Regional Approach to Luxury Market Segmentation: The Case of Western Balkans

Nature of the luxury brand requires limited market in order to maintain exclusivity. Individual countries in the Western Balkans are not lucrative per se, therefore, regional segmentation is needed in the case of luxury brands. Countries of Western Balkan, i.e. Bosnia and Herzegovina, Croatia, Serbia and Slovenia are all post-socialist, post-war countries currently going through major transitions.  Rather small markets are yet to be established in its final form politically, economically, socially and culturally and individually. Foreign investors and world’s leading companies are concerned mainly about the size of the potential individual market. The main idea of this paper is to analyze luxury consumption in the Western Balkans region in order to identify some consumption patterns and to describe the regional luxury consumer. Broad study among 800 respondents in four countries defines demographics and buying intent of the luxury consumers. Moreover, this study identified luxury consumer region-wide and helps luxury brand managers to target those small countries together as a rather significant market segment of approximately 20.000 consumers. The region that has shared similar historical and cultural facts proved to have similar or the same luxury consumption patterns. This paper has significant practical value for the luxury brand managers and their segmentation of the Western Balkan countries. They will decide much easier to target this region knowing that consumers are sharing the same lifestyle and preferences regarding the luxury consumption. Main limitation of the research is the average income of the sample. However, the top market segment is always difficult to reach with surveys, therefore, qualitative approach might be used in the further studies in this regard.