M a s t e r
T h e s i s
Thesis topic:
Loud, quiet, and silent branding and their influence on the motivations
of luxury consumption
Student:
Hélène de Haseth Möller
Student ID:
6085075
Thesis supervisor: Roger Pruppers
Diploma:
MSc Business Administration -‐ Marketing track (MSc BA)
Date:
11 February 2015
S
TATEMENT OF
O
RIGINALITY
This document is written by Student Hélène de Haseth Möller who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
A
BSTRACT
Traditionally, luxury has been linked to conspicuous consumption: wearing branded and status-‐ loaded goods in order to show status to others or to impress others. One of the simplest ways luxury brands have responded to this style of consumption is by producing heavily logoed products that carry high levels of status and which anyone can immediately recognize as a ‘luxury product’. Over the past years, however, luxury brands are changing their strategies and moving to less logoed and more qualitative, subtly branded, and understated luxury goods. Conspicuous consumption therefore becomes less evident since conspicuously branded products are less wanted and therefore status cannot be ostentatiously displayed. However, does this mean that conspicuousness motivation for luxury consumption has vanished? The objective of this research is to understand how different types of branding ranging from heavily conspicuous – also called loud – to no logoed – silent – branded products have an influence on the purchase motivation for luxury consumers and on their product attitude towards differently branded products. Manipulating logo size and typical designs will determine the type of branding the products. These products will be shown in the final experiment, which is a questionnaire in which the respondents are asked about, amongst others, their product attitudes, purchase motivations, and their luxury knowledge. The results reveal that there are three purchase motivations for luxury goods: quality, hedonic, and conspicuousness. Conspicuousness motivation does still play a role in luxury consumption, and is moderated by the type of branding used on products. Where previously logo size seemed to have an influence on conspicuous consumers, this research has shown that conspicuousness-‐motivated consumers prefer highly typical designs rather than large logos. Therefore conspicuousness motivation does still exist, also for less loudly branded goods, and even though logo size does not play a strong role in
conspicuous consumption, brands can respond to their consumer wants by producing products with highly typical designs.
T
ABLE OF CONTENTS
CHAPTER 1: INTRODUCTION ... 1
1.1 Luxury branding anno 2014 ... 1
1.2 Definition of luxury ... 2
1.3 Luxury branding from a consumer and marketing strategy perspective ... 3
1.4 Luxury branding: loud, quiet, and silent? ... 3
1.5 Contribution ... 5
1.6 Structure of the research ... 5
CHAPTER 2: LUXURY ... 7
2.1 The concept of luxury ... 7
2.1.1 Luxury defined ... 7
2.1.2 Veblenian luxury ... 9
2.1.3 New luxury ... 9
2.2 Luxury dichotomy ... 11
2.3 Motivations for luxury consumption ... 12
2.3.1 Functional value ... 12
2.3.2 Personal value ... 13
2.3.3 Social value ... 13
CHAPTER 3: LUXURY BRANDING ... 16
3.1 The distinctiveness of luxury brands ... 16
3.2 Brand elements ... 17
3.3 Brand logos ... 17
3.4 Design ... 18
3.5 Brand conspicuousness ... 19
3.6 Types of branding ... 19
CHAPTER 4: CONCEPTUAL FRAMEWORK ... 22
4.1 Motivations and product attitudes ... 23
4.2 Logo size, design typicality, and quality motivation ... 24
4.3 Logo size, design typicality, and self-‐identity motivation ... 25
4.4 Logo size, design typicality, and conspicuousness motivation ... 26
CHAPTER 5: METHODOLOGY ... 29
5.1 Research design ... 29
5.2 Stimuli requirements ... 29
5.3 Pre-‐test 1: qualitative pretest ... 30
5.4 Pre-‐test 2: quantitative pretest ... 31
5.4.1 Sample, data collection and data analysis ... 32
5.4.2 Results ... 32 5.5 Main study ... 36
5.5.1 Experimental design ... 37 5.5.2 Questionnaire design ... 38 5.5.3 Sample ... 38 5.5.4 Measures ... 38 CHAPTER 6: RESULTS ... 41
6.1 Sample Characteristics ... 41
6.2 Factor Analysis ... 42
6.3 Reliability Check ... 43
6.3.1 Product attitude ... 43 6.3.2 Brand attitude ... 44 6.4 Manipulation checks ... 45
6.4.1 Brand familiarity ... 45
6.4.2 Realism of products ... 45
6.4.3 Luxury of products and brands ... 46
6.4.4 Design Typicality ... 47
6.4.5 Logo size ... 49
6.5 Hypothesis Testing ... 50
6.5.1 Motivations ... 51
6.5.2 Motivations and product attitudes ... 52
6.5.3 Logo size, design typicality, and quality motivation ... 54
6.5.4 Logo size, design typicality, and conspicuousness motivation ... 54
6.5.5 Other significant effects ... 57
6.6 Additional analysis ... 57
CHAPTER 7: DISCUSSION ... 59
7.1 Interpretation of Results ... 59
7.1.1 Manipulation checks ... 59
7.1.2 Motivations and their effect on product attitude ... 60
7.1.3 Product Attitude ... 61
7.1.4 Logo size, design typicality, and product attitude ... 62
7.1.5 Branding, motivations, and product attitude ... 63
7.1.6 Different effects of motivations ... 64
7.2 Implications ... 65
7.2.1 Theoretical implications ... 65
7.2.2 Practical implications ... 66
CHAPTER 8: CONCLUSION ... 69
8.1 Summary and answer to the research question ... 69
8.2 Limitations and future research ... 71
REFERENCES ... 74
APPENDICES ... 77
Appendix 1: Questionnaire ... 77
Appendix 2: Results repeated measures ANCOVA ... 86
Appendix 3: Results manipulation checks ANOVA ... 88
Repeated measures ANOVA for Design Typicality ... 88
Repeated measures ANOVA for Logo Size ... 89
L
IST OF FIGURES
Figure 1: Hermès Kelly bag
Figure 2: Modelling motivations and product attitudes
Figure 3: Modelling logo size, design typicality, and quality motivation Figure 4: Modelling logo size, design typicality, and self-‐identity motivation Figure 5: Modelling logo size, design typicality, and conspicuousness motivation Figure 6: Quantitative pre-‐test design typicality ANOVA
Figure 7: Quantitative pre-‐test logo size ANOVA Figure 8: Design typicality ANOVA results Figure 9: Logo size ANOVA results Figure 10: Motivation histograms
Figure 11: Product attitude and quality motivation Figure 12: Product attitude and hedonic motivation
Figure 13: Product attitude and conspicuousness motivation Figure 14: Types of branding and conspicuousness motivation Figure 15: Additional analysis
8 24 25 26 28 34 35 49 49 52 53 53 54 56 58
L
IST OF TABLES
Table 1: Overview of the previous literature Table 2: Ten characteristics of luxury branding Table 3: Types of branding
Table 4: Quantitative pre-‐test stimuli requirements Table 5: Quantitative pre-‐test motivations reliability check Table 6: Items based on the previous literature
Table 7: Sample characteristics 1 Table 8: Sample characteristics 2 Table 9: Motivations factor analysis
Table 10: Reliability check product attitudes Table 11: Product attitude per scenario Table 12: brand familiarity
Table 13: Realism of products Table 14: Luxury of products Table 15: Luxury of brands Table 16: Design typicality Table 17: Logo size
Table 18: Repeated measures ANCOVA Table 19: Motivations and product attitudes
Table 20: Additional analysis repeated measures ANOVA
12 17 20 33 36 39 42 42 43 44 44 44 46 47 47 48 49 51 51 58
CHAPTER 1: INTRODUCTION
1.1
L
UXURY BRANDING ANNO2014
Over the past few years, there has been a clear shift in the use of logos for luxury brands. After a grand success in emerging markets such as China, Louis Vuitton – the most recognized luxury house in the world – has decided to try to restore its exclusivity by reducing its logoed products as well as opening fewer stores and focusing more on the quality of the products (Anaya, 2013).
Consumers of luxury brands in emerging markets have previously focused heavily on conspicuous consumption through logos but are now becoming more ‘true’ luxury consumers that appreciate uniqueness, quality and “understatement in luxury items” (Anaya, 2013). Luxury brands are
therefore now reducing the logo size on their products to prevent dilution of brand status (Lawson, 2013) and to regain exclusivity. Lawson (2013) even suggests that brands with a smaller logo can charge higher prices for their products; this is further supported by the fact that luxury brands actually do charge more for quieter items that have subtler brand marks on their products – see example below (University of Southern California, 2010). Moreover, Han, Nunes, & Drèze (2010) find that some consumers pay a premium for goods that not everyone recognizes as a luxury product.
As luxury brands are increasingly using quiet branding on their products, they are focusing more on the quality and details than on logos (Anaya, 2013). Without obvious logos or brand symbols it is more difficult to signal status and some have said that conspicuousness in luxury consumption is coming to an end (Kapferer, 2010). More and more luxury consumers are ignoring logoed products and are becoming more appreciative of discrete luxury, highlighted by unique, sophisticated and subtle products (Philips, 2014).
According to Kapferer & Bastien (2009) luxury however, has two components to it: “luxury for oneself” and “luxury for others”. Luxury for oneself highlights the personal value that luxury has, the
Loud product: Louis Vuitton Neverfull MM, monogram canvas, € 855
Quiet product: Louis Vuitton Neverfull MM, Epi, € 1,390
pleasure one receives from consuming luxury. Luxury for others, on the other hand, refers to the social aspect of luxury; it refers to the desire of belonging to a social group or portraying status through luxury consumption.
Nowadays, the trend is that consumers show less and less logos to show their status or to belong to a group, but rather seem to express themselves through “details, exquisite materials and things that are not so identifiable (Shi, 2011). Consumers want to be “in the know versus in the show” (Anaya, 2013). It seems that luxury for others is making way for luxury for oneself; however, at the same time, Shi (2011) suggests that “anonymity is the key to being recognized”.
Historically, luxury is linked to social structures and, today, luxury still remains a “signal of latent social stratification” (Kapferer, 2010). Even though logos have made room for quiet details, anonymity now seems to be the new way to visibly consume; conspicuousness has not vanished.
1.2
D
EFINITION OF LUXURYThe dual definition of luxury for oneself and luxury for others seems to prevail. Over and over again luxury has been defined in different ways, yet, this duality remains common among most
explanations. Several authors have also included functional value in their concept of luxury, which can be thought of as the attributes that provide personal or social benefits. Hanzaee et al. (2012), for example, include functional value as one of the luxury value dimensions, next to social and individual value. In this model, functional value stems from uniqueness, usability and quality value (Hanzaee et al., 2012). Other authors describe functional value as the benefits and utilities of the product
(Wiedmann et al., 2007); this value is ascribed to a product’s superior performance and quality. It seems evident that the product’s benefits satisfy some personal needs at either a materialistic or hedonic level (Hanzaee et al., 2012; Vigneron & Johnson, 2004). Hedonic value can be described as a positive emotional response by consumers which is associated with feelings of happiness and
pleasure. Beyond satisfying certain hedonic needs, luxury can also be used for self-‐expression (Bian & Forsythe, 2012) by either making yourself stand out from others or extending self-‐identity through luxury products (Hanzaee et al., 2012; Vigneron & Johnson, 2004).
The social dimension of luxury value perception can be defined as being “related to the perceived utility of individuals acquire by consuming products or services recognized within their own social groups” (Wiedmann et al., 2007). This dimension includes perceptions of conspicuousness, status, and prestige (Hanzaee et al., 2012; Vigneron & Johnson, 2004; Wiedmann et al., 2007). Specifically, conspicuous value of luxury brands refers to signalling to what social group one belongs to through luxury consumption (Hanzaee et al., 2012).
1.3
L
UXURY BRANDING FROM A CONSUMER AND MARKETING STRATEGY PERSPECTIVEEvidently, a lot of research has been done in defining luxury in terms of functional, individual and social value. Specifically, most of this research focuses on the consumer perspective, emphasizing luxury brand perceptions, purchase intention and its underlying motivations. In 2004, Vigneron & Johnson created dimensions of perceived luxury based on non-‐personal and personal perceptions, including items such as conspicuousness and uniqueness, as well as hedonic and extended self, respectively. Wiedmann et al. (2007) focus on similar items but named them financial, functional and social perceptions and researched these as antecedents of luxury brand perception. Similarly, Hung et al. (2011) researched social context, individual perception and vanity and their influence on luxury brand purchase intention. Unlike these research papers, Bian & Forsythe (2012) go beyond the antecedents of luxury brand purchase intention, and concentrate on the underlying motivations of purchase intention; namely, need for uniqueness and self-‐monitoring.
At the same time, research has also been done from a marketing strategy perspective, focusing on consumer segmentation. Hanzaee et al. (2012) used luxury value perceptions in order to segment consumers; similar to the more consumer-‐oriented research the value dimensions they used are functional, social and individual. Han, Nunes, & Drèze (2010) propose another classification of consumer segments; this taxonomy is based on wealth and need for status. According to these authors, different consumer segments use different type of luxury brands according to the loudness of brand marks. They use these loud or quiet brand signals to signal to others, whether it be
everyone or a select group, that they belong to a certain group.
1.4
L
UXURY BRANDING:
LOUD,
QUIET,
AND SILENT?
Overall, the research in this field can be classified into a more consumer-‐oriented view and a firm-‐ oriented view, however research on the interaction between these two is limited. With heavily logoed brands and recognizable luxury items – i.e. loud brands and products – the social aspect seems very evident, as others will instantly recognize the luxury brand or product. Even for brands that use quieter brand marks, according to Han, Nunes, & Drèze (2010) consumers use these marks to signal to like-‐minded that they are ‘in the know’ and belong to a certain group. But what happens if the luxury brand or product is not recognized at all? Is there such as thing as silent branding, on top of loud and quiet branding? The purpose of this research is therefore to discover: how the type of luxury branding – loud, quiet, silent – influences the role of functional, personal and social luxury brand purchase motivations on product attitude. Since the common definition of luxury includes a social component, how, and does this exist for silent brands?
Prior to answering this question, certain concepts and relationships need to defined and explained. This research will therefore start by answering the question: what is luxury branding and how is it different from any other type of branding? What are the components of luxury brand perception? And how these play a role in the purchase motivations of customers? As brand prominence plays a role in recognition of luxury goods, and therefore their ability to signal status, the importance of brand recognition for luxury brands will be examined. Specifically, the phenomenon of loud, quiet and silent branding will be discussed. To understand consumer motivations and consumer behaviour in luxury brand consumption, it will be examined how consumers react to logos and other brand marks and how this influences their purchase intention. With these explanations and definitions the research question will be answered.
As stated previously, this research will look specifically at ‘silent’ luxury brands and how social and conspicuous consumption plays a role for these brands; and will use loud and quiet brands as a frame of reference. This research will not attempt to define luxury in a new way; rather it will delve deeper into the antecedents of luxury perceptions for specific types of branding, namely loud, quiet and silent. These specific types of branding will be defined according to the size of logos used on products and the typical designs and patterns used on these products. Moreover, this research will be done from a consumer perspective, explaining how consumers are motivated by three different ‘luxury value perceptions’ in the purchase of different type of luxury brand. Even though this might provide key insights for luxury brand managers, this research does not attempt to explain marketing or branding strategies. Other authors have approached status and conspicuous consumption of luxury from a more strategic approach, and have identified consumer segments in which status signalling is lower than in others (Han et al., 2010; Hanzaee et al., 2012). This paper will not try to establish whether or not this consumer segment exists, but rather explain it from a consumer behaviour perspective.
1.5
C
ONTRIBUTIONHan, Nunes & Drèze (2010) have proposed a classification of consumer segments for luxury goods according to wealth and need for status. They suggest that there are different segments according to the consumers’ preference of consuming heavily branded products versus more quiet products and their need to be associated to or separated from certain social groups. This paper will attempt to explore this topic further by understanding what role status plays for consumers for products that are not recognizable because of the absence of logos and typical designs. Whereas Han, Nunes & Drèze (2010) focus on well-‐known brands with ‘loud’ and ‘quiet’ products, this paper will contribute by focusing especially on ‘silent’ products. It will contribute to the understanding in consumer behaviour in luxury brand consumption and how perceptions of unknown luxury brands and products have an influence on purchase intention. By combining this consumer behaviour and marketing strategy perspective, the contribution is clearly in overcoming the gap that exists between these two perspectives in luxury branding research. Moreover, understanding what ‘luxury for others’ means in the context of others not knowing the luxury brand and product will extend Kapferer & Bastien (2009) and many others’ definitions of luxury into a new context.
From a managerial perspective, this research will contribute to the understanding of the underlying motivations of consumers in purchasing different types of luxury brands. Having a superior
understanding of your consumers, their preferences and why these preferences exist, managers can adapt their marketing and branding programs to fit their consumers’ needs. Whether consumers prefer to be more or less recognizable, or recognizable by subtle details, and knowing the underlying reasons hereof helps marketing managers implement marketing programs that fit their customers. The booming success of the luxury market in emerging markets luxury brands initiated with a ‘conspicuousness’ strategy (Doran, 2014), however as these customers are developing their tastes and developing a need to differentiate, this strategy will no longer hold. Ultimately, brands need to understand the more evolved wants and needs of their consumers. This will help marketers
understand how their brand appeals to consumers, and to use suitable marketing strategies for these consumers.
1.6
S
TRUCTURE OF THE RESEARCHThe remainder of this article is organized as follows: first, the relevant literature on this topic will be discussed. The literature overview will start by identifying what the concept of luxury means and identifying the different dimensions of luxury. Then, the review will delve deeper into the underlying motivations of purchasing luxury and look at how customers react to different types of branding – from loud to silent brands. In the fourth section, based on the relevant literature a conceptual model will be established and hypotheses generated. In the fifth section, the methodology of the research
will be explained. In the sixth section, the results of the research will be explored and analysed. Lastly, this paper will finish with a discussion of the results and their relationship to the hypotheses and a conclusion will be made of the implications and further directions of the research.
CHAPTER 2: LUXURY
2.1
T
HE CONCEPT OF LUXURY2.1.1 Luxury defined
Luxury comes from the Latin word ‘luxus’, which has been defined by the Oxford Latin Dictionary in 1992 as “soft or extravagant living, (over-‐)indulgence, and sumptuousness, luxuriousness, opulence” (as cited in Dubois, Czellar, & Laurent, 2005). Even though this definition covers some features of luxury, it does not provide a clear and concrete concept for the word ‘luxury’. Due to the many definitions of luxury in dictionaries and academic papers, Kapferer (2012) has defined luxury in terms of commonalities between these different definitions; these are related to: price, hedonism, heritage and culture, exclusivity, human services, and people. Moreover, considering the numerous research papers that have been written on luxury three additional commonalities can be identified, namely, subjectivity, quality, and superfluousness. These different commonalities are key to luxury brands, define how luxury products are different from any other consumer goods, and therefore will be used to define luxury from a consumer perspective. At the same time, the defining characteristics are also related to consumer motivations of buying luxury brands. For this reason, the following section will explain the characteristics of luxury that are specific to its definition – that is, subjectivity, price, superfluousness, heritage, and human services – and not its motives for consumption. The definition of luxury related to its motivations for purchase will be further explained in section 2.3 – that is, hedonism, exclusivity, social marker, and quality.
Common among many definitions of luxury in academic journals is the aspect of subjectivity. Luxury is a very subjective concept as it is judged by a customer’s own perceptions of what is and is not considered a luxury; it depends specifically on a customer’s wants and needs (Bian & Forsythe, 2012; Wiedmann et al., 2007). What is considered a luxury for one person does not necessarily mean that is a luxury for another, this can be due to a customer’s feelings and perceptions or due to the person’s environment; as such, luxury is highly context-‐dependent and subjective (Vigneron & Johnson, 2004).
Another commonality found among the many definitions of luxury is the high price. Luxury is often priced much higher than the non-‐luxury options for the same product (Dubois et al., 2001; Vigneron & Johnson, 2004). Since luxury brands charge a premium for their products and people are willing to pay this premium, it is clear that this is related to the fact that consumer benefits derived from luxury consumption exceed luxury products’ functional utility (Kapferer, 2012). Since these consumer benefits go beyond the functional benefits, it is implicit that luxury products are not a necessity for
life: luxury is by definition superfluous (Dubois et al., 2001). In other words, luxury products are not a necessity for survival (Amatulli & Guido, 2012).
Dubois et al. (2001) suggest that luxury products become pieces of art; this might be due to their unique heritage, culture, and their underlying stories (Kapferer, 2012). Luxury brands are commonly built on heritage or legends (Kapferer & Bastien, 2009). Louis Vuitton, for example, is related to its heritage because he, Louis Vuitton, was originally an artisan making luggage, bags, and accessories for the wealthy and the brand still continues to have these items at the core of their business. Luxury brands often use production processes based on the brand’s history, incorporating tradition, fine craftsmanship, and unique know-‐how; and allowing them to produce goods that embody a brand’s culture and heritage.
Moreover, luxury brands are often exclusive; one way this is achieved is through highly exclusive and controlled distribution. Key to this controlled distribution is that a luxury brand uses their mono-‐ brand stores to convey their image, heritage and culture (Amatulli & Guido, 2012). Human services at the distribution channels are extremely important for luxury brands as they are used to convey the brand’s image and the ‘feeling of luxury’. Additionally, human involvement along the whole ‘product to market’ process is what differentiates luxury brands from any other type of brand (Kapferer, 2012; Vigneron & Johnson, 2004).
Furthermore, luxury brands are exclusive and provide great quality products, providing luxury consumers a positive hedonistic experience and making it a social marker. These aspects will be further explained in section 2.3, in which the motivations for buying luxury brands will be discussed. To illustrate the definition of luxury, the legendary Hermès Kelly bag is shown in the figure below along with relevant explanations for each characteristic of luxury.
Figure 1: Hermès Kelly bag
1Fashion 101: The Making of Hermès Kelly and Birking Bags. (2013, July 10). Retrieved August 1, 2014, from
Antwerpsex: http://antwerpsex.wordpress.com/2013/07/10/fashion-‐101-‐the-‐making-‐of-‐hermes-‐kelly-‐and-‐ birkin-‐bags/
In order to fully grasp the concept of luxury in the context of consumer behaviour, it is important not only to understand the specific characteristics of luxury, but also to understand how luxury
consumption has been perceived traditionally and how it is perceived in modern day society.
2.1.2 Veblenian luxury
Traditionally, luxury was intricately linked to conspicuous consumption. Luxury was the visible result of social stratification (Kapferer & Bastien, 2009). One denoted his or her social ranking in society through signalling with expensive dress and leisure activities (Husic & Cicic, 2009). Certain types of dress were reserved for the kings, priests, and noble men, whereas other types of clothing were worn by the commoners (Kapferer & Bastien, 2009). At this time, social classes were established by birth, or by ordainment (Han et al., 2010); the higher the social class the wealthier one was.
Wealthier people could afford more expensive clothing, but they could also excessively consume food, drink, narcotics, services, amusements, and much more (Veblen, 1899).
To control the order of the social classes, there were sumptuary laws to ensure that every social class dressed according to their status. Despite these laws, at the turn of the 18th century, the lines
between the different social classes began to slowly disappear and the sumptuary laws were
abolished (Han et al., 2010). Social class was no more solely a result of birth and ordainment, but was also based on achievements (Han et al., 2010). Along with achievement came wealth, and this could be displayed through the consumption of certain goods.
According to Veblen, wealth is not what shows others that one has status; rather, what is bought with wealth and publicly exhibited is what confers social status (Veblen, 1899). Publicly exhibiting the use of wealth for owning superfluous products is what can be defined as conspicuous consumption (Veblen as cited in Han et al., 2010).
Ever since luxury exists, wealth and status have been closely tied to it. Because of this, Veblen’s theory of conspicuous consumption has always been seen as the main driver of luxury consumption; however, today, it is also acknowledged that the more personal, instead of only social, aspect of luxury consumption influences consumer behaviour with regards to luxury products (Wiedmann et al., 2007).
2.1.3 New luxury
Compared to the time when Veblen created the theory of conspicuous consumption (1899), today’s world is much more open and is often called a ‘classless society’ (Kapferer & Bastien, 2009). Today, however, people still have the need for social recognition and use luxury consumption to show society to what social group they belong to. One the other hand, however, another social aspect of
luxury consumption has emerged, namely wearing products to show one’s identity (Husic & Cicic, 2009; Kapferer & Bastien, 2009).
In today’s consumption culture, people still use material items to show others to what social group they belong (Nelissen & Meijers, 2011) and luxury goods are the most visible way to show success and achievement (O’Cass & McEwen, 2004). According to this, luxury brands can therefore be used to show to what group one belongs to and paying a premium for these types of products is likely to be motivated by status gains. Status can be defined as a relative higher position than others in society as perceived by society (Nelissen & Meijers, 2011). The image on the left, for example, shows how Yuppies dress in a certain way; they use visible items to signal to others that they are ‘young urban professionals’. Luxury items can serve the same function; consumers who purchase luxury items can use this to communicate to others that they can afford luxury. Next to this sense of achievement that luxury brands convey to customers, luxury brands are used in creating a unique, individual identity – luxury brand consumption is seen as and extension of the self (Dubois & Duquesne, 1993; Kapferer & Bastien. 2009). As cited in Atwal & Williams (2008, p. 340), Dumoulin says that “’today’s luxury’ is about a celebration of personal creativity, expressiveness, intelligence, fluidity, and above all, meaning”. And nowadays, everyone can ‘express’ him or herself using luxury products; whether this are unaffordable luxury items for the extremely wealth (e.g. a Louis Vuitton Neverfull MM for €1,390) or accessible small luxury goods (e.g. a Louis Vuitton key chain for €135).
Overall, it seems that even though status is no longer gained by birth or ordainment, society stills deems that luxury brands are a means of signalling status to others, no longer simply showing one’s wealth but one’s success. Taking the example of Yuppies again, this social group dresses to show that they are a ‘Young Urban Professional’ and they are successful in doing so. During the time of Veblen’s theory of conspicuous consumption society had different social classes defined by birth, these classes were vertical, ranging from the wealthy to the poor. These social layers were defined by birth rather than by achievement. Nowadays, however, we live in a more ‘classless society’ in which social layers are defined horizontally rather than vertically; where we have classes such as hipsters and Yuppies. For this reason, wealth is no longer the main way of showing status, but rather
(Johnson, 1984)
status is shown through one’s success in a certain social group which is communicated through dress, as is for example the case with Yuppies.
2.2
L
UXURY DICHOTOMYAs stated previously, luxury has two sides to it: luxury for oneself and luxury for others (Kapferer & Bastien, 2009). On the one hand luxury has a very personal aspect. Kapferer & Bastien (2009) refer to this a ‘luxury for oneself’, suggesting that this is strongly related to the hedonic benefits that one gains from the consumption of luxury. Vigneron & Johnson (2004) refer to this side of luxury as the personal perception of luxury and Amatulli & Guido (2012) refer to this as ‘internalised luxury’ – “luxury as individual style”.
On the other hand luxury is for others; luxury can be seen as a ‘badge’ used as a marker for social status (Kapferer & Bastien, 2009). Vigneron & Johnson (2004) describe this type of luxury as ‘non-‐ personal luxury’ perceptions; similarly, Amatulli & Guido (2012) call this aspect of luxury
‘externalised’ – “luxury as a social statement”.
Along these two aspects, a third side of luxury is often mentioned in the relevant literature, namely, functional value (Hanzaee et al., 2013; Wiedmann et al., 2007). These three sides of luxury are described in the literature as ‘dimensions of luxury value’, ‘antecedents of luxury brand perceptions’, ‘perceptions of luxury that affects consumers’ decision-‐making’, ‘reasons of luxury consumption’, ‘motives for luxury consumption’, and so forth (for example, Amatulli & Guido, 2012; Vigneron & Johnson, 2004; Hanzaee et al., 2012). This paper will refer to these three aspects of luxury as values. For the purpose of the paper, the term value is used to describe the value that consumers attribute to a specific luxury dimension – functional, personal, and social – which, in turn, is the motivation of consumers to choose certain luxury products.
In the previous literature these values have been extensively defined and explained (see Table 1 for an overview). These previous constructs will be combined into a single framework for the purpose of this study. Even though, in the literature, each construct has been defined differently and
categorized, the values described are not mutually exclusive and are difficult to put into one category – functional, personal or social. In the following section the values will be explained and critically examined before coming to the constructs that will be used in this research.
Table 1: Overview of the previous literature Amatulli & Guido (2012)
Motives behind luxury consumption
Vigneron & Johnson (2004) Motives for consumption of luxury brands
Hanzaee et al. (2012) Key dimensions of luxury value perception Wiedmann et al. (2013) Antecedents of luxury brand perception Externalised luxury • Ostentation • Materialism • Superfluousness Non-personal perceptions • Conspicuousness • Uniqueness • Quality Functional value • Usability • Uniqueness • Quality Functional brand perception
• Superior quality and
performance Internalised luxury • Individual lifestyle • Hedonism • Culture Personal perceptions • Hedonic • Extended self Individual value • Materialistic • Hedonic • Self-identity Financial brand perception • Rareness • Exclusivity • Prestige price Social value • Prestige • Conspicuous
Social brand perception
• Prestige
• Conspicuousness
• Status
2.3
M
OTIVATIONS FOR LUXURY CONSUMPTION2.3.1 Functional value
Key to luxury products is that they are expected to have superior quality over their non-‐luxury alternatives. This can be described as the functional value of luxury (Hanzaee et al., 2012; Wiedmann et al., 2007). According to Hanzaee et al. (2012) functional value can further be dissected into three dimensions: namely, uniqueness, quality and usability value. ‘Uniqueness value’ considers the exclusivity factor of luxury; luxury is superior to its non-‐luxury counterparts because it is unique and not everyone can access it. Accessibility to luxury goods should, by definition, be limited in order for a product to be considered a luxury (Dubois et al., 2001; Hung et al., 2011). For this reason, luxury goods are often limited in supply (Vigneron & Johnson, 2004), not mass-‐produced (Hung et al., 2011), and sold via controlled distribution (Kapferer, 2010) in order to evoke the exclusivity associated with luxury (Phau & Prendergast, 2000).
Additionally, luxury is often unique because it is partly or wholly handmade. Since luxury is partly handmade by highly skilled artisans and made with “delicacy and expertise” (Dubois et al., 2001), the quality is assumed to be superior. Moreover, luxury brands are often tied to premium quality derived not only from this fine craftsmanship but also from the use of exceptional materials (Dubois et al., 2001; Hung et al., 2011; Husic & Cicic, 2009). This superior quality gives the luxury consumer reassurance of the product’s outstanding performance and ‘technical superiority’ (Hanzaee et al., 2012; Vigneron & Johnson, 2004); this is termed as ‘quality value’. Lastly, superiority of luxury products lies in its ‘usability value’ since it satisfies consumer needs in usage situations fundamentally better than its alternatives.
The strongest indicator for functional value of luxury brands is the quality of luxury products. Luxury goods are by definition of superior quality; for this reason, this construct of functional value will be
used in this paper. For luxury to qualify as luxury, however, luxury cannot just outperform its competitors on functional value; luxury must provide benefits beyond the functional, one of them being hedonic benefits.
2.3.2 Personal value
Hedonism is defined as “the doctrine that pleasure or happiness is the sole or chief good in life” (“Hedonism”, 2014). According to Vigneron & Johnson (2004), the psychological benefits, including hedonic benefits, derived from luxury consumption are what distinguish luxury from non-‐luxury products or counterfeits. Kapferer (2012, p. 47) refers to this aspect of luxury as the “qualitative hedonistic experience”; Dubois et al. (2001) take this one step further and suggest that luxury products become pieces of art and as such provide a highly hedonistic, multi-‐sensory, experience. Nowadays, consumers are not only motivated to purchase goods in order to satisfy functional (or utilitarian) benefits but are more and more concerned with satisfying their emotional needs (Amatulli & Guido, 2012). Luxury does this and has a high “perceived hedonic value” (Vigneron & Johnson, 2004); the beauty of a product, for example, can provide pleasure to a luxury consumer (Kapferer & Bastien, 2012; Vigneron & Johnson, 2004).
The previously described uniqueness construct can also satisfy a customer’s hedonic needs by fulfilling the ‘need for uniqueness’ (Vigneron & Johnson, 1999). At the same time, however, uniqueness is an attribute of the product itself, hence a functional aspect. Moreover, the need for uniqueness is related to a person’s need to be different from others, hence this construct will be attributed to ‘self-‐identity value’ as described in the next section.
According to Vigneron & Johnson (2004) the ability to satisfy not only functional benefits but also psychological benefits is unique to luxury products. Some of these benefits have been described in this section and are related to the ‘self’; additional to these benefits, luxury goods also provide social benefits, which are related to ‘others’. These will be described below.
2.3.3 Social value
Social value of luxury products plays a fundamental role in consumers’ decision-‐making processes. As Amatulli & Guido (2012, p. 190) state: “the purchase of luxury products is stimulated by the desire for social approval; it is based on ‘social factors’ and influenced by interaction with others and by the opinion of other people”. Luxury can be used to portray one’s identity but also to associate or dissociate with other members of society (Vigneron & Johnson, 2004; Wiedmann et al., 2007). Even though luxury is, for a large part, in the eye of the beholder, luxury is also largely determined by one’s environment and culture (Kapferer & Bastien, 2009). As stated in Chapter 2, luxury has always
been closely related to the display of status; whether this is a Louis Vuitton monogrammed bag for one person or a Hermès Kelly bag for another, the recognition by others is what sets these items apart from non-‐luxury products.
2.3.3.1 Self-‐identity value
Luxury has a “self-‐identity value” (Hanzaee et al., 2012). Luxury consumers seek out products that match their self-‐image or their aspirations; they use luxury products to strengthen their own identity or to extend their identity (Amatulli & Guido, 2012; Hanzaee et al., 2012). Even though this construct can be placed in personal value because of the personal need to show one’s identity, this value is placed under social value since people consume luxury brands to signal their identity or aspirational identity to others.
One of the main drivers of self-‐identity value is the usage of luxury brands to extend one’s self-‐ identity. The concept of extended self suggests that people regard what they own as integral to their self-‐identity (Belk as cited in Vigneron & Johnson, 2004). When consumers feel that a luxury product image and their inner self are congruent and coherent with each other they can integrate the symbolic meaning of that brand into their own identity (Amatulli & Guido, 2012; Hanzaee et al., 2012); and by these means extending or even enhancing their self-‐identity.
Another driver of self-‐identity value is the motivation to signal group membership. Consumers not only choose product to show their self-‐identity, but also to show their identity with regards to group membership, be it associative or dissociative (Han et al., 2010). Vigneron & Johnson (2004) label this effect ‘social referencing’: classifying or distinguishing oneself in relation to others. The possession of luxury goods can satisfy this need to belong by symbolically signalling to which group one does or does not belong (Hanzaee et al., 2012).
The last driver of self-‐identity is the need for uniqueness. The uniqueness, rarity, and exclusivity of luxury items contributes to the symbolic value the brand has in consumer’s perception (Hanzaee et al., 2012). Many consumers want products that are difficult to obtain, and thus avoiding the consumption of goods that everyone consumes (Vigneron & Johnson, 2004). This is related to the motivation to dissociate from others and certain people will refuse to consume certain luxury products because many others consume it (Vigneron & Johnson, 1999).
2.3.3.2 Conspicuousness value
The most evident social value of luxury consumption is luxury as a status symbol. Luxury is used to show that ‘I am one of the happy few’. Additional to the hedonic benefits derived beyond the mere functional benefits of a luxury good, is the prestige a consumer derives from the consumption of
