The Consumption Of Luxury Products Marketing Essay

The consumption of luxury products can be categorized into three main purposes; there are the creation of identity, the sustainability of identity, and the presentation of socio-economic status (Wattanasuwan, 2005). The consumers seen their income as a factor that constraints their individual consumption needs. However, there was still many consumers are constraint to purchase luxury products because those products are produced and target on upper class consumers (Dubois & Duquesne, 1993). Bhar and Reddy (1998) defined some consumers purchasing of luxury products is one of their privileges to maintain their exclusivity and superiority compared to others mass consumers in society. Some researchers used “personal vs. non personal” proposition to define owning luxury products in a measurable manner (Vigneron & Johnson, 2004). However, the entire ideas of consumers purchasing on luxury products still remain unstable because the influences changed across time, technologies and culture (Dubois & Duquesne, 1993). Most of the literatures about luxury brand products are considered as interrelated and interdependent because the focus is on the motivation of luxury consumption (Ahmed at al., 2002). Therefore, motivation is the best way to determine the consumer behaviour (Raaij & Wandwossen, 1977).The study will give a detailed definition of luxury products then followed by the aspects that effect on consumers’ behaviour of purchasing luxury products. The research focused on generation Y consumers in Penang, Malaysia only. Firstly, the gender of generation Y consumer and their purchasing behaviour will be examined. Secondly, the materialism of consumers’ behaviour is reviewed. Thirdly, the consumers’ behaviour on status consumptions and conspicuous consumption will be importantly discussed and reviewed. Finally, major attention had turn towards to the decision making process for consumers motivations has been taken into account. This consideration had determined the consumers’ characteristic as interpersonal and personal effects to carry out in this research.

2.2Definition of Luxury Products

When mention about luxury products, consumers will come to mind and think of luxury brands such as Rolex, Patek Phillip, Burberry, Louis Vuittion, Mout Blanc, Gucci, Prada, Hermes, Jaguar, BMW, Aston Martin, Porsche, Lexus, Bang & Olufsen, Starbuck and more luxury products in current global market. Those luxury products shared common characteristic feature which were high price and quality, exclusivity, reputation, unique & timeless design, desirability, and brand personality (Nueno & Quelch, 1998; Dubois & Duquesne, 1993). However there was no clear definition to determine on luxury products but Dubois et al (2001) research in 20 countries had found out the consumer perception on luxury products. They have found out the six facets of luxury which were excellent quality, very high price, scarcity and uniqueness, aesthetics and poly-sensuality, ancestral heritage and personal history, and superfluousness.As luxury products, it must be used premium raw materials and specialized craftsmanship on its product element (Mortelmans, 2005). The build quality of the products will provide more durability and reliability compared to mass-produced commercial product (Suvarnasuddhi, 2007). It was targeted on certain particular group of consumers to attract them for initial purchase because it will give certain feeling for consumers that reached the results of self-achievement once the good is acquired (Vigneron & Johnson 1999). Beside this, luxury products had own uniqueness and characteristics on its brand which as a symbol of its product’s concept that often well in the marketing promotions (Pantzalis, 1995). For consumers that consumed on luxury products, they will feel the pursuit of pleasurable experience that meets their psychological satisfaction on the products (Chaudhuri & Majumdar, 2006; Danziger, 2005). Each luxury products have a legend story attached and highlighted on its brand as the luxury products symbolic of its status (Dubois et al, 2001).In certain situation, luxury products can be used for daily usage because it can be for certain individual consumers who have excess cash for displaying their wealth. For example, consumers were having coffee in nice environment Starbuck café eventually it was only a coffee but them willing to pay the expensive price to enjoy the moment (Hanna, 2004; Jette, 2004). Luxury products had been as symbols of personal and social identity that motives sociability and self-expression in consumer behaviour (Vickers & Renand, 2003; Vigneron & Johnson, 2004).

2.3Generation Y

2.3.1Gender

2.3.2Generation Y’s Purchasing Behaviour

2.4Materialism

2.5Status Consumptions and Conspicuous Consumption

Luxury products have ability to attach social referencing and prestigious values, consumers will desire to own their luxury products in public which can indicate as personal satisfaction and symbolic sign that helps to be admired, recognized and accepted by others. (Wiedmann et al., 2007; Nia & Zaichkowsky, 2000). Status consumers purchasing certain products that it’s meet the requirements for status purposes which also can correlated the image of success and prestige. Kilsheimer (1993) defined status consumers would associate themselves to status quality products or luxury products that will enhance individuals’ status levels. This can be one of the factors that influencing consumers to purchase luxury products (Nueno & Quelch, 1998).The concept of social consumption was a driving force that reflects itself in the craving for status symbols (O’Cass & Frost, 2002). It represented those materialists may act as a motivator to achieve success and greater purchasing power (Fitzmaurice & Comegys, 2006; Richins & Dawson, 1992). It also showed that status consumption was positively related with materialism and each measurement a unique consumer’s characteristics (Eastman et al., 1999; Fitzmarice & Comegys, 2006). Eastman et al. (1999) defined status consumption refers to consumers motivated their purchasing behaviour by the desire for status on their owners by those significant others surrounding them and it is independent on certain specific factors such as actual income or social class position. Conspicuous consumption can be described as consumption behaviour that mainly display on wealth or social status (Veblen, 1899). Veblen (1899) described the affluent classes purchasing luxury products in order to show their economic superiority and they were not bought luxury products for functional purpose but for social purpose. Veblen’s conspicuous consumption theory was widely accepted but Campbell (1987) commented against to the efficiency of Veblen’s theory that it will fail if the target consumer is unable to translate the message affixed to the brand’s product.Mostly status consumption and conspicuous consumption are explained in literature but both are two distinction concepts (O’Cass & McEwen, 2004). O’Cass and McEwen (2004) define status consumption as “the behavioural tendency to value status and acquire consume products that provide status to the individual” and conspicuous consumption as “the tendency for individuals to enhance their image through overt consumption of possessions, which communicates status to others”. In other words, product’s brand that fall into conspicuous consumption should be positioned as a critical status as given the results of their research that consumers choose the brand for status consumption and conspicuous consumption is significant degree of perception status depends on the brand (O’Cass & McEwen, 2004). A product’s brand required an identified characteristic that show a symbolic status reference and it must supported by marketing mass media that emphasize the expense, exclusivity, and unique of the brand (O’Cass and McEwen, 2004). Therefore, celebrities were suitable as prefect status brand endorsers to refer as symbolic status because their gilded and glamorous lifestyles (Schiffman et al., 2010). Both status consumption and conspicuous consumption cannot be fully identical constructs but it is still clearly shown the status is an important component for both the practices theories.As Bearden and Michael (1982) concluded that “luxury products consumed in public were more likely to be more better than privately consumed luxury products and the conspicuous consumption plays a significant part in shaping preferences for many products which are purchased or consumed in public contexts.” Based on above findings, the consumers purchasing on luxury products were purposely for social status and representation in a society. If the consumers want to be achieving higher social status then they have to expose the higher conspicuous consumption and status consumption.

2.6Motivations of Purchasing Luxury Products

On this following research had found that demand of products and services consumption has classified into two main aspects which were functional and non-functional demands (Leibenstein, 1950). Functional demand for a commodity which is due to the inherent quality of the product itself requires and Non-functional demand is product consumption that comes from other factors but not its product quality (Leibenstein, 1950). Leibenstein (1950) mentioned the values of external effect are most important on non-functional demand because the product can be decreased or increase due to the quantity of consumers purchasing the same products and also the product has a higher value. Therefore, Leibenstein (1950) had described in his studies on the role of interpersonal effects towards luxury products consumption and he has derived it into three main effects; Veblen, Snob, and Bandwagon.Vigenron and Johnson (1999) had investigated a research study which was focus on motivations of purchasing luxury products. He had conceptualized framework into two personal effects and he has derived it into Hedonist and Perfectionist (Vigenron & Johnson, 1999). Fenigstein et al. (1975) defined “Self-Consciousness is the consistent tendency of persons to direct attention inward or outward”. However, self-consciousness can be classified into two types; Firstly, the publicly self-consciousness person is concerned on individual appearance, and secondly the privately self-consciousness person is concerned on individual inner feelings and thoughts (Vigenron & Johnson, 1999). There will be more discussion for interpersonal effects and personal effect for more details as below. These five effects can explain the motivations of consumers purchasing the luxury products and this strategy are applied worldwide.

2.6.1Interpersonal Effects

2.6.1.1The Veblen Effect

2.6.1.2The Snob Effect

2.6.1.3The Bandwagon Effect

2.6.2Personal Effects

The personal effects as below (Figure 2.2) shown that the consumers who purchasing luxury products was due to personal’s aesthetic taste and sensory emotion on luxury product requirements.

2.6.2.1The Hedonic Effect

The hedonic effect viewed the consumers who purchase luxury products and value the item for self-fulfilment. Those hedonic consumers can be assumed as inner direct consumers or role relaxed consumers (Riesman, et al., 1950; Kahle, 1995). However, they does not affected by interpersonal influences which conforming themselves to group (Bearden, et al., 1989). The motivations of non-cognitive and unconscious were able to persuade consumer with their preference products (Dichter, 1960). As Vigneron & Johnson (1999) described those products are known to have an emotional value is added to their character therefore, the consumers purchase the luxury products will expect it offer benefits such as exclusiveness. These products create an emotional value for consumers and also represents it’s beneficial and characteristic (Dubois & Laurent, 1994).Dubois & Laurent, (1994) mentioned the hedonic consumers purchasing luxury products which their motive was “one buys luxury goods primary for one’s pleasure and refutes the snobbish argument”. Vigneron & Johnson (1999) stated some examples of emotional value that influences consumer purchasing luxury products which are sensory, pleasure, excitement, and aesthetic beauty; for example, BMW describes the feeling of luxury automobiles by applied the emotional value “Sheer Driving Pleasure” as its slogan.

2.6.2.2The Perfectionism Effect

2.7Chapter Summary

CHAPTER 3

Theoretical Framework and Research Methodology

3.1Introduction

3.2Research Methodology

3.3Theoretical Framework

The theoretical framework is a strategies and plan structure which used in investigations for obtain answers to the questions that related to a research study and control the variance (Emory, 1985). Currently this research study is to examine and investigate on generation Y consumers purchasing behaviour of luxury products in Penang, Malaysia. There are two variables in this in this research study, which are dependent variable and independent variables. For dependent variables, it is generation Y consumers’ purchasing behaviour of luxury products in Penang. For independent variables, it is the various factors such as Materialism, Status Conscious, Veblen Effect, Snob Effect, Bandwagon Effect, Hedonic Effect, Perfectionism Effect, and gender differences between generation Y consumer purchasing behaviours. Refer figure 3.1.

3.3.1Hypotheses Statements

Based on the theoretical framework has showed both of the variables in this research study. Therefore, the research hypotheses are stated as follows.Hypothesis 1: Status Conscious toward purchasing luxury products has positive causal effect on Generation Y consumers’ intention to purchasing luxury products.Hypothesis 2: Materialism toward purchasing luxury products has positive causal effect on Generation Y consumers’ intention to purchasing luxury products.Hypothesis 3: Veblen Effect toward purchasing luxury products has positive causal effect on Generation Y consumers’ intention to purchasing luxury products.Hypothesis 4: Snob Effect toward purchasing luxury products has positive causal effect on Generation Y consumers’ intention to purchasing luxury products.Hypothesis 5: Bandwagon Effect toward purchasing luxury products has positive causal effect on Generation Y consumers’ intention to purchasing luxury products.Hypothesis 6: Hedonic Effect toward purchasing luxury products has positive causal effect on Generation Y consumers’ intention to purchasing luxury products.Hypothesis 7: Perfectionism Effect toward purchasing luxury products has positive causal effect on Generation Y consumers’ intention to purchasing luxury products.Hypothesis 8: There are differences in consumer behaviour factors when considering gender between generation Y consumers’ intention to purchasing luxury products in Penang.

3.4Questionnaire Design

3.5Data Collection

3.5.1Primary Data

3.5.2Secondary Data

3.6Sampling

Sampling is a method that used for represents a group of whole population. In most of the research findings, those questionnaires will use as group of samples because it is impractical for gather the data from entire population (Walters, 1994). Fink (2003) mentioned it is only needs a small size of reliable and accurate samples of items or people to represent an entire population.Based on this research study, the target sample is focus on male and female generation Y consumers who live in Penang, Malaysia. The participants are target at ages range from 18 to 35 years old for completing the questionnaires. There were 100 people who completed the questionnaires, 50 people were male and another 50 people were female which both consist of an equal proportion gender. Researcher required to identifying the characteristic of the Generation Y consumers for interview therefore non-probability sampling is used as the method to select some number of respondents in the population is more likely to be selected than the others (Bryman, 2008). However, there were different types of non-probability sampling methods but only two types of the sampling methods are suitable for this research study, It was snowball sampling and purposive sampling.Snowball sampling is a sampling process that involved a small group of people who are related with the research study and follow these people to build up contacts with others in same related field but this might cause problem for the result’s sample might not accurate to representatives of the whole population (Bryman, 2008). As Bryman (2008) mentioned “The very notion of a population may be problematic in some circumstances”. Therefore, researcher prefer to select purposive sampling method to conduct this research study because it can representatives most of the population which can achieve more accurate result. Tashakkori and Teddlie (2003) defined the purposive sampling is a method that selecting samples from the target group for representatives the whole population. Finally, researcher has a clear characteristic of the generation Y consumers in luxury market. So, purposive sampling method will be effective for this research study.

3.7Data Analysis

The research purpose is to study on generation Y consumers purchasing behaviour of luxury products in Penang, Malaysia. All the questionnaires’ data were collected from the online survey (email and social network such as Facebook) and face-to-face interview that target to those generation Y consumers in Penang, Malaysia. The data were analysed by statistical method. If the data is using by the corrected method to analyse, it will able to produce useful information, which will be enhance decision-making process and gain competitive advantage in organization (Thomas et al., 1997).In this research study, researcher used SPSS software to analyse the data that collected from the respondents. However, Microsoft Excel software also will be used as a tool for applying a method of descriptive statistics-frequency analysis, T-tests, reliability tests, correlation analysis, one-way annova analysis, and regression analysis. Finally the data were analysed and presented in table’s format. The information have been gathered from the secondary data can be compared with the primary data from survey questionnaires in order to find out the study has gained any relevance or not at generation Y consumers’ purchasing behaviour of luxury products in Penang, Malaysia.

3.8Chapter Summary