luxury-and rethinking marketing

1. HOW TO POSITION LUXURY GOODS IN
THE EMERGING MARKETS IN TURBULENT
TIMES------By Rola Ezzedine
STRATEGIC INSIGHT FOR SUCCESS
The world stands at a cross road of financial repression and economic deprivation. Debt levels
are going up in advance economies. Governments are printing money and living standards are
going down. Austerity measures have failed to stimulate growth in Europe which is sinking in
recession. France is bankrupt. Surprised. One senior government officials said. So, all is bad. No.
Emerging markets are driving the global economy with strong consumption base, increase in
private/public sector investment and solid confidence level make it easier for them to achieve a
GDP growth rate of over 5% in these turbulent times.
Luxury goods market is hot in emerging markets like India, Malaysia, Indonesia, Vietnam, China,
Korea, Philippines, Singapore, Myanmar and Mongolia. The point is how the marketers use
positioning strategy to capture the mind share in order to build their market share. Simple
techniques to ponder upon.
1. Quality,
2. Innovation,
3. Strong association and
4. Brand Status.
People in emerging markets are very well cognizant of the brand image and value of the luxury
item that they are buying. They want to have strong feeling, association and status with that
particular brand. Marketers have recognized this trend in the emerging markets and have focused
their energies to maintain sustainable profits and scalability of their brand in these treacherous
times. Managing the brand promise is the key to capture the luxury market in these arduous times.
The big question, do we want the old thinking in managing luxury?? or it is time to take luxury
into a step further that protects it's real value and contribution in economy, creating a new approach
that helps this source to remain a leader in that growth, the mind ,the consumer ,the time are
changing. But the real truth above all that luxury and it's details, delicate touch, craftsmanship,
know how are irreplaceable the luxury will be still and forever a source of growth to nations
(LUXURY OF LOVE). Luxury goods have got the attention of ultra-high net-worth clients who
want to diversify and move to other asset classes for wealth preservation. The very wealthy clients
want luxury goods companies to sell them a quality service and “something that feels special”,
over and above the exclusive price tag. This trend began before the global financial crisis.
According to my market intelligence report, clients mostly believe the recession has hastened this
“flight to quality” in buying habits. Buying behavior among the very wealthy is continuing to shift
following the global downturn. They want better, longer-lasting and more environmentally

2. sensitive products. They will pay for experiences and service rather than strictly for products.
Opinion is divided as to how long these trends will last. Many expect the desire for visible luxury
items to return with the next upturn in the business cycle. Luxury goods should promote
specialization in order to make huge impact on the clients experience and buying pattern.
I came across an interesting piece on Phaidon’s website, recently, entitled “How the
art market became a luxury goods business”. This article describes the reactions to, and
contains an interview about, artist Andrea Fraser’s who is based in California and professor
at UCLA stresses herconcerns that today, art is not only an asset class for the financial elite,
but has also become a financial instrument. She also states that, the greater the discrepancy
between the rich and the poor, the higher prices in the art market rise. According to Ms
Fraser, while there is a direct link – quantified in recent economic research between the art
market boom and economic inequality that has reached levels not seensince the ‘20s in the
US and the ‘40s in Britain, it is not just the art market that has expanded from this
unprecedented concentration of wealth but museums, art prizes, residences, art schools, art
magazines have multiplied in the past decade. She expresses her uneasiness at working in
the art field, which has benefited from, and, as an artist, having personally benefited so
directed from, the anti-union, anti-tax, anti-regulation, anti-public sector politics that have
made this concentration of wealth possible. Ms Fraser concludes her essay by saying that “a
broad-based shift in art discourse can help bring about a long overdue splitting off of the
market-dominated sub-field of galleries, auction-houses and art fairs. Let this sub-field
become the luxury goods business it already basically is, with what circulates there having
as little to do with art as yachts, jets and watches. European museums have the potential to
be the birthplace of a new art field that could emerge from this split, where new forms of
autonomy can develop”.
THE GROWTH STORY IN ASIA’s LUXURY AND RETAIL MARKET: Brand
recognition and status profiling are the key in this asset class.
According to Economic Intelligence Unit Aug 2014 report. Consumer spending in Asia is rising
at impressive rates, presenting big opportunities for retail and wholesale companies. Capturing this
opportunity isn’t easy, given rising costs and intensifying competition. But a barometer of
“industry dynamism” developed by the Economist Intelligence Unit shows that Asia would do
pretty well in Luxury sales. .
Asia stands out as being the most exciting part of the world for retail businesses. Between 2013
and 2018, the Economist Intelligence Unit forecasts that retail sales in Asia Pacific will grow by
10.2% every year, whereas globally retail sales will grow by only 6.9% a year. Asia’s rising retail
sales are driven by expanding populations and rapidly rising incomes. In 2010, Asia’s population
stood at 3.8bn people. By 2040, it will rise to 4.6bn, creating an additional 800m consumers. The
average wealth of these consumers is rising too. In 2001, the region accounted for 26.8% of global
GDP [measured using purchasing power parity]. By 2013, that share had risen to 36.6%. Asia’s
economic outperformance will continue to stay positive for the foreseeable future.

3. Retail sales in Asia are being fuelled by increasing levels of urbanization and deepening
penetration of modern retail formats. In 2013, Asia had 80m square metres of modern retail space,
but this will rise to 135m square metres by 2018, dramatically increasing the opportunities for
retailers against this positive backdrop, the retail opportunities are highly varied, from mass market
grocery chains and fast-food outlets to high-end fashion stores and luxury boutiques. The
opportunities for online retail look especially potent, with growth rates of close to 17% a year.
In more affluent market segments, retailers will see strong opportunity in the blossoming of travel
in Asia by selling at airports and hotels and targeting Asia’s deepening tourist flows. Asia’s
homegrown retail companies are growing rapidly. Between 2005 and 2011, revenues at Asia’s
listed retail and wholesale firms rose by an average of 21% every year. Most of this growth was
organic in character. Indeed, Asia’s retail sector remains highly fragmented, suggesting
opportunities for consolidation and acquisitive growth in future. But while topline growth is
exciting, a number of structural issues are making profits growth harder to achieve. Human capital
with retail skills is in short supply, forcing companies to invest heavily in training. Wages are
rising, with staff costs up from 3.5% of operating revenues in 2005 to 5% by 2011. In some
markets, rents are high. And everywhere competition is getting ever more intense as both local
players and global retailers are drawn to Asia’s strong growth outlook.
According to the famous Uni of Chicago trained economist and investment strategist based in Asia
Pacific and considered as an authority in ASEAN economies, Shan Saeed at IQI Group Holdings,
Asia will lead the way in the global economic recovery and be the driving force to be reckon with.
Moreover, he added, Chinese consumers total 14% of the global luxury clients, however, they total
28% of global spend on luxury goods. This is colossal number and positive for luxury goods sector.
In a nutshell, Luxury needs human touches in order to attract smart buyers in the international
market. All these facts lead us to rethink on a futuristic question can we still protect, develop and
lead the human power behind that sector?
Certainly, an important strategic point to focus upon in the next 5 to 10 years.
About Rola Ezzedine
She is a fashion strategist, owner of a luxury limited editions brand
“Maison Rola Ezzedine “and founder of LUXURY OF LOVE. She has 23 years
of solid luxury market experience. She deals with high profile clients
who want finest quality in luxury living. She is advising many ultra
high networth across the globe, in the field of design,luxury
products,jewelry.She can be reached at rlezzedine@gmail.com and her
website:www.rolaezzedine.com
,www.pinterest.com/rallouch/rola-ezzedine/,https://twitter.com/rolouch.
Graduated from top Lebanese University (Lebanese American
university ) in business and international marketing .than chambre
syndicat de la haute couture francaise in Paris ,heading several

4. there several training program and related field in matter of
Embroideries, designs and craftsmanship. She is advising many ultra-high-networth clients
globally. She has attended Innovation in marketing workshop at Fashion Institute of Technology
in New York and Harvard University, Boston, USA.