Master Thesis
Product personalization and consumer based brand equity
in the case of luxury products
by
Ioana Silvia Panait
(Student no. 11087722)
Supervisor: Dr Marco Mossinkoff
University of Amsterdam
Faculty of Economics and Business
Marketing track
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Statement of originality
This document is written by Student Ioana Silvia Panait 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.
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Abstract
The evolving consumer demands have determined companies to constantly look for ways to attract, retain and involve consumers. In this rapidly changing market, product
personalization is slowly gaining more attention from both companies and consumers. From the point of view of companies, product personalization might mean losing their brand identity and image, while experiencing higher costs. On the other hand, it can also mean differentiation and getting closer to the real consumer needs and wants. Having this into consideration, this paper studies the impact of product personalization on the value of a company from the eyes of the consumer, meaning on the consumer based brand equity. This relationship is going to be studied for luxury products, as luxury brands are the ones selling unique objects with high prices that need justification, so product personalization is expected to increase the way they are perceived and their relationship with the consumers. Using an online questionnaire of 291 international respondents that has been analysed quantitatively, this research has found that product personalization increases consumer based brand equity, especially in the case of the loyalty, associations and perceived quality indicators. What is more, this impact of the relationship does not change for different product categories. The thesis ends with the managerial implications of the results, the limitations of the study and suggestions for future research.
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Table of Contents
1. Introduction ... 7
2. Literature review ... 9
2.1 Product personalization ... 9
Defining product personalization ... 9
Product personalization implications ... 10
Levels of product personalization ... 11
2.2 Brand equity ... 12
Defining brand equity ... 12
Brand equity indicators ... 14
2.3 Product personalization and brand equity ... 16
2.4 The luxury segment ... 18
Defining luxury goods ... 18
Personalization of luxury goods ... 19
Luxury personalization trade-offs ... 21
2.5 Conclusion ... 22
3. Conceptual model ... 24
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4. Research Design and Methodology ... 27
4.1 Method ... 28
4.2 Sample ... 28
4.3 Measures ... 29
4.4 Data collection procedure ... 31
4.5 Pilot study ... 33
5. Results and analysis ... 34
5.1 Analytical strategy ... 34
5.2 Results and Conclusions ... 36
6. Discussion ... 40
7. Managerial implications ... 44
8. Limitations and further research ... 46
References ... 48
Appendices ... 53
I. Questionnaire ... 53
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Table of Figures and Tables
Figure 1. Conceptual model ... 24
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1. Introduction
This thesis pursues to analyse the impact of product personalization, a process that is growing in importance, on consumer based brand equity, one of the most relevant measures for the value of a brand.
There is an existing dilemma for traditional luxury brands that want to maintain control of their image and, at the same time, to satisfy the rising demands of consumers (Piller,
Moeslein & Stotko, 2004). This has become particularly relevant as individuals have started to expect products that are tailored to their needs and which can become “their own”
(Okonkwo, 2007). That is why, product personalization in the case of the luxury segment is difficult to approach, and not many companies have decided to tap into it.
Through personalization, the consumer finds a clearer way to express his personality and can also find it easier to identify himself with the brand. This is why personalization might increase the value for the customer (Piller, Moeslein & Stotko, 2004). The luxury objects are by definition distinguishing, but through personalization, the products become even more special, making the customer feel more important, more valued. Nevertheless, this represents a problem for the brands that want to maintain a clear image of what they represent, and who are sceptical of putting this into the customer’s hand. As a consequence, product
personalization in the case of luxury products refers to adding the buyer’s initials and a few distinguishing elements, but at the same time maintaining the overall design and colour of the object in order to keep it easily recognizable.
This research contributes to the existing literature by filling the existent gap with insights on the relationship between personalization and brand equity, in the case of luxury goods. It
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provides a more comprehensive understanding of how personalization has an impact on brand equity and how it contributes to building a positive/negative associations towards the brand, for the consumer.
Furthermore, this industry is suitable as it involves a high price premium, so the brand equity for such kind of products is extremely important. This high price premium should reflect a higher product value in terms of quality, differentiation and rarity in the minds of consumers (Tynan, McKechnie & Chhuon, 2010). This being said, it would be interesting to analyse if product personalisation has an influence on consumer behaviour and consumer perceptions, by which brand equity is defined.Also, since it is an investment, the decision to buy such products represents a high involvement decision, so brand equity should be relevant.
The link between product personalization and brand equity is studied in order to understand the behaviour of luxury products consumers and, more precisely how to improve the
relationship with them, how to benefit from them and how to replicate the model in order to increase the company revenues.
It also broadens the theoretical research of Li, Li & Kambele (2012) about the luxury
segment, the perceived value customers have on luxury objects and how to manage the trade-offs companies make when deciding to personalize or not a product.
More specifically, this paper proposes the following research question:
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2. Literature review
The literature review has the purpose of defining the key concepts of the paper in order to build the basis of the research question and to clearly identify a gap in the existing literature. This chapter starts by analysing the existing literature on product personalization and brand equity separately, and then it continues with the link between the two concepts. Further on, the literature review continues with the inclusion of the luxury segment in the analysed relationship and its fit. This section ends up with a conclusion that highlights the existing literature gap on this topic and how it can be covered by this paper.
2.1 Product personalization
Defining product personalization
By defining product personalization, scholars have proved it has strong connections with marketing practices. Pine and Gilmore (1999) mention the fact that through personalization, the ego of the consumer is being gratified by modifying a standard product for him, and so, a whole new experience is created. Based on this, Moon, Chadee & Tikoo (2008), draw the conclusion that this means adding up benefits for the customers, which might result in a justifiable higher price. Accordingly, they offer their own definition for the personalization process by reporting it means “customizing some important attributes of a product or service and offering it online at price that is almost the same as or somewhat higher than that of a comparable standardized product” (p. 32).
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At the same time, many scholars use the term “mass customization” (Piller, Moeslein & Stotko 2004; Huffman and Kahn 1998; Squire, Readman, Brown & Bessant 2004) for the same process. This term is sometimes accompanied by “product individualization” (Riemer, & Totz, 2001).
On the other hand, there are other scholars that talk about personalization from the
perspective that it is mostly in the hands of the company and it is done through previous data collection (Arora et al. 2008), having the purpose of targeting the consumer, and that all the systems need to be adapted to the dynamics of the user’s online actions in order to be able to suggest “products of interest to the consumer” (Treiblmaier et al. 2004, p. 2). These articles make a clear distinction between personalization and customization. Both support the idea that customization is initiated by the consumers and it is driven by his specific requests (Arora et al., 2008; Treiblmaier et al., 2004).
Taking all this into consideration, this paper is going to use the term “product
personalization” to define the adaptations of products, made by companies in order to satisfy the needs of the consumers.
Product personalization implications
The process of personalization, like the one of customization, either online or offline, requires a strong interaction between the brand and the consumer. This interaction might prove to be problematic for the company that has to adapt its products to each consumer preference, in order to bring added value, and in the same time to have to give up on economies of scale and to experience higher costs.
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However, the complexity of this process can be well rewarded by the consumer. Randall, Terwiesch & Ulrich (2007) have proven that when the complexity of the user design is low, it can mean a higher fit between the consumer’s preferences and the final product, which might as well, result in a higher willingness to pay.
Furthermore, since consumers can communicate their values and personality through the brand, personalization is a clear and a more effective way to signal the status, as there is a higher congruence with the self, compared to the mass brands (Raimondo & Farace, 2013).
Among other implications, Riemer & Totz (2001) indicate the creation of a unique position, compared to the one of competitors, due to the perceived dissimilarities between products that make comparisons between products more distinctive.
Levels of product personalization
In terms of measurement, the paper is going to use a framework developed by Gilmore & Pine (1997) to illustrate different levels of product personalization. According to the authors, there are four approaches to “mass customization” (p. 95), related to product and
representation change. When both elements are present, there is a collaborative
personalization, represented by the cooperation of the designer and the consumer to the final look of the product. At the opposite side, there is the adaptive personalization, consisting of the alterations made to already existing standard products, where both of the elements are absent. The third approach is the transparent approach and represents the case where the products re adapted to match the needs. In this case, the product is changed but there is no representation change. The last approach concerns the change of the representation, meaning
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a special type of packaging according to the needs and wants of the consumers, it does not involve a change in product and is defined as cosmetic.
Taking into consideration the described framework, this paper is going to measure product personalization, thus it is going to use one out of the four approaches defined by Gilmore & Pine (1997), the one that implies a change in product, more specifically the transparent personalization.
2.2 Brand equity
Defining brand equity
In this study, the purpose is to talk about brand equity from the consumer’s point of view, meaning the consumer based brand equity, and how it influences preferences and intentions to purchase in the situation where the products are personalized.
The concept of brand equity has been defined by Aaker (1991) as consisting of five indicators: brand loyalty, name awareness, perceived quality, brand associations and the proprietary brand assets. However, only four out these five indicators refer to consumer perceptions, more precisely: brand loyalty, name awareness, perceived quality, brand associations. Keller (1993) supports Aaker (1991)’s findings and describes brand equity as “the differential effect of brand knowledge on consumer response to the marketing of the brand” (p. 1) and classifies the dimensions of brand knowledge as being brand awareness and brand image. This brand equity can be perceived by the consumer positively or negatively and it is directly connected to the associations the consumer makes with that particular brand. The article also mentions the reasons why brand equity is relevant to study, more precisely
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because it defines the brand value financially and because it is used strategically for marketing purposes.
Using Keller’s framework (1993), Krishnan (1996) builds up on the idea of using the analysis of past behaviours to measure brand equity, along with the interconnectivity of brand
associations in the mind of the consumer. A good example is how a brand name is capable of activating sets of associations and how this memory network is directly connected to the brand equity.
The concept of brand equity is further on studied by Yoo & Donthu (2001) who emphasize the fact that a brand name represents value added to the product. Additionally, the authors have summarized the 4 dimensions of brand equity: “brand loyalty, brand awareness,
perceived quality of brand, and brand associations” (p. 3), that have been suggested by Aaker (1991) and Keller (1993).
Cobb-Walgren, Ruble & Donthu (1995) have reported that “in the marketing literature, operationalizations of brand equity usually fall into two groups: those involving consumer perceptions (e.g., awareness, brand associations, perceived quality) and those involving consumer behaviour (e.g., brand loyalty, willingness to pay a high price)” (p. 26-27). In addition to this, it has been highlighted that attitudes are not enough to predict behaviour, and that is why, perceptions and actions have to also be considered.
In this thesis paper, brand equity is going to be defined according to Aaker (1991)’s
indicators of consumer based brand equity consisting of brandy loyalty, awareness, perceived quality and associations. This is the stepping stone and one of the most reliable measures for consumer based brand equity in the existing literature, which many authors have built upon and that is still valid nowadays.
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Brand equity indicators
This thesis considers the concept of consumer based brand equity according to the
classification made by Aaker (1991), comprised of four indicators. Brand equity represents the sum of dimensions that contribute to the value of a brand. It represents a form of leverage and of competitive advantage (Aaker, 1996).
Brand awareness
Brand awareness is also called brand salience and represents the ability of the brand to be identified by consumers according to the strength of the node created in consumer’s minds (Keller, 1993). According to Keller (1993), there are 2 levels of brand awareness, more exactly, brand recall and brand recognition. The concept of brand recall is stronger as it is represents the retrieving from memory of the brand and shows how strong a brand is in certain contexts, revealing what are the top of mind brands for a category. At the same time, the concept of brand recognition refers to a correct discrimination of a brand from the others. The same scholar stresses out the importance of brand awareness, as it is an influencer of the decision making process, regarding the brands existent in the consideration set. In the
absence of a high involvement and a strong attitude, it determines choice and, in the same time, it has an impact on the associations. This being mentioned, of utmost importance is to make sure that consumers take into consideration the brand when they think about the product category.
Brand associations
In order to facilitate the decision making process, consumers make use of linkages between brands to anything that can be related to them (Low & Lamb, 2000). Such linkages are called brand associations and carry meanings related to attributes, benefits and attitudes of the brand
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(Keller, 1993). Also, according to Keller (1993), brand associations have different favourability, established according to how positively the brand is associated by the consumer, according to the quality and the quantity of the information that enters the consumer’s memory and its strength, influencing how accessible and easy to activate is. Furthermore, associations differ in terms of their uniqueness, more exactly how rare the links are with the brand and how much of those links are shared with other brands.
It is important for a brand to have strong, favourable and unique associations as they represent a differential advantage against competition, as it creates value and it influences purchase decisions (Atilgan, Aksoy & Akinci, 2005).
Perceived quality
This indicator of brand equity is a strategic tool for the company since it represents the way consumers think about a brand in terms of its quality. The brand evaluations are subjective and represent judgements about how good the brand is (Yoo & Donthu, 2001). In the same time, Keller (1993) mentions the fact that perceived quality is related to brand attitudes and beliefs about attributes and benefits, and that consumers form different kinds of expectations related to it. In consequence, even though the brand has different types of products of
different qualities, attributes and benefits, they may still perceive the products as having the same quality.
Perceived quality can be a premise for a high price and a higher positioning in the market and it is often taken into consideration in comparison to other brands (Aaker, 1996). Cobb-Walgren, Ruble & Donthu (1995) state the fact that perceived quality can be influenced through advertising along with usage experience.
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The concept of brand equity refers to the intent of the consumer to buy a brand regularly as a result of an attachment. This intention is considered to be loyalty when it comes as a first choice decision (Yoo & Donthu, 2001). According to Aaker (1996), prior purchase and usage are required in order to be able to achieve loyalty and also, the loyalty concept is highly influenced by the other three indicators of consumer based brand equity, awareness,
associations and perceived quality.
It is highly desirable for a company to achieve brand loyalty as it represents a major
advantage in front of competitors in terms of response and competition practices and a reason to have a higher price (Aaker, 1996). This does not only represent a regular intention to buy, it consists of a relationship between the brand and the consumer (Atilgan, Aksoy & Akinci, 2005).
2.3 Product personalization and brand equity
The assumption of this paper is that personalization increases brand equity, since product personalization creates additional benefits for the consumer by getting closer to his real needs and tapping into them.
Product personalization, does not apply in the same manner to all individuals. For example, Moon, Chadee & Tikoo (2008), have proven that the value customers place on
personalization depends on the cultural orientation, among other factors. The article is based on Hofstede's (1980) cultural dimensions as a framework, to measure the cultural orientation, and the major findings reveal that individualist countries have a higher tendency of
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purchasing personalized products, compared to collectivist countries, individualism being the most relevant cultural dimension in explaining the purchase behaviour related to
personalization.
Furthermore, Squire, Readman, Brown & Bessant (2004) question the fact that all customers gain value from product personalization. They report that it represents a compromise for other benefits that a customer might find more valuable, and that is why, this does not apply to all industries, situations and customers.
Besides, not all products can or should be personalized in order to have a better outcome. According to Girard, Silverblatt & Korgaonkar (2002), consumer online preferences are influenced by product classes. More specifically, it has been noted that, for personalized products, selling online is better for search goods, rather than experience goods (Moon, Chadee & Tikoo, 2008).
However, it has been reported that the user design personalization creates differentiation in the minds of consumers through the possession of those kinds of products (Fiore et al. 2004; Lynn and Harris 1997; Michel et al. 2006; Simonson 2005). Franke & Schreier (2008), emphasize the fact that the effort put in contributing to the design of the product increases the preference toward the product.
Also, Huffman and Kahn (1998) have reported that satisfaction is increased when customers put their input in the shopping process and when desired attributes are specifically requested from them. Nevertheless, the choice variety should not be perceived as being too complex, since it decreases satisfaction because consumers feel overwhelmed.
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On the other hand, the fact that “across-attribute importance judgments or trade-offs” should be avoided as they might result in frustration and dissatisfaction, is also mentioned (Huffman and Kahn 1998, p. 507).
Taking into consideration what has been reported, according to the knowledge of the author, there is no article directly connecting product personalization and brand equity and measuring the impact of one construct to the other.
2.4 The luxury segment
Defining luxury goods
For many customers, clothes and accessories go way beyond their functional utility. They have become objects with psychological values, being reflectors of personalities in a society where individuals feel the need to distinguish and position themselves (Tynan, McKechnie & Chhuon, 2010).
Luxury products have a special status as they represent more than just a way of social signalling, especially in fashion, where they are a visual representation of the prestige of the owner (O'cass & McEwen, 2004). Li, Li & Kambele (2012) accentuates their capacity of showing wealth, power and exclusivity. The authors mention their role in offering pleasure and representing more than the essential wants and needs, having a strong emotional and social value that varies according to the social, cultural and economic context. Moreover, customer perceptions are influenced by luxury goods as those products are considered having a higher quality, justifying a higher price premium(Tynan, McKechnie & Chhuon, 2010).
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According to Tynan, McKechnie & Chhuon (2010), wealth is not the only factor that determines the acquisition of such goods, and their demand does not necessarily increase as the wealth increases, because the socio economic factors have also an important influence on the decision. Interesting to mention is also the fact that the increase in purchases of luxury might determine the decrease in the demand for it, as consumers who buy luxury goods expect it to be rare, because it represents a differentiating tool and do not want to be associated with the masses.
Besides social signalling, consumers tend to have a hedonistic motivation to buy luxury goods, as those goods have a role in creating emotional fulfilment, influencing the experiences consumers have by stimulating pleasure and life enjoyment (Shukla, 2012).
Personalization of luxury goods
Customers feel the need to be closer to the brands. The social media platforms are customer’s way of communication with the brands, of expressing his opinions and ideas for
improvement, in a fast and accessible way. Annie Jin (2012) notes that self-expression and self-presentation, revealed through user generated content, are a way of disclosing consumer perceptions about luxury brands and a way to indicate attitudes toward that brand. Berger (2014) stresses out the fact that through impression management, people perform in a certain way to create impressions and to shape their perceived identities the way they want to be seen, and this is easily controllable through the way people dress up. According to the same author, people use their outfits to signal something about their personality or status.
Besides interacting with customers through social media, brands can get closer to consumers by personalizing the products according to their needs. Luxury objects are by nature
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distinguishing and exclusivist and personalization can accentuate this feature while focusing on the personality of the consumer. By owning unique products, consumers are able to easily differentiate and stand out from the crowd (Berger, 2014). This can represent a good strategy to increase overall value for the consumer and, accordingly, to strengthen the relationship, since consumer demands are increasing and rapidly changing (Piller, Moeslein & Stotko 2004).
Because those demands are rising, consumers have become already aware of the option to personalize products, seen at mass market brands and so, they have the same expectations from the luxury objects (Okonkwo, 2007).
As stated by Okonkwo (2007), product personalization for luxury goods can represent a “strong selling factor” (p. 253) because for luxury consumers, price is less important than choice. The author contradicts the misbelief of having to pay higher production costs to personalize goods and due to the fact that customers are not price sensitive, the products can be sold at a higher price, differentiating them from mass market personalized products.
Brand awareness is expected to be increased by product personalization. The reason for this is because word of mouth increases awareness and more interesting products are more talked about, since they represent a social currency that make the speaker seem more interesting and more aware (Dye 2000; Hughes 2005; Sernovitz 2006). In this case, product personalization of luxury goods creates special and unique products that are going to generate more word of mouth and more sharing. Nevertheless, this increase in word of mouth for more interesting products applies only for the immediate “buzz”. According to Berger & Schwartz (2011), immediate word of mouth is driven by more interesting products, while the on-going one is fuelled by mundane products, cued more by the environment, especially if they are visible at consumption.
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What is more, in the support of the fact that product personalization in the case of luxury goods should increase brand awareness are Berger (2014)’s findings. They point out that goods of high status, like luxury, are more talked about because they show how much knowledge the speaker has about those types of products. Furthermore, this is a way to achieve impression management by self-enhancing through talking about products that are used to signal identity, in this case luxury, increasing the positive perception about the self. Additionally, Chung & Drake (2006) mention that people are more likely to talk about and share products that are self-concept rather than utilitarian, for the same reasons mentioned previously.
Luxury personalization trade-offs
From the consumer’s perspective, product personalization is beneficial as it represents a step closer to the real needs and wants of the consumer (Moon, Chadee & Tikoo, 2008).
By comparison, from the brand’s perspective, there are some trade-offs that need to be considered when deciding to personalize.
Keller (2009) mentions the importance of having a premium image for a luxury brand, image that is vital for creating aspirational thoughts and that can justify a higher price. This needs to have the same significance everywhere in the world and has to create strong brand
associations that are intangible, that reflect exclusivity. Fionda & Moore (2009) accentuate the weight those brands carry by reporting that “luxury brands are among the most recognised and respected of consumer brands over the world” (p. 348).
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Additionally, Fionda & Moore (2009) indicate the importance for luxury brands to keep control of their image, through which the status of the brands is determined. The products need to be in line with the collection and most importantly, with the brand style. For some, especially traditional luxury brands, their connection to the brand’s tradition and heritage has a crucial importance because it is what defines them as a brand.
Through product personalization, luxury brands expose themselves to the risk of losing control over their image and status. That is why, companies allow consumers to make only small modifications to the product that restrains consumers from becoming overly creative with the products and endanger their well established brand image and brand associations.
2.5 Conclusion
The role of this section has been to define and observe the concepts aimed to be analysed throughout this paper, in order to lay a foundation for this research and to identify the existing literature gaps.
The literature review emphasis the connection of product personalization with marketing and its ability to bring extra benefits to the companies who decide to use it, in spite of some small trade-offs. Moreover, it looks at different portrayals of brand equity, focusing on the one developed by Aaker (1991) that mentions brand loyalty, perceived quality, brand awareness and brand associations, as consumer based brand equity indicators. After noticing the lack of a direct connection in the literature between product personalization and brand equity, the emphasis of the chapter moves to the benefits that product personalization might bring and how through this, consumer based brand equity could be increased from the consumer’s
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perspective. A few relevant arguments mentioned by scholars have been remarked here, like the boost of the consumer’s ego because of the differentiation achieved through
personalization (Pine and Gilmore, 1999), the ease of the social signalling process and of the self-expression due to a self-congruent product (Raimondo & Farace, 2013) or the overall addition in benefits (Moon, Chadee & Tikoo, 2008).
Later on, the chapter discusses the relevance of luxury products in this particular context. A supporting argument revealed is the need of luxury products to have high brand equity because of their expensive nature that has to be justified. More than this, luxury products should be unique in order to facilitate differentiation (Berger, 2014), and personalization helps them achieve exactly this.
Considering all the above mentioned arguments, the literature review shows a potential existing connection between product personalization of luxury goods and consumer based brand equity, which this research is going to look into. The following chapter is going to explain in detail the modality through which this is going to be achieved focusing on methods, reasons and expected results.
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3. Conceptual model
This section has the purpose to offer an overview of the relationships and hypothesis tested in this research.
The conceptual framework of this study is depicted in Figure 1 and has been developed to test the impact of product personalization on brand equity, through its four indicators: awareness, associations, loyalty and perceived quality, as developed by Aaker (1991).
3.1 Hypothesis
This paper aims at understanding the relationship between product personalization and consumer based brand equity regarding luxury products. More exactly, the transparent
product personalization as described by Gilmore & Pine (1997) in relation to consumer based brand equity indicators.
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As mentioned in the literature review chapter, product personalization refers to the
modifications made to a standard product in order to add a personal touch (Pine and Gilmore, 1999), action which generates a new experience for the consumer, creating an overall added value (Moon, Chadee & Tikoo, 2008). Furthermore, according to Riemer & Totz (2001), product personalization is a valuable tool that can distinguish a company from its
competitors, as it offers unique products which create differentiation in the consumer’s minds (Fiore et al. 2004; Lynn and Harris 1997; Michel et al. 2006; Simonson 2005). This also results in an increase in preference towards the personalized products because it has the consumer’s input in it (Franke & Schreier, 2008).
For this study, luxury products have been considered appropriate since they are social signalling products, used by consumers to differentiate and distinguish from the crowd (Tynan, McKechnie & Chhuon, 2010). Accordingly, personalization should add value as it creates even more special products, making it easier for individuals to stand out and signal wealth thorough unique products that have their input. However, personalization in the case of luxury objects needs not to change the product too much, in order to be sure that other people still recognize the styles of the products and link it to the prestige of the known brand. In the same time, brands need to make sure that they are still in control of their products, while not losing their image and style (Fionda & Moore, 2009). In this sense, this thesis analyses the transparent personalization approach, which consists of only small adaptations of the products (Gilmore & Pine, 1997).
The added value supposedly achieved through personalisation can be measured through the consumer based brand equity as it describes best the brand value and, in turn, it can indicate if product personalization has an addition to it overall. This total value is measured through the four indicators of consumer based brand equity identified by Aaker (1991). Brand awareness is measured in order to observe the ability of consumers to recall brands that
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personalize and if personalization is able to create more brand awareness. For noticing what are the links created in the minds of the consumers for the brands that personalize, brand associations are used. They show how people perceive a brand and how they perceive themselves in relation to that brand. Further on, perceived quality has the role to show how consumers think about the products of a brand according to how they perceive the
personalized products of the same brand. Loyalty is looked at in order to determine the commitment consumers are going to make for a brand and if personalization determines a higher values for this indicator.
According to this line of reasoning, this paper proposes the following hypothesis:
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4. Research Design and Methodology
This paper contributes to the literature by providing an insight into the relationship between product personalization and brand equity in the case of luxury products. The previous chapters laid the foundation for the research by studying the already exiting findings and setting up a conceptual framework that would best suit the existing literature gaps related to this matter. This section is going to explain how the relationship is going to be studied and analysed in order to ensure a suitable design and methodology of the research.
The impact of product personalization of luxury goods on brand equity is going to be
analysed for 3 luxury product categories, bags, clothes and watches/jewellery. It is predicted that product personalization has a different effect on each of those categories. The
relationship is expected to be stronger in the case of jewellery/watches, since those are products that can carry strong family values and are transmitted from generation to
generation. In this case, monograming a piece of jewellery, a process that implies graving the name initials of the individual, would add more value, compared to applying the same
technique to clothes and bags. Furthermore, it is also awaited for the relationship to be stronger for bags than for clothes, as the personalization is more visible in this case, which is a strong method of social signalling (Berger & Heath, 2007).
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4.1 Method
This confirmatory research points at answering the research question by using a
cross-sectional survey design in order to capture customer’s current perceptions. The gathering data tool is going to be one survey, administered online, distributed through social media and emails. The data collected is going to be quantitative in nature.
A pilot study has been carried in order to test respondent’s ability to understand and answer the questions, and the sensitivity of the statements. The results in the pilot study support the hypothesis and offer meaningful insights regarding the changes that need to be made to the final survey.
4.2 Sample
The targeted population in this research is represented by consumers interested in buying luxury objects, particularly ones who have bought before and who buy on a regular basis such products. Accordingly, the sample is going to be a diverse one, with respondents from
different age groups, with different income, gender and nationality. The sampling method that is going to be used is non-probability, convenience sampling, because of the difficulty of determining the whole population, and because of the accessibility this technique has to offer with the available existing resources of the researcher and the time frame. The desired
number of respondents is aimed to be as many as possible but the researcher has 100 respondents as minimum target. Nevertheless, in order to have a proper research for data analysis, patterns are going to be observed in responses and, if needed, additional respondents
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are going to be supplied. In order to reduce the response bias generated by question
randomization, the order is going to be predetermined (Magnusson, Westjohn & Zdravkovic, 2011).The time frame of the data collection is going to last until a sufficient number of respondents is gathered. Since the survey in going to be distributed online, a response rate is difficult to name.
On the 4th of April 2016, the questionnaire has started being distributed online and when it was deactivated, on the 23rd of April 2016, it had gathered 291 respondents. Out of the total of 291 respondents, only 192 have completed it. The data that was missing has been coded as such. From the 192 respondents who have completed the questionnaire, there were only 186 who stated their age and gender. The results show that 133 participants are female (72%) and 53 are male (28%). Furthermore, the majority of the respondents are under 25, the next predominant group being between 26 and 40.
4.3 Measures
The impact of product personalization on brand equity is analysed for 3 luxury product categories: bags, clothes and watches/jewellery. The type of product personalization approached is the transparent one, as defined by Gilmore & Pine (1997), more precisely, representing the adaptation of the standardised products. In the thesis paper, brand equity is going to be defined according to Aaker (1991)’s four indicators of consumer based brand equity consisting of loyalty, awareness, perceived quality and associations. This is a clear and representative framework that has been used as a frame of reference by many other academic papers and can also be used in to measure the impact of product personalization.
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However, the scales for measuring the brand equity items are going to be taken from other articles, as Aaker (1991) does not have the explicit scales. The approach is going to be explained further on in this chapter.
The questionnaire consists of 3 parts. The first part has two sets of statements that represent an introduction to the concepts of luxury and personalization, meant to measure the degree of luxury and personalization and to introduce and familiarize the respondent with the meaning of the concepts for him. Firstly, participants were asked to rank on a 7-point scale (1= strongly disagree, 7=strongly agree) 4 statements about luxury items. The second set of statements has the purpose to illustrate what the concept of “product personalization” in this study is about. The same request to rate the 4 statements related to the personalization of luxury goods was written. To ensure validity, an adapted version the 12-item scale used by Li, Li & Kambele (2012) to test the fashion lifestyle was used. All the items from this scale had a Cronbach alpha higher than 0.70 and were modified to fit the purpose of this study. The second part aims to measure the impact of product personalization on consumer based brand equity. This part was split into four sections, each of them for one indicator of brand equity, as described by Aaker (1991). To test the awareness of brands who personalize, an item from Aaker (1996)’s awareness 4-item scale was used. The respondents were asked if they know any brands that personalize and to name the top of mind one, for the 3 product categories analysed. For the respondents who answered “no”, the “skip logic” option redirected them to the next question without the necessity to name the brands.
Aaker (1996) was also used with its adapted 7-items loyalty scale reduced to 4 items, in order to measure the impact of product personalization on brand loyalty and the modified 6-item scale, reduced to 4 items, to measure perceived quality. Associations have been tested using
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O'cass & Frost (2002)’s 12-items scale, with the Cornabch alpha higher than 0.74, reduced to 4 items for the 3 categories analysed.
The third part of the questionnaire includes demographic questions about gender and age. All the questions used in questionnaire are shown in the appendix.
4.4 Data collection procedure
In order to test if product personalization has an impact on the 4 indicators of brand equity, the data collection procedure used in this research is an online questionnaire. There are several reasons for making this particular choice. Rhodes, Bowie & Hergenrather (2003) mention the ease of making changes and adjustments, additions and removals. Moreover, according to the scholars, one immense benefit of using online methods is the unlimited number of the respondents and the lack of geographical boundaries for those. This research has gathered respondents from various countries around the World, like the US, Germany, the Netherlands, Romania and others. In addition to this, the online questionnaire offers the possibility to see the location of the respondents without asking, by using the IP address and the location coordinates.
The online questionnaire not only exceeds barriers of space, but it also offers a time and cost advantage. There are no more costs to what materials, transportation or postal services are considered, and a single questionnaire can reach in the same time millions of respondents without wasting other resources, while reducing the risk associated with resource investment and low response rates. Due to the anonymity of the response, it reduces bias and it gives access to a wider pool of participants, which might be difficult to contact through other data collection procedures. The time advantage refers to the speed of response facilitated by the
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lack of planning and meetings and also the convenience offered by online sharing that facilitates the spreading of the questionnaire in a very short time. Worth mentioning is also the fact that with the this procedure, the response time can be tracked, offering the chance to easily observe how much time do the respondents spend on the survey, the best time frame to spread the questionnaire, according to the start dates seen at previous respondents and, the dropout rate for every part of the questionnaire. Besides this, data gathered like this is easy to download and interpret as it can be saved in a format ready for analysis, saving time and eliminating other costs. Also, it is very beneficial for the respondents because they can complete the questionnaire at their earliest convenience, also being able to close and continue it another time, and in an environment they are comfortable with (Rhodes, Bowie &
Hergenrather, 2003).
The above being mentioned, the data collection choice for this research has been an online questionnaire, created on the platform www.qualitrics.com, that offers various advantages like the ease of sharing and of creating various types of questions in an user friendly format, downloading data files ready to use in multiple programs or making content analysis.
The distribution took place through social media, being shared mostly on Facebook, publicly and in private messages and through emails, shared by two Multinational Corporations from Romania, with their contact lists. In this way, various types of individuals, with different nationalities, education, cultural background, lifestyles, age, education and gender, have been reached.
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4.5 Pilot study
In order to make sure the final survey is easy to understand and complete for participants, a pilot study has been conducted, prior to the main study. In addition to this, it offers some preliminary results, reducing the associated risk. Even though conducting a pilot study is not a certainty for a well-designed questionnaire, it increases the chances to succeed (Van Teijlingen & Hundley, 2002). Additionally, it can bring up associations and or different perspectives that have not been approached before (Thabane, Lehana, et al., 2010).
In this study, an online questionnaire has been distributed to 13 participants on the 7th of March 2016, who gave written feedback for the survey design that included how easily understandable the questions are, how interesting they considered the questionnaire and the study, and how difficult it was complete. The pilot questionnaire has been hosted on the same platform as the main study, and was deactivated 2 days after its start, on the 9th of March.
After receiving the feedback, six problems have been identified by the participants, related to the length, the phrasing of the questions and the requirements. The pilot asked participants to say what word comes to their mind when they see pictures of different objects before and after the personalization, but the words written did not turn out to be relevant for the study and also, the participants considered that this task could have made them give up on the questionnaire, because they were not sure of what to write. Other issues concerned questions that were not very clear, or not suitable for the Likert scale format (e.g. “I have personalized products before”, “I have purchased several luxury products throughout my life”). All the feedback received has been implemented in the final questionnaire.
The next chapter is going to analyse and interpret the data collected from the final questionnaire.
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5. Results and analysis
5.1 Analytical strategy
The previous chapter explained how the collection of the data has been done through online distributed questionnaires. The results have been downloaded from the website and imported to SPSS in the proper format. Further on, the frequencies have been checked and there have not been found any errors in the data set.
In terms of dealing with the missing data, the variables have been recoded using the number “999”, for the discrete missing variables, both in variable and in data view, and all the cases with missing data have not been analysed, according the procedure of list wise deletion. After a careful look, there have not been spotted any counter indicative items, so the data preparation moved forward to the descriptive statistics. For this part, skewness and kurtosis have been computed for each one of the variables.
All the variables have a normal distribution, with skweness around 0, product personalization having items between -0.7 and 0.3, associations bags between -0.6 and -0.05, associations clothes between -0.5 and -0.1, associations jewellery all around 0.17, loyalty between 0.3 and 0.3 and perceived quality between -0.5 and -0.1 .
In the same time, all the variables have a moderate negative kurtosis, not far from normal but a bit pointier. Here we can note values between -1.1 and 0.6 for product personalization, -1.3 and -0.6 for associations bags, -1.3 and -0.9 for associations clothes, -1.2 and -0.5 for
associations jewellery, -1.2 and -1 for loyalty and -1.3 and -0.8 for perceived quality.
Besides the normality checks, the reliability has been computed for all the variables and their items. Accordingly, all the variables have a cronbach’s alpha above 0.7 (product
personalization α=0.753; associations bags α=0.729; associations clothes α=0.787;
associations jewellery α=0.774; loyalty α=0.909; perceived quality α=0.824), all representing good scales and a high internal consistency.
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Above, when mentioning all the variables, we are referring to all the continuous variables, which are Loyalty, Associations and Perceived Quality. Awareness is a categorical variable and it has been computed as a dummy variable, therefore, the skewness, kurtosis and reliability checks have not been computed.
In order to check if the items are good, the Corrected Item-Total Correlation was inspected. In order to have good items, this has to be above 0.30, which was the case for all items. However, we have observed that 2 items from the Associations bags scale have the Corrected Item-Total Correlation 0.39, which is close to the lower level of the limit.
The second condition to have good items is to make sure that the difference for the Cronbach alpha if item deleted is more than 0.10. In the case of this data set, there is no item would affect the scale reliability if it would have been deleted, because it checks this condition. As a next step, the scale means have been computed and they have the addition of “TOT” to their initial name: Loy_TOT (Loyalty), Pq_TOT (Perceived quality), Assocb_TOT
(Associations bags), Assocc_TOT (Associations clothes) and Assocj_TOT (Associations jewellery).
Further on, the correlations between the independent variable (Personalization) and each dependent variable have been computed using the Bivariate Correlation function for all the continuous variables. The results show that all the correlations are significant (lower than 0.01) and the Pearson coefficient has shown that all the variables have a high positive relation. More specifically, Personalization and Associations bags r=0.519, Personalization and Associations clothes r=0.545, Personalization and Associations jewellery r=0.538, Personalization and Loyalty r=0.635 and Personalization with perceived quality r=0.631. For awareness, which is a categorical variable calculated through a dummy variable, a logistic regression has been computed in order to see its relationship with Personalization. The results show that there is no significant relationship between Product personalization and Brand Awareness as the sigma coefficient is 0.151. Furthermore, contrary to the expectations, the relationship between the two variables is negative, as the Beta coefficient is -0.198, showing a negative relationship where with every change in 1 unit of Product personalization, Brand awareness decreases by -0.198.
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Table 1. Means, Standard Deviations, Correlations
Variables Mean SD 1 2 3 4 5 6 1. Pers_TOT 4.1667 1.39779 (0.75) 2. Assocb_TOT 4.1803 1.42466 .519** (0.72) 3. Assocc_TOT 4.2887 1.54810 .545** .831** (0.78) 4. Assocj_TOT 4.5880 1.49387 .538** .808** .836** (0.77) 5. Loy_TOT 3.6791 1.55737 .635** .578** .626** .589** (0.9) 6. Pq_TOT 4.3378 1.49898 .631** .523** .595** .572** .784** (0.82)
** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed)
5.2 Results and Conclusions
In order to test the hypothesis, multiple hierarchical linear regressions for each of the brand equity indicators have been performed. By using this, the aim is to understand the effect of the independent variable, product personalization of luxury products, on each dependent variable, the indicators of brand equity. In addition, we are also going to control for gender and age in order to see how much of the variance is explained by these factors.
Firstly, we are going to look at the relationship between product personalization of luxury goods and loyalty. The first step of the analysis represents the introduction of the two predictors, age and gender, where we observed a relationship that is not statistically significant F (2, 181) = 0.318, with p= 0.72. Further on, the second step involved the introduction of product personalization, which resulted in a statistically significant relationship of F (3, 180) = 40.54, with p< 0.001, which explained 40% variance of the model as a whole. The additional 40% variance in loyalty is explained by the introduction of product personalization after gender and age have been introduced as control variables (R2 Change =
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.40; F (1, 180) = 120.59; p < .001). The final model has only one out of three predictor variables that is statistically significant, product personalization, with a Beta value β = .63 (p < .01).
The next relationship that is going to be analyzed through a hierarchical linear regression is the one between product personalization of luxury goods and perceived quality of brands. In the first instance, age and gender have been entered as the first independent variables. The results indicate the lack of a statistically significant relationship having F (2, 181) = 0.435, having p=0.64. The procedure continued with entering the second independent variable, product personalization of luxury goods, leading to a statistically significant result of the entire model F (3,180) = 39.85, having p<0.001, with a variance of 39.9%. The product personalization variable introduced in the model explains 39.4% variance in perceived quality of brand, after the control for age and gender (R2 Change = .39; F (1, 180) = 118.12; p < .001). At the end of the analysis we observed that only one predictor variable is statistically significant, more exactly product personalization, with a Beta value of β = .63 (p < .01). For the analysis between product personalization of luxury goods and brand associations, data about 3 product categories has been collected: bags, clothes and jewellery. In order to see the differences between categories, 3 different hierarchical regressions are going to be done for each category while controlling for age and gender, like it has been done with the previous models.
The first relationship out of the 3 product categories that we are going to look at is the one between product personalization and brand associations for bags. As for the previous analysis, the gender and age control variables have been entered first as independent variables, but the relationship does not prove to have statistical significance F (2, 181) =0.6 , with p= 0.54. The second block of independent variables for the second step contains the product personalization variable. The variance justified by the whole model is 29.5%, with F (3, 180) = 25.06 and a statistically significant indicator of p<0.001. The introduction of product personalization in the model explains 28.8% variance, after controlling for age and gender (R2 Change = .288; F (1, 180) = 73.49; p < .001). The final model revealed that the 2 out of the 3 predictor variables introduced are significant, product personalization (β = 0.54, p < .01) and age (β = 0.12, p < .05).
Next, a hierarchical linear regression is used to analyze the impact of product personalization on brand associations of clothes, while controlling for gender and age. In the first step, the
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introduction of gender and age as independent variables did not result in a statistically relevant relationship, having F (2, 181) =0.75, with p= 0.47. The next step implied the introduction of product personalization, which resulted in a statistically significant relationship that explained 31% variance of the whole model. F (3, 180) = 26.98, with p < .001. After controlling for age and gender, out of the total variance explained by the model, 30.2% is because of the introduction of product personalization (R2 Change = .302; F (1, 180) = 78.81; p < .001). In the end, 2 out of 3 predictor variables proved to be statistically significant, more precisely product personalization (β = 0.55, p < .01) and age (β = 0.13, p < .01).
For the 3rd product category, the same statistical procedure was used. The hierarchical linear regression between product personalization of luxury goods and brand associations jewellery began by entering the two predictor variables, age and gender. This revealed the lack of statistical significance of this relationship, with F (2, 181) =0.16 and p= 0.85. Further on, after the introduction of product personalization as a predictor variable, it has been observed that the total variance explained by the model is 30.5% F (3, 180) = 26.33, with p < .001. The introduction of product personalization showed that after controlling for age and gender, it caused 30.3% variance (R2 Change = .303; F (1, 180) = 78.53; p < .001). In this model, only one predictor variable turned out to be statistically significant, product personalization (β = 0.55, p < .01).
The next variable to be analyzed in relation to product personalization of luxury objects is brand awareness. This has been collected as a categorical variable and it is going to be analyzed differently from the rest of the variables. In order to analyze the impact of product personalization on brand awareness, the questionnaire had in its structure a “yes/no” question asking participants if they know any luxury brands that personalize. If the participants responded “yes”, they were further on asked to give examples of known names of luxury brands for the 3 categories studied: bags, clothes and jewellery.
The results show that a total of 208 respondents responded to this question and that out of the total number, only 46% (96 respondents) of them responded “yes”, while the rest of them (112 respondents) did not know a luxury brand that personalizes.
Furthermore, we are going to look at the top of mind luxury brands (Keller, 1993) written by the respondents in order to spot certain patterns.
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Looking first at the bags category, there are only 59 of entries, out of the total of 96 respondents who stated that they know luxury brands that personalize. Here, the majority of respondents, more exactly 33 out of the total of 59, mentioned one brand, Louis Vuitton. Other brands mentioned more than one time were: Hermes, Chanel, Gucci, Michael Kors, Dolce & Gabbana.
The clothes category has also been filled by 59 respondents and the responses have been characterized as having the largest response variety, taken in comparison with the two other categories. Amongst the responses there could be observed 9 mentions of Burberry, 6 of Prada, 4 of Armani and Nike and a few others. Louis Vuitton has been mentioned this time only by 2 respondents, so we can say that it is a top of mind luxury brand that personalizes only when it comes to bags.
In the jewellery category, 60 respondents filled in their top of mind luxury brands that personalize. As in the case of clothes, the results are varied, with no dominant brand in the category. The responses mention the following entries: 12 Cartier, 10 Rolex, 4 Chopard and Pandora and others. Here, by looking at the answers it can be noticed that most predominantly, the brands mentioned are exclusively jewellery and watches brands, with a few exceptions.
An important mention needs to be made as some responses contained more than one brand and were taken into account when the names have been counted, as they also represent top of mind brands for their categories.
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6. Discussion
It is well known that consumer based brand equity is a proper measure for the value of a brand. After the studies made by Aaker (1991) and Keller (1993), where brand equity has been defined and split into different measurement indicators (brand associations, brand awareness, brand loyalty and perceived quality), many other scholars have tested and analyzed this dimension.
In the same time, various studies have reported that product personalization is a tool that is able to create differentiation when used accordingly (Fiore et al. 2004; Lynn and Harris 1997; Michel et al. 2006; Simonson 2005), not only through its uniqueness but also because through personalization, it is easier for the consumer to express himself and communicate the desired wealth, social status, style or knowledge. This best applies for luxury goods that are
expensive, thus bought by a limited number of people, which makes them unique. Considering the fact that luxury products are expensive and bought mostly for identity signalling, having high brand equity is vital.
Taking all this into consideration, this study linked product personalization of luxury goods with consumer based brand equity, and has shown that product personalization increases brand equity overall, as expected.
There has been an interest in finding out if product personalization impacts each four indicators of consumer based brand equity, as described by Aaker (1991), separately.
Firstly, the study tested the impact of product personalization on loyalty, which has proven to be a significant positive relation. This is justified, as through personalization, the consumer
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develops a closer relationship with the brand, generating future regular purchases, in favour of other brands with which he does not have a close relationship.
The impact of product personalization on brand perceived quality has also been positive and significant, finding which is extremely relevant especially for luxury brands and products where prices are high and they have to be justified by an associated quality in order to be credible.
Through three different regressions, there has been analysed the impact of product
personalization on brand associations for three different product categories. The relationship was positive and significant for all the product categories studied: bags, clothes and
jewellery. Even though it has been expected that the relationship would be stronger for jewellery, as it represents a category that is highly distinctive in terms of the associations like wealth, prestige and success, it has been proven that there is not a significant difference between the categories studied.
Contrary to the initial beliefs, the brand awareness indicator in this study has not shown a predominantly positive relation for the impact of product personalization of luxury goods on brand awareness. Less than half of the survey respondents indicated through their response the existence of a positive relationship. However, the luxury brands that have remarked themselves through product personalization, came up most often in the study. It is interesting to note that even though some luxury brands do not offer the option to personalize goods, people assumed that they did. The explanation for this result stands in the fact that people may not have truly known brands that offer this, but assumed that because of their prestige, they might have this option.
The brand awareness was expected to increase brand equity, as unique luxury products represent a differentiation tool for consumers, which increases word of mouth (Berger, 2014).
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Talking about unique, high status goods, makes the individual seem interesting and unique, thus more inclined to share this kind of information. Nonetheless, this relationship needs further study in order to be able to tackle in-depth the issue.
Besides the quantitative analysis, the rating of some particular statements reveal a few interesting findings.
The questionnaire shows that even though people state that they would feel closer to the brand if it would offer the option to personalize and they would recommend it to their close ones, the majority would not buy from the brand regardless of the price, revealing the fact that consumers are price conscious. Nevertheless, the sample of this study is a convenience sample that might not perfectly reflect the target audience of the luxury products. Future studies should consider taking into consideration the income of the respondents and their lifestyle.
Moreover, a vast majority of respondents consider that a brand that personalizes is innovative. This answer points out the fact that this service has not been used by many companies, and that the ones who are using it are not emphasizing enough this procedure. This finding shows that people are not used having the option to personalize and thus do not expect companies to have this extra service. However, when asked, their answers revealed that they would like to be offered this option. Luxury brands can use this to make themselves remarked as being on step ahead and innovative, setting new trends and expectations for the customers.
As mentioned in the introduction of this thesis, there is a trade off when deciding to
personalize products because of the risk of losing the identity of the brand. This is seen as a trade-off, especially in the case of luxury brands where the identity of the brand and its recognition weights very much. Because of this dilemma, this study has talked about product
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personalization of luxury goods considering only small additions of elements to the product, which are not going to affect the identity of the brand, making it as recognizable as before. In consequence, this study highlights the fact that luxury companies would increase their brand equity, especially the loyalty, perceived quality and brand associations, if they
personalize their products with small elements that are not going to change the image of the product, but only offer a personal touch to it.
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7. Managerial implications
Brand equity is a relevant definer of a brand’s overall value in the eyes of the consumers. Companies need to keep track of the indicators of brand equity and how they affect their brands, and should also make sure that they increase the equity of their brands, in whichever way they can. Therefore, if product personalization has a role in increasing brand equity, this practice should receive more attention, especially in the case of luxury products where the brand has a huge importance for the consumers, representing one of the main reasons for buying the product.
As the literature suggests, product personalization is a complex process that involves many resources from the company’s side, but in the same time, can offer important returns.
By knowing the importance of product personalization on brand equity, managers can decide if they should invest in this practice and if yes, how much. This research offers the answer to this question concerning each one of the indicators of consumer based brand equity.
The study shows that product personalization of luxury goods increases brand equity, especially brand loyalty, perceived quality and brand associations, and recommends careful monitoring of the indicators along with increased efforts and investments in them, in order to create a competitive advantage and accordingly, higher sales and returns.
Managers should not focus only on a particular luxury product category, as it has been proven that there are no major differences between the observed product categories (bags, clothes, and jewellery). However, there are more product categories to be studied, for this to be made a generally applicable study.
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It is also important to note that the majority of respondents have proven to be price conscious, so managers should take into account the fact that the findings are not applicable on any type of consumers and that factors like income and lifestyle are foremost important.
As the questionnaire unveiled the fact that people are not used to having the option to personalize but they consider it valuable, companies can make use of this extra service to be seen as innovative, setting new trends for other companies to follow and having the
advantage of being remarked as pioneers of this trend. Another advantage of this practice is also the fact that it provides a clear distinction between luxury and mass market brands, because for a mass market brand it is much more difficult to offer personalized products. This is particularly relevant in today’s market as low end brands are usually fast paced, selling high end fashionable designs at small prices and good quality, with designs similar to the ones of luxury fashion houses.
What is more, managers of luxury brands should keep in mind that modifying too much the product through personalization can change the brand’s style and identity, causing confusion and not creating an easy recognition. This is why the product personalization that increases brand equity is the one with the addition or modification of only a few small elements to the design of the product, which are meant to make the consumer feel that the product is closer to his identity, but at the same time a tool for social signalling.
