This article possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research should be removed. Luxury goods are often luxury brand management pdf with superior goods and Veblen goods.
Luxury goods are said to have high income elasticity of demand: as people become wealthier, they will buy more and more of the luxury good. This also means, however, that should there be a decline in income its demand will drop.
Income elasticity of demand is not constant with respect to income, and may change sign at different levels of income. That is to say, a luxury good may become a normal good or even an inferior good at different income levels, e.
Some luxury products have been claimed to be examples of Veblen goods, with a positive price elasticity of demand: for example, making a perfume more expensive can increase its perceived value as a luxury good to such an extent that sales can go up, rather than down. Although the technical term luxury good is independent of the goods’ quality, they are generally considered to be goods at the highest end of the market in terms of quality and price. Classic luxury goods include haute couture clothing, accessories, and luggage. Many markets have a luxury segment including, for example, automobile, yacht, wine, bottled water, coffee, tea, foods, watches, clothes, jewelry, feminine hygiene products, and high fidelity.
The hiring of full-time or live-in domestic servants is a luxury reflecting disparities of income. Some financial services, especially in some brokerage houses, can be considered luxury services by default because persons in lower-income brackets generally do not use them. Luxury goods often have special Luxury packaging to differentiate the products from mainstream competitors.
The three dominant trends in the global luxury goods market are globalization, consolidation, and diversification. Globalization is a result of the increased availability of these goods, additional luxury brands, and an increase in tourism. Consolidation involves the growth of big companies and ownership of brands across many segments of luxury products. Examples include LVMH, Richemont, and Kering, which dominate the market in areas ranging from luxury drinks to fashion and cosmetics.
Gamble, are also attracted to the industry, due to the difficulty of making a profit in the mass consumer goods market. The luxury goods market has been on an upward climb for many years.