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Marketing Luxury Goods Online

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Philipp Nikolaus Kluge

The marketing of luxury goods faces a fundamental challenge: balancing sales growth against exclusiveness. In today’s digital world, this trade-off has become even more challenging. A luxury brand’s fragile concept of exclusiveness is seemingly incompatible with the ubiquitous availability provided by the mass medium Internet. The author addresses this trade-off both conceptually and empirically. First, the author conceptually examines the specific marketing-mix for luxury goods in terms of product, price, communications, and distribution management. Second, this marketing-mix is applied to the online environment. Third, the author empirically tests the effects of the online accessibility of luxury goods on consumer perceptions of scarcity and desirability.

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3. Marketing-Mix of Luxury Goods

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3.  Marketing-Mix of Luxury Goods

Researchers show an increasing interest into the phenomenon of luxury goods (see Figure 2). Part of the fascination arises from the observation that luxury goods manufacturers apply specific marketing principles that may be counterintuitive to conventional marketing theory. Understanding the essential principles of marketing luxury goods is subject to this manuscript and a necessary prerequisite for discovering how the Internet affects the way luxury goods are marketed. Online marketing initiatives should be considered as integral part of a luxury brand’s overall marketing strategy rather than as an isolated decision.

Hence, we are first interested in identifying the essential specificities of the marketing-mix for luxury goods. Introduced in 1960 by the American marketing scholar Edmund Jerome McCarthy the marketing-mix framework refers to a set of parameters that companies manage to satisfy customer needs. In particular, McCarthy (1964, p. 38) suggests four groups of parameters, which he calls “The 4 P’s”, i.e. product, price, promotion (or communication), place (or distribution). How these marketing-mix elements can be applied to luxury goods will be conceptually examined throughout this chapter. Specifically, Chapter 3 addresses the first research question (compare Chapter 1.2):

3.1  Product management of luxury goods

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