Luxury in an economic context, the well differentiated and well aware of luxury based on its price elasticity. When the price of property increases and demand decreases, we call this product a good current. When the price increases and demand increases, we call it a luxury good, although Veblen to be precise. Include perfume for example; a perfume sold € 5 will not sell because it does not reflect a premium positioning. The price increase shows that famous location.
In another context, luxury product is made from beautiful fabrics with a unique know-how and generally sold at prices staggering. However, luxury is an area much larger than anyone can define their own way.
The Russian market: The market for Eastern European countries is very different from western markets which we are usually faced. The successful implementation of the Swatch Group will depend on the approach it will market.
Russia is a large country changing that offers real business opportunities is a source of growth in a global economy that is slowing down. The luxury market in Russia is about 7% of the world in this sector therefore $ 7.5 billion from the Treasury Department and that number should increase with time since Russia has a growth rate in luxury estimated at 30% per annum in the coming years. Besides brands like Vuitton, Dior, Chanel and Cartier have developed their own distribution network, although some of the houses continue to rent the walls of their stores to local distributors.
The number of billionaires in Russia is the largest in the world, the standard of luxury customers in Russia are mainly from three groups: The oligarchs, businessmen and the rising classes (young managers, the middle class, and merchants). Unlike many markets, all the traditional sectors of luxury are popular or have a strong development potential. For Russians, the sectors that make up the luxury are: fashion and accessories, jewelry and watches, food, alcohol, tableware and decoration, hotels, perfumes, and the boats, planes and automobiles.
The defining criteria of luxury in Russia: the visibility of the object, a high price, brand, exclusivity, and the place of sale, which represents security against counterfeiting. The presence of numerous brands on site, media development and the many trips taken by the Russians in Europe have helped to change the report to the luxury of Russian consumers. For women as for men, there is a desire to overcome the constraints of the label, a desire to express their own taste, a desire for exclusivity and personalization becoming stronger. The taste of consumers of refined more; they favor miscegenation and refocus on product quality. They come in logic of "connoisseur" and discreet luxury. Or they do not offer local match their demand and tastes, which is why they are turning to luxury goods from other countries.
The Swatch Group Ltd is the world's leading producer of finished watches. It is a multinational, based in Switzerland, involved in the manufacture of finished watches, jewelry, watch movements and watch components. It produces virtually all the components needed to manufacture the watches sold under its 19 watch brands, from low end to the luxury watch and under the label of multi-brand Tourbillon. It provides them to the Swiss watch industry. It also operates its own global distribution network.
Finally, the Swatch Group is also a key player in the electronic systems sector. The market in Eastern Europe is very different from western markets which we usually face. The successful implementation of the Swatch Group will depend on the approach that it will market. The taste of consumers is becoming more refined; they favor miscegenation and refocus on product quality. However, they do not offer local matches or cater to their demand and tastes and are turning to luxury goods from other countries.
Tags: luxury sector; Russian market; Swatch Group; history of the Swatch Group
[...] Pure technology, Swatch group has the force of a multinational in terms of research and development as well as the extensive experience. Ecological aspects: Clean, renewable energy, the watch is not a pollutant, but there is a mass production done in an industrialized manner. Legal aspects: Russia has launched a stimulus package of "special economic zones" in 2005 to attract investors: - Substantial aid to build infrastructure - Streamline administrative procedures - Exemption from taxes The recent tax reforms introduced since 2001 allow easy installation of foreign companies: - Easing of tax burden on businesses: Lower rate of income tax and social contributions Elimination of taxation on value added Lower taxation on individuals This leads to a revitalization of public finances. [...]
[...] Indeed, Swatch Group can count on an offer that is different from its competitors, which is in part the competitive advantages of the group. First, the luxury watch company stands out by displaying the "Swiss made" label. This is a guarantee of quality for the consumer since it means that over 50% of the production of these watches happened in Switzerland. It must also respond to many conditions and criteria.The assembly work of the movement and assembly of the watch itself must be done Switzerland. [...]
[...] With this alliance, Swatch will therefore benefit from the brand of Rolex, and thus consolidate its position in the luxury sector Swatch Group and Tiffany This co-branding strategy is based on profit sharing as follows: Swatch is the sole owner of the capital of the subsidiary, but grants Tiffany a percentage of the profits, and one of five administration council seats and a voice in the design and marketing. This is a strategy with a long-term goal since the contract commits both parties for a period of twenty years. [...]
[...] 18 brands including 9 positioned in the luxury or upscale range Production line Distribution subsidiary Marketing services among the best OPPORTUNITY THREATS Strategic Alliance Increase in raw material (Tourneau) prices Industry trends Change in customer Omega Initiatives demand Internationalization of the "Counterfeit!" Group in emerging countries Financial Crisis Swiss Made Label World leader in the watch sector, the Swatch Group represents 25% of the total market for watches, with sales on the upswing since 2003. The double-digit growth of the group is confirmed by the global market. [...]
[...] Representatives of the various subsidiaries in the European Union are well informed of key developments and important events within the Group. The group also participates in various events to contribute to causes it supports and is sometimes rewarded, for example: The Swatch Group received Cyber language edition award in 2008, and it was crowned one of 600 players in Europe for its efforts in favor of linguistic and cultural diversity on the internet as its main site, since 2008, was fully available in German, English, French and Italian. [...]
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