1. 1. What environmental factors could affect the purchase of luxury goods in India? <br />One of the biggest factors that could affect sales of luxury goods in India is the tariff. The higher the taxes are for luxury goods, the smaller the incentive is to sell those goods because demand isn’t going to be as high if prices have to increase in order to make up for the tax. In order for luxury goods to survive in India, the government would have to make the tax relatively low so that customers have an incentive to purchase the luxury item. Any company trying to sell a luxury good in India must convince the government that it is better for the economy to internalize the market and have money flowing through the Indian economy than for customers to put their money elsewhere. <br />A company trying to sell luxury also has to make sure it can target the richest people in the country. Most of the population is very poor and wouldn’t be able to purchase luxury goods, even if they saved up for it. However, there is a select group of rich people who would make setting up luxury stores in India profitable because there are very few stores in India for them to go to. The market is currently set up for an oligopoly, because the demand for goods at a luxury store would be inelastic for anyone interested in a luxury item and there are so few stores. This makes it possible for luxury stores to either jack up their prices as part of a cartel or to sell below the price set-up by the oligopoly. If this were to happen, the store would capture a large part of the market share and increase demand for luxury goods in India. <br />One of the other factors that could affect a luxury company’s ability to sell is the “cocooners,” who gradually increase higher income and want to eventually buy luxury items, but aren’t ready to completely commit to the market. If most of the market is full of people in this market segment, it’s important to establish different price points with varying level of quality so that this segment can establish brand loyalty and eventually buy more expensive items once they establish a higher income. Having a cheaper option will also be beneficial for the “super rich” segment, if the company decides it is easier to sell a higher quantity with more demand than to bank on that segment to buy the top of the line product. If the premium is available, but there are still cheaper versions of the product, the upper class won’t see the same prestige in the premium product than if it is the only one available. The rich will only use all of their disposable income if it will guarantee them a higher social status, which selling a product at different price points does not. <br />2. Describe in detail your marketing plan or strategy for LV in India. Address the following issues: Your target market or segments, your objectives, the positioning of your product or service and the marketing mix that you will use in your strategy. Focus primarily on pricing, promotion, and distribution.<br />The target market for LV in India should be focused mainly on the cocooners. Due to the varying levels of wealth in India, it would make more sense to appeal to the different types of wealthy people than to focus only on the wealthiest. When the customers make more money, they will stay loyal to LV and buy its higher-priced luxury items. These people will also see buying the top-of-the-line LV products as a reward for their hard work, so they will have an incentive to continue buying more products as their income level goes up. Marketing towards that particular segment will pull customers with more wealth as well, since they won’t necessarily use the same discretion in buying luxury items, because it will be considered more of a common good. However, it will not discourage the customers with the highest income from buying, as they will still have that same product with disposable income to go elsewhere for products that will serve their social status. <br />The ultimate objective will be to make LV more convenient for customers in India so they don’t have to go to other countries to buy LV. There needs to be a way for the rich to get what they want when they want it if they pay a high enough premium. In this aspect, it will be important to focus more on the service that LV provides than the product, since the wealthy have no problem going to other countries to buy luxury items. In addition, the LV brand should try to capture mostly people who are experiencing wealth for the first time in their life and want the feel of having a luxury item, but aren’t picky about how much the item costs because they are more concerned with the feel of luxury than the exclusivity of it. <br />LV will be primarily positioned towards the top of the clear rich percentage, but focus mainly on the sheer rich. The sheer rich are the people who have a very high income already and have the potential to become super rich in a few years. If LV focuses only on the super-rich, it will alienate the rest of its customers who have the ability to buy luxury items, but won’t because they are new to the idea of being wealthy. On the other hand, if LV focuses on the sheer rich, but provides a service that will give the super-rich some sort of exclusivity, it will be more likely to capture a greater market share. Ultimately, LV will have the challenge of positioning its product towards two separate segments in order to make the most profit. <br />In order to keep LV a rare and prestigious brand, there will only be one store in India near the Taj Mahal, which is a popular tourist destination and will attract people outside of the country. In addition, LV will sell its products at varying degrees of price points in order to appeal to those who recently became wealthy. However, it will also keep its customers who are trying to purchase exclusivity by using the just-in-time concept towards that demographic. These customers will be able to order a custom-made item either by phone or online and have it shipped to them the same day. This alleviates the inconvenience of having to travel to another country to purchase LV, and also gives customers who want to feel more exclusive a premium service because the newer wealthy class won’t necessarily care won’t be as picky about the kind of item they purchase and they won’t care as much about how quickly it gets to them. <br />