Dissertation
Dissertation > Economic > Trade and Economic > China's domestic trade and economic > Market

New Luxury Brand Masstige and Its Potential on Chinese Luxury Market

Author DengShuo
Tutor LiYuanXu
School Fudan University
Course
Keywords Trading up New Luxury Masstige strategy sub-brand
CLC F723
Type Master's thesis
Year 2011
Downloads 260
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Traditional luxury brands often maintain a strict consistency between perceived prestige and price premium in order to perserve the brand exclusivity. They have brought their customers with unique sense of superiority, but have closed the door to the majority. Consequently, recent years the burgeoning New Luxury is beginning to focus on the middle part of the pyramide---the middle class as potential customers. By providing high-quality and high-standard luxury products with an affordable price, New Luxury enables customers to enjoy the quality and feeling of luxury products more easily, which will stimulate the consumption of the middle class.The psychological factor to drive New Luxury is that by purchasing these high-level luxury products, consumers can attain a sense of status and a sense of identification. This phenomenon is closely related to Trading up---Customers are willing to pay more to purchase high-level products selectively.Masstige is exactly "born" in the environment of New luxury and Trading up. The word "Masstige" is combined by the two words "mass" and "prestige". This new luxury brand positioning reflects a high perceived prestige with reasonable and affordable price premiums to attract middle-class consumers.On one hand, the perceived prestige of a masstige product should be closer to the level of prestige of traditional luxury product than to mass-market product. On the other hand, the price of a masstige product will be higher than the same mass-market product by about 50%, but still much lower than the traditional luxury product of the same sort.Luxury brands are often regarded as being exclusive and expensive. It seems that the masstige strategy should totally have no relation with luxury brands. But a distinct phenomenon is that a growing of traditional firms are broadening the range of their offers with products that are more accessible to the middle-class consumers, such as Armani Jeans ($100) vs Armani Haute Couture ($900).Not all the luxury firms have adopted this brand-extension strategy. Furthermore, some firms that do extend their brands pay much less attention and resource to the marketing of their sub-brands, worrying about the possible brand dilution.Obviously, the critical success factor of a masstige strategy lies in the equilibrium between the perceived prestige differentiation and a reasonable price premium. How can it be achieved?For traditional luxury brands, after recognizing the changes in the luxury marketplace, how can they attune their strategies accordingly, without sacrificing their core heritage and brand essence? In other words, will the masstige sub-brands blur the exclusivity of traditional luxury brand value? To make the study more concrete, the research of this paper is limited to Chinese luxury market. Chinese consumers are becoming aware of the growing number of luxury brands, becoming more discerning in their individuality and tastes and making greater efforts to understand the heritage of each luxury brand. On the other hand, they have little understanding about concept of "Masstige", even though the figure of middle-class consumers is leaping in the last five years. Obviously, the application of brand extension strategy in Chinese luxury market is an opportunity as well as a challenge to the traditional luxury firms.The paper will make a introduction of the trend of New Luxury, discuss the rationality of the appearance of masstige positioning in luxury market, and analyze how luxury firms strategize masstige operation. In detail, we will fucus on the burgeoning luxury market-China, and analyze the potential of this luxury brand positioning in Chinese luxury market.

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