The line jewelry brand concept is intended to offer products empowering and differentiating the customers from the crowd. Essentially, the product design is unique, very powerful and also flawless. The brand products’ objective is to please their clients by providing them with the best and luxurious product (Berthon et al., 2009). The focus is on establishing an outstanding jewelry line for potential investors. The line jewelry will be established in Italy since it is a strategic place whereby most of refined jewelry is produced. It is therefore essential for the company to retain its product image and also its reputation for high-quality goods. The company needs to be recognized as one of the best luxury goods company in jewelry production to gain some monopoly within the market. For optimal results, partnering with celebrities as well as the press is highly recommended (Karmark et al., 2016). In essence, the production of uniquely customized engagement rings, as well as other important jewelry pieces to famous people and celebrities will provide a most important asset to the brand. This paper presents a business plan for a line luxury jewelry brand to be launched.
There have been a big trend in luxurious products consumers shifting towards the experiential and digital trends. Currently, a lot of luxury brands have emerged and tend to realize the need for reinventing themselves consistently. A decade ago, the fashion industry was dominated by Gen X and baby boomer consumers. Today, the market has been dominated by the popular millennial generation who have combined their purchasing decisions with some values. In this generation of the internet revolution, social patterns of consumers, as well as their influences, have significantly increased in different platforms. The millennials have been gradually growing in the luxury brand consumer market making up about 30% of luxury customers, a population that is expected to increase to 50% by 2025 (Sanguanpiyapan & Jasper, 2010). This account to one of the reasons why it is appropriate to establish a line jewelry brand.
The origin of this business idea was stimulated by social factors such as the financial status of the customers. The customers of jewelry products are wealthy and prefer showing it off. These customers like items that are rarely found in the market and are of premium quality. These customers mostly own unique products that were personally designed for them. Moreover, these customers tend to attend private events that most average people dream to attend. These events include; NY Fashion Week, Met Gala, and Rihanna’s private birthday party amongst other events (Lerma et al., 2018). These customers are brand ambassadors on their own, thus indirectly promoting sales of luxurious brands such as jewelry. They tend to motivate the new generation to limitlessly spend money on luxurious products and enjoy life. These customers appear to be both socially and professionally successful and popular. Therefore, they act like role models who are admired which in turn stimulates the need to establish a line jewelry brand to maximize profits. They also inspire several customers both younger and those of their age to save money to afford luxurious jewelry just to taste what the kind of lifestyle they are living is like.
Additionally, the luxurious jewelry purchase trend has significantly changed with the sales spreading evenly and this contrasts the previous sales that used to be made. This warrants the need to implement this business idea of line jewelry to capitalize on the purchase trends that tend to favor jewelry products. Conscious consumers have increased and tend to purchase luxury goods regardless of their high prices. Moreover, there is a growing demand for luxurious products in Japan, North America, China, and Western Europe (Lamb, 2010). This creates room to reap higher profit margins as well as to attract young consumers. The luxury jewelry market relies on the trend in global tourism. Specifically, Chinese consumers tend to make more purchases of luxury products when traveling. Therefore, there is a need to implement this business idea and also make Chinese targeted promotions. Furthermore, the luxury industry market has opened new concept stores in rapid growing tourism hotspots. There have been increased airport shops as well as duty-free shops because of tourism which makes it favorable for the line Jewelry business to be implemented. It also appears that semi-finished jewelry is capable of satisfying different customers’ demands by having unique and personalized products.
Cultural factors such as gender, religion, and income play an important role in consumer purchase on luxury products. Financial aspects such as resale, discounts, and prices have shown to greatly influence luxury brand use (Risitano et al., 2017). Most importantly, luxury products rely more on brand reputation. Some cultures consider luxury products as a sign of wealth. Additionally, women tend to be more concerned with luxurious products than men. This is a good indicator that can shape the brand’s target market.
Currency devaluation has a big impact on global tourism which influences luxury sales on personal goods involving jewelry sectors. The low exchange rate of the Euro is beneficial to luxury product sales. The increasing employment rate as well as the declining oil and fuel prices influences luxury products purchases. Moreover, the price deflation has minimal impact on suppliers, therefore, lowering the cost of raw materials (Serdyuk & Votchenko, 2019). Low operational cost on labor and energy leads to increased profits and margins. Therefore, the low operational cost makes it favorable to implement this business idea. The availability and increased investment in high technology increase efficiency and attract more profit which makes it suitable to start up the line jewelry brand.
Luxury products such as jewelry have maintained a steady growth attracting high rates of revenue. In the United States, the slow holiday season tends to lead to declined tourism in Europe, the Middle East instability as well as China’s downturn resulted in slow growth rate in the luxury products market (Dauriz, Remy & Tochtermann, 2014). Moreover, the persistent economic conditions weaknesses in BRIC countries, as well as unfavorable currency exchange rates, also affect the luxury product demand. Geographically, the decline in tourism due to the strength of the dollar as well as local demand has influenced the luxury products market, while the renaissance of tourism has caused positive spending in the United States. Currently, the European market is suffering from slow tourism due to recurrent tourism and also new visa necessities (Risitano et al., 2017). Nonetheless, the local consumption of luxury products in various countries contributes to the decrease in tourist spending. Although mainland China has an increase in the luxury market, Hong Kong significantly weakens the general growth of the luxury products market in China. Japan appears to have high growth in the luxury products market. Although, changes like decreased tourism, strong yen as well as local thrifts indicates the likelihood of luxury products slowing down.
It is anticipated that the luxury products market revenue will grow by $280 to $290 billion, a growth of 3% by 2022. By then the local spending is likely to increase in the United States. In China, the middle-class customers will be about a third of the luxury consumers globally by 2022. The young generation is continuing to increase purchases of luxury products as compared to Baby Boomers. Moreover, the new consumers of generation X and Y will be about fifty million. The generation Z, are perceived to be potential customers as young consumers are expected to account for 75% of the luxury industry worldwide (Serdyuk & Votchenko, 2019). The aging populations make up the biggest part of the luxury industry. Aging individuals are increasing which shows a sign of increased luxury product purchases.
With regards to distribution, the retail channel makes up 40% of the luxury products market, as airports and airports make up 7 and 8% of the sales respectively (Salem & Chaichi, 2018). Although progressive technological development disintegrates the boundary between offline and online stores. Luxury brands have adopted the digitization innovation in their stores. There has been a rapid growth in e-commerce and m-commerce.
Consumption of luxury brands is growing and consumers are expecting meaningful shopping experience. Today, luxury brands are offering personalized services satisfying the needs of the customers. Customer service is also backed up with real-time information like purchase history, browsing history and also an individual’s preferences. More focus is being placed on user-generated content which facilitates brand identities as well as loyal customers’ engagement (Xu, 2017). The mobile generation results in the replacement of interactive applications by mobile-synced websites. The big trend in the luxury industry has been smart fashion whereby more companies are collaborating with tech organizations. Most luxury brands have implemented high technologies like AI and virtual reality applications to offer advanced services. There is also an increase in the sale of male luxury products as male desire is progressively increasing in various parts of the world. This depicts the shift that is likely to occur in the sale of male luxury products being more than that of women thus affecting the luxury brands’ portfolio from targeting only females to extending to male consumer products.
The luxury jewelry market is divided into affordable jewelry and high-end jewelry. It is predicted that the annual jewelry global sales will reach $250 billion by 2022 with a 6% growth rate. United States’ hard luxury, as well as jewelry sales, were about $74.7 billion as the jewelry market recorded a 7% growth (Wen et al., 2012). Based on statistics, the United States remains to be the largest jewelry market, preceded by China and Japan. The greatest changes are that the Chinese market has decreased while that of Italy has increased. Just like other industries, the jewelry market has made a significant shift toward e-commerce. The international revenue also has increased significantly. The online jewelry market has grown making it a potential market for this line jewelry brand. Branded jewelry has become popular in developing and developed nations. There is a positive outlook of jewelry as demand has increased. The present jewelry market is consisting of national retail brands as well as small companies (Hsu et al., 2014). The United States is regarded as the largest market for luxury jewelry while Japan is the second. China is considered to be the largest market for the hard luxury industry. These markets can be considered to be suitable markets for this line jewelry brand.
The luxury jewelry market has many players who can be potential competitors to this line jewelry brand. They include; Pandora, Blue Nile, Mikimoto, Tiffany&Co, Harry Winston, DeBeers, Bvlgari, David Yurman, Swarovski as well as Cartier. Most of these brands have been operating for a long time and have grown significantly. Moreover, there are high-end apparel brands that have also introduced jewelry like Hermes, Dior, Chanel, Gucci, and Louis Vuitton (Candra & Abadi, 2018). All these brands are potential competitors to the new jewelry brand. The majority of these brands are competing with each other and definitely will stage a competition with a new brand. Due to that, this brand needs to find a way to differentiate from the other brands in the form of innovative designs. Possible future consumers could be brands that have high-end apparel that introduces jewelry lines like Issey Miyake, Olympia Le-Tan, Philip Lim, Charlotte Olympia, and Mansur Gavriel. Essentially, these are trending and popular brands most of them specializing in one area like handbags.
Unique features of the new brand
The concept of the new brand is to provide products aimed at empowering and differentiating customers from a crowd. The brand is uniquely designed to be flawless and powerful. The brand also aims at pleasing and meeting the wants of the clients by providing the best luxurious products. Jewelry will be available in different markets and maintaining the product image is essential (Ruggiero, 2017). High quality has to be maintained in the production of the items. The brand aims to be recognized globally as a top luxury products company for jewelry to gain a monopoly in the jewelry market. It is highly recommended that the company makes a partnership with celebrities and push the brand through press media and social media. The brand also seeks to provide customized engagement rings as well as fine jewelry to celebrities and other customers.
Target consumer profile
Demographically, the brand targets male and female customers aged between 25 and 40 years. Possibly, some of the customers can be younger or older than this age bracket although this is the main age range the brand targets. Psychographic; the brand’s customer is excited with life, eccentric happy and also sexy. They like unique and beautiful products. They like traveling, frequently attend events and also love exotic items. The core interest is in fashion and art (Kapferer & Bastien, 2012). They love both nature and luxury. They are set for today and always ready to sacrifice for their luxury lifestyle. Geographically, most consumers are from the United States, Europe, and Japan. Ultimately, the market will expand to other parts of the world.
One of the main competitive advantages of this brand is its brand recognition. It is a popular brand that has a strong following as well as loyal customers including celebrities, millennials, and also loyal customers. It has a wide range of prices and different materials and designs that customers can choose when purchasing. Moreover, it has faithful and effective employees who ensure that proper customer service, and brand reputation. The brand can develop unique and creative advertisements, showrooms as well as marketing pieces for revealing its collections (Liu, 2011). It is also capable of establishing a good partnership with main retailers as well as with celebrities. The brand can capitalize on the endorsement by celebrities and major retailers. The availability of an e-commerce site is another advantage for the brand. Several people nowadays shop online and the number keeps increasing. Even when they are not shopping they tend to do some research on these e-commerce sites. With all these advantages, launching this brand becomes quite easier.
Risk factors vs. success factors
Due to the increasing demand for branded jewelry, jewelry specialists and high-end brands have developed branded jewelry line. Currently, the luxury jewelry market has high competition which is the greatest risk for this brand. In launching this new brand, there is a need to have adequate resources when it comes to marketing and manufacturing (Sanguanpiyapan & Jasper, 2010). Suppose the brands seek additional funds by borrowing money from the band, the debt for the brand will increase. The supply of high-quality raw materials is quite hard. Diamond and colored gemstones are fragile materials. Moreover, it is challenging to find a reputable mining and manufacturing company since it significantly influences the quality of the products.
Nonetheless, launching a luxury brand entails some advantages. A possible success element is changing consumer preference. Conscious consumers opt to buy luxurious jewelry as a form of investment. Jewelry is not a temporary product. From day-to-day, most women present themselves with jewelry as a gift. On the other hand, men as slowly gaining interest in fashion as they tend to purchase luxury jewelry and apparel (Sanguanpiyapan & Jasper, 2010). In the United States and China, the demand for jewelry is high and the sales are anticipated to increase. In comparison with fashion jewelry, luxurious jewelry attracts more profit to the company meaning that the company should anticipate a healthier financial status by launching this luxury jewelry brand. Techno logical development also allows the company to offer convenient shopping options in form of m-commerce and e-commerce as well as an interactive shopping experience for the customers through digital platforms.
The organizations can invest 4% ($2 million) of its total revenue into marketing and the budget subdivided into digital and traditional marketing. It should also focus on digital marketing entailing online and mobile channels which is more effective than traditional marketing. The company should invest in digital public relations, digital advertising as well as social media advertising taking up, 30%, 20% and 16% of the overall marketing budget respectively.
Long term strategy
The long term strategy for the new jewelry brand is to continue creating. The jewelry line should be flexible to extend a seasonal collection or to develop new means for customers personalizing their products as well as making it more special. Due to the high demand for fine jewelry products the brand needs to participate in this division of fashion to attract new customers and to be even favored by the existing customers (Chastel et al., 2019). The brand will continue to use online retailers and traditional retailers in promoting this brand. The main objective of this brand is to establish good luxury items for their consumers as well as expanding the market reach to attract more customers.
To sum up, this brand is appropriate and suitable to be implemented. The jewelry line brand is expected to bring more profit margins. This business plan is anticipated to be successful because the product design is unique, very powerful and also flawless. The brand products’ objective is to please their clients by providing them with the best and luxurious product. The significant trends in consumer trends in luxurious products shifting towards experiential and digital trends make this business viable and sound to be launched. Luxury products such as jewelry have maintained a steady growth attracting high rates of revenue. Therefore, it is appropriate to launch this brand to increase revenues. Consumption of luxury brands is growing and consumers are expecting meaningful shopping experience. This jewelry brand is, therefore, designed to uniquely meet the customers’ expectations. The brand also has some competitive advantages which make it viable. It is capable of developing unique and creative advertisements, showrooms as well as marketing pieces for revealing its collections. It is also capable of establishing a good partnership with main retailers and also with celebrities. The brand can capitalize on the endorsement by celebrities and major retailers. The availability of an e-commerce site is another advantage for the brand. With regard to all these competitive advantages, brand concept and brand positioning, it can be termed that this business plan is viable and appropriate to be launched.