Abstract

This paper discussed how to understand the price of a luxury good from BPM perspective. BPM provides us a comprehensive framework to explain the pricing mechanism of luxury goods. Based on BPM, an index (IVDI) was compiled to probe how much the price of a luxury good relies on the utilitarian reinforcement. IVDI also provides profound implications to marketers when they promote different luxury goods. Different parts of BPM are linked together, as a whole they will influence a customer’s entire buying process.

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