In the present scenario, there is a thriving market worldwide for fake luxury goods, even in India. Not only for luxury items but also for anything and everything which is catching attention among consumers. Cheap imitations is killing the market. That's why all those advertisements like "Kill Piracy and buy originals CD's & DVD's" for music and blah blah. But still the fashion labels won't budge. They will infact keep their prices high if not keep increasing it.
From the above, 3 possibilities come out for this type of action:
- The big "Exclusivity factor" for their customers which the famous fashion brands like Louis Vuitton, RL etc bank upon.
- The power of selling more of less (at least this is what is perceived among customers).
- Consuming for the purpose of showing off among fellowmen.
So, there are many considerations to keep in mind while pricing like the demand curve, cost, environmental factors, differentiation, profit, revenue targets etc. In addition to supporting the realities of the marketplace, pricing is information that supports the product positioning. When buying something close to the the high end of the possible price range, the enjoyment we derive from the product signals another kind of social information that says -- because I'm worth it.
That's why no wonder we always keep all these brands on the top of our mind. And now the question is how companies from other categories will learn this trick, especially in country like India where the saying goes "Saasta hain toh accha hain" i.e. the cheaper, the better.