1. Explain the social element of luxury brands, and explore how this concept relates to some of the challenges facing luxury brands, such as counterfeiting and parallel markets.
Luxury brands are run completely by social elements. When a brand becomes popular they become the most wanted brand, which is why they are able to charge the outrageous prices they charge. Celebrities and the upper class create an image for the brand. People idolize stars and want to wear everything they wear. With the prices being so high they cant always afford the newest purse or shoes, so that’s when counterfeiting becomes a problem. People will create a replica of the merchandise and sell it for a substantially lower cost. Also brands like Forever 21 will mimic things they see and make them with cheap materials and sell them for a much lower cost.
2. What is the meaning of a lifestyle brand? Why are most luxury brands described as such?
“A lifestyle brand successfully identifies itself with a lifestyle and a marketing segment to the point that its name or image is mentally triggered when the segment is mentioned.”
(Hameide 117) They are described as such because not everyone can afford a $3000 purse, so you have to live a specific lifestyle of high class to be able to spend the money and wear the luxury brands.
3. Explain how luxury brands seem to defy traditional marketing principles
“If marketing strategies are meant to increase sales volume and market shares and allow for maximization of profit through smaller margins but higher volumes, this is totally the opposite with luxury brands. Luxury brands are keen on deliberate limited production and exclusive distribution, in spite of any rise in demand. Luxury brands are expected (and accepted) to be harder to acquire.” (Hameide 149)
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