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Marketing Management | "Selling Luxury Brands in Downturn"

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Selling Luxury Brands in Downturn

- by Aniruddh Kr. Singh *

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Setup Manufacturing Bases in Low Cost Markets

Luxury brands are shifting their manufacturing base to emerging countries to leverage the cost advantage of these regions. 60% of the world's luxury brands will make their products in China by 2009 due to low manufacturing costs and increasing demand for products.

  • Prada started to source and manufacture in Asia, particularly China, due to unfavorable currency situation.

  • Burberry shifted production of shirts and some other items in China.

  • Louis Vuitton is considering setting up a shoe factory in Southeast India by the end of 2008.

    The Customer Front

    New Customer Segments

    Luxury brands are polarizing, either targeting the 'new rich' segments with highly expensive offerings, or launching more affordable collections to expand their customer base.

    Next

    * Contributed by: -
    Aniruddh Kr. Singh,
    Batch of 2007-09,
    Faculty of Management Studies, Delhi.
    Article posted on December 21, 2008.

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