Post-purchase evaluation of luxury goods, a means-end chain analysis

Post-purchase evaluation of luxury goods, a means-end chain analysis

Vladimir Pavlov Duhalov S2751534 / 140674749

DDM Advanced International Business Management & Marketing

University of Groningen - Faculty of Economics and Business, Newcastle University Business School

Supervisors:

Dr. Eleftherios Alamanos (Newcastle University) Dr. Henk Ritsema (University of Gronigen)

Abstract

Luxury goods consumption is growing rapidly on a global scale and despite the interest this has provoked in academia, much remains to be understood regarding the drivers of this growth. The purpose of this paper is to investigate the post-purchase evaluation of luxury products in terms of

the most important product attributes; the benefits they create; and the end goals they help consumers reach. The research project is based on an extensive review of the relevant literature and an empirical investigation that includes primary data. The data collection and analysis were

carried out following the means-end chain framework, using qualitative semi-structured interviews with luxury goods consumers. The study finds that product attributes translate almost

exclusively into intangible benefits, which are in turn related to three end values for consumers: better quality of life, self-esteem, and social acceptance. The main conclusion from this study is that luxury products cater to the psychological and emotional needs of consumers through their social distinction function. The paper provides valuable insights for luxury brand managers, who

can use the findings to tailor their marketing communications strategy more efficiently.

Acknowledgments

This master dissertation marks the end of a fifteen month long journey between the University of Groningen and Newcastle University. It has been a difficult, yet extremely rewarding period for

me, as I have learned more than I even considered possible before starting the programme. I would like to thank my family for supporting me throughout this period in every possible way. I

would also like to thank my fellow students Emre Acar, Thomas Mentink, and Stefan Haumer with whom I have had great moments and who have helped me manage the stress in the last few months. Additionally, I want to express my gratitude to the participants in my research who were willing to share their experiences with me. Finally, I would like to thank my supervisors - prof.

Table of Contents

Post-purchase evaluation of luxury goods, a means-end chain analysis ... 1

1. Introduction ... 7

1.1 Background ... 7

1.2 Research focus ... 9

1.3 Overall research aim and individual research objectives ... 11

1.4 Summary ... 13

2. Issues and review of related literature ... 14

2.1 Luxury goods ... 14

2.2 Customer-based brand equity ... 19

2.2.1 Brand Identity (Salience) ... 20

2.2.2 Meaning (Brand Image) ... 23

2.2.3 Brand Response ... 25

2.2.4 Relationships (Brand Resonance) ... 28

2.3 Consumer Decision Process ... 29

2.4 Luxury product categories ... 32

2.5 Research Questions ... 33

3. Research Design and Methodology ... 35

3.1 Research design ... 35

3.2 Sampling ... 37

3.3 Data collection and analysis ... 38

3.4 Ethical considerations ... 40

3.5 Limitations ... 40

4. Findings and Discussion ... 42

4.1 Introduction ... 42

4.2 Luxury Product Attributes ... 43

4.2.1 Concrete (Tangible) Attributes ... 44

4.2.2 Abstract (Intangible) Attributes ... 45

4.3 Benefits (Consequences) ... 48

4.4 Values ... 50

5. Conclusion ... 53

5.1 Research Objectives: Summary of Findings and Conclusions ... 53

5.1.1 Better quality of life ... 53

5.1.2 Self-esteem ... 54

5.1.3 Social Acceptance ... 55

5.2 Managerial Implications and Further Research ... 55

References ... 58

1.

Introduction

This chapter gives the reader background information on luxury goods, including history, different concepts of luxury, and the state of current research in the domain. The section next identifies a gap in the literature and justifies the need for additional research in the field. Finally, the author clarifies his research focus, setting the overall research aim and individual research objectives for the remainder of the paper.

1.1 Background

The consumption of goods has long been researched in the academic world. More than two centuries ago, Adam Smith (1776) divided consumption into four categories: necessary (to maintain life), basic (for normal growth and prosperity of people and communities), affluence (goods that are not essential for growth and prosperity), and luxury (goods that are in limited supply, difficult to procure and/or very expensive).The term luxury is derived from the old French luxurie, meaning ‘lasciviousness, sinful self-indulgence’, and reaching back further, from the Latin luxus, meaning ‘excess, extravagance’ and even ‘vicious indulgence’ (Etimonline.com, 2015). Its more positive meaning only emerged in the seventeenth century, and more recently it has come to be more associated with escape from the ordinary and the struggle for betterment (Berthon et al 2009). Brands like Louis Vuitton that started more than 150 years ago as a niche manufacturer for the aristocracy are now a common brand among successful professionals (uk.louisvuitton.com, 2015). The market for luxury goods has grown exponentially, reaching 220 billion euro in 2015, triple its size 20 years ago (Bain.com, 2015). Luxury products are

advertised aggressively on media, endorsed by celebrities, and are associated with any cultural, sport, or business event. What was once considered a mere extravagance is now a booming sector where marketers and consumers are constantly exchanging information.

accordingly to the increased demand by investing heavily in marketing and in opening new retail locations. For instance, one of the iconic luxury brands - Louis Vuitton - has opened 37 stores across 29 cities in China (Kapferer, 2012). The company that is traditionally associated with cities like Paris, London, and New York is now present in what are considered provincial cities in China.

This growth has also provoked the interest of scholars and academics and the body of research has significantly grown in the last 15 years. Nevertheless, there is little consensus in academia as to what luxury is and why consumers perceive a product to be luxurious. Various studies have focussed on the consumer perspective and the motivation to buy luxury goods. One stream of research outlines the symbolic value of luxury goods building on Veblen (1899) who argues that people use the conspicuous consumption of luxury goods to signal wealth, power, and status. Such view is supported by Belk’s (1988) theory of the extended self, where individuals define themselves, in part, by what they own. Certain possessions aim at signalling to others an

individual's self-concept or identity. Thus, possession and display of luxury brands is a powerful ‘weapon’ that serves to validate one’s perception of oneself. Wiedmann et al. (2009) extend this view by outlining that consumers may use luxury goods to support their self-identity by

integrating symbolic meanings of these brands into their own identity. Furthermore, luxury goods work as an effective social label because of their premium prices and the associated symbolic meanings (Batra, Ramaswamy, Alden, Steenkamp, & Ramachander, 2000; Bearden & Etzel, 1982; Steenkamp, Batra, & Alden, 2003 cited in Zhan and He, 2012).

1.2 Research focus

As demonstrated in the previous section, the state of research on luxury goods is still in its early stages, with some controversies and unexplored topics. There is still some confusion about how to define luxury and what benefits consumers seek from it. There is no universally agreed upon definition of luxury. Nueno and Quelch (1998) find that the understanding of luxury is very much biased by the social and cultural environment. Scholars have called for more extensive research in the luxury phenomenon. Berthon et al. (2009) assert that luxury brands present somewhat of a paradox for they are one of the most profitable and fastest-growing brand

segments, yet at the same time they are poorly understood and under-investigated. Ciornea et al., (2012) further argue that despite the growing interest in luxury goods there are still many areas in this field that had been hardly, or not researched at all. Walley et al. (2013) posit that despite the long interest in the subject, patterns of consumption of luxury goods remain an open issue. This paper focuses on the post-purchase evaluation of luxury goods, which is one of the

underexplored areas in the literature. In the post purchase phase, the consumer uses the product and assesses to what extent his needs have been satisfied. Blackwell et al. (2006) posit that this post purchase evaluation have a crucial role in understanding what features of the product have the strongest positive effect on the consumer. This connection, in turn, would advance our understanding in consumer’s motivation to buy luxury goods. This is an area well worthy of study both from academic and from practitioners’ perspective. From a scholar perspective, this is an understudied area and the study will deepen our understanding of consumer preferences for luxury goods. From a marketing practitioners’ perspective understanding what features of a product are valued most and the emotional response of consumers is of tremendous importance because it will allow them to emphasize these characteristics in marketing campaigns.

of consumers’ perception of an offer to be adequately satisfying their desires (Olson and

Reynolds, 2001) cited in (Schaefers, 2013). Hence, the study will use this model combined with a laddering interview technique in order to get a deeper understanding of consumers’ ultimate desires and goals that drive their luxury goods consumption.

The study offers a novel approach to investigating consumer preferences for luxury goods. It addresses a gap in the luxury goods literature related to the theoretical and methodological perspectives previously used. First, it connects consumers to a tangible product that they have bought, rather than exploring abstract future purchase behaviour. Second, the paper uses the means-end chain model that provides more depth in understanding not just on the important attributes of luxury goods, but also the benefits, and end values and the connection between these constructs. In the means-end chain model, products are not chosen and purchased just for their features, but for the meaning they have for consumers (Reynolds and Gutman, 1988).

In order to tackle all these questions, a three-step process will be implemented. First, an extensive literature review will provide the theoretical foundations behind luxury good

consumption and will provide the context of the current state of research in the field. The review will examine the different concepts of luxury goods and the conceptualised drivers behind their consumption. Additionally, this section will expand on the two main theoretical frameworks for this paper – the customer-based brand equity model and the consumer decision process– by critically evaluating their relevance to luxury goods research. Second, the author will collect primary data for the study by conducting in depth qualitative interviews. The respondents will be filtered by their interest in luxury and by a recent purchase of such a good. The aim is to obtain first hand data that is specifically relevant for the study’s research topic. Finally, a qualitative analysis on the data will be conducted in order to gain insight in the post-purchase evaluation and hence fill the gap in the literature that this domain represents.

Luxury good as such is a very general term that can refer to different products. In order to

narrow the research question, the researcher builds on Dijk (2009) who identifies three categories of luxury goods: personal, home, and experiential. This paper will focus on the personal luxury goods, which include clothing, accessories, watches and jewellery, as they represent the largest portion of the consumer spending (Bain.com, 2015).

1.3 Overall research aim and individual research objectives

As discussed in the previous section, the overall aim of this paper is to explore how luxury good consumers evaluate the products they purchase, outline the benefits that are most valued by them and the end values they fulfil. In order to address this overall research aim the paper will tackle four sub questions that are highly relevant to the research topic. Answering those research objectives will give the study the necessary context to address the research focus. These objectives are the following:

2. Critically evaluate consumer behaviour models such as the customer - based brand equity model and the consumer decision process in the context of luxury goods

3. Explore in depth the luxury products’ attributes that consumers find most important and the benefits they bring to them

4. Outline the terminal values (end goals) of consumers that luxury goods help them fulfil and the connections between the attributes-benefits-values chain

The first objective addresses what luxury goods are and the possible reasons why consumers buy them. As outlined in the background section, the sales of luxury goods are growing steadily and the economic growth in certain parts of the world is not a sufficient explanation. The paper will provide an extensive literature review of the drivers behind such growth. Objective 2 evaluates critically two models related the relationship between consumers and luxury brands and how it affects their decision-making. Objectives 3 focuses on the post-purchase evaluation of luxury products that respondents have bought: what are the attributes in a product that are most important to consumers; what are the benefits of their consumption - functional, emotional, symbolic; how the consumer feels about the brand; what are the most important features of the product that the consumer evaluates; how their evaluation reflects on their opinion about the brand. Finally, objective 4 delves deeper into consumers’ evaluation of luxury goods and outlines the terminal values consumers aim to reach by their consumption. A hierarchical value map will be created that details the relationships between attributes, benefits, and values. These objectives should not be regarded as separate subjects but rather as linked steps.

Addressing the research objectives will be done through an extensive literature review of the relevant academic literature. In addition, primary data that explores consumers’ perceptions and preferences will be collected. The paper adopts an exploratory research design and uses semi-structured interviews with luxury good consumers. Section 3 - Research design and methodology - will provide the reader with pertinent information on the data collection and analysis

The paper will contribute to the luxury goods literature in the following ways:

• Contribute to the emerging literature on luxury goods consumption by examining the key perceived benefits that drive purchase behaviour

• Interpret and expand existing consumer behaviour models such as the consumer decision process and the customer based brand equity model with regards to luxury goods

• Identify how consumers evaluate luxury goods and the key benefits they are looking for to help marketers in the marketing and promotion of luxury goods.

• Stimulate further research on the post-purchase evaluation of luxury goods

1.4 Summary

The first chapter of this paper provided background information on luxury good consumption, emphasizing the massive growth in sales in the last few years. The introduction also identified some controversies in the topic and a research gap in the existing literature. With most studies focusing on the antecedents of consumers’ luxury good consumption, the post-purchase

2. Issues and review of related literature

As outlined in the introductory chapter, the following individual research objectives will be addressed in the literature review:

1. Explore the different typologies of luxury and existing literature on consumers’ motivation to buy such goods

2. Critically evaluate the existing consumer behaviour models such as the customer - based brand equity model and the consumer decision process in the context of luxury goods

The section begins by outlining the theoretical background of luxury goods and brands. Various typologies of luxury and the drivers behind its consumption are investigated. Further, this part explores the two main models used in the paper – customer based brand equity and consumer decision process - and critically evaluates their relevance to the study. Finally, the literature review focuses on the gap that this paper aims to address and justifies the need for further empirical study.

2.1 Luxury goods

class used expensive silverware for meals when less expensive substitutes could work as well or even better. Economists have confirmed that empirically by showing that consumer derive subjective utility from products that deliver no functional benefits, but serve as signals of social status (Bourdieu, 1984). This is in line with Grossman and Shapiro (1988) who define luxury goods as goods that people use to show prestige and status while the difference in functional utility over other goods is largely negligible. However, not every consumer practices

conspicuous consumption. Some consumers instead seek non-conspicuous benefits, such as the quality of the product (Beverland, 2006) or self-directed pleasure (Truong and McColl, 2011).

Luxury goods are traditionally defined as goods such that the mere use or display of a particular branded product brings the owner prestige apart from any functional utility (Grossman and Shapiro 1988).Kivetz & Simonson (2002) define luxury goods as products that are not essential. The authors make a clear distinction between necessities like food, shelter, electricity, and non-essentials like expensive wine, cruises, sports cars, custom fragrances. They further posit that luxury purchases are made rarely, as an exception to the general. However, such a view is rather limited in scope, as what is luxury is largely defined by the frequency of consumption, which does not necessarily correlates with what the consumers perceive as luxury. For example, a seasonal purchase such as a winter jacket would be considered a luxury following this logic, but it can also be a necessity that is nonetheless bought seldom. A differentiator between luxury and non-luxury goods can be the price. Luxury goods are associated with high price and are usually reserved for the higher upper-class society because of that high-price (Miyazaki, Grewal, & Goodstein, 2005; Nuemo & Quelch, 1998; Silverstein & Fiske 2003). Hence, such goods are attainable by few and are therefore associated with social distance (Hansen and Wanke, 2011). Moreover, because of this exclusiveness, the ordinary consumers do not have a lot of experiences with luxury products and they feel ‘foreign to the world of luxury’ (Dubois et al., 2001). As there are apparent differences in perceptions, the current paper will filter respondents by a recent luxury purchase.

brands are publicly consumed luxury products that consumers can easily employ to signal wealth’. In addition, new terms are emerging in the luxury literature such as ‘old luxury’ being about the good itself and defined by the company and ‘new luxury’ being experiential and defined by the consumer (Florin et al., 2007).

Vigneron and Johnson (1999), in their seminal paper, conceptualize luxury products as ‘an

example of extreme high-end high-involvement decision making’ and identify five types of

Table 2.1 Types of luxury consumers

Type of consumers Value derived Motivation

Veblenian Conspicuous value The primary objective is to impress others. High price is very important for such consumers, as it serves as an indicator of luxury and prestige.

Snob Unique value The primary objective is to be unique. Snob consumers regard price as an indicator of exclusivity, and hence avoid using the most popular brands.

Bandwagon Social value Consumers buy a certain luxury product because many other people have bought it and its deemed trendy.

Hedonist Emotional value Consumers get a euphoric feeling from the consumption of luxury products.

Perfectionist Quality value Consumers buy luxury goods because of their high quality, durability, and the

Source: Adapted from Vigneron and Johnson (1999)

In a study on the value associated with luxury brands, Berthon et al. (2009) identify similar motivations and posit that luxury brands provoke three worlds of consumer experience. World one focuses on functional value, where the quality of the actual goods and service quality as perceived by the consumer. For the consumers operating under this category, quality can be important because it signals what an object does and how well this object can perform (Berthon et al., 2009; Sweeney and Soutar, 2001). In world two, the experiential value consists of

individual thoughts and feelings toward the luxury brand because it is often perceived

subjectively as something that is rare, precious, and unique. These can be divided into hedonic and uniqueness-seeking motivations. World three emphasizes a luxury brand’s symbolic value, which indicates conspicuousness, expensiveness, and wealth. Within the symbolic dimension, possession of luxury brands could provide a signal to others as well as the user (Belk, 1988; O’Cass, 2004).

In addition to social values, luxury brands can help consumers satisfy their personal needs by providing other psychological benefits (Wiedmann et al., 2009). For instance, consumers can derive excitement from the consumption of luxury products, thereby experiencing personal rewards and fulfilment (Sheth, Newman, & Gross, 1991). Also, consumers may use luxury brands to develop and support self-identity by integrating symbolic meanings of these brands into their own identity (Wiedmann et al., 2009). Such view is supported by Belk’s (1988) theory of the extended self, where individuals define themselves, in part, by what they own.

Luxury goods are also related to the concept of personal desire (Berry, 1994). People pursue luxury in part to fulfil certain personal desires. In other words, the very notion of luxury involves increasing pleasure beyond basic functionality (van der Veen, 2003; Kemp, 1998), suggesting a motivation that focuses on hedonist experiences (Chua and Zou, 2009). Danziger (2005) adds that ‘Luxuries are the extras in life that make it more fulfilling, more rewarding, more

self-directed pleasures or gratification for themselves (Tsai, 2005; Vigneron & Johnson, 1999) cited in Chua and Zou (2009).

In order to narrow the research question, the researcher builds on Dijk (2009) who identifies three categories of luxury goods: personal, home, and experiential. This paper will focus on the personal luxury goods, which include clothing, accessories, watches and jewellery, as they represent the largest portion of the consumer spending (Bain.com, 2015).

The review of luxury literature clearly demonstrates that luxury is a multidimensional concept, with no clear boundaries. Different streams of research tackle the construct from various angles. Economists focus on the ever-higher demand for such products despite the high price and economic crises in some of the markets. Social scientists emphasize the role of luxury as a source of social stratification, where only the higher classes have access to it, whilst the rest feel ‘foreign to the world of luxury’ (Dubois et al., 2001). Clearly, there is complex relationship between consumers and luxury brands that need to be analysed further. A model that provides very important insights regarding the relationship between consumers and luxury brands is the Customer – Based Brand Equity model (CBBE onward). It will be discussed next.

2.2 Customer-based brand equity

associations in memory’. Brands with high brand equity can command premium prices, have more inelastic consumer response to price increases, and elicit improved perceptions of product performance. All three can be related back to the literature review on luxury brands, which outlined that: consumers are willing to pay premium prices; the demand for some luxury goods goes up with the price; in addition to the functional benefits, consumers derive emotional and symbolic utility form luxury goods. From this perspective, it seems like successful luxury brands have achieved high levels of CBBE. However, in order to understand how luxury brands build brand equity and what their relationship with consumers is, we need to investigate the building blocks of CBBE. The CBBE has four levels and six building blocks, where each layer serves as a foundation for the next one. The first layer relates to the brands identity from consumer’s

perspective; the second to its meaning for the consumers; the third to the emotional response that the brand triggers; and the final one to the relationship between the consumer and the brand. Figure 2.1 below shows the building blocks of the CBBE pyramid, which will be explored next.

Fig. 2.1 Customer-Based Brand Equity Pyramid

Source: Keller (2003)

2.2.1 Brand Identity (Salience)

under different conditions’. Brand awareness is essential for a purchase to occur, as consumers must first be made aware of a brand in order to buy it. Brand awareness is the crucial first stage in buyer readiness to develop a brand preference and move closer to the point of purchase (Chadwick and Arthur, 2008). In the CBBE model, brand awareness is regarded as consisting of brand recognition and brand recall. Figure 2.2 shows the components of brand awareness.

Fig. 2.2 Brand Awareness components

Brand recognition refers to consumers’ ability to recognize or connect a product to a brand that they have previously been exposed to. Brand recognition is therefore considered as the minimum level of brand awareness and is based on aided recall (Holden, 1993). Luxury brands have distinct brand attributes such as logos and proprietary designs that ensure they are widely recognized. As the discussion on luxury products consumption outlined, many consumers buy such goods so they can demonstrate a certain social status. Unlike standard brands who have a target group of consumers to whom they advertise, luxury brands need to make sure everyone is familiar with their brand attributes, not just luxury consumers. The effect of this wide recognition is twofold: first, luxury consumers would buy goods to express themselves to others; second, current non-luxury consumers would aspire to be able to buy luxury products in the future. Hence, luxury brands invest heavily in promoting their brand attributes. For instance, Gucci’s logo and Louis Vuitton’s iconic brown and yellow design pattern are highly recognized and associated with the brand even by non-luxury consumers. They are shown in table 2.2 below.

Brand

Awareness

Brand

Table 2.2 Gucci and Louis Vuitton designs

Gucci Louis Vuitton

products. In luxury, if somebody is looking at somebody else and fails to recognise the brand of his watch, and to know the price that goes with it, part of its value is lost (Kapferer, 2009). Luxury brands are highly advertised not just in media but also through a range of communication channels such as celebrity endorsement, sponsorship of sports and cultural events, and product placement in the most popular films and TV shows. For instance, the Swiss watchmaker Omega offers a special new model that is worn by Daniel Craig in the new James Bond film “Spectre” for $7,500 (Business Insider, 2015). Once luxury brands have established sufficient brand awareness, they can focus on the brand image, which will be discussed next.

2.2.2 Meaning (Brand Image)

Brand image conveys what the brand stand for in the minds of customers and what distinguishes it. Brand image is made of two major categories of brand associations related to performance and imagery. Li and Kambele (2012) find that people distinguish luxury fashion brands as brands with the following characteristics: global recognition, core competence, high quality and

innovation, powerful advertising, and immaculate in-store presentation. The two building blocks of brand image - performance and imagery - are shown in figure 2.3 and are discussed next.

Fig. 2.3 Brand Image components

Brand Image

Brand performance describes how well the product meets customers’ functional needs (Keller, 2003) in terms of quality, durability, and design. He further argues ‘the product itself is at the heart of brand equity, because it is the primary influence on what consumers experience with a brand’.

Luxury products are often described as being of excellent quality, because the ingredients or components in luxury products are exceptional and superior to items individuals commonly find (Hansen and Wanke, 2011. They are made from premium materials, often hand made by talented craftsmen, which makes them highly durable and reliable. The iconic female luxury brand

Cartier for instance offers lifetime warranties for its watches (Cartier.co.uk, 2015). Additionally, flagship luxury brand stores are usually in top locations and offer perks like free champagne, personal stylist, and home delivery to their customers. Finally, the price serves a very particular purpose for luxury brands. Unlike other products where the customer wants to get highest value for the lowest price, in the luxury good market premium price serves as effective social label that communicate prestige and social status (Kapferer, 2007).

Brand imagery depends on the extrinsic properties of the product, including the ways in which the brand attempts to meet customers’ psychological or social needs. It is the way people think about a brand abstractly, rather than what they think the brand actually does. Thus, imagery refers to more intangible aspects of the brand (Keller, 2003). The four main types of intangibles linked to a brand are the following:

 User profiles

 Purchase and usage situations

 Personality and values

 History, heritage, and experiences

that group. Also, consumers may use luxury brands to develop and support self-identity by integrating symbolic meanings of these brands into their own identity (Wiedmann et al., 2009). Purchase and usage situations refer to the locations consumers buy and use the products. Luxury brands are characterised by “selective distribution” (Kapferer and Bastien, 2009). In terms of usage situation, luxury brands can be associated with more formal situations as business conferences or informal as dinner parties or a game of golf. Through consumer experience or marketing activities, brands may take on personality traits or human values and, like a person, appear to be “modern,” “old-fashioned,” “lively,” or “exotic (Plummer, 1985). Following the literature review on luxury in the previous section, the most common themes in consumers’ minds are “successful”, “prestigious”, “desired”, “and sophisticated”. Brand’s history, heritage, and experiences form the final element of brand imagery. Many luxury brands tend to emphasize their history of craftsmanship like Swiss watchmakers; other brands like Dolce & Gabbana try to leverage associations with their country of origin. Consumers might have personal experiences with the brand in the past, or associate it with certain places, events, or people. Such associations help produce brand responses, or what customers think or feel about the brand (Keller, 2003). These will be presented in the next section.

2.2.3 Brand Response

On this level of the pyramid, users form important judgments and feelings about the brand based on its performance and imagery, discussed in the previous section. The CBBE model

Fig. 2.4Brand Response components

Brand judgments are customers’ personal opinions about the brand. Keller outlines four types of judgments as particularly important:

 Quality  Credibility

 Consideration

 Superiority

Quality judgments can refer to brand’s functional attributes. These can come from any of the performance attributes discussed in the previous section like design, style, or product reliability. Credibility measures how consumers see the organization behind the brand - its perceived expertise, trustworthiness, and likeability. Luxury brands address this by emphasizing their history of success, the expertise of the people who create the products; and the social

responsibility. Luxury brands like Hublot, Bulgari, and Graff Diamonds have recently supported various charity initiatives by creating limited edition products and donating the proceeds of the sales (Financial Times, 2015). Next, consideration in brand judgments refers to whether the brand is in consumers’ consideration sets and how personally relevant customers find the brand. This is an important element, as consumers may have very positive attitude towards a luxury brand, but unless they find it personally relevant, they would still keep it at distance. Finally,

Brand

Response

superiority measures the extent to which customers view the brand as unique and better than other brands (Keller, 2003).

Brand feelings are the second building block of brand responses. Keller defines them as ‘the customers’ emotional responses and reactions to the brand’. Brand feelings explore how the brand affects customers’ feelings about themselves and their relationship with others. (Keller, 2003). The model outlines six main feelings brands evoke:

 Warmth  Fun  Excitement  Security  Social approval  Self-respect

The last two - social approval and self-respect - are the ones most commonly found in the luxury literature, and are identified among the drivers behind luxury goods’ consumption. Luxury brands provide consumers with a sense of indulgence and can send meaningful social signals about the type of person using that brand (Nunes et al., 2010). The term ‘bandwagon’

consumption occurs in luxury markets when consumers buy certain categories of luxuries because of their popularity and that triggers further demand (Kastanakis and Balabanis, 2011). Mandel et al. (2006) conduct a series of experiments and find that comparisons with successful others can cause individuals to imagine themselves achieving a similar level of success, which can alter their future expectations, and consequently, their preferences for luxury brands.

2.2.4 Relationships (Brand Resonance)

Brand resonance is the final step of the CBBE pyramid and describes the ultimate relationship and level of identification that the customer has with the brand (Keller, 2003). At that stage the consumers feels ‘in sync’ with the brand. Brand resonance is expressed into four categories:

 Behavioural loyalty

 Attitudinal attachment

 Sense of community

 Active engagement

Behavioural loyalty answers the question how often customers purchase a brand and how much they purchase. Loyalty is necessary but not sufficient for resonance to occur. Resonance requires a strong personal attachment to the brand where customers go beyond having a positive attitude to viewing the brand as something special in a broader context (Keller, 2003). The term ‘brand love’ has been coined by academics and has been associated with positive word of mouth, brand loyalty, and increased willingness to pay a price premium (Batra et al., 2012). The brand can also have a broader meaning to the customer by conveying a sense of community where the consumer feels some sort of kinship with other consumers of the brand (Keller, 2003). Luxury brands try to encourage such sense of community by creating special events for customers such as fashion shows, parties, or travels. The fashion brand Gucci offers tours of its Florence workshop to top customers to show them “how much history, tradition, quality, and passion there is behind our work”. Luxury brands Valentino, Loewe, and Dunhill have created an online club for travellers with the love for luxury, where clients can travel and shop exclusive products together (Roberts, 2013). The last element fostering brand resonance is active engagement, where consumers become brand evangelists.

Summary: The CBBE gives the true measure of the strength of a brand, that is, how customers really think, feel and act in regards to that brand. The model gives valuable insights of

luxury brands and the different building blocks of that relationship. The review of the literature has demonstrated that luxury brands invest a lot in creating a connection with consumers both through the means of marketing communications, and through carefully planned product

management. What the CBBE model does not to address, however, is why consumers buy luxury products, and what are the product features and benefits that influenced their decision-making. To address this gap, the paper will examine next the consumer decision process model.

2.3 Consumer Decision Process

The CDP model was introduced by Blackwell et al. (2006) aiming to provide a framework for the various factors that influence consumers’ behaviour and decisions. The model outlines the different steps consumers goes through, as well as the factors that influence his decision. According to the framework a potential consumer begins by identifying a need, which could be functional, psychological, or social and can be triggered by internal or external stimuli.

Advertising represents a possible external stimulus, whilst feeling cold for instance is an internal stimulus that leads to need recognition. The second step of the model outlines the search for information. This can come from media, opinion leaders, advertising, previous experience with the product or brand. This information, stemming from various sources is analysed in stage three – pre-purchase evaluation of alternatives. The consumer uses previously collected the

information and his personal perceptions to define his preference criteria and evaluate which alternative has the most chance to satisfy them. In the next stage, the consumer makes a purchase decision that is based on his evaluation. In the consumption and post consumption phase, the consumer uses the product and assesses to what extent his needs have been satisfied. Blackwell et al. (2006) posit that this post purchase evaluation have a crucial role in consumers’ attitude towards the brand. A satisfied consumer is more likely to reduce the steps the next time he identifies a similar need and purchase again the same brand. This creates a relationship between the consumer and the brand and enhances brand loyalty.

phase, as it is then that consumers evaluate whether their goals have been fulfilled. This in turn is likely to influence their relationship with the brand. Post-purchase behaviour is a process in which consumers compare their expectations to reality, experience consequent satisfaction or dissatisfaction and then act in a way influenced by that satisfaction or dissatisfaction (Gilly and Gelb, 1982). The study will explore this process with the particular focus on the product

attributes and the benefits they created. Figure 2.5 depicts the CDP model’s phases. Fig. 2.5 Consumer decision process model

Need Recognition

Post Consumption Evaluation Consumption

Search for Information

Purchase

Pre-Purchase Evaluation of Alternatives

Source: Blackwell et al. (2006)

The CDP offers a valuable framework for consumer behaviour analysis, as it can be used for any product category. This is both its strength and its weakness, as it makes it rather generic and assumes that consumers follow the same pattern for any type of purchase. Hence, the study need to explore further the theory of consumer decision-making, in order to have the necessary

theoretical basis for the data collection process. A framework that is highly relevant to consumer decision-making and attitudes is the means-end chain model (MEC onwards) (Gutmanm 1982) because it investigates the relationship between a product and consumers’ values in depth. MEC is defined as ‘a model that seeks to explain how a product or service selection facilitates the achievement of desired end states’ (Gutman, 1982); it is based on the elicitation of constructs and has been widely used in marketing research, particularly for retail marketing, advertising,

product development and branding (Reynolds et al., 1995; Reynolds and Gutman, 1988, Wagner, 2007, cited in Amatuli and Guido, 2010).

Means-end chain (MEC) analysis is a qualitative method for investigating individuals’ general cognitive structures in decision-making (Aurifeille and Valette-Florence, 1995). The basic premise of this approach is that consumers buy products in order to achieve specific values. The chain that leads to this end is attributes-benefits-values. Attributes relate to the product’s

Design and Methodology provides details of how the MEC framework will be used in the data collection process.

2.4 Luxury product categories

This section aims to clarify the relationship between luxury brands and products and to outline how these two terms are interrelated. Heine and Phan (2011) posit that for a brand to be luxury, it must offer luxury products. Nueno and Quelch (1998) further add that a luxury brand is not merely a premium priced product, and must offer consistent delivery of premium quality across all products in the line, from the most to the least expensive. Hence, luxury brands are generally treated as homogenous - a luxury brand is a luxury brand (Berthon et al., 2009). The current study focuses on personal luxury products such as clothes and accessories. Previous research has found that fashion product categories evoke high product involvement in consumers (Radder ad Huang, 2007). Product involvement requires an on-going commitment on the part of the

consumer with regard to thoughts, feelings, and behavioural response to a product category (Miller and Marks, 1996; Gordon et al., 1998) cited in Quester and Lim (2003). Product

involvement reflects the perceived relevance of the product category to the individual on an on-going basis (Quester and Lim (2003). Research shows that when product involvement is high, buyer decision processes are thought to proceed through extended decision making, a series of sequential stages involving information search and evaluation of criteria (Browne and

relevant to the personal luxury goods product category, which represents the biggest part of luxury sales (Bain.com, 2015).

2.5 Research Questions

This paper outlined four individual research objectives set within the context of luxury goods consumption that relate to the post-purchase evaluation of luxury goods. Chapter 2 provided an important review of the concept of luxury goods. Furthermore, the study analysed consumers’ motivation to buy such product and critically evaluated the importance of brand equity in consumer decision-making. The literature review has provided a sound theoretical basis for the paper and the necessary context for the study. However, it has not provided information on the post-purchase evaluation of luxury goods by consumers, which is the focus of the study. There is no existing data that is relevant to this research question and could be used by the paper. Hence, in order to address this gap, the researcher engaged in collecting primary data from luxury good consumers. The aim of the data collection and analysis was to answer the following research questions:

1. What are luxury products’ attributes that are most important to consumers in their post-purchase evaluation and how they separate luxury from non-luxury products

2. What tangible and intangible benefits do consumers experience from luxury good consumption

3. What are the end values that consumers want to reach through the products’ attributes and the benefits they bring

3. Research Design and Methodology

3.1 Research design

Research design is the general plan that outlines how the research questions will be answered. It specifies how the researcher intends to collect data, and what the limitations of this particular design are (Saunders et al., 2012). The current study is exploratory in nature – its purpose is to explore how luxury goods consumers evaluate their purchases, what are the benefits that they focus on, and how the post-purchase evaluation of a product shapes their future consumption preferences. The focus on the post-purchase phase and the relationship between the consumer and the brand as defined by the CBBE pyramid represents a novel research approach within the luxury goods literature. To the best knowledge of the author, this represents a gap in the

literature that the study aims to address. The paper does not aim to offer conclusive answers regarding the post-purchase evaluation on luxury goods that can be generalized; rather it aims to provide an initial understanding of this phenomenon that can be built upon in future research. The research strategy for the paper is a qualitative survey, where the researcher conducted semi-structured interviews with luxury good consumers. The nature of the study is cross-sectional because it studies a particular phenomenon at a particular time (Saunders et al., 2012).

Denzin and Lincoln (2005) posit that qualitative research involves studying ‘things in their natural settings, attempting to make sense of, or interpret, phenomena in terms of the meanings people bring to them’. As the purpose of the study is to explore consumers’ psychological and emotional reaction to luxury goods consumption in depth, a qualitative approach is adopted because of its ability to obtain first-hand a description of some specified experience (Hastings and Perry, 2000). Cooper (1999) posits that brands are not simple measurable things but a set of features that meet consumers’ rational, social, emotional, and cultural needs. Hence,

understanding how consumers interact with luxury products and brands requires an in-depth approach that will allow the researcher to explore the mental process through which they go in purchasing luxury goods and evaluating the purchase. Qualitative research design is

 An inductive logic of the relationship between theory and research, whereby the former is generated out of the latter

 An epistemological position described as interpretivist, meaning that the stress is on the understanding of the social world through an examination of the interpretation of that world by its participants

 An ontological position described as constructionist, which implies that social properties are outcomes of the interactions between individuals

To achieve that, the paper used the laddering technique and the Means-end chain framework as described in section 2.3. Laddering refers to an in-depth, one-on-one interviewing technique used to develop an understanding of how consumers translate the attributes of products into

meaningful associations with respect to self, following Means-End Theory (Reynolds and Gutman, 1988). Hawley (2009) compares a market researcher using the laddering technique to a psychologist who, through skilled interviewing can dig deeper and deeper to unearth insights that have relevance - even if the patient is not be able to make connections between underlying issues and their manifestations. This research instrument is highly relevant to the research aim of the paper, as it would allow to explore how consumers’ evaluate luxury products in terms of their attributes, while also outlining respondents’ underlying goals and emotions.

Collecting data for the MEC analysis is normally done using personal interviews that explore consumers’ attitude towards a product in terms of its attributes and benefits. Furthermore, the MEC investigates how these attributes and benefits help the consumer achieve his goals. Questions about these constructs are followed up by ‘why’ questions in order to examine the values behind the consumption of a product. As illustrated by figure 6, the MEC ladder explores both concrete and abstract attributes; functional and psychosocial benefits, which can be directly related to the building blocks of the CBBE pyramid model – performance, imagery, judgements and feelings. Hence, exploring the MEC ladder constructs provided in-depth data about

Fig. 2.6 Means-end chain ladder

3.2 Sampling

A sample is the segment of the population that is selected for investigation (Bryman, 2012). There are two main sampling methods – probability and non-probability depending on how the participants are selected. Probability sampling (or representative sampling) is most commonly associated with survey-based quantitative research strategies where you need to make inferences from your sample about a population to answer your research question or to meet your

objectives. The non-probability sampling approach (or non-random sampling) provides a range of alternative techniques to select samples based on your subjective judgement (Saunders et al., 2012).

The study used a purposive sampling, which is a non-probability approach that is conducted with reference to the goals of the research, so that units of analysis are selected in terms of criteria that will allow the research questions to be answered (Bryman, 2012). The aim of purposive sampling

Values

Benefits (tangible

vs. intangible)

Attributes (tangible

is to sample participants in a strategic way, so that participants who are interviewed are relevant to the research question being analysed (Bryman, 2012). As the study focuses on luxury

products, it is crucial that the respondents do actually buy luxury goods. Non-luxury consumers do not have a lot of experiences with luxury products and feel ‘‘foreign to the world of luxury’’ (Dubois et al., 2001), thus the researcher needed to make sure that only actual luxury shoppers were interviewed. To address these issues, the researcher filtered the participants in the study using two criteria:

 General interest in the topic of luxury brands and products  A purchase of a luxury product within the last six months

The first criterion ensure that participants have general knowledge of luxury including various brands, products, and their social meaning. This provided the researcher with some context. The second criterion ensured that the participant had bought recently a product they considered luxurious and could talk about the purchase in details. Only people who met both criteria were interviewed. An initial group of potential respondents was found using the personal network of the researcher by asking friends and fellow students to refer people they know that have interest in luxury. People who got recommended, were contacted by the researcher in order to explain the purpose of the research and make sure they are comfortable talking about a recent purchase that they deemed luxury.

3.3 Data collection and analysis

Data was collected using semi-structured interviews with seven luxury good consumers. An interview is a purposeful discussion between two or more people with the purpose of gathering valid and reliable data relevant to your research question and objectives (Clock et. al, 1957). The semi-structured variant was selected because it allowed the researcher to have in depth

‘In semi-structured interviews the researcher has a list of themes and questions to be covered, although these may vary from interview to interview. The order of questions may also be varied depending on the flow of the conversation. On the other hand, additional questions may be required to explore your research question and objectives given the nature of events within particular organisations’

This is highly relevant to the research objectives of the paper, as it gives it structure, but also allows for flexibility. In assessing the different interview variants, the researcher concluded that a fully structured interview with a strict set of questions is not a suitable strategy, as it would be too formal and will not elicit the rich data that comes from a more discussion-like interview. On the other hand, a completely unstructured interview bore the risk of being too broad and lacking the necessary focus to address the main research question – what are the benefits that are most appreciated by luxury good consumers in their post-purchase evaluation and which product attributes create them. Blumberg (2005) argues that semi-structured qualitative interviews are highly appropriate for exploratory studies. Saunders et al. (2012) add: ‘Semi-structured and in-depth interviews provide you with the opportunity to ‘probe’ answers, where you want your interviewees to explain, or build on, their responses’. The paper aimed to go beyond the ‘what’ and towards the ‘why’ by exploring the goals luxury products help consumers achieve. Hence, the interviews began with questions about the attributes of the purchased product, and gradually moved towards consumers’ values. Questions followed the attributes-benefits-values chain where the follow-up question is ‘why’. The aim was to explore what the goals of the consumer were and how the product helped achieve them. Data analysis was carried out following Gengler and Reynolds (1995) recommendations for analysis of laddering interviews following the means-end chain (cited in de Oliveira and Campomar, 2006). In the first stage, interviews were

3.4 Ethical considerations

The researcher contacted participants in the study to discuss their role in it. The researcher gave them information regarding the nature of the study, the general research aim and why primary data collection was necessary. They were informed of potential applications of the research. The researcher outlined the value of the research and informed them that the anonymity of their data was ensured. Participation in the study was voluntary, and participants could withdraw from it at any time. Any questions that were deemed too personal by the respondents would be dropped from the interview process. In order to ensure that respondents were comfortable and relaxed during the interview process, the researcher conducted the interviews in a location they preferred such as their home or a local coffee house. Finally, collected data was stored in a secure location and was only accessible by the author.

3.5 Limitations

conduct qualitative research with the aim to be easily replicated undermines the strength of this type of research.

Another limitation of the study stems from the fact that it is interpretative in nature and thus carries the risk of being influenced by the researchers own views on luxury. Even unconsciously, the researcher could influence the study by his perception of what is significant and important. The researcher minimized this by not incorporating his preconceptions in the analysis but rather look at the data through the lens of the participants. Additionally, the nature of the questions asked was objective and not leading towards a specific answer.

4. Findings and Discussion

4.1 Introduction

This chapter reveals the results from the empirical data analysis. As described in Chapter 3, the researcher conducted semi-structured interviews with luxury goods consumers. A total of 7 consumers (5 female and 2 male) were interviewed. The number of interviews was determined by the amount of new information that every new interview brought. The study stopped at seven, as at this point no significant new information or themes were observed in the data. The focus of the interview was the post-purchase evaluation of a luxury product. Following a laddering interview technique, the researcher delved into the attributes and benefits consumers found most important. The respondents were asked about the product attributes they valued, and these were followed up with ‘why’ questions in order to elicit the benefits and the values respondents had achieved with their purchase. A transcript of the interview guide and the interviews can be found in Appendix A. Table 4.1 presents the demographic profiles of the respondents. Table 4.1 Demographic profiles

Respondent Age Education Nationality

1 26 Bachelors degree British

2 29 Bachelors degree British

3 27 Masters degree British

4 30 Bachelors degree British

5 23 Masters degree British

6 25 Bachelors degree British

4.2 Luxury Product Attributes

Following the Means-End Chain framework, the interviews started out by having respondents name a luxury product they have bought in the last six months. Table 4.2 below describes the purchases the respondents have made and deemed luxurious.

Table 4.2 Luxury purchases

Respondent Gender Product Brand

1 Female Coat Ted Baker

2 Female Bag Michael Kors

3 Female Watch Rolex

4 Female Shoes Prada

5 Female Bag Dolce&Gabanna

6 Male Watch Omega

7 Male Apple Watch Apple

4.2.1 Concrete (Tangible) Attributes

Virtually all respondents outlined high quality as a must for a product to be luxurious. Four respondents declared the premium quality materials used, the careful production process and the workmanship involved in creating the product very important to them. One respondent stated that ‘when you understand what goes into it (the watch) you appreciate it more and even though the price is expensive you accept it’. Three respondents additionally outlined the durability and longevity of luxury products by stating that they expect them to last for a long time. One respondent said she was sick of buying bags that fall apart a couple of months after she had bought them and stated that she uses her new luxury bag nearly every day since she bought it and it is in the exactly same condition. Another consumer emphasized this point:

‘You can buy one (watch) for 10 pounds but it’s going to break in a week, whereas if you buy a Rolex it will last for decades… It doesn’t have batteries, so you once you got it that’s basically it, no further costs or anything. My dad has one since he was 21 and he is now 66 and it’s exactly the same watch.’

Another product attribute that was mentioned in the interviews was fitting. Respondents stated that luxury clothes fit better and are more comfortable because of the better fabrics and stitching. One respondent posited:

‘I wouldn’t buy a Dolce&Gabanna shirt just because it’s Dolce&Gabanna but it’s essentially the same as a five pound t-shirt from H&M. But if the feel of the fabric was better, all the details look nicer, and it fits better, then I would buy it’

An additional concrete attribute that came out of the interviews is design. Several respondents focussed on the beautiful design that is in line with the fashion trends as a key feature of luxury products. Only one respondent mentioned practical value explicitly as an important consideration for the purchase stating:

Overall, the predominant theme in concrete attributes was quality. Luxury consumers expected their purchases to retain their initial condition because of the high quality materials and work involved in producing them. In line with Hansen and Wanke (2001), consumers expected luxury products to have superior quality over non-luxury ones. The attributes that were outlined – quality materials, workmanship, design, durability correspond to the performance attributes outlined by the CBBE model. As discussed in the analysis of the CBBE model, the product itself is at the heart of brand equity, because it is the primary influence on what consumers experience with a brand. Hence, it is important to emphasize the attributes that are valued most, as they directly influence consumers’ perception of the brand.

4.2.2 Abstract (Intangible) Attributes

A significantly higher number of attributes that can be classified as abstract came out the interviews. All seven respondents mentioned high price as key attribute of luxury products. Interestingly, all respondents stated the price they have paid for the product in question, even though the researcher did not ask for it. Hence, it can be argued that the effect of price of luxury goods is twofold: before the purchase it serves as some sort of guarantee for the quality of the product, whereas post-purchase it is used as a justification that the product is indeed luxurious by the consumers. There’s a duality in the connection between price and luxury: a product is

expensive because it’s luxury, but also a product is luxury because it’s expensive. The discussion on high prices split the respondents into two groups – some believed that high price reflects the high quality of the product:

‘Given the high quality of the materials and the workmanship involved, you have a higher price point to reflect that... When you understand what goes into the product, you appreciate it more and even though the price is very high, you accept it’

On the other hand, some consumers believed luxury products are greatly overpriced:

Another respondent further emphasized this point by stating that:

‘There are shops in Newcastle that are really expensive and sell a ‘Comme des garcons’ t-shirt for 300 pounds but to me this is not luxury. Just because its 300 pounds it doesn’t make it luxury’

There’s an apparent difference in the way luxury consumers perceive price as either a logical consequence of the high quality of the product, or as a mere premium that comes just from the brand name and is not really related to any physical attributes of the product. One consumer summarized this very aptly:

‘I think fashion magazines play a big role in positioning something as luxury. Especially for new brands that positions themselves as luxury and the only way they do that is by appearing in various publications like Vogue and GQ that say this is a luxury product. And just because it’s there you’re like oh yeah this is a luxury product, I would pay a lot for it’

Related to that is another abstract attribute that was present in the interviews, namely the media coverage and associations with celebrities. Two respondents outlined celebrities as opinion leaders that have influence on their decision-making process:

‘Brands have a lot of influence through things like music videos, so you could see a video of Taylor Swift and she will have 6 different products there, so you see them and say Oh my God I should get those. Personally I’m not affected by that but I’m aware of it, so I guess you could say I am’

‘It’s difficult not to associate luxury products with celebrities such as models, actors, football players.’

The next attribute that was outlined is related to exclusivity of luxury products. Four respondents indicated it as important to them, and described it with terms like ‘rare’, ‘limited edition’,

‘There are a lot of rip offs out there and from a distance you can’t even tell which one’s fake and that upsets me’

She further added:

‘I think brands can become quite diluted when you have a lot of replicas (counterfeits). For example Louis Vuitton bags, you see so many of them that you just assume it’s fake. And you always have to ask oh is that real or not?’

This also relates to some products being ‘fashionable’ and ‘trendy’. Some consumers

emphasized the importance of being in line with the current trend, however there’s seems to be a tipping point where a trendy brand or product becomes too popular and is no longer desired. One respondent who had bought several Michael Kors products in the last few months (bag, purse, and watch) said that ‘the brand has become too popular, so I’m not sure if I’ll be buying other products anymore. I would probably go for a more expensive bag next time’. Referring back to the idea of exclusivity, a natural reaction for consumers appears to be moving up to a brand that is perceived as more exclusive because of higher price or lower popularity among consumers. Luxury products tend to be something that consumers want rather than need, as expressed by several interviewees. It is something that goes ‘beyond your basic needs’ and is not really necessary as described by one respondent:

‘When I think about luxury, to be honest, the first thing I think about is unnecessary. It’s very nice, but it’s not something you need, it something you want. Something you don’t need in your day-to-day life but makes you feel special because you’ve got it’

Another respondent expanded this view in the context of a purchase she made:

Related to this is the notion of ‘out of everyday norm’ that one respondent indicated. In her opinion you can have a product that you use every day, but also a luxury version of it for special occasions.

Two major themes were identified in the data relating to product’s price and exclusivity. Even though all respondents agreed that high price is an important attribute of luxury goods, some expressed the opinion that luxury brands overcharge for their products. Interestingly, none of them complained that she has overpaid for the product or had any remorse for paying the perceived high price. One respondent talked about the boots she recently bought:

‘I’m very aware that they are not worth the price tag but I know that the name of the brand always hikes up the price’

Hence, it can be argued that luxury goods consumers tend not to be sensitive to price and willing to buy a product even if the perceived value of it is lower than the price. This is in line with the luxury goods literature outlining that strong luxury brands could command price premiums. Furthermore, luxury brands could increase their prices without losing sales, as outlined by Kapferer (2007) who posits that luxury brands should keep raising their prices continuously in order to increase demand.

The other interesting point in the data is the issue of exclusivity. It appears that consumers want to be in line with the trends, but not too much, as this diminishes their perception of luxury. In that sense, luxury brands can become victim of their own success if too many consumers

purchase their products. Counterfeits have particularly negative effect on consumers’ perceptions of luxury and hurt the image of the brand, as they appear similar to the original products but only cost a fraction of the cost. This result further advances Keller’s (2008) point that luxury brands must legally protect all trademarks and aggressively combat counterfeits.

4.3 Benefits (Consequences)

where there was a close to even spread between tangible and intangible ones, the outlined benefits were almost exclusively psycho-social. One theme that can be classified as tangible is personal comfort and style. Two respondents shared that luxury clothes and accessories give them physical comfort, because of the quality fabrics and design. In terms of the intangible benefits, there were a few topics that emerged in the data. Two respondents outlined feeling in a ‘good mood’ when wearing luxury products and receiving compliments for them, which

reinforced that positive mood. Furthermore, four respondents outlined feeling more confident and powerful when wearing luxury products. One respondent shared that:

‘In my work I meet a lot of people and having a brand that everyone recognizes makes me more confident. It also creates a certain status that I like to project. When you walk around in nice shoes and bag, you feel good, more confident. It’s not that much about what people think but about how you feel’

Another consumer also pointed the idea of social status:

‘Luxury goods help you provide a status for yourself. You’re walking on the streets wearing a Prada and people who know what it is will constantly pick it and respect you for it, so you create a status without having to say anything’

These two quotes illustrate the dual role of luxury products: first, they provide a status for oneself, give you confidence, pride, and make you feel special. Second, luxury goods foster social acceptance, help you be received better, get respect and sometimes envy from other people. One respondent stated that she does not feel ‘worthy of the day’ unless she wears clothes of a certain standard. She further added:

Another benefit that was outlined by consumers was a feeling of accomplishment and success. Three respondents declared using luxury goods to demonstrate that they are successful and to ‘inflate their ego’. Respondent 2 put it this way:

‘People who have luxury products think I’m better than you because I have something nicer. It’s a capitalist society so you are brought up to think that the nicer things you have the better you’re doing in life’

Another consumer reinforced the notion of success:

‘There are certain connotations and ideas that go with luxury brands. I will buy a pair of Christian Louboutin shoes and everyone will see the red sole and will think I’m really trendy, and you know, winning at life because I can afford these expensive products’

The idea of emotional attachment to luxury products was also outlined in the data. Building on the idea that luxury goods are rare and special, creates a bond with consumers not just on a brand level - as described by the CBBE pyramid - but also on a product level. The analysis of data demonstrates a total dominance of intangible benefits over tangible ones. The CBBE model posits that consumers can have many different types of responses, coming either from the ‘head’ - rational judgements about the brands’ functional benefits, or from the ‘heart’- emotional responses based on how the brand makes them feel. Based on the data, it can be argued that emotional response has significantly higher effect on consumers’ attitude towards luxury products and brands.

4.4 Values