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PORTS: Luxury Brand Case Analysis

Read the case "PORTS: China's Walk on the Global Luxury Fashion Boulevard," by Gerald Yong Gao, Jiangyong Lu and Hung-Gay Fung from the Asia Case Research Centre at the University of Hong Kong.

(1) What are the characteristics of a luxury brand? How do marketers segment the luxury goods market and what is the implication for PORTS?
(2) How has PORTS implemented its corporate strategy in the last two decades?
(3) What accounts for PORTS's success in the Chinese market? What are the risks that PORTS is exposed to?
(4) a) Describe luxury consumption behaviour in Western developed countries (eg, USA, UK) and in Asia, particularly China.
b) In view of the global luxury consumption pattern, what suggestion could be given to the management of PORTS?
(5) Discuss the independent family brand management model and the multi-brand model adopted in the luxury goods industry. What can PORTS learn from these business models?
(6) What are the social issues and criticism levelled against the luxury industry? What are their implications to PORTS?

Solution Preview

(1) What are the characteristics of a luxury brand? How do marketers segment the luxury goods market and what is the implication for PORTS?

Luxury goods are those made for people with wealth using materials and resources that are more expensive. Often handmade, sewn, or built, these brands bring to mind elegance and quality through reputation. A luxury brand is inclusive of all products under the brand name.

Consumers require those brands as a means of showing success, elitism, and status symbols. Marketers identify those with means and money and create goods that appeal to their wants, if not their needs. This means, the company has to know and anticipate the wants of the consumer and what resources and materials will appeal to those consumers. The company will also have to build a reputation of quality and expensive consumption for the target market, marketing their product as rare, individual, and unable to be duplicated.

(2) How has PORTS implemented its corporate strategy in the last two decades?

It moved to areas that had excellent business and tax incentives. The company built its target market by taking the unknown for Chinese consumers and informing, educating, and supplying them with goods that were popular in the west. This built their market and their reputation for the brand.

The company also employs vertical integration with manufacturing, designing, marketing, distribution and retailing under the same umbrella. This is the first of such companies in international fashion. As important, it is the first luxury goods company to employ vertical integration. All of the company's goods under its brand are made entirely in China.

(3) What ...

Solution Summary

The characteristics of a luxury brand is determined. The expert examines the accounts for PORTS' success in the Chinese market.

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