The Market and Business of Luxury : An Introduction

Conventional business wisdom suggests low prices stimulate demand, business size increases competitiveness, and consumers shop for functional use. In luxury, however, these and many more conventions are turned upside down: demand can increase with price, a brand's diffusion acts negatively on its desirability, and consumers make extraordinary efforts to purchase products that usually do not exceed the functional performance of considerably less expensive and, thus, more reasonable alternatives. Luxury, thus, is a phenomenon that is quite real in today's world. Luxury companies have to work more or less within the same mechanisms as other companies, but they apply a set of considerably different parameters. We aim to give an overview of the phenomenon that is today's luxury business, taking snapshots of the market, the luxury organization, management challenges and the must-reads of research in luxury.