India in 2003. The World Wealth Report
puts HNI growth in India at 14.6 per cent per annum, nearly double
the global rate.This is likely to be much higher. More than the
numbers, it's the attitude that has changed. Indian consumers have
shown a pronounced desire to consume. Instead of making yearly
trips abroad to shop.
It is, thus, the emergence of mass affluence combined with
aspirational mindsets and lifestyles that are helping to stimulate
consumer demand. The rapid growth of the Indian middle class
means that a larger number of consumers are able to afford luxury
goods than ever before.

How & why Luxury market is Booming in INDIA?

o India ranked first for the fifth time, on the Global Consumer
Confidence Index – June 2007, conducted by The Nielsen
Company.
o Indians were judged the world’s most optimistic consumers, with
high financial confidence about their income for the next 12
months.
o Higher disposable incomes, easy availability of credit and high
exposure to media and brands has increased average
propensity to consume considerably over the years.
o India ranked first for the third consecutive year, on the Global
Retail Development Index – 2007, conducted by AT Kearney

Page 85
 across 30 emerging economies. India is ranked as the most
preferred retail destination for international investors.
o Modern retailing outlets are increasingly matching up to global

standards and witnessing intense competition.

o Organized retail sector is estimated to grow by 400%, in value

terms, by 2007-08.
o Increasing number of domestic and international players are

setting up base and expanding their business to tap the

burgeoning market.
o Fastest Growing Economy is one of the biggest reason for
the growth in Indian luxury market:
o • Two-thirds of India’s population is under 35 years of age and

more than 60% of the population will be in the working age

group (15-60) till year 2050.
o • The median age of 23 years, opposed to the world median age

of 33, sets the emerging young India apart

o • India is home to about 20% of the global population under 25

years of age.

Page 85
 WHERE'S THE MARKET- THE PRESENT SCENARIO

Source: IMD World Competiveness Yearbook 2006

Page 85
Page 85
LUXURY MALLS IN INDIA

Page 85
 AFFLUENT CONSUMERS OF LUXURY

The new generation affluent Consumers are:

• CEOs and other senior professionals
(in their thirties and early forties)
• Entrepreneurs in new businesses
• Returning "prodigal children"
• Actors and models
• Franchisees, and small and medium Retailers

In terms of population percentage, it may seem minuscule. The

seriously rich and affluent represent just 1 per cent of the entire
population, but with a base of one billion people, it still adds upto 10
million high end customers, a substantial number in any market.

They are what is being termed Global Indians, the ones who are
traveling abroad at the drop of a barbour hat. They are acquisitive,
brand conscious and, above all they want the best and they want it
now. If they can buy in their city so much better.

Source: IMD World Competiveness Yearbook 2006

Page 85
TOP DRAWS
The five top purchases of the affluent Consumer
• Watches & Jewellery • Apparel & Accessories

• Electronics • Wines & Spirits

• Personal Care • Automobiles

Source: India Luxury Review-2007,A.T-Kerney

Page 85
 THE EXISTING PLAYERS IN THE INDIAN LUXURY
MARKET

JEWELLERY:
The top Luxury Jewellery brands in India today

Cartiers SA is a French jeweller and watch manufacturer that is a

subsidiary of Compagnie Financière Richemont SA. The corporation
carries the name of the Cartier family of jewelers whose control ended
in 1964 and who were known for numerous pieces including the
"Bestiary" (best illustrated by the Panthère brooch of the 1940s
created for Wallis Simpson), the diamond necklace created for
Yadavindra Singh the Maharaja of Patiala and in 1904 the first
practical wristwatch, the "Santos." Cartier SA is headquartered in
Paris. Jacques Cartier (of cartier family) visited India in 1911 in pursuit
of fine pearls. He also persuaded a number of Maharajas to reset
their jewels using Cartier designs. The necklace, created for the
erstwhile Maharaja Bhupinder Singh of Patiala by the House of
Cartier in 1928 is one of the most expensive pieces of jewellery ever
made.

Page 85
The world famous jeweler was back in India in 1997, when the curbs
on luxury goods imports were eased, with its watches, pens and
eyewear. The jewellery has had to wait. Cartier retails its jewellery
only through exclusive boutiques. The company is now shopping for
the right real estate in Delhi and Mumbai.

De Beers is coming to India now for its EBO, its already present in
MBO’s. The world’s largest diamond trader is about a year away from
starting an exclusive outlet here in India. For De Beers, India is a key
market. Almost 10 per cent of its global retail business or around $7
billion comes from India. The company has been doing research on
the Indian market. The firm conducted a study along with Ledbury
Research, according to which the growth of millionaires in India has
been at the fastest pace in 2007.

Page 85
 CLOTHING:

LVMH or Moet Hennessy Louis Vuitton S.A is a French holding

company and one of the world’s biggest luxury goods conglomerates.
It is the parent of around 60 sub-companies that each manage a small
number of prestigious brands. The group was formed after mergers
brought together champagne producer Moet et Chandon and
Hennessey, a leading manufacturer of cognac. In 1987, they merged
with fashion house louis vuitton to form the current group. LVMH owns
several famous brands in India in various product categories such as :

• Wines and spirits (Dom Pérignon, Moët & Chandon, Veuve,

Clicquot and Hennessy),
• Perfumes (Christian Dior, Guerlain and Givenchy),
• Cosmetics (Bliss, Fresh and BeneFit),
• Fashion and leather goods (Christian Lacroix, Donna Karan,
Givenchy, Kenzo and Louis Vuitton),
• Watches and Jewellery (TAG Heuer, Ebel, Chaumet and Fred).

AUTOMOBILES:

Page 85
More than 5,000 luxury cars were sold in 2006, up from 3,000 cars in
2005 and just 1,000 in 2004. Both financiers and companies like
BMW India believe that the market will hit 10,000 units by 2010. Over
80,000 millionaires in metros and mini-metros have fuelled increasing
demand for these vehicles priced at Rs 20 Lakh and above. Car loans
have also come up with competitive equated monthly installments
(EMIs) to attract the common individual with big dreams. Top of the
line marques like Mercedes-Benz, BMW, and Audi are now available
at an EMI very close to those of premium cars like Honda Accord,
Toyota Corolla, and Hyundai Sonata. In the volume car market, 75%
of all sales are financed, while 60% of luxury cars are financed.

Given the global economic conditions, the worldwide passenger car

market is expected to witness a 10% fall in sales. However, India’s
luxury car market outperformed other Asian countries in sales last
year by rising 40%.

 TOP 10 LUXURY CARS IN

INDIA

MERCEDES BENZ E CLASS

Page 85
VOLVO S 80
BMW 5 SERIES
AUDI A 4
BMW 3 SERIES
MERCEDES BENZ C CLASS
VOLKSWAGON PASSAT
TOYO TA CAMRY
SKODA SUPERB
NISSAN TEANA
LUXURY CARS AWAITED
MODEL COMPANY
Evolution X Mitsubishi
Minis BMW
AMV8 Vantage Aston Martin
Brooklands coupe Bentley
C30, C70 Volvo
Hummer General Motors
Lexus LS 460 Toyota
Cruse Chevrolet

Source: www.luxurycarwheelsindia.com

SOME MORE THE OTHER LUXURY BRANDS PRESENT IN INDIA

T2 Gucci
Fendi Chanel
Jimmy Choo Versace
FCUK Bvlgari

Page 85
Burberry Mango
Moschino Lapidus

Page 85
 POTENTIAL OF LUXURY MARKET IN INDIA

Source: www.UnityMarketing/luxurymap .com

Page 85
PROMISING GROWTH OF LUXURY MARKET IN INDIA

Page 85
Indian luxury market to touch US$ 452 million

A recent luxury trends report from Ledbury Research advises

companies to start focusing on India. They are estimating that the
number of families with annual incomes of more than $230,000 will
have more than doubled from 20,000 in 2002 to 53,000 by the end of
2005 and will grow to 140,000 by 2010. By way of comparison, the
UK has 400,000 families at this income level currently.

Luxury car makers are pouring in to woo the nouveau riche (Audi,
BMW are the most recent entrants). A recent article in the Christian
Science Monitor talks about how the luxury product makers are trying
to tap the lavish spending that occurs around the wedding season by
timing their new product introductions, market promotions etc. An
average Indian wedding ($34,000) costs almost 30% more than the
average American wedding ($26,327), with rich Indian families
spending as much as $2 million dollars.

Indian luxury market may boom to US$ 30 billion by 2015

Luxury is all set for an unprecedented flourish here as the

Indian consumer has overcome the guilt pangs associated
for ages with indulgence. The size of the luxury market in
India is estimated at around $3.5 billion, and what’s best,
given the right impetus, it could easily leapfrog to $30-billion
by 2015.

Page 85
Indians are lapping up luxury assets, services and goods
with voracious appetite, according to a comprehensive
survey done by AT Kearney for The Economic Times.
Indians splurge $2.9 billion on luxury assets (essentially
private jets and luxury homes, cars or yachts and art),
spend another $953 million on luxury services and top it
by buying luxury goods worth $377 million.

Source: www.indianluxuryreview-2007,A.T Kerney

Some facts and figures assisting the market growth

• The market for luxury products in India is estimated to be

worth half a billion US dollars as of 2005, growing at a rate
of 20% p.a
• India has the world’s third largest consumer class (122
million individuals with purchasing power).

Page 85
• Personal consumption is 67% of GDP in India; only the US
is higher at 70%.
• 1.2 million Indians are “extremely rich”, with an estimated
83,000 having net assets of over US$ 1 million (19.3% p.a.
increase).

Super-deluxe brands like Porsche, Chanel, Louis Vuitton, Rolls-

Royce, Rolex, Bvlgari and others have entered the market in 2006.

PRESENCE OF
SOME HIGH PURCHASED LUXURY
BRANDS IN INDIA

HUGO BOSS – The name denotes success, perfection and a style

that transcends international borders. This German luxury fashion

Page 85
group is a well established menswear brand for the last 80 years; the
company was started in 1923.

Key initiatives of the company

• Started women wear in 1998.
• Started shoes/accessories in 2003.

Presence in India
2003 - Entered India through franchisee partner, Bin Hendi
Enterprises of Dubai and launched its first store in the Oberoi hotel,
Delhi.
2004 - Launched one more store in Mumbai.
2005 - Launched 2 more store in Bangalore and Mumbai.
But at the present there are only 3 stores in India, one of the Mumbai
store has been shut down. The company has invested Rs.25crore
approx. in these stores in India.

Product Portfolio in India

Uniform presentation of products through-out the world and effective
marketing measures support the strong image of the HUGO BOSS
brands and the Company. Hugo Boss has brought two premium lines
to the country: Boss Black and Boss Orange and the product category

Page 85
is only for men in India. Hugo Boss's Indian customers preferred
sportswear and this comprised a large percentage of its sales.

Product Range – Ready to wear, Footwear’s, Belts, Handbags, other

accessories.

BOSS Orange
BOSS Orange offers casual collections for men and women who
enjoy dressing in style and wearing surprising looks. Unusual
materials, bold colors and beautiful details appeal to a clientele that
delights in experimentation.

BOSS Black
The women’s- and menswear collections in the BOSS Black line offer
versatile fashion ranges with a rich array of elegant "modern classics"
in business-, leisure- and formalwear: perfect looks that satisfy the
most sophisticated tastes.

Price Points
Men shoes Rs.13000-35000
Belts Rs.5000-15000
Wallets Rs.8000-15000
Ready-to-Wear Rs.15000-35000

Employees Remuneration in India

Page 85
 • The sales executives get 15000 p.m. + incentives.
• The store manager gets 35000 p.m. + incentives.

Positioning in Delhi
The 1,350 square foot store showcases the Hugo Boss menswear
collection in the 5 star Oberoi hotel in Delhi and has been set up next
to Louis Vuitton, in order to give the ideal positioning and to get the
right profile of customers.

Challenges Faced in India

• Understanding the market and the consumer behavior.
• Understanding the right location because consumer behavior in
the high end market is not easy to predict.

Marketing Strategy
• Global advertising campaigns.
• Do a lot of sponsorship activities both in sports and arts. In sport
they have been the oldest sponsor of F1 racing for the past 25
years. They also sponsor tennis and golf.

Page 85
Advertising
• They do not use TV for fashion, but they use it for perfumes
which are handled by Procter and Gamble. TV doesn’t make
sense for fashion.
• They use a lot of print media in the big global fashion
magazines and newspapers. Print is a very big medium for
them around the world.
• Taking into account the worldwide publicity which includes
sponsorships, events and advertising, they spend 8 per cent of
their net sales on advertising and promotions.
• In India the franchisees invest in bill boards and magazines.

Expansion Plans

• The company has plans to launch Hugo Boss stores in

Chennai, Hyderabad and Kolkata in future. The brand intends to
focus on expanding in the Indian market only through franchises
and thus do not intend to enter the Indian retail market at the
moment through any joint venture.

Page 85
Page 85
 LOUIS VUITTON

Moët Hennessy Louis Vuitton (LVMH) is a french holding company

and the world's largest luxury goods conglomerate. It is the parent of
around 60 sub-companies that each manages a small number of
prestigious brands. The group was formed after mergers brought
together champagne producer Moët et Chandon and Hennessy, a
leading manufacturer of cognac. In 1987, they merged with fashion
house Louis Vuitton to form the current group.

The company was founded in 1854 in Paris, soon established itself in

London, but remained a handmade, luxury traveling bags brand for
seven decades before its diversification into bags and other leather
goods.

As of December 31, 2006, LVMH operates approximately 1,859

stores worldwide.

Page 85
Key Initiatives
1997 - Ready-to-wear was launched.
2003 - Watches were launched.

Presence in India
2003 – Launched first store in Delhi.
2004 – Launched second store in Mumbai.

LVM has picked 51% in Mumbai’s LV Trading (LVT India), which has
two stores in the country’s financial capital and Delhi. It had entered
into a distribution agreement with LVM to sell Louis Vuitton branded
products in India.

Challenges Faced in India

• The lack of appropriate infrastructure their distribution is in
hotels but in the long term they can't limit themselves only to 5
star hotels.
• FDI restrictions in retail, they are here to build presence for
luxury products.
• High import duties.
• Have little control over the client-tenant mix as there are limited
brands in this segment.
• The fashion media in the country is in a nascent stage. The
media environment is unused to the luxury market. There are a
limited number and variety of lifestyle/fashion publications

Page 85
Expertise In
LVM specializes in manufacturing and marketing luxury products in
leather goods, ready to wear, shoes, watches, jewellery, textiles,
writing instruments, luggage, bags, sunglasses and accessories.

Louis Vuitton, which started as a luggage goods maker in mid 19

century, later diversified into other fashion and luxury products.

Product Portfolio in India

India does not have Louis Vuitton's entire range as yet, certainly not
jewellery, or ready-to-wear, two of its prime categories; it is because
store sizes are small, even as the company itself is gearing itself for
larger stores worldwide.

Product Range – Women shoes, men shoes, handbags, wallets,

luggage bags, watches and sun glasses.
Shoes are a big part of their collection and of course they go deeper
into certain lines such as open shoes. In some types of watches,
there are local preferences. But it is the same basic collection as you
see around the world.

Page 85
Objective in India
• The objective of the company is generating a customer base
and building brand loyalty among Indian customers.
• The company hopes to reach one million lifestyle consumers in
India, and offer them superior service and a truly Louis Vuitton
experience.
• The company aim to increase the contribution of Indians to
Louis Vuitton's market share worldwide.
• Louis Vuitton is not worried about local turnover while
formulating its expansion strategy

Pricing
The price positioning of Louis Vuitton is at a premium segment.
Majority of its leather products retail at Rs 25,000 upwards.

Women Hand bags Rs.18000-250000

Men Hand Bags Rs.60000-300000
Wallets Rs.12000-15000
Men shoes Rs.25000-75000
Women shoes Rs.25000-75000

Employees Remuneration in India

• Sales executives – Rs.35000 p.m. (inclusive of incentives)
• Store manager – Rs.50000 p.m. (inclusive of incentives)

Page 85
Marketing Strategy in India

• The company has rolled out its global ad campaign in India.

• They also promote the brand through local events to reach a
wider audience.
• The company, made the opening of their Mumbai store coincide
with the 150-year celebrations of the brand Louis Vuitton. The
Chairman and CEO of Louis Vuitton, Yves Carcelle, came down
from France specially to host this event, which was a
tremendous success.

• They plan to a do a `trunk show' where they will exhibit antique

trunks from Louis Vuitton's museum which showcases the
history and tradition of the brand. India and Louis Vuitton have
had a shared history, as the Maharajahs were some of the most
loyal `special order' clients of Louis Vuitton since its inception in
1854, and this event can showcase this shared tradition, and re-
introduce `special orders' to today's Indian customer.
• They have unique business strategy where in they do not
believe in hiring any one person to represent the brand. LV
treats each client as its brand ambassador. Not just the
business strategy but it is also the philosophy these brands
follow that is interesting.

Page 85
Manufacturing
French luxury goods giant Louis Vuitton has set up its first Asian
manufacturing plant at Pondicherry through a 50:50 joint venture with
Dilip Kapur's Hidesign. The plant is expected to come up on a 30 acre
plot within a year.

The move to set up a production base in India is crucial as the

company largely relied on Europe, and France in particular, as
customers took to the LV insignia in a big way.
Like LV, Hidesign stresses on artisan-driven, soft, supple leather
designs.

Page 85
Page 85
 VALENTINO

Valentino Fashion Group is an Italy-based company active in the

luxury market of the fashion industry started in 1959 in Rome.
Valentino operates in 69 countries, with more than 1,250 shops, and
208 shops directly managed by the Company. Valentino Fashion
Group is headquartered in Milan, Italy.

In 2006, proceeds reached 239.5 million of Euro a 14.5% increase

over 2005.

Key Initiatives
1965 - Valentino is recognized as the top name in Italian Haute Couture.
1969 - Begins his Boutique line of clothes
1970 - Launch of his first Ready-to-Wear collections
1971 - Opening of the first menswear shop in Rome
1978 - Launch of the Valentino perfume at a gala evening in Paris
1996 - Valentino is named Cavaliere del Lavoro
2004 - Launch of V perfume which will be followed by V for men

Page 85
Presence in India
Italian couture brand Valentino opened its flagship store in Delhi’s
Shangri La hotel in 2006. The store is a product of a franchising and
licensing with Mafatlal Luxury (P) Ltd.

Product Portfolio in India

The store here is retailing brands such as
• Valentino Garavani - positioned as a main line black label,
focusing on handbags, footwear, small leather goods, belts, and
other accessories for both men and women.
• Valentino Roma - an easy-to-wear line of women's clothing in
the diffusion segment for a broad range of consumers in the age
group of 25-40 years, designed for all occasions.
• R E D Valentino - that primarily addresses young and modern
clientele of up to 25 years and reinterprets the values of the
store in a fresh, contemporary manner.

Product Range - Ready-to-wear, handbags, footwear’s, small leather

goods, belts and other accessories for both men and women.
Price Points
Women Handbags Rs.25000-2,50000
Sunglasses Rs.11000-16000
Men Belts Rs.12000-25000
Women shoes Rs.30000-60000
Men Shoes Rs.31000 and abv.

Target Customers

Page 85
This brand targets high end customers with an age group from 15
years and above.

Strength
Its image of glamour, exclusivity and strong style make Valentino a
brand well known for the sophistication and elegance of its creations.

Store’s Concept in India

The new outlet - at Hotel Shangri La - is designed in pure Valentino
style, in keeping with the layout of Valentino stores worldwide with
signature pieces imported from Milan.

Expansion Plan in India

In 2007 they plan to open valentino store in Mumbai.

Valentino V/S Fratelli Rossetti

• Pricing of Valentino is higher than Rossetti.
• Its target customers are 15 yrs and above, which says valentine
is catering to all age group from teenager to adult due to its
glamorous and exclusive style. Whereas Rossetti mainly cater
to people in age group from 25yrs and onwards.

Page 85
Page 85
 DIOR

Established his main fashion house in 1949; Christian Dior New York,
Inc. Christian Dior remains a leader in the world of fashion after more
than 50 years. Yet Christian Dior has grown far beyond its high
fashion origins to become one of the world's leading luxury goods
holding companies, through LVMH Moët Hennessy Louis Vuitton, led
by Bernard Arnault. While Christian Dior continues to lend its name
and prestige as the parent company to Arnault's luxury goods empire,
it remains a tiny part of the company's overall sales. Christian Dior is
organized into two main divisions: Christian Dior Couture and LVMH.

With EUR 350 million in sales, Christian Dior Couture represents just
2 percent of the company's total sales of more than EUR 12 billion in
2001. Christian Dior operates a network of 130 boutiques around the
world.

Page 85
Key Dates:
1946: Dior launches his own fashion house.
1947: Debut of Dior's "New Look" line revolutionizes women's fashion.

1948: Company launches Christian Dior Perfumes.

1950: Company begins licensing Dior name.
1958: Yves Saint Laurent becomes lead designer for Dior.

1990: Christian Dior acquires controlling share of Moët Hennessy

Louis Vuitton, founding the LVMH luxury goods empire; begins cutting
back number of Dior licenses.
1996: John Galliano as lead designer in order to revive Christian Dior
image.
2001: Hedi Slimane is named to create new men's fashion line;
company launches new retail concept, Christian Dior Haute Joaillerie.

Principal Competitors
Bulgari; Cartier; Chanel; Gianfranco Ferre; Gianni Versace; Gucci
Group; Hermès International; I Pellettieri d'Italia; LVMH Inc. (U.S.);
Montres Rolex; Puig Beauty & Fashion Group; Compagnie Financière
Richemont AG; S.T. Dupont; Tiffany & Co.

Page 85
Presence in India
In 2006 French fashion house Christian Dior announced its foray into
the Indian market under the franchisee run by khote family and set up
its first boutique in the The Oberoi hotel in New Delhi. Kalyani Chawla
is the brand ambassador and spokesperson of CDC in India.

Product Portfolio
The group's principal activities are the production and sale of:
Christian Dior Couture, Champagne & Wines, Brandy & Spirits,
Fashion & Leather Goods, Perfumes & Cosmetics and Selective
Retailing.

In India Dior sells a host of ready-to-wear apparels, leather goods,

shoes, accessories, cosmetics and sunglasses and all these
categories are for women through its boutique.

Footwear’s
• Christian Dior Shoes are extremely durable and classy at the
same time.
• The Christian Dior shoes for women are noted for their subtle
colors with designs that show the true feminine side of a
woman.
• Christian Dior sneakers are just right for one’s daily walks
especially if one wants want to feel light and comfortable, and
not to mention that they are very affordable for anyone to have.

Page 85
Pricing
Prices of the products ranging from cosmetics, shoes, leather bags,
costume jewellery and dresses would be slightly higher in India than
in Paris and other Middle East countries due to the different tariff
regime and import duties.

Price Points
Hand bags Rs.19500-300000
Belts Rs.13000-20000
Women Shoes Rs.17000-55000
Women Apparels Rs.17000-1000000
Watches Rs.46000 and abv.

Employees Remuneration in India

• Sales executives – Rs.15000 p.m. + incentives
• Store manager – Rs.35000 p.m. + incentives

Target Customer
Christian Dior has engineered a remarkable commercial breakthrough
based on top quality, highly creative products that appeal to a
youthful, refined clientele. The company is undoubtedly the biggest hit
of today's fashion world.

Objective in India

Page 85
Focus would be to establish the brand in India rather than just making
profits.

Challenges Faced in India

• Indians prefer to buy luxury goods in Europe or Singapore or
Dubai, as they feel that it is cheaper abroad.
• Most Indians feel that the latest launches take a while to come
to India. After-sales service is also a major concern for people.

Marketing Strategy in India

• A lot of promotion such as organising photo-shoots with lifestyle
magazines such as Cosmopolitan and Femina.
• Making its latest international launches available in India.
• Offering zero per cent finance schemes to make the watch
category more affordable for the Indian youth, Swiss watch
company LVMH Watches and Jewellery is going all out to reach
its niche target market.

DIOR at Luxury Mall- Emporio

(Rated one of the best Luxury mall in India)

Page 85
 HOW LUXURY BRANDS
CAN ENTER IN THE INDIAN MARKET?

Page 85
FDI up to 100% allowed under the automatic route for cash and
carry wholesale trading and export trading and FDI up to 51% is
allowed, with prior Government approval for retail trade in ‘Single
Brand’ products. However, FDI in retailing of goods under multiple
brands, even if the goods are produced by the same manufacturer,
is not allowed under the current guidelines.

o Policy Framework
This route involves foreign company entering into a licensing
agreement with a domestic retailer or partnering with Indian
promoter owned companies.

o Strategic License Agreements

This entry route is widely used, with many international brands
setting up shop. There exists the master franchise route and the
regional franchise route for India entry.

o Franchisee Route
100% Foreign Direct Investment is allowed in wholesale trading
which involves building of a large distribution network.

o Cash and Carry Wholesale Retailing

Page 85
International firms can enter into agreements with domestic players
and set up base in India. Share of MNCs is restricted to 49% in this
route.

o Joint Venture

Company can establish its manufacturing unit in India along with

standalone retailing outlets. These are the available Routes for
Foreign Players to Enter the Retail Sector.

How taxes and Duties are affecting growth of

INDIAN LUXURY Market?

Page 85
o Steep import duties mean luxury fashion products are priced 15
percent higher in India than in their country of origin and a
reduction in rates will actually increase government revenue from
their sales.
o We pay around 45 percent taxes to import our goods to India and
this affects the retail pricing of the product.
o The pricing of these items is almost 15 percent higher.

o The high duties apart, the fact that there is a flourishing market in
India for foreign luxury goods can be gauged from the fact that
brands like Kenzo are looking to ramp up their presence in the
country despite the global financial meltdown.
o Owned by LVMH, one of the biggest luxury groups in the world,
Kenzo has ready-to-wear, accessories and home furnishing lines.
For the moment, it has introduced only its men’s wear and
accessories sections and plans to shortly introduce a women’s
wear line.

PORTERS FIVE
FORCE MODEL

Page 85
5 FORCE HIGH MEDIUM LOW
Buyers •
bargaining
power
Suppliers •
bargaining
power
Threat of new • •
entrants
Threat of •
substitutes
Competitors •
rivalry

COMPETITORS RIVALRY: HIGH

Page 85
• There are limited brands as a result they are competing to cater
to the same audience.

• High fixed costs/high operational cost-winding up is difficult.

• Industry growth-increasing disposable income.

• Competition at all levels.

SUPPLIERS BARGAINING POWER: MEDIUM

• Limited number of suppliers at present but because of
tremendous market potential there might be more suppliers.

• Buying on the basis of consignment as a result loss marking is

reduced.

• Reach of the established suppliers(distributors) in terms of

networking is excellent as a result they can get a good offer
from the manufacture.

BUYER BARGAINING POWER: LOW

• Lack of availability of large no. Of brands.

• Brand loyalty-cannot easily switch over to other brands.

• High prices and no discount offered by any retailer on such high

end brands.

• Product differentiation is high.every brands has its own image in

the minds of the consumer.

THREATS OF SUBSTITUTES: LOW

• There are no other substitutes for luxury brands.since it has
high brand value which cannot be replaced by any other brand.

THREATS OF NEW ENTRANTS : LOW TO MEDIUM

(Depending on the Category)
• Government barriers –FDI limits

Page 85
 • High capital cost.

• Branding is very important.

• Difficult to set up a distribution network.

SWOT ANALYSIS

STRENGHTS WEAKNESSES

1. Brand Name/Brand Ambassadors 1. Concentrated Market-only metro

2. Customer Loyalty cities
3. Quality 2. Government Regulations
4. Global Presence 3. High Prices
4. Percentage of target audience is
Less
5. Higher Operational cost-rents

OPPUTUNITY THREATS

1. Manufacturing the brands in India itself 1. Fake branded stuff available in India
rather than importing it 2. Available at cheaper prices abroad
2. FDI Regulations
3. Gloabalization

Page 85
 MAJOR PROBLEMS AFFLICTING IN THE INDUSTRY

1. HIGH TARIFF DUTIES

Luxury retailers have to pay multiple taxes to import their goods in

India. Various duties like custom duty, octroi, service tax etc make the
price of the product dealer in India when the same branded product is
available at a cheaper rate in other international markets. Hence
people traveling abroad prefer buying branded products from outside
rather than from India.

2. HIGH OPERATIONAL COST

The cost of operating a luxury outlet is high because the size of the
store has to be elaborated and also it has to located at a prime
location in major cities. Due to the image that is associated with luxury
products, the cost of maintaining the store is high because it has to
look upbeat all the time. At the same time these stores normally
situated in 5 star hotels or big shopping malls where the rents
charged are very high and hence the cost is further increased.

Page 85
3. LOW CUSTOMER TURNOVER

The number of customers who visit a luxury store is comparatively

lower than a regular store. Also the luxury store outlets are located
exclusively in certain areas and are sometimes not accessible by
everyone, this factor also affects the customer turnover.

4. LACK OF ADEQUATE SPACE

The luxury retail stores have to be located in 5 star hotels or malls,

because that is where the potential customers are most likely to come
for shopping, hence the feasible space available is very less.

5. DUPLICATION

There are a lot of duplicate products available in the Indian market.

Most of these products come from China. The same branded product
which is available for 25000 Rs. is available for 1500 Rs. When it is
not authentic. Though the quality of these products is not good, they
appear to be the same and hence people don’t mind buying them.

Page 85
6. LACK OF AWARENESS OF BRANDS AMONGST INDIAN
CONSUMERS

The Indian consumer is not very well informed about the various
luxury brands, only may be 5% of the population is well versed with
various foreign brands. The Indian consumer is not aware of the
quality standards that these brands possess and hence resists from
buying these brands as they find them overpriced.

Page 85
Limitations of the Government framework

o The luxury sector needs to be treated in isolation with other

retail sectors as the dynamics governing it are significantly
different in nature.
o To reach its potential, the Indian retail sector requires significant
capital, technology and best practices to bridge the existing
productivity gap and achieve scale in operations, which are
critical to the sector's success.
o One of the key steps towards facilitating the development of the
retail sector and in accelerating its growth would be to further
ease foreign direct investment in the sector.
o The constant back and forth on policy decision on retail at the
centre also acts as a dampener for luxury brands.
o The Indian tariff structure is high and that in itself is a huge
deterrent.
o India has one of the highest duties/taxes on imported luxury
goods, which drive the grey market and duty free purchases,
while the stringent regulatory environment impedes investment
by foreign brands.

Page 85
LUXURY BRANDS URGE RATIONALISATION
OF TAXES

o Dealers in luxury brands today urged the Government to rationalise

the taxation structure in the country so that luxury brands, which
were still largely purchased abroad, were available at globally
competitive prices to Indian consumers.
o Govt. should take legislation like Foreign Direct Investment (FDI),
Value Added Tax (VAT) and other duties into consideration in order
to help promote the sale of luxury brands for which there was a
sizeable demand within the country.
o To try to remove yet another hurdle to luxury sales in the country

i.e. the lack of appropriate retail space and High Streets, resulting
in them having to rent space in 5-star hotels at exorbitant prices.
o The 112% tax on luxury cars is a great barrier, Coupled with the
poor road infrastructure, it resulted in customers ending up with the
feeling that they were not getting value for their money.
o They said there was an emerging 97 million strong middle class
segment with a huge consumer mindset who believed in
demonstrating their wealth and wanted nothing but the best.

Page 85
 Market Research

Research Objective:
• To analyze the consumer’s preference and awareness of the
present Indian luxury market.
• To analyze the awareness of consumers with regard to celebrity
endorsements and their attitudes towards it.

Management Objective:
• To study the gender product preference of products pertaining
to luxury sector.

Sample Area: Upscale malls, Luxury Boutiques and Hotels.

Sample Size: 50

Research Methodology

• Questionnaire (Hybrid) -Consumers

• Inerviews -Retailers

Page 85
 Data Collection

Q1) Gender
( ) Male ( ) Female

Page 85
Q2) What brand comes to your mind first when you think of luxury?
( ) Calvin Klein ( ) Versace
( ) Mercedes Benz ( ) Others

Page 85
Q3) What factors influences you in buying these brands?
( ) Famiy & Friends ( ) Brand/Designer name
( ) Advertising ( ) Others

18
16
Number Of Respondents

14
12
10
8
6
4
2
0
a.Family & b .Brand ? c Adverising d Others
Friends Designer Name

Page 85
Q 4) What Medium of Advertisement appeals you most for Luxury
Brands?
( )Newspaper & magazines ( ) Hoardings
( )Television ( ) Others

18

15

11

New Paper & Hoardings Television Others

Magazines

Q5) Where do you prefer Buying Luxury Brands?

( ) Mumbai ( ) Delhi
( ) Bangalore ( ) Abroad
( ) Others

Page 85
Q6) Out of these which ONE product will you choose to buy a luxury
brand?
( ) Jewellery ( ) Clothing
( ) Digital Accessories ( ) Time Wear
( ) Cosmetics

Page 85
Q7) what factor motivates you to buy a Luxury product?

Page 85
( ) Attention ( ) Interest
( ) Desire ( ) Conviction

Q8) You buy Luxury Brands that are endoresed by Famous

Celebrities.

Page 85
( ) Strongly Agree ( ) Agree
( ) Disagree ( ) Strongly Diasgree

Q9) Match the following Brands according to their Brand Ambassadors?

Page 85
a.Tag Heur Amitabh Bacchan
b.Ried & Taylor Sushmita Sen
c.O'lay Maharani Gayatri Devi
d.De Beers Shahrukh Khan

Number of Respondents

Gender product preference

Page 85
FINDINGS

Page 85
• Calvin Klein has the highest top of mind awareness with 36% of the
respondents followed by Mercedes Benz.
• 34% of the respondents feel that Mumbai is a shopping destination for
luxury brands followed by Delhi and then Bangalore in the third place
with 24% favoring it. And 10% felt that Abroad is the shopping
destination for luxury brand which is again good for our domestic luxury
market as people for seeling for these products and brands in India
rather than countries abroad for luxury products.
• It brought out the product preference of the consumer. 16 out of fifty
respondents opted for Clothing as product they would buy in luxury
brands followed by cosmetics and then jewellery.
• Attention was the highest motivation factor to buy a luxury product
followed by Interest which shows that the consumer perception regarding
luxury brand is becoming more positive. The consumer now is gradually
taking keen interet in knowing the attributes of these products rather then
going just for the brand name but still majority opts for these luxury
branded products to seek attention.

• Celebrity endorsements play a vital role in the buying behavior of

consumer in this is sector. 38% of the respondents agree that they buy
luxury brands which are endorsed by famous celebrities whereas 16% of
the respondents “strongly disagree” to this statement.
• The consumers are very much aware of the brands and the celebrities
as their brand ambassadors. 24 out of fifty respondents got two correct
answers, 8 got all answers correct and 3 out of 50 respondents got all

Page 85
wrong and were unable to identify the brands with their brand
ambassadors. This shows that consumers in this segment are becoming
more aware of such brands endorsed by celebrities and the marketers
can use this promotional tool to attract more consumers towards their
brands.
• We also found out the gender product preference through the coding
sheet. In clothing the ratio was same for both men and women. 5 out
of 22 male preferred time wear in luxury product whereas in female it
was 3 out of 28. In cosmetics it was 4 out of 22 men and 9 out of 28
women.
• In the brand awareness associated with their brand ambassadors we
found that female were overall more aware of this. Out of the total of
24 in two correct answers 15 were female and out of the total of 11 in
three correct answers 8 were female.

• The luxury market in India is growing with a pace and the reasons
for growth were found out to be the following:

1. Higher disposable incomes

2. IT culture
3. Increased brand awareness

SUGGESTIONS

Page 85
Respect: Connect with luxury consumers as a selective target. Luxury
brands need to respect this point of difference in all interactions between
the brand and the consumer
Segment: Acknowledge luxury consumer subsets. Luxury brands need to
identify, differentiate and prioritise the most profitable subsets for targeted
strategies.
Insight: Identify what is important to the defined target. Motivations could
be based on personal and non-personal factors.
Connect: Brand interactions really matter. For example, respondents
cited that friends and family are an important influence on luxury
consumption
Experience: Establish emotional connectivity. Deep and meaningful
relationships need to be developed in order to win the soul of the luxury
consumer.
Indianness: Embrace and celebrate the Indianness brand. India has a
very powerful and unique identity, and this needs to be leveraged within a
luxury brand context.
Consistency: Adopt a truly holistic approach, to ensure that all brand
interactions, whether advertising or customer service, are consistent with
the brand positioning. Contemporary Indian society is challenging
traditional consumption patterns. The Indian consumer is ready to
embrace luxury consumption.

CONCLUSION

Page 85
The starting point for identifying successful Luxury brand strategies in
India has been established by identifying certain salient aspects of
luxury brands that remain constant as well as identifying the stage of
mindset of the Indian consumer towards these brands.

The focus is now towards ‘how many’ more luxury brands will enter
the market to gain a first mover advantage, which is of significant
importance in India. Apart from ‘how soon’, we primarily focus on
‘How will’ luxury brands cater to the mainly aspirational needs of the
Indian consumer.

A word of caution that goes for luxury marketers, irrespective of their

brands and geographical presence – The luxury consumer is always
looking for newer ways to satisfy his continuously changing needs.
Hence, the need to keep a close tab through insightful research is of
prime importance.

As far as India is concerned, given the rapidly accelerating affluence

of the masses, the scenario is set to witness a boom. The ones who
will be riding the wave will be the ones who have kept their ears open
to each and every word of their each and every customer. After all, in
the luxury business, no marketer can afford the luxury of treating its
consumers as a loosely bunched segment.

Page 85
 ANNEXURES

QUESTIONNAIRE

Page 85
Q1) Gender
( ) Male ( ) Female
Q2) What brand comes to your mind first when you think of luxury?
( ) Calvin Klein ( ) Versace
( ) Mercedes Benz ( ) Others ( pls Specify)________
Q3) What factors influences you in buying these brands?
( ) Famiy & Friends ( ) Brand/Designer name
( ) Advertising ( ) Others ( pls. Specify)________
Q 4) What Medium of Advertisement appeals you most for Luxury Brands?
( )NewsPaper & magazines ( ) Hoardings
( )Television ( ) Others ( pls Specify)________

Q5) Where do you prefer Buying Luxury Brands?

( ) Mumbai ( ) Delhi
( ) Bangalore ( ) Abroad
( ) Others (pls Specify)________________

Q6) Out of these which ONE product will you choose to buy a luxury brand?
( ) Jewellery ( ) Clothing
( ) Digital Accessories ( ) Time Wear
( ) Cosmetics

Q7) what factor motivates you to buy a Luxury product?

( ) Attention ( ) Interest
( ) Desire ( ) Conviction

Q8) You buy Luxury Brands that are endoresed by Famous Celebrities?
( ) Strongly Agree ( ) Agree
( ) Disagree ( ) Strongly Diasgree

Q9) Match the following Brands according to their Brand Ambassadors?

a.Tag Heur Amitabh Bacchan

b.Ried & Taylor Sushnita Sen
c.O'lay Maharani Gayatri Devi
d.De Beers Shahruk Khan

Page 85
Page 85
 BIBLIOGRAPHY

Articles

1. Eight things that every marketer needs

2. The changing face of luxury
3. The Psychology of Travel
4. How to build a ‘New Luxury’ Brand
5. The unmistakeable sign language of luxury

Books

1. The cult of the luxury brand

Websites

1. unitymarketing.com
2. hindustantimes.com
3. brandchannel.com
4. Wikipedia.com
5. eluxury.com
6. Luxurymarketing/India.com
7. Forresterr.com

Page 85
Page 85