Luxury Brands Essay

ATTITUDES TOWARDS THE CONCEPT OF LUXURY: AN EXPLORATORY ANALYSIS Bernard Dubois, Groupe H. E. C. Gilles Laurent, Groupe H. E. C. Even though recent years have not been extremely favorable for the luxury industry (the ComitT Colbert which includes many prestigious French names – Chanel, Dior, Yves Saint-Laurent, etc†¦ – reports a 1. 5% increase in real terms for 1993), its growth rate, considered over a longer period, remains impressive. Colbert companies have more than doubled their sales over the last eight years (ComitT Colbert, 1991, 1993). In 1993, they achieved a global turnover of about USD 5. 5 billion. The Pacific Rim countries represented 28% of that amount (21. 6% in 1988), equally divided between Japan and the other Asian countries. Interestingly enough, however, such growth in demand has not been matched by an equivalent progress in consumer research and what was estimated by McKinsey (in 1990) to be a USD 60 billion market largely remains unexplored territory (McKinsey, 1991). Some studies obviously have been conducted and published in the past but they tended to focus on relatively narrow aspects. For example, the consumption habits of the affluent have been investigated regularly since Veblen’s seminal work (Veblen, 1899) and, today, anecdotal reports (Stanley, 1988, 1991) as well as in-depth monographies of specific segments such as upper class wasps (Hirschman, 1988) or nouveaux-riches (LaBarbera, 1988) are available. Limiting the investigation of the luxury market to the analysis of privileged consumers however would fail to recognize that, under the influence of diffusion strategies adopted by many luxury goods companies (for brands such as Dior or Yves Saint-Laurent, accessories may represent up to two thirds of their sales), today’s demand for luxury goods primarily consists of â€Å"ordinary† consumers who, from time to time, transform their desire to acquire a luxury item into reality. Similary, a few studies have been published on luxury brands, for instance on issues such as their relative positions in people’s mind (Dubois and Duquesne, 1993 ; Weber and Dubois, forthcoming) or their adopters’ characteristics (Andrus, Silver and Johnson, 1986) but many luxury goods (houses, diamonds, furniture, etc†¦ ) belong to product categories where branding is not a salient dimension, while, at the same time, a few brands (such as FabergT) which were in the past considered as luxury names seem to have lost their affiliation to the luxury world, usually because they have overdiffused their products. Finally, some research has also been published on the determinants of the acquisition of luxury products, emphasizing economic (Leibenstein, 1950 ; Mason, 1981) socio-demographic (Dubois and Laurent, 1993) or cultural aspects (Dubois and Duquesne, 1993 ; Mason 1993) but no overall conceptual scheme, model or theory has been developed yet. Paradoxically, one of the untapped research areas concerns the very nature of perceptions and attitudes attached to the word â€Å"luxury† itself. This is somewhat surprising because even casual conversations reveal that the word â€Å"luxury† evokes rather strong connotations among people. Some attach to it very positive feelings while others are quick to express their disdain, but few are left indifferent. The absence of research on the word â€Å"luxury† also is unfortunate because, in several product categories, the luxury adjective is used routinely to segment markets and to position products. In the car industry for example, both manufacturers and consumers clearly identify luxury models (Mercedes, BMW, Lexus, Infiniti, Cadillac, etc†¦ ) usually advertised as such. The same holds true for such services as hotels or restaurants. The objective of this paper is to report on an exploratory analysis of the perceptions and attitudes attached to the word (and underlying concept of) â€Å"luxury†. It is hoped that the results presented below will stimulate further research in the area and eventually contribute to the development of a theory of luxury acquisition and consumption behavior. METHOD In order to explore the meanings attached to the word â€Å"luxury†, a two-step survey methodology was adopted. Other approaches such as semiotics could also have been used but were left less appropriate to explore, and to some extent, quantify consumers’ attitudes towards the luxury concept (Wargnier, 1985). First, in-depth interviews were conducted by a professional psychologist with sixteen consumers selected for their widely different (and complementary) profiles. Both males and females were equally represented in the panel and age varied from 17 to 70 years. Occupations were also strongly contrasted, ranging from sales rep to student and from opera singer to mechanic. All interviews were conducted at home, on a face-to-face basis, and taped. On the basis of results obtained from such qualitative research, a battery of attitudinal items was developed and administered to a sample of 440 French consumers. Although not randomly drawn, the sample was chosen according to quotas set in terms of sex, age and geographical location. Given the nature of the topic under investigation, it was decided to overrepresent female respondents and to underrepresent lower income categories. All interviews were conducted by professional interviewers on a face to face basis. Although the questionnaire included many questions about specific product categories such as perfumes, jewelry, etc†¦ only the results connected with qualitative research and the general attitudinal statements are reported in this paper. RESULTS www. acrwebsite. org/search/view-conference-proceedings. aspx? Id=11539 1/4 3/4/13 Attitudes Towards the Concept of Luxury: an Exploratory Analysis by Bernard Dubois and Gilles Laurent From the results obtained through qualitative research, several important themes emerge in relation to the concept of luxury. First, the world â€Å"luxury† itself is spontaneously associated with other terms such as (in decreasing order of frequency) : â€Å"upscale†, â€Å"quality†, â€Å"good taste†, â€Å"class†, but also â€Å"flashiness† and â€Å"bad taste†. All of these terms overlap in meaning to a certain extent but also have distinct connotations. For example, the key perceived difference between upscale and luxury products is that the former imply a relative position on an evaluative scale while the latter correspond to a self-contained entity. Upscale products also are naturally connected with material goods while the concept of luxury encapsulates symbolic and cultural values. During interviews, many respondents referred to abstracts concepts such as space, time, or freedom to convey their perceptions of luxury. The fact that both good taste and bad taste are associated with luxury, sometimes by the same people, clearly reveal the ambivalent nature of respondents’ feelings, a theme which has been recently investigated in the context of gift giving behavior (Sherry, McGrawth and Levy, 1993). Typical contrasts emerge on dimensions such as : essential/superfluous, decent/indecent, quality/gadget†¦ Given this ambivalence, it is not surprising to find that luxury items often provoke avoidance/attraction reactions. For many respondents, luxury products are desirable when contemplated at a distance, at a day-dreaming level : when a specific purchase is considered (sometimes â€Å"ruminated†), guilt feelings arise however and the buying act is experienced by many as a transgression, a not totally excusable attempt to break off daily routine and run away, at least temporarily. TABLE 1 (/volumes/ap01/01274t01. gif) (/volumes/ap01/01274t01. gif) ATTITUDINAL STATEMENTS ABOUT LUXURY (/volumes/ap01/01274t01. gif) At the same time, the luxury transgression can also be a regression, a trip back to one’s idealized childhood, when everything was warm and smooth. This would explain why the concept of luxury was felt by many to be relative and idiosyncratic. During interviews, a number of respondents spontaneously started to describe â€Å"their† luxury, as if they were talking about a secret garden, only known to them. The dual nature of luxury-a world in itself and a world for me-certainly accounts for a large proportion of the ambivalence of feelings. Without oversimplyfing too much, one could say that many negative feelings are attached to â€Å"others’ luxury†, while the positive ones are kept for â€Å"my† luxury. On the basis of such themes, a battery of 34 attitudinal items was developed, pretested and administered. The attitudinal statements as well as the overall frequencies are presented in Table 1 and discussed in the following sections. Overall results tend to confirm conclusions obtained from qualitative research about the ambivalent nature of respondents’ feelings. As far as the concept itself is concerned for example, a majority of respondents considers that luxury is synonymous with â€Å"good taste†, is â€Å"pleasant†, â€Å"not old-fashioned† and â€Å"useful† but also â€Å"flashy† and â€Å"too expensive for what it is. † When commenting on their personal rapport to luxury, most respondents express a positive attitude (â€Å"I like luxury,† â€Å"I’m interested in luxury,† â€Å"Luxury makes me dream,† â€Å"Luxury products make life more beautiful†) but also confess their relative lack of expertise (â€Å"I don’t know much about it,† â€Å"I could not talk about it for hours†) and infrequent purchase activity (â€Å"I almost never buy luxury products†). When asked (in a projective mode) to comment on others’ behavior, a vast majority subscribes to the hedonic motive (â€Å"One buys luxury goods primarily for one’s pleasure†) and refutes the snobbish argument, but more than 50% of those who express an opinion consider that â€Å"people who buy luxury products seek to imitate the rich† and, on issues like â€Å"people who buy luxury goods try to differentiate themselves from others† or â€Å"people who buy luxury products are refined people† the sample is totally divided. Similarly, one out of two respondents does not support the idea of a heavier tax but one out of three welcomes such a proposal! In order to improve our understanding of the underlying attitudinal structure, correlation and principal component analyses were performed. Rather than displaying the full 34 x 34 correlation matrix, not easy to read (1156 coefficients), we decided to attempt to graphically represent the underlying structure, even though we recognize that it is not always possible to completely eliminate arbitrariness in positioning the items on the resulting map. Figure 1 depicts the map obtained when only intercorrelations higher than 0. 4 are considered. To make it easier to read and to interpret, all items which imply a favorable predisposition towards luxury are positioned on the left side of the figure while â€Å"negative† statements appear on the right side. Coefficients between 0. 40 and 0. 50 are indicated by dotted lines while solid lines correspond to correlations above 0. 50. Obviously, all coefficients are statistically significant. It appears that the backbone of perceptions and attitudes evolves around the attraction-avoidance dimension mentioned previously. The two attitudinal statements â€Å"I like luxury† and â€Å"I’m not interested in luxury† exhibit a strong (negative) correlation, with an absolute value which is the highest one in the whole matrix. From such a map, a number of conclusions can be drawn : 1. – There are two basic reasons underlying the lack of interest in luxury. The first one is a negative perception of the luxury world, considered in an absolute, general and abstract sense. Those who adopt this perspective tend to describe luxury goods as useless, old-fashioned, too expensive and flashy. Since they fail to see much value in luxury items, they do not develop an appetite for them. 2. – The second reason is more linked to a perceived lack of fit between the individual and luxury. Those who feel this absence of connivence tend to explain it in terms of their own inexpertise, their uneasiness with luxury environments and an impression of artificiality when they wear their luxury items (in case they own some). All those factors logically result in a minimal involvement in both interest for luxury goods and acquisition behavior. 3. – Although not reported on the map, the correlations between, on the one hand, those two sets of items and, on the other hand, the group of three statements related to the perceived reasons why others buy luxury goods (located at the extreme right of the figure) are statistically significant, typically in the 0. 20 – 0. 40 range. Those who don’t feel at ease with luxury goods and admit their incompetence also tend to believe that â€Å"others† buy luxury items to imitate the rich or to differentiate themselves from the rest of the population. www. acrwebsite. org/search/view-conference-proceedings.aspx? Id=11539 2/4 3/4/13 Attitudes Towards the Concept of Luxury: an Exploratory Analysis by Bernard Dubois and Gilles Laurent Those who believe that luxury goods are too expensive and flashy have a similar perception of the behavior of â€Å"others. † But the factors underlying such perceptions are not the same for both groups. While the former find one more reason to deepen the gap which separates them from the world of luxury, it looks as if the latter have one more justification in support of their disdain of an environment perceived as sterile and futile. 4. – The two mechanisms underlying disinterest have their counterparts on the positive (left hand) side. Although not shown on the map, the correlation between â€Å"I like luxury† and â€Å"I could talk about it for hours† is highly significant (0. 32). People who like luxury also are people who feel knowledgeable about it, both in terms of expertise and familiarity (Alba and Hutchinson, 1987). The luxury world is â€Å"their† world and they move in it like a fish in water, as revealed by their strong opposition to the statement â€Å"I almost never buy luxury goods†. 5. – But the appetite for luxury goods can be also developed on a more abstract and symbolic dimension (upper left corner). Those who adopt this viewpoint see the luxury word as a source of fascination and enlightment. Luxury products make them dream and contribute, in their opinion, to a more beautiful life. This ethereal perception of luxury is also the most hedonic of all in nature, as revealed by the strong correlations obtained with the items related to pleasure. Luxury becomes a permanent source of inspiration and happiness, almost a goal for life, far beyond transient fads and fashions. All these facets of luxury are easily confirmed by the rotated factor structure. Applying the varimax procedure to the table of intercorrelations yields the matrix reproduced in Table 2. Ten factors were extracted explaining about 60% of the variance. While the last six correspond to specific items (or pairs of items) not directly linked with the core attitudinal structure but useful to illustrate such topics as price perceptions and their consequences (Factor 5), or the scarcity issue (Factor 6), the first four correspond rather closely to the structure discussed previously. Factor 1 expresses the lack of interest due to limited expertise and familiarity, while Factor 2 corresponds to the positive evaluation of luxury goods fostered by hedonistic motives. Factor 3 summarizes the negative perceptions attached to the behavior of others and Factor 4 corresponds to the mythical and symbolic values attached to the luxury â€Å"fairy tale†. Taken together, these four factors contribute to a better understanding of the underlying structure and can be helpful for someone interested in developing a short scale intended to measure attitudes toward the concept of luxury. As an illustration, the factorial structure of a subset of twelve items appears on Table 3 and is rather straightforward in its interpretation : While the first factor corresponds to perceptions related to the concept of â€Å"Luxury in general†, factor 2 expresses a more personal rapport to luxury, and the remaining two factors describe attitudes towards those who consume luxury items. CONCLUSIONS Despite the importance and growth of the luxury sector, the determinants of luxury acquisition and consumption have received very little attention in the consumer research literature. There is a distinct lack of systematic studies to model and test the processes whereby individuals develop an appetite for the world of luxury (or fail to do so). FIGURE 1 (/volumes/ap01/01276f01. gif) TABLE 2 (/volumes/ap01/01277t02. gif) (/volumes/ap01/01277t02. gif) FACTOR STRUCTURE (/volumes/ap01/01277t02. gif) Given its exploratory nature, the present research only represents a first step in the development of a model of luxury acquisition and consumption. Only the attitudes towards the concept in general have been investigated here. The dual nature of those attitudes has emerged as a major conclusion of both qualitative and quantitative data: The structure of people’s predispositions towards luxury, as a concept, are affected both by their perception of the luxury world in general and their perceived personal fit with such a world. Future studies could investigate: 1) the socio-demographic and psychographic elements associated with such predispositions; 2) the role of specific product categories in the development of attitudes towards luxury and 3) the evolution of these predispositions over time. A program of research on each of these topics is being conducted by the authors and its results will be reported in future contributions. TABLE 3 (/volumes/ap01/01278t03. gif) (/volumes/ap01/01278t03. gif) A TWELVE ITEM ATTITUDINAL SCALE ON THE CONCEPT OF LUXURY (/volumes/ap01/01278t03. gif) REFERENCES Alba, Joseph, W. and J. Wesley Hutchinson (1987), â€Å"Dimension of Consumer Expertise†, Journal of Consumer Research, 13, March, pp. 411-454. Andrus, David M. , Edward Silver and Dallas E. Johnson (1986), â€Å"Status Brand Management and Gift Purchase: A Discriminant Analysis†, The Journal of Consumer Marketing, vol. 3, Winter, pp. 5-13. ComitT Colbert (1993), Rapport 1992 – Perspective 1993, Paris : ComitT Colbert, and (1991), Rapport 1990 – Perspective 1991 – Paris : ComitT Colbert. Dubois, Bernard and Patrick Duquesne (1993), â€Å"Polarization Maps: A New Approach to Identifying and Assessing Competitive Position: The Case of Luxury Brands, Marketing and Research Today, vol. 21, n ¦ 2 (May), pp. 115-123 Dubois, Bernard and Patrick Duquesne (1993), â€Å"The Market For Luxury Goods: Income vs Culture†, European Journal of Marketing, vol. 23, n ¦1, pp. 35-44. www. acrwebsite. org/search/view-conference-proceedings. aspx? Id=11539 3/4 3/4/13 Attitudes Towards the Concept of Luxury: an Exploratory Analysis by Bernard Dubois and Gilles Laurent Dubois, Bernard and Gilles Laurent (1993), â€Å"Is There a Euro-Consummer For Luxury Goods? â€Å", in Fred Van Raaij and Gary Bamossy (Eds), European Advances in Consumer Research, vol. 1, Provo, UT, Association For Consumer Research, pp. 58-69. Hirschman Elizabeth (1988), â€Å"Upper Class Wasps as Consumers: A Humanistic Inquiry†, in Elizabeth Hirschmann (Ed), Research in Marketing, vol.3, pp. 115-147, JAI Press Inc. 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