The advertising expenditure for the average luxury brand is 5-15% of sales revenue, or about 25% with the inclusion of other communications such as public relations, events and sponsorships.
A luxury brand or prestige brand is a brand for which a majority of its products are luxury goods. It may also include certain brands whose names are associated with luxury, high price, or high quality, though few, if any, of their goods are currently considered luxury goods.
Luxury cars costing over US$100,000 (as of 2007) can be considered as "ultra-luxury cars". Examples include the Rolls-Royce Phantom, Maybach 57, Bentley Arnage, and Toyota Century. High-end sports cars which are targeted towards performance rather than luxury are not usually classified as ultra-luxury cars, even when their cost is greater than US$100000. The history of a brand and the exclusivity of a particular model can result in price premiums compared to luxury cars with similar features from less prestigious manufacturers.
LVMH (Louis Vuitton Moet Hennessy) is the largest luxury good producer in the world with over fifty brands, including Louis Vuitton, the brand with the world's first fashion designer label. The LVMH group made a net profit of €8.1 billion on sales of €42.6 billion in 2017. Other market leaders include Richemont and Kering (previously named PPR).
A rather small group in comparison, the wealthy tend to be extremely influential. Once a brand gets an "endorsement" from members of this group, then the brand can be defined as a true "luxury" brand. An example of different product lines in the same brand is found in the automotive industry, with "entry-level" cars marketed to younger, less wealthy consumers, and higher-cost models for older and more wealthy consumers.
Many of these luxury saloons are the flagship for the marque and therefore include the newest automotive technology. Several models are available in long-wheelbase versions, which provide additional rear legroom and often a higher level of standard features.
Examples of luxury saloons / full-size luxury sedans include the BMW 7 Series, Cadillac CT6 Genesis G90, Mercedes-Benz S-Class, Lexus LS, and Porsche Panamera.
The next category of luxury cars is known in Great Britain as a luxury saloon or luxury limousine, and is known in the United States as a full-size luxury sedan or large luxury sedan. It is the equivalent of the European F-segment and German Oberklasse segment.
Despite the increased popularity of crossover models, luxury versions of traditional SUVs remain in production, often being badge-engineered versions of their non-luxury SUVs. Examples include the Lexus LX, Infiniti QX80 and Lincoln Navigator, which are the premium versions of the Toyota Land Cruiser, Nissan Patrol and Ford Expedition respectively.
Since the development of mass-market "luxury" brands in the 1800s, department stores dedicated to selling all major luxury brands have opened up in most major cities around the world. Le Bon Marché in Paris, France is credited as one of the first of its kind. Neiman Marcus, Selfridges, Lane Crawford, Isetan, Fortnum & Mason, Lord & Taylor, Harvey Nichols, Barneys New York, Saks Fifth Avenue, David Jones, KaDeWe, Harrods, and Holt Renfrew are also seen as some of the most influential and historical.
A luxury tax system does not have a limit to how much money can be spent on player salaries. However, there is a tax levied on money spent above a threshold set by the Collective Bargaining Agreement (CBA) between the players union and the owners. For every dollar a team spends above the tax threshold, they must also pay some fraction to the league. This system is used to discourage teams from greatly exceeding the tax threshold, with the goal of ensuring parity between large and small market teams.
Research data from the mid-2000s suggested that luxury SUV buyers did not consider traditional luxury cars (e.g. sedans and coupes), therefore the SUV is becoming the key to bringing new customers to the luxury dealerships.
Fashion brands within the luxury goods market tend to be concentrated in exclusive or affluent districts of cities around the world. These include:
The SUV models generated higher profit-margins than passenger cars, and car manufacturers began introducing new luxury SUVs during the late 1990s. SUVs such as the 1995 Lexus LX, 1997 Mercedes-Benz M-Class and 1998 Lincoln Navigator were the first SUVs produced by these luxury car brands. Some of these early luxury SUV models used a unibody construction, becoming part of the trend moving away from the body-on-frame construction traditionally used by off-road vehicles.
Another precursor to the luxury SUV is the Range Rover, which was released in 1970. It was the first road-going vehicle to have a permanent four-wheel drive system, split tailgate, clamshell bonnet and continuous waistline (in the same vehicle). The Range Rover had long-travel coil spring suspension and an aluminium V8 engine. Development of the Range Rover began in 1951.
Long before the luxury SUV segment became popular in the 1990s, the vehicle in this segment was the 1966 Jeep Super Wagoneer, which was marketed at the time as a station wagon. It was the first off-road SUV to offer a V8 engine, automatic transmission, and luxury car trim and equipment. Standard equipment included bucket seating, a center console, air conditioning, seven-position tilt steering wheel, a vinyl roof and gold colored trim panels on the body sides and tailgate. By the late 1970s, optional equipment included an electric sunroof, The 1978 Jeep Wagoneer Limited was the spiritual successor to the Super Wagoneer and was the first four-wheel drive car to use leather upholstery.
During the mid-2000s, SUVs from luxury car brands grew at almost 40 percent in the United States to more than 430,000 vehicles (excluding SUV-only brands like Hummer and Land Rover), at a time when luxury car sales suffered a 1% decline, and non-luxury SUV sales were flat. By 2004, 30 percent of major luxury brands' U.S. sales were SUVs. Crossover SUVs became increasingly popular in the mid-2000s, and manufacturers also began to produce luxury versions of crossovers. The Lexus RX was the earliest luxury crossover on the market, and it has since been the best-selling luxury vehicle in the US. Some luxury crossovers are built on a platform shared with sedans or hatchbacks, for example the Infiniti FX is based upon the same platform as the Infinite G35 sedans and coupes. While early luxury crossovers released in the late 1990s have resembled traditional boxy SUVs, later crossovers, such as the Infiniti FX and BMW X6, have been designed with a sporting appearance.
In the mid 1990s, the SUV market expanded with new entrants. By the mid-1990s, the entry-level Ford Explorer and upscale Jeep Grand Cherokee were the market leaders for SUVs. The fastest growing sector of this market was for the so-called luxury SUVs, which included the Jeep Grand Cherokee ... the Grand Cherokee's allure: "This vehicle is proof you can have a true off-road vehicle without giving up luxuries and amenities" with the Jeep providing a crucial new intangible factor for buyers—image.
As of 2013 the trend continued as the number of luxury cars and SUVs shown expanded at the Shanghai auto show and plans were announced by both foreign and domestic auto manufacturers to introduce new models in China and increase production of larger cars.
Major global luxury brands like Mercedes-Benz, BMW, Audi, and Lexus have operations in China. Audi, which has dominated China's luxury car market for more than two decades, is the market leader in the luxury car segment, with China being Audi's second largest market in the world. However Audi's market share in this category is gradually falling as BMW and Mercedes-Benz are adopting new strategies to boost sales. According to data from Global Insight, Audi's market share in China decreased from 66% in 2004 to 42% in 2009, while the market share of BMW and Mercedes-Benz increased from 7% to 23%, and 9% to 16%, respectively. BMW is enlarging its current plant in China and building a second one.