Luxury Brands Insights Essay Example for Free

Luxury Brands Insights Essay Over years, India’s tryst with luxury brands has changed gears. With high disposable incomes and a penchant for all things luxury amongst affluent Indians on the rise, the country is emerging as the next stopover for global luxury brands such as Gucci, Christian Dior and Versace. However, we must realize that Luxury marketing is a whole new ball-game altogether, both from the perspective of the marketer as well as the luxury consumer. It therefore becomes important to view it both in relation and isolation from the ‘regular’ goods marketing. To achieve the above objective, we would first look at how luxury goods are different from regular goods and then go on to explore some facets and trends of the luxury goods as well as their market and consumers. This analysis would finally sum up into a SWOT analysis of the luxury goods segment, thereby helping in obtaining a bird’s eye view of the exercise at hand. Considering that the luxury concept has shifted to the ‘new’ meaning, we would further delve into that aspect to understand the drivers for luxury brands presently, as well in the time to come. This is followed by a luxury potential determination of the Indian market both in terms of quantitative growth factors as well as qualitative initiatives. INDEX Abstract5 Objectives Sub Objectives6 Research Design6 Getting To Know Luxury8 Difference Between Regular Luxury Goods10 Luxury In India14 Qualitative Insights15 Quantitative Insights16 The Affluent Indian: Profiling The Indian Luxury Consumers17 Classification Of The Indian Luxury Consumer21 4p Trends24 Consumer Trends29 Strategies For Luxury Marketing In India57 Moving Forward66 References69 Annexure70. â€Å"Why do I need to know how the watch market is doing? I’m in the business of luxury† Partick Heiniger, CEO, Rolex GETTING TO KNOW LUXURY Luxury brands have often been associated with the core competences of creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but the extra-added psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these pricey items. The luxury sector targets its products and services at consumers on the top-end of the wealth spectrum. These self-selected elite are more or less price insensitive and choose to spend their time and money on objects that are plainly opulence rather than necessities. For these reasons, luxury and prestige brands have for centuries commanded an unwavering and often illogical customer loyalty. Luxury, derived from the Latin word luxus, means indulgence of the senses, regardless of cost. Luxury brands are brands whose ratio of functional utility to price is low while that of intangible utility to price is high. Such brands share characteristics like consistent premium quality, a heritage of craftsmanship, a recognisable style or design, a limited production run of any item to ensure exclusivity, an element of uniqueness and an ability to keep coming up with new designs when the category is fashion-intensive. THE market for luxury brands in our country has expanded in recent times. With income levels going up, customers prepared to buy such brands are growing in numbers. According to an NCAER Household Income Survey, in 2001-02, there were 20,000 families in India with annual incomes of more than Rs 1 crore. By 2005, that number increased to almost 53,000. By 2010, India will have some 1, 40,000 crorepatis. Retail management company KSA Technopak estimates the market for luxury and high-end clothing in India at Rs 1,000 crore and for accessories at another Rs 1,000 crore. CHARACTERISTICS OF THE LUXURY INDUSTRY 1. Luxury is a product category in itself: This can be best explained by the fact that both an expensive watch and an artwork can be considered to be luxury items. Therefore, all luxury marketers are not just competing in their ‘technically defined’ product categories (like manufacturers of refrigerators compete amongst themselves) but for the wallet share of luxury goods in total. 2. The meaning of luxury had changed Luxury has moved from its ‘old’ meaning of ownership that is also known as conspicuous consumption Conspicuous consumption is a term used to describe the lavish spending on goods and services that are acquired mainly for the purpose of displaying income or wealth rather than to satisfy a real need of the consumer. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status. Invidious consumption, a necessary corollary, is the term applied to consumption of goods and services for the deliberate purpose of inspiring envy in others has now changed its objects to the ‘new’ meaning of the experience / fulfilment derived from possessing a certain object. 3. Aura is more important than exclusivity Exclusivity is something that cannot be ensured to a great extent and neither is it the prime requirement of a luxury consumer. The consumer bases his decisions on the relevance of the aura of the brand to his fulfilment or actualization needs. 4. Trading up A mass of wealthy people have emerged the world over, give rise to a large section of consumers who are now moving to luxury / premium brands, thereby creating greater business opportunity for luxury marketers. 5. Trading down Today, fashion brands are giving luxury brands competition because of marketing mix and branding strategies, which make it acceptable to pair these two brands. This is something that was not practiced before. eg. Wearing an Armani shirt with a pair of GAP jeans 6. Emergence of luxury brands. Sea of luxury brands have emerged giving a wide choice to consumers, in all segments of luxury goods. 7. Factors at play In luxury marketing there is a subtle interplay between three factors that most strongly influence the luxury consumer to buy: product brand; dealer or store’s brand or service providers’ reputation; and price/value relationship 8. Customer loyalty is more important that brand awareness Rather than focus on measuring the brand awareness of a luxury company, measuring customer loyalty is far more significant a metric regarding the success or failure of corporate strategy to connect with the luxury consumer. CONSUMER PERSPECTIVES TOWARDS LUXURY Consumers can be segregated in 3 groups according to what luxury means to them: Luxury is Functional – these consumers tend to buy luxury products for their superior functionality and quality. Consumers in this segment, the largest of the three, tend to be older and wealthier and are willing to spend more money to buy things that will last and have enduring value. They buy a wide array of luxury goods, from artwork to vacations, and conduct extensive pre-purchase research, making logical decisions rather than emotional or impulsive. Messages that highlight product quality and are information-intensive are powerful with this group. Luxury is Reward – these consumers tend to be younger than the first group but older than the third. They use luxury goods as a status symbol to say â€Å"I’ve made it! † They are motivated by their desire to be successful and demonstrate this to others. Luxury brands that have widespread recognition are popular, however they don’t wish to appear lavish or hedonistic in their appearance. They want to purchase â€Å"smart† luxury that demonstrates importance while not leaving them open to criticism. Marketing messages that communicate acceptable exclusivity resonate with this group. Luxury is Indulgence – this group is the smallest of the three and tends to include younger consumers and slightly more males than the other two groups. Their purpose for luxury goods is to lavish themselves in self-indulgence. They are willing to pay a premium for goods that express their individuality and make others take notice and are not overly concerned with product longevity or possible criticism. They enjoy luxury for the way it makes them feel; therefore they have a more emotional approach to purchases. They respond well to messages that highlight the unique and emotional qualities of a product. DIFFERENCE BETWEEN REGULAR LUXURY GOODS Luxury has never been something easy to define, yet this mystery concept is something highly desired by one and all alike. We look at delving deeper into this mystery and aura of luxury goods by way of comparing them against ‘regular goods’ as well as highlighting the characteristics of the luxury industry. Strategies for Luxury Marketing in India There are conventional foundations for ensuring success of a brand and they are listed below in brief: 1. The brand must be â€Å"expansive† Which means it should be full of innovation opportunities for the marketer and in terms of satisfying the divergent needs of the luxury consumer 2. The brand must tell a story It is this story, of either heritage or performance or other aspects that goes on to build the aura of a brand over time. The story always accentuates the identity of the brand. 3. The brand must be relevant to the consumers’ needs Depending upon the mindset of the luxury class, it is imperative for a brand to satisfy those needs, whether they are for recognition or functional use etc. 4. The brand must align with consumers’ values A brand that does not concur with the basic values of a consumer’s society has a small chance of succeeding because luxury items are forms of expression or identification for a luxury consumer. This makes it difficult for the consumer to adopt the brand in such cases. 5. The brand must perform Irrespective of which category the brand belongs to, a performance assurance is a must for the brand if it wishes to be in the evoked set of luxury consumers, considering the price being paid for luxury. INDUSTRY OVERVIEW. In the past, brands like Liz Claiborne and Pierre Cardin tested Indian waters but made a hasty retreat following poor customer response. This led to a general perception that India is still not ready for luxury brands. But now that impression is changing. Many leading global luxury brand marketers have started taking our market seriously. Luxury goods marketing is a different ball game as the type of customers involved fall in a different class altogether. These customers are influenced more by glamour and style and want to stand out in a crowd. They do not bat an eyelid whey they buy a Vuitton bag costing Rs 50,000 or a Mont Blanc diamond-encrusted pen for Rs 50 lakh, Ermenegildo Zegnas top-of the-line, custom-tailored suit costing Rs 6 lakh or a mid-range Louis Vuitton briefcase priced Rs 1. 27 lakh. As these figures suggest, luxury brands are prestige products characterised by high-involvement decision-making that is strongly related to the persons self-concept. Sensory gratification and social approval are the primary factors in selecting a prestige product. Cutting prices or giving discounts can be detrimental in case of luxury brands. A higher price implies a higher level of quality and also suggests a certain degree of prestige. Similarly, distribution should be restricted. Status-sensitive consumers may reject a particular product if the feeling of exclusivity goes away. Managing luxury brands is as much an art as a science. The challenge is to create a demand for something which is not really needed. After all, it looks crazy to spend Rs 50,000 on a handbag or Rs1,27,000 on a briefcase. Creativity plays a key role in creating such a premium image. Many luxury brands achieve legitimacy and fashion authority as a result of the creative talent of their design teams who respect the brand heritage and yet continuously reinvent it. MARKET SIZE AND INDUSTRY GROWTH RATE With the European and American markets reaching a saturation point, leading players are now concentrating on the BRIC countries and the action is expected to shift to India, being the fastest growing luxury market, growing at 25%. , and is expected to maintain these rates for the next 10 years. The Indian Luxury Market is estimated to be to be USD 4. 35 billion and this forms only 2% of the global share. The growth of luxury markets is on the basis of GDP per-capita growth and the High Networth Individuals (HNI’s) in a country. India will be the second largest economy by 2040. Factors like Consumer Attitudes, Real Estate, Regulatory Environment and Ecosystem are important for the growth of luxury market and these are improving in the country. India has 83,000 millionaires and every year 16,000 more are getting added to this. The main trigger behind Indians indulging in luxury is to flaunt status, and the consumers here are becoming aware of leading global brands in the space, but tend to be extremely value conscious. There is a sizeable population engaging in outbound travel and getting exposure to global luxury market. The Indian consumer wants not just to be pampered, but entertained, excited and Inspired by Luxury brands and hence global players will have to look at innovative methods of reaching and engaging customers to succeed in the Indian market. With India emerging as one of the important players in the Luxury Space, the rich and famous across the globe are interested in exploring Indian Luxury products. Also, because of the availability of high disposable income Indians have developed an appetite to live a lavish lifestyle. India is being looked upon by the entire world as an emerging market and a potential Global hub. Hence, considering the potential of the Country many big brands from across the Globe either have set up their base here or are planning to do the same. GDP CONTRIBUTION The Gross Domestic Product or GDP is the indicator of the performance of an economy. According to the estimates of 2008, Indias GDP is $1. 209 trillion and this is slated to make improvement in the coming times. It is estimated that Indias GDP will grow by 6. 5% in the year 2009. In 2008 the countrys GDP was 9%; the slowdown that has been witnessed this year in the estimates is largely due to the slowdown witnessed by the agriculture and the industrial sectors. A look at the India GDP composition sector wise throws up some interesting figures. The agriculture sector contributed 17. 2%; industry contributed 29. 1% while the service sector had a contribution of 52. 7% according to 2008 estimates. FDI LIMITS AN INTERESTING FACT!!! What is the size of US Luxury Market? A) A third of India’s GDP B) Half of India’s GDP C) Equal to India’s GDP D) More than double India’s GDP ANS: D) More than double India’s GDP. While India will certainly not match the US, Japan or China in terms of its domestic market size for luxury goods and services for decades to come, its influence on global luxury business will steadily increase in the coming years. The reasons are many and mostly historical. Unlike Japan or China, India has a history and a tradition of luxury for millennia. It has an influence on textiles and handwork on them, on gems and their setting in jewellery, in food (including ingredients and spices), on natural skin and body care, on fragrances and cosmetics, and even furniture, furnishings, and objects d’art. For centuries, India’s nobility and the wealthy have been used to â€Å"commission† and patron works of luxury and extraordinary human skill. LUXURY MARKET SECTORS SECTORS| KEY PLAYERS| MARKET SHARE %| Jewellery| | 27| Clothing| | 16| Digital Accessories| | 13| Time Wear| | 8| Cosmetics Skin Care| | 8| Foot Ware| | 6| Wine Liquor| | 6| Accessories| | 6| Fragrances| | 4| Crystal Wear| | 2| Others| | 4| The Key Player Analysis The following table summarizes the marketing mix adopted by the 4 leading luxury brands. In order to arrive at successful strategies to market luxury in India, it is pertinent to look at the marketing strategies instituted by the existing luxury players in India. Product| Price| Place| Promotion| Valentino offers a limited assortment due to the nascent demand of gowns in India. This is attributed to Indian women’s preference of sarees over gowns. Because of this trend, Valentino has launched â€Å"saree inspired gowns† in their latest collection. Valentino has also included a few sarees (worn by Elizabeth Hurley) in its trademark red in their collection. | Valentino claims to charge prices same as their western counterparts. | Opened its first store in August ’06 at Delhi’s Shangri La hotel. it is currently looking for space to open a standalone store each in bangalore, Mumbai surprisingly, Ludhiana. Has no plans of opening a store in a luxury mall due to a fear of dilution of identity. The brand owns numerous stores in China. | The brand has little promotional presence. In the west it relies on red carpet events fashion shows to promote its gowns. However due to lack of such events in India, it uses little print advertisements from abroad in India. They predominantly feature Hollywood actresses models. | Product| Price| Place| Promotion| The brand offers a smaller assortment of their products in west in India. This is attributed to the cultural difference the differences fashion trends. | The brand claims to price their products equitably in India when compared to their western counterparts. However, it does admit to the greater taxes. | Launched operations in India in 2005. has only one boutique in India as opposed to 8 boutiques in China. The brand’s only boutique in India is located at The Imperial Hotel in Delhi. | Has no. promotional campaigns targeted exclusively at Indian market. Nicole Kidman, the brand’s leading endorser, recently shot an advertisement with Indian model/actor Arjun Rampal in Rajasthan. However, the advertisement will not be aired in India as Chanel only promotes in print media in India. Came into headlines for dressing up actress Sonam Kapoor for a film premier. | Product| Price| Place| Promotion| Made headlines with their intention to design sarees. However, the brand has shown no signs of actually producing them. Offers limited amount of their product offerings due to limited demand in Indian market. However, is planning to expand their offering in future. | The brand admits to charging a higher price due to the tax structure high infrastructure costs. | Launched operations in India in 2007 with boutiques in Mumbai and Delhi. Murjani Group is the master franchisee of this brand in India. The brand’s store in Delhi is located at The Oberoi’s Hotel. the brand has currently shelved the plans of opening four more stores including one in the Emporio Mall. The brand owns close to 27 stores in almost all leading cities of China. | The brand relies heavily on print advertisements. However, it regrets its recent decision of promotions through newspaper advertisements as it harmed the brand’s exclusive luxe image. Has no specific advertisements promotional material for Indian customers. | Product| Price| Place| Promotion| Armani offers all of their latest collection in their Indian stores. The brand recently made headlines in Indian newspapers for including Sherwanis in the 2009 fall-winter collection. The sherwanis are now sold globally in all their stores. The brand has registered a tremendous growth by selling above 200 items a month and registering a growth of above 50 percent annually. | Armani claims to price their products same as abroad refuses to comment further. | Armani has recently entered the Indian market with a joint venture with DLF. The store currently operates through two exclusive stores in Delhi’s first Luxury Mall DLF Emporio. The is currently in plans of opening four more standalone stores in Delhi and Mumbai. It owns 15 stores in China. | Armani, unlike in west, only relies on print media (in magazines) to promote their products. The brand features its international promotional material in India as well. However, in its latest ad campaign, it featured a model of Indian descent (Vasuki)| DETAILED ANALYSIS OF THE MACRO-ENVIRONMENT Political Trends One positive factor for any company entering India is the political stability of the nation as well as democratic style of leadership. Government apart from tariffs has taken a neutral stance towards the luxury stalwarts, FDI and tariffs as only concern which will be strengths in coming future. The implementation of the Free Trade Area, which laid out a comprehensive program of regional tariff reduction, will be continuously implemented in phases through the year 2010. Over the course of the next several years, the programs in tariff reductions will be made broader. Efforts to eliminate non-tariff barriers and develop common product certification standards were initiated. In addition, ASEAN also was able to formulate framework agreements for the intra-regional liberalization of trade in services. Economic Trends Despite the adverse economic trends in the last year, the luxury goods industry as a whole experienced relatively robust economic growth. Many countries have also seen the risk-weighted capital adequacy ratios of their banking systems improve due to government-sponsored bank recapitalization programs, continued progress in financial restructuring, and improvements in financial risk management. Overall Indian economic trend is a silver lining for companies as India is increasingly becoming the hotbed for millionaires and billionaires the new found riches is growing and will continue to be so, hence economic trend which was a challenge will grow as a big advantage. Social / Cultural Trends. There have also been social and cultural trends that have been evident over the last few years in the luxury goods industry. These include: (a) The irreversible rise of civil society (b) The rise of civil society and urbanisation blends perfectly with dreams that luxury brands sell (c) The increase in the roles of intellectuals and social awareness. (d) Indians are a peculiar breed, victims of centuries-old socio-economic oppression. Where each of us is pinned on the social matrix is revealed by our last name or even a stray twist in accent. Money or the display of it can rarely manage to unsettle the hierarchy. Awareness or rather subtle awareness is something which luxury marketers are happy about and aiming at. With more and more urbanisation and globalisation the need to be in parity with the world will fuel the demands for more upmarket and more luxurious lifestyle. Technological Trends It is a common knowledge that the luxury goods industry is still a relatively new industry in the country and is still in its early stages of development. Technology being a important factor still comes as second at times in various luxury categories, though make no mistakes that that second is still way above what a mid level brand can aim at. India being hub of technological development still does not provide luxury brands enough lucrative options as tech advancement are not synchronised and homogeneous, hence it is a dark spot but might be a very significant area in future. Legal Trends. Intellectual property (IP) and IP Rights (IPR) creation, commercialization, and protection have been a significant source of comparative advantage of enterprises and economies and a major driver of their competitive strategies. Indeed, countries all over the world are fully aware of the pressing need for a long-term policy commitment to collectively transform the luxury goods industry into one which is largely based on knowledge, driven by innovation and sustained by life-long learning. Countries all over the world have pledged to work together to help accelerate the pace and scope of IP asset creation, commercialization and protection; to improve the regional framework of policies and institutions relating to IP and IPRs, including the development and harmonization of enabling IPR registration systems; to promote IP cooperation and dialogues within the region as well with the region’s Dialogue Partners and organizations; to strengthen IP-related human and institutional capabilities, including fostering greater public awareness of issues and implications, relating to IP and IPRs. INDIA and IPR are a big problem, just not having the stringent and encompassing laws is not the only issue, and problem also arises due to weak enforcement of laws. Cheap imitation and intellectual property infringement is a common occurrence in the nation. Luxury Goods Industry SWOT Analysis Strengths: †¢Has products that boast of a very powerful retail. This includes a reputation for value of money, convenience and a wide variety of products †¢Has grown significantly over the years, and has experienced global expansion. †¢Main competence lies on the use of information technology (IT) to fully support its international logistics system. Therefore, companies in this industry can see how their individual products perform within the United States for instance, or even at stores at a glance. †¢Is able to deliver good customer care, as the limited amount of work would mean plenty of time to devote to customers. †¢Products have established a strong reputation within the market. †¢Offers little deficits and overheads. Therefore the companies in this industry can offer good value to customers on a consistent basis. Weaknesses: †¢Is one of the worlds largest industries but has a weak control of its empire, despite its IT advantages. This could lead to a decrease in productivity in some areas where it has the least control. †¢Since companies in this industry sell products across many sectors, they may lack the flexibility that some of its more focused competitors possess. †¢Operates globally, but its presence is located in only relatively few countries worldwide. †¢Some luxury goods lack market presence or reputation †¢The company’s cash flow is unreliable especially in the early stages of a new luxury product development. †¢Over flooding doesn’t leave a luxury brand a real luxury brand. Opportunities: †¢Taking over, merging, or forming strategic alliances with other luxury good companies while focusing on strong markets like Europe or the Greater China Region and India. †¢Luxury good companies operate only on trade in a relatively small number of countries all over the world. Thus, this would open the opportunities for future businesses in expanding various consumer markets, such as those in China and India. †¢The opening of new locations and branches offer luxury good companies the opportunities to exploit market development. This could lead to the diversification of the company’s branches from large super centres to local-based sites. †¢Opportunities exist for luxury good companies to continue with their current strategy of establishing large branches worldwide. †¢The industry is continuously expanding, with plenty of future opportunities to exploit for success. †¢AS FOR INDIA IT IS â€Å"THE â€Å"INDUSTRY OF FUTURE maybe 10 more years. Threats: †¢Being number one means that the luxury goods industry is the target of competition, the industry to beat, both locally and globally. †¢Being a global retailer means that luxury goods companies might be exposed to political problems in the countries where the company has operations. †¢The production costs of most luxury products have the tendency to fall because of lower manufacturing costs. Manufacturing costs fall because of outsourcing to low-cost regions around the globe. This phenomenon could lead to competition in prices, which in turn would result in the deflation of prices in various ranges. Intense price competition must definitely be considered a threat. †¢Indian mentality of the masses. †¢REPUTATION, if it goes down company goes down. Detailed Analysis of the Industry Environment The assessment of the industry attractiveness is performed using the Porter’s Five Forces Model. A. Threat of New Entrants New entrants in the luxury goods industry will have to deal with high costs of entry for their latest technologies. Most major competitors in this industry have yet to establish strong distribution channels. This will severely hamper their plans to retaliate with their technological developments as without distribution channels, their products would never be seriously considered in the market by customers. These companies must worry though about certain government laws in some countries that might weaken their competitive position (2002). B. Bargaining Power of Suppliers. Suppliers of luxury goods have relatively lower bargaining power because their products have yet to establish consistency in the market. This is in contrary to ordinary brands where these products have been able to secure the confidence of its customers worldwide. C. Bargaining Power of Buyers A majority of consumers in the luxury goods industry are professionals who rely on mobile and expensive gadgets and expect seamless services every time they use them. For instance, a customer phones in a service request from the New York airport while boarding a plane bound to Paris the same day. The technical people in New York will immediately work on the service ticket of the client. And when that client arrives in Paris, he / she would be able to call the New York service centre and pick up exactly where he / she left off (1999). The bargaining power of buyers in the luxury goods industry is relatively high because there are only few, large players in the industry. D. Threat of Substitutes There are very little threats that could emerge from possible substitutes. This is because product-for-product substitution could not possibly happen especially with luxury goods. Other products cannot simply replace the ingenuity of the established luxury products in the market. Also, the millions of users of these luxury products surely would find it too uncomfortable using other products other than their luxury products CASE STUDY: THE MURJANI GROUP OVERVIEW Murjani Group develops, launches, and builds various designer lifestyle brands. It operates in the United States, India, and internationally. Murjani Group was founded in 1930 and is based in New York, New York. They partner with international luxury brands and retail them in India. KEY EXECUTIVES Managing Director: Mr. Vijay Murjani. Chief Operating Officer: Mr. Pradeep Mansukhani Business Head of French Connection: Mr. Dhiresh Sharma Marketing Head of Luxury Division: Mr. Vikram Raizada Business Head of Gucci: Ms. Ananda Kara JOURNEY 1930: Mr B. K. Murjani found the group in Shanghai, CHINA with it’s first retail store 1950: After the world war Murjani commenced operations in Hong kong with a trading company. 1952: Murjani sets up Hong Kong’s first garment manufacturing factory. 1958: With 6 years, Murjani grew to one of the largest apparel producers in the world, with a production capacity in excess of 10 million units per annum. 1966: The current Chairman, Mohan Murjani, joins the group. 1966: The Group commenced its transition from manufacturing to designer lifestyle brand development and marketing, by launching its first brand in the USA, â€Å" Marco Polo† 1976: Murjani launches the â€Å"First Designer jean† 1980: Murjani sponsors the US Open 1985: Murjani launched Tommy Hilfiger,in 1985. Here again Murjani group re-enforced their panache with ground breaking and ingenious marketing, to ensure that Tommy Hilfiger, would almost immediately, positioned amongst the top designers in the world. The innovative brand marketing and management techniques adopted by Murjani Group over the years, have changed the very paradigm of marketing, merchandising and retailing, as we know it today. 1986: Murjani launches â€Å"Coca-Cola clothes Why India With a luxury boom in India, there are over one million luxury consumers, which is only a fraction of eight million plus consumers who have the disposable incomes but are unfamiliar with the luxury segment. The growth rate is 14. 6 per cent. Target audience is 22-55 year olds. India’s luxury goods market of Rs 717 billion is set to expand with a new firm to facilitate process by bringing together buyers and manufacturers. India’s total retail market has been estimated at $160 billion or Rs 7,170 billion, covering eight million consumers. Of them, one million are considered to be in the luxury brands segment 2000: NAMASTE INDIA The Murjani Group for many years, was very keen to establish a presence in the Indian market, but had to wait for the right time. In 2000 with the rapid growth in the consuming class, Murjani was amongs.

Jack Welch Essay example -- GCSE Business Marketing Coursework

Jack Welch - Leadership Secret 1- Harness the Power of Change It is important in today’s changing economy that business leaders are not afraid to make necessary changes to succeed. When Jack Welch became CEO of General Electric in 1981, it was a lethargic business, satisfied with its output and entangled in bureaucracy. He understood the competition that overseas markets presented and the need for a new global strategic plan. He was able to envision the true potential of his resources and implemented drastic changes such as the Stretch, Work-Out, and Number One, Number Two business concepts (which will be discussed later) to achieve his goals. - Leadership Secret 2- Face Reality This is the most important rule in Jack Welch’s business strategy. Too many business leaders become comfortable with their performance and refuse to see the need for change. A business leader must understand the importance of accurately defining their company’s current position if they are planning on making successful changes. And once problem areas are discovered, managers must act immediately to correct them. When Welch took over at GE, he quickly addressed the common practice of sugar coating financial paperwork that only left a false since of security and insisted that every business unit in the GE empire must be the number one or number two competitor in its respective marketplaces or it would be fix, close, or sold. - Leadership Secret 3- Managing Less is Managing Better Managers need to provide the vision for their employees and instill confidence. Too many times, employees are held back by not having the power to make even the simplest of decisions without approval. Managers should empower their employees and trust that they are giving their total effort. This will give managers more time to work on plans to achieve the long-term goals of the company. - Leadership Secret 4- Create a Vision, Then Get Out of the Way â€Å"People always overestimate how complex business is. This isn’t rocket science. We’ve chosen one of the world’s most simple professions.† In Jack Welch’s words, business is simple. A leader needs to supply his employees with the information, the resources, the vision, and the atmosphere to succeed and reward them when they do. Welch does not concern himself with the details of GE’s many business units; he only needs to ma... ...direct more attention to the services side of an industry. The growth rates for product services increases more rapidly than that of product productions, so there is great incentive to direct your primary resources to provide service after the sale. - Leadership Secret 27, 28, 29- Turn Your Business into an e-Company The Internet is the future of business. Bring your company up-to-date and provide customers, not only with product descriptions and information, but with a way to shop, communicate and interact with your company via the web. The Internet also provides less chance for human error in the ordering process because fewer individuals have to handle information. And, most importantly, the Internet speeds up operations, whether it is use for sending information to employees or receiving custom orders from customers. - Conclusion Jack Welch has definitely revolutionized the business approach. He has proven, over the years, that his techniques and concepts are extremely effective and that business leaders, worldwide, should heed his advice. This book provides a small glance into the methods and methodology of, arguably, one of the greatest managers of our time.

Breach of contract †contract law Essay

Spanish Contract Law provides a broad notion of breach of contract for any behavior that departs from the specified behavior in the contract in any way (time, quality, substance, etc.) or is not specially justified on legal grounds (actions forbidden by the government are not breaches since they are justified on a legal ground). The general benchmark to determine breach is the contract agreed by the parties themselves, and not external notions. However, external notions are used in important situation such as the consumer’s market where the consumer’s expectations are the primary benchmarks to assess quality and performance since there is not an explicit contract. External notions are also important in other market, where a third party may have some duty or responsibility over the contract, and therefore, is responsible (at least in part) for any potential breach. The reason for breach does not exclude the breach. What matters is the breach. The analysis of breach takes place in objective terms. Subjective factors generally do not exclude breach, although they may affect remedies. In certain contractual areas, breach of duty and fault are generally required (professional contracts, management contracts: breach requires violation of a duty of care or a duty of loyalty). In professional contracts, the fault may be of a professional who was in contract with the firm, and in management contracts, it may be the fault of the manager. 2) Remedies: Spanish Contract Law provides a wide range of general remedies for breach of contract: †¢ Specific performance: the court forces the breacher to act as it was established in the contract. If for example, the contract stipulated that the promiser had to give the promisee a product of quality 2 and he delivers a good of quality 1, then as remedy the court force the promiser to deliver a good of quality 2. †¢ Damages: the court force the breacher to pay a certain amount of money  (damages) to the other party as compensation. It is a monetary remedy. The court calculate the amount to be paid. †¢ Liquidated damages: these are also monetary compensation, but with the difference that they are not calculated by the court, but they are instead specified in the contract itself. One example are the soccer players’ contracts, or sale contracts that specifies the amount to be paid for each day of delay. Other general remedies that we can find are: †¢ Termination: if a party suffers a breach, it can contract with another party and abandon its contractual obligation. If the breacher does not agree with this, court is necessary. †¢ Reduction of prices: in case of breach of a party, a general remedy is to reduce the price to equilibrate the contract. Generally, it is the aggrieved party who chooses the remedy to be imposed. 3) Specific performance: Specific performance is a remedy for breach characterized by the fact that a failed performance or departure from required action by the contract will be imposed upon breaching party. It is also characterized by several material variants of the remedy such as: forced delivery, forced action, injunction not to do, repair defective performance and replace non-conforming good. In the case of the injunction not to do, the court oblige the breacher not to do something, such as obliging a CEO to work for the competition if in the contract it was stipulated that he cannot. Specific performance conceptually includes repair and replacement of consumer goods. The main issue with specific performance, when it is feasible, is the issue of the balance of benefits and costs of the remedy. Specific performance implies that the breacher perform as the contract establishes. However, sometimes, the cost of this performance may be higher than the benefit in social welfare terms. Take the example of the mining firm, which has a contract with the owner of the land to mine for 10 years and then clean the land. When the 10 year pass, the firms breaches the contract and refuse to clean. The cost of cleaning the land is 20 millions, and the benefit for the  owner is 1 million. So if the court imposes a specific performance to firm, society will loose 19 millions. A good alternative would be to impose damages to the firm, which would be preferred by the owner, since an agreement between the firm and the owner will be reached that maximize the social welfare. In these cases, performance may be more costly than its value for promisee: performance may be ex post inefficient. There are both positive and negative features of specific performance as a remedy. As positive features, we can distinguish low informational requirements to apply remedy (avoids cost of error linked to estimating damages) and the party aggrieved by breach appears to be satisfied in its promissory expectation. As negative features, we find performance may be more costly than its value for promisee (performance may be ex post inefficient), requires a court order and takes time, for complex performances requires costly and difficult supervision by court and performance by a party forced to comply with contract may be perfunctory (lowest effort) at best. 4) Damages: Damages are understood as general remedies that can be applied to all types of contracts and breaches of contracts. It is a remedy defined in very broad terms: amount of money to compensate any harm suffered by the injured party as a consequence of any breach of contract. We can differentiate between two kinds of damages: expectation and reliance damages. This is why it is a remedy with a variable extension. Expectation damages: Expectation damages is the sum of money that will give the party damaged the same amount of welfare and utility than if the contract would not have been breached and the final result would have been attained. Therefore, the breach party would have to pay the aggrieved party an amount of money that would compensate for the harm caused and in addition an amount of money equal to the value of the performance for this party. There are however some problems with expectation damages since they are difficult to compute and some instances of moral hazard may appear. Those who seek for damages have to provide evidence of both the existence and amount of damages. This requirement has some exceptions in case of harm in re ipsa: illegitimate use of a productive good, deprivation of a productive good, and few other examples. Expectation damages is the general rule in Spanish Law for breach of contract. It is the damage measure that accompanies termination for breach and the replacement measure of specific performance. It is awarded when there is a breach of representations and warranties, advertising and promotional communications and in cases of pre-contractual fraud that are equivalent to breach of contracts. How can we compute expectation damages? When goods or services admit substitutes or cover transactions to avoid the negative consequences of the other party’s breach of contract, the price of these transactions is relevant. If the seller breaches the contract and the buyer has bought a good, generally fungible, then the expectation damages will be equal to the difference between the price of the substitute and the price established in the contract: Psub-Pc. If the buyer breaches the contract and the seller celebrates a cover sale the expectation damages would be equal to the difference between the price established in the contract and the price of the new sale: Pc-Psub. Other ways of computing expectation damages are the following: Market damages: (for fungible good with market price) buyer will receive expectation damages consisting of the difference between the market price when the breach of contract took place (Pm) and the contract price (Pc). Seller will receive the opposite difference. Expectation damages present some limitations that reduce it scope and amount. One of this limitations is the foreseeability rule. This rule state that the breacher should only be liable for the things that are foreseen or could have foreseen at the time of contracting and that are necessary  consequence of his failure to perform. For instance, if the foreseeable harm of a breach is 100 and the aggrieved party end up suffering a loss of 1000, the foreseeability rule states that damages will amount only to 100. The foreseeability rule gives incentives to give information in the time of contracting. Those who suffer from harm must declare the value of the performance. In tort law, there is no foreseeability rule, you pay the actual damage. Another limitation is the duty to mitigate damages: the aggrieved party is under the duty to mitigate damages that the other contracting party has caused with her / his breach of contract. Reliance damages: Reliance damages: sum of money that will give the party damaged the same amount of welfare and utility than if the contract would not have taken place (the initial situation). This is why reliance damages are generally lower than expectation damages. Reliance damages cover expenses for the injured party derived from concluding the contract, specific investments that the injured party has made in reliance of performance of the contract by the other party and opportunity costs. Limited assets: Damages do not always work well. Sometimes, individuals can bear the payment of these damages, and therefore, they will have incentives to reduce them. However, this is not always the case. When the breacher has not enough assets to pay damages up to the point of optimal care, damages do not work well, because people will not pay for the consequences of their acts, and therefore, their level of care will be the optimal according to what they can pay, and not what they should pay. This is known as judgement proof problem. Damages for pain and suffering: The traditional position of the Spanish Supreme Court and Spanish Courts is: †¢ To accept damages for pain and suffering for breach of contract †¢ To award damages for pain and suffering with a relative amplitude and generosity. †¢ To award damages for pain and suffering with several functions: †¢ To avoid the problems of calculating and justifying the amount of the damage award †¢ To compensate harm in personality rights (right to life, liberty, honor, etc.). †¢ To compensate non-patrimonial values joined to economic goods and rights (discomfort, inconvenience, disappointment, frustration) †¢ To punish intolerable or egregious behaviors of breach of contract. When an individual suffer harm, her utility decreases (she goes form point A to point B, but her utility function for money will not change). If this harm is economic, we can compensate this harm with money, which will leave her at point A again. However, the harm that an individual can suffer may be non-economic, and for the same amount of money her utility decreases (her utility function changes). Money cannot restore the initial utility (a huge amount would be needed). This is the case of pain and suffering (accident and death of a relative, discomfort, etc). This is why it is useless to take insurance for death, since it would not compensate the harm. The hairy hand example: What is the difference between expectation and reliance damage? Let’s look at an example. An individual was injured in his hand and lost 50% of his use. He entered in a contract with a doctor who promised to reestablish the hand to a 100% of use in exchange for quantity of money. Before the contract was made, the individual was situated in an indifference curve that related all the  combination of hand use and money that let the individual indifferent. We assume that the individual is willing to give up hand use for money. After the contract and operation, the individual was worse off, with 25% of use. What should the doctor pay as damage? If expectation damages are used, the doctor should pay the individual a quantity of money that together with the 25% of hand use leave him with the same utiity as if the contract had succeded and he had 100% of use (situate him in a higher indifference curve). If reliance damages are imposed, the doctor should pay the individual a quantit y of money that, together with the 25% of hand use, leave him with the same utility as if the contract did not take place, with 50% of hand use (situate him in the initial indifference curve). 5) Liquidated damages: Liquidated damages are damages for breach that are not determined ex post breach by a Court or arbitration panel, but ex ante by the contract parties themselves into the contract. Such possibility of â€Å"privately stipulated† remedies for breach is acknowledged by most legal systems, typically in the form of payment of money, although other possibilities may exist. They typically replace Court damages and they can be agreed as added penalty for breach. The most important issue is whether Courts are forced to enforce liquidated damages, or they may disregard, or reduce, the amount of the liquidated damages award. The reasons why Courts allow liquidated damages are: †¢ Freedom of contract †¢ A large liquidated damages clause may be necessary to induce promisee to find promise credible and the contract sustainable. †¢ Parties are in a better position than Courts to assess benefits and costs of determining a given amount. †¢ Liquidated damages compensate systematic underestimation of damages by Courts. If liquidated damages are higher than the expectation damages, then the court will apply the second ones. There are however some economic arguments that may lead to reduce or at least control the level of liquidated damages clauses: †¢ â€Å"Excessive† damages clauses resulting from incorrect predictions or forecasts about future outcomes. †¢ External shocks unforeseen by parties that produce an unexpected increase in the damages payment. †¢ True â€Å"uncertainty† about future costs for one party. †¢ Behavioral biases that lead party to underestimate the true adverse impact of a damages clause (the â€Å"deferred cost problem†): †¢ Over-optimism concerning future performance and costs (the example of the gym) †¢ Hyperbolic discounting of future outcomes We can see the liquidated damages as barriers to entry. An excessive amount of LD is beneficial for the parties to the detriment of a third party who  may bid for the services of breaching party. Promisor agrees to pay an amount larger than ED, in exchange of higher price. Promisee uses high liquidated damages to extract larger payment from a third party interested in performance by promisor: larger payment from third party increases the surplus to the contract parties, that is shared between them. Also, excessive payment of third party are made possible by excessive damages clauses, which reduce efficient entry by third parties, and prevents them from successfully bidding for promisor’s performance. That is why the goal of reducing â€Å"excessive† liquidated damages is not to protect the breaching party, but third-parties. Sometimes, excessive LD for signaling are unwanted, since an unforeseeable contingency may appear that will cause a breach in the contract. A pooling equilibrium may be more desirable than a separating one when the distortion caused by the penalty on the â€Å"good type† is large enough. 6) Termination: Among the general remedies for breach, the last one is termination (or rescission, or cancellation, as it may also be called in Common Law jurisdictions). This remedy entitles the aggrieved party to cancel the contractual relationship with the breaching party, eliminating the obligations arising from the terminated contract. Once the contract is terminated the parties should give back what was received under the contract, unless the goods are now in lawful possession of a third party. In this case, the value of the goods would replace the goods themselves. The elimination of the effects of the contract is retroactive: it is considered that the contract did not exist. Spanish courts have established that termination does not require a lawsuit. However, if the other party disputes the termination or its conditions, restitution would require a lawsuit. Courts do not determine termination, but declare whether termination was or not properly effected by the party. The most contested issue about termination is when is termination available as a remedy. It is clear that not every breach or non-performance allows the  aggrieved party to terminate, but a qualified breach (material or fundamental breach) is required. We can define it as follow: †¢ Relevance: the breach must affect the central obligations or duties under the contract and not merely ancillary or incidental duties. †¢ Duration: the breach should not be merely sporadic or transitory, but likely to be repeated or continuing. †¢ Importance: the breach must substantially affect the interests of the non-defaulting party. Termination does not go alone, it does not exclude damages, and in fact it is naturally accompanied by damages payment.

Analysis Of The Lottery By Shirley Jackson - 773 Words

In the short story, The Lottery, written by Shirley Jackson, is about a small village or some type of society with a yearly tradition called, the lottery. From what the reader may read online, they may find out that during the time period Jackson wrote this, she was interested in magic and witchcraft. Not only that she was also rumored to have gotten rocks thrown at her by children who believed she was a witch. One may also say, that the story was absolutely unique and the ending completely shocking. Especially, with how it begins. The story just starts off as just another normal day you may imagine to take place in a small town. â€Å"The morning of June 27th was clear and sunny, with the fresh warmth of a full-summer day; the flowers were†¦show more content†¦While this event takes place, chatter goes around the crowd discussing the different opinions on the lottery. Most were agreeing to its practice. By the time each member is instructed to open their slip of paper, if it is blank, they are safe and free to go. If not, then they would get stones thrown at them by the other citizens to their death. In this case, one of the characters, Tessie Hutchinson, gets the unlucky slip of paper. One may ignore the little details that could possibly be giving them hints of the ending. The reader may reread the story twice and notice this paragraph. â€Å"Bobby Martin had already stuffed his pockets full of stones, and the other boys soon followed his example, selecting the smoothest and roundest stones; Bobby and Harry Jones and Dickie Delacroix†¦ eventually made a great pile of stones in one corner of the square and guarded it against the raids of the other boys.† In this short story, there is many different types of meanings that could be portrayed. But the one that seems to match the plot the best is the statement that everyone has a secret bloodlust which is buried deep inside them. Some people may notice, that in this town, it never seemed to mention anything about crime or some type of violence. It could be because each citizen holds their anger in until the day of the lottery where they are allowed to let it all out. That is the generic meaning however, I mean it is pretty obvious. WhatShow MoreRelatedAn Analysis Of The Lottery By Shirley Jackson744 Words   |  3 Pagesâ€Å"The Lottery† - For Analysis 1. There are multiple examples to suggest that â€Å"The Lottery† is a ritualistic ceremony. In several instances â€Å"The Lottery† is referred to as a ritual: â€Å"..so much of the ritual had been forgotten..† and â€Å"†¦because so much of the ritual had been forgotten†¦Ã¢â‚¬ . In addition, the ceremony happens annually on June 27th, a t0:00 a.m., suggesting a ceremonial quality. This happens with such regularity that the citizens â€Å"†¦only half listened to the directions†¦Ã¢â‚¬ . This ceremonyRead MoreThe Lottery By Shirley Jackson Analysis732 Words   |  3 PagesFollowing other people may have a positive or negative effect, but when it reaches a certain point where you blindly follow others it may not have a positive outcome. â€Å"The Lottery† made by Shirley Jackson is about a small community of villagers that gather together every year to perform a tradition. All of the villagers gather together and draw small sl ips of paper from a black wooden box, whoever draws the first slip with the black dot on it, their family has to draw first. Now all of the membersRead More Analysis of The Lottery by Shirley Jackson Essay693 Words   |  3 PagesAnalysis of The Lottery by Shirley Jackson â€Å"The Lottery† by Shirley Jackson was written in 1948. The story takes place in a village square of a town on June 27th. The author does not use much emotion in the writing to show how the barbaric act that is going on is look at as normal. This story is about a town that has a lottery once a year to choose who should be sacrificed, so that the town will have a plentiful year for growing crops. Jackson has many messages about human nature in this shortRead MoreLiterary Analysis Of The Lottery By Shirley Jackson910 Words   |  4 PagesLiterary Analysis of the Short Story â€Å"The Lottery† by Shirley Jackson Shirley Jackson explores the subject of tradition in her short story â€Å"The Lottery†. A short story is normally evaluated based on its ability to provide a satisfying and complete presentation of its characters and themes. Shirley describes a small village that engages in an annual tradition known as â€Å"the lottery†. Narrating the story from a third person point of view, Shirley uses symbolism, foreshadowing and suspense to illustrateRead MoreEssay on The Lottery by Shirley Jackson: an Analysis1522 Words   |  7 PagesKouyialis EN102: Composition II Professor Eklund The Lottery by Shirley Jackson: An Analysis The short story â€Å"The Lottery† by Shirley Jackson was written in 1948 and takes place in a small town, on the 27th of June. In this story, the lottery occurs every year, around the summer solstice. All families gather together to draw slips of paper from a black box. When reading this story, it is unclear the full premise of the lottery until near the end. The heads of households are the firstRead MoreLiterary Analysis Of The Lottery By Shirley Jackson1534 Words   |  7 Pages Literary Analysis: â€Å"The Lottery† by Shirley Jackson â€Å"The Lottery† by Shirley Jackson is a short story written in 1948. Due to World War II ending around this time, her story took some strong criticism. The people at that time wanted uplifting stories, and this story is the very opposite because of its underlying theme of tradition and conformity. â€Å"The Lottery† shows that no matter the tradition or belief, people will not stray from their daily routine because humans are creatures of habitRead MoreAnalysis Of The Lottery By Shirley Jackson1060 Words   |  5 Pagesthird point of view about other but our view are mostly to always limited, not knowing everything. In a story called â€Å"Charles† by Shirley Jackson, the author creates a limited first point of view of Laurels mother where the reader reads and understand only what Laurie’s mother understand and see. In the other story also written by Shirley Jackson called â€Å"The Lottery†, the story proceed at a limited third point of v iew where the reader understands more ideas. Although each storied have a differentRead MoreAnalysis of The Lottery by Shirley Jackson993 Words   |  4 PagesSpanish author, When we blindly adopt a religion, a political system, a literary dogma, we become automatons. We cease to grow. Shirley Jackson was born in 1919 in San Francisco, California to Leslie and Geraldine Jackson. She is most well known for her short story titled â€Å"The Lottery† which was first published in The New Yorker to overwhelming and mixed reviews. The lottery, as portrayed in the short story, is a religious, annual ceremony in the afternoon of June 27. This event is said to be olderRead MoreThe Lottery By Shirley Jackson Analysis802 Words   |  4 PagesIf everyone else was doing something, would you? Or maybe if someone needed to be stood up for, would you have their back? In The Lottery, people do follow other people blindly. And the consequences are devastating. But in First They Came, not hav ing someone’s back might get you in the same position†¦ The Lottery by Shirley Jackson is a story that takes place in a small village on a warm summer day. Little boy’s run around in boisterous play, collecting small stones into a pile. As the adults gatherRead MoreAnalysis Of The Lottery By Shirley Jackson784 Words   |  4 Pagesthose groups. Then they came out for him and there was no one left to speak out for him. In the story â€Å"the lottery† by Shirley Jackson it explained how they play the lottery but rather than winning its actually a loss if you win. In the story they have a black box and slips of paper and if you have a black dot on your paper you get stoned to death. In their town it’s a tradition to play the lottery. So they come to the town square they all get called up to get their slip of paper and when everyone gets