Dissertation ON "Luxury Brands Are Making More Space in Indian Market"

DISSERTATION
ON
“LUXURY BRANDS ARE MAKING
MORE SPACE IN INDIAN
MARKET”
PRESENTED TO PRESENTED BY
PRO. RISHABHA LIKENDRA VERMA
NAYYAR PGP -2
WHAT IS LUXURY?
 Luxury, derived from the Latin

word luxus, means indulgence of the
senses, regardless of cost.
 Luxury denotes:-
1. Something that is an
indulgence rather than a
necessity.
2. The quality possessed by
something that is excessively
expensive..
3. Luxury speaks a level of exclusivity, unusualness”
CHARACTERISTICS OF THE LUXURY INDUSTRY
 Luxury means different things to different people
 Luxury is a product category in itself
 The meaning of luxury had changed
 Aura is more important than exclusivity
 Luxury is Functional
 Luxury is Reward
 Luxury is Indulgence
THE LUXURY GROWTH DRIVERS
 The increase in the number of millionaires across India.
 Robust economy
 Entrepreneurial drive
 India has over 2.0 million households earningy
usd $ 100,000 or more annually
 Double income family
 There were around 62000 ultra high net worth individuals in India in 2010-11
 India is now the 12 the largest market globally for luxury products over the
next couple of years it is likely to emerge among the top 10 luxury
markets.
 The highest growth in Indian luxury industry has been recorded in Delhi
across all brands closely followed by Mumbai .The south of the country-
Bangalore ,Hyderabad and Chennai – is in catch-up mode
WHERE TO SPEND MONEY?
 Holyday packages
Luxury market 2007
 Jwellaery/ precious stones
Accessories
11.10%
16.20%
 Luxury watches 10% Home and others
18.40% fashion and clothing
 Household electronics fragrance and

44.30% cosmetics
watches and jewellery
 Apparel accessories
 Home décor/ crystals Luxury market 2012
 Luxury pens 12.10%

18.20% Accessories
10% Home and others

 Vintage spirits
fashion and
17.70% clothing
fragrance and
 Art/artifacts 41.90%
cosmetics
LUXURY CONSUMER PROFILE
 Consumer profile Includes professionals, inheritors and

the entrepreneurs.
 Profile of the Indian luxury consumer, leaning on the

latest study by research group KSA Tecnopak: -
“Primarily resident in urban India Lives in a household

earning more than about INR800,000 (US$18,000) a year,
where the chief wage earner is
male, average age 36–37 Owns a
premium/luxury saloon car such as a Honda”
Operating margins of top 10 luxury brands
Christian Dior Couture

Bulp,ari 8.0
Giorgio Armani 13.0
Polo Ralph Lauren ł4.9
Average 1G.9
Richemont
burb crry 2D. 1 )
Prada 20.4
LVMH 20.5
Gucci Group
Hermes 27.8
Operating margin & (Full year 2011/12)

’Giorgio Arm ani operating marg in is est inn ated based on repor led EBITDA and sales.
’L\'NIH includes hig h s meet busine sses, such as 5e phora
Source: \' erdic I, Companv accounts
RESEARCH MEASUREMENTS
RESEARCH METHODOLOGY
 Project has information gathered from both from primary
and secondary sources.
 Quantitative method, used questionnaire by using
• Likert scale
• Ranking scale
• Open ended and close ended question
SAMPLE
 Sample Size: 30
 Sample Frame: Pune City
 Sample Unit: working professionals of Pune
 Sample age:-23 to 35
 Sampling Method: Simple Random Sampling
 Constraints: Time, No. of Respondents
 Survey: Questionnaire
STATISTICAL ANALYSIS AND FINDINGS
 About 90%respondence agree that Purchase of Luxury

Products is totally related to the Income level of an
Individual .Income usually affects the lifestyle and
attitude of individuals which might shape choice of the
products you buy.
 In luxury brands most of the respondents prefer quality

followed by price and availability. This response
shows that customers are ready to pay for quality.
 In opinion of Respondents, majority of People

buy luxury product because they want to flaunt
their superiority over others. Followed by those
people who really have taste of art and exclusiveness.
 About 70% of the respondents are of the view that
service quality in luxury brands is more superior then
other brands.
 According to survey most of the people prefer to shop

luxury brands followed by local brands International
brand has least share.
 50% of our respondents prefer to shop from malls

than local market followed by branded outlet. This
shows that real estate (commercial) mall concept have such
a high impact on the sale of luxury items.
 Due to less sales luxury brands generally fall into trap of
discounting and that goes very true in case of a
developing country like India. To understand this question
following information is gathered.
 Most of the people like to purchase from Malls

followed by local market and brand outlets. This
shows that real estate (commercial) mall concept have
such a high impact on the sale of luxury items.
 According to respondents celebrity endorsement is one

of the best way to promote luxury brands than word of
mouth or public relation.
LOCALIZATION OF RICH LUXURY
 To stay in India, foreign brands have to adapt to

India and they have to localize.
 Indians are intelligent and they wouldn't buy any product

just for its label.
 Lots of coffee brands like barista lavazza, hard rock café,

costa café planet mocha these brands are trying to
change their tastes .
 Brands like McDonalds ,pizza hut, dominoz pizza

have changed their quality of product service and
tastes according to Indian culture and beliefs.
EXISTING PLAYERS IN THE INDIAN LUXURY MARKET
JEWELLERY:-
 Cartier:- Cartiers SA is a French jeweller and watch
manufacturer persuaded a number of Maharajas to reset
their jewels using Cartier designs in india.
 De-beers:-For De Beers, India is a key market. Almost 10

per cent of its global retail business or around $7
billion comes from India.
CLOTHING:
 LVMH(Moet Hennessy Louis Vuitton) is a French
holding company and one of the world’s biggest
luxury goods conglomerates.
It is the parent of around 60 sub-companies that each
manage a small number of prestigious brands.
 LVMH have a category of :-
 Wines andspirit(DomPérignon, MoëtChandon,
Veuve, Clicquot and Hennessy),

 Perfumes (Christian Dior, Guerlain and Givenchy),
 Cosmetics (Bliss, Fresh and BeneFit),
 Fashion and leather goods (Christian Lacroix, Donna

Karan,Givenchy, Kenzo and Louis Vuitton),
 Watches and Jewellery (TAG Heuer, Ebel, Chaumet
and Fred).
TOP 10 LUXURY CARS IN INDIA
 MERCEDES BENZ E CLASS

 VOLVO S 80
 BMW 5 SERIES
 AUDI A 4
 BMW 3 SERIES
 MERCEDES BENZ C CLASS
 VOLKSWAGON PASSAT
 TOYO TA CAMRY
 SKODA SUPERB
 NISSAN TEANA
FASHION INDUSTRY & LUXURIOUS BRANDS
 India is among the most brand conscious

countries in the world, with 35% of
Indian survey respondents reporting to
buy designer brands.
 Between 2008 and 2012,
the Indian fashion industry is expected

to grow 178%.
Fashion Weeks
 - Wills Lifestyle India Fashion Week
 - Lakme India Fashion Week
Aim to make India a global fashion destination

Indian Designers
 Increasing visibility in the global fashion arena
 Anamika Khanna,Manish Arora Ritu beri

showcase their work at the Paris Fashion Week.
Fashion Magazines
 Play an important role in generating awareness of
luxury products from a global perspective
 Face association
Bollywood Celebrity
endorsments’ to create
hype
PROMOTION OF LUXURY BRANDS
 Celebrity endorsement for luxury brands is one of the best

way to promote.
 Brand association with regional movies has been going on for
some time, but what has changed is the entry of up market
products in tune with the increasing aspirations and
purchasing power in regional markets. Ex. adidas &reebok
 Brand experts say that regional movies give them a much

better reach to the target audience as the market is clearly
identified.
 Promotions through magazines ,hoarings ,sponsorships are the
other ways to promote the brands.
ISSUES AND CHALLENGES
 Luxury is not just about selling an emotion but also

delivering an experience Therefore, getting the
right space is critical.
 Biggest issue is the lack of proper infrastructure
 The government policies also don't support luxe retail.
 Bureaucracy and high market-regulation are

another bother.
 India imposes 45-65 percent taxes on luxury goods

unlike China's 20 percent.
CONCLUSION
 In 2011 recovery in the luxury goods market has continued

with retail expenditure on branded luxury products forecast
to expand by 17.3% in dollar terms year-on-year.
 There are many multinational luxury brands which are
entering in India with their full pace like Jimmy Choo, Gucci,
Christian Dior, Louis-Vuitton, Cartier,, Prada, Fendi and
others.
 Now the majority of luxury players have at least a
limited online offer.
 Above given statistics of growth of luxurious brands are
proof of success of brands in the Indian market.
 So we can say that Indian luxurious brands are making more
space in Indian market.

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DISSERTATION

 Luxury, derived from the Latin

 Luxury means different things to different people

 Luxury is a product category in itself

 The meaning of luxury had changed

 Aura is more important than exclusivity

 India has over 2.0 million households earningy

usd $ 100,000 or more annually

 Double income family

 Luxury watches 10% Home and others

18.40% fashion and clothing

 Household electronics fragrance and

 Home décor/ crystals Luxury market 2012

 Luxury pens 12.10%

10% Home and others

 Consumer profile Includes professionals, inheritors and

 Profile of the Indian luxury consumer, leaning on the

“Primarily resident in urban India Lives in a household

Christian Dior Couture

Operating margin & (Full year 2011/12)

 About 90%respondence agree that Purchase of Luxury

 In luxury brands most of the respondents prefer quality

 In opinion of Respondents, majority of People

 According to survey most of the people prefer to shop

 50% of our respondents prefer to shop from malls

 Most of the people like to purchase from Malls

 According to respondents celebrity endorsement is one

 To stay in India, foreign brands have to adapt to

 Indians are intelligent and they wouldn't buy any product

 Lots of coffee brands like barista lavazza, hard rock café,

 Brands like McDonalds ,pizza hut, dominoz pizza

 De-beers:-For De Beers, India is a key market. Almost 10

 Wines andspirit(DomPérignon, MoëtChandon,

Veuve, Clicquot and Hennessy),

 Cosmetics (Bliss, Fresh and BeneFit),

 Fashion and leather goods (Christian Lacroix, Donna

 MERCEDES BENZ E CLASS

 India is among the most brand conscious

the Indian fashion industry is expected

 - Lakme India Fashion Week

Aim to make India a global fashion destination

 Anamika Khanna,Manish Arora Ritu beri

 Celebrity endorsement for luxury brands is one of the best

 Brand experts say that regional movies give them a much

 Luxury is not just about selling an emotion but also

 Biggest issue is the lack of proper infrastructure

 The government policies also don't support luxe retail.

 Bureaucracy and high market-regulation are

 India imposes 45-65 percent taxes on luxury goods

 In 2011 recovery in the luxury goods market has continued

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