18 April 2008

Luxury marketing in India: ‘because I’m worth it’. Shaziya Khan, JWT Planning, Mumbai

Glyn Atwal, ESC Rennes School of Business, and Shaziya Khan, JWT Mumbai, examine how luxury brands can best maximise the Indian luxury rupee.
PARADISE FOR ANYBODY wanting to stay en vogue is the shopping arcade at the Taj Mahal Palace and Towers Hotel in Mumbai. Being at the cutting edge of fashion comes at a price – whether in London, Paris or Mumbai.
According to Ledbury Research, the global luxury goods market in 2006 was worth £75 billion, with annual sales growth in double figures. India has been identified as an important source of this growth and is likely to growth at an annual rate of 28% in the next three years.
Market luxurification
The accelerating pace of economic and social change is transforming the Indian luxury landscape. The so-called luxurification of society is a phenomenon that can be attributed to the following dynamics.
New affluence: The booming economy
According to the McKinsey Global Institute, consumers earning more than 1,000,000 rupees a year will total 24 million by 2025 – larger than China’s comparable segment. It is however the emergence of ‘mass affluence’ combined with aspirational mindsets and lifestyles that are helping to stimulate consumer demand. The rapid growth of the Indian middle class means that a larger number of consumers are able to afford luxury goods than ever before.
Media exposure: Luxury is now mainstream
The media-cultural phenomenon is however, not restricted to the pages of glossy magazines. Mainstream media are taking a greater interest in luxury brands, fashion trends and consumer lifestyles. Weekend supplements in national newspapers devote pages to fashion features and product reviews. Increased product knowledge and brand awareness are translating into greater consumer confidence – an important catalyst for luxury consumption in a fast-emerging market.
Luxury accessibility: The world at your doorstep
Luxury brands are now following the Indian consumer, expanding their sales operations not only in Delhi and Mumbai, but to smaller cities or metrocities such as Pune and Hyderabad. Luxury boutiques which were traditionally confined to the secure but often inaccessible surroundings of exclusive hotels have been thrown open to the masses thanks to the shopping mall boom.
Market regulation
Although high import duties on luxury goods continue to prevail, India’s policy of liberalisation and deregulation has improved its image as an attractive destination for foreign investment.
The changing face of the Indian luxury consumer
The luxury market has traditionally been segmented according to two very separate and distinct customer groups – namely the ‘affluents’ and the ‘non-affluents’. The transition towards a consumer society has changed the profile of the luxury consumer. Luxury is no longer reserved for the English-speaking elite. Priyanka,a BPO employee, loves shopping, worships brands and is typical of a new generation of luxury consumers – the ‘because I’m worth it’ generation.
Today’s luxury shopper could be a broker, an entrepreneur, an IT specialist or a student.
Maximising the Indian luxury rupee
Beyond exclusivity
Beyond status
Beyond westernisation
Burberry meets Bollywood
The following seven guidelines set out to guide high-end brands to capture India’s growing fascination with luxury consumption.
1. Respect.
Connect with luxury consumers as a selective target. Luxury brands need to respect this point of difference in all interactions between the brand and the consumer.
2. Segment. Acknowledge luxury consumer subsets. Luxury brands need to identify, differentiate and prioritise the most profitable subsets for targeted strategies.
3. Insight. Identify what is important to the defined target. Motivations could be based on personal and non-personal factors.
4. Connect. Assess which brand interactions really matter. For example, respondents cited that friends and family are an important influence on luxury consumption.
5. Experience. Establish emotional connectivity. Deep and meaningful relationships need to be developed in order to win the ‘soul’ of the luxury consumer.
6. Indianness. Embrace and celebrate the ‘Indianness’ brand. India has a very powerful and unique identity, and this needs to be leveraged within a luxury brand context.
7. Consistency. Adopt a truly holistic approach, to ensure that all brand interactions, whether advertising or customer service, are consistent with the brand positioning. Jitnee Lambi Chadar ho Utna hee pair failana Chahiye is an Indian proverb that means ‘limit your spending to your earnings’.
Contemporary Indian society is challenging traditional consumption patterns. The Indian consumer is ready to embrace luxury consumption. Is the international luxury industry ready to unlock the market potential?
NB: The authors would like to stress that the term ‘affluent masses’ should be interpreted broadly within the context of the emerging
middle classes. This paper was also presented jointly by the authors at the Asia Brand Congress held in September 2007 in Mumbai,India.
1. M Silverstein and N Fiske: Trading Up: The New American Luxury. Penguin Group: New York, 2003. 2. S J Vickers and F Renand: The Marketing of Luxury Goods: An Exploratory Study – Three Conceptual Dimensions. The Marketing Review, 3 (4), 2003.

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