Fashion Marketing of Luxury Branding - Literature review Example

Marketing Table of Contents Chapter 2: Literature Review 3 Reference List 10 Chapter 2: Literature Review 2 Fashion Industry Fashion is regarded tobe most creative, dynamic and exciting global business. It is all about identity, emotion and self expression. It pushes and reflects the social and cultural boundaries. Fashion has turned into a fascination and special industry due to the mix of business, technology and aesthetic. It is a huge business and engages large number of peoples with variety of skill and talents in order to offer the customers with wide range of fashion apparels. The front line customer service staff, which includes “Designers, new product developers, textile producers, manufacturers, merchandisers, buyers, marketers, technologists, supply chain experts, logistics managers, strategists and retailers” (Hines and Bruce, 2007, p. xxi) works continuously to offer the best product in the market place at the fastest possible time and at a competitive price. This whole process has been managed through complicated network of suppliers and number of intermediaries who are supporting the production located at various parts of the world and making them reachable to the consumers from the producers. The growth of new economy and constant changes in the fashion industry has affected the structure of the fashion business. This has given rise to the potential threat for the fashion business by opening new channels of marketing and offering various branded products at a cheaper price. The emergence of the retailers who offers their products through the internet sites has given rise to shopping through internet. This has caused blurring of boundaries between the dotcom companies, manufacturer and the retailers. In such a market scenario, the loyalty of the customers has reduced by considerable amount. The consumers are now looking for the best deal based on price, quality, convenience and brand awareness. However, the purchase behaviour of the customers while buying online is still cannot be predicted and needs further research. 2.2 Fashion Marketing of luxury branding As compared to other industries the size of the luxury industry is relatively small in terms of both sales and influence. The luxury industry offers the best packaging, merchandise, designs and materials, which keeps this segment ahead of its competitors around the world (Ko and Megehee, 2012). The valuation of the luxury sector all over the world is $240 billion. This includes Italian and French firms that are well known as the traditional luxury houses with long old heritage and has wider presence in product category of spirit, wine, cosmetics, leather goods, accessories and fashion. The main drivers that have caused a growth of the luxury industry are globalization, emerging segment of affluent class, wealth creation and expansion of international travel. Traditional well-off elite are not the only segment that is included in the luxury market but also include spendthrift, modern, well paid, younger people who are acting as the new base. 2.3 Purchasing decision There are several reasons due to which the customers get attracted towards the luxury goods. The primary reason for the purchase of luxury goods is the symbolism that the customers attach with the products rather than the attributes of the product (Berthon, et al., 2009; Han, Nunes, and Dreze, 2010). The luxury brand attaches particular themes and meaning to the fuel consumption. Some of the scholars have pointed out that the main attracting feature of the luxury goods lies in the inability of the mass consumers to buy it, rarity and uniqueness (Weele, 2009). The empirical observation has shown that many brands operating in the luxury market has stretched their boundaries for selling massive amount of luxury products. In order to cater these requirements the luxury firms aims to balance between these two goals. Firstly they look towards increasing their exclusivity and secondly increasing their brand awareness and growing market share and revenue. The huge expansion of the luxury market, which is regarded to be in the category of luxury buying behaviour, lies at the intersection of mass consumption and exclusivity has gained prominence. 2.3.1 Bandwagon luxury consumption Bandwagon effect is indicated by the desire of the people to purchase any particular product in order to be stylish or fashionable or to be in line with the people with whom they want to remain associated. It has been suggested by many of the research scholars that purchase of luxury goods is associated with the bandwagon effect (Chaudhuri and Majumdar, 2006; Tynan, McKechnie and Chhuon, 2010). In luxury market bandwagon effect occurs when the consumer goes for buying any product due to its popularity, which in turn leads to further demands for the product. In case of bandwagon consumption of luxury goods the behaviour of the consumers are of special importance since luxury values get co-created and re-enforced by the complex interaction between several social groups of brand communities and customers (Tynan, McKechnie and Chhuon, 2010). It has been claimed by many of the consumers that the popularity of the luxury products are signified by must have product and prestige since the value is derived from the interaction between the consumers. The bandwagon effect is re-created when the consumers observe the consumption behaviour of others; find a popularity of the luxury product and goes for purchasing it. The luxury products gains attractiveness since others are buying and using them. This type of consumption of luxury goods provides a sharp contrast with the snob effect in which the consumers value the luxury product because only few can own it and Veblen effects in which the consumers are inclined towards purchasing the luxury goods when their prices increases. Thus two factors like social origin and social valence of consumer’s behaviour are seen to create bandwagon affect (Kastanakis and Balabanis, 2011). 2.4 Niche marketing Niche marketing can be used as synonym to micro marketing, concentrated marketing, focus marketing and target marketing. Niche marketing can be defined as the process by which a small part of the whole market can be carved out, whose needs are not fulfilled. Since it is specialised to particular market, the company matches the marketing mix and product as per the unique requirement of those customers. 2.4.1 Difference between Segmentation and Niche marketing Segmentation has been assumed to the starting point of niche marketing. Segmentation is defined as the process of breaking down a larger market into smaller sections, which implies that it follows a top-down approach whereas the niche marketing follows a bottom up approach in which the marketer starts the process by indentifying the needs of the customers and gradually creating a larger customer base (McDonald, 2012). Thus niche marketing can be termed as reversed or inverted segmentation. This denies the concept that assumes niche marketing as the final stage of segmentation. Some other differences that can be seen are when compared in terms of size niche appears to be much more smaller than segment; in niche an individual is focussed whereas in case of segment a particular homogeneous group is focused; the segment is the manageable part of the market whereas the niche looks towards fulfilling a specific need. Thus it can be said that niche marketing signifies positioning of the product into a profitable and small homogeneous market segment that has been neglected by others (Dalgic and Leeuw, 1994; Dalgic, 2006). Figure 1: Bottom up Approach of Niche marketing (Source: Dalgic and Leeuw, 1994) 2.5 Social Media Marketing (SMM) With the rapid increase in the number of customers and expansion in the scope of the market, the luxury market has been seen to attain maturity. Luxury market is an industry that is based on high brand assets that adds value to the industry. An increase in the demand for the luxury goods has been seen to come from the counties like India, Middle East and China. Apart from this, entrance of new fashion brands into the luxury market has created more competition that signals formation of sudden changes in the market. The fall in the sales due to the economic downturn creates changes in the luxury business. Now the businesses are not only dependent upon the brand symbol but also should focus on the customer relationship, esthetic values, quality and brand legacy in order to become successful. In order to compose customer assets via means of effective communication with the customers, luxury brands have started focusing on the social media. Social media tools like YouTube, Facebook and Twitter are evaluated to be the best techniques for luxury brands. Many of the luxury brands have been seen to create their own accounts on twitter or post on Facebook. Through social media networks the customers and brands are seen to be engaged in both way communications without any restrictions in form of medium, place or time; thus changing the traditional way of one way communication (Kim and Ko, 2011). 2.5.1 SMM for luxury brands With the advent of technological development the fashion industry is able to attract more customers through interaction with the brands. The fashion brands are seen to involve in networking, blogging and tweeting that leads the luxury brands to partake in the current trends. The technology has provided the luxury industry with a large number of opportunities. The interaction with the consumers through the social media sites like Twitter or Facebook has lead to creation of friendly affection and attention towards the brand that exaggerate the customer’s desire for luxury brands (Kim and Ko, 2011). Reference List Berthon, P., Pitt, L., Parent, M. and Berthon, J. P., 2009. Aesthetics and ephemerality: Observing and preserving the luxury brand. California Management Review, 52, pp. 45–66. Chaudhuri, H. R. and Majumdar S., 2006. Of diamonds and desires: understanding conspicuous consumption from a contemporary marketing perspective. Academy of Marketing Science Review [pdf] Available at [Accessed 8 July 2013] . Dalgic, T. and Leeuw, M., 1994. Niche Marketing Revisited: Concept, Applications and Some European Cases. European Journal of Marketing, 28(4), pp. 39-55. Dalgic, T., 2006. Handbook of niche marketing: Principles and practice. London: Routledge. Han, Y.J., Nunes, J.C. and Dreze, X., 2010. Signaling status with luxury goods: the role of brand prominence. Journal of Marketing, 74, pp. 15–30. Hines, T. and Bruce, M., 2007. Fashion marketing contemporary issues. 2nd Ed. Massachusetts: Elsevier Ltd Kastanakis, M.N. and Balabanis, G., 2011. Between the mass and the class: Antecedents of the “bandwagon” luxury consumption behaviour. Journal of Business Research, 65 (2012), pp. 1399–1407. Kim, A.J. and Ko, E., 2011. Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand. Journal of Business Research, 65(2012), pp. 1480–1486. Ko, E. and Megehee, C.M., 2011. Fashion marketing of luxury brands: Recent research issues and contributions. Journal of Business Research, 65(2012), 1395–1398. McDonald, M., 2012. Market segmentation: How to do it and how to profit from it. New Jersey: John Wiley & Sons. Tynan, C., McKechnie, S. and Chhuon, C., 2010. Co-creating value for luxury brands. Journal of Business Research, 63(11), pp. 1156–63. Weele, A.J.V., 2009. Purchasing and supply chain management: Analysis, strategy, planning and practice. Connecticut: Cengage Learning EMEA. Read More