Question

Why are luxury brands more likely to use non-price competition as a marketing strategy than price competition?

A.
Above a certain price point, cost is no longer important to consumers.
B.
Their brands are built more on being unique than being a good deal.
C.
Luxury industries have agreed to ban the use of price competition.
D.
At the higher end of the market, people are more likely to be looking for a bargain.

Answer 1

Their brands are built more on being unique than being a good deal.

Answer 2

B. Their brands are built more on being unique than being a good deal.

Step-by-step explanation:

Brand differentiation is about creating value (or the appearance of value). Most brands differentiate themselves on price, product offerings, or organization. For example, Dollar Shave Club entered the market by attacking its competitors on price and convenience.

Luxury brands, however, differentiate themselves by establishing some type of superiority through higher pricing. When we hear brand names like Louis Vuitton, Chanel, Gucci, Cartier, Rolex, Dior, Tiffany & Co., Burberry, Prada, and Lexus, we anticipate higher prices than their competitors but also expect authenticity, legitimacy, exclusivity, uniqueness, excellence, reliability, indulgence, or exceptional service.