Luxury management in Europe and Asia

by

Luxury management in Europe and Asia

Introduction

The market for luxury goods continues to grow substantially globally. In recent times, however, consumer's demand in Western developed markets appears to be buckling under pressure of recessionary trend (Gapper, 2009, pp. 45-51). On the other hand, the appetite for luxury goods is growing substantially in emerging economies such as China, India, Brazil, and Russia (Carlson, 2009, pp. 133, Leahy and Betts, 2010, pp. 205, Shukla, 2010, pp. 29 and Tynan et al., 2010, pp. 132). The economic expansion in these emerging markets is increasing the craving for luxury among consumers, leading to a substantial growth in their overall luxury consumption. For example, according to Bain and Company estimates, in 2009, 85% of all the new luxury stores opened were in emerging markets (Krauss, 2009, pp. 105).

2. Conceptual framework

Luxury goods are conducive to pleasure and comfort and also hard to obtain. Consumption of such goods involves buying a brand that represents value to both the individual and significant others (Wiedmann, Hennigs, & Siebels, 2009, pp. 144). In other words, purchase and display of luxury goods bring esteem to the owner, apart from the functional utility (Shukla, 2010, pp. 132 and Vigneron and Johnson, 2004, pp.141). The word 'luxury' refers to products or services of a very high standard; however, researchers observe that it elicits no clear understanding due to strong involvement, contextual effects and value recognition from others (Shukla, 2011 , pp. 121and Wiedmann et al., 2009, pp. 121).

Focusing on the above conceptual debate, the present study develops and empirically tests a comprehensive model incorporating five dimensions of luxury value perceptions (see Fig. 1). The dimensions include self-directed symbolic/expressive value, other-directed symbolic/expressive value, experiential/hedonic value, utilitarian/functional value and cost/sacrifice value. Using the above value perception dimensions, this study addresses the calls for empirical testing of the largely theoretical debate in the area as well as extends the reliability and validity of the luxury value perceptions framework in a cross-national context.

Fig. 1. Model overview.

Hypotheses

H1. The relation between self-directed symbolic/expressive value and overall luxury value perceptions is stronger for British consumers than Indian consumers.

H2 . The relation between other-directed symbolic/expressive value and overall luxury value perceptions is stronger for Indian consumers than British consumers.

H3 . The relation between experiential/hedonic value and overall luxury value perceptions is stronger for British consumers than Indian consumers.

H4 . The relation between utilitarian/functional value and overall luxury value perceptions is stronger for British consumers than Indian consumers.

H5 . The relation between cost/sacrifice value and overall luxury value perceptions is stronger for Indian consumers than British consumers.

Method

Sample and procedure

Of the more than 1200 respondents contacted, after cleaning the data, the final usable sample used for the analysis is 298 for the UK and 203 for India presenting a response rate of 24.83% and 16.91% respectively. Data collection, in this study, uses mall-intercept approach at high streets. The study achieves representative sample by rotating location of interview and timing of interview of the survey teams and avoid staging effect (occurring due to a single location) by including shoppers in the survey from two cities in South ...