Synopsis Topic: effect of Financial Value on Purchase of Luxury Brands With regards of Demographic Variables. Introduction: Today, luxury is available not only to the elites and the rich but also to the masses. The meaning of luxury has changed a lot over the last few decades. Earlier, luxury was connected with smaller things like wines, cars, garments and watches. Now people have higher disposable income and they want to buy luxury brands to satisfy their personal needs and aspirations. Hence luxury can be associated more with emotional and experiential value (Kapferer&Bastien, 2008; Aaker, 2009; Yeoman &McMahon-Beattie, 2010; Siri Merethe Knag, 2012; Heine, 2012; Brun&Castelli, 2013; Hannah Koller, 2014; Bhanot et al., 2014, 2015; Sunghyup …show more content…
(2009) developed a luxury value model consisting of four main key dimensions of luxury value perception. The first one refers to the financial value of the product. This relates to its premium pricing on account of good quality and symbolic value. The second factor is the functional value of the product. This relates to the utility of the product to satisfy customer needs and requirements. It covers attributes like uniqueness, usability and excellent quality. The third dimension is the individual value of the product. This shows the personal orientation of the consumer towards luxury products. Luxury products help the consumers to express their identity, experience pleasure and show their success and achievements. The last dimension is the social value of the product. This shows that people buy luxury products because they want to be a part of the elites and get their admiration and want to distance themselves from the masses that do not possess these products. They want to attain prestige in society and do not want to buy those brands which the ordinary people can afford. This shows attributes like conspicuousness, prestige value and snob value. Yongjun Sung et al. (2015) have developed a theoretical framework for understanding the dimensions of luxury brand personality and a reliable and valid scale that measures these dimensions. Financial value of luxury …show more content…
In this study, primary data has been collected through self – administered questionnaires in order to investigate the research questions. Questionnaires are the main means of collecting quantitative primary data in marketing research (Malhotra, 2006). The present research includes the measurement of several constructs like dimensions of luxury value with rating scales in a survey questionnaire. Primary data has been collected using the probability sampling method and a self-administered questionnaire distributed to the respondents. The questionnaire has three sections. The first section explores the participants‟ opinion about luxury products, their awareness and purchase of luxury brands and the factors responsible for buying luxury brands. The second section of the questionnaire used existing scales used by Wiedmann et al. (2009) in their study “Value-Based segmentation of luxury consumption behaviour” for the financial dimension of luxury value. The third section asked for the participants‟ general demographic information including location, level of education, gender, age group, occupation, marital status and monthly income. To measure the underlying dimensions of consumers‟ luxury value perceptions, in this study we have used already existing tested measures (Tian et. al., 2001; O‟Cass& McEwen, 2004; Tsai, 2005; Wiedmannet. al., 2009) and generated various items based on the literature
People are often deceived by some famous brands, which they will buy as useless commodities to feel they are distinctive. People require brands to experience the feeling of being special. People spend their money to have something from famous brands, like a bag from Coach or Louis Vuitton which they think they need, yet all that is just people’s wants. Steve McKevitt claims that people give more thought on features or brands when they need to buy a product, “It might even be the case that you do need a phone to carry out your work and a car to get around in, but what brand it is and, to a large extent, what features it has are really just want” (McKevitt, 145), which that means people care about brands more than their needs. Having shoes from Louis Vuitton or shoes that cost $30 it is designed for the same use.
Veblen’s work was, and continues to be, quite controversial; however, his dissections of human behavior as it relates to social structure and consumption were far from inaccurate. Interestingly enough, it seems that his theories have even become increasingly accurate over time, as proved by the way conspicuous consumption and “Veblan effects,” have both played a significant role in changing not only the luxury fashion industry as a whole, but also in changing the image and symbolic nature of the luxury good.
Prosperous and opulent consumers seem to have a weakness for luxury jewelry. Affluent consumers are more likely to purchase quality products that last
Coach Inc. is a highly acclaimed entity known for producing and selling handbags along with several other products at a price significantly lower than its competitors. Indeed, while a $128 purse appears to be a steep cost, it is more attractive than a Dolce and Gabbana handbag valued at $1,695. Such has been the Coach strategy: produce “accessible luxury,” appealing to the sector which hardly considers purchasing luxury wear by creating products with the same quality as other competition but a lower accompanying pricetag. In other words, Coach follows a focused low-cost strategy that concentrates on a narrow consumer segment with offering lower costs than competitors. This strategy has proven beneficial in earlier years (i.e. late 1990’s)
Kapferer, J., & Bastien, V 2009, The luxury strategy: break the rules of marketing to build luxury brands. London: Kogan Page.
For one, luxury can be defined through good health. For another, luxury can be defined through comfort. To many, luxury is defined through lavish possessions such as cars or jewelry. Regardless of how we perceive luxury, there is a journey behind how we achieve it. Cartier produced an exquisite commercial to celebrate the brand’s history. With the worldwide icon, the leopard, we went through the odyssey of Cartier’s history. The commercial started with a leopard statue of diamonds and jewels coming alive which symbolized the birth of the legacy of Cartier, the start of the odyssey. Then we start watching the leopard visit significant places of Cartier’s history: China, India, and France. All these places are important to the luxury industry. After the journey across different continents, we finally arrive in Paris where Cartier was founded, where
The high pressure luxury brand industry has evolved over the last few decades from a small and selective to a multibillion dollar arena offering significant potential and growth opportunity for the luxury brands that compete within its realm. With many luxury brands competing for over $225 billion (The Economist, 2009) in revenue each year it is easy to see how strategy plays an important role.
On the otherhand, South Korea is on the fit in stage which means they use and consume luxury brands to show their status, wealth to the other people in their environment. Japan is in the fifhth stage of “ The spread of Luxury Model” which is named as a “a way of life”. (Chadha and Husband 2006: 46). Therefore, Japanese people have high expectations from luxury brands according to the characteristics above.
However, when looking to create a luxury brand, one must go beyond what is required of an ordinary brand, to create something of high value and therefore high prices. So instead of just having brand values, it should have brand beliefs, as this will create a stronger emotional connection with its customers. It should aim to go beyond having a logo, but rather a set of distinguishable icons and the brand’s points of sale needs to be somewhere that connects with its customers and becomes something of a pantheon among other retail outlets. Similarly the customer segmentation should have role reversal, so the customers want to buy their products. Luxury brands should instead of actively promoting their advantages over their competitors, never push the customers into buying their products, thereby offering mystique and letting the customers make the value creation. Lastly, a true luxury brand not only offers products but rather a way of life, allowing them to branch out over several product categories, into every aspect of their customer’s
For several decades, as if, a typical undergraduate dream has been characterized with few major steps – getting prestigious high education, taking or buying a diploma, and consequently becoming a successful rich careerist with intuitively main goal to consume as much as possible in order to boost one’s utility at highest potential level. In this way of thinking, development of personal individualism and pursue of human values are left behind the curtains. Everything that can be seen on the scene of our being is mass consumerism, which slowly, gradually, but surely is transferring us into a hedonistic consumer society. According to an article in European Journal of Marketing, “A consumer society is defined as one directed largely by the accumulation and consumption of material goods. The term "consumer society" is used in a pejorative sense, coming from the perception that such a society will inevitably be hedonistic. It is the search for instant gratification that we traditionally associate with hedonism….”(41 Issue: 2007). In our way to gain deep pleasure, we are over purchasing items and gadgets which once were thought to be extreme luxuries. Most of the times, we are interested in what kind of IPhone we possess, whether to buy a tablet or a laptop, are we are driving more expensive and fancy car than the others, what is more fashionable – a pair of Armani jeans or a pair of Dolce and Cabaña trousers.
By 2002, Moet Hennessy Louis Vuitton was the world’s largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.
-Status symbols: Sophisticated customers who value the distinctive, exclusive collection seem to value the corporate-branded version of luxury. –Philip Martiz, chairman of the board
“Despite worldwide softness in the sale of luxury goods, LVMH has cemented its position as the world’s largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide” (Hazlett C. 2004). That is why in its mission they state to represent the most refined qualities of Western “ art de vivre” all around the world. Their objective is to be the leader in the luxury market, continuing to transmit elegance and creativity. This poses some major challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to achieve it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why.
Brand offers superior quality of the service to the customer’s expectation and satisfaction. Furthermore, people are much attached to the branded products, as majority of the people purchase the branded products with the belief that brands show their status and life style in the society. And also because they believe that they are purchasing quality when purchasing branded product. As duration of stay creates impact of brand on consumer behaviour, so verification of brand image, brand loyalty and personality should be considered as the significant factors in this regard. It can also be said that there is need to improve the product of a particular brand so that the impact of brand on consumer behaviour is more effective in comparison to the existing scenario. The study also reflects that the product features are very essential for consumers. Advertising plays a very important role in achieving growth for any product or brand. The right media for advertising products and services should be chosen to gain customer attention.