The role of culture for pricing luxury fashion brands

Publisher:
Verlag C.H. Beck oHG
Publication Type:
Journal Article
Citation:
Marketing: Zeitschrift fuer Forschung und Praxis, 2013, 35 (2), pp. 123 - 135
Issue Date:
2013-01
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Although Europe, the Americas, and Japan still account for more than three-fourths of the market for luxury goods, the consumption of luxury goods is getting more and more a worldwide phenomenon. The rise of emerging countries further underpins the relevance of culture for managerial decisions including the pricing of goods. Prices for regular goods usually correspond to a products functional or tangible value. They work as a signal for quality and reduce consumers purchase risk. With high quality as a necessity for the perception as a luxury good, prices for luxury brands are primarily symbolic. High prices inhibit emulation and provide luxuries an exclusive image. They further work as a signal for personal wealth or the social rank consumers have or wish to have. While exclusivity corresponds mostly to consumers intrinsic needs (e. g., desire for uniqueness), the advertisement of personal wealth and social rank is rather tied to social values and consumers extrinsic needs (e. g., prestige and status). Both have value to the consumer: While feelings of exclusivity strengthen self-identity, status and prestige provide self-esteem.
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