Luxury Branding – How it Gives Consumers a Feeling of High status
Luxury goods are those products that people cannot afford to buy every day. This includes luxury items like jewelry, automobiles, boats, planes, yachts and luxury houses. In economics, a luxury item is a good whose demand increases proportionally to income, so that expenses on the item grow proportionally to overall income, so that increases in income make expenses on the item go up proportionally to overall income. Luxury goods, like cars, boats and airplanes, can be made with a design to allow them to last for a long time, with minimal maintenance costs. Whereas mass-produced luxury items are designed with low cost but inferior materials, luxury items tend to be made using high quality materials from good suppliers and with careful design so that they last relatively short periods of time, with relatively low maintenance costs.
Luxury goods are popular mainly because they tend to match consumer taste better than other kinds of consumer goods do. Luxury goods can be more difficult to manufacture because of their particular qualities; they are not very easy to mass produce. But because of the popularity and the inherent quality, luxury brands are able to charge higher prices than most other brands, which in turn brings higher profits for the manufacturers of luxury brands.
Luxury goods are also popular because they create a feeling of affluence and superiority for buyers. Luxury brands like Louis Vuitton and BMW are perceived as very fashionable, while brands like Nintendo and LG stay popular because they give young consumers the message that they can be like their favorite Hollywood stars by buying these brands. The perception that luxury brands give to consumers makes their products even more valuable to consumers, thus making the brands even more lucrative in terms of investment. In addition, higher profit margins allow luxury brands to offer better discounts to consumers, thereby allowing them to increase their market share even further.