This presentation was on one of the projects under my internship with DLF Brands, Summer 2016. This studies the consumer behaviour towards luxury brands.

1. CONSUMER
BEHAVIOUR
STUDY FOR
LUXURY
BRANDS
A report by Saisha Nagpaul

2. – Luxury brands are not bought based on ra7onale or convenience, however
rather are a result of desire. Consumers buy feelings, experiences and iden7ty
along with the physical product.
– This report talks about the consumer behaviour towards luxury brands and the
factors that affect their behaviour. It includes points from both consumer and
brand sides.

3. - Purchase 7ming
- Purchase amount
- Income
- Post purchase
evalua7on of
decision
Before buying While buying AHer buying
- Need recogni7on
- Informa7on research
- Evalua7on of
alterna7ves

4. Major factors affec7ng
consumer behavior
BRAND SIDE
- Exclusivity/Rarity
-Premium price
- Perceived quality
- Brand loyalty
CONSUMER SIDE
- Income
- Social status/ Impressing
others

5. QUALITATIVE
FACTORS
(Brand side)
EXTRAORDINARITY
PERSONA &
PERFORMANCE
PUBLIC
RELATIONS
SYMBOLISM
Uniqueness and crea7vity of the
brand. For example Fendi has a
uniquely quirky collec7on.
Providing a high quality of
consumer experience,
making him feel exclusive is
performance. Roberto
Cavalli does a great job at it.
The mix of emo7onal values
of the brand is its persona.
”There can be no luxury brand
without roots, without a
history.” (Kapferer and Bas7en) It is
not just the brand communica7on
but also the luxury consumer’s mind
is said to be apprecia7ve of the
brand’s heritage and tradi7on
Luxury brands do concentrate on PR but
in a different, more subtle way in
comparison to mass brands. luxury brands
use celebri7es in a different way.
Examples of this strategy may be
accessorizing celebri7es for fashion shows
or red carpet events

6. Despite major factors,
there are a few

7. – Income of the consumer is a game changer in the luxury market.
– With a slight increase in income of consumer, huge change could occur in the
luxury market.
– For example, Apple iPhone was ini7ally a luxury product. But these days,
almost every second person possesses an Apple gadget.
– Another example, smart phone was a luxury product, but now, it’s almost a
necessity good and even rickshaw pullers possess them.
– This is a plus point for the industry, that the lifestyle quality of people
con7nuously increases.

8. – This is a specially interes7ng theory, basically an extension of the idea that
“Luxury is understood differently by different people.
– Considering a few examples of luxury lifestyle, like luxury travel, luxury
automobiles and electronics, luxury watches, luxury fragrance or luxury
wearing. These types also play a foremost role in deciding what product the
consumer goes in for and why.
– Cruise travels were known to be a luxury in early 7mes, now most people can
afford them and they go for cruises to enjoy an experience of travel cum stay
situa7on along with entertainment on board. Similarly, spas and massages were
a treat known only to the elite, but they now are a comfort and relaxa7on
solu7on to many.

9. – Usually, the more you spend on a product, the higher quality it offers. However,
purchases of high end luxury watches and automobiles would be more
reasoned for status rather than comfort.

10. Brand image
Demandable status by
consumer
As shown in the graph, the be`er the brand image,
the more admirable is the status and since status is
one of the major factors for demand of the luxury
brand, hence the two are in direct rela7on.

12. – On another note, the luxury industry's needs
a recipe for success which strikes a delicate
balance between honoring the past and
inven7ng the future. With a stroke of magic,
crea7vity is fused with heritage, skilled
craHsmanship is combined with tailored
efficiency, and uncompromising quality
coincides with fashion, growth link up with
profits.

13. – Maintaining the balance between mass and
class is a challenge. The dilemma is, “At what
point does a brand become so a`ainable to
so many that it no longer represents
luxury?”.
– This means that keeping the pricing
absolutely accurate can be tricky, in the
sense that it must be a deal to the
prospec7ve consumer but not so affordable.

14. How does a brand deliver the message of
exclusivity?
How does it evidence the price of the product it
claims is absolutely deserving?
How does it showcase its brand image in a way
that the consumer is driven to say that, “This crazy
price of that product is 100% worth it” ?
Here are a few examples how:

16. – India is generally labelled as a fashion/trend follower country, because of being
dominated by interna7onal brands. However, Indian luxury market is expected
to cross $18.3 billion by 2016 from the current level of $14.7 billion growing
with a compound annual growth rate (CAGR) of about 25 per cent, according to
a Assocham study. (ref : The Hindu)
– The factors that have fuelled the luxury industry’s growth are the rise in
disposable income, brand awareness amongst the youth and purchasing power
of the upper class in Tier-II & Tier-III ci7es
– Considering luxury market, about 60% of their buying revolves around one
major factor : flaun7ng status, which is an implica7on of famous Indian society
theory ‘Log kya kahenge’.
– For example, weddings in India are known for the amount of spending, or
rather luxury spending one does is enormous.

17. THE EFFECT OF ONLINE MARKET
ON LUXURY BRANDS

18. – The pervasive belief was that luxury shoppers, with their discrimina7ng taste
and preference for high-priced goods, wouldn’t buy expensive things online;
they would always opt for the personalized customer service and tac7le
shopping experience that exclusive mono brand stores provide.
– That thinking has evolved in recent years. The online luxury shopping players
have understood that the growing demand of the luxury in India cannot be just
sa7ated with selling offline channel. With increasing awareness amongst the
people, they are now looking for global fashion trends and brands directly from
interna7onal runways and global streets. In the past two years, leading e-
commerce businesses are roping in global luxury brands to strengthen their
poruolios. Amazon, Myntra, Sanpdeal etc, are tying up with global brands like
Furla, Tumi, Diesel, Mango and many more brands to fulfil the growing demand
of luxury products in India.

19. – The high disposable income in combina7on of other key growth drivers has led
to be`er business opportuni7es for luxury brands in India. Instead of pursuing
the disposable income curve blindly, they have come up with innova7ve ways
to target Indian shoppers.
– 1. Social Media : A study suggests that on an average an internet user spends
approximately 25% of 7me on leading social networking sites like Facebook,
Twi`er others. The online luxury brands are developing innova7ve and
appealing content to engage the poten7al customers. Social media adver7sing
enables them to reac7vely and proac7vely target the poten7al customers.
– 2. Online Partnership – The online partnership with different brands allows the
luxury markets to create a one stop shop des7na7on for their customers, while
also bringing some of the exclusive luxury brands to Indian market. It also
allows the company to expand their target customer base and to reach and
engage more people.

20. – 3. Discounts and Deals – The online luxury shopping sites mostly always come
up with innova7ve offers and discounts that have made the luxury brands
a`ainable for the consumers. Discounted rates have also led people to buy
high-street luxury products without feeling the pinch. Whether it is luxury
watches, apparels, accessories or home products, all the high end products are
available on prices that are reachable by the growing middle class popula7on of
India.
– 4. EMI, Cash On Delivery and other – Buyers are looking for more convenience
and more value for their hard earned money. They are not just looking for more
compe77ve prices but also more perks. The bigger players have grasped this
need of the Indian buyers and offer the convenience features like easy EMI,
Cash on Delivery, free return and free delivery policies. This has radically
affected the loyalty and confidence of the Indian buyers.
– List of sites for luxury brands in India
1. Jabong
2. Myntra
3. Eli7fy
4. Amazon
5. Darveys
6. Ebay

21. – Luxury goods conNnues to post strong growth in 2016
Like men7oned earlier, Indian luxury market is expected to cross $18.3 billion by 2016 from
the current level of $14.7 billion growing with a compound annual growth rate (CAGR) of
about 25 per cent, according to a Assocham study. The market is s7ll in a nascent stage and
has many opportuni7es for growth amongst interna7onal players. The urban rich consumer
base of India is indulging in luxury goods for both style and status reasons. Apart from the
economic and demographic factors, during 2015 luxury players invested in marke7ng
campaigns to increase the awareness of luxury goods among local consumers.
– Rising interest in luxury goods among non-metro consumers
The growth of the Indian economy is also being witnessed in the smaller ci7es of the
country. There are a large number of wealthy households in these smaller ci7es with
aspira7ons similar to their metro counterparts. These consumers are showing increasing
interest in luxury goods. Changing lifestyle trends among these consumers is helping to drive
the growth of Indian luxury goods. Wealthy consumers of the smaller ci7es are increasingly
visi7ng metros to shop for luxury goods.

22. – LVMH Watch & Jewelry India Pvt Ltd leads fragmented Indian luxury landscape in 2015
Indian luxury goods remains fragmented. Interna7onal players such as LVMH Watch & Jewellery
India Pvt Ltd, Gucci India Pvt ltd, Burberry India Pvt Ltd and Swatch Group India Pvt Ltd con7nue to
lead this fragmented landscape. The presence of domes7c Indian players is mainly within
categories such as tradi7onal jewelry and dresses in the luxury space. The market has also
witnessed an increase in number of interna7onal brands entering India to tap into the poten7al
offered by this niche and high growth area.
– Future of luxury goods in India looks bright
Luxury goods in India is s7ll in its nascent stages and has many opportuni7es for growth. The
recent slowdown in Chinese luxury goods has also shiHed the focus of luxury players to India. The
government has also been taking steps to make the process of entering Indian luxury goods easier
and these steps are expected to help bring in more luxury brands to the country over the forecast
period. The young demographics of the Indian popula7on, strong economic growth and rising
income levels over the forecast period are expected to help drive luxury goods
– FINAL VERDICT
Consumers have spent on luxury, are spending and will con7nue to spend. The change is that more
and more people can now afford luxury and this booms the economy as well. The consumer looks
forward to new luxury products and wants to experience exclusivity and pampering. Majority of
consumer spends luxuriously to be`er their lifestyle. But since they spend so much, they make
sure what they’re going in for gives them maximum benefit.