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Chapter 2 Literature Review This chapter presents the previous literature relating to the luxury purchase motivations in three sections. The first section provides a general literature background of the luxury consumption. The second section reviews the various definitions of ‘luxury’ concept. The third section addresses the theories and literature on motivations of consuming luxuries in three parts: the fundamental framework, the more recent developments and extensions, and the specific motivations of Chinese and Japanese consumers examined in the previous literature. The literature gaps will be noted as the lack in research-based studies in Asian luxury consumers and cross-cultural comparisons. This chapter concludes with the research questions.
The consumption of luxury by the rich has received considerable attention ever since Veblen’s (1899) promulgation of the theory of ‘conspicuous consumption’ (e.g., Mason, 1981; Stanley, 1989; Hirschman, 1990). Historically, luxury products consumption was thought to be the preserve of the upper echelons of society: only the elite had the financial ability to afford luxury products (Allison, 2008). Therefore profligate consumption of luxuries was viewed as being a characteristic of these elite (Allison, 2008). At that time, the consumption habits of the masses, through necessity, were focused far more on survival and respectability than on indulgence (Belleau & Xu, 2006).
With the growth of the middle class and people’s average incomes (Fletcher & Melewar, 2001), attitudes towards luxury consumption have changed gradually. The consumption of luxury products is currently perceived positively by many consumers (Dubois, Laurent and Czellar, 2001), and an increasing number of customers are engaging in consuming luxury products. A significant proportion of luxury sales are now made not to the rich but to the middle classes in society.
The topic of luxury is not completely new. Ever since 1990s, the phenomenon of increasing luxury consumption has raised academic interests (e.g., Dubois & Laurent, 1994; Dubois, Laurent & Czellar, 2001; Lu, 2004; Nia & Zaichkowsky, 2000; Nueno & Quelch, 1998; Riley, Lomax & Blunden, 2004; Summers, Belleau & Xu, 2006, etc.
Wiedmann et al., 2007; Tynan et al., 2008). Early research on this topic started from the work of Rea (1834), Velblen (1899) and Keasbey (1903). Their works have built the foundations of theoretical understanding of luxury consumption. In view of the recent tremendous growth of research in the field of luxury consumption, various aspects of luxury consumption have been addressed, for instance, the nature of luxury products (Veblen, 1899; Dubois & Czellar, 2002; Vickers & Renand, 2003; Vigneron & Johnson, 1999, 2004); status and conspicuous consumption (Mason, 2001; Trigg, 2001; Shipman, 2004; O’Cass & McEwen, 2004; Truong, Simmons McColl & Kitchen, 2008);
counterfeiting (Bian & Veloutsou, 2007); etc. Currently, study of the luxury market is taking a new direction due to the unprecedented demand coming from Asian countries, therefore much recent research focuses on the cross-cultural comparison of perspective, attitudes and motivations towards luxury consumption (Tidwell & Dubois, 1994;
Dubois & Laurent, 1996; Dubois & Paternault, 1997; Wong & Ahuvia, 1998; Dubois, Czellar & Laurent, 2005).
Motivations towards luxury purchasing is an important topic because consumers usually do not purchase luxury products per se, rather, they purchase perceived motive satisfaction or problem solutions (Man & Stella, 2012). In addition, the consumption of luxury products is a phenomenon that spans national boundaries (Tidwell & Dubois, 1994; Dubois & Laurent, 1996; Dubois & Paternault, 1997; Dubois, Czellar & Laurent, 2005). Consumers from different nations purchasing the identical luxury product do not necessarily share the same motivations for the purchase (Allison, 2008). For instance, one customer may generate great pleasure from simply consuming the luxury product, while another might obtain satisfaction due to the sign values of the luxury product, which is the ability of the luxury products to communicate to others of who they are (Tynan, et al., 2008). Differences in motivation for consuming luxury products have been suggested between South-East Asians and Westerners even when the same luxury product is consumed (Wong & Ahuvia, 1998).
The next section outlines the nature of luxury and reviews the literature on motivation for the consumption of luxury products.
2.2 Defining luxury products Adam Smith classified consumption into four segments: necessary (for life maintenance), basic (for normal growth and prosperity), affluence (are not necessary for growth and prosperity) and luxury (limited supplied, difficult to obtain and/or extremely expensive) (Smith, 1776). This notion emphasizes the material scarcity and high price of luxury (Berthon et al., 2009). However, defining luxury is not easy (Vieneron & Johnson, 1999; Tynan et al., 2008). It is far more than the material and its attributes (Berthon et al., 2009). The concept of luxury is subjective: different people view luxury differently and it is dependent on the consumers’ mood and experiences (Wiedmann, Hennigs & Siebels, 2009). Besides, it also contains social meanings (Zhang & Kim, 2013). In the academic literature, although a wide range of studies have been conducted to explore topics relating to luxury consumption (as illustrated previously), there is still a lack of agreement as to how the concept ‘luxury’ should be clearly and objectively defined (Tynan et al., 2010; Allison, 2008).
As luxury is a subjective and multidimensional construct, a definition of luxury should not follow a narrow but rather a comprehensive and integrative understanding (Wiedmann, Hennigs and Siebels, 2007; Tynan, et al., 2010). The concept of ‘luxury’ comes from the Latin ‘luxuria’ which means ‘extras of life’ (Danziger, 2005). ‘Luxus’, which is the root of ‘luxury’, means ‘‘soft or extravagant living, (over)-indulgence and sumptuousness, luxuriousness, opulence’ (Oxford Latin Dictionary, 1992, as cited in Tynan, et al., 2010:1157). In the academic literature, Vigneron and Johnson (1999, 2004) define luxury as the highest level of prestige brands that encompass several physical and psychological values. They are goods that the mere use or display can bring prestige to the owner, apart from the functional utility (Grossman & Sharpiro, 1988; Tynan, et al., 2010). To view in an economic aspect, luxury products are those price/quality relationships is the highest in the market, even though the ratio of functionality/price might be relatively low, the ratio of intangible and situational utility to price is comparatively high (Mckingsey, 1990; Nueno & Quelch, 1998; Man & Stella, 2012).
Therefore, luxury products can be described by the nature of their high price, standard and rarity, and are associated with wealth, exclusivity and power (Dubois & Gilles, 1994;
Brun et al., 2008; Shukla, 2011). As non-essential items or services, they contribute to luxurious living by providing an indulgence or convenience beyond the indispensable minimum (Dubois & Gilles, 1994; Brun et al., 2008; Shukla, 2011). Whereas necessities are utilitarian objects that relieve an unpleasant state of discomfort, luxuries are characterized as objects of desire that provide pleasure (Berry, 1994). Wiedmann, Hennigs and Siebels (2007) note that luxury goods enable consumers to satisfy both psychological and functional needs as the simple use or display of a particular branded product could bring esteem for the owner. Therefore, the psychological benefits can be regarded as the main factor distinguishing luxury from non-luxury products or counterfeits (Arghavan and Zaichkowsky, 2000). Cornell (2002:47) put forward the notion that the key components of luxury include ‘a strong element of human involvement’, ‘limited supply’ and the ‘recognition of value by others’. Kapferer (1997:253) thinks that ‘luxury defines beauty, it is art applied to functional items.
Luxury items provide extra pleasure and flatter all senses at once…Luxury is the appendage of the ruling classes’. Consumption of these goods involves purchasing a brand representing value to both the individual and significant others (Wiedmann, Hennigs & Siebels, 2009; Shukla and Purani, 2011; Tynan, et al., 2010). Today, marketers commonly use the word luxury to persuade consumers to purchase products that are more expensive (Tynan et al., 2010).
Luxury brands are considered to ‘evoke exclusively, have a well-known brand identity, enjoy high brand awareness and perceived quality, and retain sales levels and customer loyalty’ (Husic & Cicic, 2008:231). Tynan et al. (2010:1158) indicate that the term ‘luxury brands’ identifies ‘high quality, expensive and non-essential products and services that are perceived by consumers as rare, exclusive, prestigious, and authentic and that offer high level of symbolic and emotional/hedonic value through customer experiences’. Similarly, Beverland (2004) creates a comprehensive luxury brand model with six dimensions: product integrity, value-driven emergence, culture, history, marketing and endorsement. However, this model is criticised by Moore and Birtwistle (2005), they assert that other details such as uniqueness and price also need to be incorporated in order to build a modern luxury brand. Dubois, Laurent and Czellar (2001) also identified six dimensions of luxury after conducting both qualitative and quantitative research into attitudes towards luxury. These characteristics of luxury products are: price, quality, uniqueness, aesthetic, personal history, and superfluousness.
Although luxury brands are characterised by premium quality, recognizable style, heritage of craftsmanship, premium price, uniqueness, and global reputation as mentioned previously, it is generally agreed that ‘luxury’ defines not a category of products but a conceptual and symbolic dimension (Nueno & Quelch, 1998; Tynan et al., 2010). Consumers buy luxury brands primarily for symbolic reasons to reflect their individual or social goals. The symbolic dimension comprises values that are strongly related to cultural elements or socioeconomic context (Vickers & Renand, 2003; Tynan et al., 2010). Vickers and Renand (2003) recognise luxury goods as symbols of personal and social identity (Tynan et al., 2010). For example, individuals may use these products as a mechanism to transform some elements of an individual’s lifestyle. On the other hand, consumers may purchase luxury fashion products to gain the attention of others (Potts, 2007). Vigneron and Johnson (2004) argue that people may purchase luxuries to signal or indicate their wealth and status. At the same time, the extreme expensiveness enhances the value of such an indicator (Bian and Forsythe, 2011). Kapferer and Bastien (2008) also note that luxury has its essential role of reconstructing social stratification (i.e. a social maker). That is, people consider luxury as a key component to define themselves as they wish socially. O’Cass & McEwen (2004) further suggest that consuming luxury brands is a means to achieve prestige and higher social status. This implies that people are seeking social status recognition through consumption of luxury (Bagwell and Bernheim, 1996). Luxury goods are part of a new social protocol where one’s identity and self-worth are determined by the visible brands worn on the body (Husic and Cicic, 2009).
2.3 Motivation towards Luxury Purchasing
Motivation is what drives a person’s behaviour and has explanatory force in terms of what an individual does (Pincus, 2004; Allison, 2008). A motive is conceptualised as ‘an unobservable inner force that (a) triggers/drives behaviour, (b) predicates the general nature of the behaviour, and (c) remains influential until the motive has been satisfied’ (Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins, 2007; Allison, 2008). Piacentini and Mailer (2004) illustrate that motives can vary widely from the physiological (e.g.
the need for food and shelter, etc.), to more psychological needs (e.g. the need for pleasure, etc.).
This section examines the literature relating to the motivation of luxury consumption.
Given that different authors research or discuss the motivations on different bases, times and cultures (e.g., some researchers explore motivations based on the European consumers, while others are based on Asian consumers), the literature is categorised
into three parts groups as shown below, which are:
1. Fundamental motivation framework: refer to the Vigneron and Johnson’s (1999, 2004) framework of motivations towards luxury consumption (Leibenstein, 1950; Mason, 1981, 1995; Veblen, 1899; Vigneron & Johnson, 1999, 2004; etc.).
2. Further studies on luxury purchasing motivation: refer to the more recent luxury purchasing motivation models shared across cultures (Dubois & Duquesne, 1993; Wong & Ahuvia, 1998; Rolf-Seringhaus, 2002; Vickers & Renand, 2003; Chadha & Husband, 2006; Chaudhuri & Majumdar, 2006; Lai & Chu, 2006; Wiedmann et al, 2007; Tynan, McKechnie, & Chhuon, 2010; etc.).
3. Japanese & Chinese specific motivations: these cultures carry certain specific norms and values which strongly influence luxury purchase motivations (Danziger, 2005; Chadha & Husband, 2006; Thomas, 2007; Hofstede, 2008;
The literature review, concerning specifically motivations to purchase luxury brands is found amongst general luxury consumption literature. Much of the older literature is fundamental to the topic, and has been used as a base from which more recent literature is created. It is notable that these classifications are not independent from each other, but rather interrelated to influence an individual’s luxury purchasing behaviour with different degrees. Although the motivations are interrelated, they remain unique as each holds its own distinctive characteristics and meanings. They are discussed in more depth below.