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Mechanism of Luxury Brands Formation and Development: A Multiple Case Study of over 150 Year-Old European Top Luxury Brands Li Fei, He Ximing, Hu Saiquan, Yu Chunling School of Economics and Management, Tsinghua University Abstract The number of luxury brands one nation owns marks the level of economic development and innovation. Given the fact that luxury brands are defined by their unique names, terms, marks, symbols, target customers, marketing positions, and all other marketing factors, it is extremely important to discover how luxury brands formed and developed during their development track. There is certain uniqueness in the formation and development process of luxury brands, however, there is rare research that can clearly describe the process or shed light upon the mechanism of luxury brands formation and development. The authors did an exploratory work and built a research framework of luxury brands formation and development. Through a multiple case study of 5 over 150 year-old luxury brands, we derived a theoretical framework about the mechanism of luxury brands formation and development based on their development track, concerning the following conclusions: (1) the consumption motivation (showing off and hedonism) and consumers of luxury brands emerged and evolved with the influence of the climate of luxury culture and consumption-equality law; (2) the climate of luxury culture, private-property-protected law and the evolving luxury consumption context produced the luxury brands creator and successors with certain characteristics, including origins, qualities and rights; (3) those brand owners characteristics determined their choices and behaviors concerning brand set up and extension, to be specific, it included perfection of extrinsic brand elements (names, logos and slogans) and management of intrinsic brand elements, including target customer selection, marketing position based on target customers, and the composition of 4 marketing factors, i.e. product, price, place and information. The authors suggested that 8 dimensions along 3 aspects collectively shaped the formation and development of the luxury brands. This study made its contribution on the theory of brand formation and also provides insights and guidance for the practice of local enterprises that are embarking on the journey of cultivating luxury brands. Key Words Luxury Brand; Brand Management; Brand Group; Case Study 70