In the world of luxury products, brands have usually priced their items using the value-based pricing strategy. The price of their products was in line with the demand for the products. As an example, luxury brands have typically priced their products at 25% to 40% higher in Asia than they would in Europe. But with the world so interconnected now, a new way of pricing luxury products has taken hold.
The movement of “harmonized pricing” has taken hold in many luxury brands like Chanel, Burberry, and Cartier. Under this pricing strategy, a product would cost the same all over the world. Consumers are no longer willing to pay extra for the same products. Rather, they are price comparing and making trips to countries with lower prices to purchase their items. By using the harmonized pricing method, luxury brands have been able to combat consumers' price comparing while protecting their brand and preparing their products for the e-commerce space.
“Harmonized pricing” was able to hit a few birds with one stone for luxury companies. It helped luxury companies fight the market of resells, where consumers would purchase items in Europe at a lower cost and resell the item in Asia at a mark-up. It also helped the brand’s image and trust with consumers, where consumers felt that the brand was consistent and fair. Lastly, it helps prepare the brand's product for e-commerce, so that there is no price disparity between the stores and online.