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Welcome to Luxury Pricing, Promotion and Distribution

Welcome to Luxury Pricing, Promotion and Distribution. Dr . Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada s.singh@uwinnipeg.ca https://abem.uwinnipeg.ca https://www.abem.ca/conference. Hermes Birkin named after Jane Birkin $9,000-$150,000.

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Welcome to Luxury Pricing, Promotion and Distribution

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  1. Welcome toLuxury Pricing, Promotion and Distribution Dr. Satyendra SinghProfessor, Marketing and International BusinessUniversity of WinnipegCanadas.singh@uwinnipeg.cahttps://abem.uwinnipeg.cahttps://www.abem.ca/conference

  2. Hermes Birkinnamed after Jane Birkin$9,000-$150,000

  3. Hermes Birkinnamed after Jane Birkin$9,000-$150,000

  4. Hermes Birkinnamed after Jane Birkin$9,000-$150,000

  5. Hermes Birkinnamed after Jane Birkin$9,000-$150,000

  6. Clive Christian’s Imperial Majesty$215,000 (16.9 Oz)

  7. Hermes Birkinnamed after Jane Birkin$9,000-$150,000

  8. Patek Philippe$200,000 The man who makes ₤100,000 watch

  9. Patek Philippe: $320,000

  10. Patek Caliber  $5mMost complicated watchX 2 Ferrari’s price!

  11. Pricing Price depends on Positioning of the luxury; e.g., true luxury Operating cost, custom duty, foreign exchange Operating cost (retailing + staff) = 30% Distributors need 60% margin (co-efficient 2.4-2.6) HK, SP, Guam and Panama  no custom duty Duty-free shops  20% cheaper EU (France) may be cheaper than EM (Brazil) due to custom duty yet buy in Brazil why

  12. Consumer Mistreatment

  13. Promotion Limited advertisement control and project image Mass advertisement is not efficient for luxury goods Some brands do not advertise in mass media Zara Some countries ban luxury advertisements  China Window displays To create dream and desire Needs creativity and interactivity Product merchandizing and communications Name products after famous people Gucci’s Jackie Kennedy bag Use of celebrities for promotion  debatable LV/Furla… use celebrity as a brand ambassador

  14. Window Display

  15. Harrod’s window display: Creativity, dream

  16. Rolls-Royce at Harrod’s window display

  17. Is anything wrong with the window display?

  18. LV: Jennifer Lopez

  19. LV: Uma Thurman

  20. Porsche’s bags LV: Uma Thurman

  21. Discount No discount LV destroys old goods We cannot ↓ value  Control image and supply Loyal customers loyalty gift by invitation ReasonNew wed, 1st baby, 1st degree, … Outlet Shopping village La Vallée Village (France), Bicester village (UK)…

  22. The Bus Tour

  23. Bicester village Shop

  24. Selling Techniques Trunk shows Next season’s collections are previewed held in luxury store  by invitation  buy Burberry /Ralph Lauren  outside Pre-season shows Collections launched just prior to main season Post-season shows By invitation  50% off  True luxury avoids this Shopping lunch Eat lunch in store (e.g., Fendi…) and then buy  very selected few are invited

  25. Hilton in Sari

  26. Luxury Department Stores 25,000 square feet a place of worship People like spending time or meeting there Location is important customers avoid crossing river, railways, bridge… They carry multiple brands Department store are opinion leaders

  27. Sales in 2010  $150m Monday = 9,000 visitors Saturday = 17,000

  28. France: Luxury Department Stores Sephora Galeries Lafayette Boon Maché Printemps

  29. UK: Luxury Department Stores Harrod’s Selfridges  2nd largest in London House of Fraser Canada: Holt Renfrew (10 stores only (very upscale): Toronto, Ottawa, Montreal, Calgary, Vancouver, Edmonton)

  30. Selfridges

  31. USA: Luxury Department Stores Macy’s Bergdorf Goodman, Barney’s 5th Saks Avenue  stay as long as you wish Nordstrom  largest independent store It has a loyalty program: 2nd floor  >$2,000/year (You should spend) 3rd floor  >$10,000/year (Personal concierge service) 4th floor  >$20,000/year (customers get fashion show ticket, can host private party in store for their friends

  32. Japan: Luxury Department Stores Mitsukoshi Isetan Daimaru and Matsuzakaya Takashimaya Most exclusive

  33. TakashimayaJapan

  34. Tsum MoscowDept Store

  35. Media Selection 15

  36. Luxury Retail Strategy… Company Operated Store (COS) Free standing flagship store (i.e. one door) Non-COS Franchisee Distributor/Retailer Bluebell, Dickson Poon  Asians markets. Mercury  Singapore markets

  37. Luxury Retailing Strategy… Company Operated Store (COS) Rolex, Bréguet… prefer COS Distributors Perfumes and cosmetics 75% of luxury perfumes and cosmetics are sold through department store

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