Kunpeng Project
In a business environment that focuses on price reductions, LV (Louis Vuitton) has chosen the opposite strategy: raise prices at least three times in a year. This seemingly anti-market move has aroused people's attention and thinking about the luxury market. Why does LV dare to frequently raise prices in the context of large price reductions in the vast majority of products? Is there a special business logic in the luxury industry?
In recent years, most products around the world are implementing the strategy of price reduction**, and industry leaders such as BYD and Alibaba Cloud have also joined the "price reduction tide". However, unlike the "vast majority", luxury brands are showing the opposite trend: price increases. Top luxury brands such as LV, Hermes, and Gucci have successively announced price increases, a phenomenon that has attracted widespread attention.
There is a clear difference between the luxury market and the general goods market. First of all, the core competitiveness of luxury goods lies in brand premium and uniqueness, not **. Consumers buy luxury goods based more on brand recognition and the pursuit of unique consumer experience. Secondly, the target consumer group of luxury goods is relatively special, and they pay more attention to quality, service and social status symbols. Therefore, luxury brands pay more attention to brand image and consumer psychology when formulating the best strategy.
The volume of luxury brands in the market is usually limited, while the demand is relatively stable. Brands will maintain the scarcity of products by controlling the number of products, so as to maintain the first position. In addition, luxury brands pay attention to the shaping of brand image and do not want products to be overly discounted or sold at low prices, so as not to damage the brand value and consumer recognition of the brand.
Top luxury brands have a strong brand presence and loyalty in the market. Consumers have a deep emotional identity with these brands, and they are willing to pay more for the products they want. As a result, even though the vast majority of products are falling in price in the general environment, the top luxury brands are still able to raise prices steadily.
Behind the frequent price increases of top luxury brands such as LV, it also reflects its strategic adjustment to the market. On the one hand, by improving the product**, luxury brands can increase the profit per product, which in turn increases the overall profitability of the company. On the other hand, a modest price increase can also help brands maintain a high-end image and prevent products from falling too far into the mass market.
From another point of view, LV's frequent price increases may also be to maintain its high-end brand image. In the luxury market, ** is often seen as a symbol of product quality and uniqueness. By raising prices frequently, LV can convey a message of scarcity and uniqueness to consumers, thereby enhancing its brand value and appeal. At the same time, the price increase can also help LV control the market volume and maintain the scarcity of the product, thereby increasing the attractiveness of the product and the market demand.
In addition, LV may also be responding to market competition and cost pressures through price increases. With the changes in the market environment and the intensification of competition, luxury brands are facing pressure from raw material costs, labor costs and other aspects. By increasing the product**, LV can partially offset the impact of the cost** and maintain a stable profit level. At the same time, the price increase can also help LV maintain a certain market positioning and brand position in the market competition, and avoid the negative impact of excessive product homogenization and war.
The reason why top luxury brands such as LV dare to raise prices frequently in the global price reduction tide contains the unique business logic of the luxury industry. Under the combined effect of factors such as brand image, supply and demand, market position, etc., luxury brands can maintain stability and even raise prices, which also reflects the particularity of the luxury market and the ingenuity of brand management. In the future market competition, luxury brands need to continue to maintain brand image and product quality to meet the challenges of market changes and consumer demand.