Welcome to Group 8's Strategic Marketing Blog. This week, we've chosen to dive into a very interesting topic, the pricing of goods. More specifically, we'll be take a look into the pricing of luxury goods. Throughout the week, members of the group will be providing their findings and personal insights on this subject. But before we dive into the pricing of luxury goods, we first must examine, what is luxury?
The Oxford dictionary defines luxury as "a state of great comfort or elegance, especially when involving great expense" with the origins of the word tracing back to the Middle English term, lechery, meaning "excessive or offensive sexual desire; lustfulness." While this word dates back to the 1700s, the concept of luxury however, has been around in one form or another since the start of civilization. At the highest level, luxury goods could be considered anything that is held in exceptionally high regard when compared to regular items or services. In Christopher Berry's book, "The Idea of Luxury: A Conceptual and Historical Investigation", he begins to look at luxury during the Roman period. Romans, who were originally averse to the concept of luxury items, began to embrace the concept as they began to conquer other early civilizations such as the Greeks who valued these types of goods more. Soon after, the daily life of the more affluent members of this society began to become more focused on pleasure and extravagance whereas previously, power and influence could be seen as the primary objective. As time moved on, the concept of luxury and the desire for it grew and even permeated various religions as churches were erected with marble, gold and other ornate objects.
By the time the world reached the 1700s, the concept of luxury was full blown thanks largely in part to global exportation and international trade. During this period, every seafaring nation was sending ships to all corners of the globe in search of luxury goods of the time; sugar, spices, gold, silks etc. Although luxury has been around as long as civilization, it's accessibility has changed. During the time of the Romans up until the 1700s, the consumption of luxury goods was only something that was really limited to the most elite social classes. Since then, we have seen a shift away from this with the rise of new product categories created specifically within the luxury market to appeal specifically to middle class consumers. These products are sometimes referred to as "accessible" or "mass luxury" goods.
Although luxury items and brands as we know them today have a much broader appeal, luxury is not without it's controversy and critics. When we discussed the topic, words that came to the surface are greed, vice, extravagance, unnecessary and over-indulgence, just to name a few. In fact, the criticism of luxury goods and their relevance is as old as the concept of luxury itself. The Romans were the first create laws and put restrictions on luxury goods by capping spending on banquets and other luxury items of the time. More recently, the government in the US banned luxury showers in 2010 due to their harmful impact on the environment, and in 2012, the Chinese government banned the advertisement of all luxury goods on its official state radio and television channels.
Despite all this, luxury brands are not showing any sign of slowing down as the market continues to grow globally. The current trends we're seeing today in the modern luxury market is that of globalization, consolidation and diversification. Globalization has led to these types of goods being more prevalent all over the world with more brands on offer, while consolidation has led to the growth of large companies which produce a large variety of brands across different segments within the luxury market. The an example of one such firm is Louis Vuitton Moet Hennessy (LMVH), with annual revenues of approximately 20.3 million euros, making them the largest luxury brand company in the world.
The Oxford dictionary defines luxury as "a state of great comfort or elegance, especially when involving great expense" with the origins of the word tracing back to the Middle English term, lechery, meaning "excessive or offensive sexual desire; lustfulness." While this word dates back to the 1700s, the concept of luxury however, has been around in one form or another since the start of civilization. At the highest level, luxury goods could be considered anything that is held in exceptionally high regard when compared to regular items or services. In Christopher Berry's book, "The Idea of Luxury: A Conceptual and Historical Investigation", he begins to look at luxury during the Roman period. Romans, who were originally averse to the concept of luxury items, began to embrace the concept as they began to conquer other early civilizations such as the Greeks who valued these types of goods more. Soon after, the daily life of the more affluent members of this society began to become more focused on pleasure and extravagance whereas previously, power and influence could be seen as the primary objective. As time moved on, the concept of luxury and the desire for it grew and even permeated various religions as churches were erected with marble, gold and other ornate objects.
By the time the world reached the 1700s, the concept of luxury was full blown thanks largely in part to global exportation and international trade. During this period, every seafaring nation was sending ships to all corners of the globe in search of luxury goods of the time; sugar, spices, gold, silks etc. Although luxury has been around as long as civilization, it's accessibility has changed. During the time of the Romans up until the 1700s, the consumption of luxury goods was only something that was really limited to the most elite social classes. Since then, we have seen a shift away from this with the rise of new product categories created specifically within the luxury market to appeal specifically to middle class consumers. These products are sometimes referred to as "accessible" or "mass luxury" goods.
Excellent points! I learned a lot!
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