Economic Downturn & Luxury Sectors Essay

In Japan the luxury market decreased by 9% over the past two years. In Europe, however, which represents about 38% of the global luxury market, the industry turned in record growth in 2007. This slowed in 2008, but leveled out in 2009. In the U.S. we saw a 4% growth in 2007, but the luxury market is expected to be flat this year (Krauss, 2008).

Besides the emphasis on value rather than pure bling, as we have discussed, the luxury industry has a decided focus on customer service. Ultra-treatment for the ultra-rich customer is what's in during the economic turndown. Treating their core customers with even more pampering than usual and retaining that business is key, according to luxury marketing experts.

Expansion into new, developing luxury markets such as Brazil, Russia, India, and China is another emphasis. What the luxury market will probably not do is expand the product line downward to bring back the consumers a rung down the financial ladder. The principle goal remains selling a glamorous lifestyle to aspiring clients (Knowledge @ Wharton, 2008).

Bibliography

Knowledge @ Wharton. (2008, November 12). Luxury Brands: Marketing the Upscale During a Downturn. Retrieved September 9, 2009, from Wharton.University of Pennsylvania: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2091

Krauss, C. (2008, October 29). Worldwide luxury goods market growth projected to slow substantially by end of year and headd into recession in 2009. Retrieved September 9, 2009, from Bain & Company: http://www.bain.com/bainweb/About/press_release_detail.asp?id=26657&menu_url=for_the_media.asp

Lim, K. (2008, December 15). Luxury sector to build brands in downturn. Retrieved September 9, 2009, from media.asia: http://www.media.asia/Researcharticle/2008_12/Luxury-sector-to-build-brands-in-downturn/33809

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Unity Marketing. (2009, July 24). Affluent Consumer Confidence Bouncing Back and Luxury Consumer Spending was up Over Same Period Last Year. Retrieved September 9, 2009, from marketwire.com: http://www.marketwire.com/press-release/Unity-Marketing-1021762.html

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