How to define the hierarchy of luxury goods

In the academic literature, the specific definition of the luxury tier is often largely ignored. Consumers, practitioners, and academics generally think they know what luxury is, but further defining the concept creates all sorts of ambiguity.

The problem that makes this difficult to define precisely is that the term "luxury" is one of the most overused terms in marketing.

The overuse of the term "luxury" stems from the commodification of luxury brands, their expansion downmarket to gain more price points and categories, and the development of mass brands upmarket.

Berry (1994) made a detailed study of the concept, historical development and influence of luxury goods. In its research, luxury goods generally refer to non-essential but highly sought-after goods and services that are of high quality in terms of design, materials, and manufacturing.

This quality may stem from geographical reasons in a particular region leading to superior performance in a particular product category, such as Bordeaux wines. Or it may stem from a special craftsmanship tradition that can be traced back to iconic founders, such as luggage maker Louis Vuitton.

Luxury goods are not mass-produced;

the ideal is handmade. So they have a certain uniqueness, and because of the above reasons and limited production runs, luxury goods are necessarily expensive. They are also often difficult to obtain due to limited and selective production and distribution locations.

The value of luxury goods comes not only from the intrinsic, but also from their symbolic nature in many cases.

The appeal of luxury goods includes, but is not limited to, the strong personal (hedonic/ego) and social (uniqueness/status) values they confer on users (Kastanakis and Balabanis 2012).

Luxury as a concept is generally considered to be very clear. And luxury itself has always been a matter of rank, not a collection of scattered qualities. Luxury products and brands actually span multiple classes, from the top luxury to the very average.

Hierarchical model
Among various hierarchical models, the three-layer structure proposed by Alleres (2000) and the seven-layer structure proposed by Rambourg (2014) are representative.

Alleres' three-tier structure is based on price, simple and easy to judge and remember:

1) Luxuries available to the middle class; 2) Middle luxuries within reach of the upper middle class; 3) Inaccessible luxury, for the wealthy elite. These grades roughly correspond to the Absolute luxury, Premium, and Mass (mass prestige) categories.

Rambourg's seven-level structure is more specific and complex, and has multiple interpretations in the Chinese context:

1)Everyday: < $100, such as designer perfume; 2)Affordable: < $300, such as designer glasses; 3)Accessible: < $1,500, such as designer accessories and clothing; 4)Premium: < $5,000, top well-known brands; 5)super-premium: < $50,000, a top and little-known brand; 6) ultra-high-end: > $50,000, top and unobtrusive professional brand; 7)bespoke: There is no price limit, can be the wildest dreams, is legendary to the average person).

Each of these luxury tiers has its own typical products, signature brands, and regular customers. Therefore, almost all luxury manufacturers have their own unique strategy and marketing mix policies. For example, the mid-range luxury within reach is largely brand-based, but top luxury is often product-based and has little or no reliance on brands.

Moreover, absolute luxury necessarily seeks extreme rarity, so it can only do limited distribution. The success of mid-level luxury is largely dependent on its wide availability relative to consumers (Kapferer 2015).

Despite these important differences, the marketing literature tends to think broadly about luxury as a whole, ignoring the different levels within it. This generalized model is problematic because it can lead to confusion about what it really means, and different concepts can go down the wrong path (Gabbott and Jevons, 2009), which in turn prevents educational marketing, research and practice, and the accumulation of related bodies of knowledge.

The hierarchy of luxury items discussed in research is crucial, which means better matching the topic to the hierarchy of luxury items being studied, otherwise the results, conclusions and theories will often be distorted.

Therefore, marketing should no longer treat luxury as a whole theory. In view of the essential differences between different levels of luxury goods, marketing should develop relevant theoretical systems for different levels of luxury goods.

What should be done now is to make the expertise more specific than general.

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