marketing and branding


The other day, I read a post on Looking Feeling Smelling Great, a facebook group of and for perfume lovers, about fake perfumes that enter the markets.

The issue is an issue and more and more we see cheapies entering the market. Some of the cheap, heavily discounted fragrances are the real thing, some are fake.

The real thing: Some discounted luxury fragrant goods get into the western discount markets at a lower price than what the retailer buys for. How come? These are often goods coming back from markets such as the middle eastern markets or Russian markets where the goods did not sell. The discounter there can still sell with a small profit to a discount retailer in the west. This is called the grey market, where high end goods enter on dubious ways on the shelves. In the end, it of course makes you wonder why you paid 250$ a while ago when you can get the same now for 50$.

The fake ones: Faking goods only makes sense if the value of the goods is out of proportion compared to the production costs. See Vuiton handbags or Adidas shoes. Production costs are minimal. The price you pay is for the brand name, the blingbling factor. In the world of perfumes, it is the same. Some perfume goods are easier to fake; if a brand uses a standard bottle: Super easy.

Anyhow: When I read the comments, I was puzzled. Puzzled because I realized that still today some perfume lovers think that because a product costs 250 or more $ it MUST be expensive to make, contains expensive raw materials etc. etc.

Beyond a certain level, pricing is a marketing decision and has little to do with ingredients. You can bottle 15% pure rose absolute or Sandalwood from Mysore at 15% (edp) into a great flacon, pack it and decorate it and the production costs and distribution factors and middle men etc do not justify the prices we see in haute perfumery (expensive niche).

But back to the fake and grey market issues. I could have sold hundreds (thousands) of bottles in the mean time to middle east markets. No month without a query from a distributor from the region. I do not sell there, except for Saudi Arabia where I am working closely with a retailer that I trust. I am maybe a bit too suspicious, but still….

Why did I not sell, although I could have made an easy $?

Because I do not want my products to end on a grey market.

The same is true for tauerville. No blingblingville.