Do Luxury Brands Engage in Excessive Profiteering?
Luxury brands charge premium prices for exclusivity and heritage, often far above production costs. But how much of this price is real value, and how much is just marketing?
At a glance
Country
Global
Industry
Luxury Goods / Fashion
Case Focus
Profiteering, Ethics
Abstract
Luxury brands occupy a distinctive space in global commerce, where traditional economic principles do not always apply. Unlike most industries, demand for luxury products often grows as prices rise, reflecting the symbolic and cultural value attached to exclusivity, heritage, and craftsmanship. These products serve not only as functional goods but also as markers of identity, social status, and aspiration. Over the past decades, luxury fashion houses have refined strategies that blend artistry with business acumen, while also navigating shifting consumer expectations shaped by globalization, digital media, and heightened awareness of sustainability and ethics.
This case study examines the fine line between premium pricing and excessive profiteering in the luxury fashion sector, focusing on how leading houses justify extreme markups while facing growing scrutiny. Although these brands emphasize exclusivity, heritage, and craftsmanship, investigations and viral social media content reveal a striking gap between production costs and retail prices, raising questions about authenticity and ethics.
Photo by Laura Chouette on Unsplash
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