Sales Essay

272 WordsAug 4, 20122 Pages
3.0 Bargaining power of buyers The main customers for luxury fashion industry are individual customers. 3.1 Number of customer in the market According to the growth of the luxury fashion industry in recent years,it is considered that eh number of customer in this market is high. The compound annual growth rate for clothing, accessories and luxury goods increased by 5.1% between 2004 and 2009 (Clothing,aaccessories and luxury good Retaling,2011). Also,in 2010,Hermes recorded an increase of 38% of sales in the rest of Asia including Australia (Hermes 2010) . The increase in the industry growth rate and Hermes sales prove that people, particularly the high and middle class, are continuing buying luxury clothes and the number of buyers is increasing. 3.2 Availability of substitutes There is no substitute buyer for the luxury fashion industry apart from individual customers. The reason for this comes from the high cost of the product. Since high fashion clothes are expensive, it fairly impossible for retailers to make any profit selling them back to another party. Moreover, buyers of luxury goods are not only looking at the product itself but also prefer to be treated specially and are looking for a high-class shopping atmosphere and opening a store in departments like David Jones,Myer or exporting will limit the ability of satisfying these particular requirements. Overall, the availability of substitute buyers is low. 3.3 Analysis Given that the number of customer in the market is high and the availability of substitutes is low,the bargaining power of buyers is moderate.

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