Luxury Brands: Definition, Features, and Market Insights

Lesson 1: Introduction to Luxury and Its Characteristics

A) Defining Luxury

The word luxury originates from the Latin word Lux, meaning light. The luxury market is no longer solely defined by income levels, personal wealth, or spending budgets.

B) The Dual Nature of Luxury

Luxury has a double meaning:

• Lux: Light (the angel)
• Luxus: Abundance
• Luxation: Gap, excess
• Luxuria: Bad habit (the devil)

C) The Intangibility of Luxury

The luxury goods industry is characterized by intangibility more than any other sector.

D) Luxury and Retail

People often misunderstand luxury by focusing solely on brands. However, luxury companies are primarily retailers.

E) The Paradox of Luxury

A luxury brand's strategy balances exclusivity, which drives image, and accessibility, which drives awareness and sales.

F) Luxury vs. Fashion

1) Luxury (Focus: Product Development)

• High entry barriers
• Real market awareness achieved over time
• Quality aligned with customer expectations
• Mostly international or worldwide companies
• High prices
• Long creation-to-delivery time
• Limited production, often in specific districts
• Main skill: Improving product standards
• Long product life
• Sales followed by production

2) Fashion (Focus: Speed)

• Low entry barriers
• Market awareness through strong communication
• Trend-driven
• Mostly local companies
• Low prices
• Fast creation-to-delivery time
• Global production
• Main skill: Flexibility
• Short product life
• Production followed by sales

G) 10 Key Features of a Luxury Brand

1. Premium image
2. Intangible brand associations
3. Alignment with high quality
4. Logos, symbols, packaging, and drivers of brand equity
5. Associations with personalities, events, and countries
6. High control over distribution services
7. Premium pricing
8. Well-structured brand architecture
9. Well-defined competition
10. Legal protection of trademarks

H) Why France and Italy Dominate the Luxury Market

Factors contributing to French and Italian dominance in luxury include:

• History and heritage
• Creativity
• Flexibility
• Coherence
• Culture
• Organization
• Strong retail know-how
• Selective distribution

I) Characteristics of Luxury Goods

Luxury is:

• Qualitative, not quantitative
• Hedonistic over functional
• Sensory-driven
• Part of society
• Narrative-driven (storytelling)

Other characteristics:

• Outstanding quality
• Expensive
• Scarce and unique
• Aesthetic
• Rooted in heritage and history
• Superfluous