8. Do Luxury Pricing Decisions Create Price Continuity?

Previous research on luxury has been mainly directed towards understanding the nature of luxury, the luxury consumer behavior, and branding luxury goods. While a high price is commonly referred to as one defining characteristic of a luxury brand, little research may be found in the field of pricing luxury brands. Even less research on luxury pricing is based on empirical evidence. In this article the authors present findings on luxury pricing decisions from a large-scale survey of managers of 114 luxury brands. They introduce luxury-specific pricing decisions including long-term vision of price, rigid price discrimination policy, price-volume stability, and rigid price promotion policy. The positive effect of these components on luxury price continuity is hypothesized and empirically tested. Results indicate that luxury pricing decisions impact luxury price continuity while not yet being applied by a considerable number of luxury brands examined.