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An Empirical Study to Examine Consumer Behavior towards Luxury Brands in Pakistan

Faryal Salman 1and Usman Ali Warraich2

Abstract
Globalization and the resultant growth of consumerism in Pakistan, have consumers turn
towards foreign and branded goods. As the consumers in developed countries choose their modes of
conspicuous consumption, so do the elite in developing countries who mimic them and the middle
classes aspire to do the same. Current study seeks to expand an understanding of consumer behavior
towards branded goods through; a) need for uniqueness; b)materialism; c) avoidance of similarity and
d) utility/ functionality. Further the study investigated the consumer behavior of individual product
categories with need for uniqueness, materialism, avoidance similarity and functional attributes etc. The
research methodology for the study is based on exploratory research techniques. Constructs were
espoused from previous studies however adaptation was made to suit the researcher’s needs. The
theoretical framework for the study is based on the relationship between consumer behavior
(dependent variable) and four independent concepts that are; a) need for uniqueness; b) avoidance of
similarity (Tian, Bearden and Hunter,2001); c)material values (Richins and Dowson,1992) and d) quality
factors (Strizhakova, Coulter and Price 2008). The product categories selected for the study are; a)
shoes/footwear; b)clothes; c)handbags; d)watches; e) handbags/wallets and f) accessories. The
investigating instrument consisted of close ended questions consisting items for all the variables
adopted for the study and the demographic profile of the respondents. Cross sectional data for the
study has been collected through a self- administrated questionnaire through convenience sampling
from a sample size of 600 students studying in different business schools in Karachi, Pakistan. The
representative samples consisted of students from under graduate and graduate classes only. The
study postulates significant relationship between consumer behavior and the predictors.
Utility/functionality was the most significant variable followed by need for uniqueness, materialism and
avoidance of similarity. In clothes category we found significant relationship with need for uniqueness
and avoidance of similarity. In shoes category utility/functionality and avoidance of similarity, in watches
utility/functionality, materialism, in sunglasses need for uniqueness, avoidance of similarity and
materialism, in handbags materialism, avoidance of similarity, accessories utility/functionality and
materialism were found to be significant. The findings from this study contribute to the practical
knowledge of marketing managers. They will have insights about the attributes that instigates
consumers to make purchase decision regarding different product categories.

Key Words: Need for Uniqueness, Materialistic Pleasure, Snob Effect, Utility

1. Introduction
The origins of modern Consumerism can be traced back to the eighteenth century, whereby
the concept of consumer societies began to flourish in the European block (Stearns, 2001).These were
the economies that formed the hub of commercial activities, having had an access to the global
products. Furthermore, post Second World War culminated into the ‘economy of abundance’ as has
been rightly suggested by Galbraith in his book ‘The affluent society’, (1958). This affluence was the
result of industrialization and technological revolution in United States and other developed countries
that led to the mass production of goods and hence forth increased individuals’ standard of living.21 st
century witnessed mushrooming growth in branded goods and consumer’s aspiration to endlessly
spend on luxury goods items. Since then there has been a continuous temptation on consumers end to
spend extravagantly and acquire prestigious goods to appear more urbane, chic and sophisticated.
Consumers choice of luxury brands is also considered as social indicators that also serve as an artifact
for the reflection of their status, eminence and position in Society (Power and Hauge, 2008) Consumers
incessant desire to spend on high end luxury brands such as Channel, Burberry, Gucci and Rolex have
compelled researchers to understand the prime motivators and determinant factors that instigate
consumer behavior towards branded goods. This paper seeks to understand the factors that influence
consumer’s selection of luxury brands in Pakistan and specifically those attributes on the basis of which
different product categories are selected. The subsequent text reflects on the literature review related
to consumer behavior towards conspicuous goods consumption with specific reference to luxury goods
market in Asia and Pakistan.

1 Assistant Professor, SZABIST, Karachi, Pakistan. Email: faryal.salman@szabist.edu.pk

2 Faculty Member, Institute of Business Administration (IoBM), Karachi, Email: warraich.u.a@gmail.com

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1.1 Motivations for Conspicuous Goods Consumption

The term conspicuous goods had been first used by Veblen (1857) in his famous works “The
theory of the leisure class”. He unveils the human behavior of displaying pecuniary métier through
indulging one’s self in purchasing luxury good and using it as a means of overtly displaying wealth by
the affluent class to seek social status and prestige. Products such as branded perfumes, designer
bags, prestigious cars, shoes, accessories, watches, designer clothes, fine chocolates wines are all
categorized as conspicuous goods. According to Liebenstein(1950) snootiness is essential to the value
of product. These goods may not necessarily hold any real or actual value but consumer pay
exorbitantly high price because such goods are insignia of affiliation with an elite class. This ostentatious
behavior fosters gratuitous display of material wealth to gain social esteem (Bagwell &Bernheim, 1996).

Consumers tend to purchase luxury brands to show their social prestige, maintain their
distinctive identity from others (Husic&Cicic, 2009;Tian, Bearden, and Hunter, 2001) and image
enhancing (Eastman et al., 1999). Two other motivations for buying conspicuous goods have been
identified as “snobbism” and “snob” (Corneo and Jeanne, 1997). The former asserts that individuals
buy expensive goods to disassociate themselves from poor, whereas the latter explains the tendency
to buy luxury goods to associate with the rich and the well-heeled. Consumers also tend to buy those
luxury brands reflect their ‘self-concept’ and individual identity(Belk, 1985). This can be described as
phenomena of human psychology where an individual inadvertently looks for human qualities in a brand
and relate to them in a personal way (Guthrie and Kim,2009).Branded itemson which consumer places
a higher value and a price tag are often bought to pacify the need for uniqueness as these goods are
owned by few individuals (Sajeesh&Jagmohan, 2011).Knight and Kim (2007) assert that consumers
tend to like goods that are not very popular or common to avoid similarity. Materialistic pleasures are
often accounted as a crucial factor for consuming branded goods. Consumers often drive satisfaction
by showing off their material possessions to others (Richins, 1994). Consumer’s materialistic values
are revealed through their possession when they are used for depicting and managing impressions(Belk
,1985).Hanzaee and Rouhani (2011)assert that cultures that are inclined towards materialism tend to
favor conspicuous consumption.

Some important factors that have been widely considered as a motivation for the purchase of
luxury brands are their perceived quality and superior performance as compared to non-luxury brands
(Jacoby and Olson, 1985;Vigneronand Johnson, 2004;Quelch,1987). It is based on consumer’s
perception of products intrinsic and extrinsic value, whereby former relates to brands performance and
durability and the latter deals with brand name and warranty (Rao and Monroe, 1989). The authors
assert that luxury brands are also regarded high for the value they stand for and are of better quality as
compared to non- luxury brands. Verhallen (1982) asserts that consumers perceive high value to
products that they perceive are not readily available. This notion was further supported by the research
conducted by Solmon (1983). He postulates that items that are rare, exclusive and not commonly
available hold more prestige and emit a higher value.

1.2 Luxury Goods Consumption in Asian Markets

The wealthy elite consumers in developed and more prosperous economies have a greater
spending on conspicuous goods. Whereas their counterparts in less developed countries emulate them
and the middle class consumers aspire to do the same. Despite the economic crisis the luxury market
is experiencing a massive upsurge in Asian economies, with China stealing the show. In a recent report
published by US-based marketing and consultancy group Bain and Co, it has been reported that there
has been a phenomenal growth in the global luxury goods market where it grew by 10 percent. The
figures are reported to be as high as 191billion euros, surpassing 173 billion euros in 2010 and 153
billion in 2009 (Wislon, 2012, China Daily). Another fast growing economy in the Asian block is that of
India. The country being an epitome of flashy and flamboyant consumption culture is now nestling the
luxury market. One of the major reasons is the growing disposable income of the middle class. The
luxury market has grown at 23% since 2006 and is continuously experience upsurges (Hundekari,
November 9, 2012).

1.3 Luxury Goods Market in Pakistan

Modern day consumerism and globalization has a profound effect on the buying behavior of
Pakistani consumers. Luxury goods market is setting its footprints in Pakistan because of a larger chunk
of younger population and more disposable income contributed by women workforce (Andrew, 2011).
Both these segments have more exposure towards luxury brands. No systematic data reports the size
and growth of luxury market in Pakistan, however Pakistani consumers are also inclined towards foreign

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brands (many of which are luxury goods) because they consider them to be of better quality(Pakistani
review 2001).A recent study conducted on university students in Pakistan found personal values and
materialism to be the most significant towards foreign branded apparels (Ahmad, Sabir, Ashraf. and
Arshad, 2013). Some of the local designers in apparel category are showcasing their products as luxury
brands( refer to figure 1)Although very exclusive high end luxury brands in different product categories
do not offer retail operations in Pakistan but they do have their presence through local entrepreneurs
who import these goods in small quantities targeted towards a very niche market. With the change in
the retailing landscape the country now hosts many ‘masstige’ brands in apparels, shoes and
accessories that are relatively expensive as compared to local alternatives. For example if a local pair
of shoe costs PKR 2000 these premium brands of shoes are available for PKR 8000. Such price
differences render these products affordable only to the elites and nouveau riches, thus making these
goods luxury brands in Pakistan. The following section provides answer to the research questions
related to the identification of those factors that motivates consumers to buy luxury goods in Pakistan
and also marks specific product categories most commonly consumed as luxury goods and their
relationship with consumer behavior variables.

2. Method
The research methodology for the study is based on exploratory research techniques.
Constructs were derived from previous studies however adaptation was made to suit the researcher’s
needs. The theoretical framework for the study is based on the relationship between consumer behavior
(dependent variable) and four independent concepts that are; a) need for uniqueness; b)material values
(Richins and Dowson,1992); c) snob effect(Corneo, Giacomo and Olivier Jeanne (1997))and
functionality/utility (Strizhakova, Coulter and Price 2008). Six product categories have been selected as
conspicuous goods as they are most commonly consumed in the target population under study; a)
shoes/footwear; b) clothes; c) handbags; d) watches; e) wallets and f) accessories. The basic notion of
the study is that consumer behavior towards luxury brands in Pakistan depends on four widely
acknowledged variables that are need for uniqueness, materialism, snob effect and utility factors in
popularly used product categories. Cross sectional data for the study has been collected through a self-
administrated questionnaire (by student volunteers) through convenience sampling from a sample size
of 650 students studying in different business schools in Karachi, Pakistan. Out of the total
questionnaires distributed 638 were returned. Few of them were discarded because of incomplete
responses and in total 606 were used for analysis. The representative samples consisted of students
from under graduate and graduate classes only. The investigating instrument consisted of close ended
questions consisting items for all the variables adopted for the study and the demographic profile of the
respondents.

 First construct was need for uniqueness measured through ten statements. The instrument was
adopted from the works of Tian, Bearden and Hunter, (2001) Examples for statements are:
o I use designer brands as a way of telling people I am different;
o I often combine possessions in such a way that I create a personal image for myself that can’t
be duplicated;
o I often look for one-of-a-kind product or brands so that I create a style that is all my own;
o I often try to find a more interesting version of run-of-the-mill things because I enjoy being
original.
 The second construct materialistic pleasures were derived from Richins and Dowson (1992). It had
ten items and were measured through following statements:
o I admire people who own expensive homes, cars and clothes;
o Some of the most important achievements in life include acquiring material possessions;
o I like to own things that impress people;
o I have all the things I really need to enjoy my life.
 The scale to measure snob effect was customized from works of Corneo, Giacomo and Olivier
Jeanne (1997).The construct consisted of six statements. Its examples are:
o When products or brands I like become extremely popular, I lose interest in them;
o I avoid products that have already been accepted and purchased by the average customer
o As a rule, I dislike products or brands that are customarily purchased by everyone.
 The forth construct was functionality/utility adopted from (Strizhakova, Coulter and Price (2008). It
was measured through ten statements. Examples of items are:
o I choose designer brand because it tells a lot about the durability and reliability of the product;
o I can tell a lot about a products quality from the brand name;
o I use designer brand as a sign of purchasing quality product;

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o I choose designer brand because it tells a lot about the durability and reliability of the product.
 The instruments measures consumers responses in six product categories that are: a) clothes; b)
shoes/footwear; c) watches; d) sunglasses; e) wallets; f) accessories.

The last part of the questionnaire consisted of consumer’s demographic profile investigating
their age, education, and gender. Data was analyzed using SPSS through descriptive stats and
regression analysis.

Results
Table: 1
Cloths Shoes Watches
t t
B S.E Beta B S.E Beta B S.E Beta t value
value value
- - -
Constant 0.221 -.400 0.174 -1.637 0.206 -4.278
0.089 0.285 .880**
Need for
0.596 0.124 .569** 4.821 0.033 0.058 0.031 .562 0.079 0.07 0.069 1.124
Uniqueness
Materialistic
0.058 0.085 0.052 .687 0.067 0.077 0.064 .864 0.533 0.066 .506** 8.097
Pleasure
Snob
0.232 0.111 .224* 2.099 0.378 0.083 .336** 4.548 0.083 0.053 0.071 1.559
Effect
Utility 0.073 0.076 0.068 .956 0.565 0.084 .545** 6.743 0.6 0.051 .562** 11.869
R Square 0.727 0.82 0.83

N 101 101 101

Sunglasses Hand Bags Accessories

t t
B S.E Beta B S.E Beta B S.E Beta t value
value value
- -
Constant -0.13 0.209 -.621 0.228 -3.232 0.189 -3.264
.738** .616**
Need for
0.372 0.115 .351** 3.245 0.036 0.08 0.025 .448 0.095 0.053 0.082 1.798
Uniqueness
Materialistic
0.251 0.096 .245* 2.612 0.458 0.053 .472** 8.673 0.482 0.053 .453** 9.048
Pleasure
- -
Snob effect 0.374 0.105 .358** 3.556 0.577 0.063 .502** 9.136 0.047 -.110
0.005 0.004
Utility 0.008 0.047 0.007 .169 0.108 0.087 0.079 1.246 0.65 0.046 .614** 14.085
R
R Square 0.842 0.828 0.87
Square
N N 101 101 101

Note: a . Dependent Variable Consumer Behavior

*p< 0.05 & **p< 0.01,

Table1 shows the results of regression analysis for all categories and results of each category
separately. Data was collected through a questionnaire using survey method. Total 606 questionnaires
were filled correctly (101 respondents for each category). Results shows that consumer behavior
(studying all categories combine) is significantly influenced by all predictor under study i.e., need for
uniqueness, materialistic pleasure, snob effect and utility. These variables have positive impact on
consumer behavior at p value less than 0.05 while showing an R square of 0.73. The results of clothing
category show that materialistic pleasure, and utility of the product has no significant impact on the
consumer behavior while buying cloths. However, need for uniqueness and snob effect significantly
define the consumer behavior in clothing. The findings suggest that clothes apart from dictating the
unique identity of a consumer, should not also be worn by commoners(refer to the appendix for graphics
of an emerging luxury brand in clothes). Further in shoes category, results shows that snob effect and
utility play significant role in influencing the consumer behavior while need for uniqueness and
materialistic pleasure has no impact on consumer behavior in the category. In watch category,
consumers prefer to consider materialistic pleasure and utility while taking buying decision. Hence need
of uniqueness and snob effects insignificant for consumer behavior in watch category. Moreover,
consumers are significantly inclined to need for uniqueness, materialistic pleasure and snob effect while

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purchasing sunglasses. Regression analysis shows that these variables pose the positive impact on
the buying behavior (p value (0.05) and this model shows R square of 0.842. Further table 1 above
shows that materialistic pleasure and snob effect are the variable that are significantly consider while
purchasing the hand bags, however, consumer least bother about the utility and uniqueness of the
product. Accessories category shows the same set of variables that was considered for purchasing
watches. Consumer tends to prefer materialistic pleasure and utility while taking buying decision in
accessories category.

Table: 2
All Categories
Variables B S.E Beta t value
Constant -.643** 0.093 -6.9026593
Need for Uniqueness 0.105 0.031 .094** 3.40424054
Materialistic Pleasure 0.483 0.03 .464** 16.3820633
Snob Effect 0.297 0.028 .269** 10.5138507
Utility 0.29 0.026 .266** 11.0970151
R Square 0.731
N 606

3. Conclusion
The present study is an attempt to measure consumers’ attitudes and motivations towards
luxury brands in Pakistan and unveils the factors that instigate conspicuous consumption in selected
product categories. The empirical findings of the study suggest that although need for uniqueness,
materialistic values, status seeking behavior and functionality influence over all purchase decisions
however their individuals influence on each product category may vary. Although luxury brands industry
is still in its infancy in Pakistan nonetheless this study will be an important milestone in gaging into
consumers’ mind and shaping marketing strategies. There has been a recent upsurge of some
International foreign brands such as Next, Mango, Debenhams, Charles and Keith, accessorize etc., in
Pakistan. With sixty percent of population as highly inspirational youth and a rising disposable income,
these statistics pose significant opportunity for marketers of Luxury products. The findings of the study
may proof helpful in understanding category wise purchase intentions of the target market behavior and
devise suitable positioning strategies.

Current study is conducted on university students only as they are considered a suitable
surrogate for consumer behavior and also because they are more into using fashionable luxury products
because of their age group and more exposure to foreign brands. This may pose a limitation of the
generalizability of the study. All the concepts measured are adopted from past studies. However deeper
consumer insights can be gaged through qualitative in-depth studies.

It is recommended to consider the impact of culture on the motivation of consumer towards

purchase of luxury brands in Pakistan.

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