OBSERVATIONS: Understanding the World of International Luxury Brands: The 'Dream Formula'

Marketing luxury goods is a paradox. Managers want a certain level of diffusion for their brand in order to achieve success in the marketplace; yet, if their brand is overdiffused, it loses its luxury characteristics.

OBSERVATIONS: Understanding the World of International Luxury Brands: The 'Dream Formula'

Bernard Dubois and Claire Paternault

In spite of its spectacular growth over the last 20 years, the market for luxury goods, estimated at $60 billion by McKinsey Corp (1990), keeps its secrets. Although brand names and products are highly visible given their strong media coverage, the processes according to which consumers acquire and consume luxury items remain enigmatic. It seems particularly difficult to explain and predict the conditions under which 'dreams' of luxury emerge and how such dreams materialize into purchase acts. While for other high-involvement products, time-honored rational...

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