Eeshan Sawant

and 1 more

This study investigates market differentiation strategies within the luxury perfume industry and their economic impacts on brand value through an Exploratory Data Analysis (EDA) approach. In a highly competitive market, brands employ strategies beyond mere fragrance, emphasizing brand experience, packaging, and marketing to enhance perceived value. Understanding the economic impact of these strategies is vital for gaining a competitive edge and commanding premium pricing. The research utilizes Optical Character Recognition (OCR) to extract ingredient lists from perfume bottle labels, converting physical label information into digital data. This digitized data is then matched with a predefined cost table to determine the cost of each ingredient, providing insights into the cost structure of perfumes.By calculating the cumulative cost of ingredients, a benchmark for comparing production costs with retail prices is established, highlighting the added value from branding and marketing efforts. Comparing these costs with retail prices offers a direct measure of brand value, indicating the premium consumers pay for perceived value. Significant price differentials point to strong brand value, reflecting effective marketing, premium packaging, and robust brand reputation. Graphical representations, such as bar graphs and pie charts, facilitate understanding of the economic dynamics, revealing patterns and trends in brand value.The study identifies key drivers of brand value, including marketing strategies, premium packaging, and strong brand reputation, which justify higher retail prices and emphasize the successful implementation of market differentiation strategies. The findings underscore the importance of strategic market positioning, enabling luxury perfumes to target niche markets and sustain competitive differentiation. This research provides valuable insights for companies to make informed strategic decisions, leveraging brand value for higher profit margins and sustained market differentiation.