Are luxury goods a thing of the past?

Are luxury goods a thing of the past? It might be, if you are in a bloody market.

As critiques stone an ailing Apple, Samsung suddenly becomes the darling of products, diversification and market share. There used to be a time when Apple was worshipped for innovation, this year, the clock’s still ticking, and sources say it’d tick a while more until a new model launches while Samsung gathers more apple customers and carriers – loyalty check!

Various products, concepts, services claim price premiums. Mostly led by vicious cycles of ‘innovation,’ R&D, etc. As you’d know the rise and fall of Zynga. most of these premium led products would go through a bubble period. The hype creates word of mouth, opens doors to Venture capitalists, increase in value of brand/assets, goes for IPOs, etc., but most of these brands at one point lost the edge of ‘rational innovation’. As what happened to Motorola and Blackberry. But is Apple heading to get a taste of its own medicine?

Scores of companies claim superiority over competition through a price premium and caters to a ‘niche’ while in reality practicing the focus strategy in reverse at their benefit. What has to be thought of is: if the offer is generic why go on focus? When the market is bloody, why price premium it?

The answer lies behind rational positioning coupled with pricing and free value additions (Apps). When Apple launched the iPad, Kindle already had created the e-reader concept. The Kindle responded by cutting down price and signing up thousands of titles, virtually paralyzing the publishing industry (even at a loss) to maintain market share.

When Samsung, in spite of intellectual property infringements continued to offer a better than Apple experience to the users (free apps) at a extremely competitive price, created a new segment of ‘Aspirational rational customers,’ or in a manufacturers’ point of view according to Bowman- customers that are captured though a hybrid strategy. So behind the success of both Amazon and Samsung lies a vast product portfolio that offers value to a buyer at low prices in return of ensured sustainability of its establishment.

There are many similar concepts in business platforms, consultancy firms, PR firms, law and secretarial services. The customer’s expectations are a given. An augmentation that inspired at one stage in time would become a generic offering few days/hours later.

Innovation is always the key to stay on top, but with many a technology changing fast and a better informed customer, the viability of premiums in the long term is questionable. When a ‘knowledge partner’ would fail, it brings down a little more than book assets – the credibility of services rendered!

(The writer is a Chartered Marketer and holds a BBM from the Bangalore University. She could be reached via [email protected].)