Luxury Pricing Strategy - Paper Example

Introduction

Luxury pricing strategy depends heavily on establishing the right balance between availability and product availability. Additionally, the brands should provide consistency across different marketing regions and product ranges. The price of any luxury product should contain messages that include but not limited to exclusivity, heritage, and high quality. It is worth noting that luxury pricing is different from premium pricing since the former targets an exclusive club, meaning that the products are often high-end and the entry possibilities for other players is limited. Luxury brands such as Louis Vuitton (LV) are creating brand loyalty by establishing trust in the relationship by being transparent. The most important aspect of luxury pricing is ensuring consistency the way Nike did when marketing its products at Amazon. On the other hand, clients and potential clients perceived Swatch as being inconsistent in its pricing because of the counterfeits in its brands. Therefore, Swatch lost the customer loyalty leading to low profitability when compared to Nike. Brand consistency reinforces authenticity, trust, and the entire brand ethos.

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Global brands such as Nike and Swatch ought to be persistent in their marketing and production for improved, maintained profitability. Consistency is crucial in dealing with jurisdictional issues such as taxes and different rules and regulations applied by different regional and global entities. For example, different regions have varying degrees of taxation and existence of currency fluctuations may affect the value of luxury brands. The consistency in pricing is essential in providing for the perceived differences in the value of the product to the absolute minimum and ensuring the maintenance of the integrity of the brand. For example, in 2015, when the value of the Euro depreciated the prices of Chanel products became more affordable for Asian consumer who then left the company's products in places like china and shopped in Europe. To correct that, the company raised the prices of their products in Europe to reflect the Euro depreciation. The strategy discouraged people from making round trips to Europe and instead settled for the products in the Asian markets.

In luxury pricing, positioning is compulsory since luxury is not comparative. In every aspect of consumer marketing, positioning, particularly in creating convincing competitive advantage (UCC) and unique selling proposition (USP). Positioning of brand includes various aspects such as the product, quality, communication, and distribution. Positioning creates the difference and the subsequent preference for a particular product. For example, Nike decided to use the Amazon platform to target a given groups of consumers while Swatch suffered due to various counterfeits and diminished marketing efforts. Positioning is responsible for the difference that establishes the client's preference for a particular brand. Nike positioned itself as the leading producer of sportswear and that paid off as shown by the massive profit margins. Closely related to that is the fact that luxury brands out to be unique to increase and maintain the customer traffic.

Being unique entails assertion of creative identity and expression of taste. A proper identity has the propensity of giving a brand the much-needed, powerful feeling of uniqueness, authenticity, and timeliness that resonates well with the targeted market niche since it gives the expression, notion of permanence. Louis Vuitton, Chanel, and Nike have recognizable identities that are superlative and quite far from comparative. It is important to be faithful to identity than to worry about the prospects of competition.