The Paradox of Prestige: Why Luxury Brands Raise Prices During Economic Downturns

Jialu Xu

2025

Abstract

This paper discusses reasons that high-end luxury brands continue to raise prices during an economic slump. The study analyzes the intrinsic motivation and reasons behind the capacity of these brands to maintain high prices during economic downturn. By means of brand positioning, consumer psyche, supply chain forces, and market forces, this study con-cludes that luxury brands employ their position of exclusivity and prestige to justify their high prices. Their craftsmanship, uniqueness, and history as well as promotion generate value per-ception and attraction to high-net worth and aspirational buyers. This study concludes that the success of luxury brands in their high-pricing power is contingent upon the balance of ex-clusivity, consumer psyche, and supply chain strategy. One suggestion for the high-end luxu-ry brands is to continue to spend on brand history, craftsmanship, and digitalization, which could help maintain their customer base, market share and profitability during an economic slump.

Paper Citation

in Harvard Style

Xu J. (2025). The Paradox of Prestige: Why Luxury Brands Raise Prices During Economic Downturns. In Proceedings of the 2nd International Conference on Public Relations and Media Communication - Volume 1: PRMC; ISBN 978-989-758-778-8, SciTePress, pages 529-536. DOI: 10.5220/0013995600004916

in Bibtex Style

@conference{prmc25,
author={Jialu Xu},
title={The Paradox of Prestige: Why Luxury Brands Raise Prices During Economic Downturns},
booktitle={Proceedings of the 2nd International Conference on Public Relations and Media Communication - Volume 1: PRMC},
year={2025},
pages={529-536},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0013995600004916},
isbn={978-989-758-778-8},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd International Conference on Public Relations and Media Communication - Volume 1: PRMC
TI - The Paradox of Prestige: Why Luxury Brands Raise Prices During Economic Downturns
SN - 978-989-758-778-8
AU - Xu J.
PY - 2025
SP - 529
EP - 536
DO - 10.5220/0013995600004916
PB - SciTePress