Global luxury fashion industry

Abstract

The economic definition of a luxury brand is goods for which demand rises either in proportion with income or in greater proportion than income (i.e. where the income elasticity of demand is equal to or greater than 1). But this definition is not a sufficient explanation as income is a necessary but not a sufficient condition for the purchase of Luxury goods. A more complete definition of Luxury brandsHigh quality, expensive and non-essential products and services that appear to be rare, exclusive, prestigious, and authentic and offer high levels of symbolic and emotional/hedonic values through customer experiences. (Tynan et al, 2009) But today there are infact two definitions of luxury i - Old Luxury- About the product It has more to do with how the company defines the product as luxury- special qualities, features and attributes intrinsic to a product. These are mainly to do with the Heritage products- those which have the ‘Best of the Best’ status within a product category. These products usually go hand in hand with a heavy price tag and big brand name. New Luxury- About the experience The luxury factor is to do with the experience of the consumer. Here the brands are irrelevant, it is whether the product delivers a luxury experience or not. This can hence be called the democratization of fashion, where a Zara gown can be termed as affordable Luxury because of the experience it provides to the customer.