At what cost luxury?
How brands act in a downturn defines their pathway to success in the recovery
Don’t expect to see slashed-price sales for luxury goods and services during this downturn, as many high-end brands are using the current market conditions to set their benchmarks for pricing strategy and market position.
Lebua Hotels and Resorts chief executive Deepak Ohri said good times had caused a proliferation of ‘luxury’ brands that were now struggling through tougher circumstances.
But those that cut prices to increase customer levels would pay, he warned.
“If you are confident in your product and services then you don’t need to dilute the price – people will pay for quality,” he said.
“Once you go to the negotiating table you never know how low the price will go until the sale is complete. So the question is, do you want to go to the table, or do you want to hold onto your brand?”
And consumers were still
willing to pay for quality, he said.
“If you are used to going out six days a
week and now you are only going out one day a week, then you are not going to
compromise on quality because you have already compromised on the number of
visits,”
he explained.
“The brands that maintain prices are those that will take a lead when the market recovers.”
