Luxury Institute News

April 29, 2013

Now made in China: Taste

5 Things Big in Beijing, Headed for Buffalo

By Quentin Fottrell
April 28, 2013

Despite the ubiquitous “Made in China” label on everything from clothing to toys, China has been slow to export its own products and culture. Most Americans couldn’t name a single Chinese brand, a survey released this month found. Only 6% of could think of one, according to international marketing firm HD Trade Services. Some respondents mistakenly identified Japanese brands like Honda, Sony and Toyota as Chinese. Indeed, Chinese companies often sells products under non-Chinese names. Volvo Car, for instance, is owned by China’s Zhejiang Geely Holding Group.

“Branding was an alien concept in old China,” says Stanley Kwong, managing director of China Business Programs at the School of Management of University of San Francisco. “China had been making products for companies like Wal-Mart and Apple, but has not developed many brands.” It’s been easier for China to make a product than build a brand, experts say. Popular Chinese cosmetic brand Herborist is labeled “Made in Shanghai,” for instance, and the box for Apple’s iPhone — although made in China — is labeled “Designed by Apple in California.”

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute:

November 8, 2012

Industry experts project affluent spending habits based on election results

By Mathew Evins
Evins Communications
November 7, 2012

Do you think that Barack Obama’s re-election will have a major effect on affluent consumers’ day-to-day spending? Long-term spending?

I do not think the re-election of Obama will have a direct effect on the affluent consumer’s day-to-day spending in the near term.

If it causes a major downturn in the stock market, this will have a slightly negative impact on the spending of the affluent, especially for holiday gifts.
As for the general public, they are not likely to change their spending because of his re-election. The larger influence on spending will be the actions taken, or not taken, to avoid the “fiscal cliff”, i.e. the increase in taxes and the major reductions in government spending due to take effect in January.

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute:

January 11, 2012

Should luxury brands back presidential candidates?

By Rachel Lamb
Luxury Daily
January 10, 2012

Select luxury marketers including Marc Jacobs, Diane von Furstenberg, Donna Karan, Tory Burch and Jason Wu are participating in an ecommerce effort in which proceeds from select items benefit the Obama Victory Fund. However, the general consensus is that brands which support a presidential candidate run a much higher risk of alienating consumers than gaining them.

The ecommerce initiative, called Runway to Win, ecompasses luxury goods that are sold to support the Obama Victory Fund, a foundation aiding the campaign for sitting U.S. president Barack Obama’s reelection. However, many experts believe that mixing fashion and politics is not a game that luxury brands should be playing.

“If the candidate wins, you get some halo effect of getting it right, and there’s always a pro to siding with a winner before they become a winner,” said Milton Pedraza, CEO of the Luxury Institute, New York. “However, the downside is that you can alienate a significant number of constituents by playing the political game.

“Politics in general is a rather controversial subject,” said Ron Kurtz, president of the American Affluence Research Center, Atlanta. “The U.S. electorate, even among the affluent, is pretty evenly divided between support for the presidential candidates of the two major parties.

“The members of Congress of both parties have very low job-approval ratings,” he said. “To be identified with one side or party could alienate an almost equal number of potential consumers.”

While affiliating with a presidential candidate could significantly turn consumers off for the time being, it may not be completely damaging since most U.S. consumers have short memories and the campaigns will be over in November.

Additionally, just because a candidate says that he has certain beliefs or has plans to accomplish something does not mean that he will actually do so if elected.

This does not have anything to do with any specific candidate, just that each has opposing parties that make it difficult to get unpopular decisions done, Luxury Institute’s Mr. Pedraza said.

“The ability for someone to really deliver on their agenda is limited,” Mr. Pedraza said. “It’s a tough bet to make and not something that most brands, specifically luxury brands, should make.

“There is a very significant and potential downside,” he said.

Alien policy
Politics, like fashion, is a passionate topic.

Therefore, it makes sense that luxury designers turn their fashion passion to another area.

Just as luxury brands could turn customers off, they could just as easily gain loyalists who share their presidential, moral and political affiliations.

However, the fact remains that fashion and politics do not have much in common.

“I don’t think that it’s worthwhile to become involved in politics because it is a game where there are tremendous emotions attached, good or bad, and playing the political game can damage a brand for no good business reason whatsoever,” Luxury Institute’s Mr. Pedraza said.

“You’re not in the politics game, you’re in the product and services game,” he said. “Your first priority should be to develop great customer relationships based on what you deliver, not one that candidates deliver.”

In a way, supporting a candidate who has the same morals or beliefs to a brand is similar to cause marketing, but without the charity aspect.

However, global consumers not living in the United States may be more inclined to accept a luxury brand that supports a presidential candidate.

“I don’t think the support of a political candidate is the same as cause marketing, at least not in the U.S.,” Affluent Research’s Mr. Kurtz said.

“[However], there may be some countries such as in Europe where Obama has a great image and the affluent consumers might like to see him being supported by a luxury brand,” he said.

“The upsides are not so great, but the downside could be catastrophic,” he said. “Brands should stay away from the political game and focus on building customer relationships, period.”