The Impact of Factors Influencing The Buying Behaviour RADHIKA NARAYANAN PDF

The Impact of Factors Influencing the Buying Behaviour on the
Development of Marketing Strategies

For Luxury Fashion Products
A Study of the Urban Youth in Select Cities of India
Thesis submitted to
D.Y. Patil University, Navi Mumbai
Department of Business Management
In partial fulfilment of the requirements
For the award of the Degree of
DOCTOR OF PHILOSOPHY
In
BUSINESS MANAGEMENT
Submitted by
RADHIKA NARAYANAN
Enrolment No. DYP-PhD-116100011
Research Guide
Dr. R. GOPAL
Director Dean & Head of Department
D.Y. Patil University, Navi Mumbai
Department Of Business Management,
Sector 4, Plot No. 10, CBD Belapur,
Navi Mumbai – 400 614
April, 2014
The Impact of Factors Influencing the Buying Behaviour on The
Development of Marketing Strategies
For Luxury Fashion Products
A Study of the Urban Youth in Select Cities of India

DECLARATION
I hereby declare that the thesis titled “The Impact of Factors Influencing the Buying
Behaviour on the Development of Marketing Strategies For Luxury Fashion Products -
A Study of the Urban Youth in Select Cities of India” submitted for the Award of Doctor
of Philosophy (PhD) in Business Management at D.Y. Patil University, Navi Mumbai,
Department of Business Management, is my original work and the Dissertation has not
formed the basis for the award of any degree, associate ship, fellowship or any other similar
titles.
The materials borrowed from other sources and incorporated in the thesis have been duly
acknowledged.
I understand that, I myself could be held responsible and accountable for plagiarism, if any,
detected later on.
The research papers published are based on the research conducted in the course of the study
and are also based on the study and not borrowed from other sources.
Date: Signature of the student
Enrolment No: DYP-PhD-116100011

CERTIFICATE
This is to certify that the thesis titled “The Impact of Factors Influencing the Buying
Behaviour on the Development of Marketing Strategies For Luxury Fashion Products -
A Study of the Urban Youth in Select Cities of India” submitted by Radhika Narayanan
is a bona fide research work for the award of the Doctor of Philosophy in Business
Management at D.Y. Patil University, Navi Mumbai, Department of Business Management
in partial fulfilment of the requirements for the award of the Degree of Doctor of
Philosophy in Business Management and that the thesis has not formed the basis for the
award previously of any degree, diploma, associate ship, fellowship or any other similar title
of any University or Institution.
Also certified that the thesis represents an independent work on the part of the candidate.
Place:
Date:
Signature of the Signature of the Guide

Head of the Department

Acknowledgement
I am greatly indebted to D.Y. Patil University, Navi Mumbai to have accepted me for the
Doctoral Program and provided me with an excellent atmosphere to carry out the present
study.
The success of this study required the Divine Grace of God and immense help of various
individuals. Without them, my dream to complete this study would have remained a dream.
Foremost, I would like to express my sincere gratitude to my guide, and guru, Prof. Dr. R.
Gopal, for the continuous support during my PhD study and research. I would take this
opportunity to thank him for his patience, motivation, enthusiasm, and immense knowledge.
His guidance helped me at all times of research and writing of this thesis. I could not have
imagined having a better advisor and mentor for my PhD study. I would also thank Mrs Jaya
Gopal for her kind hospitality and encouraging words, all times.
This shloka is dedicated to my guru
I would also like to thank the staff of D.Y Patil University, Navi Mumbai, Department of
Business Management especially Mr Samir Yadav, for his continuous assistance.
My sincere thanks to Dr. Debasis Mallik (Prof SPJIMR) for statistical guidance and
unconditional support, throughout my study.
I want to thank Prof Umesh Dhand – Retail Consultant, Mr Mohan Mariwala- MD Auto
Hanger - Mercedes Benz & Lamborghini, Ms Lulu Raghavan – MD Landor Associates and
Mr Biju Anthony – General Manager, Intercraft Trading Pvt. Ltd. for sharing their practical
marketing insights of the Luxury industry. These inputs have been extremely valuable for
validating my study.
ii

I would like to acknowledge Mr Ajay Saraf - Subject Head Mathematics and Statistics,
Mahesh Tutorials for helping me with the analysis and interpretations.
I take this opportunity to thank the team S.P Jain Institute of Management and Research
(SPJIMR) to have encouraged me and supported me throughout my research work. I would
like to make a special mention of the staff of SPJIMR, especially Ms Mamta, Ms Mayuri, Mr
Vaibhav and Mr Mukesh, who have enthusiastically helped with my backend work.
I would like to fondly thank my father Mr. S Parthasarathy for having lived this dream of
seeing his daughter acquire this prestigious degree. Without my parents blessings this mission
would never have been completed.
Last but not the least I would like to thank my husband Mr. Ravi Narayanan, our daughters,
Sharanya and Supriya, who are my anchors and pillars of strength and without whose caring
support, I would never have successfully completed this journey. My degree is dedicated to
my family.
I thank my students, respondents, family, friends and all my well wishers who stood by me
and gave me unconditional time and support.
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Contents
List of Tables ........................................................................................................................................................ vii

List of Diagrams .................................................................................................................................................. viii
List of Abbreviations .............................................................................................................................................. x
Executive summary ............................................................................................................................................... xi
CHAPTER 1 - INTRODUCTION....................................................................................................................... 1
1.0 Categorization of Luxury Products ................................................................................................................... 3
1.1 Concept of Luxury .......................................................................................................................................... 5
1.2. New and old luxury ........................................................................................................................................ 5
1.3. Contributions to the Study of Luxury .............................................................................................................. 8
1.4. Socio-economic factors and luxury consumption .......................................................................................... 14
1.5. Motivations in India to consume Luxury ....................................................................................................... 14
1.6. Indian Luxury Market .................................................................................................................................... 15
CHAPTER 2 - Literature Review ..................................................................................................................... 17
2.0 Prelude ............................................................................................................................................................ 18
2.1. Luxury Products ............................................................................................................................................ 19
2.2. Products and Brands ...................................................................................................................................... 21
2.3. The Relationships between Luxury Products and Brands.............................................................................. 22
2.4. Buying Motivations ....................................................................................................................................... 23
2.4.1 Buying Motivation for Luxury products ............................................................................................. 24
2.5. Buying Intention ............................................................................................................................................ 25
2.5.1. Buying Behaviour of luxury products ................................................................................................ 26
2.6. Demography .................................................................................................................................................. 27
2.6.1 Geographical Location and Buying Intention ..................................................................................... 28
2.6.2 Youth - GEN Y ................................................................................................................................... 28
2.7. Perception Value Factors and Buying Intention: ........................................................................................... 30
2.7.1 Materialism ......................................................................................................................................... 30
2.7.2 Attitude towards Luxury ..................................................................................................................... 32
2.7.3 The need for uniqueness ..................................................................................................................... 33
2.8. Social Value Factors and Buying Intention ................................................................................................... 35
2.8.1 Status................................................................................................................................................... 35
2.8.2 Reference Groups................................................................................................................................ 37
2.8.3 Price .................................................................................................................................................... 41
2.8.4 Product Knowledge and Information .................................................................................................. 41
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2.8.5 Distribution of luxury products ........................................................................................................... 43
2.9. Culture ........................................................................................................................................................... 43
2.9.1 Subculture ........................................................................................................................................... 44
2.9.2 Culture and Luxury Consumption....................................................................................................... 44
2.10 Research gap ................................................................................................................................................. 48
CHAPTER 3 - OBJECTIVES HYPOTHESIS AND RESEARCH METHODOLOGY .............................. 50
3.0 Statement of the Problem................................................................................................................................ 51
3.1 Scope of the Study .......................................................................................................................................... 51
3.2 Objective of the Study .................................................................................................................................... 53
3.3 Hypothesis ...................................................................................................................................................... 53
3.4 Methodology................................................................................................................................................... 57
3.4.1 Descriptive Study ................................................................................................................................ 57
3.4.2 Data Collection ................................................................................................................................... 58
3.4.3 Focused Group Discussion.................................................................................................................. 58
3.4.4 Population Frame and Sample ............................................................................................................ 58
3.5 Survey Development ...................................................................................................................................... 59
3.5.1 Questionnaire design ........................................................................................................................... 59
3.5.2 Scales .................................................................................................................................................. 60
3.6 Data Processing .............................................................................................................................................. 60
3.7 Utility of the study .......................................................................................................................................... 60
CHAPTER 4 - LATEST TRENDS IN THE GLOBAL AND INDIAN LUXURY MARKET ..................... 62
4.0. Latest trends in the Global Luxury Market .................................................................................................... 63
4.1. Indian Luxury Industry .................................................................................................................................. 67
4.1.1 Fragmented and diversified consumer base ........................................................................................ 69
4.1.2 Challenges faced by Luxury retailers in India .................................................................................... 69
4.1.3 Emergence of ‘Closet Consumers’...................................................................................................... 70
4.2 Ranking Of India's Leading Luxury Retail Cities........................................................................................... 71
CHAPTER 5 - CONSUMER BEHAVIOUR .................................................................................................... 73
5.0 Maslow’s Hierarchy of Needs ........................................................................................................................ 74
5.1 Asian Version of Maslow’s theory ................................................................................................................. 76
5.1.1 Comparison between the Western & Asian consumers: ..................................................................... 77
5.2 Factors Affecting Consumer Behaviour .................................................................................................. 78
5.3 Consumer Decision Making Process .............................................................................................................. 79
5.3.1 Decision Making Process for Luxury Products................................................................................... 80
CHAPTER 6 - MARKETING MIX STRATEGIES ....................................................................................... 83
CHAPTER 7 -FOCUS GROUP DISCUSSION ............................................................................................... 94
CHAPTER 8 –DATA ANALYSIS .................................................................................................................. 104
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CHAPTER 9 -DISCUSSION WITH MARKETERS AND EXPERTS OF LUXURY PRODUCTS ........ 190
CHAPTER 10 - INFERENCES AND FINDINGS ......................................................................................... 210
CHAPTER 11.................................................................................................................................................... 228
Conclusion .......................................................................................................................................................... 228
CHAPTER 12 - RECOMMENDATIONS ...................................................................................................... 238
CHAPTER 13 – ANNEXURE ......................................................................................................................... 248
Questionnaire ...................................................................................................................................................... 260
vi

List of Tables
Table Title Page

No No
1. Categorization of Luxury Product Industries 3
2. Differences between new luxury, conventional and old luxury 7

goods
3. Chadha and Husband’s Evolution of Luxe Model 13
4. 7 New Faces of the Global Luxury Consumer 64
5. Results of Hypothesis testing 216
6. Conclusions – Watches 233
7. Conclusions – Mobile Phones 233
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List of Diagrams
S. No. Title Page

No.
1. Hofstede cultural model for India 47
2. Maslow’s hierarchy of needs 76
3. The Asian equivalent to Maslow's hierarchy of needs 77
4. Consumer Decision Making Process 79
5. McCarthy’s 4 P Model 87
6. Segment-specific Marketing-mix Strategies 92
7. Diagram of respondents according to gender 105
8. Diagram of respondents according to age 106
9. Diagram of respondents according to qualification 107
10. Diagram of respondents according to nativity 108
11. Diagram of respondents according to the region they lived in 108
12. Diagram of respondents according to the region they are living in 109
13. Diagram of respondents according to the region they are living for 110
14. Diagram of respondents according to their social role 110
15. Diagram of respondents according to family income 111
16. Diagram of the level of buying intention of respondents 123
17. Diagram of importance scores according to age group and factors 138
- watches
18. Diagram of importance scores according to age group and factors 142
– mobile phones
19. Diagram of importance scores according to social role and factors 146
– watches
20. Diagram of importance scores according to social role and factors 149
– mobile phones
21. Diagram of importance scores according to gender and factors – 151

watches
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S. No. Title Page
No.
22. Diagram of importance scores according to gender and factors – 155

mobile phones
23. Diagram of importance scores according to region and factors – 158

watches
24. Diagram of importance scores according to region and factors – 168

mobile phones
25. Diagram of importance scores according to employment and 178

factors – watches
26. Diagram of importance scores according to employment and 181

factors – mobile phones
27. Diagram of importance scores according to income and factors – 184

watches
28. Diagram of importance scores according to income and factors – 187

mobile phones
ix

List of Abbreviations
Sr No. Abbreviation Full Form
1 PVF Perception Value Factors
2 SVF Social Value Factor
3 MMF Marketing Mix Factors
4 BI Buying Intention
x

Executive Summary
This summary provides the reader an essence of the study, of the factors influencing the
Buying Behaviour of luxury fashion products among Indian youth. It also gives a glimpse of
the recommended marketing strategies that can be developed to capture the attention of the
potential young Indian consumers.
Many researchers have attempted in their own way to define and expand the meaning of this
word. The dictionary states that, the English word 'luxury' is derived from the Latin term
‘luxus’ and is defined as 'the state of great comfort and extravagant living and an inessential
but desirable item'.
‘Luxury products’ are broadly defined as ‘more than necessary and ordinary compared to the
other products of their category’ Based on the studies of Dubois et al. (2001), it can be stated
that the consumers perceive luxury products to have six major characteristics namely
excellent quality, very high price, aesthetics, scarcity and uniqueness which is rarity,
extraordinariness and symbolism.
The luxury sector can be broadly categorized under three categories – Luxury fashion
products, which include jewellery, watches, electronic gadgets, mobile phones, hand bags,
wine and more. The second category is the Luxury Automobiles, which include all the two
wheelers and four wheelers auto and the third category is the Luxury services, which include
the hotels, spas, and other high end hospitality sectors.
The past two decades have seen an increase in the luxury consumption in India. The number
of high net worth individuals increased by 20.5 percent (Merrill Lynch and Cap Gemini
2007). The number of middle class people in India is expected to grow from 5 percent to 41
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percent (Atwal & Khan, 2008). ). The Indian luxury market grew at a healthy rate of 30 per
cent in 2013, to reach USD8.5 billion in 2013. It is predicted that the growth would continue
at a healthy pace to reach USD14 billion by 2016. There is a change in the consumption
pattern of the Indians, with an upward trend in the consumption of luxury products.
There has been a spurt in affluence, with the emergence of a new breed of professionals,
entrepreneurs, and business men. Along with them there is an upsurge of their children who
are the young entrants who contribute majorly to the consumption of luxury. The younger
generation represents the most important segment that will influence the global luxury market
over the next decade (Luciana de Araujo Gil, 2009). A young demographic profile, growing
number of millionaires and billionaires and an aspiration of the youth to integrate the outside
world are all among the driving factors for the luxury markets which see a big potential in
India.
Scope of the Study
For the purpose of this study, global luxury branded ‘watches’ and ‘mobile phones’ were
selected, as a representation of luxury fashion products. Watches and mobile phones were
chosen because the Indian youth are familiar with them. They frequently purchase and can
relate to them. They would be the most appropriate products to capture the influencing
factors.
This study attempted to understand the impact of the perception value, social value and
marketing mix factors influencing the buying behaviour on the development of marketing
strategy for luxury fashion products among Indian youth. Under the Perception value factors,
Attitude towards luxury, Materialism and Need for uniqueness was examined. Under the
Social value factors, influence of luxury products as status symbol and reference group was
examined and under the Marketing Mix factors Product, Price, Communication and
Distribution was examined.
xii

Objective of the Study
The main objective of the study was to:
1. Study the factors that influence the buying intention of luxury watches and mobile phones
among Indian youth
2. Examine the factors that influence the buying intention of luxury watches and luxury
mobile phones with respect to age, gender, and occupation and income levels among
Indian youth.
mobile phones with respect to different regions, among Indian youth.
4. Identify factors which have an impact on the development of marketing strategy for such
products
Methodology Adopted
The study embraced both qualitative and quantitative research approaches.
The present study was a descriptive study. In this study there were three independent
variables: 1) Perception Value factors, 2) Social Value factors 3) Marketing Mix factors. The
dependent variable is the Buying Intention of Luxury fashion products. The primary data was
collected using the following instruments in the study.
1) Questionnaires 2) Interviews
The Secondary Data were collected from various available sources through desk research
including literature survey and referring e-libraries etc. Review of literature and other
available information from various published and unpublished reports. Journals, books,
newspapers etc (including databases like Ebsco, Pro-quest, Emerald, Google Scholar, India
Business Insight Databases and others)
xiii

Data Processing
Population Frame and Sample
The population frame for the study was Pan India. The survey was conducted among was
limited to the youth population between age group of 18 and 36 years. The sample units are
students, employees, entrepreneurs and business men.
The study targeted a sample size of 384 respondents:
At a confidence level of 95 percent, with a margin of error of 5 percent, the formula that is
generally used to find out the sample size is as follows:
zσ2 2 × pˆ × (1 − pˆ )
n=
ME 2
The proportion of the population, which is involved in the purchase of luxury products, is
represented as p̂ . p̂ is the prior judgment of the correct value of p. In the absence of any
initial estimate of p, the convention is to assume p̂ = 0.05. Based on this information, the
calculation of the sample size, at 95% level of confidence and 5 percent margin of error, is as
follows:
1.96 2 × 0.5 × 0.5

n= = 384
0.05 2
A total of 1900 questionnaires were distributed, out of which 695 valid responses were
returned, giving a response rate of 36.57 percent.
3.5 Survey Development
This section discusses how the current study’s questionnaire was designed. In this study the
structured self administered questionnaire was applied, and were administered using an
online survey tool “Survey Monkey” (www.surveymonkey.com). Respondents answered the
self-administered questionnaire from the Survey Monkey web link sent by the researcher.
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According to Saunders et al., (2003) self administrated questionnaires ensure the right
respondent participates in research.
3.5.1 Questionnaire design
The data collected with help of the questionnaire was analyzed with the help of the statistical
package SPSS 20. The mean scores arrived were analysed using various statistical tools, to
test the research hypothesis. Statistical percentage, Arithmetic mean, Standard Deviation,
Range, Co-relation, Chi Square test, z test, Anova and Linear Regression were used.
Findings for Watches
1. In order of importance of factors influencing the buying intention of youth towards
luxury watches is – Perception Value Factors, followed by Marketing Mix Factors
and Social Value factors.
2. The Perception Value Factors are very important for men in the age group of 24 to 29
years, and who are natives of East of India. For youth who lived in or are presently
living in these five regions, the Perception Value Factors are equally important for all
of them.
3. The Social Value Factors are important for youth living in and native of East of India.
The Social Value Factors are equally important for the different age groups, for both
men and women, and also for youth who lived in formative years in any of the five
regions of India.
4. The Marketing Mix Factors are important to young men who lived in, presently living
in and native of East India. The Marketing Mix factors are equally important for all
age groups.
5. There exists no difference in factors influencing buying intentions of luxury watches
across the student class, service class and business class. The Perception Value
xv

Factor, Social Value Factor and the Marketing Mix factors are equally important for
all above three groups.
6. There exists no difference in factors influencing Buying Intention of luxury watches
among Indian youth who are employed, those doing their post graduation and those
doing their graduation. The Perception Value Factor, Social Value Factor and the
Marketing Mix factors are equally important for all above three groups.
across different income groups. The Perception Value Factor, Social Value Factor and
the Marketing Mix factors are equally important across different income groups
Finding for Mobile Phones
luxury mobile phone is – Perception Value Factors, followed by Marketing Mix
Factors and Social Value factors.
2. The Perception Value Factors are very important for youth in the age group of 18 to
23 years, and who are natives of East of India, and who spent their formative years in
North India. For both men and women who are living in these five regions, the
Perception Value Factors are equally important.
3. The Social Value Factors are important for the youth in the age group of 18 to 23
years. The Social Value factors are equally important for both men and women and
also for youth who lived in formative years, presently living in and who are natives of
any of the five regions of India.
age groups.
xvi

5. There exists no difference in factors influencing buying intentions of luxury mobile
phones across the student class, service class and business class. The Perception
Value Factor, Social Value Factor and the Marketing Mix factors are equally
important for all above three groups.
6. There exists no difference in factors influencing Buying Intention of luxury mobile
phones among Indian youth who are employed, those doing their post graduation and
those doing their graduation. The Perception Value Factor, Social Value Factor and
the Marketing Mix factors are equally important for all above three groups.
Recommendations
1. Market the brand before marketing the products.
2. Develop customized strategies based on the cultural, perceptional, social and
demographic factors of the target consumers
3. Develop products keeping the target market in mind and communicate the strength
of the products effectively.
4. The nouveau riche Indian youth are non sensitive to price but strategising the price
with frills will be an added advantage.
5. Using the digital space effectively would help to reach out the young Indian
population who are the target segment.
6. Using the digital space effectively would help to reach out the young population who
are the target segment.
7. Get into Internet retailing which is going to be the next destination for the Indian
luxury market.
xvii

8. Build a strong Post Purchase Relationship with the young Indian luxury consumers,
which will lead to building a loyal customer base.
For marketers and international brand companies treating India as one big market would be a
mistake. The country has different regions, different religions more than 100 languages are
spoken, the attitude towards luxury varies amongst different age groups, amongst different
religions, and the economic factors also play a very important role. Therefore there is a need
to look at each region as different markets, and customise their marketing strategy
accordingly. ‘Standardizing one strategy, for one country’ would not work in a country like
India.
xviii

Chapter 1 - Introduction
Overview
1. Categorization of Luxury Products
2. Concept of Luxury
3. New and old luxury
4. Contributions to the Study of Luxury
5. Socio-economic factors and luxury consumption
6. Motivations in India to consume Luxury
7. Indian Luxury Market
1

Chapter 1
Introduction
Luxury is perceived differently by different people, and hence it is very subjective (Phau and
Prendergast, 2000; Wiedmann et al., 2009). Though there is no definite definition of ‘luxury’
many researchers have attempted in their own way to define and expand the meaning of this
word. According to Veblen, (1899) Leisure class consumers turned to luxury products which
could be used to signify wealth and status and distance consumers when consumed
conspicuously from more humble ancestral beginnings. A luxury good is generally defined as
a good at the highest end of the market in terms of quality and price (Wordiq, 2004). Luxury
products carry both private value and social codes (Strach & Everett, 2006) but apart from
any functional utility (Bhat & Reddy, 1998; Vigneron & Johnson, 2004) luxury products are
viewed as symbols of personal and social identity (Vickers & Renand, 2003). The dictionary
states that, the English word 'luxury' is derived from the Latin term ‘luxus’ and is defined as
'the state of great comfort and extravagant living and an inessential but desirable item'.
Based on the studies of Dubois et al. (2001), it can be stated that the consumers perceive
luxury products to have six major characteristics namely excellent quality, very high price,
aesthetics, scarcity and uniqueness which is rarity, extraordinariness and symbolism. Thus the
definition of luxury products can be summarized as follows: ‘Luxury products have more
than necessary and ordinary characteristics compared to other products of their category,
which include their relatively high level of price, quality, aesthetics, rarity, extraordinariness,
and symbolic meaning’.
The characteristics of luxury products are interdependent. This means that if one dimension is
at a high level, it also induces high levels of other dimensions. For example their relatively
2

small production volumes (high rarity), their superior level of quality and the relatively high
effort made for aesthetics, extraordinariness and a good story behind the product inevitably
lead to a relatively high price (Heine, Klaus, 2012)
1.0 Categorization of Luxury Products

According to Kapferer (2008) luxury is “constantly on the move” and will always change its
appearance (Jäckel & Kochhan 2000, and Mortelmans 2005), which means that it will not
remain constant and is subject to regular change.
The luxury product industries are categorized into different segments (Allérès 2003; Bain &
Company 2011; Berry 1994; Britt 2006; Castarede 2003; Giraud et al. 1995 and McKinsey
1990). This categorization does not remain same, and new luxury product industries keep
emerging. According to Heine and Trommsdorff 2010b and McKinsey 1990 luxury products
fall under the following categories:
Table 1
Categorization of Luxury Product Industries
Products Services
Fashion Products Delicacies 35. Retailing
1. Clothing 18. Foods Experiences
2. Shoes & Beverages 36. Restaurants
3. Bags & Luggage 19. Champagne 37. Hotels
4. Fashion Accessories 20. Wine 38. travelling
5. Cosmetics & Perfumes 21. Spirits 39. Entertainment
6. Jewellery 22. Publications 40. Clubs & Communities
7. Watches Interior Decoration 41. Healthcare & Beauty
3

Products Services
8. Stationary (e.g., pens) 23. Furniture 42. Education
9. Personal Accessories 24. Kitchen Equipment 43. Financial Services
10. Communication Devices Table Decoration 44. Consultancy
11. Laptops 25. Porcelain & Store ware 45. Personal Services
B2B Products and
12. Cameras 26. Silverware Services
Means of Transportation 27. Crystal & Glassware
13. Bikes 28. Bedroom Equipment
14. Automotive &
Motorcycles Carpets
15. Boats & Yachts 29. Lamps
16. Aircraft 30. Interior Electronics
17. Sports & Leisure
equipment 31. Musical Instruments
32. Household Fabrics
33. Interior Accessories
34. Garden Furnishing
Source: Heine - The Identity of Luxury Brands, 2012
The type of luxury product one buys depends on the individual’s personal needs and priority.
The determinants that influence the buying intention of luxury products can be personal
factors, social factors, demographic factors, marketing mix factors and cultural factors
(Wiedmann et al., 2007).
4

1.1 Concept of Luxury
Despite many researches and studies there is no single definition of Luxury which has been
accepted by everyone. This is because the meaning of the word ‘luxury’ means, different
things to different people. It may depend on the individual’s priority, need, cultural
background, educational background, the country which the individual belongs, and many
more factors. The concept of luxury is not new and has been in existence right from the
eighteenth century. Many researchers have contributed tremendous content to the body of
knowledge of ‘Luxury’ There has been plenty of work that has been done in this area. Even
though the definitions and meaning of ‘Luxury’ have changed over the years and would
continue to change, the present days definitions are built on the foundation of the studies
developed by the school of researchers from the past.
1.2. New and old luxury
In 2003, Michael J. Silverstein and Neil Fiske introduced the concept of “old luxury” versus
“new luxury” along with the idea of “trading up” Since the middle class population across
the world is burgeoning, there is an increase in the interest to indulge in esteemed luxurious
goods. This categorization was created in order to distinguish the products clearly.
Old Luxury refers to the original exclusive products and brands which come from the
houses which have long past histories, and who target only those individuals at a certain
level of socioeconomic status. New luxury refers to, products and services that possess higher
levels of quality, taste and aspiration than other goods in the category but are not so
expensive as to be out of reach. New luxury brands use higher technology and have higher
benefits and there are newer brands with the objective of showing higher involvement with
consumers and gain customer loyalty.(Silverstein and Fiske 2005).
5

The middle class finds New Luxury very attractive as it gives them an opportunity to buy
more upscale products. More and more middle class individuals are able to purchase a new
luxury product which have better quality and also increases their image in their social circle.
This segment of population was never the target audience of the Old Luxury product
companies.
Silverstein and Fiske (2005) divided the New Luxury into three broad types:
a. Accessible Super premium
Even though these products are priced almost near the top of their category, the
middle class consumers can still afford them as they are lower than the Old Luxury
products.
b. Old-Luxury Brand Extensions.
These are lower-priced versions of goods from the Old Luxury product companies.
These are priced lower than their core product range, thus making it affordable to the
masses along with the satisfaction of having purchased a high brand item.
c. Mass Prestige or ‘Masstige’
These goods are positioned between mass and class. Even though they command a
premium over the regular products, but they are priced below super premium or old-
luxury goods. This makes it affordable for this segment of the population.
The New Luxury products are priced at a premium rate, compared to standard products but is
priced lower than the Old Luxury products. The number of consumers of New Luxury is
increasing rapidly. They include many demographics, people of all ages, races, and
backgrounds (Silverstein and Fiske 2005).
New Luxury is not just about less expensive products but instead they have positioned
themselves as connecting with the consumers to solve their problems, instead of making the
product appear purely exclusive and for conspicuous consumption.
6

The researchers have attributed the popularity of the concept of New Luxury to many
reasons such as increase in the income, more young players in the market, women increasing,
and notion of pampering oneself.
There is a new trend of ‘Luxe Bargain Shopping’ (Lim 2009). Luxe Bargain Shopping is
defined as “purchasing a luxury brand at a bargain, which generates values in association
with both the product (luxury brand) and process (bargain shopping)” (Lim 2009). Even
though the high price for Old Luxury justifies its value, these consumers are willing to
spend on luxury if the price is right and the value appears to be high. Aspirational demand,
or demand in luxury products from the upper middle class, now accounts for 60% of all
luxury sales. Presently, not all consumers with aspirations can really buy goods in Old
Luxury categories, so the consumers comfortably purchase New Luxury products with a
smaller premium price. Sometimes, it is seen that Old Luxury brands provide line-extensions
that are less expensive to cater to theses customers, but yet there exists a gap between New
Luxury prices and Old Luxury.
Silverstein draws up the differences between old and new luxury and conventional goods in
the following table:
Table 2
Differences between new luxury, conventional and old luxury goods

(Silverstein & Fiske 2008, 56.)
NEW LUXURY CONVENTIONAL OLD LUXURY
Affect Engaging Bland Aloof
Availability Affordable Ubiquitous Exclusive
Price Premium Low cost Expensive
Quality Mass artisanal Mass produced Handmade
Social basis Value driven Conformist Elitist
7

1.3. Contributions to the Study of Luxury
Thorstein Veblen (1857–1929)
An economist and sociologist who lived from 1857 to 1929. He coined the term
“Conspicuous consumption” and “Conspicuous leisure” in his book “The Theory of the
Leisure Class” (1899). Conspicuous consumption means that people made purchases to signal
their economic status and success to others. Conspicuous leisure means the extended length
of time that a person devotes to pleasurable pursuits that grant him or her higher social-status.
Veblen criticised the consumption habits of the affluent class and questioned their values. He
also introduced the term “conspicuous waste” and “pecuniary emulation” which means that
individuals strive to meet or exceed someone else’s financial status.
The term ‘Veblen goods’ was inspired by the studies of Veblen. A Veblen product can be
described as a product whose demand increases as its price increases, because the
consumers considers it an exclusive status symbol especially when it is consumed
conspicuously. Veblen goods are designer luxury items with a strong brand identity. They are
sold only in flagship stores or boutiques and are highly desirable. They are perceived as very
valuable by the consumers because of high price. These goods are priced so high that only the
very wealthy can afford them. Due to high price the other consumers cannot afford them, and
thus more buyers perceive them to be sign of status and wealth. If a Veblen good’s price
decreases, demand will decrease because status-conscious consumers will find it less unique,
and Veblen considered this conspicuous consumption to be wasteful.
Dubois, Laurent and Czellar
Dubois and Laurent (1994) explored the meanings attached to the word "luxury"
The researchers found out that luxury items provoked many ambivalent feelings and
reactions, Individuals desired luxury products at a day dreaming level, and even considered
it but when it came to actually buying it , they were overcome by guilt feelings. There
8

existed a dual nature of luxury; a world for ‘others’ and a world for ‘me’. Many negative
feelings were attached to ‘others' luxury while the positive opinions were kept for "my"
luxury.
Dubois, Laurent and Sandor Czellar (2001) published a consumer report analysing complex
and ambivalent attitudes to luxury. They again conducted two studies. The first study was a
consumer-based exploratory analysis. Based on the responses got from the respondents the
following six characteristics of luxury surfaced. Even today these six characteristics form the
basis of definition of luxury products.
• Excellent quality: exceptional ingredients, delicacy, expertise, craftsmanship Very high
price: expensive, elite and premium pricing
• Scarcity and uniqueness: restricted distribution, limited number, tailor-made Aesthetics
and poly sensuality piece of art, beauty and dream
• Ancestral heritage and personal history: long history, tradition, pass-on to Generations
• Superfluousness or uselessness: non-functional.
Dubois and Czellar (2002) also examined the relationship between the concepts of "luxury"
and "prestige" in terms of brands. The results indicated that prestige can be achieved
independently of luxury in many categories. At a symbolic level, consumers can interpret
luxury as the symbol of brand prestige. They developed a scale to measure the attitude
towards luxury, which is used frequently in many of the studies
Vigneron and Johnson (2004)
They have developed a conceptual framework that presents five key luxury dimensions which
explains the motivations of the luxury-seeking consumer. This framework has been
segmented into Non personal oriented perceptions which are perceived conspicuousness,
perceived uniqueness and perceived quality, and Personal-oriented perceptions which are
perceived extended-self and perceived hedonism. Vigneron and Johnson (1999), highlighted
9

that 'conspicuous' motivation may be more visible for publicly self-conscious people where
people, use luxury goods as a status symbol to show-off their wealth. This type of consumers
also put a greater importance on high prices. The term ‘prestige' was defined by them.
‘Prestige' and ‘luxury' are used synonymously in the Vigneron and Johnson's research.
Vigneron and Johnson (1999) categorized three types of prestige brand as, upmarket brands,
premium brands and luxury brands, respectively in an increasing order of prestige. Hence, it
was expected that people would have different perceptions of the level of prestige for the
same brands, and that the overall prestige level of a brand would consider the prestige
perceptions from different people.
Leibenstein (1950)
He came up with the concepts of 'bandwagon' and 'snob' effects. In case of the bandwagon
effect, the demand of a product increases when an individual buys a product because other
consumers also buy it. In case of snob effect, the demand for the product goes down, if there
are many more consumers consuming it. The snob consumer tries to avoid an unwanted
reference group membership, and on the other hand the bandwagon consumer wants to
enhance his self-impression by following the aspired reference group. In both ‘snob’ as well
as 'bandwagon' effects, people try to express themselves by using their consumption
of luxury goods. The only difference is, in their way of expression. While a 'snob' consumer
avoids reference group membership and wants to maintain uniqueness, and a 'bandwagon'
consumer wants the acceptance of the reference groups and become a member of the aspired
reference group.
Richins and Dawson (1992)
According to Richins and Dawson materialism is a value that influences the way that people
interpret their surrounding and based on which they organize their lives. Richins and
Dawson define materialism as the importance attributed to the ownership and possession of
10

material goods in achieving the major goals of life or desired states. They conceptualized
material values consisting of three domains; the use of possessions to judge the success of
others and oneself, the centrality of possessions in a person’s life, and the belief that
possessions and their acquisition lead to happiness and life satisfaction. They developed a
scale to measure Materialism. This scale is very popular and a standardized scale used by
many researchers to capture Materialism. This scale has been used for this study.
Tian, Bearden, & Hunter, (2001)
Tian et al, (2001) contributed to the theory of uniqueness in respect to luxury products.
According to this theory, some individuals need to be seen as different from others and feel
threatened if there are many more consumers consuming products similar to theirs. They
defined uniqueness as a trait of pursuing differentness with respect to others through the
acquisition, utilization, and disposition of consumer goods with an objective of developing
and enhancing one’s self-image and social image.
They categorized consumer’s need for uniqueness into three behavioural dimensions:
(1) Creative choice counter- conformity: reveals that the individual seeks products that are
different from most others but this individual’s choice is considered to be good by the others.
(2) Unpopular choice counter-conformity: is opposite to creative choice counter conformity
where the individual chooses products and brands that deviate from group norms and there is
a risk of social disapproval that consumers bear, just to establish the difference but ultimately
result in an enhanced self-image and social image.
(3) Avoidance of similarity: states that an individual in order to establish the differentness
might avoid popular products and brands. They might stop using them when they realise that
there are others who are following them.
11

Tian, Bearden, & Hunter, (2001) developed a scale to measure Uniqueness, which is being
used by other researchers and also used in this study.
Park and Lessig (1977)
The researcher used a three dimensional structure to describe reference group influence on
the consumer behaviour of individuals.
(a) Informational reference group influence: While purchasing a product the information
value will influence an individual, if they believe that it is adding value and aiding them
in making the purchase decision.
(b) Utilitarian reference group influence: In a purchasing decision, an individual will abide
with the expectations of a reference group if he feels motivated or threatened by the
rewards or punishments which might be inflicted on them by the group when their
purchasing behaviour becomes visible to the group.
(c) Value-expressive reference group influence: An individual is influenced by the
reference group if he likes the group and would like to belong to the group.
The researchers developed the scales for measuring the impact of reference groups on the
consumption behaviour of individuals. These scales are popular and used by many
researchers for their study. In this study, the scales developed by them are used.
Radha Chadha and Paul Husband (2006)
‘The Cult of the Luxury Brand – Inside Asia’s Love Affair with Luxury’ in this book, the
authors have emphasized the growing trends of luxury consumption in Asia and it is so
powerful that the continent is now the biggest market in the world for western luxury brands.
It’s about a keen understanding of the psyche of the Asians that has helped the luxury indus-
try create this cult, which has proved immensely profitable. The cult of the luxury brand is so
12

powerful that Asian consumers account for as much as half of the $80 billion global luxury
industry. They have outlined a powerful model that explains the spread of luxury in
developed markets such as Japan and Hong Kong, while predicting the future course for
emerging markets such as China and India.
Chadha and Husband’s Evolution of Luxe Model
Heinemann, G. (2008). Motivations for Chinese and Indian

consumers to buy luxury brands
Chadha & Husband’s five-stage process of ‘Luxe evolution’ model, demonstrates the stages
in which each of the countries are, and explains the different stages of the model focusing on
the Asian economies. Stage 1 ‘Subjugation’ refers to poverty, and deprivation; Stage 2 'Start
of Money' refers to economic growth where the masses adopt household goods and elites
adopt luxury goods; Stage 3 ‘Show off’ refers to where symbols of wealth are acquired and
economic status is displayed; Stage 4 ‘Fit in’ refers to large-scale adoption of luxury and the
need to conform; finally Stage 5 ‘Way of Life’ refers to confident discerning buyers who are
locked into the habit of purchasing luxury. Japan is considered to be at the last stage way of
life but for developing countries when wealth has only been acquired by certain segments of
society, luxury consumption demonstrates economic status in the most conspicuous manner.
13

India is seen as moving rapidly from stage 1 to stage 2, Indian consumers are at the show-off
stage of luxury consumption that reflects big-name foreign brands or masstige brands.
1.4. Socio-economic factors and luxury consumption
The number of consumers entering the market for luxury goods is growing rapidly
worldwide, as the communist countries turn to capitalism, and emerging economies
becoming more affluent (Dubois and Duquesne 1993; Wong and Ahuvia 1998). There is a
direct relationship between increase in income and indulgence of luxury products. There is an
uptrend in the growth of the luxury industry in the emerging markets like China, followed by
India. According to Chaudhuri and Majumdar, (2006) and Chadha and Husband, (2006) the
motivation for buying luxury goods is relative to a country's development. In the twentieth
century both in India and China, luxury goods went missing due to political factors such as
closed borders, government disapproval of luxuries and price inaccessibility. Now with the
opening of borders and a rapidly increasing middle class population, who can afford luxury
products (Danziger, 2005; Thomas, 2007), there is a new wave of luxury consumption in
these two countries. Consumers are excited to indulge in luxury products, which they look at
as a means of self-expression and rebelling against the suppression of the past (Chadha &
Husband, 2006).
1.5. Motivations in India to consume Luxury
Until a few years back, caste system was strongly prevalent in India. After the abolishment of
the caste system, India moved to a class-based society. The Indian culture has always had
high dependence on hierarchies and acceptance of inequality. This background has been an
influencing factor towards purchasing of luxury products. As these products, symbolise
wealth and status, the Indian consumers enjoy displaying them, and thus are motivated to
14

indulge in them (Chadha & Husband, 2006; Debnam & Svinos, 2006; Thomas, 2007). Thus
the conspicuous consumption helps them to establish their position in society, (Chadha &
Husband, 2006; Danziger, 2005; Thomas, 2007). Secondly, due to the growth in the Indian
economy there is an upsurge of the Indian middle-class consumers who have an increased
disposable income. The present Indian consumers look for better quality of life, which has led
to aspirations of wealth, power and modern lifestyles. With globalization and frequent travel,
the Indian consumers aspiration to emulate the lifestyle of developed world, has also
influenced them to purchase luxury products. Thirdly, for many middle class entrepreneurs,
owning luxury brands is a way in which to establish an identity (Chadha & Husband, 2006;
Danziger, 2005; Thomas, 2007). Indians are deeply impacted by film stars and cinema,
copying their tastes and life style also promotes the consumption of luxury (Kripalani, 2007).
As the economy develops the per capita income increases, and with the increase in income,
there is a change in the consumption pattern. There is a shift of consumption from
necessities to luxury consumption (Alexander and Myers, 1999). The luxury goods market
has been growing continuously. Due to the recent recession, the demand for luxury products
in the western countries appears to be dipping. On the other hand the craving for luxury
goods is steadily growing in emerging markets like China, Russia, and India offering huge
opportunities for many luxury goods companies (Fiske & Silverstein, 2003; Nueno & Quelch,
1998; Shukla, 2010). According to Anestis et al., (2009), it is estimated that China and India
will continue with the expansion for the next 10 years.
1.6. Indian Luxury Market
Till the early 1980’s due to low purchasing power of the Indian consumer the consumption
was restricted to the basic necessities and essentials Owing to liberalization, the era starting
mid-1980s, saw a steady growth in the economy, leading to an increase in income and
15

purchasing power of Indian consumers. This witnessed growing demand for different
consumer products (Chunawalla, 2000). There is a change in the consumption pattern of the
Indians, with an upward trend in the consumption of luxury products.
There has been a spurt in affluence, with the emergence of a new breed of professionals,
entrepreneurs, and business men. Along with them there is an upsurge of their children who
are the young entrants who contribute majorly to the consumption of luxury. The younger
generation represents the most important segment that will influence the global luxury market
over the next decade (Luciana de Araujo Gil, 2009). A young demographic profile, growing
number of millionaires and billionaires and an aspiration of the youth to integrate with the
outside world are the driving factors for the luxury markets, which makes India a big
potential market for luxury products.
The market is expected to grow due to a good economical context and the increase of
consumers' spending pattern and the increasing obsession for global branded luxury products
especially amongst the youth. The latest survey report from According to The Associated
Chambers of Commerce and Industry of India (ASSOCHAM, 2013), the Indian Luxury
Market holds strong despite global economic downturn. The high income group Indians
spend over 40 per cent of their monthly income on popular global luxury brands. The luxury
market in India is pegged to grow at 25 per cent in 2013 through 2015, rising to $15 billion
from the current level of $8 billion. The combined effects of the entrant of the youth,
economic growth, globalization, internet and social media diffusion have created boom in the
Indian luxury industry.
16

CHAPTER 2 - Literature Review
Overview
1. Prelude
2. Luxury Products
3. Products and Brands
4. The Relationships between Luxury Products and Brands
5. Buying Motivations
6. Model of the Motivation Process
7. Buying Motivation for Luxury products
8. Buying Intention
9. Buying Behaviour of luxury products
10. Demography
11. Geographical Location and Buying Intention
12. Youth - GEN Y
13. Perception Value Factors and Buying Intention:
14. Social Value Factors and Buying Intention
15. Culture and Luxury Consumption
16. Research gap
17

CHAPTER 2
Literature Review
2.0 Prelude
There are a number of studies in the area of luxury, luxury products, and factors influencing
buyer behaviour of luxury products in both developed and emerging markets. This study aims
to study the factors influencing buying behaviour of luxury fashion products, among Indian
youth. Hence a detailed review of literature with relevance to the study has been presented in
this chapter.
According to studies of Ahuvia (2005), Belk (1988), Jenkins’s (2004) possessions of luxury
products are very relevant. The main essence of these studies is that consumers use their
luxurious belongings to define their self, and adjust their personality according to who they
are and who they would like to be, but at the same time it is important that this needs to be
endorsed by the external world (Jenkins, 2004).
Researches on the various factors influencing the buying intention of luxury products have
been undertaken (Berthon et al.2009; Tsai 2005 and Vigneron and Johnson, 2004) Even
though the terms used by them were different but all of them referred to self and external
world as significant motivators on luxury products consumption. Berthon et al. (2009) in his
study on the value associated with luxury brands stated that a consumer experience can be
characterized into three worlds, Functional value, Experiential value and the Symbolic value.
The motivating factors which influence the buying intention towards luxury fashion products
can be as Perception Value Factors, Social Value Factors, Marketing Mix Factors or external
factors, Cultural factors and the Demographic Factors. The sub factors under the Perception
Value Factors are: Attitude towards Luxury, Materialism and Need for Uniqueness. The sub
18

factors under the Social Value Factors are: Reference Groups and Status. The sub factors of
Marketing Mix Factors are: Product, Price, Communication and Distribution. The
Demographic factors are age, gender, income, qualification, occupational status, geography.
Cultural factor was considered while examining the region wise influencing factors.
2.1. Luxury Products
The literature reviews based on the studies by different researchers proposes different
definitions of luxury products, which can be broadly classified under three main categories:
1. The Philosophical-Sociological definitions include the broadest scope of Luxury,
comprising of all resources which are desirable and exceed what is necessary and
ordinary. Few examples include musical talent, time, and true love (see also Sombart
1922).
2. The Micro-economic understanding of the luxury products is in relation to price and the
demand for the products (Chaudhuri 1998; Kemp 1998; Lipsey 1975), and the relation
between income and demand for luxury products (Deaton and Muellbauer 1980;
Lancaster 1971). Under this category some of the researchers have brought in the angle of
benefits of the luxury goods industry for the economy (Thomas 2007).
Thus it can be summarized that luxury products, comprises of all products which exceed
what is necessary and ordinary, and are suitable for exchange on the market.
According to the micro economic area luxury products represents the middle scope and
are distinguished from necessary or ordinary products not by their characteristics, but by
changes in demand for the product based on price and income.
3. The Managerial understanding represents the smallest scope of luxury. The major
difference between micro economic perspective and the managerial perspective is that the
managerial understanding of luxury does not include the entire product ranges but instead
refers to only selected and best categories of products, with specific characteristics. The
19

broad definition of luxury products can be summarized as luxury products are a small
category of products, comprising of all products which exceed what is necessary and
ordinary compared to the other products of their category.
This area of study establishes a link between brands and products. Thus a broad definition
states that Luxury brands are associated with products which exceed what is necessary
And ordinary compared to the other products of their category (Heine, (2012)
Luxury Products can be of different types:
Branded and Unbranded Luxury Products, Privately consumed and Publicly consumer luxury
products, B2B and B2C Luxury Products, Uni-regional and Multi-regional Luxury Products,
Accessible and Exceptional Luxury Products, Personal and Impersonal Luxury Products,
Unique Pieces, Limited Editions, Limited- and Expanded-diffusion Products, Conspicuous
and Understated Luxury Products
Consumers perceive that luxury products have six major characteristics that are the price,
quality, aesthetics, rarity, extraordinariness and symbolism. (Heine, K., 2011). Luxury
products thus can be defined as products that have more than necessary and ordinary
characteristics compared to other products of their category, which include their relatively
High level of price, quality, aesthetics, rarity, extraordinariness, and symbolic meaning.
The consumer’s judgement of the product quality depends on the consumer’s expectation and
the perceived value of the product by the consumers, and this in turn motivates their purchase
decision (Belz 1994, Kisabaka 2001; Kotler et al. 2007). Quality is an important factor, as it
portrays the product’s functionality and its efficiency (Berthon et al., 2009; Sweeney and
Soutar, 2001; and Vigneron and Johnson (2004) According to Fionda and Moore (2009), any
luxury product to excel in product quality, there has to be continuous innovation and
creativity by talented designers and professionals. It is perceived that luxury products offer
great quality compared to non luxury products (Quelch, 1987; O'Cass and Frost, 2002;
20

Vigneron and Johnson, 2004). High quality is seen as a fundamental characteristic of a luxury
product (Quelch, 1987).
2.2. Products and Brands
Branding is a marketing term that refers to a company's efforts to build and maintain an
image or an identity. Product marketing occurs when a company delivers marketing messages
and campaigns to promote a particular product. In general, branding is broader and has a
long-term emphasis, while marketing for a given product often has a shorter-term purpose. A
brand is the meaning behind the name, logo or other symbol used to signify a company and
its products. Companies typically try to associate certain positive traits or attributes with it
when using marketing to build a brand. Brands are regarded as imagery in the minds of
consumers and the target groups (Esch, 2010) and are linked to the characteristics of the core
luxury products (Jean-Noel Kapferer 2008,) which are high level of price, quality, aesthetics,
rarity, extraordinariness, and high degree of non functional associations. These brands are
created by the companies for identifying and differentiating their products from those of other
companies (Philip Kotler et al. 2009) Luxury brands have often been associated with the core
competences of creativity, exclusivity, craftsmanship, precision, high quality, innovation and
premium pricing. These product attributes give the consumers the satisfaction of not only
owning expensive items but the extra-added psychological benefits like esteem, prestige and
a sense of a high status that reminds them and others that they belong to an exclusive group
of only a select few, who can afford these pricey items. These descriptions are summarized
by the following principles:
Price: The brand offers products which belong to a range of the most expensive products of
their category.
Quality: The brand aims to design a top line product which communicates reliability and
value.
21

Aesthetics: Whenever and wherever the brand is seen, it embodies a world of beauty and
elegance.
Rarity: In contrast to mass-market brands, the brand needs to limit its production and tries
not to disclose its high sales numbers, thus portraying uniqueness in the minds of the
consumers.
Extraordinariness: The brand has a mind and style, which offers a surprise element for the
consumers.
Symbolism: The brand stands for excellence and superiority and thus bestows on the
consumer a sense of pride when owning it.
Branding is an ongoing and long-term marketing process. New companies try to build a
brand early and established companies try to maintain and grow the value of their brands over
time. Establishing a strong brand helps lay the foundation for company success over time. A
strong brand reputation helps a company get better results when it attempts to market
products because its brand identity has carryover effects with its products.
2.3. The Relationships between Luxury Products and Brands
By definition, luxury brands need to offer luxury products. Without a product portfolio that
includes luxury products, it is impossible to achieve a luxury brand image. Nevertheless, the
product range of a luxury brand does not necessarily consist only of luxury products
(Kapferer & Bastien 2009). A product is made by a company and can be purchased by a
consumer in exchange for money while brands are built through consumer perceptions,
expectations, and experiences with all products or services under a brand umbrella. Without a
product, there is no need for a brand. Products can become obsolete but brands stay. When a
new product is launched, it’s easy to make that product instantly meaningful and useful to
consumers because it serves a specific function for them. However, a brand is meaningless
until consumers have a chance to experience it, build trust with it, and believe in it. The steps
22

to brand building include consistency, persistence, and restraint. It takes time and effort to
convince consumers to believe in your brand. Therefore, the evaluation of the luxuriousness
of a brand should refer to the core product category with which this brand is associated.
2.4. Buying Motivations
Motivation is produced by a state of tension, by having a need which is unfulfilled.
Consumers want to fulfill these needs and reduce the state of tension. The level of
motivation strongly affects the buying behaviour of customers. Every individual has different
needs such as physiological needs, biological needs, social needs etc, but the priority of each
one’s need differs. A need becomes a motive when the priority becomes higher. Much of the
research done in consumer behavior is based on motivational research. The understanding of
consumers’ motives can help marketers make better products, communicate more clearly, and
deliver benefits to the consumer.
Model of the Motivation Process
Schiffman, L. G., & Kanuk, L. L. (2000). Consumer behaviour. International. Inc.: Prentice-Hall.
This model highlights the motivation process. The drive toward behavior will often end in
the fulfillment of the need.
23

2.4.1 Buying Motivation for Luxury products
1. Veblen (1899) stated that people try to emulate the leisure class or the upper-strata of
society. This type of consumption that is related to the flaunting of One's status
symbols is also called conspicuous consumption. This conspicuous consumption is a
strong motivating factor for luxury products.
2. Based on the Veblenian effect, Vigneron and Johnson (1999 and 2004) used the term
hedonist and perfectionist motivation to explain the opposite of conspicuous
consumers who are individuals who focus on product quality and primarily concerned
about the pleasure that they get from the consumption experience.
3. Leibenstein (1950) proposed the concept of ‘bandwagon’ and ‘snob’ effects. In case
of the bandwagon effect, the demand of a product increases when other consumers
also buy it and for the snob effect the, demand of the product goes down if others also
buy the product. In both the cases individuals try to express themselves using their
consumption of luxury goods.
4. Based on Maslow’s theory, Wang, Sun and Song (2012) proposed seven practical
motivations for the consumption of luxury., such as self-actualization, social
comparison, other's influence, investment for future, buying for special time, buying
out of emotion and for gift-giving.
The buying motivations of consumers vary for different individuals based on their ways of
expression for consuming luxury goods. Past studies reveal that there are three key buying
motivations which are related to luxury goods consumption: conspicuous consumption
motivation, hedonist- motivation and self-expression motivation.
24

2.5. Buying Intention
When an individual intends to buy a product because of various factors then it can be said
that the individual has a buying intention towards that product. Buying Intention takes place
only when there is a need, want or desire for a product. In case of buying intention towards
luxury product, it is very important to have the right attitude towards the luxury product. The
key factors that motivate the purchase intention for luxury products of Indian youth in the
context of self and the external world, have been segregated as Demographic Factors,
Perception Value Factors, Social value Factors and Marketing Mix Factors
1. Perception Value Factors: This dimension represents the aspect of defining consumer’s
personal point of reference towards luxury consumption. Here the consumers have their
own perception of luxury. They are motivated to buy luxury because they perceive that
possessing the luxury products would give them personal satisfaction and happiness.
Under Perception Value factors that influence purchase intention of luxury products,
among Indian youth – Attitude towards luxury, Materialism, Need for Uniqueness have
been considered.
2. Social Value Factors: When the desire to portray status is the dominant motive for
purchase and use, then it is described as social value factor. Unlike the perception value
factor, the individuals are motivated to purchase luxury products because they want to
show off in their peer group. The urge to belong to a particular group motivates them to
buy the products. Under Social Value Factor Reference group and Status have been
examined.
3. Marketing Mix Factors: are the 4 Ps which influence the buying behavior of the
consumer. Under the Marketing Mix factors Product, Price, Communication and
Distribution have been examined.
25

2.5.1. Buying Behaviour of luxury products
Buying Behaviour can be defined as the process and activities people engage in when
searching for, selecting, purchasing, using, evaluating, and disposing of products and services
so as to satisfy their needs and desires.
According to Boston Consulting Group, society is experiencing one of the greatest shifts in
consumer buying habits and tastes since the 1950s, and thus necessitating a redefinition of the
concept of luxury provided by consumer's luxury experiences (Dubois and Czellar,
2002).Luxury goods are those goods, which when using them or even displaying them
endows the owner status apart from any functional utility (Grossman & Shapiro, 1988).
Consumption of luxury fulfils different needs for different people. Social need is one
Important factor that influences luxury consumption. Luxury material goods give a visible
status badges to confirm social stratification or distance (Kapferer & Bastien 2009; Veblen,
1979). Individual’s identity, consumption habit and symbols are associated with luxury
possession (Schouten1991; Slama, Wolfe & Clark 1999; Phillips, 2003). When exclusivity is
the motivating factor for consumption, people prefer products of perceived exclusivity
(Bagwell & Bernheim 1996; Nagel & Holden 2002). Studies have revealed that there are two
benefitting factors that interest consumers: hedonic and utilitarian (Babin, Darden, Griffin,
1994). The term “Utilitarian benefits” refers to the functional, useful, and practical benefits of
consumption offerings and the term “hedonic benefits” refer to the aesthetic, experiential and
enjoyment-related benefits (Rajeev & Ahtola, 1990; Dhar, Ravi, & Wertenbroch, 2000;
Chitturi, et.al., 2007).
According to Dubois et.al al. (2004) there is a strong relationship between the type of product
and the hedonic content of the purchase by stating that “luxuries are consumed primarily for
hedonic pleasure while necessities are required to meet more utilitarian goals” Luxuries are
26

objects of desire and that provide a condition of abundance, pleasure, ease and comfort
(Khan, et. al., 2004). The motivation for consumption of luxury can be studied in terms of
non-personal perceptions and personal perceptions (Vigneron & Johnson 1999, 2004). Non-
personal perceptions of luxury are based on opinions, others influence and suggestions based
on interactions with others (Groth & McDaniel, 1993) whereas personal perceptions of
luxury are based on one’s feelings and emotions (Dubois & Laurent, 1996). In consumer
psychology, non-personal perceptions of luxury include: (1) perceived conspicuousness
(Veblen 1899; Bearden and Etzel 1982); it states that possession of luxury signifies social
position and status (Vigneron & Johnson 2004). (2) Perceived uniqueness (Lynn 1991;
Snyder and Fromkin 1977) means exclusivity which is related to expensive pricing of luxury
goods (Verhallen1982; Lynn 1991; Pantzalis 1995; Groth & McDaniel 1993; Verhallen &
Robben1994).
2.6. Demography
One of the most important factors which influence buying intention is the demographic
factors (age, gender, occupational status, location). Different age groups show a different
pattern of behaviour towards luxury consumption. Similarly the motivating factor for a man
would be different from that of a woman. The occupational status, income, educational
qualification has a strong influence on buying behaviour. The place of residency plays a vital
role in the attitude of buying behaviour. This is a very important factor which can influence
buying intention of the individuals. India is a country with many states and each state having
its own character. The place where you live in can have a huge influence on your intention to
purchase luxury. According to Miller (1995); Shaw and Clarke (1998) cultural differences
often cause differences in consumer behaviour within and across national borders. It can be
seen that the factors influencing the buying intention of luxury fashion products will vary
from region to region within the same country
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2.6.1 Geographical Location and Buying Intention
This is a very important external factor which can impact the Buying Intention towards
luxury products. In a country like India, there are 36 states, and the culture of each of the
states is different. The attitudes, behaviours and buying intention towards luxury products
would differ from state to state. In this study we have captured and analysed the data of youth
lived in during their formative years, presently living in and original natives of the different
states in India to check the nature and nurture effect on the individuals. Hence the geography
and the external locations play a very critical role in the Buying Intentions of the individuals.
2.6.2 Youth - GEN Y
The luxury market is moving continuously and there has been a significant change in the
buying pattern and the behaviour of the consumers. (Strauss & Howe, 1999). One of the most
striking changes that are visible is the entrant of young consumers who have been taking keen
interest in luxury consumption. This segment of the population is termed as Generation Y,
Gen Y or Millennials. Horovitz, (2002) defines this cohort as all those born between 1977
and 1994. Beldona et al (2009) describes generational cohort as a group of individuals who
have similar experiences and distinctive characteristics. In his study Wolburg and
Pokrywczynski (2001) stated that usually the commonalities of motivation between
individuals of these cohorts are life stage, current conditions, and cohort experiences. Cohorts
are majorly influenced by events that occurred during their formative age (Schewe et al.
2000). Jackson et al. (2011) state that the impact which takes place during this age leaves a
mark for almost a life time. Most critical influencers to this generation are the media. This
generation is extremely tech savvy, and media consists of wide range of technology such as
television, internet, mobile phone and DVD (Angela Hughes, 2008; Sriviroj 2007). They are
28

completely glued to the internet which aids them in collecting more information about
products on line. As they are frequent visitors on social networks, Angela Hughes (2008),
stated that the internet is a very powerful tool for this generation in spreading opinions about
products to their peers, and tend to look up information before purchasing any product. This
awareness has made them bold and confident. Due to Globalization, the world is developing
into a single economy and culture as a result of improved technology and communication has
led to an increase in homogenisation in this segment of population. The technology such as
MTV and internet chat rooms is distributed worldwide; it has created great similarity between
Gen Y in different nations compared to older generation in the same country (Anderson and
Hee, 1998). If the luxury products are commercialised on MTV, it would attract the Gen Y
across nations to buy the luxury products that are associated with celebrities and heroes. This
also leads to standardisation in product consumption, which helps the marketers to use a
common message across the world to woo this segment of population.
The older generation is well educated and technology savvy, but are sceptical, and pragmatic
(Jackson et al.2011; Littrell et al. 2005). They still feel guilty to splurge on luxury products
and would think twice before consuming them. This is because this generation grew up with
both economic uncertainties and societal uncertainties (Lyons et al.2007; Schewe et
al. 2000). Whereas, Gen Y, are perceived as consumption oriented and sophisticated shoppers
(Jackson et al. 2011; Wolburg and Pokrywczynski, 2001). They are socially conscious and
are very comfortable in spending on luxury products without feeling guilty. Tucker, (2006)
describes them as very enthusiastic with a very high spending power and who desire
immediate gratification. They are extremely focused and know what they want and thus are
not swayed by mall ambiance and environmental factors (Martin and Turley, 2004).
According to O'Cass and Frost (2002), in a study of young status-conscious consumers, found
they "are more likely to be affected by a status brand's symbolic characteristics, by feelings
29

evoked by the brand and by the degree of congruency between the brand-user's self-image
and the brand image." According Chau and Schor (1998) the younger consumers spend more
on branded products including status products, thus branding is a key element of status
products, particularly for younger consumers.
2.7. Perception Value Factors and Buying Intention:
Under this factor Materialism, Attitude towards Luxury and Need for Uniqueness has been
reviewed:
2.7.1 Materialism
Veblen (1819), as early as then explained the theory of conspicuous consumption. According
to this theory, any individual who desired for social status and self esteem could achieve it
only by possessing these products Hence these consumers tend to spend more on luxury
products, as displaying the products and the wealth spent on these products increases their
status value and their esteem. Materialism is broadly defined as placing a value on
possessions (Richins and Dawson 1992) or the belief that possessions will bring happiness
(Belk 1988). Richins and Dawson (1992) defined materialism as “the importance ascribed to
the ownership and acquisition of material goods in achieving major life goals or desired
states.” It is an orientation which views material goods as important for personal happiness
and social progress (Ward and Wackman 1971). According to Belk (1985), the more
materialistic an individual is, the more luxury products he would consume. They enjoy
consuming luxury products because they enjoy possessing the products. Belk (1985)
describes materialism as “the importance a consumer attaches to worldly possessions. At the
highest levels of materialism, such possessions assume a central place in a person’s life and
are believed to provide the greatest source of satisfaction and dissatisfaction” As Richins
and Dawson (1992) defines materialism as a value added to individuals that result in
happiness through possessions and success. As these possessions take a centre stage in the
30

lives of such individuals, materialism could lead to total satisfaction or complete
dissatisfaction. For Materialist individuals possessing products is an important ingredient for
their well-being. Wallendorf and Arnould (1988), states that possessing these objects add lot
of meaning to their lives in different ways. It may add entertainment value, safety and
security or pure pleasure.
He suggested that materialism brings out traits of possessiveness, non-generosity and envy
and that non-generosity and envy may well lead to dissatisfaction. Richins and Dawson
(1992) brought in the concept that materialism brings in success and happiness. These
individuals believe that the more possessions one has the more successful they are. It was
concluded that materialistic individuals are more likely to keep their wealth to themselves
and are not likely to share money or possessions with anybody. Richins and Dowson (1992)
pointed out that materialism influences the type and quantity of goods purchased. Different
authors describe materialism differently, but their definitions have a common concept that the
materialists seek relationship with objects whereby they can improve themselves in some
way. This segment usually would like to consume in public, especially if a brand was
perceived as expensive (Richins, 1994). Some studies found high levels of materialism
among adolescents (Fields, 1999). Research has shown that materialism influences
conspicuous or status consumption (Fournier and Richins, 1991; Richins, 1994; Wong,
1997). Fournier and Richins (1991) reported that two great motivators for materialism are
status display or show off and self-affirmation through ownership of status-oriented
possessions. According to Richins (1994) people who are strongly motivated by materialism
are more likely to value expensive and publicly displayed possession items, which
communicate their success and social status. With the markets widening to global trade and
more disposable income in their hands, young Indian consumers are increasingly pursuing
materialism.
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2.7.2 Attitude towards Luxury
According to Solomon (2002), attitude is “a lasting, general evaluation of people
(including oneself), objects, advertisements, or issues.”
Daniel Katz (1960) has identified the following functions of attitudes to products:
• Utilitarian function: a product gives an individual pleasure or pain, that is some
Benefits for the consumers.
• Value-expressive function: what the product communicates about the consumer as an
individual, or his values or self-concept.
• Ego-defensive function: attitudes safe guards the individual from external threats or
Internal feelings.
• Knowledge function: attitudes are formed as the result of a need for order or
meaning for example in an ambiguous situation.
Solomon et al (2002) stated that an Attitude has three components: affect behaviour and
cognition. Affect means the feeling that a consumer has towards the product. Behaviour
refers to the individual’s intentions to do something with regard to the product, and cognition
refers to the belief that an individual holds about the product. Attitude is always affected by
the consumers’ motivations.
Attitude of an individual is a critical component impacting the purchase intention of luxury
products. Dubois and Laurent (1994) explored the meanings attached to the word "luxury" In
their study the researchers found that there were ambiguous or ambivalent feelings and
reactions towards luxury products. There existed a dual nature of luxury- a world for ‘others’
and a world for ‘me’. Many negative feelings were attached to ‘others' luxury while the
positive opinions were kept for "my" luxury. On the basis of such themes, a battery of 34
32

attitudinal items was developed, pre-tested and administered. The following conclusions were
drawn:
1. There is a negative perception of the luxury world. Those who follow this philosophy
tend to describe luxury goods as useless, old-fashioned, too expensive and flashy. As they
fail to see any value add to them they do not desire luxury products.
2. There is more of a feeling of misfit between them and the luxury products. Such people
tend to feel uneasy with the luxury surrounding and thus feel superficial even when they
wear or carry them. These factors discourage them to acquire luxury products.
3. All such individuals who are not comfortable in the world of luxury or find luxury goods
expensive tend to feel that ‘others’ buy luxury items to imitate the rich or to differentiate
themselves from the rest of the population.
4. There exists another segment that is totally opposite. They like luxury and are happy to
talk about this for hours. According to Alba and Hutchinson, (1987) such people are
familiar with luxury and are knowledgeable about its style and expertise. They get
hedonic pleasure and are fascinated with the luxury products. There is a kind of bliss that
is associated with luxury for these individuals.
Hence in the research Dubois and Laurent (1994) describes that the attitude of people towards
luxury is either positive or negative depending on their comfort, familiarity and perception
towards the consumption of luxury products. In this study we aim to examine the attitude of
the Indian youth towards luxury and study the impact of this on their purchase intention.
2.7.3 The need for uniqueness
One of the most important characteristic of luxury is rarity or uniqueness. It can be said that
some of the predominant factors of a ‘luxury’ brand are its very exclusivity, uniqueness, and
novelty value. Leibenstein (1950) came up with the concept of 'bandwagon' and 'snob'
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effects. In case of bandwagon effect the individual’s demand for a product goes up when the
people around him are all consuming it. In case of the snob effect, the demand for the product
decreases when the other consumers also consume it. Individuals who prefer the snob effect
are those who want to be different and would want to stand out among other consumers. This
segment of consumers prefer rarity and would not purchase or even stop using their product
if they feel that there are many more consumers consuming the same product. For this
segment, this decreases the value of the product, and the snob consumers would reject that
particular product. According to Solomon, (1994) the snob consumers only purchase "limited
items that have a high value, whereas those readily available are less desirable. Rare items
demand respect and prestige" Therefore the snob consumers would want to purchase these
products as soon as the product is launched which creates exclusivity and there would be only
very few consumers who would own that product. According to Leibenstein (1950), the snob
effect is highly complex. There is great demand from snob consumers for those products
which are viewed as unique, popular, and expensive. (Verhallen & Robben1994; Snyder and
Fromkin1977). Verhallen and Robben (1994) stated that some people have the desire to be
unique. These are the individuals who look for uniqueness and are motivated to buy luxury
products even if the products are in limited supply and high priced, because it dissuades many
others from indulging in it, thus making it in accessible and unique.
Uniqueness is based on the assumption, demonstrated in research, that the perceived
exclusivity and rareness of the product enhances a consumer’s desire or preference for it
(Verhallen, 1982; Lynn, 1991; Pantzalis, 1995). Tian et al. (2001) defined the need for
uniqueness as “the trait of pursuing differentness relative to others through the acquisition,
utilization, and disposition of consumer goods for the purpose of developing and enhancing
one’s self-image and social image”. This segment of the consumers seeks to enhance their
image by possessing luxury products which have superior quality, unique style and which can
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enhance their individuality. Luxury brands seem to be used for satisfying consumers’ needs
for uniqueness for the following reasons. First, luxury brands’ scarcity value enables
purchasers to differentiate themselves from others (Burns and Brandy, 2001) and they
would only purchase those items which are rare and are not bought by the masses. They
would stop purchasing or using the products if it is consumed by many other people.
Individuals who have high needs for uniqueness are more likely to value their possessions
which are perceived to be scarcer (Tian and McKenzie, 2001). The more unique a brand is
deemed, and the more expensive it is compared to normal standards, the more valuable it
becomes (Verhallen & Robben, 1994).There is a rising trend of luxury consumption among
young urban consumers in India (Sarang, 2008). With globalization and frequent travel to the
western countries there is seen a pattern in their luxury consumption, resembling their
western counterparts.
2.8. Social Value Factors and Buying Intention
Under the Social Value Factors Status and Reference Groups have reviewed.
2.8.1 Status
In the Theory of the Leisure Class, Thorstein Veblen (1899) introduced the concept of
‘conspicuous consumption’ or ‘status consumption’ which was the means of purchasing
expensive products and displaying them to others to show off one’s wealth. Eastman et al.
(1999) defined status consumption as "the motivational process by which individuals strive to
improve their social standing through the conspicuous consumption of consumer products
that confer and symbolize status both for the individual and surrounding significant others"
O'Cass and Frost's (2002) defined status consumption as "the process of gaining status or
social prestige from the acquisition and consumption of goods that the individual and
significant others perceive to be high in status."
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According to Mihaly Csikszentmihalyi and Eugene Rochberg- Halton (1981) status
consumption was described as a power which an individual gets to demand respect from the
others. According to Eastman et al. (1999) individuals seek to consume conspicuous products
which display status in order to be accepted by their social circle. O’Cass and Frost’s (2002)
defined status consumption as “the process of gaining status or social prestige from the
acquisition and consumption of goods that the individual and significant others perceive to be
high in status.” According to Veblen, 1899; Eastman et al., 1999, a person derives status
through conspicuous display of his wealth and possessions and due to which he acquires the
power, respect, consideration and envy of others. Initially the researchers used status
consumption and conspicuous consumption synonymously (O'Cass and McEween, 2004).
But recently Passariello et al. (2008) established the need to treat them differently.
Status consumption is more about the consumer’s desire to get social position and prestige by
acquiring those products that are status-laden, while conspicuous consumption is about visual
display or public display of the products to show off in front of others. So it can be stated that
status consumption is for the consumer’s ‘feel good’ factor and may or may not necessarily
be publicly displayed, while conspicuous consumption is more about showing off to the
world (O'Cass and McEween, 2004).
Many modern theorists have brought out different aspects to conspicuous consumption. Some
associate conspicuous consumption to bandwagon effect, snob effect and as a status symbol
(Corneo & Jeanne, 1997). Basmann, Molina, & Slottje (1988), stated there are two types of
utility which an individual gets by status consumption. One is the direct utility which the
individual gets from the product or service and the other is the utility which an individual gets
as a result of being seen consuming the product or service. By this conspicuous consumption
of luxury goods, an individual gets more immense satisfaction, from the other person’s
reactions to the wealth displayed rather than from the value of the product itself (Mason,
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2001). This segment of consumers always looks for an opportunity to display their products,
in order to hold themselves high in the eyes of others. They use these products to
communicate their status and power to their peer groups and their reference groups.
Many of the researchers have suggested that the youth segments are lavish spenders when it
comes to branded and luxury products (Piacentini and Mailer, 2004; Tan, 1999; Taylor and
Cosenza, 2002). O’Cass and Frost (2002) have also proved that these younger consumers are
driven by the need to possess and display status brands. The youngster’s main motivation is
to gain the acceptance and respect from people surrounding them. According to Chaudhuri,
H. R. & Majumdar, S. (2006) the Indian class behaviour and economic resource distribution
are different from those existing in Western societies and so is the consumption culture.
However, recent socio-economic transitions have significantly changed Indian consumption
habits. India has always had a very hierarchy- and status-conscious society (Kakar 1981),
which began with the caste system and has now evolved into more of a class-based system
(Venkatesh and Swamy, 1994). Thus, there has always been a search for signs and markers of
status and class, and successful Indians would always like to display their affluence through
ostentatious exhibition of the goods they own (Singh, 1982).
2.8.2 Reference Groups
Hyman (1942) introduced the term ‘reference group’, as “a person or a group of persons
which significantly influences an individual’s behaviour” A reference group can be described
as any person or group, that influences an individual’s behaviour (Blackwell and Engel,
2001), or whom the individual looks up to for opinions and guidance for purchase decision of
product (Widing et al., 2003). An individual may have many reference groups depending on
the situation and at the same time a group might be a reference group for a particular
37

individual and yet not be one for other individual. In simple words, reference group is any
person or group that serves as a point of comparison
Or reference for an individual in forming either general or specific values, attitudes, or
Behaviour (Schiffman & Kanuk, 2000). From the consumer behaviour perspective, reference
Groups serve as frames of reference for individuals in their purchase or consumption
decisions (Schiffman & Kanuk, 2000).
Peer influence is commonly defined as the extent to which peers exert influence on the
attitudes, thoughts, and actions of an individual (Bristol and Mangleburg, 2005). There are
two schools of thought with respect to social influence. According to one school, social
influence consists of three types of influences first being informational, second is value
expressive and third being utilitarian influence (Bearden and Etzel, 1982; Childers and Rao,
1992; Lessig and Park, 1978; Park and Lessig, 1977). Informational influence is upgrading
one’s knowledge of the environment, (Childers and Rao, 1992; Park and Lessig, 1977).
Informational influence also necessitates observing the behaviour of others and actively
searching for information from experts in the field. (Brinberg and Plimton, 1986; Park and
Lessig, 1977). Informational influence happens when one accepts information from others as
evidence and desires to make informed decisions (c). Utilitarian influence is when an
individual acts in accordance with the preferences or expectations of others in order to avoid
punishments or achieve rewards (Bearden and Etzel, 1982; Lessig and Park, 1978; Park and
Lessig, 1977). This happens when the individual thinks that the others have significant power
to either reward or punish him, in other words the person is influenced either due to fear or in
anticipation of a reward. (Brinberg and Plimton, 1986; Park and Lessig, 1977). Value
expressive influence happens when an individual’s motive is to enhance his or her self
concept (Brinberg and Plimton, 1986; Park and Lessig, 1977). Value expressive influence is
likely to influence an individual because of the desire to enhance one’s ego (Park and Lessig,
38

1977). This happens either by associating and disassociating oneself with others (Grimm et
al., 1999).
Another school of thought recognises two strong influences namely informational and
normative influence (Bearden et al., 1989; Brinberg and Plimpton, 1986; Mangleburg and
Bristol, 2004). Informational influence is the same as the first school of thought. Here the
utilitarian and value expressive influence have been combined together into a single concept
referred to as normative influence. Normative influence is to confirm with the positive
expectations of others (Bachmann, et al., 1993; Bearden et al., 1989; Grimm et al., 1999).
Informational and normative influences also differ in their factors (Grimm et al., 1999). The
major factors of informational influences include message content, source credibility and
trustworthiness whereas characteristics of reference groups such as appearance and social
status are the major determinants of normative influence (Grimm et al., 1999).
Reference Groups Classification: According to Schiffman & Kanuk, (2000) Reference
groups can be classified in terms of a person’s membership or degree of involvement with the
group, as well as in terms of the positive or negative influences they have on his or her
values, attitudes, and behaviour.
1. A contactual group: Here the individual is in regular contact with this group, and whose
attitude, standards and values is approved by him. Thus, this group is likely to have a
compatible influence on the individual.
2. An aspirational group: Here the individual is not a part of this group but aspires to belong
to this group. Thus the individual looks upon this group and is positively impacted by this
group.
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3. A disclaimant group: Here the individual is in regular contact with this group but does not
approve of the groups values and attitude. Hence they adopt a contradictory approach from
that of the group.
4. An avoidance group: Here the individual is not a part of the group and dislikes the values
and attitudes of this group hence chooses to adopt attitudes and behaviour that are in
opposition to those of the group.
Past research (Park & Lessig, 1977; Bearden & Etzel, 1982; Childers & Rao, 1992) has
largely focused on positive reference groups, those groups which an individual would like to
be associated with. This is the group which the individual would like to emulate. Thus this
group can have a great impact on information processing, attitude formation, and purchase
behaviour (Bearden, Netemeyer & Teel, 1989). On the contrary there are some dissociative
groups whom the individual dislikes and are often influenced by the desire to avoid any
brands or products which are associated with this group (White & Dahl, 2007). The extent to
which a reference group influences an individual depends on different types of products.
Based on the research by Bourne (1957) on the relationship between reference-group
influence and product consumption, Bearden and Etzel (1982) joined together the factors
leading to public and private consumption of luxury products, and how the reference groups
influence this consumption. The results of the study showed that, the reference group’s
influence is stronger in publicly consumed necessities and luxuries and not so much in
privately consumed products. This shows that the individuals were able to emulate the
products and the brands which were publicly used by their reference members. Four major
types of reference group appeals most commonly used in marketing are celebrity
Appeals, expert appeals, the common man appeals and the executive appeals (Schiffman &
Kanuk, 1997).
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2.8.3 Price
The price of luxury products is usually very much higher. They are not comparative but
superlative (Kapferer and Bastien 2009b). The high price makes the product less accessible
suggesting the status of a rare product. There is an interesting phenomenon with the price of
luxury products. If the price of the product is decreased, it is construed as non luxury thus
decreasing the demand for the product and an increase in price leads to higher demand for the
product. Studies have shown when the prices of luxury products are high it is perceived high
quality product (Erickson and Johansson, 1985; Lichtenstein et al., 1988). Thus, marketers
will fix a high price suggesting that the product has high quality and a high status value
(McCarthy and Perreault, 1987), and this leads to making certain products more desirable
(Groth and McDaniel, 1993). At the same side the increased price leads to less accessibility
of the product to many consumers and eventually inaccessible to everyone.
2.8.4 Product Knowledge and Information
Perception Influence and Social Influence have been tested by researchers and there have
been numerous studies conducted in different countries and regions across the world. There
is no study on the impact of Product Information and Knowledge on purchase intention. This
is a very important motivator while purchasing luxury products. When it comes to purchasing
luxury products, consumers evaluate products based on information cues (Olson and Jacoby,
1972). Consumers would collect information from different sources, which include word of
mouth experiences from existing users of the product, or from the salesperson that is assisting
him in the store. Consumers would want to get complete information on the product features,
the price, discounts, warranty and the country of origin which is where the product was
produced. According to Bilkey and Nes, 1982 information on Country of Origin (COO) has a
considerable influence on the quality perceptions of a product. Consumers often use this cue
41

to infer quality or value (Lundstrom et al, 1998).Indian consumers evaluated foreign brands
higher on technology, quality, status, credibility and esteem than Indian brands (Kinra, 2006).
Studies show that, word of mouth form of communication as one of the most important
influences on product sales and brand choice (Bertrandias & Goldsmith, 2006). Before
making a decision there is a regular exchange of information about the product under
consideration. These opinions act strongly on their decision making process. These people
are referred to as Opinion leaders. These opinion leaders are individuals who influence the
decisions of others. Before investing in a luxury product, feedback is sought from friends
who have enough knowledge about the product and decisions are then taken based on the
inputs given by them.
The salesperson is a strong factor of influence in consumers’ decision process because a store
image and ability to build loyalty can heavily depend on the ability and characteristics of the
salesperson. A consumer may fully anticipate buying, but this intention may change if the
salesperson’s performance is not satisfactory. Wilkie (1994) indicated that the reason why a
salesperson has a strong influence on the consumer purchase decision is because the
salesperson generally has more product knowledge and more experience of sales interaction
than do consumers. Woodside and Davenport (1974) explained the salesperson's power as
“expert power”, a source of selling influence based on superior knowledge. It has been
observed that effective sales people not only influence the shopping process but may also
influence the consumers to switch their store patronage. Consumers may abandon one store
brand to follow specific sales and service personnel to a new store brand (Terblanche and
Boshoff, 2005).
The young Indian consumers are tech savvy and have access to a large information base
through online sites, social media, friends and peers. With so much of literature available at
the door steps, the youngsters might seek for product information before venturing into
42

luxury products. They might do complete research on the brands and products before taking
their decision.
2.8.5 Distribution of luxury products
Moore and Doherty (2007) define
http://www.emeraldinsight.com/case_studies.htm/case_studies.htm?articleid=1839005&show=htm
l ‐ idb44 luxury fashion retailers as: … “Those firms that distribute clothing, accessories and
other lifestyle products which are: exclusively designed and or manufactured by or for the
retailer; exclusively branded with a recognised insignia, design handwriting or some other
identifying device; perceived to be of a superior design, quality and craftsmanship; priced
significantly higher than the market norm; and sold within prestigious retail settings”. Buying
from flagship stores where the ambience, the lighting the music, the display and the well
trained manicured salesmen add to the value of the purchasing experience of luxury. The
whole experience itself makes one feel proud and pampered, which is well deserved. Getting
expert advice from the knowledgeable salespersons makes buying decision easy. According
to Rajagopal, (2009), the store environment has a positive or negative impact on the
consumers who come with an intention of purchasing the products. The pleasant store
atmosphere stimulates buying behaviour. Experienced staff and the ambience around acts as
positive motivators to young consumers. The present rich young Indian consumers are also
getting used to shopping luxury products from boutiques, flagship stores and from product
launches.
2.9. Culture
Culture refers to the norms and values that a group of individuals share. It could include the
way people think, act, interact with each other, and make decisions. It also defines what
43

individuals eat, what they wear, what they think is right or wrong, and much more (Bannon et
al., 2003).
Culture is passed down from one generation to another. The norms and values learned from
their parents (nurture) and their surroundings such as education and the work environment
(nature) are then passed down to future generations.
2.9.1 Subculture
A culture can be divided into subcultures on the basis of demographic characteristics,
geographic regions, national and ethnic background, political beliefs, and religious beliefs. A
subculture is a homogeneous group of people who share elements of the overall culture as
well as cultural elements unique to their own group. Within subcultures, people’s attitudes,
values, and purchase decisions are even more similar than they are within the broader culture.
Sub cultural differences may result in considerable variation within a culture in what, how,
when, and where people buy goods and services.
2.9.2 Culture and Luxury Consumption
Many researchers have referred to the influence of culture on consumer behaviour especially
in luxury consumption. (Laroche et al., 2005; Malai, 2007) It is very important to consider
the cultural context while understanding the consumer’s motivation to consume luxury
products (Antonides,1998; Kotler, 1986). According to them culture is one of the most
important factors in consumer behaviour and will continue as a source of differentiation
between markets. It is found that even if consumers from different countries consume the
same product yet the motivation for consumption would be different for consumers of
different countries.
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Culture is thought to influence individual preferences, how decisions are made (Ford et
al.1995; McDonald, 1994), what actions are to be taken based on those decisions and how the
world is perceived (McCort and Malhotra, 1993).
Motivation for consumption is also influenced by a consumer's cultural orientation (Belk et
al., 2003; Nicholls et al., 2003). It is very important for marketers to understand the
differences in motivation that exist between individuals from different countries and the
difference in their nature. For products that are marketed cross-culturally, a marketer can plan
his strategy, whether to customize their products for a country or if whether to have a
standardized marketing mix for everyone across the nations.
In order to understand the cultural differences, many models have been conceptualized, and
one of the most used, is the Hofstede’s model (1980, 1997). Hofstede has defined culture as
“the collective programming of the mind which distinguishes the members of one group of
category of people from another”.
He had identified that there is a difference in the consumer behaviour pattern between the
East and the West due to the cultural differences.
Hofstede's Cultural Dimensions Theory describes five dimensions of value propositions
within a nation's culture.
Power Distance
The degree of power inequality that exist in a culture. It is differentiated as High Power
Distance or Low Power Distance. High Power Distance means that there is unequal
distribution of power in the culture. A low Power Distance means that the power is shared
equally.
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Individualism vs. Collectivism
The degree of strength of relationship people have with one another as a community.
Collectivism means that people live with family and friends and social ties are very important
to them. Individualism means people are self centred and take their own decision purely on
what they perceive is best for them.
Masculinity vs. Feminity
This refers to how much a society view and act on their values. Masculinity means that
people are tough, assertive and strong and Feminity means that people are more sociable,
caring and work together
Uncertainty Avoidance
This refers to the level of anxiety a member of a particular culture will behave in terms of
uncertainty. It is distinguished by High Uncertainty Avoidance and Low Uncertainty
Avoidance. High Uncertainty Avoidance means that people will avoid ambiguous situations
and feel threatened by them. Low Uncertainty Avoidance means people are not scared of
ambiguous situations and are ready to face them.
Long-term Orientation vs. Short-term Orientation
This refers to how much the society value and makes decision in terms of the short- and long-
term orientation. Long-term orientation means that people make long term plan and deem
them important. Short-term orientation means that people are only looking to fulfil short-
term goals and are usually self-oriented.
Hofstede developed a model for India and gave scores for the five dimensions.
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Hofstede (1991) cultural model for India
Power distant: Looking at the figure shows that India scored rather high with a score of 77.
Indian people tend to be very sensitive to the position of people. All seniors and elders are
expected to be treated respectfully. In the workplace, a system of hierarchy exists where
senior colleagues are obeyed and respected.
Collectivism versus individualism With a score of 48 shows that Indians are extremely
family orientated people. Indian collectivism is derived from traditional Indian family values.
Indians tend to avoid conflict and generally opt for indirect communication.
Masculinity/Feminity: With a score of 56 reflects the gender inequality form its early
history. Male children are still highly desirable and women are rarely looked upon as bread
winners, they are expected to be good wives and mothers.
Uncertainty avoidance: India ranks fairly low in this dimension as Indian does not have a
frame work of rules and regulations or any institutions to avoid uncertain situations. In India
people don’t feel threatened by ambiguous situations.
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Long-term orientation: With a fairly high score of 61, in India businesses are done for long
term.
It is a very useful model for marketers who want to develop market mix strategies. When
they know the influencing factors for various economies, they would be able to customize
their products and pitch in the market accordingly. Just like this model is used to understand
the different cultures and their impact on the consumption pattern for luxury goods, similarly
it would be important to check for cultural differences and their impact on consumer
behaviour within the nations itself.
India is a big country with 34 states which could be broadly classified into five zones North,
South, East, West and Central of India. Each of these zones has their own culture and values.
In this study the researcher aims to find if there is any significant difference in the factors
influencing consumers, among the five zones
2.10 Research gap
India is an emerging economy, which holds a very high potential for luxury products market.
While there have been numerous studies in the west and in emerging markets like China,
Korea, Thailand and Brazil on the consumption of luxury goods, there have been few similar
studies in the Indian context. Following gaps emerge from the literature review and there
exists scope for future research:
1. India is an emerging market and the youth are one of the major contributors to luxury
consumption. There have been very few studies focusing on the buying intention of
Indian youth, which is a large gap.
2. There are very few studies which have concentrated on buying intention of the luxury
fashion products among the Indian youth, leading to a gap in this area.
3. Most of the earlier studies treat factors influencing the buying intention of luxury goods,
and integrated marketing strategy as isolated topics. Studies that create a linkage between
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luxury goods consumption with an integrated focus on marketing strategy is largely
missing.
4. The Indian youth are huge contributors to luxury consumption of the country; hence the
demographic factors like age, income, educational qualifications, social role and gender
which impact the buying intention towards luxury is very critical. There are very few
studies which have analysed all the above demographic factors, which throw up a gap.
5. India is a large country with 36 states. These states can be broadly categorized into five
zones - Western, Northern, Southern, Eastern and Central India. Each zone has their own
culture, behavior and attitude towards consumption of luxury products. Hence it is
essential to check if the attitudes and consumption behavior pattern change based on the
individual’s nativity or if the individual response is based on the culture of the region
where he has been during his formative years of growing up and also find if the attitude
changes based on the region he is presently living in.
There is no study which focuses on all the above factors which leads to a huge gap.
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Chapter 3 - Objectives Hypothesis and Research Methodology
Overview
1. Statement of the Problem
2. Scope of the Study
3. Objective of the Study
4. Hypothesis
5. Methodology
6. Descriptive Study
7. Data Collection
8. Focused Group Discussion
9. Population Frame and Sample
10. Survey Development
11. Questionnaire design
12. Scales
13. Data Processing
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Chapter 3
Objectives Hypothesis and Research Methodology
3.0 Statement of the Problem
The past two decades have seen an increase in the luxury consumption in India. In 2006,
India recorded an annual growth of 25 percent in the luxury goods market (Business Wire
2007) and the number of high net worth individuals increased by 20.5 percent (Merrill Lynch
and Cap Gemini 2007). The number of middle class people in India is expected to grow from
5 percent to 41 percent (Atwal & Khan, 2008).
Emerging markets like China and India hold huge potential for companies and marketers of
luxury products, to target India in a big way. The young population of India are major
contributors to the consumption of luxury products. There are many studies on luxury
consumption by youth in other emerging markets, but there exists very few studies in the
Indian context. Therefore this study intends to examine the perception value, social value and
marketing mix factors that influence the buying intention of luxury fashion products, among
the Indian youth, and recommend effective marketing strategies that will draw each of these
segments towards luxury fashion products consumption.
3.1 Scope of the Study
For the purpose of this study, global luxury branded ‘watches’ and ‘mobile phones’ were
selected, as a representation of luxury fashion products. Watches and mobile phones were
chosen because the Indian youth are familiar with them. They frequently purchase and can
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relate to them. They would be the most appropriate products to capture the influencing
factors.
This study attempts to understand the impact of the perception value, social value and
marketing mix factors influencing the buying behaviour on the development of marketing
strategy for luxury fashion products among Indian youth.
• When a consumer is motivated to buy luxury products because he perceives it to be
valuable and gets personal happiness or satisfaction by possessing the product, it is
known as Perception Value Factor
• When a consumer is motivated to buy luxury products with an intention to show off in
front of his peer group or to belong to a group, then it is known as Social Value Factor.
• When a consumer is motivated to buy luxury products because of effective marketing
efforts, like Product, Price, Communication and Distribution then it is known as
Marketing Mix Factor.
Based on the review of literature, the following research questions were developed to guide
the study.
1. What are the factors that influence the buying intention of luxury watches and mobile
phones among Indian youth?
2. Are the factors influencing watches different from factors influencing mobile phones?
3. Will the factors influencing the buying intention for watches and mobile phones be
different for males and females?
different for different age groups?
different for the salaried class and others?
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different for individuals living in Western India, Southern India, Northern India, Eastern
India and Central India.
7. Will a good marketing strategy impact the buying intention of the consumers?
3.2 Objective of the Study
Luxury watches and mobile phones are the representation of Luxury Fashion Products.
The main objective of the study is to:
5. Study the factors that influence the buying intention of luxury watches and mobile phones
among Indian youth
mobile phones with respect to age, gender, occupation and income levels among Indian
youth.
mobile phones with respect to different regions, among Indian youth.
8. Identify factors which have an impact on the development of marketing strategy for such
products
9. Make suitable recommendations and suggestions which would aid in developing
effective marketing strategies.
3.3 Hypothesis
Hypothesis related to watches is referred as H01W and hypothesis related to mobiles is
referred as H01M.
Hypothesis for watches
H01W : There exists no difference in factors influencing purchase intentions of
Luxury watches among Indian youth.
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H11W : There exists significant difference in factors influencing purchase
Intentions of luxury watches among Indian youth.
H02W : There exists no difference in factors influencing buying intentions of
Luxury watches across different age groups among Indian youth.
H12W : There exists significant difference in factors influencing buying
Intentions of luxury watches across different age groups among Indian
Youth.
Luxury watches across the student class, service class and business class
Intentions of luxury watches across the student class, service class and
business class
Luxury watches across genders, among Indian youth;
Intentions of luxury watches across genders, among Indian youth.
H05Wa : There exists no difference in factors influencing Buying Intention of
Luxury watches among respondents ‘lived in’ West India, East India, South
India, North India and Central India, during their formative years
H15Wa : There exists difference in factors influencing Buying Intention of
Luxury watches among respondents ‘lived in’ West India, East India, South
H05Wb : There exists no difference in factors influencing Buying Intention of
Luxury watches among respondents presently ‘living in’ West India, East
India, South India, North India and Central India.
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H15Wb : There exists difference in factors influencing Buying Intention of
Luxury watches among respondents presently ‘living in’ West India, East
H05Wc : There exists no difference in factors influencing Buying Intention of
Luxury watches among respondents who are ‘natives’ of West India, East
H15Wc : There exists difference in factors influencing Buying Intention of
Luxury watches among respondents who are ‘natives’ of West India, East
H06W : There exists no difference in factors influencing Buying Intention of
Luxury watches among Indian youth who are employed, those doing their post
graduation and those doing their graduation.
H16W : There exists difference in factors influencing Buying Intention of
Luxury watches among Indian youth who are employed, those doing their
post graduation and those doing their graduation.
Luxury watches across different income groups.
Intentions of luxury watches across different income groups.
Hypothesis for Mobile Phones
H01M : There exists no difference in factors influencing Buying intentions of
Luxury mobiles among Indian youth.
H11M : There exists significant difference in factors influencing Buying
Intentions of luxury mobiles among Indian youth.
H02M : There exists no difference in factors influencing buying intentions of
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Luxury mobile phones across different age groups among Indian youth.
H12M : There exists significant difference in factors influencing buying
Intentions of luxury mobile phones across different age groups among Indian
youth.
Luxury mobile phones across the student class, service class and business
class.
Intentions of luxury mobile phones across the student class, service class and
business class
Luxury mobile phones across genders, among Indian youth;
Intentions of luxury mobile phones across genders, among Indian youth.
H05Ma : There exists no difference in factors influencing Buying Intention of
Luxury mobile phones among respondents who ‘lived in’ West India, East
India, South India, North India and Central India, during their formative years
H15Ma : There exists difference in factors influencing Buying Intention of
Luxury mobile phones among respondents who ‘lived in’ West India, East
India, South India, North India and Central India, during their formative years.
H05Mb : There exists no difference in factors influencing Buying Intention of
Luxury mobile phones among respondents presently ‘living in’ West India,
East India, South India, North India and Central India.
H15Mb : There exists difference in factors influencing Buying Intention of
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Luxury mobile phones among respondents presently ‘living in’ West India,
H05Mc : There exists no difference in factors influencing Buying Intention of
Luxury mobile phones among respondents who are ‘natives’ of West India,
H15Mc : There exists difference in factors influencing Buying Intention of
Luxury mobile phones among respondents who are ‘natives’ of West India,
H06M : There exists no difference in factors influencing Buying Intention of
Luxury mobile phones among Indian youth who are employed, those doing
their post graduation and those doing their graduation.
H16M : There exists difference in factors influencing Buying Intention of
Luxury mobile phones among Indian youth who are employed, those doing
their post graduation and those doing their graduation.
Luxury mobile phones across different income groups.
Intentions of luxury mobile phones across different income groups.
3.4 Methodology
This chapter outlines the research method used for this study, which includes data collection,
sample selection, scales and contents of questionnaire, processing of data and finally
interpretation of the data. The study embraces both qualitative and quantitative research
approaches.
3.4.1 Descriptive Study
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The present study was a descriptive study. In this study there were three independent
variables: 1) Perception Value factors, 2) Social Value factors 3) Marketing Mix factors. The
dependent variable was the Buying Intention of Luxury fashion products.
The Secondary Data were collected from various available sources through desk research
including literature survey and referring e-libraries etc. Review of literature and other
available information from various published and unpublished reports. Journals, books,
newspapers etc (including databases like Ebsco, Pro-quest, Emerald, Google Scholar, India
Business Insight Databases and others)
3.4.2 Data Collection
Data collection was done in two stages: in the first stage a pilot survey was conducted to
ascertain the research parameters and to test the validity and reliability of the instruments
used in the study. In the second stage the primary data was collected using the following
instruments in the study. 1) Questionnaires 2) Interviews
3.4.3 Focused Group Discussion
A focus group discussion was also carried out amongst 32 youth who were administered
seven questions, to check the attitude of these youth towards the luxury fashion products,
concept of materialism, uniqueness, influence of reference group and the snob value and
status associated with luxury products. The luxury fashion products were represented by
luxury watches and luxury mobile phones.
3.4.4 Population Frame and Sample
The population frame for the study was Pan India. The survey was conducted among
individuals residing in the Western, Northern, Southern, Eastern and Central India. It is
limited to the youth population between age group of 18 and 36 years. The sample units were
students, employees, entrepreneurs and business men.
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The study targeted a sample size of 384 respondents:
At a confidence level of 95 percent, with a margin of error of 5 percent, the formula that is
generally used to find out the sample size is as follows:
zσ2 2 × pˆ × (1 − pˆ )
n=
ME 2
The proportion of the population, which was involved in the purchase of luxury products, is
represented as p̂ . p̂ is the prior judgment of the correct value of p. In the absence of any
initial estimate of p, the convention was to assume p̂ = 0.05. Based on this information, the
calculation of the sample size, at 95% level of confidence and 5 percent margin of error, is as
follows:
1.96 2 × 0.5 × 0.5

n= = 384
0.05 2
A total of 1900 questionnaires were distributed, out of which 695 valid responses were
returned, giving a response rate of 36.57 percent.
3.5 Survey Development
This section discusses how the current study’s questionnaire was designed. In this study the
structured self administered questionnaire was applied, and were administered using an
online survey tool “Survey Monkey” (www.surveymonkey.com). Respondents answered the
self-administered questionnaire from the Survey Monkey web link sent by the researcher.
According to Saunders et al., (2003) self administrated questionnaires ensure the right
respondent participates in research.
3.5.1 Questionnaire design
On the first page of the questionnaire, brands of luxury watches namely Tag Heur, Omega,
Rado, Longines, Tissot and Rolex, were mentioned, and brands of luxury mobile phones
namely Samsung S4, Apple iPhone 5, Samsung Galaxy Note 3, Sony Xperia Z1 and HTC
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One, were mentioned. All these brands have global reputations in terms of premium price,
quality, and design based on which the respondents had to answer the questions. These
brands were specifically chosen because the Indian youth are familiar with them. The
respondents were briefed about the survey, and they understood the implications of this
research and its questions.
3.5.2 Scales
For measuring Attitudes towards Luxury, scales were developed by Dubois and Laurent
(1994) were used. Materialism was measured, using scales developed by Richins and Dawson
(1992). The Need for Uniqueness was measured using scales developed by Tian et al. (2001)
Status was measured, using the scales developed by Eastman Goldsmith & Flynn
(1999).Reference group was measured using scales developed by Lessig and Park’s study
(1978) The scales for Product, Price, Product Information and Knowledge and Distribution
were created by the researcher for this study.
For these variables, a seven-point Likert scale ranging from 1 being strongly disagree to 7
being strongly agree, was used.
3.6 Data Processing
The data collected with help of the questionnaire was analyzed with the help of the statistical
package SPSS 20. The mean scores arrived were analysed using various statistical tools, to
test the research hypothesis. Statistical percentage, Arithmetic mean, Standard Deviation,
Range, Corelation, Chi Square test, z test, Anova and Linear Regression.
3.7 Utility of the study
The study adds to the body of knowledge. The younger generation represents the most
important segment that will influence the global luxury market over the next decade in India.
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This study explored the factors influencing the buying behaviour of luxury fashion products
among the Indian youth. Understanding the factors like Attitude, Materialism, Need for
Uniqueness, Status, Reference group, Product, Price, Communication and Distribution and
ranking them in order of importance will help marketers and companies to strategise their
marketing efforts. It will help them to better reposition and customise their offerings to attract
the Indian youth segment.
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Chapter 4 - Latest trends in the Global and Indian Luxury Market
Overview
1. International Luxury Industry
2. Seven New Faces of the Global Luxury Consumer
3. Indian Luxury Industry
4. Fragmented and diversified consumer base
5. Challenges faced by Luxury retailers in India
6. Emergence of ‘Closet Consumers’
7. Ranking Of India's Leading Luxury Retail Cities
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Chapter 4
Latest trends in the Global and Indian Luxury Market
4.0. Latest trends in the Global Luxury Market
The modern luxury fashion industry originated in France when Charles Frederick Worth
arrived in Paris and invented haute couture in 1858 (Crane, 1997; Djelic & Ainamo, 1999).
Europe's industrialization and progression in manufacturing techniques boosted the expansion
of the fashion industry in the nineteenth century. That was the time many luxury brands were
launched, which still exist and are very well known, such as Cartier, founded in Paris in 1847
by Louis-Francois Cartier, and Louis Vuitton, created by Louis Vuitton in 1854 (Okonkwo,
2007).
The Euro monitor International's latest research report on the global luxury goods market
indicated another robust performance for 2013. Due to the positive growth in emerging
economies, the retail growth was stronger than that of 2012. The luxury goods sales exceeded
$318 billion worldwide. The major contributors have been countries like China, India,
Indonesia and Malaysia. The Euro monitor International forecasted that by 2018, United
States, with a projected 34 million high-income earners, will continue to top the luxury goods
industry. There is a rise in the high income earners in countries from the emerging markets
such as India, Malaysia, Indonesia, Mexico and Brazil, thus offering greatest opportunities
for businesses and brands offering luxury goods and services. India was the most dynamic
luxury goods market over the 2008-2013 period and is forecasted to grow by a further 86% in
constant value terms over the five years to 2018, followed by China at 72%, Brazil at 31%
and Russia at 28%.
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According to Bain and Company report (2013), the number of luxury consumers worldwide
has more than tripled over the past twenty years, from roughly 90 million consumers in 1995
to 330 million at the end of 2013; According to the report, a net total of 10 million new
consumers yearly enter the luxury market to reach an estimated 400 million luxury
consumers worldwide by 2020, and an estimated 500 million luxury consumers by 2030. The
report finds significant differences within the global luxury market and its consumer base,
which is shifting from a homogenous base of affluent consumers worldwide to a highly
heterogeneous class of luxury shoppers. The report “7 New Faces of the Global Luxury
Consumer”, categorizes the consumers under seven categories, based on their tastes and
buying behaviours.
Table 4
7 New Faces of the Global Luxury Consumer
The Omnivore New entrants to luxury, younger, mostly women,
Spending an average of high willingness to experiment with products and
€2,350 per year brands. Tend to purchase high priced jewellery and
watches, shop during travelling prefers shopping
from brand owned stores; brand loyalty level is
relatively low. Common among Chinese from Tier
Two and Three cities.
The Opinionated Highly educated Gen X and Y shoppers. Favour -
Spending an average of leather goods and watches, and awareness between
€1,750 per year brands. Shop within their hometown, influenced by
online information, social networks. They dominate
China's Tier One cities and are also prevalent in
Western Europe and the United States.
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The Investor Great attention to quality and durability, favour long-
Spending an average of lasting leather goods and watches which can be
€1,450 per year handed down from generation to generation.
Carefully evaluate luxury purchases with research
and referrals from other consumers. Find them in
Japan, the Middle East and mature markets where
discretionary spending is more cautiously allocated.
The Hedonist Infatuated with luxury goods and luxury shopping
Spending at an average of experience, high affinity for brand logos, favour
€1,100 per year accessories categories. They are most influenced by
advertising, interest in luxury for show; exhibit the
lowest levels of advocacy for brands often due to
cognitive dissonance following purchase. The only
cluster represented across all nationalities and
generations.
The Conservative Are matured men and women shoppers. Favour
Spending, an average of watches and jewellery from big brands, shop in
€1,000 per year multi-brand stores, influenced by friends and family,
are mainly in mature markets, but also in China.
The Disillusioned Mostly baby boomer shoppers who suffer from
Spending, an average of "luxury fatigue." Favour - leather goods and beauty
€800 per year products, look for products that last more than one
season, un swayed by brand messaging or
advertising. Infrequent shoppers and like shopping
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online when they can. The segment is dominated by
women. They are found in the United States, Europe,
and Japan.
The Wannabe Predominantly female shoppers, look for entry-level
Spending, an average of items in beauty and shoes, valuing affordability,
€500 per year highly likely to mix and match outside of the luxury
spectrum. Impulse shoppers, little brand loyalty,
influenced by friends and what they see in fashion
publications. They come from the global middle
class, especially in the United States, Western
Europe, and new consumers in Eastern Europe.
Source "Lens on the Worldwide Luxury Consumer"2013 – Bain and Company
Luxury Goods Worldwide Market Study, 12th Edition October 2013 Overall worldwide,
luxury goods spending will grow by 2% to €217 billion at current exchange rates over 2013.
An overview of the world luxury market is as below:
• The growth of luxury industry in America is estimated to grow at 4% in 2013 compared
to 2012.
• Europe will see 2% growth, with tourists contributing to the growth. Tourist spending
contributes to half of the revenues in Italy, 55% of revenues in the U.K, and 60% of
revenues in France.
• Japan will experience a 12% decline. In spite of Japanese consumption increasing by 9%
a sharp depreciation of yen impacted the revenues for luxury brands.
• Greater China’s growth of 4% includes a split in performance between the Mainland,
which will grow at 2.5%, and Hong Kong and Macau. Overall, Chinese consumers have
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increased from 25% to nearly 30% of the luxury market, including local luxury
consumption, and purchases made by tourists abroad.
• Southeast Asia has established a very important place in Asia Pacific region, with growth
of 11%, not only in Singapore but in Malaysia, Indonesia, Vietnam, and Thailand.
• The Middle East remains relatively strong, with 5% growth. Sales remain strong in Dubai
while Saudi Arabia is also moving forward to become the region’s second largest luxury
market
• Africa is a high potential region with 11% growth and expansion into new markets such
as Angola and Nigeria apart from its traditional strongholds of Morocco and South
Africa.
4.1. Indian Luxury Industry
According to the ASSOCHAM and KPMG (2014) report the year 2013 was marked by a
slowing down of the Indian economy, though there was no impact on the growth of luxury, as
the wealthy consumers continued to spend on luxury goods through the year. The Indian
luxury market grew at a healthy rate of 30 per cent in 2013, to reach USD8.5 billion in 2013.
It is predicted that the growth would continue at a healthy pace to reach USD14 billion by
2016.
The sector includes luxury products such as apparel, accessories, home decor, pens, watches,
wines and spirits, and jewellery; services such as fine dining, concierge services, travel,
hotels and spas, as well as assets such as fine art, yachts, and automobiles. There was a 30-35
percent growth in the lifestyle segments such as fine dining, gadgets, hotels, jewellery,
personal care and wines, and are expected to account for 45% of the overall luxury pie by
2014. According to CII and IMRB report( 2013), over the last three years, the luxury
products segment has grown faster than both services and assets segments with a CAGR of
21.8%, because of the entry of leading labels across categories, expansion of their
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geographic presence and rising aspirations among consumers. While luxury services grew at
a CAGR of 15% in the past three years, due to increase of tourists using the luxury hotel
services and increase of high-end restaurants, assets have grown at a slower CAGR of 9.4%.
The luxury cars segment has contributed to the growth. Luxury real estate segment is
currently sluggish, but is expected to revive during the second half of the 2014.
Several luxury players such as Damiani and, Royce have been attracted to the Indian market.
Godiva Chocolates and Faberge Jewellery plan to enter the Indian market, and brands such as
Geox Group and Villeroy & Boch, that exited India previously, are showing renewed interest
in the country’s luxury market
In the earlier times the luxury space was reined by the preferences of the ultra HNHs, who
consumed only the best customized products and services. However, in recent times there has
been a rise in the income and a sudden upsurge of new generation of young Indian consumers
from senior corporate professionals to young working women and students who live with
their families and are liberal spenders, successful entrepreneurs, and farmers who have sold
their land to developers having a positive outlook towards consumption of luxury.
Currently, luxury consumption in India is concentrated in Delhi, Mumbai and Bangalore, but
slowly and steadily extending to other cities in the country.
South India has emerged as a primary driver of India’s luxury market. In this region, the
population tends to be highly receptive to new products and flavours as compared to other
regions of the country. In North India, the demand for premium and imported goods has
witnessed a boom in the metros as well as tier-1 and tier-2 cities. In the last few years, cities
such as Surat, Jaipur, Lucknow, Nagpur, Coimbatore and Kanpur have witnessed promising
growth in income distribution.
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4.1.1 Fragmented and diversified consumer base
The report has classified the HNI consumer into three different categories - the inheritors
traditionally wealthy- who are habitual spenders; the professional elite -who are discerning
Spenders; a large segment of business giants (entrepreneurs, owners of small and medium
enterprises) who have the money but lack appreciation for fine luxury goods because of no
prior
Exposure to such products.
4.1.2 Challenges faced by Luxury retailers in India
Currently, returns for luxury brands are trickling in slower than anticipated and they face
serious growth challenges. There are certain challenges that are being faced by the Luxury
retailers in India, which are multiple factors which are arresting the growth of the market.
The government regulations, ambiguity in the FDI policy, lack of quality infrastructure and
the consumers themselves are the major contributors. It is expected that mid-2014 would be
a crucial period for the luxury market in the country owing to the general elections being held
in the country.
1. Lack of infrastructure and quality luxury space and environment
The presence of luxury brands in India is primarily restricted to malls, high streets and
limited luxurious hotels. The rental costs in cities like Mumbai and Delhi are very steep
and hence setting up stores in high streets affects retailer’s profitability. In cities like
Mumbai with space constraint the streets are very cluttered and crowded leading to an
absence of exclusive ambience which is a very critical requirement for luxury retail.
Hence there is urgent requirement for exclusive plush areas for dedicated luxury
showrooms in protected vicinities such as airports.
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2. Lacking policy support
Despite strong growing demand for luxury from the Indian consumers, the policies have
not been encouraging for the luxury retailers. Import duties of 20 to 150 per cent are
relatively higher in India, which is a cause for concern among the international retail
players, thus slowing down their expansion plans for India. The liberalised FDI policy in
luxury retail was well accepted by the industry in November 2013, but some of the
clauses such as 100 per cent FDI in both single and multi-brand retail requires 30 per cent
of local sourcing, could be an issue for the international luxury players.
3. Presence of Counterfeits products
Counterfeit luxury products have been mushrooming in the Indian luxury market, and
make up for a significant percentage and is estimated at around INR25 billion. This
market has been growing rapidly at almost double, to that of genuine products. Most of
these products are in the apparel, perfumes and accessories, segment, which are easily
placed in gray channels. Luxury players in India feel restrained because of lack of
regulations to curb issues such as legal loopholes with regards to intellectual property
rights, insufficient means to monitor other channels, and emerging new online portals.
4. Lack of trained staff
The luxury sector requires salespersons that are well versed with the luxury products that
they are selling. The present day young consumers do research and seek information
before buying a luxury product. There is a dearth of trained staff in the luxury market and
lack of knowledgeable salesperson poses a grave challenge to the luxury players.
4.1.3 Emergence of ‘Closet Consumers’
The CII and IMRB (2013) study have introduced the emergence of a new segment of
consumers which they have termed them as ‘closet consumers’ Closet consumers are those
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who are indulging in luxury products, but are cost conscious and seek ‘value’ even when
buying luxury products. Based on their current lifestyles, values and needs from luxury, they
have been segmented into four distinct segments as Connoisseurs, Experientialists,
Aesthetes and Flaunters. They are caught between rising incomes and conventional middle-
class mentality of guilt feeling for splurging on luxury. They look for discounts and bargains
even for luxury products. These are consumers who have the capacity to spend on luxury but
are torn between their inherent values and those that luxury brands advocate, due to which
their consumption is much less than their actual potential. So besides the other challenges, the
retailer’s biggest predicament in India is to change the middle-class mindset about luxury and
bring ‘closet consumers’ out of the closet.
4.2 Ranking Of India's Leading Luxury Retail Cities
1. Delhi NCR tops most of the parameters on which we base our retail attractiveness
quotient. The city tops all real estate drivers and also the socio-psychological parameters.
As a result, Delhi NCR stand first in rank and we can deduce that it has the most
enriching retail legacy among the Indian cities.
2. Mumbai has the highest retail demand potential. However, a lack of availability of land
parcels leading to high rents in prime areas act as a dampener that causes Mumbai to lag
behind Delhi in terms of existing retail stock, and also against other cities when compared
to the upcoming supply. The high propensity to consume creates an inherent shopping
culture, which helps sustain the rise in demand for retailers.
3. Bangalore ranks high on the chart with its good retail consciousness and the existing and
upcoming supply. In addition, affordable rents in the city - compared to other Tier I and
some Tier II cities - have helped retail to flourish here. However, the city has lesser
household expenditure even when compared to Kolkata and Chennai.
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4. Chennai, with its affordable rents and good high street stock in contrast to the organised
retail stock, has received the fourth rank. In addition, the large number of high and upper-
mid residential units launched in the last three years would be able to create the retail
demand. However, many from Chennai migrate to other IT destinations such as
Bangalore, Hyderabad and Pune, as indicated by their low migration rates.
5. Kolkata: The best that Kolkata can offer to retailers is the attractive household
expenditure and an illustrious high-street variety retailing. It has a fairly high
concentration of SEC A and SEC B households whose propensity to consume is usually
higher than others. However, rents in prime areas are not affordable and the retail stock is
also low, both of which make penetration of the retailers difficult.
6. Hyderabad offers attractiveness in terms of affordable rents, which is higher only to
Pune among the Tier II cities. In addition, a huge amount of upcoming supply in the next
three years would naturally keep the momentum in consumption alive in the future.
However, lesser household income and household expenditure has ranked it lower. With
the highest in-migration and a large number of SEC A and SEC B population,
7. Pune provides the most affordable rents in prime areas among the Tier I and Tier II cities.
The high migration rates will be well supported or even enhanced in the future, given that
the city has a large office space supply per capita in the pipeline. However, low
household income and expenditure compared to most other cities has ranked it the lowest
Luxury as a concept is not new to India. Despite the challenges faced by the luxury retailers,
there has been a steady growth in this sector. Indians enjoy luxury, the positive attitude of the
young Indian consumers and the capacity to spend India holds huge potential for this sector.
New strategies and few alterations will iron out the limitations faced by this market, and India
will boom in the next few years.
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Chapter 5 - Consumer Behaviour
Overview
1. Maslow’s Hierarchy of Needs
2. Asian Version of Maslow’s theory
3. Comparison between the Western & Asian consumers
4. Factors Affecting Consumer Behaviour
5. Consumer Decision Making Process
6. Decision Making Process for Luxury Products
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Chapter 5
Consumer Behaviour
Consumer behaviour is defined as the behaviour that consumers display in searching for,
purchasing, using, evaluating, and disposing of products and services that they expect will
satisfy their needs and desires. Consumer Behavior includes all the decisions a consumer
makes when spending their time and money. Consumer purchase process of what to buy, why
to buy, when to buy, where to buy and how to buy examined in consumer behavior.
Consumer behaviour refers to the selection, purchase and consumption of goods and services
for the satisfaction of their wants. This behavior decisions are influenced by individuals,
households, families, and groups. There are many factors influencing the purchases of
consumer such as personal, social, external, psychological and cultural.
5.0 Maslow’s Hierarchy of Needs
Maslow's hierarchy of needs is a theory in psychology proposed by Abraham Maslow in his
1943 paper "A Theory of Human Motivation" in Psychological Review. According to
Maslow's Hierarchy of Needs, all individuals are motivated by unsatisfied needs, and when
certain of these lower needs are satisfied then the individual moves to satisfying his next level
of higher needs. Maslow proposed a stepwise framework showing for how people
categorize their needs, from the most basic needs such as food and water to the need to satisfy
their ego and their self (Solomon, 2007). The first or the lower most step is the psychological
need followed by need for safety, need for belonging, need for prestige and then a need for
self-actualisation.
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1. Physiological Needs
Physiological needs are the very basic needs required to sustain life, such as air, water,
food, and sleep. According to this theory, higher needs such as social needs and esteem
are not felt until one has met the basic bodily needs.
2. Safety Needs
Once one’s the physiological needs are met, the individual would move to satisfying the
next need for safety and security. Safety needs are psychological needs which require
living in a safe surrounding, job security, financial security, and medical, insurance. The
theory states that unless the individual does not feel secure he would not move his
attention to the next level of needs.
3. Need to Belong
Once an individual feels satisfied with the physiological and safety needs, his attention
moves in satisfying his next level of social need. Man is a social animal and he needs to
belong to a group, which include friends, family, work group, social groups and religious
groups. The need to be loved, respected and accepted becomes very important at his
level.
4. Prestige needs
Once an individual satisfies his need for a sense of belonging, the need for esteem
becomes important. Internal self esteem needs can be described as self-respect, need to
be appreciated and valued and external esteem can be social status and recognition which
results from the attention and recognition that comes from others because of some
expertise and competence.
5. Self-Actualization
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Self-actualization is the pinnacle of Maslow’s Hierarchy of Needs. The need for self-
actualizations is when an individual yearns to reach his full potential as a person. Unlike
other needs, an individual is never fully satisfied with this need. There is always a craving
to grow higher and higher. According to Maslow, only a small percentage of the
population reaches the level of self-actualization.
Source: Schütte 1998).
5.1 Asian Version of Maslow’s theory
According to Schutte and Ciarlante, (1998), Maslow’s theory fitted in the context of the
Western culture, especially the American culture. The hierarchy provided a useful model for
summarizing the human needs and motives but it may not be consistent across all cultures.
Therefore Schütte (1998) developed an Asian version of Maslow’s hierarchy of needs. As
shown in his Asian framework, socially directed needs are regarded as those of the highest
level.
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The Asian equivalent to Maslow's hierarchy of needs
(Source: Schütte 1998).
5.1.1 Comparison between the Western & Asian consumers:
For both Asian and Western consumers, there may not be much difference between their
physiological and safety needs, but there is a difference in their social needs. Schutte and
Ciarlante (1998) broke down the need for belonging and prestige into three levels:
(1) Affiliation, (2) admiration, and (3) status
Schutte and Ciarlante (1998) drew the differences in the hierarchy of needs among the
western consumers and the Asian consumers.
• Asian consumers have a high need for esteem from others, while western consumers are
high in self-esteem.
• The needs for affiliation and admiration are very similar to Maslow's social needs of
belonging and prestige, but the two needs are greater motivators in the East than in the
West.
• The need for status at the top, distinguishes Asian consumers from those in the West
(Cleary and Shapiro, 1996; Daniels, 1982, Roberts, 1978). In the West, the achievement
need is related to both the socially directed prestige need and the personally directed self-
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actualisation need. People in the west tend to be more self-confident, take calculated risks
and have higher involvement in purchase decision (Schiffman and Kanuk, 1994), than
those in Asia. The Asian consumer, achievement of satisfying the social need is to get the
admiration from the peer group as well as status from society at large. The achievement in
for the Asian consumers is socially directed need in comparison to the personally directed
self-actualisation needs of Western consumers.
5.2 Factors Affecting Consumer Behaviour
1. Cultural Factors: Culture is the part of every society which influences the individual’s
wants and behaviour. Each culture contains different subcultures such as religions,
nationalities, geographic regions, racial groups etc. The influence of culture on buying
behaviour varies from country to country.
2. Social Factors: Social factors also impact the buying behaviour of consumers. The
important social factors are: reference groups, family, role and status.
3. Personal Factors: The important personal factors that influence the buying behaviour
are: lifestyle, economic situation, occupation, age, income, qualification, personality
self concept.
4. Psychological Factors: Factors like perception, motivation, learning, beliefs and
attitudes affect the consumer buying behaviour.
5. Lifestyle Factors: Lifestyle is an indicator of how people live and express themselves
on the basis of their activities, interests, and opinions. Lifestyle dimensions provide a
broader view of people about how they spend their time, the importance of things in
their surroundings, and their beliefs on broad issues associated with life and living and
themselves.
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5.3 Consumer Decision Making Process
According to Reason (1990), decision-making can be regarded as “the mental processes,
resulting in the selection of a course of action among several alternative scenarios thus every
single decision making process produces an output, which can either be an action or an
opinion of choice. Purchase decision-making can be assumed to be a reasoning or emotional
process which can be rational or irrational.
Many consumer decision making models were conceptualised by different researchers. Engel,
Blackwell, Miniard Model (Formerly Ekb Model). A model of the decision making process
was developed by Engel, Kollat, and Blackwell in 1968 and It was named the EKB model.
The EKB model is a comprehensive model that shows the components of consumer decision
making and the relationships and interactions among them. There are five stages of the
decision process which include
Needs or problem recognition
1. Information search
2. Alternative evaluation
3. Purchase Decision
4. Post Purchase Evaluation
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(Source: Engel, Kollat, and Blackwell in 1968)
According to the authors of the model consumers are engaged through all stages during the
process and in every purchase. The model is not linear in that sense that in more routine
purchases, customers can skip or reverse some of the stages. Left side on the model are the
stages in the consumer decision-making process, and the corresponding right side are the
internal psychological processes the consumer experiences along the way.
5.3.1 Decision Making Process for Luxury Products
Vigneron and Johnson (2004) did extensive work on luxury consumer behaviour and
presented five key luxury dimensions, which form the basis of decision-making process that
occurs when assessing luxury brands.
1. Perceived conspicuousness: The first dimension is perceived conspicuousness and this
dimension of a luxury brand is very important to individuals who are influenced by
reference groups and buy luxury products to show off and to demonstrate their social
status. This dimension is in line with the work of Veblen (1994).
2. Perceived uniqueness: The second dimension is perceived uniqueness, which is
important to those individuals who look for exclusivity, scarcity and limited supply of
products. Uniqueness of a brand appeals to luxury consumers who like to have exclusivity
and rarity.
3. Perceived extended self : The third dimension is Perceived extended self and is
important to individuals who use luxury brands to distinguish themselves in relation to
relevant others. They want to look different and seek to stand out in the crowd and the
extended self thus play a big role in their luxury decision making process
4. Perceived hedonism: Individuals who depend on their own personal opinion when
deciding on the luxury products represent the hedonic type of customer. Luxury
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consumers are considered hedonic when they reward themselves by purchasing luxury
products.
5. Perceived quality: The last dimension is perceived quality, which influences those
individuals, who may perceive more value from a luxury brand as they consider it to have
greater brand quality and reassurance. These individuals regard luxury brands as having
superior features compared with non luxury brands.
Based on Vigneron and Johnson’s five luxury dimensions, Wiedman et al. (2007) developed
a luxury value model consisting of key dimensions of luxury value perception to identify
different consumers’ value perceptions in relation to luxury consumption.
1. Financial dimension: This dimension refers to the monetary aspects and focuses on the
value of the product in terms of price.
2. Functional dimension: This dimension refers to the main benefits and basic utilities and
focuses on value of the product in terms of quality, uniqueness, and reliability of the
product.
3. Individual dimension: This dimension refers to the individual’s personal orientation on
luxury consumption focuses on factors such as materialism, hedonistic and self-identity
value.
4. Social dimension: This dimension refers to the perceived utility individuals acquire by
consuming products. This focuses on conspicuousness and prestige value, which have a
strong impact on the evaluation and inclination to consume luxury brands.
According to Vigneron and Johnson (2004) most consumers would trade off less important
dimensions for more important ones.
Consumer behaviour plays an important role in modern marketing practices. Most of the
marketing decisions are based on the study of consumer behaviour. It provides valuable
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information to design and marketing mix and to modify it over time. Marketing managers can
actualize marketing goals only by studying consumer behaviour and responding it by
designing and designing marketing plans objectively. It is imperative to know how
Consumers react to marketing plans, to serve them effectively.
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Chapter 6 - Marketing Mix Strategies
Overview
1. Marketing Mix Strategy for Mass Market Products
2. Marketing Mix for Luxury Products
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Chapter 6
Marketing Mix Strategies
The marketing mix refers to the set of actions, or tactics, that a company uses to promote its
brand or product in the market. The 4Ps make up a typical marketing mix - Price, Product,
Promotion and Place (McCarthy, 1960). However, nowadays, the marketing mix increasingly
includes several other Ps like Packaging, Positioning, People and even Politics as vital mix
elements.
Marketing Mix is a very important process in marketing. All the elements of the marketing
mix influence each other. They make up the business plan for a company and handled right,
can give it great success. But handled wrong and the business could take years to recover.
The marketing mix needs a lot of understanding, market research and consultation with
several people, from users to trade to manufacturing and several others.
6.0 Marketing Mix Strategy for Mass Market Products
McCarthy proposed a four Ps classification in 1960, which has since been used by
marketers throughout the world.
1. Product Policy
A product is seen as an item that satisfies what a consumer demands. It is a tangible good
or an intangible service. Tangible products are those that have an independent physical
existence. Typical examples of mass-produced, tangible objects are soaps, cars,
vegetables. Services would include hotels, hospitals, airlines, a computer operating
system.
Every product is subject to a life-cycle including a growth phase followed by a maturity
phase and finally an eventual period of decline as sales falls. Marketers must do careful
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research on how long the life cycle of the product they are marketing is likely to be, and
focus their attention on different challenges that arise as the product move. The marketer
must plan for a long term product strategy, and consider the product mix. They need to
continuously analyse to check if the existing product needs any improvement, add more
benefits and features, based on consumer research and customer feedback. They should
consider how to position the product, how to exploit the brand, how to exploit the
company's resources and how to configure the product mix so that each product
complements the other. They also need to work on increasing the sales and profitability,
and plan out the product development strategies.
2. Price Strategy
The amount a customer pays for the product. The price is very important as it determines
the company's profit and hence, survival. Adjusting the price has a profound impact on
the marketing strategy, and depending on the price elasticity of the product, often it will
affect the demand and sales as well. The marketer should set a price that complements the
other elements of the marketing mix.[3]
The amount a customer pays for the products and the services is referred to as Price. Price
is a very important factor as this is what determines the profitability of the company;
Increasing or decreasing the price has a huge impact on the marketing strategy. It is seen
that when the price increases the demand falls and the sales decreases, and there is a dent
on the growth, whereas when the price reduces, the demand increases and the sales goes
up.
When setting a price, the marketer must be aware of the customer perceived value for the
product. Therefore it becomes very critical for marketers to plan their price strategy well.
They need to analyse what product is sold, to whom it is sold, what services must go with
it and ultimately how much profit is made.
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When pricing is handled sensitively it can have a dramatic effect on the profitability of
the firm. There are no infallible rules for setting the right price, as different businesses at
different times use pricing to achieve quite different objectives. Price becomes a deciding
factor for individuals whether to stay with the company or move to purchase from the
competition.
3. Distribution Policy
Refers to providing the product at a place which is convenient for consumers to access.
In the era of Internet, catalogues, credit cards and phones people neither need to go any
place to satisfy a want or a need nor are limited to a few places to satisfy them. Marketers
should know how the target market prefers to buy, how to be there and be omnipresent, in
order to guarantee convenience to buy. With the rise of Internet and hybrid models of
purchasing, place is becoming less relevant. Convenience takes into account the ease of
buying the product, finding the product, finding information about the product, and
several other factors. Various strategies such as intensive distribution, selective
distribution, exclusive distribution and franchising can be used by the marketer to
complement the other aspects of the marketing mix. Customers will want to find
products, whenever and wherever they need them, in quantities that suit them, places.
4. Promotion Policy
However good a product or service might be, but it is very important to convey this to the
clients, in order to distinguish oneself from the competition. Promotion is not about
selling or advertising the products but it is about pooling different techniques together, in
a cost-effective manner to create awareness to the point at which they actually buy keep
coming back to buy. All of the methods of communication that a marketer may use to
provide information to different people about the product are known 'Promotional Mix'.
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http://www.cim.co.uk/marketingplanningtool/tech/tech6.asp ‐ topPromotion comprises of
elements such as, advertising, public relations, sales organisation and sales
promotion.http://en.wikipedia.org/wiki/Marketing_mix ‐ cite_note‐
Business_for_Higher_Awards‐3 Advertising covers any communication that is paid for,
from cinema commercials, radio and Internet advertisements through print media and
billboards. Public relations is where the communication is not directly paid for and
includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade
fairs and events. Word-of-mouth is another very important means of informal
communication about the product by ordinary individuals, satisfied customers or people
specifically engaged to create word of mouth momentum. Sales staff often plays an
important role in word of mouth and public relations.
5. Services Marketing
For service industries three extra elements have been added to the marketing mix they are
People, Process and Physical evidence. People refers to those who provide the service,
Process refers to how the service is given Physical evidence refers to the environment in
which the service is given.
McCarthy’s 4 Ps
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6.1 Marketing Mix for Luxury Products
Luxury product marketing is very different from marketing of mass market products. Luxury
marketing requires segment-specific marketing-mix strategies that partly opposes with the
common laws of marketing, this was described by Dubois (1992) as the “paradoxes of the
luxury marketing”.
1. Product Policy – Product Paradox
The development of new products in mass markets is dependent on the responses got
from the consumer research report. These products are produced, designed, packaged, and
advertised according to the expectation of the target segment (Trommsdorff & Heine
2008). This approach is totally opposite to the principles of luxury brand management.
Luxury brands instead, work around their specific identity and their unique vision and
standards (Kapferer 2001). They transform their vision into reality by creating products
with high benefits. Hence it is very important for luxury brands to have clarity about
their vision, and stick to their original core product without changing them often to the
expectations of the consumer. According to Dubois (1992), the product paradox of luxury
marketing is that on one side the product cannot be changed to the requirement of the
target group but at the same time they need to come close to matching the wishes of the
consumers to be successful in the market.
To resolve this problem, luxury brands have to employ specific market research to better
understand which products would please their consumers best. Moreover, they have to
think further in order to provide their demanding consumers with the “expected
unexpected” (Trommsdorff & Heine 2008).
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Product policy has a major impact on the quality dimension, sub-dimensions and the
extraordinariness dimension of a product. Quality is supported by liberal warranties
(Keller 2009) and packaging, this is very important in Luxury segment because it actually
communicates symbolic meaning (Fionda & Moore 2009).
A precondition for luxury brands to stand out in product quality is by developing
expertise through investments in innovation and creativity and also by appointing talented
designers and stylists (Fionda & Moore 2009). The status and expertise of a luxury brand
can be proved with memberships and affiliation to recognized luxury group. The product
strategy also includes developing iconic products, which emphasizes the brand signature
(Fionda & Moore 2009). Great examples of iconic products include the Chanel no. 5
perfume, the Hermès Kelly bag, and the Montblanc Meisterstück pen. The rationale of
luxury brands behind the development of iconic products is to prove their superiority and
also to enhance their luxury brand image.
2. Price Policy - The Price Paradox
The price tag of a luxury product is enormously high; they may seem unreasonable at
times. According to (Kapferer & Bastien 2009), “A reasonable price is a price that
appeals to reason, and therefore to comparison”, but luxury is not comparative, but
superlative. This superlative price results in becoming less accessible to the mass
population, thus evoking the associations of rarity. Therefore, luxury brands must be very
careful, so as to not to risk their brand image with discounts (Keller 2009). Luxury brands
can even increase symbolic benefits with this luxury pricing strategy, as demonstrated by
the price paradox, which covers the following phenomenon:
In contrast to mass-market products, when the price of luxury product is reduced then it
leads to decrease in demand and vice a versa. Price is a major indicator of quality, a status
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symbol and prestige (Keller 2009; Trommsdorff ,2009) therefore luxury products should
resist the temptation to reduce the prices, because in the short run there might be an
increase in demand but in the long run it would lead to a decrease in sales (Dubois, 1992).
In fact, it is suggested that the prices of luxury products should be increased on a regular
basis in order to increase the demand (Kapferer & Bastien 2009). Individuals who desire
the snob effect can be targeted, as higher the price, the better these consumers can show
off their wealth, and demonstrate their status, as very few individuals will be able to
afford them (Vigneron & Johnson 1999). This strategy also motivates consumers to
purchase these products at the earliest instead of postponing it. It also certifies the
stability and value of the luxury products. Many products like watches and diamonds are
commonly known products whose value increases over time, and this leads to the
purchase of products mainly for investment purpose.
It becomes very essential for luxury products to create an image of it being expensive.
Therefore, many luxury brands choose to offer super-superlative priced products, which
belong to the most expensive products of their category just to evoke respect. However,
the major chunk of the revenue of many luxury brands comes from their lower-priced
accessories (Kapferer & Bastien 2009).
There are certain limitations to the superlative pricing strategy. Firstly, the increase in
prices makes the product inaccessible to almost everyone. Secondly, the pricing is related
to true product quality and excellence. The more the value-for-money-ratio becomes
unreasonable, the more the product attracts snob consumers, and this segment does not
create much loyalty and this high price strategy can be easily copied by others (Kapferer
and Bastien, 2009).
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3. Distribution Policy – The Distribution Paradox
There exists a big contradiction to marketing luxury products. Every luxury brand wants
to grow their business, but when the sales increase it reduces the rarity aspect which is an
important requirement for luxury. Therefore the sales numbers are restricted, which in
turn has an impact on the success and sales growth of the luxury brand.
As uniqueness and rarity are the critical ingredients of luxury products, the accessibility
of these products are controlled by selective distribution (Fionda & Moore 2009; Keller
2009). One of the basic principles of luxury marketing is that the products should not be
easily accessible to the clients (Kapferer & Bastien 2009). It is said that the clients should
actually search for the availability of these products.
It is also important that the boutiques and flagship stores should be opened only in
prestigious shopping areas, in the neighbourhood of other luxury brands (Berthon et al.
2009). The rarity factor leads to keeping clients on a waitlist for as long as a year; this
again fuels their desire and thrill in anticipation (Nueono & Quelch 1998).
4. Promotion Policy – The Promotion Paradox
In contrast to mass market products, too much of awareness given to luxury products
leads to decrease in sales. Many consumers buy luxury products to communicate their
extraordinary life style and to display their status. This increased awareness is seen by
them as an over exposure of the brand, which attracts bandwagon-consumers, who
consume products mainly because their role models do so. Thus the snob customers are
dissuaded from purchasing these products, thus decreasing the sales (Leibenstein 1950).
In order to retain their snob customers, the brands do not openly create awareness but
instead protect their customers from the people they like to differentiate themselves from
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by concentrating their communication precisely to their target group and by keeping their
brand a secret to others (Dubois 1992).The side effect of this is that the brand loses the
bandwagon consumers, as they are unaware of their role model’s choices. Unlike the
mass market products, the luxury brands use communication process like direct
marketing, invitations to exclusive launches and catwalk shows which are the
communication tools for promoting their brand’s prestige and dream value. Celebrity
endorsement and Public Relations are also communication tools used frequently by these
brands (Fionda & Moore 2009).
The figure below gives an overview about the major marketing-mix strategies that allow for
the influencing of consumer perceptions about the major luxury characteristics.
Segment-specific Marketing-mix Strategies
Source: Heine, K., The Concept of Luxury Brands. In: Luxury Brand Management,No.1 2193-
1208, Technische Universität Berlin,
Thus luxury marketing is very different compared to the marketing of mass market products.
They are segment-specific, marketing-mix strategies. Each of the marketing-mix instruments
can be used to evoke the desire to reach out to their specific brand, and enjoy the uniqueness
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and extraordinariness which the brand provides. This influences a strong association about
the Luxury Characteristics by segment-specific Marketing-mix Strategies.
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Chapter 7 -Focus Group Discussion
Overview
1. Definition of Focus Group Discussion
2. Focus Group Discussion for the study
3. Focus Group results for Luxury Watches
4. Focus Group results for Luxury Mobile phones
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Chapter 7
Focus Group Discussion
A focus group is a form of qualitative research in which a group of people are asked about
their perceptions, opinions, beliefs, and attitudes towards a product, service, concept,
advertisement, idea, or packaging. Questions are asked in an interactive group setting where
participants are free to talk with other group members. The purpose of the methodology is to
make sure that the information that is collected is not biased by the researcher is a true
representation of the participant’s beliefs and feelings and is reproducible.
The first focus group was held in Ernest Ditcher’s house in a room he built above his garage.
http://en.wikipedia.org/wiki/Focus_group ‐ cite_note‐1 The term itself was coined by
psychologist and marketing expert Ernest Dichter.http://en.wikipedia.org/wiki/Focus_group ‐
cite_note‐2
In the world of marketing, focus groups are seen as an important tool for acquiring feedback
regarding new products, as well as various topics. In marketing, focus groups are usually
used in the early stages of research, of product or concept development, when organizations
are trying to create an overall direction for marketing initiative. A focus group is an
interview, conducted by a moderator among a small group of respondents. The interview is
conducted in an informal and natural way where respondents are free to give views from any
aspect. Participants are put together in groups on the basis of similar demographics,
psychographics, buying attitudes, or behaviours.
The best results are usually obtained when the group has some homogenous aspects, such as a
common profession or interest. A focus group discussion usually has around 6 to 12
members. Mini focus groups consists of about four or five members. The question path is
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open-ended, designed to gather ideas and opinions that are outside the scope of prepared
questions. The group should be held at a neutral site, so participants feel comfortable
discussing sensitive issues. The methodology we use includes the use of both a facilitator
and an observer. The role of the facilitator is to keep the group on task while making sure that
divergent viewpoints and ideas are heard. The observer’s role is to record the focus group,
taking notes to supplement the audio or video record. The observers role is note the non
verbal cues like interest, non interest, agreement, non agreement. Transcripts of the groups
are sometimes produced as part of the record. Videotaping and audio taping are common.
Audio or video clips can be useful for sharing results, when confidentiality is not an issue.
Focus Group Discussion for the study
A Focus group discussion was conducted among a group of students to check their attitude
towards luxury watches and luxury mobile phones
Participant selection
A group of students from a post graduate class were selected. They were in the age group
between 23 to 27 years old.
Group Size
There were thirty two participants .They was divided into eight groups of four each. Four
groups discussed on Luxury Watches and four groups on Luxury Mobile Phones
Question design
There were seven sets of open ended questions that were asked for luxury watches and luxury
mobile phones during the discussion. They are as follows:
Luxury Watches
1. Do you think buying luxury watches add value to your personality? How?
2. According to you will wearing this watch make you look more attractive? Why?
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3. Will you want to buy an expensive watch because it sets you apart and makes you look
different from others? Why?
4. Do you feel that people will respect you more when they see you wearing an expensive
luxury watch? Why?
5. Will you buy an expensive luxury watch because most of your friends and family wear
such watches and that you would like to be one among them?
6. Will you buy the expensive luxury watch because it communicates to the world that ‘you
have arrived’ and would love to get the attention of others?
7. Will buying an expensive luxury watch really make you feel happy and excited? Why?
The following instructions were given:
Instructions for Groups 1,3,5,7
1. Based on the above questions, have a group discussion amongst your group members
with respect to Luxury watches such as : a)Tag Heur b) Omega c) Rado d) Longines e)
Rolex
2. This group discussion should not be more than 30 minutes, with 2-3 minutes per question
3. There should be a time keeper or coordinator during the group discussion
4. The group discussion should be video recorded.
For Luxury Mobile Phones
1. Do you think buying a luxury mobile phone, adds value to your personality? How?
2. According to you will carrying this phone make you look more attractive? Why?
3. Will you want to buy an expensive phone because it sets you apart and makes you look
different from others? Why?
4. Do you feel that people will respect you more when they see you carrying an expensive
luxury phone? Why?
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5. Will you buy an expensive luxury phone because most of your friends and family carry
such phones and that you would like to be one among them?
6. Will you buy the expensive luxury phone because it communicates to the world that ‘you
have arrived’ and would love to get the attention of others?
7. Will buying an expensive luxury phone really make you feel happy and excited? Why?
Instructions for Groups 2,4,6,8
1. Based on the above questions, have a group discussion amongst your group members
with respect to Luxury watches such as : a)Samsung S4 b) Apple iPhone 5
c) Samsung Galaxy Note 3 d) Sony Xperia Z1 e) HTC One
2. This group discussion should not be more than 30 minutes, with 2-3 minutes per question
3. There should be a time keeper / coordinator during the group discussion
4. The group discussion should be video recorded.
Facility
The group chose their own venue for the discussion. All the discussions took place in an
informal setting.
Facilitator
The group selected their facilitator, who also took part in the discussion.
Reporting the output of the discussion.
1. The proceedings of the groups were video- taped, which was submitted to the researcher.
2. Each group analysed the outcome of their discussion and captured them in power point
slides and made a presentation to the researcher.
3. At the end of each presentation there was a question and answer session, which brought in
clarity to the researcher.
Focus Group results for Luxury Watches
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1. Do you think buying luxury watches; add value to your personality?
How?
Agree: Some members agreed with the above statement. They felt wearing a luxury
watch gave them a sense of power, and showing it off adds value to their personality.
Disagree: A few members felt that it is not important to wear an expensive watch to
enhance their personality but rather how you carry yourself is what matters, and they
felt that one can look good even wearing an ordinary watch if you have the confidence.
2. According to you will wearing this watch make you look more attractive? Why?
Agree: Majority of the members felt that wearing a luxury watch does make them
attractive as it increases ones personality. They also felt that as there are very limited
accessories for men, watch is a good accessory to wear, show off and look attractive.
Disagree: Some members of the group did not agree with the above statement as they
feel it is not necessary to wear a luxury watch to look attractive but if one has the
confidence, and then they would be able to carry off an ordinary watch and look
attractive.
3. Will you want to buy an expensive watch because it sets you apart and makes you
look different from others? Why?
Agree: Many of the members felt that wearing an expensive watch increases the
confidence level of individuals. They felt that the luxury watch is a good item to show off
in front of others and this indirectly communicates the status and also its uniqueness, sets
them apart from the others.
Disagree: Few felt it was a waste of money to buy an expensive luxury watch. They even
felt that it is important that the watch should suit one’s personality.
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4. Do you feel that people will respect you more when they see you wearing an
expensive luxury watch? Why?
Agree: But majority of the members felt that wearing a luxury watch creates a positive
first impression, as these watches are a symbol of status. Thus it increases their image in
front of others and people respect them.
Disagree: Some members of the group felt that people respect one another because of
their intrinsic qualities and not because of wearing an expensive luxury watch.
5. Will you buy an expensive luxury watch because most of your friends and family
wear such watches and that you would like to be one among them?
Agree: Members who agreed with the above statement felt that they would like to buy a
luxury watch because their family or friends wear them, as this would like to belong to
the group and for them so social acceptance was very important. Hence such people
would be influenced by their family and friends to buy luxury watches.
Disagree: A few members felt that they would buy a luxury watch only if they
themselves liked it and not because of their family of friends. For them, factors like trend
and affordability was of prime importance. They also felt that factors like trend, and
affordability would be major factors influencing their buying behaviour towards luxury
watches.
6. Will you buy the expensive luxury watch because it communicates to the world that
‘you have arrived’ and would love to get the attention of others?
Agree: Just a couple of them agreed, and said that they would definitely reward
themselves with an expensive luxury watch and announce to the world that they have
achieved and arrived
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Disagree: Majority of the members disagreed with the statement. They felt that they
would not want to attract unnecessary attention by buying an expensive watch. They also
felt that they would buy a watch out of their own earning, until then they would not want
to purchase it.
7. Will buying an expensive luxury watch really make you feel happy and excited?
Why?
Agree: Here almost the entire group was in agreement to the above statement. All of
them feel excited, happy, and powerful. The men feel very positive towards luxury
products as watches are a few forms of accessory which they would feel good wearing
and showing off.
Focus Group results for Luxury Mobile Phones
1. Do you think buying a luxury mobile phone, adds value to your personality? How?
Agree: Few of the members agree with the above statement. They see it as a status
symbol which brings in them confidence. According to them it complementary factor that
adds to their personality.
Disagree: Most of the members of the group did not feel that a luxury mobile phone adds
to their personality. In their opinion this was just a product with functional utility which
might act as a status symbol but does not complement their personality
2. According to you will carrying this phone make you look more attractive? Why?
Agree: Very few members agreed to the above statement and felt it might complement
them and make them look attractive.
Disagree: Majority of the members disagreed with the statement. According to them,
carrying a luxury mobile might garner some initial attention but it can never make them
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look attractive, unlike clothes or other accessories, and even this attention would be short
lived.
3. Will you want to buy an expensive phone because it sets you apart and makes you
look different from others? Why?
Agree: Most of the members agree to the above statement. According to them, carrying a
luxury mobile phone creates a unique identity of the person. It communicates affluence
and exclusivity which also leads to inner confidence. This sets them apart from the others.
Disagree: Few of them felt that it is just a gadget with a novel technology and features,
but does not set them apart from the rest of the crowd.
4. Do you feel that people will respect you more when they see you carrying an
expensive luxury phone? Why?
Agree: Very few members agreed to the above statement. Even they felt that they might
get respect but which would be short lived, only till the time the novelty existed.
Disagree: Most of the members disagreed with the above statement. They felt
That respect cannot be got just by carrying a luxury gadget. They were of the opinion that
the show off factor of the mobile phone might boomerang and instead of respect they
might witness hostility from the crowd.
5. Will you buy an expensive luxury phone because most of your friends and family
carry such phones and that you would like to be one among them?
Agree: Many members agreed to the above statement. They were of the opinion that
everyone in their close inner circle had a luxury phone; they would also want to possess
it, because they would like to belong to the group and also to avoid the feeling of
inferiority. A few of them felt that they might only buy if the immediate family had it.
They felt this would be a good platform for unification.
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Disagree: There were a few members who strongly disagreed to the above statement.
They were of the view that they would buy a luxury phone if they found a need to it and if
it gave them personal satisfaction. Some members strongly stated they might even avoid
such groups which gave respect to the possessions instead of them as a person.
6. Will you buy the expensive luxury phone because it communicates to the
world that ‘you have arrived’ and would love to get the attention of others?
Agree: Very few members of the group agreed with the above statement. They felt it
would be a reward to themselves for their achievement.
Disagree: Majority of the members disagreed with the above statement. They were of the
opinion that they would never want to celebrate their achievement by just buying a gadget
and showing off. They felt that there were examples of successful people who carried
simple devices; hence they strongly opposed this idea of communicating their
achievement.
7. Will buying an expensive luxury phone really make you feel happy and
excited? Why?
Almost everybody agreed that it in the initial phase it would give them happiness and
excitement to possess a new gadget with new features and benefits. They feel that after
the novelty factor fades off, then this would wear off. When more people buy it then the
uniqueness would be lost and also the technological obsolescence would set in.
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Chapter 8 –Data Analysis
Overview
1. Data Analysis
2. Hypothesis Testing
3. Interpretation
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Chapter 8
Data Analysis
Demographic factors:
1. Gender: The role of gender towards purchasing luxury products is considered important,
because the influencing factors for men and women might be different. From the
marketer’s perspective it would be useful for them know the different factors, so that they
could customize their marketing strategy accordingly.
Gender No. of Percent

respondents
Male 468 67.3
Female 227 32.7
Total 695 100.0
Above table indicate that out of total 695 respondents, 468 are male and 227 are female.
This information is presented using pie diagram as follows.
2. Age Group: This study aims to examine the factors influencing the youth towards luxury
fashion products. Youth have been described as all individuals between the age group of
18 to 36 years. In order to get in depth evaluation, this segment has been further
categorized into three groups – 18 to 23 years, 24 to 29 years and 30 to 36 years.
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Age group No. of Percent
respondents
18 to 23 years 118 17.0
24 to 29 years 316 45.5
30 to 36 years 261 37.6
Total 695 100.0
Above table indicate that out of total 695 respondents, 118 respondents belong to the age
groups between 18 to 23 years (young age) 316 respondents belong to the age groups
between 24 to 29 (middle age)years and 261 respondents belong to the age groups of 30
to 36 years(senior age)
3. Qualification: The youth have been grouped based on their educational qualification.
Those doing their graduation, post graduation and those employed. The aim, was to check
if the influencing factors differed based with their qualification
Qualification No. of Percent

respondents
Employed 409 58.8

Studying Graduation 40 5.8
Studying Post- Graduation 246 35.4
Total 695 100.0
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Above table indicate that out of total 695 respondents, 409 are employed. 40 respondents
are doing graduation whereas 246 are doing post graduation.
4. Nativity: The nativity of an individual has a huge influence on his buying behavior. Thus
for this study the nativity of the youth was captured
Nativity No. of respondents Percent
Central 41 5.9
East 78 11.2
West 170 24.5
North 197 28.3
South 209 30.1
Total 695 100.0
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5. Lived in during the formative years between 13 to 18 years: Past studies have proven that
the place where an individual spent his formative years of growing up has a huge
influence on the buying behavior. Hence this information was captured for this study.
Lived in No. of Percent

respondents
Central 49 7.1
East 84 12.1
West 214 30.8
North 185 26.6
South 163 23.5
Total 695 100.0
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6. Living in presently: The place where the individual is living in, has a huge influence of
that region on his buying behavior. Hence this information was captured for this study.
Living in No. of Percent

respondents
Central 44 6.3
East 45 6.5
West 348 50.1
North 91 13.1
South 167 24.0
Total 695 100.0
7. Living for: The length of time spent in a region would influence the buying behavior of
the individual. Therefore this information was captured for this study
Living for No. of Percent

respondents
Below Two yrs 155 22.3
Two to Five yrs 98 14.1
Five to Ten yrs 56 8.1
More than 10 yrs 386 55.5
Total 695 100.0
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8. Social role: Studies have shown that the mindset of an individual changes as per the
occupational background Hence for the purpose of this study, the information on the
social role was captured. They were categorized under three broad heads: Business class,
Service class and student class
Social Role No. of Percent

respondents
Business 105 15.1

Service 392 56.4
Student 198 28.5
Total 695 100.0
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9. Family Monthly income: There is always a strong relationship between income and
consumption. Hence this information was captured to understand the influence of the
factors on different income levels
Family Income (p.m) No. of Percent

respondents
Below 1 lac 291 41.9
Two to Five lacs 229 32.9
More than 5 lacs 175 25.2
Total 695 100.0
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Cronbach’s alpha
Cronbach’s alpha – Watches
Factors Number of Cronbach’s

items alpha
Perception Value 24 .852
Factor
Social Value 23 .817
Factor
Cronbach’s alpha – Mobile Phones

items alpha
Perception Value 24 .852
Factor
Social Value 23 .800
Factor
Cronbach’s alpha – Common

items alpha
Marketing Mix 19 .778
Factor
Buying Intention 2 .907
Main factors
Perception Value Factor:
This consists of three sub factors. These are Materialism, Attitude towards luxury and Need
for uniqueness. To study the individual sub factors and main factor, information is collected
through questionnaire. Response given to related questions is classified and presented in the
following table.
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Table given below gives the division of 695 respondents under the seven categories. The
short forms used in the table are decoded as follows.
SD = Strongly Disagree, SWD = Somewhat Disagree, D = Disagree, N = Neutral, A = Agree,
SWA = Somewhat Agree, SA = Strongly Agree.
I Materialism (watches and Mobile) SD SWD D N A SWA SA
1 I have high regard for people who have

expensive luxury watches, mobile phones, 94 110 158 155 58 94 26
homes, cars and clothes
2 The things I own say a lot about how well I am

29 77 64 112 148 209 56
doing in life
3 Buying luxury products gives me lot of pleasure 26 81 83 127 153 181 44
4 I like a lot of luxury products in my life 29 88 104 143 135 143 53
5 My life would be better, if I am able to own

55 119 121 116 106 134 44
something which I don’t have currently
6 I would be happier if I could afford to buy

43 83 104 113 144 145 63
more luxury products
II Attitude (watches) SD SWD D N A SWA SA
1 The luxury we buy reveal a little bit about who

23 58 65 100 197 196 56
we are
2 In my opinion, Luxury is too expensive for what

18 63 53 110 176 169 106
it is
3 I almost never buy Luxury Products 61 125 155 112 80 110 52
4 People who buy Luxury products seek to imitate

34 91 116 120 117 165 52
the rich
5 I could talk about luxury products for hours 107 105 185 145 52 81 20
6 I would not feel at ease in a Luxury shop 59 108 165 140 72 120 31
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III Uniqueness (watches) SD SWD D N A SWA SA
1 If I see the watch / mobile brand or model, used

by too many people, I may change my mind as 27 59 92 98 174 131 114
there would be no uniqueness.
2 Purchasing luxury products can help enhance

28 40 50 63 208 200 106
one’s image
3 I like to buy luxury products to show other

79 76 153 101 116 120 50
people I am different
4 I like to communicate to others about my

uniqueness, especially while buying luxury 57 69 126 103 147 132 61
products
5 I like to show my personal uniqueness by

61 66 134 87 141 141 65
buying special luxury products
6 My favourite brands can greatly express my

28 44 63 98 189 169 104
individuality
7 When a product, I own becomes popular among

the average population, I begin to stop using it 77 120 189 117 67 87 38
or use it less.
8 I like new and limited edition of luxury products 50 58 100 140 148 114 85
9 As a person, I like products which are rarer and

not owned by the bulk of other people, that is 42 61 105 109 133 150 95
why I prefer luxury brands
10 The products ‘superior quality’ is my major

15 33 24 51 246 159 167
reason for buying luxury products
11 By owning a luxury products, I show others,

how I do not appreciate identical ordinary 86 105 170 132 80 85 37
things
12 I purchase luxury brand because I simply like

18 39 52 69 242 174 101
the style of it
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Above responses are rated as given below.
Strongly Disagree = 1
Somewhat Disagree = 2
Disagree = 3
Neutral = 4
Agree = 5
Somewhat Agree = 6
Strongly Agree = 7
After rating is given to all responses, arithmetic mean is calculated using formula given
below.
Mean score = Sum of scores of all questions * 100
Maximum score of all questions
Result of descriptive statistics is as follows:
Descriptive statistics of Perception Value Factor (Watches)
Using above formula Mean scores are calculated for Materialism, Attitude (watches) and
Uniqueness (watches). Clubbing mean score of these three sub factors, mean score for
Perception Value Factor is obtained.
N Minimum Maximum Mean Std. Deviation
Materialism Score (common) 695 14.29 100.00 60.0036 16.90553
Attitude watches score 695 14.29 100.00 59.1365 12.66095
Uniqueness watches score 695 14.29 100.00 63.6211 14.34709
Perception Value Factor watches

695 23.81 100.00 60.9204 10.93934
score
115

Descriptive statistics of Perception Value Factor (Mobile):
Using same formula mean scores are calculated for Mobiles. Sub factor materialism is
common for watches and mobile and hence mean scores are same. Mean scores for other sub
factors, ‘attitude’ and ‘uniqueness’ is also calculated. Clubbing all three factors mean
Perception Value Factor score for Mobile is obtained. Results are as follows.
N Minimum Maximum Mean Std.

Deviation
Materialism Score (common) 695 14.29 100.00 60.0036 16.90553
Attitude Mobile score 695 14.29 100.00 58.5437 12.61167
Uniqueness mobile score 695 14.29 100.00 62.1994 13.83680
Perception Value Factor

695 24.61 100.00 60.2489 10.92328
Mobile score
1. Social Value Factor: This factor consists of two main factors first is the reference group
and second is status.
I Reference Group (watches) SD SWD D N A SWA SA
1 I would search information about

various brands and models of
watches / mobile phones from an 37 64 131 101 163 143 56
association of professionals or
independent group of experts.
2 I seek information from those who

54 67 181 133 106 119 35
work in that industry
3 I will collect information from

those friends, neighbours, relatives, 20 38 51 68 237 128 153
or work associates (such as how
Brand A watch performance
116

compares to Brand B; or how
Brand A mobile phone
performance compares to Brand B)
4 My choice of watch / mobile phone

is influenced by other consumer’s
word of mouth or some evaluation 20 55 68 113 198 164 77
reports from an independent testing
agency (e.g., online reviews)
5 My friend’s evaluation and

preference of watches / mobile 30 73 85 97 176 175 59
phones will influence my choice
6 Other people’s recommendation of

watches / mobile phones may 36 67 107 125 129 193 38
influence my final decision
7 The preferences of family members

can influence my choice of watches 36 58 6 112 174 154 75
/ mobile phones
8 To satisfy the expectations of

classmate or fellow work
associates, my decision to purchase 146 91 209 101 56 79 13
a watch / mobile phone is
influenced by their preferences
9 I tend to choose those brands or

models of watches / mobile phones
52 41 81 86 155 149 131
that will enhance my image in
others’ eye.
10 I feel that that those who purchase

or use the products of a particular
brand or model possess the 61 83 148 127 103 128 45
characteristics which I would like
to have
11 I feel that it would be nice t act like 139 76 175 116 63 106 20
the type of person whom
117

advertisements show with the
products of a particular brand or
model
12 I think that the people who

purchase the products of a
particular brand or model (e.g. Tag
Heur, Omega, Rado, Longines,
Tissot, Rolex and Samsung S4, 35 50 6 103 188 179 71
iPhone5, Samsung Galaxy Note 3,
Sony Xperia Z1, HTC one) are
sometimes admired or respected by
others
13 Using the products of a particular

brand or model helps me show
others who I am, or who I would
60 71 114 110 135 141 64
like to be (such as a successful
businessman, a movie star, a sports
person or celebrity, etc.)
ii Status (Watches) SD SWD D N A SWA SA
1 A product is more valuable to me if

62 73 128 174 97 127 34
it has snob appeal
2 If I buy a luxury product, I will

buy those brands which are known 26 69 46 111 197 164 82
to many
3 I purchase luxury to show off, that

156 97 162 100 63 88 29
I can afford them
4 I would pay more if the products

42 90 92 110 132 178 51
had status
5 The status of the products is

28 161 82 154 120 112 38
irrelevant to me
6 Many people buy luxury products

9 28 24 71 232 172 159
for showing off
118

7 Luxury goods are a symbol of
12 33 36 81 254 179 100
social status
8 Purchasing luxury goods, can be

9 65 35 89 226 201 70
noticed and admired by everyone
9 purchasing luxury products

communicates to other ‘ I have 28 84 70 149 158 165 41
arrived’
10 In my opinion Luxury is flashy 16 101 55 131 156 184 52
Descriptive statistics of Social Value Factor (Watches):
Descriptive Statistics

Deviation
Reference group watches score 695 17.58 100.00 61.4992 12.36053
Status watches score 695 22.86 100.00 63.8169 11.30529
Social Value Factor watches

695 26.16 100.00 62.6599 10.28912
score
Descriptive statistics of Social Value Factor (Mobile):

Deviation
Reference group Mobile score 695 20.88 100.00 64.5698 11.40025
Status Mobile score 695 20.00 100.00 63.7223 11.21277
Social Value Factor Mobile

695 26.16 100.00 64.1479 9.77647
score
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2. Market mix:
i Product (common) SD SWD D N A SWA SA
1 For me luxury product means

9 30 28 57 240 152 179
Quality
2 I don’t mind being on the wait list,

39 96 103 129 131 156 41
to get my luxury product
3 I like to experience the product by

wearing or carrying it before buying 6 41 65 89 234 165 95
it
4 Not only should the product look

good, but it should also be pleasant 4 8 11 54 302 104 212
to touch and feel.
5 I buy a product only after I

understand the technical and 0 32 14 57 292 137 163
stylistic competence
ii Price (Common) SD SWD D N A SWA SA
1 Price is not a factor while buying

38 155 153 89 107 119 34
luxury products
2 For me higher the price means

75 134 165 91 84 119 27
‘Luxury’
3 Even if there is a price increase, I

42 121 109 145 94 153 31
will still buy the luxury product
4 I would like to get the best deal for

7 17 21 55 276 140 179
my luxury products
5 I will visit different boutiques or

check online for best deals before 4 34 20 53 230 123 231
purchasing the luxury product
6 I would be interested in discounts

4 21 27 59 249 127 208
while purchasing the luxury product
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iii Distribution (Common) SD SWD D N A SWA SA
1 I will buy my luxury product only

from ‘Flagship Stores’ or ‘Exclusive 20 87 73 150 163 117 85
Boutiques’
2 For me a product is not luxury if it

48 137 138 116 99 122 35
is sold in general stores or malls
iv Communication (Common) SD SWD D N A SWA SA
1 My decision to buy a luxury product

depends on the celebrity endorsing 129 98 192 110 49 99 18
it
2 It is very important that the logo or

the symbol of the brand should be 18 41 48 90 208 161 129
explicitly visible
3 I only like to be introduced to a

luxury product in ‘Exclusive 41 135 147 175 81 82 34
Product Launches and events’
4 While buying luxury products, I

would look for information on
2 22 15 57 293 95 211
warranty, guarantee and loyalty
programs
5 Before buying the product, I would

like to talk to people who already 6 27 23 68 278 157 136
own the product
6 It is important, that the salesperson

who is showing the product to me,
should have complete information 4 8 10 47 205 53 368
of the product and answer all my
queries
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Descriptive statistics of Marketing Mix factors:

Deviation
Product common 695 22.86 100.00 73.1263 12.02331
Price common 695 19.05 100.00 66.6079 11.69822
Communication common 695 21.43 100.00 68.7870 11.59614
Distribution common 695 14.29 100.00 59.5784 19.52582
Market Mix common

695 28.10 100.00 67.0258 10.04454
score
Dependent Variable Buying Intention
Buying Intention SD SWD D N A SWA SA
1 I will always buy luxury

26 73 61 128 171 134 102
products in future
Same rating that of factors is also given to buying intention. Descriptive statistics of buying
intention is as given below.

Deviation
Buying Intention
695 14.29 100.00 66.5982 23.68422
watches score
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Above table indicate that mean score of buying intention is 66.59 with very high standard
deviation of 23.68. Respondents are classified into three groups according to buying intention
score. Respondents of score below 42.91 (mean – standard deviation) are classified as ‘Low
buying intention’ group. Respondents of score from 42.91 to 90.28 are classified as ‘Medium
buying intention’ group. Respondents of score above 90.28 (mean + standard deviation) are
classified as ‘High buying intention group’. Classification of respondents according to level
of buying intention is as given in the following table.
Level of Buying Frequency Percent

intention
High 102 14.7
Medium 433 62.3
Low 160 23.0
Total 695 100.0
Above table indicates that out of 695 respondents, 160 belong to low buying intention group,
433 are from medium buying intention group and remaining 102 are from high buying
intention group. This information is presented using pie-diagram as shown below.
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Hypothesis Testing
First hypothesis (H01) is divided into two parts. Hypothesis related to watches is referred as
H01W and hypothesis related to mobiles is referred as H01M.
H01W : There exists no difference in factors influencing purchase intentions of
Luxury watches among Indian youth.
H11W : There exists significant difference in factors influencing purchase
Intentions of luxury watches among Indian youth.
To test the above null hypothesis scores of three main factors and corresponding sub factors
are considered. To test the difference, the factors are paired and the z-test is applied. Results
of test are as follows.
124

Paired Samples Statistics
Std. Std. Error

Mean N
Deviation Mean

60.9204 695 10.93942 .41496
(watches) score
Pair 1
Social Value Factor (watches)
62.6580 695 10.28922 .39029
score
Social Value Factor (watches)

62.6580 695 10.28922 .39029
score
Pair 2
Market Mix (common) score 67.0249 695 10.04466 .38102
Market Mix (common) score 67.0249 695 10.04466 .38102
Pair 3
60.9204 695 10.93942 .41496
(watches) score
Above table indicate mean and standard deviations of main factors pair wise.
These results are used to apply z-test. Results of z-test are as follows.
Paired Samples Test

Comparing Factors Paired Differences z- p-
calculated value
Diff. of Std. Std. Error
Mean Deviation Mean
Perception Value
Factor(watches)score
Pair 1 -1.73761 7.71246 .29255 -5.940 .000
Social Value Factor
(watches) score
125

Social Value Factor
(watches) score
Pair 2 -4.36691 9.10381 .34533 -12.646 .000
Market Mix (common)
score
Market Mix (common)

score
Pair 3 6.10452 9.20058 .34900 17.492 .000
Perception Value
Factor(watches)score
Above table indicate, that for pair-1, the p-value is 0.000 which is less than 0.05. Hence z-test
is rejected and conclusion is, there is significant difference between mean score of Perception
Value Factor and Social Value Factor. Importance of Social Value Factor is more as
compared to Perception Value Factor
For Pair-2, the p-value is 0.000 which is less than 0.05. Hence the z-test is rejected and
conclusion is, there is significant difference between mean score of Social Value Factor and
Market Mix factor. Importance of Market Mix factor is more as compared to Social Value
Factor
For Pair-3, the p-value is 0.000 which is less than 0.05. Hence the z-test is rejected and
conclusion is, there is significant difference between mean score of Perception Value Factor
and Market Mix factor. Importance of Market Mix factor is more as compared to Perception
Value Factor.
To test the association between buying intention and each main factor chi-square test is
used.
First association between Buying Intention and Perception Value Factor is tested. It is tested
using chi-square test. Null hypothesis designed for this testing is given below.
Null Hypothesis: There is no association between Buying intention and Perception
Value Factor of respondents.
126

Alternate Hypothesis: There is association between Buying intention and Perception
Value Factor of respondents.
For testing above hypothesis respondents are classified into three levels according to
Perception Value Factor score. Respondents of Perception Value Factor score below 49.98
are classified as ‘Low level’. Respondents of score from 49.98 to 71.86 are classified as
‘medium level’. Respondents of score more than 71.86 are classified as ‘High level’. Table
of classification of respondents according to Perception Value Factor level is as given below.
Perception Value Frequency Percent

Factor watches Level
High 100 14.4
Medium 499 71.8
Low 96 13.8
Total 695 100.0
For testing of above null hypothesis bivariate frequency distribution table is obtained as given
below.
Buying Int watches_level * Perceptionl Value
Factor_watches__Level Crosstabulation
Perception Value Factor Level Total

Buying Intention
(watches)
level (watches)
High Low Medium
Low 4 37 119 160
Medium 64 52 317 433
High 32 7 63 102
Total 100 96 499 695
127

Above table indicate that out of 695 respondents, 100 respondents are of opinion of
Perception Value Factor is highly important, 96 respondents are of opinion of Perception
Value Factor has low importance. Remaining 499 respondents feels that Perception Value
Factor is medium important.
To test hypothesis statistically Chi-square test is applied. Results of test are as follows.
Chi-Square Tests
Value Df Asymp. Sig.

(2-sided)
Pearson Chi-Square 52.541a 4 .000
a. 0 cells (0.0%) have expected count less than 5. The

minimum expected count is 14.09.
Chi-square calculated value = 52.541

Chi-square table value (5% l.o.s.) = 9.49
Degree of Freedom = 4
Result of test = Rejected
Above table indicate that Chi-square calculated value (52.541) is greater than Chi-square
table value (9.49). Hence test is rejected and null hypothesis is rejected. Conclusion is there is
association between Buying intention and Perception Value Factor of respondents.
Similarly other two factors are tested and overall results are presented in the following table.
Chi-
Chi-
Sr square Degree of Result of
Hypothesis square
no table freedom test
calculated
value
Association between
1 Perception Value Factor and 52.541 9.49 4 Associated
buying intention
2 Association between Social 29.809 9.49 4 Associated
128

Value Factor and buying
intention
Association between Market

3 Mix factor and buying 56.807 9.49 4 Associated
intention
Second row of above table indicate that Chi- square calculated value (29.809) is greater than
table value (9.49) for 4 degree of freedom and at 5% level of significance (l.o.s.). Therefore it
is concluded that there is association between Social Value Factor and buying intention of
luxury watches.
Third row of above table indicate that Chi- square calculated value (56.807) is greater than
table value (9.49) for 4 degree of freedom and at 5% level of significance (l.o.s.). Therefore it
is concluded that there is association between Market mix factor and buying intention of
luxury watches.
To study nature of association and strength of association correlation is obtained.
129

Table of Pearson’s correlation is given below.
Correlations
Social
Buying Perception Market
Value
Intention Value Factor Mix
Factor
watches watches common
watches
score score score
score
Buying Intention Pearson
1 .368** .332** .323**
watches score Correlation
Perception Value Pearson

.368** 1 .738** .618**
Factor watches score Correlation
Social Value Factor Pearson

.332** .738** 1 .599**
watches score Correlation
Market Mix common Pearson

.323** .618** .599** 1
score Correlation
**. Correlation is significant at the 0.01 level (2-tailed).
First row of the table indicate that correlation between Buying intention and Perception Value
Factor is +0.368. This indicates that there is positive correlation between Buying intention
and Perception Value Factor watches. If Perception Value Factor increases then BI also
increases.
BI and SVF is +0.332
BI and MM is +0.323
To study impact of each main factor on BI regression is obtained. Results are as follows.
Model Summary
Model R R Square Adjusted R Std. Error of the

Square Estimate
1 .612a .374 0.356 19.4371
130

a. Predictors: (Constant), Market Mix (common) score,
Social Value Factor watches score, Perception Value
Factor watches score
ANOVA
Model Sum of Df Mean Square F Sig.

Squares
Regression 59928.950 3 19976.317 41.910 .000b
1 Residual 329364.839 691 476.650
Total 389293.789 694
a. Dependent Variable: Buying Intention watches score
b. Predictors: (Constant), Market Mix common score, Social Value Factor

watches score, Perception Value Factor watches score
Coefficients
Model Unstandardized Standardized T Sig.

Coefficients Coefficients
B Std. Beta
Error
(Constant) 3.541 6.004 .590 .556

.474 .119 .219 3.994 .000
watches score
1
Social Value Factor watches
.208 .124 .090 1.681 .093
score
Market Mix common score .315 .109 .134 2.890 .004
a. Dependent Variable: Buying_Int_watches_score
131

Regression Equation of BI on three main factors is as given below.
BI (watches) = 3.541 + 0.474*PVF + 0.208*SVF + 0.315*MM
Inference:
Above regression equation indicate that, BI of watches is influenced by three main
factors. Impact of PVF is 0.474 times. Impact of SVF is 0.208 times and impact of
MMF is 0.315 times. Constant is 3.541. This indicates that the influence of PVF is
maximum and SVF is minimum.
Therefore the null hypothesis is rejected.
H01M: There exists no difference in factors influencing Buying intentions of luxury
mobiles among Indian youth.
H11M: There exists significant difference in factors influencing Buying intentions of
luxury mobiles among Indian youth.
Paired Samples Statistics

Std. Error
Mean N Std. Deviation
Mean
Perception Value Factor(Mobile)

60.2489 695 10.92327 .41434
Pair 1 score
Social Value Factor(Mobile) score 64.1460 695 9.77658 .37085
Social Value Factor(Mobile) score 64.1460 695 9.77658 .37085

Pair 2 Market Mix Factor (common)
67.0249 695 10.04466 .38102
score
Market Mix Factor (common)

67.0249 695 10.04466 .38102
score
Pair 3
Perception Value Factor(Mobile)
60.2489 695 10.92327 .41434
score
132

Paired Samples Test
Paired Differences Z Sig.
(2-tailed)
Mean Std. Std. Error
Deviation Mean
Perception Value
Factor_Mobile__score -
Pair 1 -3.89711 7.86413 .29830 -13.064 .000
Social Value
Factor_Mobile__score
Social Value
Factor_Mobile__score -
Pair 2 -2.87889 8.98990 .34101 -8.442 .000
Market Mix
Factor__common_score
Market Mix
Factor__common_score -
Pair 3 6.77599 9.38482 .35599 19.034 .000
Perception Value
Buying Int Frequency Percent

Mobile level
High 114 16.4
Low 140 20.1

Valid
Medium 441 63.5
Total 695 100.0
133

Perception Frequency Percent
Value Factor
Mobile_Level
High 98 14.1
Low 101 14.5

Valid
Medium 496 71.4
Total 695 100.0
Chi-square test between BI and PVF mobiles
Crosstab
Count
Perceptionl Value Total

Factor_Mobile_Level
High Low Medium
High 32 12 70 114
Buying Int Mobile level Low 1 31 108 140
Medium 65 58 318 441
Total 98 101 496 695
Chi-Square Tests

(2-sided)
134

Chi-square test between BI and SVF mobiles
Crosstab
Count
Social Value Total
Factor_Mobile_level
High Low Medium
High 19 7 88 114
Buying_Int_Mobile_leve
Low 2 37 101 140
l1
Medium 32 52 357 441
Total 53 96 546 695
Chi-Square Tests

(2-sided)
Chi-square test between BI and MMF mobiles
Crosstab
Count
Market Mix Total

Factor_common_level
High Low Medium
High 38 8 68 114
Buying_Int_Mobile_leve
Low 11 40 89 140
l1
Medium 54 43 344 441
Total 103 91 501 695
135

Chi-Square Tests

(2-sided)
a. 0 cells (0.0%) have expected count less than 5. The

minimum expected count is 14.93.
Correlations
Buying In Perception Social Value Market Mix
Mobile Value Factor_Mob Factor__co
score1 Factor ile__score mmon_scor
Mobile e
score
Buying_Int_Mobile_s Pearson
1 .340** .323** .314**
core1 Correlation
Perceptionl Value
Pearson
Factor_Mobile__scor .340** 1 .717** .602**
Correlation
e
Social Value
Pearson
Factor_Mobile__scor .323** .717** 1 .589**
Correlation
e
Market Mix
Pearson
Factor__common_sco .314** .602** .589** 1
Correlation
re
**. Correlation is significant at the 0.01 level (2-tailed).
136

Model Summary
Model R R Square Adjusted R Square Std. Error of the

Estimate
1 0.643a 0.413 0.402 19.2643
a. Predictors: (Constant), Market Mix Factor__common_score, Social Value

Factor_Mobile__score, Perceptionl Value Factor_Mobile__score
ANOVAa
Model Sum of Df Mean Square F Sig.

Squares
Regression 52386.702 3 17462.234 37.555 .000b
1 Residual 321298.220 691 464.976
Total 373684.921 694
a. Dependent Variable: Buying_Int_Mobile_score1

b. Predictors: (Constant), Market Mix Factor__common_score, Social Value
Factor_Mobile__score, Perceptionl Value Factor_Mobile__score
Coefficientsa
Model Unstandardized Coefficients Standardized T Sig.

Coefficients
B Std. Error Beta
(Constant) 6.733 6.132 1.098 .273
Perceptionl Value
.361 .113 .170 3.183 .002
1 Social Value
.278 .125 .117 2.225 .026
Market Mix
.329 .106 .142 3.090 .002
Factor__common_score
a. Dependent Variable: Buying_Int_Mobile_score1
137

Regression equation of BI on three main factors is as given below.
BI (Mobile) = 6.733 + 0.361*PVF + 0.278*SVF + 0.329*MMF
Inference:
Above regression equation indicate that, BI of Mobiles is influenced by three main
factors. Impact of PVF is 0.361 times. Impact of SVF is 0.278 times and impact of
MMF is 0.329 times. Constant is 6.733. This indicates that the influence of PVF is
maximum and SVF is minimum.
Therefore the null hypothesis is rejected.
H02W: There exists no difference in factors influencing Buying Intention of luxury
watches across different age groups among Indian youth.
H12W: There exists significant difference in factors influencing Buying Intention of
luxury watches across different age groups among Indian youth.
To study the above hypothesis, mean importance scores of all age groups are calculated and
presented in the following table.
Mean
Age group Perception Social value Marketing Mix Buying

value factor factor watches factor common Intention
watches score score score watches score
30-36 yrs 59.4600 61.4934 66.0880 67.1045
24-29 yrs 61.9060 63.4489 67.6135 66.5913
18-23 yrs 61.5113 63.1160 67.5209 65.4964
Total 60.9204 62.6580 67.0249 66.5982
The above table indicates that the mean importance score for 695 respondents for
• PVF is 60.92. Mean importance of PVF for 18-23 yrs group is 61.51, for 24-29 yrs group
is 61.90 and for 30-36 yrs group is 59.46.
138

• SVF is 62.65. Mean importance of SVF for 18-23 yrs group is 63.11, for 24-29 yrs group
is 63.44 and for 30-36 yrs group is 61.49
• MMF is 67.02. Mean importance of MMF for 18-23 yrs group is 67.52, for 24-29 yrs
group is 67.61 and for 30-36 yrs group is 66.08
• BI is 66.59, Mean importance of BI for 18-23 yrs group is 65.49, for 24-29 yrs group is
66.59 and for 30-36 yrs group is 67.10
Above information is presented using bar diagram as shown below.
(To test above null hypothesis following sub hypothesis is designed)
Null Hypothesis: There is no significant difference in mean importance scores for PVF, SVF,
MMF among three age groups.
Alternate Hypothesis: There is significant difference in mean importance scores for PVF,
SVF, MMF among three age groups.
139

ANOVA is obtained and F-test is applied. Results of test are as follows.
Sum of Df Mean F- p- Result

Squares Square calculated value
Between Groups 904.825 2 452.413

Perception value 3.811 .023
Signifi
factor watches Within Groups 82146.850 692 118.709
cant
score
Total 83051.675 694

2.736 .066 Non-
Social value factor
Within Groups 72896.092 692 105.341 signific
watches score
ant
Total 73472.455 694

Marketing Mix 1.826 .162 Non-
factor common Within Groups 69653.622 692 100.656 signific
score ant
Total 70021.220 694

.187 .830 Non-
Buying Intention
Within Groups 389083.603 692 562.260 signific
watches score
ant
Total 389293.789 694
1. Results of PVF factors indicate that p-value is 0.023 which is less than standard p-value
0.05. Therefore test is rejected. Null hypothesis is rejected. Alternate hypothesis is
accepted.
There is significant difference in mean importance score of PVF among the three age
groups.
2. Results of SVF factors indicate that p-value is 0.066 which is greater than standard p-
value 0.05. Therefore test is accepted. Null hypothesis is accepted.
There is no significant difference in mean importance score of SVF among the three age
groups.
140

3. Results of MMF factors indicate that p-value is 0.162 which is greater than standard p-
value 0.05. Therefore test is accepted. Null hypothesis is accepted.
There is no significant difference in mean importance score of MMF among the three age
groups.
4. Results of BI factors indicate that p-value is 0.830 which is greater than standard p-value
0.05. Therefore test is accepted. Null hypothesis is accepted.
There is no significant difference in mean BI score among the three age groups.
Inference
• There is significant difference in mean importance score of PVF among the three
age groups. The null hypothesis is rejected and the alternate hypothesis is accepted
• There is no significant difference in mean importance score of SVF, MMF and BI
factors among the three age groups. Thus the null hypothesis is accepted
H02M: There exists no difference in factors influencing Buying Intention of luxury
mobiles across different age groups among Indian youth;
H12M: There exists significant difference in factors influencing Buying Intention of
luxury mobiles across different age groups among Indian youth.
141

To study the above hypothesis, mean importance scores of all age groups are calculated and
presented in the following table.
Mean
Age group Perception value Social value Marketing Mix Buying Intention
factor Mobile factor Mobile factor common Mobile score
score score score
30-36 yrs 58.8108 62.8653 67.6135 68.4182
24-29 yrs 60.9792 64.6606 66.0880 68.2640
18-23 yrs 61.4743 65.6007 67.5209 68.5230
Total 60.2489 64.1460 67.0249 68.3659
• PVF is 60.24. Mean importance of PVF for 18-23 years group is 61.47, for 24-29 years
group is 60.97 and for 30-36 yrs group is 58.81.
• SVF is 64.14. Mean importance of SVF for 18-23 years group is 65.60, for 24-29 years
group is 64.66 and for 30-36 years group is 62.86
• MMF is 59.57. Mean importance of MMF for 18-23 yrs group is 59.32, for 24-29 yrs
group is 60.39 and for 30-36 yrs group is 58.70
• BI is 68.36, Mean importance of BI for 18-23 yrs group is 68.52, for 24-29 yrs group is
68.26 and for 30-36 yrs group is 68.41
142

ANOVA is obtained and F-test is applied. Results of test are as follows.
Sum of df Mean F p-value Result

Squares Square

Perception value 3.740 .024
factor Mobile Within Groups 81921.139 692 118.383 significant
score
Total 82806.630 694

4.018 .018
Social value factor
Within Groups 65572.059 692 94.757 significant
Mobile score
Total 66333.527 694

Marketing Mix 1.826 .162
Non-
factor common Within Groups 69653.622 692 100.656
significant
score
Total 70021.220 694

.006 .994
Buying Intention Non-
Within Groups 373678.016 692 539.997
Mobile score significant
Total 373684.921 694
143

0.05. Therefore F- test is rejected. Null hypothesis is rejected. Alternate hypothesis is
accepted.
There is significant difference in mean importance score of PVF among the three age
groups. PVF is most important for 18-23 yrs respondents and less important for 30-36 yrs
respondent.
2. Results of SVF factors indicate that p-value is 0.018 which is less than standard p-value
0.05. Therefore F-test is rejected. Null hypothesis is rejected. Alternate hypothesis is
accepted.
There is significant difference in mean importance score of SVF among the three age
groups. SVF is most important for 18-23 yrs respondents and less important for 30-36 yrs
respondent.
value 0.05. Therefore F- test is accepted. Null hypothesis is accepted.
There is no significant difference in mean importance score of MMF among the three age
groups. MMF is equally important for all age groups.
4. Results of BI factors indicate that p-value is 0.994 which is greater than standard p-value
0.05. Therefore F-test is accepted. Null hypothesis is accepted.
There is no significant difference in mean BI score among the three age groups. BI is
equally important for all age groups.
144

Inference:
• There is significant difference in mean importance score of PVF and SVF among the
three age groups. The null hypothesis is rejected and the alternate hypothesis is
accepted
• There is no significant difference in mean importance score of MMF and BI factors
among the three age groups. Thus the null hypothesis is accepted.
145

H03W: There exists no difference in factors influencing buying intentions of luxury
watches across the student class, service class and business class
H13W: There exists significant difference in factors influencing buying intentions of
luxury watches across the student class, service class and business class
Mean
Social Role Perception Social value Marketing Buying

value factor factor watches Mix factor Intention
watches score score common score watches score
Business 60.1021 62.2122 68.0370 68.1633
Service 60.7609 62.3710 66.4829 67.2376
Student 61.6702 63.4627 67.5613 64.5022
Total 60.9204 62.6580 67.0249 66.5982
• PVF is 60.92. Mean importance of PVF for Student class is 61.67, for Service class is
60.76 and for Business class is 60.10.
• SVF is 62.65. Mean importance of SVF for Student class is 63.46, for Service class is
• MMF is 67.02. Mean importance of MMF for Student class is 67.56, for Service class is
• BI is 66.59, Mean importance of BI for Student class is 64.50, for Service class is 67.23
and for Business class is 68.16.
146

ANOVA
Sum of df Mean F- p- Result

Between Non-
191.619 2 95.809
Groups Significant
Perception .800 .450
value factor
Within Groups 82860.056 692 119.740
watches score
Total 83051.675 694
Between Non-
181.362 2 90.681
Groups Significant
Social value .856 .425
factor watches
Within Groups 73291.092 692 105.912
score
Total 73472.455 694
Between Non-
279.683 2 139.841
Groups Significant
factor common
Within Groups 69741.538 692 100.783
score
Total 70021.220 694
Between Non-
1287.343 2 643.672
Groups Significant
Buying 1.148 .318
Intention
Within Groups 388006.446 692 560.703
watches score
Total 389293.789 694
147

1. Results of PVF factors indicate that p-value is 0.450 which is greater than standard p-
There is no significant difference in mean importance score of PVF among the three
classes. PVF is equally important for all the three classes.
There is no significant difference in mean importance score of SVF among the three
classes. SVF is equally important for all the three classes.
There is no significant difference in mean importance score of MMF among the three
classes. MMF is equally important for all the three classes.
4. Results of BI indicate that p-value is 0.318 which is greater than standard p-value 0.05.
Therefore F- test is accepted. Null hypothesis is accepted.
There is no significant difference in mean importance score of BI among the three
classes. BI is equally important for all the three classes.
Inference:
• There is no significant difference in mean importance score of PVF, SVF, MMF and
BI factors among the student class, service class and business class. Thus the null
hypothesis is accepted and the alternate hypothesis is rejected.
148

H03M: There exists no difference in factors influencing buying intentions of luxury
mobile phones across the student class, service class and business class.
H13M: There exists significant difference in factors influencing buying intentions of
luxury mobile phones across the student class, service class and business class
Social Role Perception Social value Marketing Buying

value factor factor mobile Mix factor Intention
mobile score score common score mobile score
Business 59.6750 64.0711 68.0370 70.4762
Service 60.1606 63.6664 66.4829 68.6953
Student 60.7283 65.1353 67.5613 66.5945
Total 60.2489 64.1460 67.0249 68.3659
• PVF is 60.24. Mean importance of PVF for Student class is 60.72, for Service class is
• SVF is 64.14. Mean importance of SVF for Student class is 65.13, for Service class is
• MMF is 67.02. Mean importance of MMF for Student class is 67.56, for Service class is
• BI is 68.36, Mean importance of BI for Student class is 66.59, for Service class is 68.69
and for Business class is 70.47
149

ANOVA
Sum of df Mean F- p-value Result

Squares Square calculated
Between Groups 83.150 2 41.575 Non-
Perception .348 .706 Significant
value factor Within Groups 82723.480 692 119.543
watches score
Total 82806.630 694
Social value 1.491 .226 Significant
factor watches Within Groups 66048.981 692 95.447
score
Total 66333.527 694
Marketing Mix 1.388 .250 Significant
score
Total 70021.220 694
Buying 1.051 .350 Significant
Intention Within Groups 372553.495 692 538.372
watches score
Total 373684.921 694
There is no significant difference in mean importance score of PVF among the three
classes. PVF is equally important for all the three classes.
150

There is no significant difference in mean importance score of SVF among the three
classes. SVF is equally important for all the three classes.
There is no significant difference in mean importance score of MMF among the three
classes. MMF is equally important for all the three classes.
There is no significant difference in mean importance score of BI among the three
classes. BI is equally important for all the three classes.
Inference:
• There is no significant difference in mean importance score of PVF, SVF, MMF and
BI factors among the student class, service class and the business class. Thus the null
151

watches across genders, among Indian youth;
H14W: There exists significant difference in factors influencing Buying Intention of
luxury watches genders, among Indian youth.
Mean
Gender Perception Social value Marketing Buying

value factor factor watches Mix factor Intention
watches score score common score watches score
Female 59.7267 61.8784 65.7758 65.3241
Male 61.4994 63.0362 67.6308 67.2161
Total 60.9204 62.6580 67.0249 66.5982
• PVF is 60.92. Mean importance of PVF for Female is 59.72, for Male is 61.49.
• SVF is 62.65. Mean importance of SVF for Female is 61.87, for Male is 63.03
• MMF is 67.02. Mean importance of MMF for Female is 65.77, Male is 67.63
• BI is 66.59, Mean importance of BI for Female is 65.32, for Male is 67.21
152

SE of Differen
Number Calculated Degree of Table
Watches Mean SD diff of ce of Result
of Resp z-value Freedom z-value
Mean Mean
Male
Perception 468 61.49 11.43
value factor Significan
0.84 1.77 2.11 693 1.96
Female t
Perception 227 59.72 9.75
value factor
Male Social
468 64.26 11.45 Non-
value factor
0.90 1.36 1.51 693 1.96 Significan
Female Social t
227 62.9 10.96
value factor
Male Market
468 67.63 9.87
Mix Factor Significan
0.82 1.86 2.26 693 1.96
Female Market t
227 65.77 10.3
Mix Factor
Male Buying
468 67.21 24.28 Non-
Intention
1.87 1.89 1.01 693 1.96 Significan
Female Buying t
227 65.32 22.39
Intention
153

Above table indicates that the z-value calculation for Male and Female respondents to test the
hypothesis
1. For PVF, the z-calculated value is 2.11 which is greater than z-table value (1.96) for 5%
level of significance. Therefore z-test is rejected and null hypothesis is rejected.
There is significant difference between mean importance scores of PVF among Male
respondents and Female respondents. Importance of PVF factor is more for male
respondents as compared to female respondents.
2. For SVF, the z-calculated value is 1.51, which is less than z-table value (1.96) for 5%
level of significance. Therefore z-test is accepted and null hypothesis is accepted.
There is no significant difference between mean importance scores of SVF among Male
respondents and Female respondents. SVF factor is equally important for male and
female respondents.
3. For MMF, the z-calculated value is 2.26 which is greater than z-table value (1.96) for 5%
There is significant difference between mean importance scores of MMF among Male
and Female respondents. Importance of MMF is more for male respondents as compare to
female respondents.
4. For BI, the z-calculated value is 1.01 which is less than z-table value (1.96) for 5% level
of significance. Therefore z-test is accepted and null hypothesis is accepted.
There is no significant difference between mean importance scores of BI among male
and female respondents. The BI is equally important male and female respondents.
154

Inference:
• There is significant difference in mean importance score of PVF and MMF factors
among the genders. Thus the null hypothesis is rejected and the alternate hypothesis
is accepted
• There is no significant difference in mean importance score of SVF and BI factors
among the genders. Thus the null hypothesis is accepted and the alternate
hypothesis is rejected.
mobile phones across genders, among Indian youth;
H14M: There exists significant difference in factors influencing Buying Intention of
luxury mobile phones across genders, among Indian youth.
Gender Perception Social value Marketing Mix Buying Int

value factor factor Mobile factor common Mobile score
Mobile score score score
Female 59.3839 63.9975 65.7758 67.2750
Male 60.6685 64.2181 67.6308 68.8950
Total 60.2489 64.1460 67.0249 68.3659
• PVF is 60.24. Mean importance of PVF for Female is 59.38, for Male is 60.66
• SVF is 64.14. Mean importance of SVF for Female is 63.99, for Male is 64.21
• MMF is 67.02. Mean importance of MMF for Female is 65.77, Male is 67.63
• BI is 68.36, Mean importance of BI for Female is 67.27, for Male is 68.89
155

Number Degree
SE of Calcul Table
of Difference of Result
Mobile Mean SD diff of ated z- z-
Respond of Mean Freedo of Test
Mean value value
ents m
Male
Perception 468 60.66 11.39
value factor Non-
0.84 1.28 1.52 693 1.96 Significa
Female nt
Perception 227 59.38 9.84
value factor
Male Social
468 64.21 9.82 Non-
value factor
0.79 0.22 0.28 693 1.96 Significa
Female Social nt
227 63.99 9.69
value factor
Male Market
468 67.63 9.87
Mix Factor
Significa
Female 0.82 1.86 2.26 693 1.96
nt
Market Mix 227 65.77 10.3
Factor
Male Buying
468 68.89 23.78
Intention Non-
Female 1.83 1.62 0.89 693 1.96 Significa
Buying 227 67.27 21.97 nt
Intention
Above table indicates that the z-value calculation for luxury Mobile phones for Male and
Female respondents to test the hypothesis
156

1. For PVF, the z-calculated value is 1.52 which is less than z-table value (1.96) for 5%
There is no significant difference between mean importance scores of PVF among Male
respondents and Female respondents. PVF is equally important for male and female
respondents
2. For SVF, the z-calculated value is 0.28, which is less than z-table value (1.96) for 5%
There is no significant difference between mean importance scores of SVF among Male
respondents and Female respondents. SVF factor is equally important for male and
female respondents.
3. For MMF, the z-calculated value is 2.26 which is greater than z-table value (1.96) for 5%
There is significant difference between mean importance scores of MMF among Male
and Female respondents. Importance of MMF is more for male respondents as compare to
female respondents.
4. For BI, the z-calculated value is 0.89 which is less than z-table value (1.96) for 5% level
of significance. Therefore z-test is accepted and null hypothesis is accepted.
There is no significant difference between mean importance scores of BI among male
and female respondents. The BI is equally important male and female respondents.
Inference:
• There is no significant difference in mean importance score of PVF, SVF and BI
factors among the genders. Thus the null hypothesis is accepted and the alternate
hypothesis is rejected.
157

• There is significant difference in mean importance score of MMF factors among the
genders. Thus the null hypothesis is rejected and the alternate hypothesis is
accepted.
The Hypothesis (H08) related to region of respondents, is divided into three parts.
In the first part of the hypothesis (H08 A) lived in during formative years is considered.
In the second part of the hypothesis (H08 B) presently living in is considered.
In the third part of the hypothesis (H08 C) native of is considered.
Statement of hypothesis is as follows:
H05Wa: There exists no difference in factors influencing Buying Intention of luxury
watches among respondents ‘ lived in’ West India, East India, South India,
North India and Central India, during their formative years
H15Wa: There exists difference in factors influencing Buying Intention of luxury watches
among respondents ‘ lived in’ West India, East India, South India, North India
and Central India, during their formative years
Mean
Lived in Perception value Social value Marketing Mix Buying Int

factor watches factor watches factor common watches score
score score score
Central 62.3906 62.2503 67.2254 65.0146
East 61.8480 63.4628 68.6661 70.7483
North 62.2715 64.0411 68.5211 65.7143
South 60.2347 62.4206 67.1812 65.5565
West 59.5739 61.4206 64.9224 66.8892
Total 60.9204 62.6580 67.0249 66.5982
158

• PVF is 60.92. Mean importance of PVF for Central India is 62.39, for East India is 61.84,
for North India is 62.27, for South India is 60.23, for West India is 59.57
• SVF is 62.65. Mean importance of SVF for Central India is 62.25, for East India is 63.46,
• MMF is 67.02. Mean importance of MMF for Central India is 67.22, for East India is
68.66, for North India is 68.52, for South India is 67.18, for West India is 64.92
• BI is 66.59, Mean importance of BI for Central India is 65.01, for East India is 70.74, for
North India is 65.71, for South India is 65.55, for West India is 66.88
159

ANOVA
Sum of df Mean F- Sig. Result


Perception 2.061 .084 signific
ant
watches score
Total 83051.675 694

Social value 1.787 .130 signific
factor_ Within Groups 72719.154 690 105.390
ant
watches score
Total 73472.455 694
Between Groups 1592.382 4 398.095 Signific

Marketing Mix 4.014 .003 ant
score
Total 70021.220 694

Buying Int .850 .494 signific
Within Groups 387384.616 690 561.427
watches _score ant
Total 389293.789 694
There is no significant difference in mean importance score of PVF among youth who
lived in different regions of India during their formative years. PVF is equally important
to all them.
There is no significant difference in mean importance score of SVF among youth who
lived in different regions of India during their formative years. SVF is equally important
to all them.
160

3. Results of MMF factors indicate that p-value is 0.003 which is less than standard p-value
0.05. Therefore F- test is rejected. Null hypothesis is rejected
There is significant difference in mean importance score of MMF among youth who lived
in different regions of India during their formative years. MMF is more important for
youth who lived in East and North of India followed by Central and South of India. MMF
is of least importance to youth who lived in the West of India.
There is no significant difference in mean importance score of BI among youth who lived
in different regions of India during their formative years. BI is equally important to all
them.
Inference:
factors among the youth who lived in the different zones of India during their
formative years. Thus the null hypothesis is accepted and the alternate hypothesis is
rejected.
youth who lived in the different zones of India during their formative years. Thus
the null hypothesis is rejected and the alternate hypothesis is accepted.
161

H05Wb: There exists no difference in factors influencing Buying Intention of luxury
watches among respondents presently living in West India, East India, South
India, North India and Central India.
H15Wb: There exists difference in factors influencing Buying Intention of luxury watches
among respondents presently living in West India, East India, South India,
North India and Central India.
Mean
Living in Perception Social value Marketing Buying Int

value factor factor watches Mix factor watches score
watches score score common score
Central 59.5330 61.8667 66.1309 66.5584
East 62.4337 65.7034 71.8066 74.9206
North 63.0952 64.7134 69.3323 66.5620
South 59.6047 62.2182 66.8772 65.8683
West 60.9629 62.0378 65.9871 65.8867
Total 60.9204 62.6580 67.0249 66.5982
for North India is 64.71, for South India is 62.21, for West India is 62.03.
162

ANOVA
Sum of df Mean Square F Sig. Result
Squares
Non-
Between Groups 907.867 4 226.967 1.906 .108 significan
Perception value
t
factor watches
score Within Groups 82143.808 690 119.049
Total 83051.675 694
Significa
Between Groups 995.500 4 248.875 2.369 .051
Social value nt
factor_ watches
Within Groups 72476.955 690 105.039
score
Total 73472.455 694
Significa
Between Groups 1926.989 4 481.747 4.882 .001
Marketing Mix nt
factor common
Within Groups 68094.232 690 98.687
score
Total 70021.220 694
Non-
Between Groups 3382.168 4 845.542 1.512 .197 significan
t
Buying Int
385911.62
watches _score Within Groups 690 559.292
1
389293.78
Total 694
9
There is no significant difference in mean importance score of PVF among youth who are
presently living in different regions of India. PVF is equally important to all them.
2. Results of SVF factors indicate that p-value is 0.051 which is just equal to than standard
p-value 0.05. Therefore F- test is rejected. Null hypothesis is rejected
163

There is marginal significant difference in mean importance score of SVF among youth
who are presently living in different regions of India SVF is more important for youth
who are presently living in East and closely followed by North of India. Then comes
South and West of India. SVF is of least importance to youth who are presently living in
Central part of India.
There is significant difference in mean importance score of MMF among youth who are
presently living in different regions of India. MMF is more important for youth who are
presently living in East of India and then followed by North of India. Then it is followed
by Central and South of India. MMF is of least importance to youth who are living in the
West of India.
Inference:
• There is significant difference in mean importance score of SVF and MMF
factors among the youth who are presently living in the different zones of India.
Thus the null hypothesis is rejected and the alternate hypothesis is accepted.
• There is no significant difference in mean importance score of PVF and BI
Thus the null hypothesis is accepted and the alternate hypothesis is rejected.
H05Wc: There exists no difference in factors influencing Buying Intention of luxury
watches among respondents who are natives of West India, East India, South
164

H15Wc: There exists difference in factors influencing Buying Intention of luxury watches
among respondents who are natives of West India, East India, South India,
Mean
Nativity Perception Social value Marketing Mix Buying Int

value factor factor watches factor common watches score
watches score score score
Central 62.5723 63.8920 66.4691 63.0662
East 63.2173 64.5434 69.9921 72.7106
North 62.5513 63.6966 68.5858 66.6425
South 60.0764 62.2055 66.5296 65.0718
West 58.6158 60.8481 64.5978 66.4706
Total 60.9204 62.6580 67.0249 66.5982
• PVF is 60.92. Mean importance of PVF for Central India is 62,57, for East India is 63.21,
165

ANOVA
Sum of df Mean Square F p-value Result
Squares
Between Groups 2099.154 4 524.789 Significa

Behavioral_Fact 4.473 .001 nt
or__watches_sc Within Groups 80952.521 690 117.322
ore
Total 83051.675 694

Social_factor__ 2.747 .027 nt
Within Groups 72320.617 690 104.812
watches_score
Total 73472.455 694

Market_Mix__c 5.680 .000 nt
Within Groups 67789.182 690 98.245
ommon_score
Total 70021.220 694

Buying_Int_wat 1.753 .137 Significa
Within Groups 385377.978 690 558.519
ches_score nt
Total 389293.789 694
166

There is significant difference in mean importance score of PVF among youth who are
natives of different regions of India. PVF is more important for youth who are natives of
East of India and then followed by North and Central India, and then followed by South
of India. PVF is of least importance to youth who are living in the West of India.
2. Results of SVF factors indicate that p-value is 0.027 which is less than standard p-value
There is significant difference in mean importance score of SVF among youth who are
natives of different regions of India SVF is more important for youth who are natives of
East of India and then followed by North and Central India, and then followed by South
of India. SVF is of least importance to youth who are living in the West of India.
natives of different regions of India. MMF is more important for youth who are presently
living in East of India and then followed by North of India. Then it is followed by Central
and South of India. MMF is of least importance to youth who are living in the West of
India.
There is no significant difference in mean importance score of BI among youth who are
natives of different regions of India. BI is equally important to all them.
167

Inference:
• There is significant difference in mean importance score of PVF, SVF and MMF
factors among the youth who are natives of the different zones of India. Thus the
null hypothesis is rejected and the alternate hypothesis is accepted.
• There is no significant difference in mean importance score of BI factors among the
youth who are natives of the different zones of India. Thus the null hypothesis is
accepted and the alternate hypothesis is rejected.
H05Ma: There exists no difference in factors influencing Buying Intention of luxury
mobile phones among respondents who lived in West India, East India, South
H15Ma: There exists difference in factors influencing Buying Intention of luxury mobile
phones among respondents who lived in West India, East India, South India,
North India and Central India, during their formative years
Mean
Lived in Perception Social value Marketing Mix Buying Int
value factor factor mobile factor common mobile score
mobile score score score
Central 61.6941 63.8460 67.2254 68.8047

East 61.4985 65.5312 68.6661 71.5986
North 61.7309 64.8426 68.5211 66.6409
South 59.2099 63.5754 67.1812 67.0465
West 58.9378 63.5035 64.9224 69.4927
Total 60.2489 64.1460 67.0249 68.3659
168

• BI is 68.36. Mean importance of BI for Central India is 68.80, for East India is 71.59, for
169

ANOVA
Sum of df Mean F- p-value Result

Between Groups 1183.690 4 295.922 Significant

Perception 2.502 .041
watches score
Total 82806.630 694

Social value 1.038 .387 significant
factor_ watches Within Groups 65936.736 690 95.560
score
Total 66333.527 694
Between Groups 1592.382 4 398.095 Significant

score
Total 70021.220 694

.925 .449 significant
Buying Int
Within Groups 371691.699 690 538.684
watches _score
Total 373684.921 694
0.05. Therefore F- test is rejected. Null hypothesis is rejected.
There is significant difference in mean importance score of PVF among youth who lived
in different regions of India during their formative years. PVF is more important for
youth who lived in North, Central and East of India followed by South of India. PVF is
of least importance to youth who lived in the West of India.
170

There is no significant difference in mean importance score of SVF among youth who
lived in different regions of India during their formative years. SVF is equally important
to all them.
There is significant difference in mean importance score of MMF among youth who lived
in different regions of India during their formative years. MMF is more important for
youth who lived in East and North of India followed by Central and South of India. MMF
is of least importance to youth who lived in the West of India.
There is no significant difference in mean importance score of BI among youth who lived
in different regions of India during their formative years. BI is equally important to all
them.
Inference:
• There is no significant difference in mean importance score of PVF and MMF
factors among the youth who lived in the different zones of India during their
formative years. Thus the null hypothesis is rejected and the alternate hypothesis is
accepted
• There is significant difference in mean importance score of SVF and BI factors
among the youth who lived in the different zones of India during their formative
years. Thus the null hypothesis is accepted and the alternate hypothesis is rejected.
171

H05Mb: There exists no difference in factors influencing Buying Intention of luxury
phones among respondents presently living in West India, East India, South India,
H15Mb: There exists difference in factors influencing Buying Intention of luxury mobile
Mean
Living_in Perception Social value Marketing Buying Int
value factor factor mobile Mix factor mobile score
mobile score score common score
Central 59.4880 62.6411 66.1309 67.5325
East 62.4780 67.1993 71.8066 75.5556
North 62.3756 65.2892 69.3323 65.6201
South 59.2198 63.8181 66.8772 68.9478
West 59.9947 63.7999 65.9871 67.9803
Total 60.2489 64.1460 67.0249 68.3659
• BI is 68.36. Mean importance of BI for Central India is 67.53, for East India is 75.55, for
North India is 65.62, for South India is 68.94, for West India is 67.98.
172

ANOVA
Sum of df Mean F p-value Result
Squares Square
Perception Between Groups 860.025 4 215.006 Non-significant
1.810 .125
watches score Total 82806.630 694
Social value Between Groups 697.742 4 174.435 Non-significant
1.834 .121
factor_ Within Groups 65635.785 690 95.124
Marketing Between Groups 1926.989 4 481.747 Significant
4.882 .001
Mix factor Within Groups 68094.232 690 98.687
common score Total 70021.220 694
Buying Int Between Groups 3151.050 4 787.762 Non-significant
1.467 .211
watches Within Groups 370533.872 690 537.006
_score Total 373684.921 694
There is no significant difference in mean importance score of PVF among youth who are
presently living in different regions of India. PVF is equally important to all them.
173

There is no significant difference in mean importance score of SVF among youth who are
presently living in different regions of India. SVF is equally important to all them.
presently living in different regions of India. MMF is more important for youth who are
presently living in East of India and then followed by North of India. Then it is followed
by Central and South of India. MMF is of least importance to youth who are living in the
West of India.
presently living in different regions of India. BI is equally important to all them.
Inference:
youth who are presently living in the different zones of India. Thus the null
hypothesis is rejected and the alternate hypothesis is accepted.
Thus the null hypothesis is accepted and the alternate hypothesis is rejected.
174

H05Mc: There exists no difference in factors influencing Buying Intention of luxury
mobile phones among respondents who are natives of West India, East India,
South India, North India and Central India.
H15Mc: There exists difference in factors influencing Buying Intention of luxury mobile
phones among respondents who are natives of West India, East India, South
Mean
Nativity Perception Social value Marketing Buying Int
value factor factor mobile Mix factor mobile score
Central 62.0304 65.2977 66.4691 65.1568
East 63.0241 66.4624 69.9921 73.9927
North 61.8342 64.6837 68.5858 67.7302
South 59.1081 63.4904 66.5296 66.4388
West 58.1115 62.9885 64.5978 69.6639
Total 60.2489 64.1460 67.0249 68.3659
175

ANOVA
Perception Between Groups 2274.556 4 568.639 Significant
4.872 .001
mobile score Total 82806.630 694
Social value Between Groups 847.487 4 211.872 Non-
2.232 .064
factor mobile Within Groups 65486.040 690 94.907 significant
score Total 66333.527 694
Marketing Between Groups 2232.039 4 558.010 Significant
5.680 .000
Mix factor Within Groups 67789.182 690 98.245
common
Total 70021.220 694
score
Buying Int 1.882 .112
mobile score
Total 373684.921 694
0.05. Therefore F- test is rejected. Null hypothesis is rejected There is significant
difference in mean importance score of PVF among youth who are natives of different
regions of India. PVF is more important for youth who are natives of East of India and
176

then followed by Central India, then North India, followed by South of India. PVF is of
least importance to youth who are natives of West of India.
There is no significant difference in mean importance score of SVF among youth who are
natives of different regions of India. SVF is equally important to all them.
natives of different regions of India. MMF is more important for youth who are presently
living in East of India and then followed by North of India. Then it is followed by Central
and South of India. MMF is of least importance to youth who are natives of West of
India.
natives of different regions of India. BI is equally important to all them.
177

Inference:
• There is significant difference in mean importance score of PVF and MMF factors
among the youth who are natives of the different zones of India. Thus the null
hypothesis is rejected and the alternate hypothesis is accepted.
• There is no significant difference in mean importance score of SVF and BI factors
among the youth who are natives of the different zones of India. Thus the null
watches among Indian youth who are employed, those doing their post
H16W: There exists difference in factors influencing Buying Intention of luxury watches
among Indian youth who are employed, those doing their post graduation and
those doing their graduation.
Mean
Qual Perception Social value Marketing Buying Int
Employed 60.5203 62.2149 66.7554 67.2721
Doing Post- Graduation 61.7207 63.6188 67.6793 65.9117
Doing Graduation 60.0895 61.2801 65.7560 63.9286
Total 60.9204 62.6580 67.0249 66.5982
• PVF is 60.92. Mean importance of PVF for those employed is 60.52, for those doing post
graduation is 61.72, and those doing graduation is 60.08,
178

• SVF is 62.65. Mean importance of SVF for those employed is 62.21, for those doing post
graduation is 63.61 and for those doing graduation is 61.28,
• MMF is 67.02. Mean importance of MMF for those employed is 66.75, those doing post
graduation is 67.67, and for those doing graduation is 65.75,
• BI is 66.59. Mean importance of BI for those employed is 67.27, those doing post
graduation is 65.91 and for those doing graduation is 63.92,
179

ANOVA
Sum of df Mean F p- Result

Squares Square value
Perception value Between Groups 250.659 2 125.329 Non-
1.047 .351
factor watches Within Groups 82801.016 692 119.655 Significa
score Total 83051.675 694 nt
1.815 .164
factor watches Within Groups 73089.102 692 105.620 Significa
Marketing Mix Between Groups 199.471 2 99.735 Non-
.988 .373
factor common Within Groups 69821.750 692 100.898 Significa
Buying Int .522 .593
Within Groups 388707.048 692 561.715 Significa
watches score
Total 389293.789 694 nt
employed, those doing graduation and those doing post graduation.
Conclusion: There is no significant difference in mean importance score of MMF among
youth who employed, those doing graduation and those doing post graduation.
180

There is no significant difference in mean importance score of MMF among youth who
Inference:
• There is no significant difference in mean importance score of PVF, SVF MMF and
BI factors among the youth who are employed, doing post graduation and those
doing graduation. Thus the null hypothesis is accepted and the alternate hypothesis
is rejected.
mobile phones among Indian youth who are employed, those doing their post
H16M: There exists difference in factors influencing Buying Intention of luxury mobile
phones among Indian youth who are employed, those doing their post
Mean
Perception Social value Marketing Buying Int
value factor factor Mobile Mix factor Mobile score1
Mobile score score common score
Employed 59.9876 63.5483 66.7554 69.1582
Doing Post- Graduation 60.5657 64.9909 67.6793 67.5377
Doing Graduation 60.9722 65.0618 65.7560 65.3571
Total 60.2489 64.1460 67.0249 68.3659
• PVF is 60.24. Mean importance of PVF for those employed is 59.98, those doing post
graduation is 60.56, and for those doing graduation is 60.97,
• SVF is 64.14. Mean importance of SVF for those employed is 63.54, those doing post
graduation are 64.99, and for those doing graduation is 65.06.
181

• MMF is 67.02. Mean importance of MMF for those employed is 66.75, those doing post
• BI is 68.36. Mean importance of BI for those employed is 69.15, those doing post
ANOVA
Sum of df Mean F Sig. Result

Squares Square
Perception value Between Groups 73.537 2 36.768 Non-
0.308 0.735
factor Mobile Within Groups 82733.093 692 119.556 Significant
1.863 0.156
factor Mobile Within Groups 65978.247 692 95.344 Significant
0.988 0.373
factor common Within Groups 69821.750 692 100.898 Significant
Buying Int 0.731 0.482
Within Groups 372897.339 692 538.869 Significant
Mobile score
Total 373684.921 694
182

Inference:
BI factors among the youth who are employed, doing post graduation and those
doing graduation. Thus the null hypothesis is accepted and the alternate hypothesis
is rejected.
183

H07W: There exists no difference in factors influencing buying intentions of luxury
watches across different income groups.
H17W: There exists significant difference in factors influencing buying intentions of
luxury watches across different income groups.
Mean
Monthly Income Perception Social value Marketing Buying Int
More than 5 lacs 60.1837 62.2788 66.9895 66.9388
Two to Five lacs 61.7124 63.3857 67.6030 66.2508
Below 1 lac 60.7402 62.3134 66.5913 66.6667
Total 60.9204 62.6580 67.0249 66.5982
• PVF is 60.92. Mean importance of PVF for income below 1 lakh is 60.74, for income
between 2 to 5 lakhs is 61.71, and for income more than 5 lakhs is 60.18,
• SVF is 62.65. Mean importance of SVF for income below 1 lakh is 62.31, for income
between 2 to 5 lakhs is 63.38, and for income more than 5 lakhs is 62.27.
• MMF is 66.59. Mean importance of MMF for income below 1 lakh is 66.59, for income
between 2 to 5 lakhs is 67.60, and for income more than 5 lakhs is 66.98
• BI is 66.59. Mean importance of BI for income below 1 lakh is 66.66, for income
between 2 to 5 lakhs is 66.25, and for income more than 5 lakhs is 66.93.
184

ANOVA

Perception Between Groups 248.082 2 124.041 Non-
1.037 .355
value factor Within Groups 82803.593 692 119.658 significant
.854 .426
factor_ Within Groups 73291.473 692 105.913 significant
.651 .522
factor common Within Groups 69889.753 692 100.997 significant
watches _score
Total 389293.789 694
There is no significant difference in mean importance score of PVF among different
income groups.
185

There is no significant difference in mean importance score of SVF among different

income groups.
There is no significant difference in mean importance score of MMF among different
income groups.
There is no significant difference in mean importance score of BI among different income

groups.
Inference:
BI factors across different income groups. Thus the null hypothesis is accepted and
the alternate hypothesis is rejected.
H07M: There exists no difference in factors influencing buying intentions of luxury
mobile phones across different income groups.
H17M: There exists significant difference in factors influencing buying intentions of
luxury mobile phones across different income groups.
186

Mean
Monthly income Perception Social value Marketing Buying Int

(in Rs.) value factor factor mobile Mix factor mobile score
More than 5 lacs 59.2064 63.6940 66.9895 69.7143
Two to Five lacs 60.9638 64.7373 67.6030 67.3113
Below 1 lac 60.3133 63.9526 66.5913 68.3849
Total 60.2489 64.1460 67.0249 68.3659
• PVF is 60.24. Mean importance of PVF for income below 1 lakh is 60.31, for income
more than 5 lakhs is 59.20, and for income between 2 to 5 lakhs is 60.96
• SVF is 64.14. Mean importance of SVF for income below 1 lakh is 63.95, for income
• MMF is 67.02. Mean importance of MMF for income below 1 lakh is 66.59, for income
• BI is 68.36. Mean importance of BI for income below 1 lakh is 68.38, for income more
than 5 lakhs is 69.71, and for income between 2 to 5 lakhs is 67.3.
187

ANOVA

Perception Between Groups 308.457 2 154.228 Non-
1.294 .275
value factor Within Groups 82498.173 692 119.217 significant
mobiles score Total 82806.630 694
.662 .516
factor_ Within Groups 66206.827 692 95.675 significant
mobiles score Total 66333.527 694
Marketing Between Groups 131.468 2 65.734 Non-
.651 .522
Mix factor Within Groups 69889.753 692 100.997 significant
common score Total 70021.220 694
mobiles score
Total 373684.921 694
There is no significant difference in mean importance score of PVF among different
income groups.
188

There is no significant difference in mean importance score of SVF among different
income groups.
There is no significant difference in mean importance score of MMF among different
income groups.
There is no significant difference in mean importance score of BI among different income
groups.
Inference:
BI factors across different income groups. Thus the null hypothesis is accepted and
the alternate hypothesis is rejected.
189

Chapter 9 -Discussion with Marketers and Experts of Luxury Products
Overview
1. Mr Umesh Dhand was the head of Luxury Products including Cosmetics &
fragrances, watches, sunglasses, writing instruments, mobiles and jewellery
at Shoppers Stop Ltd. Shoppers Stop is India’s leading departmental store.
Presently he is a Retail Management Consultant.
2. Mr. Biju Anthony is the General Manager with Intercraft Tading Pvt. Ltd.-
Dealers in Luxury Fragrances, Colour Cosmetics and Skin Care products.
3. Mr Mohan Mariwala - Managing Director of Auto Hanger (India) Pvt. Ltd -
Dealers for Mercedes Benz (passenger cars) and Lamborghini.
4. Ms Lulu Raghavan - Managing Director of Landor Associates
Landor Associates is an international Brand Management company, which is
a multidisciplinary, full-service consultancy providing branding, design, and
digital services.
190

Chapter 9
Discussion with Marketers and Experts of Luxury Products
Mr Umesh Dhand was the head of Luxury Products including Cosmetics & fragrances,
watches, sunglasses, writing instruments, mobiles and jewellery at Shoppers Stop Ltd.
Shoppers Stop is India’s leading departmental store. At Shoppers Stop, Umesh Dhand
was instrumental in bringing & launching many of the international cosmetic brands
across product categories.
Now he is a Retail Management Consultant to many of the big retail houses.
He says there is a major shift in the attitude of the Indians especially the youth segment. The
urge to spend on luxury or premium products has gone up. The demand is especially high in
Luxury fashion products like jewellery, watches, sunglasses, ladies hand bags, mobile
phones, fragrances and cosmetics, as they are relatively low ticket items. The other segments
like the Luxury automobiles and Luxury estates and services are not far behind.
He owes this shift to the rise in the income level, media influence, international travel, the
popularity of Bollywood and Hollywood movies and a desire to emulate the celebrities and
sports stars who endorse these products. Many international brands have entered India and
many more are eyeing it, as they realise that India holds a huge appetite for Luxury products.
Product Development
According to him the most important aspect which the luxury companies need to keep in
mind is developing the product. He shares that, even though there is a lot of demand for
international luxury brands, an Indian is always an Indian at heart, who is proud of his origin.
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They like to have an Indian flavour to their product. They feel a sense of historical and
geographical belonging. Many of the international players have sensed this sensitivity and
have launched India inspired product lines/ designs. Brands like Cartier launched their
‘IndeMystérieuse’ collection, which was inspired by Indian heritage contained motif taken
from Taj Mahal. Tigers and peacocks were the integral part of their collection. Lladro, the
Swiss porcelain brand, has come up with the season’s offering, a statue of goddess Lakshmi.
The limited edition piece follows the Ganeshas, Rama Sita, Radha Krishna, Lord Krishna,
Sacred Cow and Nataraja, all part of its Spirit of India collection. Forest Essentials is another
company who has used Ayurveda as a base, again rooting it to culture. Canali, one of the
most reputed Italian brands has come up with the very Indian ‘bandh gala’ coats. French
brand Hermes launched a limited range of the Indian Sari. Mirror work on footwear in the
traditional Indian style can also be seen on some international footwear brands.
Going to the Market:
Mr Dhand says when a customer buys a luxury product; he does not only pay for the product
but pays for the entire shopping experience. While shopping for cosmetics and skin care, the
customer appreciates if they are given a chance to try out the products in the form of samples,
in store makeovers, tips on using the products. Several brands like Clarins and Shiseido have
used this strategy very effectively. According to him the location of the store, the ambience,
the lighting and the staff catering to him are all very crucial. A Luxury customer wants to feel
pampered when he enters the store. The customer pays not only for the product but for the
entire experience. Thus it is very important for luxury companies to create this aura of
shopping. Another very important factor which a luxury customer is particular about is the
sales staffs who serve them in the store. They look for knowledgeable staff who can present
them the product, the features, benefits and most importantly walk them through the unique
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aspects of the offering (brand & product). Apart from knowledge they look for polish and
finesse in the sales staff.
Post Purchase Relationship
Mr Dhand says that luxury customers world -wide wants to be serviced personally both
during the process of buying and also post purchase. He says that it is very important to keep
the customer happy, because that would lead to repeat purchase and also a good word of
mouth advertisement for the brand. So it is very important to have a continuity of relationship
post transaction. A special invite to their new launches and events, or specialised greetings on
birthdays and anniversaries, or an invitation to join their ‘exclusive member club’ would give
the customer the feeling of exclusivity and of belonging.
Challenges faced by International Luxury Brands in India:
1. Infrastructure constraint and Online options Availability of high end retail space for
retailers to set shop in India is a major concern. Apart from that the rental costs are sky
rocketing in India and thus the only option is that to set stores in five star hotels. To
combat this issue many international players are entering India.
2. Internet retailing is going to be a strong force in the Indian luxury market. Many
luxury e-tailers like Net-a-porter.com, Qvendo.com, Revolveclothing.com,
milanstyle.co.uk have started shipping to India. Besides many luxury retailers and brands
like Macy’s, Bloomigdales, Nieman Marcus, and Burberry have started shipping to India
thus creating a foothold in the Indian luxury market.
3. Trained Sales force: It requires huge investment for training the staff to meet the
international standards of service, etiquette and product knowledge.
4. Price Challenge: The present luxury consumers are mostly the nouveau riche, means
those have suddenly become rich. For this segment, price may not appear to be a
constraint, but yet they look out for bargains and discounts in this category. They also
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look for exclusivity and value. Many luxury brands like Burberry, Chanel and Moet
Hennessy have started introducing new entry price points especially for India.
The taxes and government policy is not friendly to the international luxury brands, which
ultimately affects the end user. Hence a lot of shopping for luxury products happens
abroad (Middle-east, South East Asia or Europe) at the cost of luxury players present in
India.
5. Another problem is the presence of unscrupulous middle men or intermediaries who run
an unauthorized or parallel trade hurting the interests of luxury shoppers & luxury brands
in India.
Mr Dhand concluded by saying that in spite of all these constraints the international
brands are eyeing India and are waiting to make a dash into the Indian market.
Mr. Biju Anthony – General Manager Intercraft Trading Pvt. Ltd.
Intercraft trading are dealers of luxury Fragrances, skin care products and Colour cosmetics.
Some of the brands that Intercraft deals in are Bourjois , Ferrari, Elizabeth Arden, FCUK ,
Issey Miyake, Dolce And Gabbana, Versace, Boucheron , Jacques Bogart, Prada Perfume
dealers.Burberry Beauty Product Dealers, Clarins, Aigner Skin Care Product Dealers YSL
Cosmetic Dealers, Valentino Cosmetic Dealers , Bebe Beauty Product Dealers. They supply
to all the top retailers like Shopper’s Stop, lifestyle, Reliance and more.
Mr Anthony is an expert in the luxury cosmetic and fragrance business. He shared his
experience and the insights of the luxury fashion products industry in depth. This added
immense value to the study.
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Shift in the attitude of the youth towards fragrances and cosmetics:
Mr Biju Anthony said there is a drastic shift in the attitude of the youth towards buying
luxury cosmetics and fragrances. Even though the youth segment between 18 to 25 years,
may not be earning, but the aspiration level for this segment is very high, compared to the
older generation. He attributes these aspirations to two factors: The brand influence and the
brand ambassadors. People who endorse such products have a huge influence on the younger
generation. In colour cosmetics, also this age group is growing fast, compared to 10 years ago
where only women over 40 years of age would look at cosmetics, as they were the ones who
had the money to buy. In skin care, people believed one needs to be 45- 50 years of age to
even consider an anti ageing cream, as the mind set was that one needed to look at these
products only when one was older, but now there is a shift in the attitude of the 18 to 25
years. This segment is growing; they do not buy ageing creams but buy age delaying creams.
They have money, today youngsters at the age of 21 yrs are earning well and consume these
expensive products, and have the same consuming power as that of a 40 year old. Their
interest levels and aspiration levels are very high.
Influencing Factors
According to him the Indian youth are much more aware of these products than their previous
generation. The influencing factors are peer pressure, social recognition, wanting to show off
guaranteed quality, and long lasting usage. However the present youth are not interested in
buying anything to last them lifelong, because they soon get bored with it. So the factors that
drive them are aspirations, snob value, social recognition and peer pressure and belonging.
Gender:
In terms of gender, he said that in this age group the women spend a lot more on these
products than men, because there are more avenues for a women compared to men. They can
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spend on colour cosmetics, skin care, fragrances, bags, shoes apparels etc whereas the men
have limited options in this category. Men can buy fragrances, may be apparels or shoes.
Indian consumers, both men and women look for value, while buying luxury products,
because the mentality is that the ‘more I spend the more value I must get’ He said they seek
discounts and seek better deals. As discounts in luxury products are not encouraged, ‘a gift
with purchase’ is given to them. Both men and women are fond of gift with purchase, but the
women are hard bargainers.
Loyalty to brands
Anything over Rs 4000 for a fragrance is considered as luxury. With taxes going up and the
rupee depreciating, the cost of fragrances have gone up, many of the Indians don’t buy
because the price puts them off. In colour cosmetics and skin care there is brand loyalty, they
would stick to a brand even if it gets expensive but in fragrances there is no loyalty. They
shift to a different brand. They do not mind experimenting, because they have a huge choice
of brands in India. The moment the price goes up; they would try and explore other options.
This shows that the Indian consumers are very price sensitive. On the other hand, with skin
care they are more loyal to a brand, because once they get good response; they do not want to
shift. They are also not sure how the new skin care in the market, would react with their skin
and thus will not shift out for a very long time. In case of colour cosmetics, there is lot of
experimentation, and there is no loyalty.
Challenges
It is getting more and more competitive for all the brands. There are many challenges faced
by the brands. They need to constantly be innovating, bringing in something new all the time.
Previously there used to be one launch in a year, but now there is almost one launch every
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three months. Some of them even launch every month. This is because they need to keep the
customer engaged all the time. The youth keep looking for newness all the time. If no
innovations are added to the product then the brands fall out.
Celebrity endorsements
Celebrity endorsements have worked very well in colour cosmetics. There might not be a
single colour cosmetic brand which has worked well without a celebrity endorsement. At the
same time celebrity brands have not worked for fragrances in India. Celebrity fragrances
might have worked in their country where they are popular but have not really worked in
other countries especially India.
E-commerce in India:
Mr Anthony acknowledges that in spite of e commerce picking up in India, they have not yet
started selling through their own sites. This is because, e commerce in India is difficult as one
cannot air or ship fragrances because they contain alcohol. He said that e commerce is pretty
large in the country, and there are large players like Flipkart, Amazon. E bay but most of the
products do not come from official wholesalers but instead come from parallel or grey
markets.
Challenges with the grey market
Mr Anthony referred India as a ‘big tariff market’ because the duties are high. There is huge
scope for grey market and parallel market supplies, and that they have learnt to live with it.
Though government is taking the right step towards curbing it, but with corruption prevalent
in the country this grey or parallel market still exists The only positive thing is that the large
retailers like Shopper’s Stop, lifestyle or Reliance pick up only from official distributors,
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even though they could have made 5 times more money if they had bought form the parallel
market. They are happy, and thus Intercraft are concentrating on developing theses retailers.
Indianising products
On Indianising products, he said that there was a time when everything oriental was mystical
to the west. because they found it interesting. The Indian story globally is very mysterious.
The Indian youth don’t want to have anything that they have grown up with, simply because
they are looking at exploring something different and want to be associated with something
else. Hence they want the ‘western flavour’ in all their products in the purest form.
Different choices in different regions
Choice of the fragrance varies from region to region. The North prefers loud woody musky
fragrance, the choice of the people from the east are also similar to that of the North. This is
because, the majority of the population in the east who indulge in luxury are all Marwaris
settled in Kolkata. The South prefers more of floral fragrance, the Central zone like Nagpur,
Bhopal, Indore, have lots of money but they are not flashy like the North but are rather subtle
like the South, Mumbai and West of India prefer very light and rich fragrance.
Marketing Strategies:
Mr Anthony is of the opinion that the marketing strategies should be customised and the
messages should communicate differently in different zones. In India, every zone is like a
different market, communication and marketing strategies should be tailor made. This is not
happening because the brands decide their own messages, as they do not want to dilute their
brand image. Thus the messages and communications are standardized across the world. Mr
Anthony feels that if they are given choice of crafting the marketing strategies and
communications, then he would definitely go in for customizing the strategies zone wise in
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India. He feels by doing this he would be able to connect with the consumers better and more
effectively.
Mr Mohan Mariwala - Managing Director of Auto Hanger (India) Pvt. Ltd
Dealers for Mercedes Benz (passenger cars) and Lamborghini.
Mr Mariwala is an expert in the luxury automobile segment. His experience through his
interactions with the high end consumers and his insights on the luxury auto segment has
added immense value to the study. He shared his opinion about the changing trends in the
consumer behaviour, the role of the youth who are strong influencers, the attitude of people
towards luxury in different regions of the country, and the challenges faced by them were all
captured in this discussion.
An excerpt of the discussion the researcher had with Mr Mariwala:
Changing Patterns:
According to Mr Mariwala, the consumer behaviour pattern has changed tremendously in the
country. He says a few years ago the segment which bought the super luxury cars were
typically 50-52 years old, but today that age has dropped drastically to 40 -45 years. Mind
sets have changed, Attitude towards spending on luxury has changed completely with the
youngsters. Earlier men would come with their wives and small children and look for
utilitarian benefits, like more leg space, manoeuvrability, which would give them value for
money, but today things have changed. The family walks in with grown up children who
influence the decision. The decisions are based on being associated with winning brands
rather than the utilitarian benefits.
This shift he owes to, high level of awareness, frequent international travel, social media,
increasing incomes and a shift of attitude towards spending on luxury.
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Different Markets
In this section he talks about the different attitude of consumers in different regions.
Central India
Raipur
Raipur is one city which is coming out of its traditional culture. It is a newly created state,
and the euphoria of a new city is high, they are a homogenous group with less cultural
differences. They are now splurging on luxury, and the urge to show off is very obvious and
high, they seem to be in a rush to buy luxury. It is a very potential market for luxury products,
and if the marketers and companies use the right marketing strategies, they would be able to
exploit this market, which is waiting to be tapped.
Nagpur
According to Mr Mariwala, this is one market which has seen a major shift. This is a city has
lots of traditional wealth, but the older generation was resistant to splurging on luxury and
showing off, but which is changing completely now. Most of the affluent families have
bought homes outside Nagpur, in places like Mumbai. They travel abroad for vacations, most
of the children are sent abroad to study. These youngsters come back with a totally different
attitude towards spending, but he says that still there is a lot of value systems maintained in
Nagpur. Mumbai according to him is highly evolved, very youth driven, extremely well
researched, depends on what kind of positioning appeal that is created by the manufacturers,
like to be associated with brand which is on a winning curve, completely media driven, the
positive picture given by the media has immediate effect compared to the negative report.
Even when Mercedes was slipping down, families would walk in, but might go to
competition due to youth influence.
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North India
According to him, Delhi is completely a different market. Here the attitude towards spending
on luxury is very high, but the reasons for buying luxury are totally different from the rest of
the country. The decision to buy luxury is totally dependent on the society and peer group.
Whether they can afford it or not, they would find some means to buy them. The consumers
from this region would always want to outdo their neighbours. They would buy the most
super luxury cars, not because they find a value for it but more because they want to prove
their supremacy over the others in their circle. The consumers in this segment have always
been or flamboyant and flashy.
East India
According to Mr Mariwala, East is changing very fast. He said that his friend has set up a
Mercedes show room in Kolkata, and he finds a drastic shift in the attitude towards spending
on luxury. He says that, post independence, people in the east spent their lives in a state of
deprivation, in spite of possessing huge traditional wealth. The prevalence of communism
and the philosophy of ‘high thinking and simple living’ made this region very tolerant. But
now the things are changing rapidly. With the high degree of literacy, and awareness the
young working class have started feeling that this is not the kind of standard of living they
would want to continue. With the desire soaring high, and the changed mindset of the newer
generation there is bound to be a fillip in the luxury market. Even though there is a nascent
recovery in the luxury market, this region seems to be coming back with a vengeance. The
youth are out to make a statement that they have ‘arrived’
Along with Kolkata, the states of Meghalaya and Tripura are also showing signs of positive
attitude towards luxury. This is because; the north east is also very hungry to improve their
standard of living. The youth here are highly educated, who have taken up jobs in cities like
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Mumbai, Kolkata, Delhi and all the money is remitted back to their state, leading to
considerable increase in spending on luxury.
South India
Bangalore, Chennai, Hyderabad and Kerala.
There is high literacy in the states of South. According to Mr Mariwala, it is very easy to deal
with the consumers from the south. He says, here the youth knows exactly what they want,
they are highly informative and similar to the youth from the west, they do in depth research
on the products they want to buy. They are well travelled and only venture into those luxury
items which they can afford. Unlike their counterparts in the North, they would not buy a
product to show off to their peer group, but instead would look at the value which the product
would give them.
West India
Gujarat
According to Mr Mariwala, the consumers in Gujarat are very different to those from
Mumbai. They are more flamboyant and at the same time seek value for money. There is lot
of money with the individuals in this state, and they do not shirk from spending on luxury
without feeling guilty. The difference between Delhi and Gujarat is that, consumers in Delhi
indulge in luxury not for themselves but to show the world, whereas the consumers in Gujarat
buys luxury to show off but also seeks value in their products.
Mumbai
According to Mr Mariwala, Mumbai is a market by itself, which cannot be compared to other
markets in the country. Here the youth segment has emerged very strongly who have a mind
of their own. If any other market is comparable to Mumbai then, they are certain pockets in
South India, like Bangalore and Chennai. They are well researched and have in depth
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knowledge about the cars they want to buy, very well travelled, very clear on what they want,
in comparison to the guys in north. The Mumbai youngsters make a conscientious decision
about luxury. They might be able to afford it but they would think practically before
indulging in it, example, the use of the car, the poor infrastructure like roads where the car
might be a constraint etc. They might desire a super luxury car and would have the capability
too, but he might still buy a smaller car which is practical unlike his counterparts in the north.
Characteristics of the young Indian consumers
He categorises the luxury consumers into three categories; first one who have traditional
money and ancestral properties and have been affluent for generations, the second type of
consumers are the Bollywood stars and sports personalities who have excess money to spend
on luxury, and the third category which has emerged strongly are the young service class who
are doing extremely well as private bankers, IT professional and budding entrepreneurs who
are the nouveau riche of India.
He says that the young consumers in India are having collectivistic mind set. Whenever they
come to buy a luxury car, they take collective decisions, unlike their counterparts in the
western countries. It is important for the immediate families to endorse their choice.
The present youth gives a lot of importance to the product, its features and the benefits. They
are extremely technology savvy and are very particular about the touch and feel of the
product. If one is investing in a luxury car, they expect certain technological supremacy.
They look for features like phone connectivity, the entertainment and infotainment value,
high standard of music system. They want that the car should have the flexibility to
customize certain features like colour, choice of music systems to their taste. Basically the car
that allows such individuality, to describe their driving fashion is rated very high. If they do
not get this kind of customization then they would not think twice before switching to other
brands.
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Prices
Though this segment is not price sensitive, but the inherent quality of the Indians to get
discounts and best deals are very much prevalent, though it is not the influencing factor.
Markets like Gujarat are a combination of ego and emotion, which need to be handled
differently. Community building or co branding does not work in this segment. He felt it
might work in other luxury segments or categories.
Sales Force
He said that it is very important for the sales force who are serving in such segment to have
an attitude, not arrogance but definitely somebody who can make a point with a straight face
without bending backward. He said that today the youth are more knowledgeable than the
sales staff. They prefer to deal with someone who is stylish and suave. One of the greatest
challenges in India is the demographic gap between the end consumer of such luxury
products and the person servicing this customer is very high. This person cannot imagine or
understand what the consumer wants and his needs. There exists a huge training gap, which
needs to be addressed.
Post purchase relationship
It is very important to maintain a very good post purchase relationship. They are the best
form of word of mouth advertising. Social media has great influence. For this luxury segment
of cars, they have events where they invite customers to come to come together. The only
condition is that they should be the owners of Mercedes or Lamborghini or they should be
strong prospects. They are then taken for an experiential drive for a brunch in a top notch
restaurant, or they are taken to places like Ambi valley and are put up in an overnighter.
Essentially this is done to create camaraderie, so that people would start aspiring to buy such
a car and rub shoulders with this segment of society, which would benefit the company. It
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still is a challenge, as the customer base is scattered across different geographic conditions, it
becomes very difficult to get to create this experience, though they are in the process of
perfecting it. He says that it is very important for them to communicate constantly, as so that
they feel confident about whom they are dealing with, leading to a high level of comfort and
trust.
Celebrity endorsement
He says that it is very risky, to let one celebrity carry off a brand. For brands like
Lamborghini or Mercedes the brand itself is so strong, that it is detrimental to have somebody
endorse it. The celebrity endorsement cannot be ignored, so in such cases they have a very
subtle or below the line kind of endorsement, like somebody fixes up an interview of Ranbhir
Kapoor with the MD or CEO of Mercedes Benz, and this appears in the internal Mercedes
magazine, which goes to select customer group, where the endorsement has happened in a
very subtle manner without seeming like overtly pushing. The word of mouth is very
important.
Mr Mariwala concludes saying that the Indian market is so diverse that what works in one
region might not necessarily work in other one, like Gujarat will drive towards value, Delhi it
is only driven by what the others would say. The Central region is like sponge, they will
absorb anything. East is again value driven and taking baby steps towards luxury. The west
and south markets are evolved, practical and value driven. Therefore he feels it is very
important to understand the characteristic of the different regions and plan a marketing
strategy for each of them.
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Discussion with Ms Lulu Raghavan - Managing Director of Landor Associates
Landor Associates is an international Brand Management company, which is a
multidisciplinary, full-service consultancy providing branding, design, and digital services.
Their clients in India include Café Coffee Day, Delhi International Airport, ICICI Bank,
Mahindra, Taj, Tata Global Beverages, The Park Hotels, Titan, and Usha Martin. The Landor
369 Studio specializes in fashion, food, and wine clients such as Anita Dongre, Busaba, and
Charosa Wineries
Ms Raghavan shared her experiences on branding and its importance as a marketing strategy.
According to Ms Raghavan, the youth in India are diverse and hence whenever they are doing
a brand they only look at what unites in a diverse market, and that they don’t really check
what clicks for the youth in North India or South India. It is the brand voice that is very
important when connecting with the youth. One needs to speak and think like them. When
they were doing the branding for Cafe coffee Day, they made the walls of cafe coffee day
quirky to appeal to the youth, which speaks the e tonality of the brand. She said while she
was working with Cafe coffee Day, there were two important revelations; first that the Indian
youth were not rebellious and individualistic. In fact they wanted to be together more
collectivistic. Individualism in a collective space is what is very important to the youth. It
became a social hub.
Secondly, it was found that the youth were very attracted to western aesthetics. When they
tried to make Cafe Coffee Day’s, ambience more Indian with beautiful Indian designs, it was
found that the youth wanted it western.
She said that many companies want to target the youth as they are the new icon of India. She
mentioned banks like ICICI Bank are creating a whole new bank for the youth. Lot of studies
were done there, and it was found that a lot of regional differences existed.
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Creation of the VIVANTA brand
This brand from Taj was evolved for the youth that is for the 30-35 year olds. These youth
were earning well and frequently travelled for work, they were not happy to spend their after
work hours in a stuffy hotel and at the same time were intimidated by luxury hotels. They
wanted an experience that was not intimidating, high on design, high on quality and
technologically sound. Learning was that they would not want to look at Taj because they felt
intimidated walking into it, hence the aim of Taj was to create a brand within Taj which was
more approachable, more accessible where they felt comfortable walking into it.
She said that whatever the product might be, be it a watch or a bank the youth appreciate
authenticity; they don’t want just plain advertisement. They want the product to reflect it,
they want their store reflect it. The youth seem to be sceptical about advertisements, they
were not totally enamoured by them unlike the older generation. The experience must speak
for it. They love to pamper themselves and thus the Spas, are attractive to them. The youth
look for instant gratification and thus this has to be communicated loud and clear.
In terms of brand strategy for the youth, it is very important that it is more about talking in an
authentic tone, not over promising, but speaking what can be done.
According to her celebrity endorsement works in India amongst youth. The Dell
advertisement with Kareena is such a hit that they say, every time they run the advertisement,
they cannot keep the product on the shelf. In a country like India where the concept of
branding itself is new, the celebrities are a short cut for companies to sell. It works in India
especially if it is endorsed by a cricketer or a Bollywood star. She said that we are a star
starved country, when there is over communication then these endorsements work.
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She is of the opinion that it is not right for the brand to use celebrities. She says it is sad
because of these endorsements the original value of the brand goes down. When a Tag Heur
watch is seen then a person would remember Shahrukh Khan, but unfortunately the product
credentials or the brand credentials is not remembered, this might be a short cut for sale but it
is a lost opportunity for the brand.
Youth and Branding
Branding is nothing but a communication which speaks of quality, authenticity and style.
Brands are very important, even for youth they associate their status to the success of the
brand. Especially when one is younger, they don’t have many achievements, so the only ways
they can set themselves apart from others are through brands. What brand one wears or
accessorises or what of bag one carries talks about then the kind of lifestyle one leads. These
are badges or signals to show who they are.
International brands are very clear as to what they stand for. A BMW clearly states that it
stands for ultimate driving machine or a Mercedes stands for class. In India the brands have
no clarity of what they stand for or their positioning or their vision.
The youth have lots of choices to choose from, they need to know what the brand stands for
and how it will behave in different situations, and what is the brand doing for society. These
need to be thought through. Every brand has a potential youth market, but it should make
sense for that product .One cannot just customize brands to suit a particular market or a
country. The global brands need to be careful, because if a Mercedes tweaks its brand for
India, it might have a repercussion in other parts of the world where it is doing well.
Brands should have a youth appeal, especially in India where 50% is youth market. But at the
same time it is important to understand as to what my business is and what my products stand
for. Youth is just another segment, which needs to be treated like any other segment.
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‘Indianising international brands’
According to her, the youth are not in favour of indianising the foreign brands. The classic
example is Starbucks, when they set up their first shop, they tried to bring in Indian flavours
to the ambience, but it was not appreciated by the youth segment. Many of the youth want the
freedom of the west, flavour of the west. For them not accessing the western brand is price
and not choice. They want to show that they have arrived. They want the western lens of
India; they want the western brand in its pure form. They might stay at Vivanta, but yet they
would say that they stay in Taj, because they want the pride of association with high end
brands. She concludes that the youth segment is a very complex segment but they are the
most important segment in India today.
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Chapter 10 - Inferences and Findings
Overview
1. Inferences of the Hypothesis
2. Results of Hypothesis Testing
3. Findings for Watches
4. Findings for Mobile Phones
5. Discussion on the Findings
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Chapter 10
Inferences and Findings
10.0 Inferences
Interpretations from the SPSS analysis have logically led to the acceptance or rejection of the
hypothesis. The results of hypotheses testing have been summarized below:
H01W: There exists no difference in factors influencing purchase intentions of luxury
watches among Indian youth.
H11W: There exists significant difference in factors influencing purchase intentions of luxury
watches among Indian youth.
Inference
The null hypothesis is REJECTED and the Alternate hypothesis is ACCEPTED
H01M: There exists no difference in factors influencing Buying intentions of luxury mobiles
among Indian youth.
H11M: There exists significant difference in factors influencing Buying intentions of luxury
mobiles among Indian youth.
Inference
H02W: There exists no difference in factors influencing buying intentions of luxury watches
across different age groups among Indian youth.
H12W: There exists significant difference in factors influencing buying intentions of luxury
watches across different age groups among Indian youth.
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Inference
H02M: There exists no difference in factors influencing Buying Intention of luxury mobiles
across different age groups among Indian youth.
H12M: There exists significant difference in factors influencing Buying Intention of luxury
mobiles across different age groups among Indian youth.
Inference
across the student class, service class and business class.
watches across the student class, service class and business class.
Inference
The null hypothesis is ACCEPTED and the Alternate hypothesis is REJECTED.
H03M: There exists no difference in factors influencing buying intentions of luxury mobile
phones across the student class, service class and business class.
H13M: There exists significant difference in factors influencing buying intentions of luxury
mobile phones across the student class, service class and business class
Inference
H04W: There exists no significant difference in factors influencing Buying Intention of
luxury watches genders, among Indian youth.
H14W: There exists significant difference in factors influencing Buying Intention of luxury
watches genders, among Indian youth.
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Inference
H04M: There exists no difference in factors influencing Buying Intention of luxury mobile
phones across genders, among Indian youth;
H14M: There exists significant difference in factors influencing Buying Intention of luxury
mobile phones across genders, among Indian youth.
Inference
The null hypothesis is REJECTED and the Alternate hypothesis is ACCEPTED.
H05Wa: There exists no difference in factors influencing Buying Intention of luxury watches
among respondents ‘ lived in’ West India, East India, South India, North India and
Central India, during their formative years
H15Wa: There exists difference in factors influencing Buying Intention of luxury watches
among respondents ‘ lived in’ West India, East India, South India, North India and
Central India, during their formative years
Inference
H05Wb: There exists no difference in factors influencing Buying Intention of luxury watches
among respondents presently living in West India, East India, South India, North
H15Wb: There exists difference in factors influencing Buying Intention of luxury watches
among respondents presently living in West India, East India, South India, North
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Inference
H05Wc: There exists no difference in factors influencing Buying Intention of luxury watches
among respondents who are natives of West India, East India, South India, North
H15Wc: There exists difference in factors influencing Buying Intention of luxury watches
among respondents who are natives of West India, East India, South India, North
Inference
H05Ma: There exists no difference in factors influencing Buying Intention of luxury mobile
phones among respondents who lived in West India, East India, South India, North
India and Central India, during their formative years
H15Ma: There exists difference in factors influencing Buying Intention of luxury mobile
phones among respondents who lived in West India, East India, South India, North
India and Central India, during their formative years
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Inference
H05Mb: There exists no difference in factors influencing Buying Intention of luxury mobile
H15Mb: There exists difference in factors influencing Buying Intention of luxury mobile
Inference
H05Mc: There exists no difference in factors influencing Buying Intention of luxury mobile
phones among respondents who are natives of West India, East India, South India,
H15Mc: There exists difference in factors influencing Buying Intention of luxury mobile
phones among respondents who are natives of West India, East India, South India,
Inference
H06W: There exists no difference in factors influencing Buying Intention of luxury watches
doing their graduation.
H16W: There exists difference in factors influencing Buying Intention of luxury watches
doing their graduation.
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Inference
H06M: There exists no difference in factors influencing Buying Intention of luxury mobile
H16M: There exists difference in factors influencing Buying Intention of luxury mobile
Inference
across different income groups.
watches across different income groups.
Inference
H07M: There exists no difference in factors influencing buying intentions of luxury mobile
phones across different income groups.
H17M: There exists significant difference in factors influencing buying intentions of luxury
mobile phones across different income groups.
Inference
The above hypotheses have been summarized in a tabular form
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10.1 Results of Hypothesis Testing
Table: – Results of Hypothesis testing

Null Hypothesis Alternate Hypothesis
H01W: There exists no difference in H11W: There exists significant
factors influencing purchase difference in factors
intentions of luxury watches influencing purchase intentions
among Indian youth. of luxury watches among
REJECTED Indian youth.
ACCEPTED
H01M: There exists no difference in H11M: There exists significant
factors influencing Buying difference in factors
intentions of luxury mobiles influencing Buying intentions
among Indian youth. of luxury mobiles among
ACCEPTED
factors influencing buying difference in factors
intentions of luxury watches influencing buying intentions
across different age groups of luxury watches across
among Indian youth. different age groups among
ACCEPTED
Intention of luxury mobiles influencing Buying Intention
across different age groups of luxury mobiles across
among Indian youth. different age groups among
ACCEPTED
217

across the student class, of luxury watches across the
service class and business student class, service class and
class. business class.
ACCEPTED REJECTED
intentions of luxury mobile influencing buying intentions
phones across the student of luxury mobile phones across
class, service class and the student class, service class
business class. and business class
ACCEPTED REJECTED
H04W: There exists no significant H14W: There exists significant
difference in factors difference in factors
influencing Buying Intention influencing Buying Intention
of luxury watches genders, of luxury watches genders,
among Indian youth. among Indian youth.
REJECTED ACCEPTED
Intention of luxury mobile influencing Buying Intention
phones across genders, of luxury mobile phones across
among Indian youth. genders, among Indian youth.
REJECTED ACCEPTED
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H05Wa: There exists no difference in H15Wa: There exists difference in
factors influencing Buying factors influencing Buying
Intention of luxury watches Intention of luxury watches
among respondents ‘ lived among respondents ‘ lived in’
in’ West India, East India, West India, East India, South
South India, North India and India, North India and Central
Central India, during their India, during their formative
formative years. years.
REJECTED ACCEPTED
H05Wb: There exists no difference in H15Wb: There exists difference in
among respondents presently among respondents presently
living in West India, East living in West India, East
India, South India, North India, South India, North India
India and Central India. and Central India.
REJECTED ACCEPTED
H05Wc: There exists no difference in H15Wc: There exists difference in
among respondents who are among respondents who are
natives of West India, East natives of West India, East
India, South India, North India, South India, North India
India and Central India. and Central India.
REJECTED ACCEPTED
219

H05Ma: There exists no difference in H15Ma: There exists difference in
Intention of luxury mobile Intention of luxury mobile
phones among respondents phones among respondents
who lived in West India, who lived in West India, East
East India, South India, India, South India, North India
North India and Central and Central India, during their
India, during their formative formative years.
years ACCEPTED
REJECTED
H05Mb: There exists no difference in H15Mb: There exists difference in
presently living in West presently living in West India,
India, East India, South East India, South India, North
India, North India and India and Central India.
Central India. ACCEPTED
REJECTED
H05Mc: There exists no difference in H15Mc: There exists difference in
who are natives of West who are natives of West India,
India, East India, South East India, South India, North
India, North India and India and Central India.
Central India. ACCEPTED
REJECTED
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H06W: There exists no difference in H16W: There exists difference in
among Indian youth who are among Indian youth who are
employed, those doing their employed, those doing their
post graduation and those post graduation and those
doing their graduation. doing their graduation.
ACCEPTED REJECTED
H06M: There exists no difference in H16M: There exists difference in
phones among Indian youth phones among Indian youth
who are employed, those who are employed, those doing
doing their post graduation their post graduation and those
and those doing their doing their graduation.
graduation.
ACCEPTED REJECTED
across different income of luxury watches across
groups. different income groups.
ACCEPTED REJECTED
intentions of luxury mobile influencing buying intentions
phones across different of luxury mobile phones across
income groups. different income groups.
ACCEPTED REJECTED
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10.2 Findings
Findings for Watches
luxury watches is – Perception Value Factors, followed by Marketing Mix Factors
and Social Value factors.
2. The Perception Value Factors are very important for men in the age group of 24 to 29
years, and who are natives of East of India. For youth who lived in or are presently
living in these five regions, the Perception Value Factors are equally important for all
of them.
3. The Social Value Factors are important for youth living in and native of East of India.
The Social Value Factors are equally important for the different age groups, for both
men and women, and also for youth who lived in formative years in any of the five
regions of India.
age groups.
across the student class, service class and business class. The Perception Value
Factor, Social Value Factor and the Marketing Mix factors are equally important for
all above three groups.
6. There exists no difference in factors influencing Buying Intention of luxury watches
doing their graduation. The Perception Value Factor, Social Value Factor and the
Marketing Mix factors are equally important for all above three groups.
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Findings for Mobile Phones
luxury mobile phone is – Perception Value Factors, followed by Marketing Mix
Factors and Social Value factors.
2. The Perception Value Factors are very important for youth in the age group of 18 to
23 years, and who are natives of East of India, and who spent their formative years in
North India. For both men and women who are living in these five regions, the
Perception Value Factors are equally important.
3. The Social Value Factors are important for the youth in the age group of 18 to 23
years. The Social Value factors are equally important for both men and women and
also for youth who lived in formative years, presently living in and who are natives of
any of the five regions of India.
age groups.
5. There exists no difference in factors influencing buying intentions of luxury mobile
phones across the student class, service class and business class. The Perception
Value Factor, Social Value Factor and the Marketing Mix factors are equally
important for all above three groups.
6. There exists no difference in factors influencing Buying Intention of luxury mobile
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those doing their graduation. The Perception Value Factor, Social Value Factor and
the Marketing Mix factors are equally important for all above three groups.
the Marketing Mix factors are equally important across different income groups.
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Discussion
10.3 Discussion on Findings
Based on the analysis it is found that there is a set pattern influencing the youth of different
regions. In order of importance, it is the youth from East of India, and North of India closely
followed by Central India who seem to be majorly impacted by Perception Value, Social
Value and Marketing Mix factors. Youth from South of India and West of India seem to be
least impacted by these factors. The discussions with the leading luxury Marketers have
validated these findings. According to them, post independence, the people in the east spent
their lives in a state of deprivation, in spite of possessing huge traditional wealth. The
prevalence of communism and the philosophy of ‘high thinking and simple living’ made this
region very tolerant. But now this is changing very fast, there is a radical shift in the attitude
towards spending on luxury. With high literacy and awareness the young working class has
started feeling that they need to better their standard of living. With the desire soaring high,
and the changed mindset of the newer generation, there is a fillip in the luxury market. As
they are in the nascent recovery in the luxury market, this region is coming back with a
vengeance. The youth are out to make a statement that they have ‘arrived’ Even in the states
of Meghalaya and Tripura, there are signs of positive attitude towards luxury. This is
because; the north east is also very hungry to improve their standard of living. The youth here
are highly educated, who have taken up jobs in cities like Mumbai, Kolkata, Delhi and all the
money is remitted back to their state, leading to considerable increase in spending on luxury.
Therefore it is explainable why these factors like Materialism, need for uniqueness, influence
of reference groups and status seem to be of great importance to the youth of the east.
The experts strongly opined that the youth from the North of India, especially in cities like
Delhi, had a voracious appetite for luxury products, and the reasons for buying luxury is
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totally different from the rest of the country. They indulge in luxury only to show off and
they get a high level of happiness in possessing luxury products which sets them apart, and
proves their affluence in their social circle. Their decision is influenced by materialism, status
and reference groups. They would buy the most super luxury cars, gadgets, houses not
because they find a value for it but more because they want to prove their supremacy over the
others in their circle. The consumers in this segment have always been flamboyant and
flashy. The youth from this region indulges in conspicuous products, which can be seen by
others. Hence our findings are in tune with this culture.
South and West are more matured, and have evolved in the luxury market. The marketers
also vouch for the fact that youth from these two regions are very well read, well travelled
and technologically very savvy. They indulge in luxury, not because they want to prove their
achievement to others but to reward themselves. They have a mind of their own and nothing
really influences them except their own convictions and the value which they see in buying
the products. Thus the study confirms this point of view. Therefore it is found that none of
the Perception Value factors or Social Value factors has significant importance in their
decision making towards buying luxury products.
The study reveals that the Marketing mix factors are strong influencing factors for the youth
from East, North and Central part of India. This can again be validated because, the
awareness level about the luxury products in places like Tripura, Meghalaya, Raipur and
hinterland markets of North of India is very limited, and hence the advertisements, celebrity
endorsements, discounts and deals have a great impact on the buying behaviour of the youth
in these regions.
Based on the above discussions, it can be concluded that the international marketers and
companies cannot treat the whole of India as one big market, because there exists large
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diversity in the different regions across the country. The most effective strategic plan would
be to customize the marketing mix based on the character and culture of each region.
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Chapter 11
Conclusion
228

CHAPTER 11
Conclusion
India is a fast growing economy and the luxury sector is growing very fast. There is a large
appetite for luxury products especially from the youth segment of India. This segment unlike
the previous generation does not shy away or is not guilty about spending on luxury products.
There is a huge potential in India for luxury market, with many international luxury brands,
already present in India and many are waiting to enter India. Thus it becomes imperative to
understand the youth segment, and their buying behaviour towards the luxury products. This
study analysed the impact of the various factors which influences the buying behaviour of the
Indian youth towards luxury fashion products.
Luxury is categorized under three broad heads: Luxury Fashion Products, Luxury
Automobiles, and Luxury estates and services. This study emphasized on the Luxury fashion
products which are very popular amongst the youth segment. For the purpose of this study,
global luxury branded ‘watches’ and ‘mobile phones’ were selected, as a representation of
luxury fashion products. Watches and mobile phones were chosen because the Indian youth
are familiar with them. They frequently purchase and can relate to them. They would be the
most appropriate products to capture the influencing factors.
Focus Group Discussion
In the initial stage of the study a focus group discussion was conducted among 32 youth in
the age group of 23 to 27 years. This was essentially done to understand the attitude of the
youngsters towards luxury products which was represented by luxury watches and luxury
mobile phones. There were mixed opinions which were informative and which also added
more input to the study. Many of the youth felt that owning luxury fashion products gave
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them power and confidence which added value to their personality. They felt that men had
very few accessories to show off and thus such luxury fashion products definitely give their
personality a boost. It also helps them to garner attention. They felt it communicated status
and this helped them to stand out in a crowd and also get respect from their peer group. They
stated that their family and friends would be great influencers, motivating them to buy luxury
products. This will keep them on par with the group making them feel superior. They would
indulge in luxury as a reward for their achievements. Almost everyone in the group agreed
that possessing luxury products gave them immense happiness and excitement. They felt it
may be that, the initial attraction might fade slowly but yet it would positively add a fillip to
their self.
At the same time there were contradicting opinions from few members of the group. They felt
that one’s intrinsic qualities were more important as a value add to the personality and that
these luxury fashion products were just flashy and a waste of money. They stated that they
would never be tempted to splurge on luxury just because their family and friends owned
them, instead they would be motivated to buy only if it was trendy and if it suited their
profile. Affordability would a major factor while deciding on luxury products. Unlike the
other group, this group strongly believed that one cannot get respect from peer group just
because one possesses luxury products, and if it is so, they would strongly avoid such groups
and would stay away from them. They do not believe in celebrating their achievement
through splurging on luxury products. They stated they would in fact avoid this because they
would not want to invite unnecessary attention. They believed in ‘simple living and high
thinking’ attitude.
This focus group discussion revealed that even though they belonged to similar age groups,
similar qualifications but yet there were divergent in their thoughts, which might be
attributed to other factors which were analysed in the latter part of this section.
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Statistical Analysis
The study analysed the attitude of the youth towards luxury products, how much importance
do the youth give to factors like materialism, need for uniqueness, in their products. Do they
buy luxury products to show off or as status symbol or they are influenced by the reference
groups. It also analysed the importance of the marketing mix factors on their behaviour. This
was an in depth study which examined the impact of Perception Value Factors, Social Value
Factors and the Marketing Mix Factors on different demographic aspects like age, gender,
income level, social role, educational background.
The study revealed that in case of luxury watches, Perception Value Factors impacted
different age groups, and the Social Value Factors and Marketing Mix Factors had an equal
impact on all age groups. On the other hand, the Perception Value Factors and Social Value
Factors impact differently on different age groups in case of mobile phones, and Marketing
Mix Factors has an equal impact on all ages.
All the three factors have an equal influence on the student class, service class and business
class, for watches and for mobile phones.
In case of gender, it was found that for luxury watches the influence of Perception Value
Factors and Marketing Mix Factors were more important for Men compared to Women. The
Social Value Factors was equally important for both of them. In case of Mobile phones,
Perception Value Factors and Social Value Factors were equally important to both but
Marketing Mix Factors was more important to Men than women.
There was a comparative study to check if factors influencing people who are employed and
students were different, but it was found that for both watches and mobile phones all the
factors were equally important to the employed and the student community.
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Similarly for watches and mobile phones, there was no significant difference found for
between the factors influencing different income groups, which meant that the Perception
Value Factors, Social Value Factors and Marketing Mix Factors were equally important for
individuals under different income group bracket.
India is a country with more than 30 states, which can be broadly divided into five regions,
North, South, East, West and Central India. Each of these regions has its unique
characteristics, beliefs, attitudes and behaviour pattern, which is reflected by the people living
there. This study aimed to check if the influencing factors on the Buying Behaviour are
different in different regions.
In order to get an in depth evaluation this section was divided further. Firstly for luxury
watches, the impact of the three factors on individuals who lived in these regions during their
formative years was scrutinized. The results revealed that the Perception Value Factors and
Social Value Factors were equally important to individuals across the five regions, but in case
of Marketing Mix Factors there was a difference in the importance ranking. Marketing Mix
Factors is very important factor for youth living in East India, followed by North India,
Central India and South India, for West India it was of least importance.
Next for luxury watches, the impact of the three factors on youth presently living in these
regions was examined. It was found that the Perception Value Factors was equally important
influencing factor for youth across all regions. Social Value Factors was marginally different
with East India, closely followed by North India, South India, West India and Central India.
There was a difference in the Marketing Mix Factors, where the importance ranged from East
India to North India, followed by Central India and South India. Again for West India it was
of least importance.
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Lastly for luxury watches, the impact of the Perception Value Factors, Social Value Factors
and Marketing Mix Factors on youth who are natives of these regions were studied. The
findings were that all the three factors influenced the youth differently. The order of
importance for Perception Value Factors, Social Value Factors and Marketing Mix Factors
was the same. It was most important to the youth who are natives of East followed by natives
of North, Central and South of India, for natives of west of India it was of least importance.
In case of luxury mobile phones the impact of the three factors on individuals who lived in
these regions during their formative years were scrutinized. The results revealed that the
Perception Value Factors was different and in terms of importance it was North, Central, East
and South. For West of India it was of least importance. It was found that the Social Value
Factors was equally important influencing factor for youth across all regions. Marketing Mix
Factors was also different for different regions. The order of importance was East India,
North India, Central India, South India followed by West India for whom it was of least
importance.
Next, the impact of the three factors on youth presently living in these regions was examined.
It was found that Perception Value Factors and Social Value Factors were equally important
to youth across the regions. The order of importance for Marketing Mix Factors was
different. It was of highest importance to East India, North India, and then Central India,
followed by South India. West India found it to be of least importance.
Lastly for luxury mobile phones, the impact of the Perception Value Factors, Social Value
Factors and Marketing Mix Factors on youth who are natives of these regions were studied.
The results revealed that the Social Value Factors was equally important to the youth across
all regions. The importance of Perception Value Factors was different to different regions. In
the order of importance it is East India, Central India, North India and South India. West
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India again did not find it very important. For Marketing Mix Factors too there was a
difference in the importance across regions. It was the most important to East India, then
North India, followed by Central and South India. For West India it was least important.
The above conclusions have been represented in a tabular form
Watches
S. no DESCRIPTION PVF SVF MMF
1 Age 24-29,18-23,30- Equally important Equally important
36 yrs
2 Gender Male, Female Equally important Male, Female
3 Lived In Formative Equally Equally important East, North, Central,
Years important South, West India
4 Presently living in Equally East, North, South, West, East, North, Central,
important Central India South, West India
5 Native of East, North, East, North, Central, East, North, Central,
Central, South, South, West India South, West India
West India
Mobile Phones
S. no DESCRIPTION PVF SVF MMF
1 Age 18-23, 24-29,30-36 18-23, 24-29,30-36 yrs Equally
yrs important
2 Gender Equally important Equally important Male, Female
3 Lived In Formative North, Central, East, Equally important - East, North,
Years South, West India Central, South,
West India
4 Presently living in Equally important Equally important East, North,
Central, South,
West India
5 Native of East, Central, North, Equally important - East, North,
South, West India Central, South,
West India
Cross-cultural theories have introduced many cultural dimensions that have concentrated on
understanding the culture composition of different countries. Many a time it has been found
that these theories have failed to understand the domestic and regional structure of a country.
All countries have regional differences that must be captured when planning the marketing
strategy for that country. India is one country which should be viewed with this perspective in
mind. This is because India is a huge country with many states, religions, beliefs and
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attitudes, thus emphasizing the multi-cultural facets of the Indian market, which in turn
influences the behaviour of the consumer.
One of the key revelations to this study is that there are different factors influencing different
regions. The consumer’s taste and preference is unconditionally influenced by the
environment, where he or she belongs, have lived or are presently living in. The cultural
diversity of India leaves the marketer perplexed. It is very important for Luxury marketers
and companies eyeing India, to understand the differences in consumer behaviour due to
regional differences in India. This critical information would help them in planning effective
marketing strategies for the Indian market.
“Often people treat India as one big market, but the reality is that India is more like the
European Union – a mix of different cultures, habits, and languages” (Khicha, 2007).
According to Usunier (2000), India is comparable to Europe, where there is an equal presence
of homogeneity within the country, but due to the diversity among the regions within the
country, and the long history of several different rules and immigration, the country requires
differentiation like the one present in the European Union.
Usunier (2007) states that regional difference can explain differences in consumer behaviour
in large countries with multi-ethnic and multicultural backgrounds. Therefore it becomes
imperative for marketers to consider differences within the country and adapt to each
consumer group in North, South, East, West and Central regions of India.
In the era of globalisation, marketing is one of the most important tools for marketers and
companies who look for catering to cross border markets. It is not only important to know the
consumer but understanding the needs of different consumer groups within a country helps
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in successfully introducing new products and adapting them to satisfy the specific regional
consumer group, leading to consumer loyalty in the market.
The Implication of this study would help the international brands waiting to enter India, in
strategising their marketing plans according to the regional requirement as preferred by
consumers. Ultimately the marketing strategy planning should always aim to focus on the
consumer. This study has thrown open factors which motivate and influence the various
consumers from different regions. Understanding these influencing factors would help the
marketers to in developing an effective strategy to grab the interest of the consumers from the
five regions of India. Therefore, this analysis would help the luxury marketers to understand
what influences the Indian youth in different regions, why and how they buy, and react.
These inputs will not only facilitate in making a smooth entry into the market but also help in
effectively creating new needs.
There have been constant debates worldwide with marketers of international brands, as to
whether companies should standardize their products, price, distribution and communication
and ignore local differences, or customize their marketing mix according to the local
contexts. Most of them are of the opinion that it should be standardised, as the international
markets are homogenous or in the process of becoming one, and therefore companies should
bring in standardization in their marketing efforts. Standard means, the same for everybody,
the same everywhere in the world and the same for all time. It also means that the product
quality remains the same unless new technological development allows improvements which
add value to the existing product.
This school of thought of standardization of marketing strategies was thrown up for
discussion with the leading luxury marketers in India. These marketers strongly felt that it
might be possible to standardize the strategy in countries where the regional differences were
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not as conspicuous as in India. As this study revealed that the motivating factors are so
strongly different amongst consumers from different regions, that standardizing the strategies
might not work out for the Indian market, in fact they fear that it may back fire. Hence they
were of the opinion that instead of standardizing, it would be more appropriate to adapt the
marketing strategies for the Indian market.
Simon Ulrik and Kragh (2000), defines the difference between standardising and adapting
which is so relevant for the Indian context, “When homogenisation takes place, the
consumers move in the right direction and the companies can follow suit; but when local
differences are apparent and there seem to be arguments in favour of local adaptation, the
global company must know its role as the repository of the truth, not only for its own sake,
but also for the benefit of the ignorant consumers”
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Chapter 12 - Recommendations
Overview
1. Recommendations
2. Limitation of the study
3. Scope for future research
238

Chapter 12
Recommendations
India is a vast country, with a wide number of heterogeneous population, spread across the
different regions of the country. Each of these regions have their unique characteristics which
gets reflected on the individual’s consumption behaviour, attitudes, beliefs and values, it is
almost like catering to different markets within the country. With the luxury market growing
at a phenomenal rate, it very essential for international brands and the markets to understand
this, and strategise their marketing plan accordingly.
Based on the past researches, analysis of the present study and after getting views of the
expert luxury marketers, the researcher has made a the following recommendations that
would facilitate the international marketers and brands to customize the marketing pitch for
the different segments of the young population of India, and successfully exploit the potential
buoyant market.
1. Marketers Strategy: As discussed in our studies, it is very important for the marketer to
plan their strategy differently in the Indian context. At the outset the marketer should
have a clear idea of their company’s vision, goal, and the policies and procedures
prevalent in India which would impact them. It is very important for their company and
their products to create an awareness to be accepted by the Indian market.
Recommendation 1- Market the brand before marketing the products The awareness
of luxury products is very high among the youth segment in India. This is because of their
frequent travel abroad, influence of media, and because of the in depth research that an
Indian youth does before even intending to buy the product. Hence it becomes very
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important for any luxury product company wanting to enter India to be present in the
minds of the youth even before they come in. Therefore it is recommended that:
• The companies should first market their Brand even before they market their
products.
• The brand should build around the products, the benefits associated with them and the
target segment which they would pitch to.
• The consumer bases his decisions on the relevance of the aura of the brand to his
fulfillment or actualization of needs.
• The brand should powerfully communicate this message to the target audience, so that
there is instantaneous recall factor rising to a higher demand from the target audience,
leading to immediate acceptance and smooth entry of the company into India.
2. Consumer Strategy: The Indian youth play a crucial role in the decision making and
consumption of the Luxury fashion products. Hence it is critical to understand the
demographic profile of these consumers. The youth can be defined as all those individuals
falling between the age group of 18 to 36 years. The country is divided into five different
regions– North, South, East, West and Central India. These youth come from these
different regions and the factors influencing them might be different, it is important to
factor in these differentiations, and customize the marketing plan.
Recommendation 2 – Develop customized strategies based on the cultural,
perceptional, social and demographic factors of the target consumers
• A separate marketing strategy needs to be coined based on the age group they fall
under, the regions they belong to and the factors that influence them the most.
• If the study has revealed that Perception Value factors are of greater influence to a
particular group of individuals in a particular region, then the marketers should craft a
message which communicates a vivid imagery of euphoria in the minds of this
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segment on the materialistic achievement (materialism) and the satisfaction of being
unique (uniqueness), after possessing the product or associating with the brand.
• Similarly if the Social Value factors have emerged important, then the communication
should revolve around the pride that the individuals would experience amidst their
reference groups and the snob value leading to the upliftment of their status amongst
their peer group should be emphasized.
3. Message Strategy: The Product and the Price are very important components of the
luxury sector. The consumers keep looking out for more information on these two
components. The product is the heart of the company. A company has no meaning if the
product is not strong. All the other strategies revolve around the core product, and thus it
is important to have a strong product and therefore it is very important for companies to
communicate the strength, features, benefits and the uniqueness of their products, to their
target audience.
Recommendation 3 – Develop products keeping the target market in mind and
communicate the strength of the products effectively.
The Indian youth give much importance to the product and its features. Thus it is
recommended that the companies should keep the following things in mind while
building the product and communicating the same.
• Uniqueness: Studies reveal that the Indian youth give importance to the product.
They like the product to have features that are very different from those in similar
categories. They like to possess unique products as it sets them apart from the rest of
the crowd, giving them an edge over others. The only concern is that they get
disinterested in the product very soon, hence the companies wanting to place their
products in the Indian market need to constantly innovate, upgrade and add newer
features to the product.
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• Technologically stimulating: The Indian youth are very well versed with latest
technology and get drawn towards products which are technologically competent.
Hence the companies looking at catering to the Indian market need to be abreast with
the new technology and have to continuously upgrade their products in order to hold
their position in the Indian market.
• Do not ‘Indianize’ the Products: Many luxury fashion product companies have
customized their products to bring in the Indian flavour to the international brands.
Lladro, the Swiss porcelain brand, has come up with the season’s offering, a statue of
goddess Lakshmi. Canali, one of the most reputed Italian brands has come up with
the very Indian ‘bandh gala’ coats. French brand Hermes launched a limited range of
the Indian Sari. These companies cater to the general Indian segments, not specifically
to the youth.
During discussions with leading Marketers it was revealed that the Indian youth want
the products in the ‘pure’ form, the way it is presented across the world. They like to
feel a sense of belonging and association to their counter parts in the other parts of the
world. They do not appreciate the Indian touch to these products. Hence companies
catering to this young segment should refrain from creating a fusion of the products.
Recommendation 4 - The ‘nouveau riche’ Indian youth are non sensitive to price, but
adding frills will be an added advantage.
For this segment, price may not appear to be a constraint; there is a kind of acceptance about
luxury products being expensive. In fact in some regions of India, the high priced products
ooze out affluence leading to increase in their status value among the peer group. But
basically the intrinsic ‘Indian’ attitude, loves freebies, and thus the youth look for frills in
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kind in this category. It is recommended that in order to clutch the attention of this segment
the marketers can strategise the embellishments, without touching the price.
• Community building strategy: The marketer could sell his luxury product, as an
incentive he could club it with a non luxury but well known branded product. An
example would be to package a pair of Nike Shoes with an I Phone mobile phone.
• Build in value add: While shopping for cosmetics and skin care, the customer
appreciates if they are given a chance to try out the products in the form of samples, in
store makeovers, tips on using the products.
• Build in Experiential Value: The location of the store, the ambience, the lighting
and the staff catering to the young consumers are all very crucial. A Luxury customer
wants to feel pampered when he enters the store. The customer pays not only for the
product but for the entire experience. Thus it is very important for luxury companies
to create this aura of shopping
4. Channel Strategy: Communicating the right message at the right time to the right target
audience is very important for capturing the attention of the potential customer. But this
process can be effective only when the right channel or medium is used to communicate
the message. The Indian youth are very well informed. They do complete research before
venturing into the market. As they are all well travelled, and are exposed to information
about the brands and the products, it gives them an advantage of making a decision. Thus
it is recommended that the companies and marketers feed them with the right information
at the right time through the right medium.
Recommendation 5 - Using the digital space effectively and getting their brands
endorsed by celebrities, would help to reach out to the young Indian population who
are the target segment.
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• Use Social Media as an effective channel: Social media can be a powerful tool for a
promoting luxury brands. With a growing affluent market, the online world is a place
where every international brand needs to be. The common urge today, for all the
youngsters across the globe is the high exposure to the same mass media such as Face
book, twitter, internet and the exposure to and other social networks which gives
them a sense of belonging with their counterparts across the world. Having used these
technologies since childhood, these youth have become habituated to depending on
their laptops, cell phones, instant messaging, e-mail, the web, and interactive media in
almost all aspects of their lives
• As players in the digital space, they are exposed to all the international brands, an
opportunity to get complete knowledge and information about the product, the brand,
the pricing structure, the distribution channels and the latest trends and fashions. So if
a marketer uses this medium effectively, he would be able to seize the attention of the
Indian youth. The Internet has a profound influence on their views.
• Celebrity Endorsements: Even though the present youth take their decisions based
on their research and interactive exchange of information through digital media, yet in
some regions there are pockets, where the youth are influenced by the celebrity
endorsements. The most popular role models for Indian youth are the sports
personalities, especially the cricket players, Bollywood and Hollywood stars, films
and popular soap actors. A marketer wanting to lure this segment in India should
make a strong appeal through these role models.
5. Feedback Strategy: The present youth are very curious to know about the international
brands, they research, read and also take part in interactive discussions with their peer
group and experts. Even though they exchange information continuously on the social
media, yet they also look for assurances from the sales staff.
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Recommendation 6 - Appoint well informed, well trained and polished sales person
to cater to the Indian youth.
The basic nature of Indians is that they do not trust anybody easily. They would take time
to build trust and look for long term relationships, so if the marketers are able to build this
trust then they can be assured of a loyal customer, and a good word of mouth advertiser
for their brand. Therefore it can act to the advantage of the company, if they can have
sales force who can instil trust and confidence in the minds of the consumer.
• The youth are very particular about the sales staffs who serve them in the store. They
look for knowledgeable staff who can present them the product, the features, benefits
and most importantly walk them through the unique aspects of the offering (brand &
product).,
• Apart from knowledge they look for polish and finesse in the sales staff.
6. Distribution Strategy: In India availability of high end retail space for retailers to set
shop is a major concern. The rental costs, to set up flagship stores and boutiques are sky
rocketing. The only other places, where the luxury brands display their products are in the
five star hotels; the challenge with this is that it takes a lot of effort to bring the youth to
these hotels as many of them get intimidated by going to a star hotel. Thus it is
recommended that these companies should move towards e- tailing
Recommendation 7 - Get into Internet retailing which is going to be the next
destination for the Indian luxury market.
Many luxury e-tailers like Net-a-porter.com, Qvendo.com, Revolveclothing.com,
milanstyle.co.uk have started shipping to India. Besides many luxury retailers and brands
like Macy’s, Bloomigdales, Nieman Marcus, and Burberry have started shipping to India
thus creating a foothold in the Indian luxury market. E-commerce players are now
promoting global luxury brands.
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7. Post Purchase Strategy: Whenever the young consumers buy luxury products, they
expect to be pampered both during the purchase process and after the purchase is done.
Therefore, it is important for retailers in India to provide good customer service as a
means to encourage repeat purchases and build brand loyalty. So it is recommended to be
constantly in touch with the luxury consumers
Recommendation 8 - Build a strong Post Purchase Relationship with the young
Indian luxury consumers, which will lead to building a loyal customer base.
The young Indian consumers like to be made ‘special’ during and post purchase phases.
This can be done by developing consumer-friendly policies in terms of return and
exchange, loyalty programmes, Special invites to their new launches and events, or a
specialised greetings on birthdays and anniversaries, or an invitation to join their
‘exclusive member club’ would give the customer the feeling of exclusivity and of
belonging. It is very important to keep the customer happy, because that would lead to
repeat purchase and also a good word of mouth advertisement for the brand. So it is very
important to have a continuity of relationship post transaction.
These recommendations would be useful for the marketers who are waiting for the right
opportunity to plunge into the Indian market. The most important lesson that the international
brand companies and the marketers should know is that they cannot treat India as one big
market, because the country has different regions, different religions more than 100
languages are spoken, the attitude towards luxury varies amongst different age groups,
amongst different religions, and the economic factors also play a very important role. Hence
for any of these companies to be successful and to enjoy the customer loyalty, they need to
customise their marketing strategy accordingly. ‘Standardizing one strategy, for one country’
will not work for the Indian Market.
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Limitation of the study and Scope for future research
This study has certain limitations, and provides some suggestions for future research.
1. This study focused on high-end personal fashion products where watches and mobile
phones were used as a representative of luxury fashion products. This has support from
the literature (Jackson 2004; McKinsey 1990). There could be future studies on other
luxury products and service categories to increase the portfolio of knowledge about the
luxury products market in India.
2. This study has been restricted only to the youth population of India. A comparative
analysis of youth and the older population could lead to an interesting study.
3. This study has been restricted to broadly 5 zones namely, Western India, Eastern India,
Northern India, Southern India and Central India. Even though the data has been collected
from tier I cities across the 5 zones, it has not captured city wise details. There is future
scope to conduct a study city wise, covering not only Tier I cities but also Tier II cities.
247

Chapter 13 – Annexure
Overview
1. Bibliography
2. Questionnaire
3. SPSS Output
248

Chapter 13
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259

Questionnaire
For the purpose of this study, the researcher has chosen luxury watches and mobile phones. The
below given questions needs to be answered with respect to:
Luxury watches such as a) Tag Heur b) Omega c) Rado d) Longines e) Tissot f) Rolex
Mobile Phones such as a) Samsung S4 b) Apple iPhone 5 c) Samsung Galaxy Note 3 d) Sony
Xperia Z1, e) HTC One
The questions are on a 7 point Likert scale.
1 = Strongly Disagree, 2 = Disagree, 3 = Somewhat Disagree, 4 = Neutral, 5 = Somewhat Agree, 6=

Agree, 7 =Strongly Agree
Section I – Perception based questions

1 I would search information about various brands
and models of watches / mobile phones from an
association of professionals or independent
{{{{{{{ {{{{{{{
group of experts.
2 I seek information from those who work in that

industry
{{{{{{{ {{{{{{{
3 I will collect information from those friends,
neighbors, relatives, or work associates (such as
how Brand A watch performance compares to {{{{{{{ {{{{{{{
Brand B; or how Brand A mobile phone
performance compares to Brand B)
4 If I see the watch / mobile brand or model, used

by too many people, I may change my mind as {{{{{{{ {{{{{{{
there would be no uniqueness.
5 My choice of watch / mobile phone is influenced

by other consumer’s word of mouth or some
evaluation reports from an independent testing
{{{{{{{ {{{{{{{
agency (e.g., online reviews)
6 My friend’s evaluation and preference of

watches / mobile phones will influence my {{{{{{{ {{{{{{{
choice
7 Other people’s recommendation of watches /

mobile phones may influence my final decision
{{{{{{{ {{{{{{{
8 The preferences of family members can
influence my choice of watches / mobile phones
{{{{{{{ {{{{{{{
9 To satisfy the expectations of classmate or
fellow work associates, my decision to purchase
a watch / mobile phone is influenced by their
{{{{{{{ {{{{{{{
preferences
260

Section I – Perception based questions

10 I tend to choose those brands or models of
watches / mobile phones that will enhance my {{{{{{{ {{{{{{{
image in others’ eye.
11 I would search information about various brands
and models of watches / mobile phones from an
association of professionals or independent
{{{{{{{ {{{{{{{
group of experts.
12 I tend to choose those brands or models of
watches / mobile phones that will enhance my {{{{{{{ {{{{{{{
image in others’ eye.
13 I feel that that those who purchase or use the
products of a particular brand or model possess {{{{{{{ {{{{{{{
the characteristics which I would like to have
14 I feel that it would be nice t act like the type of
person whom advertisements show with the {{{{{{{ {{{{{{{
products of a particular brand or model
15 I think that the people who purchase the
products of a particular brand or model (e.g. Tag
Heur, Omega, RAdo, Longines, Tissot, Rolex
and Samsung S4, iPhone5, Samsung Galaxy
{{{{{{{ {{{{{{{
Note 3, Sony Xperia Z1, HTC one) are
sometimes admired or respected by others
16 Using the products of a particular brand or
model helps me show others who I am, or who I
would like to be (such as a successful {{{{{{{ {{{{{{{
businessman, a movie star, a sports person or
celebrity, etc.)
17 Purchasing luxury products can help enhance
one’s image
{{{{{{{ {{{{{{{
18 I like to buy luxury products to show other
people I am different
{{{{{{{ {{{{{{{
19 I like to communicate to others about my
uniqueness, especially while buying luxury {{{{{{{ {{{{{{{
products
20 I like to show my personal uniqueness by buying
special luxury products
{{{{{{{ {{{{{{{
21 My favorite brands can greatly express my
individuality
{{{{{{{ {{{{{{{
22 When a product, I own becomes popular among
the average population, I begin to stop using it or {{{{{{{ {{{{{{{
use it less.
261

23 I like new and limited edition of luxury products {{{{{{{ {{{{{{{
24 As a person, I like products which are rarer and
not owned by the bulk of other people, that is {{{{{{{ {{{{{{{
why I prefer luxury brands
25 The products ‘superior quality’ is my major
reason for buying luxury products
{{{{{{{ {{{{{{{
26 By owning a luxury products, I show others,
how I do not appreciate identical ordinary {{{{{{{ {{{{{{{
things
27 I purchase luxury brand because I simply like
the style of it
{{{{{{{ {{{{{{{
28 A product is more valuable to me if it has snob
appeal
{{{{{{{ {{{{{{{
29 If I buy a luxury product, I will buy those
brands which are known to many
{{{{{{{ {{{{{{{
30 I purchase luxury to show off, that I can afford
them
{{{{{{{ {{{{{{{
31 The luxury we buy reveal a little bit about who
we are
{{{{{{{ {{{{{{{
32 In my opinion, Luxury is too expensive for what
it is
{{{{{{{ {{{{{{{
33 I almost never buy Luxury Products {{{{{{{ {{{{{{{
34 people who buy Luxury products seek to imitate
the rich
{{{{{{{ {{{{{{{
35 I could talk about luxury products for hours {{{{{{{ {{{{{{{
36 I would not fell at ease in a Luxury shop {{{{{{{ {{{{{{{
37 I will always buy luxury products in future {{{{{{{ {{{{{{{
38 I would pay more if the products had status {{{{{{{ {{{{{{{

I have high regard for people who have expensive luxury watches,
39
mobile phones, homes, cars and clothes
{{{{{{{
40 The things I own say a lot about how well I’m doing in life” { { { { { { {
41 Buying luxury product give me a lot of pleasure { { { { { { {
42 I like a lot of luxury products in my life { { { { { { {
My life would be better, if I am able to own something which I don’t
43
have currently
{ { { { { { {
44 I’d be happier if I could afford to buy more luxury products { { { { { { {
262

45 The status of the products is irrelevant to me { { { { { { {
46 Many people buy luxury products for showing off { { { { { { {
47 Luxury goods are a symbol of social status { { { { { { {
48 Purchasing luxury goods, can be noticed and admired by everyone { { { { { { {
49 purchasing luxury products communicates to other ‘ I have arrived’ { { { { { { {
50 In my opinion Luxury is flashy { { { { { { {
51 For me luxury product means Quality {{{{{{{
52 Price is not a factor while buying luxury products { { { { { { {
53 For me higher the price means ‘Luxury’ { { { { { { {
54 Even if there is a price increase, I will still buy the luxury product { { { { { { {
55 I would like to get the best deal for my luxury products { { { { { { {
I will visit different boutiques or check online for best deals before purchasing
56
the luxury product { { { { { { {
57 I would be interested in discounts while purchasing the luxury product { { { { { { {
I will buy my luxury product only from ‘Flagship Stores’ or ‘Exclusive
58
Boutiques’ { { { { { { {
59 For me a product is not luxury if it is sold in general stores or malls { { { { { { {
60 I don’t mind being on the wail list, to get my luxury product { { { { { { {
61 My decision to buy a luxury product depends on the celebrity endorsing it { { { { { { {
62 I like to experience the product by wearing or carrying it before buying it { { { { { { {
Not only should the product look good, but it should also be pleasant to touch
63
and feel. { { { { { { {
64 I buy a product only after I understand the technical and stylistic competence { { { { { { {
It is very important that the logo or the symbol of the brand should be
65
explicitly visible { { { { { { {
I only like to be introduced to a luxury product in ‘Exclusive Product Launches
66
and events’ { { { { { { {
While buying luxury products, I would look for information on warranty,
67
guarantee and loyalty programs { { { { { { {
Before buying the product, I would like to talk to people who already own the
68
product { { { { { { {
263

It is important, that the salesperson who is showing the product to me, should
69
have complete information of the product and answer all my queries { { { { { { {

70. Please indicate your gender
Male {
Female {
71. Please indicate your age
18 to 23 years {
24 to 29 years {
30 to 36 year {
72. My qualification is
Doing my Graduation {
Doing my Post Graduation {
Employed {
73. I am native of
N. I. {
S. I. {
Central India {
East India {
My formative years between 13 to 18 years, I have
74.
lived in
NI {
SI {
EI {
WI {
CI {
264

75. Currently i live in _________ city
N {
S {
E {
W {
76. I have been living in this city for
0 – 2 years {
2 – 5 years {
5 – 10 years {
Above 10 years {
77. My social role is
Student {
Employee {
Self Employed {
Entrepreneur {
78. If employed my monthly income (approx) is
NA {
Less than Rs. 50,000/- {
Between Rs. 50,000 to Rs. 1 Lakh {

265

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The Impact of Factors Influencing the Buying Behaviour on the

Development of Marketing Strategies

Behaviour on the Development of Marketing Strategies For Luxury Fashion Products -

of Philosophy (PhD) in Business Management at D.Y. Patil University, Navi Mumbai,

Date: Signature of the student

Enrolment No: DYP-PhD-116100011

Behaviour on the Development of Marketing Strategies For Luxury Fashion Products -

Management at D.Y. Patil University, Navi Mumbai, Department of Business Management

of any University or Institution.

Signature of the Signature of the Guide

This shloka is dedicated to my guru

List of Tables ........................................................................................................................................................ vii

Table Title Page

1. Categorization of Luxury Product Industries 3

2. Differences between new luxury, conventional and old luxury 7

3. Chadha and Husband’s Evolution of Luxe Model 13

4. 7 New Faces of the Global Luxury Consumer 64

5. Results of Hypothesis testing 216

6. Conclusions – Watches 233

7. Conclusions – Mobile Phones 233

S. No. Title Page

1. Hofstede cultural model for India 47

2. Maslow’s hierarchy of needs 76

3. The Asian equivalent to Maslow's hierarchy of needs 77

4. Consumer Decision Making Process 79

6. Segment-specific Marketing-mix Strategies 92

7. Diagram of respondents according to gender 105

8. Diagram of respondents according to age 106

9. Diagram of respondents according to qualification 107

10. Diagram of respondents according to nativity 108

11. Diagram of respondents according to the region they lived in 108

14. Diagram of respondents according to their social role 110

15. Diagram of respondents according to family income 111

16. Diagram of the level of buying intention of respondents 123

21. Diagram of importance scores according to gender and factors – 151

22. Diagram of importance scores according to gender and factors – 155

23. Diagram of importance scores according to region and factors – 158

24. Diagram of importance scores according to region and factors – 168

25. Diagram of importance scores according to employment and 178

26. Diagram of importance scores according to employment and 181

27. Diagram of importance scores according to income and factors – 184

28. Diagram of importance scores according to income and factors – 187

Sr No. Abbreviation Full Form

1 PVF Perception Value Factors

2 SVF Social Value Factor

3 MMF Marketing Mix Factors

potential young Indian consumers.

but desirable item'.

extraordinariness and symbolism.

the hotels, spas, and other high end hospitality sectors.

Scope of the Study

Distribution was examined.

The main objective of the study was to:

among Indian youth

mobile phones with respect to different regions, among Indian youth.

The study embraced both qualitative and quantitative research approaches.

collected using the following instruments in the study.

Business Insight Databases and others)

Population Frame and Sample

students, employees, entrepreneurs and business men.

The study targeted a sample size of 384 respondents:

generally used to find out the sample size is as follows:

1.96 2 × 0.5 × 0.5