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In a post called “Analyst Pulse: Economy, Standard, Premium or Luxury? Brand Perceptions Around the World,” Euromonitor International survey analyst Lisa Holmes delves into the perceptions of luxury brands and luxury brand buying practices.
Holmes writes, “As consumer products expand their global boundaries, it is important to track how luxury brands are perceived across different regions and markets, specifically how these perceptions relate to http://www.euromonitor.com/survey trends in buying behaviors. The perception of brands as luxurious and trends in buying behaviors differ between developed and emerging markets and even between regions. For example, standard, or ‘affordable’ European and American brands that are expanding into newer (often emerging) markets may have the opportunity to position their products as more ‘up market.’ To find out more, Passport Survey asked Euromonitor International’s global network of analysts to categorize selected brands of beauty products, timepieces, and apparel according to their local reputation, as well as the common occasions for which luxury goods might be purchased.
“Brands that are generally perceived in developed markets as standard, or affordable, tend to be perceived as more luxurious in emerging markets. Across apparel, timepieces, and beauty products, Latin America is most likely to perceive historically affordable brands as more luxurious, while the U.S. and Canada are more likely to perceive these brands as standard or even economy. There are also additional regional variations within product types. For instance, Swatch has more ‘luxury’ mindshare in EMEA than in Asia Pacific, while Fossil sees the reverse,” Holmes explains.
A chart titled Perception of Beauty Brands as ‘Luxury’ Goods—By Region,” which was created from a Euromonitor International Analyst Pulse survey in May 2013, shows approximately 100% of those in the Asia-Pacific region perceive Chanel beauty products as luxury, while approximately 95% of those in the EMEA region do, 95% of those in Latin America do, and 88% in the U.S. and Canada do. For Clinique beauty products, about 60% of those in the Asia-Pacific region think of them as luxury, while approximately 62% of those in the EMEA region do, 61% of those in Latin America, and 48% of those in the U.S. and Canada. About 6% in the Asia-Pacific see L’Oreal beauty products as luxury goods, while about 12% of those in EMEA do and 11% of those in Latin America do. Also, about 3% of those in EMEA think of Dove as luxury, as do 2% of those in Latin America.
Holmes continues, “Across markets, almost all analysts rate Burberry, Rolex, Tag Heuer, Chanel and Clinique brands as luxury or premium, rather than standard or economy. We then asked these analysts to provide additional detail on the perception of these brands as ‘premium,’ ‘super premium,’ or ‘luxury.’ Rolex is perceived to be the most luxurious brand, with about 4 out of 5 analysts reporting it to be a luxury brand in their country. About half of the analysts report Chanel and Burberry to be luxury brands. Tag Heuer is balanced between luxury and super premium, while Clinique is largely perceived as a premium, rather than luxury, brand.
“When buying luxury goods, consumers show different inclinations in their buying behaviors. Buyers in both developed and emerging markets appear to be cost-conscious with regard to luxury goods; however, this frugality translates to variations in typical buying behaviors.
“Buyers in developed markets prefer affordable luxury products or luxury products that are highly discounted, such as during a flash sale or a limited time offer. These buyers are also more likely to purchase luxury products seasonally, perhaps around the holidays as gifts.
“Alternatively, buyers in emerging markets prefer to buy luxury products abroad or at duty-free areas, where they often cost less than in their home countries. Cost-consciousness is also more likely to show itself via purchases of imitation luxury products in emerging markets. Here, the appearance of luxury sometimes matters more than an authentic luxury good or store experience.
“In both emerging and developed markets, luxury goods are sought domestically and abroad and consumers are willing to exert a great deal of effort to find examples that fit their budgets. The heightened status associated with buying and wearing or toting luxury brands instead of standard brands still holds great allure for many consumers.
“In this truly global market for luxury goods, historically premium brands, such as Burberry, are competing with standard brands entering emerging markets. These brands may look into increasing their prices in emerging markets in order to maintain their ‘luxury’ perception in relation to standard brands also entering the market. In contrast, premium brands in developed markets who wish to expand their customer base should focus on marketing themselves as a more-affordable option and can selectively increase their exposure by offering discounted products during seasonal buying sprees or flash sales. Simultaneously, higher prices and import duties are also feeding consumer trends of buying products abroad or in duty-free shops, and purchasing imitation products,” Holmes concludes.