Question 1

Question 1
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China has a highly collective and restrained culture (Hofstede Insights Citationn.d.).
Hofstede (Citation1985, 348) explains that Collectivism stands for a preference toward a
“tightly knit social framework” (Hofstede Citation1985, 348) where individuals expect
relatives or others in their group to look after them in exchange for unquestioning loyalty.
Hofstede (Citation2011, 15) defines restraint refers to a society that controls this
gratification of needs by means of what can be considered strict social norms (Hofstede
Citation2011). Asian consumers purchase them to secure social recognition as well as to
adhere to social norms.
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Today's rising global appetite for luxury, is far beyond the limited circle of riches and power.
For an emerging country, the presence of luxury stores is a signal of the country's economic
growth and of the emergence of a middle class willing to access to the best that the
consumer society can offer.
If mature countries still remain the dominant luxury markets because of their high
purchasing power (USA, Japan, Europe), then the long-term future of luxury is elsewhere in
these emerging countries. It is predicted that China could become the Number 1 country in
the luxury sector in 2020, because of the considerable size of its middle class, wanting to
enjoy life after decades of deprivation (Bain & Company., 2014), and travels now outside
China.
In fact, the even notion of performance does not fully apply to luxury: Luxury redefines what
quality means.
As luxury high prices are not fully explained by functional qualities, this means that luxury
brands create value far beyond the satisfaction derived from superior product or service
performance or quality. Luxury price is that of the "singularities" (Karpik and Scott, 2010)
built by the intangibles (such as heritage, tradition, history, country of origin, association to
famous clients, to an imaginary lifestyle). It is also the price to be paid to symbolically be
part of the same closed club as these VIP's who made the brand, thus, gain social
recognition and distinction (Veblen, 1899). Finally, beyond wealth and status signaling (Belk,
1988), as shown by Amaldoss and Jain (2005) it is the price high enough to make followers,
unable to follow.
Wiedman et al. (2009) proposed an integrated tri-partite model of these key values created
by luxury. They distinguish functional, individual (luxury for self) and social values (luxury for
others). Functional values remind that unlike art, luxury products have also to be extremely
well performing. Individual values refer to self-identity values, hedonic benefits and liking
materialism. Social values are fulfilled by luxury conspicuousness. Wiedmann et al. (2009)
added a "financial value" to their model, but this remains awkward: Measured by an item
like "Luxury is inevitably very expensive", this is more a defining characteristic than a value
stricto sensu.
They express first a choice of brands. In modern luxury, the brands have accumulated a
symbolic capital which does not merely rely on the product uniqueness and preciosity but
on the desirability of the brand as a whole. Social statements are made by wearing the logos
of known brands: Social recognition is not conveyed by a bag unless its brand is recognized
even by non-buyers.
In modern luxury, brands have become crucial because the more one sells intangible values
beyond functional ones, the more these intangible values must be certified: Only the fame
of the brand can guarantee them. This is why luxury business is a brand-building business:
Once established, trust, reputation and desirability can be leveraged to expand the product
base, as well as the consumer base. These brands do not sell function but hedonism, style,
recognition and art (Hagtvedt and Patrick, 2009).
To conclude, it is time to acknowledge that luxury is made by brands and that luxury brands
are not simply brands which sell luxurious products, they also sell the dream attached to
their own name and the world they symbolize. The luxury sector has grown because today,
more people want a share of this luxury dream, even exceptionally (Nueno and Quelch,
1998; Silverstein and Fiske, 2005). In the modern society, consumption is held as a source of
happiness (Baudrillard, 1998): It is normal that its most extreme production as well as
experience be held as an access to dreams, under the umbrella of a highly desirable brand.
Another well-known luxury scale (Dubois et al ., 2001) identifies three factors underlying
luxury: distinction, elitism and hedonism. The first factor is measured by items such as "This
is a brand to dream", the second by "This brand represents luxury" and the third by "It is a
real pleasure to own this brand".
It starts with products, out of the ordinary, rich in emotions: superior quality, craftsmanship,
full of hedonism and being the fruit of history and tradition. Luxury opposition to mass
marketing is also made through its selective distribution: very few stores but highly
qualitative stores. It is important to be strict concerning where the stores will be located,
how many will they be? In what type of town, of street, with what atmosphere? Both
factors create feelings of possessing something rare, which does not mean just scarce, but
also far above the ordinary.
Although high quality is necessary, this is not sufficient to be qualified as luxury: The
products are also to be perceived as social and cultural markers. The brand must look
exclusive: This is achieved through two factors. First, the brand needs to convey that it is not
for everybody: This is done by restricting its diffusion, limiting its accessible product lines,
controlling its prices and most of all taking care of whom is wearing it on the streets. The
second factor of exclusivity is more intangible: It refers to the singular style of the brand,
intemporal and yet remaining so original, actual. Exclusivity here refers to the permanence
of the brand, remaining one of its kind, singular in its style or behavior, also in the ability to
always be very present in the media. Four first-order dimensions will increase the overall
likelihood that the brands be considered both as luxurious and dreamt about.
In the tested model, the bottom four factors are playing another game: fame. The glamour
factor is constructed by the celebrities believed or known to be buying the brand. They are
themselves very mediatized and contribute to make the brand: Audrey Hepburn made
Tiffany and as Grace Kelly made Hermès. Together with the elitism factor (the brand being
associated with very high ticket special items, inaccessibility), these VIP's build the "prestige
level" of the brand.
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According to Belfanti (2009), the sixteenth century is the “turning point”. Changes in
clothing and accessories already start to become more frequent in the fourteenth century,
but the expression of one’s own taste in clothing was still to a great extent limited to the
narrow circle of the social elite, with the careful strategy of appearance defined precisely by
one’s social class.
In this century there was not a generalized increase in purchasing power (Belfanti 2009, p.
272). On the contrary, the price of food increased such that it made the poor even poorer
and landowners even wealthier. Meanwhile, there was an increase in the number of middle
class and upper-class people whose success originated in the world of work. This increase
led to an inflation of sumptuary laws in Europe, with examples of this (Beebe 2010; Belfanti
2009) also to be seen in other parts of the world, from Japan to the United States, in an
attempt to maintain the status quo. Anyone who did not dress according to the strict
definitions was put on trial and punished.
According to Belfanti (2011, p. 211) while in India, China and Japan, fashion was identified
with luxury and its influence came from a “trickle-down” effect, in Europe, the greater
availability of a supply of Fashion products and accessories at more reduced prices led to
many examples of a “trickle-up” effect.
The framework for the book is established in the chapter by Marta Mendonça and from a
philosophical perspective, the origin of luxury and its relationship with human beings is
explored. It is referred to by various authors, among them Voltaire, who questions “why
luxury is a necessity in the lives of humans”. And it is explained how culture, the “human
world”, provides the conditions so that the dynamics of tastes and desires materialise in
different ways and thus furnishes humans with the realisation of their aspirations to luxury.
With regard to emotions, Ambrogia Cereda invites us to discover the transformation of
consumer culture through the lens of “glamour”, as defined by Gundle and Castelli (2006)
the search for an enchanting and dreamlike experience with goods and services. This auratic
dimension attached to places and things is understood in terms of luxuriousness, exists in
the mind of the consumers and is linked to their interpretation of the symbolic world
attached to the wide range of luxury goods.
Social class
Beginning from the twentieth century, the luxury world has started to lose part of its the
exclusivity and total isolation, and it has opened the doors to an increasing number of
ordinary consumers from the upper middle class who are not wealthy but want to enjoy a
short trip in the universe of luxury, they are the so-called “excursionists” (Dubois and
Laurent 1995), who represent a source of luxury growth even if, different form their wealthy
peers, they “cannot buy lofts or penthouses, or even Chanel suits, but they might
occasionally buy a small product from a prestigious brand for themselves, friends, or some
important contact. This development drives the queues of tourists waiting outside the Louis
Vuitton or Gucci flagship stores in capital cities” (Kapferer2015, p. 26).
Those areas could generally be found next to the centres “of wealth and power and they
quickly acquired an allure as tourist sights, places of style and opulence, and home to all
that was modern and fashionable” and the “ultimate purpose of such grandiose efforts was
to endow commodities with an aura, a mystery or an appeal that went beyond their use-
value” (Gundleand Castelli2006, p. 10). As cities expanded, and the thirst for luxury
increased, they also became the point of reference for cultural change (Dewald 1996, p.
133) and for finding events, entertainment and more, so that new ways emerged for old and
new elites of asserting their social and cultural leadership. In the same time, against the
background of the metropolitan life role-playing and fantasy could become key elements of
an individual’s social behaviour (Gundleand Castelli2006, p. 29).
In the urban context the possibility to access luxury in some form has increasingly expanded,
mainly due to the incorporation of that exclusive world into the spheres of industrial and
consumer society. Such transformation has not only affected but has also blurred the
boundaries between goods as well as it has reversed the relationship between luxury and
rarity, that is now deeply embedded in the typical mechanisms of imitation and competition
of late modern societies: “[G]rowth and absorption have influenced current views on the
concept of luxury, and the idiosyncratic nature of luxury has been influenced by the rules of
competition of industrial economy and society” (Turunen2018, p. 16). That relationship is
far from being irrelevant and needs to be reframed, as the main goal of luxury brand
management reveals in Kapferer’s view (2015, p. 32), “unlike any other sector, for luxury,
growth creates ambivalence, because the expanded market penetration dilutes perceived
exclusivity. By starving the market, managers can drive prices up and earn excess margins,
which can be reinvested in creating brand prestige. Thus, luxury brand management is
highly specific and turns traditional marketing principles upside down”, the crucial factor for
the existence of luxury products and brands is thus fundamentally to create an excess of
demand without satisfying it.
If the key of desire appears as a useful tool for managing the perception of luxury among
the consumers in the eyes of luxury brand managers, at the same time it seems to appeal to
the main feature of the typical middle class mentality.
As Campbell (1987, pp. 35–38) puts it, this distinctive emotional condition is at the basis of a
desiring or yearning predisposition that fuelled aspirations and dreams of the bourgeoisie,
and that was characterised by insatiability, an apparently unlimited pursuit of wants. Also
due to the fact that middleclass people “had neither heritage nor breeding to draw on, they
set about winning this by fashioning a lifestyle of great ostentation. Massive palaces, ultra-
refined interiors, enormous yachts, grand summer houses, glittering parties, elegant
weddings, and international travel became the key markers of status of the super-rich”
(Gundle2008, p. 122).
In this perspective, luxury goods are available for self-narration in many forms, distributed
on the two levels of the global chessboard, where wealthy consumers can find a place next
to middle class consumers in order to receive social recognition, success, and increase one’s
own prestige (Mazzalovo and Chevalier 2012, p. 5):
The global luxury chessboard is therefore distributed on two levels, if not more; on the one
hand, true luxury, which few people can afford, increases its hold on the market. The growth
in the number of wealthy consumers (especially in the BRIC [Brazil, Russia, India, China]
countries), combined with a bigger supply, plus investments in the luxury industries that
have been yielding higher returns on investment than ordinary brands, have led to wide
visibility of luxurious lifestyles.
Nowadays’ consumers appear as ostensibly continuing their search for forms of excitement
or diversion, for identification or self-expression, also to avoid a return to the obnoxious
vision of a well-organized and planned life as heralded in the modernity (Campbell 1994).
Ranging from gourmet food and wine to lavish weekends at prestige resorts, the variety of
possibilities for the appropriate deluxe experience seems to be expanding every day,
drawing with itself a plethora of new issues about what luxury is going to be, most of all in
the form of “self-illusory, imaginative hedonism that found a practical outlet in the
distractions and shopping of the late nineteenth century and after […]. The daydreaming to
which novelists had become so expert in catering was sustained and further stimulated in
the new temples of consumption” (Gundleand Castelli2006, p. 10).
An extremely important aspect of the relation between luxury and need is also provided in
the interplay between the notions of ‘need’ and ‘desire’, which have been held as vital
preconditions for the presence of luxury in a society. The concept of desire is difficult to be
defined, or rather, it’s difficult to identify what characterizes the nature and the dimension
of desire and if it is enough to influence our perception of luxury. Even if the idea of luxury
often entails a desiring dimension (for exclusiveness, expensiveness, rarity) the very
sensation of it is variable in quantity and quality due to its general incidence, the very extent
of its diffusion or merely the intensity with which it is held (Berry1994, p. 5). Luxury goods
are expected to be widely desired and even to produce a certain sensation of envy among
those who can’t afford them, nonetheless desirability alone is not sufficient quality to
guarantee that we are dealing with luxury products. This condition can be better expressed
by the case of the products of (mass) fashion which are widely desired even though they are
far from being legitimated as high gamut products pertaining the luxury sector of
production, since they are generally not the result of sophisticated techniques of production
or long periods of manual work, but that are nonetheless associated with an idea, an
experience, a value, a possibility to make a statement about one’s ownership to anyone
(Bovone 2014).
China market
“China emerged as the luxury market in which to have a presence, a market that didn’t exist
10 years before in 2003. China saved many brands from sliding into the red. […] China’s
economic growth in 2013, China represented around a quarter of global luxury purchases”
(Som and Blanckaert 2015, p. 15). In this perspective, we might assume that if Italians can
be regarded as the main creators of meanings for luxury goods and luxurious experience in
late modern societies, Chinese appear as the crucial component in the interpretation of
those meanings and in their use for individual purposes. In particular, they seem to pay
particular attention to specific issues related to the changes of the Chinese luxury landscape,
namely, a meaning and perception of luxury that is embedded in the past, but is responding
to the changing public sentiment; the influence of new regions in China that represent an
increasingly significant market opportunity for long-term luxury brand sustainability; and,
the increasing significance of heritage and country of origin, which enable international
luxury brands to connect with current, but also prospective Chinese luxury consumers
(Rovai 2015, 130). These factors are to be taken into account in understanding the changing
nature of the different typologies of luxury(ous) experience contemporary consumers are
looking for.
In this perspective, it is also important to point out that Chinese culture and way of thinking
insist on concepts of rites and harmony as inspired by Confucian thought. As a consequence
of this, the experience with luxury goods is generally lived and interpreted as an affirmation
of individualism and distinction, reflecting at the same time the structure of social dynamics.
Such a traditional interpretation of the relationship with goods and services is also related to
the concept of inequality between individuals and the spiritual forces existing between
them. In this framework, luxury goods participate in a ritual hierarchical pattern in which
status and social obligations are reflected. Besides, they represent the character and spirit
of each individual (who can afford them), since traditional Confucian culture does not
consider luxury as something superfluous or frivolous (Rovai 2015).
As Chen (2013, p. 114) suggests: “in an attempt to reach the same level as those rich people,
the middle class in China may consume luxury beyond their income in order to feel that they
belong to a certain elite group”, indeed, “due to urbanization and the ever-rising number of
middle classes, the demand for luxury in China has grown rapidly in recent years”.
Consumer behavior nonetheless appears as significantly differentiated and is regarded as an
effect of the rapid expansion of luxury consumption. In more economically advanced
regions, Chinese customers still adopt a highly knowledgeable and refined approach
towards the purchase of luxury brands (Rovai 2015) and they are able to spend long time
looking for the best solution in terms of money invested and expression of their own
personality and individuality: this process of information research and evaluation can last up
to 2–3 months before the actual purchase (Panchout 2013).
Engaging with luxury consumers in China also means recognizing their attention for the
symbolic dimension of things and experiences. China appears to the observers as a country
that places great importance on its cultural heritage and traditions, to the extent that the
social organization allows luxury brands to be used as “amulets, instantly recognizable and
acknowledged as a sign of personal success and social status”. Consumer behaviour is
supported by this symbolism and those values, producing a striking resonance between
individual and the symbolic values of brands (and in particular luxury brands) in the mind of
the consumer (Panchout 2013, p. 92):
Likewise, Woodall (Citation2003) has identified another set of 4 dimensions of luxury values,
including exchange, use, utilitarian and intrinsic values. Similarly, Wiedmann et al.
(Citation2007) conceptualized luxury value using four dimensions, i.e. financial, functional,
social, and individual. Likewise, literature also advocates the candidature for various other
luxury dimensions including objective, subjective and the collective values (Berthon et al.,
Citation2009); as well as symbolic, functional, cost-related, experiential (Smith & Colgate,
Citation2007), self-directed and other-directed values (Tynan et al., Citation2010). Based on
the early research, it is evident that there are some standard and repeatedly proven
dimensions of luxury values. Apparently, the luxury value perception has links with social
dimension referring to consumption and use of luxury brands being appreciated in the social
circle, functional dimension referring to the use of and features of the luxury brand, and the
individual dimension referring to the fulfillment of personal motives. Having understood the
role of luxury-based value dimensions, building consumer perception and established
behaviors, the literature also argues that the luxury value is an outcome of the combined
effects of various dimensions. However, the significance of each luxury value dimension will
vary across variant cultures (Faschan et al., Citation2020).
In today’s digital world, because of the internet and electronic medium, consumer
interactivity and communication has gone to another level (J. H. Kim, Citation2019).
The social dimension of luxury value is perceived utility acquired by individuals with the
services or products recognized in their social group. This perceived utility includes
conspicuous value and the value of prestige. These things influence the inclination and
evaluation to buy or use luxury brands (Bearden & Etzel, Citation1982; Brinberg & Plimpton,
Citation1986; J. Kim, Citation1998; Vigneron & Johnson, Citation1999). Here,
conspicuousness means to spend money on a luxury product to display economic power.
Conspicuous consumption also encompasses the factor of expenditure which is specifically
made to display one wealth in an ostentatious manner (Mason, Citation1981). Consumers
do not purchase different things because of their functional benefits but the reason behind
such purchase is to display their image in the public (O’Cass & McEwen, Citation2004).
Klaus-Peter et al. (Citation2009)carried out a research study in which researchers divided
their sample into 4 clusters; the Materialists, the Rational Functionalist, the Extravagant
Prestige-Seekers and the Introvert Hedonists. The people belonging to “the Materialists”
group tend to give the least value to the social dimension of Luxury Value. The second
cluster of “the Rational Functionalist” also gives priority to individual needs rather than
social value. While the 3rd group and 4th group of people acts opposite. They want to
impress others from the brand they buy. A study conducted on the luxury cruise industry by
(Hwang & Heesup, Citation2014), shows that perceived brand prestige positively affects
brand loyalty (which is one of the aspects of consumer luxury behavior). Another study
shows that brand prestige plays important role in social value and customer satisfaction
(Han et al., Citation2017). Sharda and Bhat (Citation2018) have described in a research
study that youth of India tend to buy expensive items to symbolize their wealth and status
that ultimately depicts the importance of the social and symbolic value of prestigious and
expensive brands. Another research work, about tourists’ perspective, done by Correia et al.
(Citation2018), has shown the social nature of shopping behavior of luxury tourists. This
nature is conscious about not only about the items they buy, but also the place from where
they buy. Another study indicates that status-conscious people tend to buy clothes that
depict as status symbols (Millan & Mittal, Citation2017). It also states that public self-
conscious consumers want to impress others that make them influenced by others’ choices
regarding clothes. In brand dilution condition, if a product is announced as a limited-edition
product, it enhances consumers’ attitude towards luxury brands. Consumers with a higher
level of self-presentation motive are more prone to adopt this trend thus is leading to the
following hypothesis
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Fake product
The luxury goods industry is a flourishing and ever-growing market. With the value of the
luxury market growing, many designer brands have become targets for counterfeit
producers, and consumers' decisions to purchase fakes instead of originals have developed
into a worldwide crisis (Jiang and Cova, 2012). The Report on European Customs
Enforcement of Intellectual Property Rights (European Commission, 2013) states that the
top categories of fake articles were clothing, which accounted for 12 per cent of the overall
amount, followed by other fashion accessories (11 per cent). Among these, luxury brands
suffer the most; in this sector, the economic damage in 2012 reached US$313 m of seizures
a year (World Customs Organization, 2013). In 2012, the most counterfeited product
category was handbags and wallets, reaching US$500 m of seizures worldwide (World
Customs Organization, 2013).
Considering counterfeits as a sign of brand desirability (Wang and Song, 2013). In addition,
as various scholars state (Bloch et al. , 1993; Cheung and Prendergast, 2006; Wilcox et al. ,
2009; Yoo and Lee, 2009), customers may look at fake consumption as an attempt to
assume a particular personality and social traits (imagery block) to gain social approval. The
more a genuine consumer is aware of these attempts, the more he or she may be personally
conscious of possessing these desirable social and personality traits him- or herself (Cordell
et al. , 1996; Park et al. , 2010), and the more he or she is inclined to feel positive sensations
related to being consistent with a socially desirable profile (feelings block).
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Asia is known as the world’s center of both counterfeit goods production and consumption,
with China often seen as the primary culprit (Predergast, Chuen, & Phau, Citation2002).
One major issue is understanding why people buy luxury goods. Based on the seminal work
of Vigneron and Johnson (1999), a broad range of studies has been carried out recently on
luxury consumer behavior. Most of them focus on social factors, such as hedonism, group
conformism, status-seeking, perception of the self (Hirschman and Holbrook, 1982;
Lichtenstein et al., 1993; Batat, 2019; Brun and Castelli, 2013; Hudders and Pandelaere,
2013; Wiedmann et al., 2009) and cultural specificities (Atwal and Bryson, 2014; Hennigs et
al., 2012; Lu, 2008; Wong and Ahuvia, 1998).
However, the impact of income inequality is seldom analyzed in this context. One can
wonder whether inequality leads to more consumption of luxury goods. In highly unequal
societies, belonging to the wealthy class used to be traditionally expressed through
conspicuous consumption, as already argued by classics such as Veblen (1899), Simmel
(1904) and Bourdieu (1979). Research on consumer behavior has confirmed that the so-
called Veblen effect had an impact on consumption until today (Leibenstein, 1950; Mason,
1981; Tian et al., 2001; Kastanakis and Balabanis, 2012), although the luxury market has
transformed from a niche orientation addressed to the happy few into a fast-growing global
industry (Donzé and Fujioka, 2015). Hence, there is a need to measure the possible relation
between the development of luxury consumption around the world and growing
inequalities. Ordabayeva and Chandon (2011) argued that increasing equality led to more
conspicuous consumption by the bottom-tier consumers because it could fulfill a desire for
greater position gains.
The relocation of production activities to emerging countries contributed to the
development of counterfeit goods (Gistri, 2021; Grossman and Shapiro, 1998).
access to new markets and new consumers – particularly in emerging countries – is a major
topic relating to both the globalization and democratization of luxury brands. Social
distinction and exclusivity are important factors in explaining the consumption of luxury
goods (Mason, 1981; Eastman et al., 1999; Kastanakis and Balabanis, 2012). However, to
delineate the factors behind the global expansion of luxury business, scholars tend to point
to elements such as the emergence of new generations of consumers such as millennials
(Cabigiosu, 2020) or the expansion of middle classes and increases in disposable income
rather than social inequality (Eckhardt et al., 2015; Xu et al., 2013).
However, a shortcoming of that study is its lack of clarity concerning the differences
between categories and it fails to precisely define “luxury.” Accessible luxury – for example,
accessories of global brands – is now a major target of luxury companies because the
segment provides the highest profits because of the large margins that come with massive
sales. Silverstein and Fiske (2008) and Truong et al. (2009), use the concept of “masstige
brand” (mass-prestige) to describe these goods, which also ties into the so-called
democratization of consumption.
Although the literature is heterogeneous in terms of statistical methodologies and the scope
of social inequality globally (Semieniuk, 2017), there is a consensus that income and wealth
inequality has dramatically increased in the USA and Western Europe since the 1980s and
throughout the world since 2000 (Piketty, 2019). Ray and Vatan (2013) argue that French
exports of luxury goods are strongly related to income inequality in the partner country.
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How luxury brand create value
Luxury is as old as humanity, at least humanity with a social and hierarchical organization
(Berry, 1994).
Luxury started as a niche, limited to the happy few, the only ones who could afford it. At the
turn of the past century, few people had an automobile, just as very few consumers today
fly in private jets or own a yacht or maintain a Caribbean island. Although these images
come spontaneously to mind when consumers are asked what the word luxury evokes
(IPSOS, 2014), modern luxury is very different: It is an actively growing sector, targeting an
expanded clientele. Luxury stores now flourish in all capital cities of the world. For an
emerging country, the presence of luxury stores is the signal of the country's economic
growth and of the emergence of a middle class willing to access to the best that the
consumer society can offer.
If mature countries still remain the dominant luxury markets because of their high
purchasing power (USA, Japan, Europe), then the long-term future of luxury is elsewhere in
these emerging countries. It is predicted that China could become the Number 1 country of
the luxury sector in 2020, because of the considerable size of its middle class, wanting to
enjoy life after decades of deprivation (Bain & Company., 2014) and who travels now
outside China.
Despite the ubiquitous visibility of luxury brands and luxury malls in capital cities of the
world, the question "what is luxury? " is still debated among academics. Not only are there
as many definitions as researchers but also these definitions changed through time
(Yeoman, 2011; Yeoman and Mc Mahon-Beattie, 2010). Many scales have been proposed to
identify what factors underlie the luxury concept (Kapferer, 1998; Vigneron and Johnson,
1999; Dubois et al , 2001; Beverland, 2005; Wiedmann et al. , 2012). However, this
abundance of scales has not helped in understanding the steady growth of the luxury sector.
To grow, with the exception of very few (Romanée Conti wine, Ferrari or Rolls-Royce
automobiles, boutique hotels with very few rooms,) luxury brands have had no choice but
to abandon product and ingredients rarity as the precondition of luxury and adopted
"abundant rarity" strategies (Kapferer, 2012) characterized by feelings of exclusivity more
than actual exclusivity and by artificial rarity tactics (limited editions, capsule collections).
This is also why luxury brands have changed the focus of their investments, moving from
production to the creation of memorable retail experiences, to personalized services and to
attaching symbolic capital and prestige to the brand name itself through communication,
social influence, social networks, celebrities, brand ambassadors [...] Because these
investments are very demanding, many independent luxury brands have now joined
concentrated luxury groups (Kapferer and Tabatoni, 2011): Gucci, Bottega Veneta, Bulgari,
Loro Piana, etc., are recent typical cases.
Luxury evokes high prices among consumers of most countries (Godey, 2013). But the high
price of luxury is of a special kind: It can never be fully justified by a gap in product quality or
performance alone. Sheth Godin's definition of luxury (Godin, 2009) as "needlessly
expensive" does capture this essential facet.
As luxury high prices are not fully explained by functional qualities, this means that luxury
brands create value far beyond the satisfaction derived from superior product or service
performance or quality. Luxury price is that of the "singularities" (Karpik and Scott, 2010)
built by the intangibles (such as heritage, tradition, history, country of origin, association to
famous clients, to an imaginary lifestyle). It is also the price to be paid to symbolically be
part of the same closed club as these VIP's who made the brand, thus, gain social
recognition and distinction (Veblen, 1899). Finally, beyond wealth and status signaling (Belk,
1988), as shown by Amaldoss and Jain (2005) it is the price high enough to make followers,
unable to follow.
Wiedman et al. (2009) proposed an integrated tri-partite model of these key values created
by luxury. They distinguish functional, individual (luxury for self) and social values (luxury for
others). Functional values remind that unlike art, luxury products have also to be extremely
well performing. Individual values refer to self-identity values, hedonic benefits and liking
materialism. Social values are fulfilled by luxury conspicuousness. Wiedmann et al. (2009)
added a "financial value" to their model, but this remains awkward: Measured by an item
like "Luxury is inevitably very expensive", this is more a defining characteristic than a value
stricto sensu.
In modern luxury, the brands have accumulated a symbolic capital which does not merely
rely on the product uniqueness and preciosity but on the desirability of the brand as a
whole. Social statements are made by wearing the logos of known brands: Social
recognition is not conveyed by a bag unless its brand is recognized even by non-buyers.
In modern luxury, brands have become crucial because the more one sells intangible values
beyond functional ones, the more these intangible values must be certified: Only the fame
of the brand can guarantee them. In luxury, no one wants to buy the wrong brand. This is
why luxury business is a brand-building business: Once established, trust, reputation and
desirability can be leveraged to expand the product base, as well as the consumer base. This
explains why luxury brands can be so largely extended
To conclude, it is time to acknowledge that luxury is made by brands and that luxury brands
are not simply brands which sell luxurious products, they also sell the dream attached to
their own name and the world they symbolize. The luxury sector has grown because today,
more people want a share of this luxury dream, even exceptionally (Nueno and Quelch,
1998; Silverstein and Fiske, 2005). In the modern society, consumption is held as a source of
happiness (Baudrillard, 1998): It is normal that its most extreme production as well as
experience be held as an access to dreams, under the umbrella of a highly desirable brand.
https://www.tandfonline.com/doi/abs/10.1080/20932685.2018.1435294?
journalCode=rgfm20
China’s luxury goods market is still expected to keep on growing in China despite the
slowdown of the last years. Chinese consumers’ appetite for luxury brands is still present
and in particular in new geographic areas of mainland China is growing as it is growing their
digital experience in luxury purchase. Nowadays it is showing an increasing interest in luxury
consumption and also a new emerging creative momentum (Rovai, Citation2016).
The Chinese socio-economic transition from a centrally planned economy to a market
oriented one has oriented Chinese consumers towards global luxury fashion brands seen as
symbols of the new acquired success and identity social status (Park, Rabolt, & Sook Jeon,
Citation2008). Chinese consumers purchase luxury garments to prove their achieved status
in relation to the Chinese socio-cultural symbolic value of products representing an
additional status (Adams, Citation2011). Chinese consumers, in particular the “new rich”
segment arising from the new Chinese young digitally-savvy middle-class, and the younger
upscale digitalised luxury segment have become one of the main consumers’ segments,
showing their newly acquired status or rewarding themselves and their family and focusing
on a new online purchasing experience. If in the past, luxury goods firms have cautiously
chosen to orient themselves towards digitalisation as their main concern to lose their aura
of exclusivity (Kapferer, Citation2014; Okonkwo, Citation2007), and a personalised unique
luxury in-store experience would be considered the main choice (Kapferer, Citation1997);
recently, as a response to the increasing online luxury appetite from Asian economies,
luxury brands have began to develop digital technologies in order to affirm their brand
online presence and customers awareness (Okonkwo, Citation2009). Consequently, if in the
past the development of the digitisation phenomenon was problematically considered with
respect of the exclusivity, rarity and other luxury characteristics (Kapferer, Citation2014;
Nyeck, Citation2004) however, nowadays, it is increasingly assumed that the main issue is
no longer on the appropriateness of adopting a digitalisation strategy but on its mode of
operations (Okonkwo, Citation2009). It has become a “must” in order to reach some new
segments of the market as the Millenials.
Nowadays, luxury and fashion brands have to evoque and sell unicity in the experience as
well as quality, originality and feelings of belonging (Yeoman, Citation2011). Luxury fashion
products are defined as not available for everyone but highly desired (Okonkwo,
Citation2009), rarity being as one of the main characteristics of a luxury brand defining its
consumption together with exclusivity and uniqueness (Chevalier & Mazzalovo,
Citation2012; Dion & Arnould, Citation2011; Kapferer, Citation1997).
“Luxury” defined the main category of highly prestigious brands (Vigneron & Johnson,
Citation2004). Luxury brands are associated to concepts of wealth, exclusivity and power
and are related to the fulfilment of nonessential desires (Brun et al., Citation2008; Dubois &
Laurent, Citation1995). “Luxury brands” integrate highly quality, expensive and nonessential
items, symbols of rarity, exclusivity, prestige and authenticity for consumers providing
symbolic and emotional value (Tynan, McKechnie, & Chhuon, Citation2010). Wiedmann,
Hennigs, and Siebels (Citation2007) defined the concept of luxury as the physical and
psychological values provided by prestige of luxury brands and evidencing the individual and
social symbolic dimension associated to luxury. However, it was also evidenced the
association of that dimension to cultural values resulting in a luxury phenomenon
representative of the individual social identity (Vickers & Renand, Citation2003).
The last decades have evidenced the evolution of luxury and the diversification of
customers’ behaviours in luxury as a result of the opening up to luxury of the new fast
growing economies with a diversified socio-cultural context (Atwal & Williams, Citation2009;
Heilman, Bowman, & Wright, Citation2000). The evolution of luxury fashion consumption
mode, in particular in the Chinese market, showed the emergence of new customers’
segments and consequently new customers’ expectations (Ackerman & Chung,
Citation2017; Lee, Ko, Chae, & Minami, Citation2017; Li, Li, & Kambele, Citation2012). The
emerging Chinese consumer segments behaviours and values have driven the digitalisation
for luxury fashion consumption in China (Rambourg, Citation2014). Chinese younger luxury
consumers segments seeking social recognition and identity through their luxury
consumption, live the new luxury purchasing experiences differently (Lim, Kim, & Yu,
Citation2011; Ngai & Cho, Citation2012; Tsai, Yang, & Liu, Citation2013). The highly digitally
savvy Chinese young luxury consumers segments heavily rely on online applications to live
their “luxury experience” and make their purchase choices.
https://www.proquest.com/docview/2615222530?pq-origsite=primo
Recently, luxury fashion brands have been the target of several high-profile consumer
boycotts in China. In 2018, Dolce & Gabbana was boycotted over an advertising campaign
for the Chinese market which was widely decried as “racist.” In 2019, Coach, Givenchy and
Versace faced boycotts over perceptions that they had contradicted China’s territorial
claims. In each of these cases, rapid apologies by the brands concerned were not enough to
quell the controversy, and today they remain an active target of anti-consumption in China.
Chinese luxury consumers represent almost a third of the global market for luxury goods,
set to rise to 44% by 2025 (McKinsey & Co, 2017). More than ever, it seems, this immense
market is willing to punish brands for perceived social infractions.
In November 2018, Dolce & Gabbana posted a series of promotional videos on social media,
including Chinese microblogging site Weibo, to raise awareness of its forthcoming fashion
show, “The Great Show,” set to take place at the Shanghai Expo Centre. The video series,
called “Eating with Chopsticks,” featured a Chinese model inexpertly attempting to eat
Italian dishes (pizza, pasta and cannoli) with chopsticks. The campaign was accompanied
with the hashtag “#DGlovesChina.” Social media users responded with accusations that
Dolce & Gabbana was being offensive and disrespectful, reinforcing negative cultural
stereotypes. Following a social media campaign to boycott the brand, the videos were
removed and the show was cancelled. The backlash was compounded when screenshots
circulated online appearing to show Stefano Gabbana making derogatory remarks about
China, although the designer claimed his account had been hacked. Apologies by both
Domenico Dolce and Stefano Gabbana, the company’s two founders, did not prevent
Chinese e-commerce sites from removing Dolce & Gabbana products from their platforms.
As the controversy over Dolce & Gabbana’s statements swept through Chinese social media,
it developed through what we describe here as six distinct stages. We refer to these as the
“6As Lifecycle of Brand Hate.” These began with awareness of the controversy, which then
provoked anger, resulting in amplification, which translated into antagonism, leading to
consumer action and finally culminating in apathy. We discuss each of these stages in
greater detail below. The stages are not frictionless, and may coexist and overlap.
Nevertheless, each is a result of what preceded it, leading to a specific causal life cycle of
brand hate from initial controversy to long-term anti-consumption. A comparison with the
“2019 T-shirt controversy” involving Coach, Givenchy and Versace shows that the cycle
repeated itself, with consequences for how we understand brand hate in China and more
broadly in the luxury market (Figure 1).
https://web.s.ebscohost.com/ehost/detail/detail?vid=0&sid=8f1e3554-d538-45f4-9760-
5a03715961ec
%40redis&bdata=JkF1dGhUeXBlPXNoaWImc2l0ZT1laG9zdC1saXZl#AN=155543356&db=bsu
Russia's invasion of Ukraine, the ensuing humanitarian crisis, and a raft of new sanctions and
restrictions on trade and travel have forced European brands to walk a tightrope, balancing
their morals, and a desire to help those who are suffering, with the responsibilities of
running an international business.
Brands have reacted differently to the crisis: there has been a degree of posturing and virtue
signaling, with some brands making grand statements about boycotting Russia without
actually doing any significant business there.
Indeed, Russia is no longer a hot market for European luxury brands. According to a report
from Morgan Stanley issued earlier this week, the importance of Russia and Russian
nationals for the luxury goods sector has declined over the years and is now "relatively
immaterial."
The bank said that for companies such as LVMH and Kering, Russians account for about 1
percent of worldwide sales. Burberry - and the Italian brands - are more popular with the
Russians. They generate around 2 percent of sales for companies including Moncler, Prada,
Salvatore Ferragamo and Tod's.
While Russian customers may account for a small part of their overall sales, these
companies are still suffering the commercial consequences of Vladimir Putin's war.
"The war has triggered a domino effect that will impact all of the luxury sector. And even if
tourists will eventually travel to Russia, they will hardly go and shop for international fashion
brands. The market is very local in Russia," he said.
He noted that the country has a middle class that will be afraid to spend given the
uncertainties they will have experienced.
Versace, Coach, Asics and Givenchy are among the foreign brands that posted apologies on
Chinese social media after consumers took issue with their merchandise or store locators
that listed Hong Kong separately from China. Calls for boycotts spread to major U.S. brands
Tuesday, as Chinese consumers attacked Apple Inc. for listing Hong Kong, Taiwan and Macau
in the clock system of its new mobile operating system without specifying they are Chinese
territories.
Last year, retail sales reached $5.1 trillion in China, compared with $5.3 trillion in the U.S.
This year, retail sales in China are expected to grow 3.5% to $5.3 trillion. In the luxury
market, 70% of growth is expected to come from China during the next six years, according
to ad agency Ogilvy, with Chinese luxury purchases accounting for 40% of that market by
value.
Chinese consumers this week called out brands on the country's social-media platforms,
urging boycotts of companies that had listed Hong Kong and Macau, another special region
administered by China, and Taiwan, a self-governing island that China claims as part of its
territory, as if they were separate countries. The phenomenon quickly became a viral
hashtag on Weibo, China's Twitter-like social media site: "Luxury Brands Apology Day."
China accounts for 6.7% of LVMH's sales.
Chinese consumers have also boycotted some American brands as a show of support for
China in its continuing trade fight with the U.S. In a June survey, 56% of Chinese consumers
said they have avoided purchasing an American product to show support for China's
position in the trade war. That poses a significant risk to U.S. companies, since three out of
four Chinese consumers say they often buy products from American businesses, according
to Brunswick Group's opinion research practice.
Italian luxury brand Versace offered an apology on Chinese social media after internet users
posted photos of one of its T-shirts that appeared to label Hong Kong and Macau as
separate countries. More than 77,000 comments and nearly one million likes had collected
under the apology as of Tuesday, with many users still expressing dissatisfaction with its
statement, and urging Versace to issue similar apologies on its Facebook, Twitter and
Instagram accounts.
Now a days, luxury brands are not exclusively for the rich and elite, and even the masses are
purchasing them; this is because most luxury brands have developed specialized product
lines (e.g. Armani has Emporio Armani, Armani Exchange, Armani Jeans and Giorgio Armani)
to cater to different market segments. Therefore, luxury consumption is no longer restricted
to the most rich and famous of society, but also includes the masses earning well with a
greater level of consumption orientation (Catry, 2003). Hence, these luxury brands
paradoxically seek to maintain an apparent exclusivity while increasing brand sales and
customer base by targeting the masses. This has led to a phenomenon of mass consumption
of exclusive luxury brands, where the masses indulge in luxury brand consumption as they
aspire to be a part of the elite class. Researchers refer to this concept as the
“democratization of luxury” (Kapferer and Bastien, 2012), “mass affluence” (Nunes et al.,
2004) and “bandwagon luxury consumption,” which signifies that “consumers buy certain
categories of luxuries as these are very popular” (Kastanakis and Balabanis, 2012, 2014).
Although research identifies the existence of this type of consumption behavior (Tynan et
al., 2010), not much has been researched on which psychological factors/personality traits
motivate bandwagon luxury brand consumption. This research is an attempt to fill this gap.
The “democratization” of luxury on the one hand offers new business opportunities and on
the other hand offers large challenges for developing effective strategies to increase
purchase on part of the consumer (Tsai, 2005). As a result of the growing population and the
increasing consumption orientation of fashionable commodities in Asia, a number of
western brands are tapping into these markets (Park et al., 2008). As per recent trends,
young adults with higher incomes and consumption orientation are replacing the middle-
aged group as consumers of luxury products. To cater to this market, luxury houses have
expanded into Asian countries and developed product lines for consumers with moderate
income levels (Park et al., 2008)
Luxury brands are observed as images in the minds of consumers that are linked with a high
level of price, quality, aesthetics, rarity, extraordinariness and a high level of non-functional
associations (Heine and Phan, 2011). These brands offer pleasure and gratification, are hard
to obtain and enhance self-esteem of the consumer along with functional usefulness
(Shukla, 2010; Vigneron and Johnson, 2004). In other words, consumption of luxury brands
involves purchasing a brand that has significance not only for consumers but also for
significant others (Wiedmann et al., 2009).
Vigneron and Johnson (2004) categorize two main dimensions of perception toward luxury.
The first is the personal perception, which consists of hedonic value and indulgence for an
extended self, and the second is the non-personal perception, which includes perceived
conspicuousness, uniqueness and quality. Their research highlights several important
factors regarding the perceptions contributing to the formation of attitude toward luxury.
To begin with, luxury brands have a social dimension; in other words, luxury brands are
acquired for personal satisfaction as well as for the display in front of relevant others.
Second, the personal dimension of luxury brands, which entails experience and pleasure
associated with the acquisition of the brand, is also of great value and significance. Third,
luxury brands are purchased for their high quality and functionality and a higher price is
associated with premium quality.
Kapferer and Bastien (2009) perceive that a luxury brand is like a coin with two different
sides to it; one side is luxury for one’s own self and the other is luxury for others. Luxury for
the self involves self-satisfaction from the acquisition of luxury brands, and luxury for others
involves status consumption and demonstration of an ideal self to be part of a referent
group (Belk, 1988; Kapferer and Bastien, 2009).
Leibenstein (1950) explained the consumer behavior as a catalyst to attract the mass
population. He clarifies the significance of external effects on utility, where the utility is
derived from factors other than the inherent functionality, value consciousness and quality
of the product. In the field of economics, Leibenstein (1950) categorizes these effects as
“Veblen” or “snob” and the “bandwagon effects.” The bandwagon effect refers to the
consumers’ tendency to buy a popular luxury brand with a purpose to get approval
from/identify with the groups they belong to (Tsai et al., 2013).
Status consumption
Status consumption is the acquisition, usage and display of commodities in order to enhance
the actual or ideal self-concept with the purpose to affiliate with a particular social group
(Belk, 1988; Eastman et al., 1999; Kastanakis and Balabanis, 2012). It helps consumers “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”
(Eastman et al., 1999, p. 42)
Identifiable luxury brands such as Louis Vuitton and TAG Heuer, purchased for their
popularity, are relevant in this case, as they personify status which categorizes the buyers
within a certain social class.
Conformity
refers to modifying one’s behavior or thought process to have it synchronized with that of
other people in the society. It largely impacts the purchase of publicly consumed
commodities, and in the case of luxury fashion brands it is an integral component because
the primary purpose of these products is to be used socially (Park et al., 2007).
High levels of conformity allude to the tendency to display luxury brands (Rose et al., 1994).
Bearden and Etzel (1982) found that there is a great level of influence of reference groups in
choosing the public goods over private and luxury over necessities. According to Wong and
Ahuvia (1998), western consumers indulge in luxury brand consumption to illustrate their
personal preferences and personality; on the other hand, Eastern consumers purchase
luxury goods to conform to their reference groups. Consumers in Eastern cultures purchase
luxury goods for the symbolic meanings that they hold and to show that they are affluent
and wealthy (Park et al., 2007).
The social context exerts its influence on the purchase of foreign luxury brands (Hung et al.,
2011). Further to this, conformity is linked to collectivism (Hofstede, 2001; Triandis et al.,
2001). Consumers tend to conform to enhance their interdependent selves by purchasing
luxury goods (Lascu and Zinkhan, 1999). On the other hand, consumers with independent
orientation do not derive their motivation from external factors, and are internally
motivated; thus independent orientation discourages bandwagon luxury brand
consumption. Summarizing, conformity is an important variable that enhances the
interdependent self and supports consumption of luxury brands.
https://onlinelibrary.wiley.com/doi/full/10.1002/pa.2543
The trade war between the US and China is one of the big problems that have a propagating
effect on other countries (Aslam, 2019; Gunawan & Arfah, 2019; Ke, 2019). The trade war,
which had decreased at the beginning of 2019, revived when the US raised tariffs by 10%
from USD200 billion of Chinese imports in May 2019 (Aslam, 2019). The agreement made
between the US and China at the G-20 forum in Osaka in June was also unsustainable
because The US re-implemented import tariff increases in September and December. The
latest developments were that the US and China have entered the first phase of
negotiations (Purwohandoko & Akbar, 2018).
https://przegladeuropejski.com.pl/resources/html/article/details?id=229487
Deepening economic, political, and technological ties between Moscow and Beijing and
their open confrontation with the U.S., polarise the world more and more
The coronavirus outbreak occurred in China. Therefore, this country suffered the first
humanitarian and economic losses. Accordingly, China’s growing economic, diplomatic and
military power is a matter of particular concern to Americans. However, the last straw in
their relationship was an outbreak of a coronavirus pandemic in the Chinese city of Wuhan.
President Trump’s official accusations of a coronavirus outbreak directly indicated that it
was China’s fault. However, China claimed that the virus is American, and a delegation of
American soldiers brought it to Wuhan (Economic Times 2020), where sports games took
place on the eve of the pandemic. During the pandemic, Moscow joined the political game
between Beijing and Washington, which was accompanied by spreading information that
the coronavirus was invented in American laboratories.
Asian Market
Instagrammable
Social media advertising remains prominent, with major platforms such as Facebook,
Instagram, and TikTok earning billions of dollars in ad revenue annually and costs for
advertisers continuing to climb (Appel et al. Citation2020). Yet savvy marketers have found a
way to advertise on social media without having to pay for social media ad placements.
These marketers use cleverly designed physical spaces to inspire consumers to create and
share consumer-generated content on social media that indirectly results in advertising for
their companies or products. This article terms this phenomenon environment-cued indirect
advertising. Such advertising is indirect: While firms neither explicitly pay for nor incentivize
the resulting postings to be placed, firms often make sizable investments in built
environments designed to inspire postings by consumers. These investments arguably
render the resulting posts different from word of mouth but less overt than traditional
advertising.
By investing in physical environments, firms can enhance consumer engagement and
promote the creation of indirect advertising. Indirect advertising can save costs associated
with crafting and placing advertising, while potentially increasing the persuasiveness of
resulting posts because they come from consumers rather than the firm (Campbell and
Grimm Citation2019). Restaurants are early adopters of this trend, with many purposefully
designing their spaces and menus to be photographable (Lucas Citation2019; Newton
Citation2017) and some wondering if social media might reshape the industry forever
(Repanich Citation2020). Hotels and retail stores are among the many other market
domains looking to provide consumers with “Instagram-ready” environments (Maitland
Citation2020; Sheehan Citation2016) that cue indirect advertising. Businesses are emerging
that primarily offer consumers opportunities to create attractive social media posts, thus
weaving the generation of indirect advertising into consumer value creation. These
opportunities include festivals purposely designed for Instagram (e.g.,
https://risefestival.com), as well as “museums” such as Museum of Ice Cream and Color
Factory.
As Mundel (2017) explains, high-end brands expanded their offering by selling more
affordable items, enabling brands to capitalise on the trading-up phenomenon that as
occurred within the middle class. The word “trading up”, in this case, describes the
behaviour in which people are willing to shop for inexpensive products to have more money
to spend in luxury goods (Kapferer and Bastien, 2009). This has been happening due to
democratisation of luxury, which sometimes is accompanied by a wide range of firms,
tagging the masses (Truong, McColl & Kitchen 2009; Twitchell 2002), which are driven by a
continuous increase of the aspirational consumer segment (Granot et al. 2013). There are
three segments in this new luxury, according to Granot et al. (2013; Kastanakis & Balabanis
2012; Silverstein & Fisker 2003a): old luxury brand extensions: are lower-priced versions of
luxury goods or services, extending their offer line, to provide accessibility, thus selling low-
end versions, cash cow items, and at the same time marketing aspirational, high-end
versions. A good example is Louis Vuitton, which is providing product lines at an accessible
price.
To capture the masses, luxury brands have extended their brand and product lines, offered
a variety of products with varying quality and quantity levels, and developed new
distribution channels. While this business strategy has proven to be lucrative, in recent
years, industry experts began questioning whether the industry has gone too mass because
of globalization, social media, and economic recession (Pike Citation2016). Such an industry
trend may not only damage perceived exclusivity and uniqueness of luxury brands, but also
destroy the cultural and historical value they have established for society.
From a business viewpoint, making luxury more accessible to the masses could eventually
result in losing not only the elite, but also the masses. Amaldoss and Jain (Citation2005,
Citation2008) introduce a concept of uniqueness and conformity by consumers of luxury
brands. The elite customers value exclusivity and uniqueness, and the masses conform to
what is accepted by the elite customers. As a luxury brand becomes more and more
accessible to the masses, at first it can enjoy the scale of economy (positive spillover effect),
but its attractiveness to the elite decreases, leading to a decline in high-end luxury sales
(negative spillover effect). The process further continues. As fewer and fewer elite
customers purchase the luxury brand, its attractiveness to the masses eventually decreases
because it is no longer accepted by the elite (negative feedback effect).Footnote1 Thus, by
going too mass, a luxury brand will lose both the elite and the masses in the long run, and it
will be very challenging to re-establish the luxury brand image.
Recently, the purchasing power crisis and the rise of the low-cost and hard discount
phenomena have incited more and more brands to compete on price (Kapferer, 2004).
Likewise, the democratization of the luxury sector has attracted more price-sensitive
customers to lower-end products (Lipovetsky and Roux, 2003; Kapferer and Bastien, 2009).
To meet these new market trends, more and more companies have decided to stretch down
brands. The vertical-line extension strategy is based on the differentiation of the quality
level within the same product category (Randall et al , 1998). From the consumer point of
view, we define a step-down line extension (SDLE) as the launch of a new product perceived
as lower quality than the other products the brand, usually selling in the same category of
the pre-existing brand. Such practices are attractive because they offer opportunities for
brands to leverage equity to enlarge the core target, increase sales volumes and, thus,
increase profitability through more affordable products under the same brand name.
However, this strategy is considered particularly dangerous because it directly affects the
perceived quality of brands (Kapferer, 1996; Kirmani et al , 1999; Ries and Trout, 2001). The
important risks include the dilution of the core brand image (Quelch and Kenny, 1994;
Aaker, 1997; Heath et al , 2006), cannibalization (Reddy et al , 1994; Nijssen, 1999; Lomax
and McWilliam, 2001) and, finally, negative feedback effects for core-brand consumers
(Keller, 1993; Kim and Lavack, 1996; Kirmani et al , 1999). Building and maintaining a strong
consumer-brand relationship is of great importance for managers (Fournier and Yao, 1997;
Fournier, 1998; Aaker et al , 2004). Brand trust, brand affect and brand loyalty can increase
market share and consumer willingness to pay for specific brands (Chaudhuri and Holbrook,
2001).
Rejection of luxury brand
The need to belong is deeply rooted in human nature. Therefore, people constantly strive to
maintain positive social relationships (Tajfel & Turner, 1986), as a lack of these can lead to
physical and psychological suffering (Baumeister & Leary, 1995). One of the prominent
strategies people employ to foster affiliation is through their consumption behaviour (Belk,
1988). For instance, studies indicate that individuals seek to acquire the brands, and
especially luxury brands, used by their membership groups as well as their aspirational
groups (Escalas and Bettman, 2003, Shukla, 2011), while tending to avoid brands associated
with out-groups (Berger and Heath, 2007, Escalas and Bettman, 2005). The associations and
meanings attached by reference groups can help individual members to create their
identities (McCracken, 1989) by integrating these brands into their self-concepts.
Rejection is a common yet painful social experience representing a fundamental threat to
social survival which leads to severe negative consequences (Mead et al., 2011, Williams,
2009). Due to the importance of actual or possible social rejection, even the slightest form
of manipulation can still evoke the detection of rejection, leading to negative consequences
(Williams, 2009). The behavioral responses to personal rejection can manifest in either
positive responses such as fostering affiliation, or negative responses such as aggression
(Lee & Shrum, 2012). For example, rejected individuals are found to be willing to tailor their
spending preferences to gain acceptance from new social partners (Mead et al., 2011), or to
self-indulge in conspicuous consumption (Lee & Shrum, 2012).
https://www.sciencedirect.com/science/article/pii/S0148296317301960
Research in the past few years has increasingly focused on brand dilution effects in various
forms (Cleeren et al., 2017, Dessart et al., 2020). For example, studies have reported
negative emotional responses (Baghi & Gabrielli, 2019), negative brand attitudes (Ahluwalia
et al., 2000, Ferraro et al., 2013), negative word of mouth and purchase intention (Baghi &
Gabrielli, 2019), anti-consumption and anti-brand activism (Cambefort and Roux, 2019,
Dessart et al., 2020), brand avoidance (Khamitov et al., 2020) and lower consumer-based
brand equity (Veloutsou, Chatzipanagiotou & Christodoulides, 2020).
Additionally, within the luxury domain, studies have documented the negative impact of
vertical downscale line extensions (Dall'Olmo Riley et al., 2013, Magnoni and Roux, 2012) on
consumer-brand relationships, brand attitudes, evaluations and purchase intentions. For
instance, Shin, Eastman & Mothersbaugh (2017) show conditions under which brand
dilution can be managed among millennials through introduction of limited edition offers.
Similarly, Park, Im & Kim (2020) highlight the greater effects of brand dilution among
consumers with high levels of brand engagement, particularly within the social media
context.
https://www.sciencedirect.com/science/article/pii/S0148296321001314#s0170
The relationship between luxury, fashion and wellbeing is complex. As the statistics above
suggest, fashion may be complicit—with other socio-cultural factors—in encouraging
dissatisfaction with one’s appearance and lifestyle. People who focus most on their
appearance, wealth, status and possessions tend to be less happy than those that don’t
(New Economics Forum 2006, p. 31), as this tends to reflect a need for the validation of
others. Links between social media usage and feelings of inadequacy have been well
established, as well as those between feelings of inadequacy and of stress (Abel et al. 2016,
p. 34). As social media is an important communication channel for luxury fashion brands,
which present a dream lifestyle that indelibly associates luxury with beauty, status and
perfection, it may feed the insecurities of consumers who purchase items they may not be
able to afford in a cycle of desperate aspiration and self-gratification (Wu et al. 2015, p. 19;
Abel et al. 2016, p. 34; Kapferer2010, p. 42). In a study by Kennedy and Bolat (2017),
subjects reported feelings of anxiety if they did not get enough likes on social media and
looked for products that would bring them the most likes: those were usually luxury items.
Luxury consumption may therefore be understood to be part of the problem.
However as consumer values shift, with increasing emphasis placed on personal health and
growth, and more concern for ethical, political and environmental issues, there is an urgent
need for “luxury with good intentions” (Gutsatz and Heine 2018, p. 409). As Gutsatz and
Heine (2018) imply in the following quotation, this should not be just another marketing
strategy but rather a sincere acknowledgement by luxury brands that they should have a
positive impact on society:
There is a growing desire for authentic products that are good for the environment and
especially for personal health, while at the same time also being good for the people
involved. (Gutsatz and Heine 2018, p. 409)
A new methodology is needed for future luxury fashion that is more ambitious than simply
doing less harm to people and planet, but rather one that is pro-actively positive in every
possible way in how it conceives and creates luxury goods. Luxury is the perfect arena in
which to explore and resolve new, holistic approaches to sustainable fashion design—where
the costs of research, development, prototyping and production are unlikely to be a
prohibiting factor to consumers and where a high premium is placed on beauty and
uniqueness (Kapferer2010, pp. 41, 45; Maisonrouge 2013, p. 119). And where luxury leads,
others will follow.
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In a society where appearance plays a critical role (Lipovetski, 1983), clothing and
accessories are a major part of how individuals define themselves in relation to others
(Joubert & Stern, 2005). Such material possessions that extend the self (Belk, 1988) and help
protect, display, and transform it (Arnould & Thompson, 2005) have been widely studied.
Specifically, beyond conveying social status or perpetuating an affluent lifestyle, luxury
fashion possessions are also used to perform self-transformation (Seo & Buchanan-Oliver,
2017).
However, alternative practices of sharing and of having access to luxury fashion – without
fully owning the products – have flourished over the past few decades; however, they have
received little attention with respect to the consumer self–object relationship (Lawson,
Gleim, Perren, & Hwang, 2016). Overall, the ‘sharing economy’ is expanding worldwide, with
66% of consumers stating they are ready to ‘share’ goods, 22% ready to ‘share’ clothing
items, and 21% ready to ‘share’ cars.1 PwC (2014) estimates that the scope of global
‘sharing’ activities will expand from $15 billion in 2014 to around $335 billion in 2025
(Godelnik, 2017). Specifically, the global online clothing rental market is anticipated to
expand at a CAGR of around 10% by 2023–2026, with the female segment remaining
dominant.2 Thus, in the domain of luxury clothing and accessories, new online business
models mainly targeting women have flourished and offer temporary access to items via
rental (e.g., Rent the Runway in the USA, Chic by Choice in Europe, and Une Robe un Soir,
Ma Bonne Amie, and Panoply City in France) or via peer-to-peer sharing for a fee (e.g., Les
Cachotières in France). How do these access and sharing practices influence consumer self-
identity, given that the luxury items are not fully owned by the individuals temporarily
consuming them?
Thus, summarizing, we should note that fashion and gender in modern society are
interdependent phenomena. Also, fashion includes the tendency for social subjects to
demonstrate gender characteristics to some extent, deliberately emphasizing them and
giving them the opportunity to realize their identity to the fullest, as they wish. Modern
fashion is designed to provide an individual with a variety of choices, aesthetic pleasure,
non-standard stylistic solutions, which provokes the individual to actively search for his
place in this world and a unique way of socialization. In many ways, all of the above
elements add up to a single gender system, which gives us full grounds to synthesize two
areas of sociological thought: gender studies and the sociology of fashion.
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Second-hand shopping is gaining popularity globally. In the U.S., approximately 1 out of
every 5 shoppers regularly visits thrift stores (Tully, Citation2012). Low-income people and
college students having a relatively small budget are more likely to shop at thrift stores
selling gently used products at lower prices (Cascade Alliance, Citation2017; Tuttle,
Citation2012). Additionally, people who care about sustainability are more likely to shop at
thrift stores than people who are indifferent regarding sustainability (Yan, Bae, & Xu,
Citation2015). One of the leading non-profit thrift stores, Goodwill, is operating more than
3,300 stores in the U.S. (Goodwill, Citationn.d.a) and has expanded globally into 13
countries including South Korea, Venezuela, the Philippines, and Taiwan (Goodwill,
Citationn.d.b). In addition to Goodwill’s global expansion, an increasing number of non-
profit organisations are opening thrift stores to generate funds to fulfil their social missions,
and this creates the more competitive business environment (Liu, Eng, & Sekhon,
Citation2014; Mitchell, Montgomery, & Rauch, Citation2009).
Consumer decision-making is a complex process (Ajzen, Citation1991). The TPB, which has
been widely used to understand consumer behaviour, assumes that consumer behaviour is
not a spontaneous action but the result of planned behaviours (Smith & McSweeney,
Citation2007). According to the TPB, attitude toward the behaviour, subjective norms (SN),
and perceived behavioural control (PBC) influence consumers’ behavioural intention. Both
consumers’ behavioural intention and PBC are predicted to lead to actual behaviour. In the
context of second-hand shopping at non-profit thrift stores, it is posited that purchase
intentions at thrift stores are influenced by the following three antecedents: (1) attitude
towards purchasing at thrift stores, (2) SN, and (3) PBC (Ajzen, Citation1991). The TPB
further explains that consumers’ beliefs about behaviours influence their attitudes toward
such behaviours (Ajzen, Citation1991; De Groot & Steg, Citation2007; Pagiaslis & Krontalis,
Citation2014).
Question 2
What is paradox in business
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In their seminal study, Poole and Van de Ven (1989) argue that using paradox theory as a
lens allows for the investigation of multiple facets and intricacies of reality by enhancing
comprehension of contradictions and opposing elements (Poole and Van de Ven 1989).
In line with paradox interpretations proposed by early organizational scholars (e.g. Lewis
2000; Poole and Van de Ven 1989), a recent review of the field by Schad et al. (2016, p. 6)
defines paradox as ‘persis- tent contradiction between interdependent elements’. Tensions
arise from these contradictions between interdependent elements (Poole and Van de Ven
1989; Smith and Lewis 2011).
Tensions emerge by defining organizational characteristics or components, which
concurrently entails defining what is not included in said characteristics or components
(Smith and Lewis 2011). Examples of such tensions include global vs. local, centralized vs.
decentralized, flexible vs. controlling, or socially focused vs. financially focused in the con-
text of a firm’s corporate social responsibility policies (Du et al. 2010; Lindgreen and Swaen
2010; Maon et al. 2010; Smith and Lewis 2011). Paradoxical tensions arise when
contradictory but interlinked elements require simultaneous balancing (Schad et al. 2016;
Smith and Lewis 2011).
Paradox theory (for review, see Schad, Lewis, Raisch, & Smith, 2016) emerged to provide
alternatives to the traditional view on scientific theories as being simple, straightforward,
and narrow (Poole & Van de Ven, 1989). Traditional theorizing could not capture the
intricacies of complex, real-life phenomena, which often involved contradictions (Poole &
Van de Ven, 1989). Paradox theory set out to embrace the divergent and complex nature of
phenomena (Lewis, 2000; Raza-Ullah, Bengtsson, & Kock, 2014; Schad, Lewis, Raisch, &
Smith, 2016; Smith & Lewis, 2011; Vafeas & Hughes, 2020). This is often expressed in a
“both/and” approach, unlike conventional “either/or” methods frequently used in
organizational management studies (Smith & Lewis, 2011). The “both/and” mindset
promotes accepting conflicting tensions and creating synergies between them (Schad, Lewis,
Raisch, & Smith, 2016; Smith, 2014; Smith & Lewis, 2011).
LVMH is a paradox in itself. A company that makes and sells products that nobody actually
needs. A recipe for disaster? A manager's nightmare? Far from it - LVMH's combined
revenue was estimated at $11 billion in 2001, with a market capitalization of $27 billion.
With Arnault at the helm, this organization has gone from a small clothing manufacturer on
the verge of ruin to a conglomerate of nearly 50 star brands including Dom Perignon, TAG
Heuer and Christian Dior.
Star brands, in his opinion, are in themselves a paradox. They must simultaneously be
timeless, modern, fast-growing and highly profitable.
Exclusivity
Access to luxury products and brands that were once considered a privilege for a certain
few, today, with such market expansion, it is threatening that exclusivity status (Dion and
Borraz 2017; Belleza, Gino and Keinan 2014). Globalised consumption and new marketing
ideas have influenced our social-cultural context, influence material lifestyles and prosperity
brands (Amatulli & Guido 2012; Park, Rabolt & Jeon 2008; Nueno & Quelch 1998; Allérès
1991).
The performance of a brand involves inherent properties which are related to how
consumers perceive the fit between the brand and their functional needs (quality, services,
style, price and design), however, not only intrinsic properties are involved, extrinsic
properties take a part in brand’s perception and in how the brand meets social and
psychological needs of the client (user profiles, personality and values, heritage and
experiences) (B. Godey et al. 2012).
In 2013, Granot et al. made research exploring luxury for the masses, and in their findings,
they found out that luxury items are no longer just for a selected few. Contemporary brands
in Europe, USA and Asia have adopted this new luxury trend, making that market worth up
to $1 trillion (Kastanakis & Balabanis 2012; Truong 2010). Additionally, new luxury brands
position themselves between high prestige and price premium to attract middle-class
consumers (Truong, McColl & Kitchen 2009).
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The luxury product is exclusive in two ways: ‘I am the only person to own one,’ and ‘This
excludes the other.’ It makes the owner someone special. Everything depends on the survey
sample: the elites value exclusivity, the masses do not. The luxury market has grown, by
allowing the public at large to have access to some luxury products.
Selling millions: Emotional branding

In an ever-changing and highly competitive market, fashion brands struggle to distinguish
themselves to increasingly apathetic consumers (Clark 2017). Moreover, customer loyalty is
at its lowest levels due to lack of product diversity and high brand switching (Kusek 2016). In
this retail environment, fashion brands need to develop new strategies to grab consumers’
attention by speaking to their hearts.
To address this need, retailers employ emotional branding as a way to engage their
customers, appealing to their needs, aspirations, dreams, and ego (Acharya 2018). This
branding strategy addresses the growing trend of consumers’ seeking emotional rela-
tionships with a brand. Although brand technicalities may be unmemorable, consumers do
not forget how a brand makes them feel. As opposed to information such as product
attributes, features, and facts, personal feelings and experiences better shape consumers’
evaluations of brands (Jenkins and Molesworth 2017; Schmitt 2009; Zukin and Maguire
2004). Hence, emotional branding seems to be a strategy that creates strong brand
attachments between consumers and brands (Akgun et al. 2013).
Emotional branding establishes itself as a critical factor in developing brand loyalty, which
has been conceptualized as a long-term, committed, and affect-laden partnership devised to
characterize consumer-brand bonds (Fournier 1998). Increased loyalty driven by emotional
branding, in turn, leads to higher sales. Overall, emotionally connected consumers are 52%
more valuable to a brand than those who are just satisfied (Otley 2016). Presumably,
emotionally attached consumers are a brand’s highly profitable market segment (Rossiter
and Bellman 2012). Because fashion has traditionally been associated with experiential,
symbolic, or hedonic products (Fiore et al. 2005; Johnson et al. 2014; Noh et al. 2015),
emotional branding is likely a vital approach to directly speak to fashion consumers.
A major factor that explains the importance of emotional branding is related to consumer
experience. No longer are consumers focusing on product specifics or service satisfaction;
they seek experiences from a brand they like. In experiencing a brand, whether it is a
product, service, or a retail store, consumers do not just look for quality or low prices; they
want to gain emotional rewards from enticing store atmosphere, superb customer service,
and entertaining experiences. They also want to express who they are and the relationships
that are important to them through consuming or supporting a specific brand (Kim et al.
2014; Kumar and Kim 2014).
Sensory branding
As marketing emphasis has shifted from the product to the creation of consumers’ expe-
riences, sensory marketing seems to be integral to stimulating excitement and pleasure
(Douce and Janssens 2013). Sensory marketing engages and triggers consumers’ senses (i.e.,
sight, sound, feel, taste, and smell) (Krishna 2012). All these five senses elicit emotional
responses to goods, services, and the environment with some notable differences such as
the sense of sight being most powerful in detecting changes and differences in the
environment (Orth and Malkewitz 2008) and the sense of smell triggering the most vivid
memories (Fiore et al. 2000). As such, sensory branding influences consumers’ perceptions,
judgement, and behavioral responses toward a particular brand (Krishna 2012). As
Lindstrom (2010) stated in his book Brand Sense, a brand’s appeal to consumers’ senses
allows them to experience the brand more profoundly and have an emotional connection
with it at a deeper level.
Sephora is a company that utilizes sensory branding. Traditionally, Americans have shopped
for high-end cosmetics and fragrances at department stores like Macy’s and Belks. In
traditional department stores, each brand is isolated at a separate service coun- ter, staffed
by a salesperson who only sells that brand, and all products are stocked in closed cases. This
creates a high-pressure selling environment, can lead to long waits for service, and makes
experimenting with brands very difficult. Since Sephora entered the cosmetics market, it has
completely reinvented the shopping experience. Sephora provides a low-pressure
environment that encourages its customers to explore and experiment with its products.
Open shelving allows Sephora shoppers to touch, smell, and apply any product. With
appealing to multiple senses, its open selling environment allows sensory experiences,
which are the key to this company’s success (Ostlund 2012).
Story-telling
Stimulating consumers’ imagination and involving them emotionally (Mossberg 2008),
storytelling is a powerful marketing strategy that uses narratives to appeal to or inspire
consumers (Silverstein and Fiske 2003). Given that well-told stories are better remem- bered
and more convincing than facts (Escalas 2004), narratives enhance consumption experience
in a way that influences consumers’ feelings, opinions, or lifestyles (Kaufman 2003). Through
this emotional influence, storytelling creates a holistic brand image and can relay to
consumers the desired information (Mossberg 2008). However, Holt (2002) cautions that
the relayed story must be perceived as authentic to avoid consumer suspi- cions of
manipulative marketing efforts.
Storytelling can be used via digital media as well as traditional media. Valck and Kretz (2011)
conducted a netnographic study on fashion and luxury blogs to examine whether fashion
opinion leaders use their blogs for narratives about fashion consumption practices and
self-brand association. Based on the result, they promoted fashion blogs as a new method
for advertisement (Valck and Kretz 2011). Successful fashion brands using digital storytelling
include Louis Vuitton, Stuart Weitzman, and Under Armour. The following are examples of
fashion brands that successfully incorporate storytelling in their brand strategy.
Emotional branding described as a concept of brand formation with emotional nuances. The
emotional branding paradigm emphasizes the human relationship that exists between
companies and customers, this is the corporate's culture and fundamental belief that
humans are the real power in business (Komariah et al., 2016). Pradana & Suryoko (2017)
argue that emotional branding is a methodology for connecting products to consumers
emotionally that focuses on the most urgent aspects of human character; the desire to
obtain material satisfaction and experience emotional fulfillment. According to Gobe (2005)
in Devina & Andreani (2015); Ellina et al. (2020), there are four pillars that provide a
blueprint for a successful emotional branding strategy, namely: relationships, sensory
experiences, imagination, and vision.
Image is the impression, feeling, public self-image of the corporate. Deliberately created
Ardianto (2017) states that corporate image is the view or impression of other parties in
seeing the corporate, image is also an important asset of the corporate and the impression
obtained based on his knowledge and experience. The corporate image of a corporate is
influenced not only by how consistent the corporate's performance is, but also by how
effectively the corporate communicates with stakeholders (Ofori et al., 2018). According to
Harrison (2010) in Pratiwi & Widiyastuti (2018), complete information about a corporate's
image includes four elements, namely: personality, reputation, values, and corporate
identity.
Satisfaction is a customer's feeling towards one type of service they've got. Lovelock et al.
(2016) stated that satisfaction is a kind of behavioral assessment that occurs after the
experience of consuming services. Perceived satisfaction is part of the pleasure felt
individually. Customers can understand one level of satisfaction in general, which is, if
performance is below expectations, then consumers will be disappointed and if
performance is as expected, then consumers will be satisfied, then performance exceeds
expectations, then consumers will be very satisfied (Meylano et al., 2020). According to
Hakubun & Wijono (2014), although there are many definitions of consumer satisfaction, in
general it still leads to three main components or indicators, namely: responsiveness, focus,
and response time.
Lovelock et al. (2016) defines loyalty as the willingness of customers to continue to be
customers of the corporate in the long term, buy and use their products and services
continuously and recommend products from the corporate voluntarily to friends and
relatives. Tsiotsou (2016) states that loyalty is a deeply held commitment to consistently
purchase or use a preferred product or service in the future, despite situational influences
and marketing efforts that have the potential to cause switching behavior. According to
Bobâlca et al. (2012), customer loyalty can be measured through indicators: cognitive
loyalty, affective loyalty, conative loyalty, and action loyalty.
People’s desire for exclusivity implies the pursuit of differentiation through superiority over
other consumers (Kim 2018). People often choose brands due to their desire to associate
with or resemble the typical brand (Han, Nunes & 2010; Escalas & Bettman 2003; 2005).
Another factor that has increased the search for this type of products is the fact that
consumers' wealth is exponentially expanding, new market segments appear (Kastanakis &
Balabanis 2012; Chow, Fung & Ngo 2001) and consumers travel more internationally, hence
these new consumers are younger, modern, have a better income and are big spenders
(Kastanakis & Balabanis 2012; Twitchell 2003).
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Customer relationship
According to Bowlby's (1979, 1980) pioneering work, attachment is an emotion-laden
target-specific connection between a person and a specific object. Attachments vary in
strength, and various behaviours may reveal their existence (Bowlby, 1980; Hazan and
Zeifman, 1999). For example, the stronger the attachment to something, the more likely it is
that an individual will try to maintain proximity to that thing. Research into attachment
(Belk, 1988; Kamptner, 1991; Kleine et al. , 1993; Mehta and Belk, 1991; Schultz et al. ,
1989), specifically that was conducted in the field of marketing, shows that people can form
emotional attachments to a variety of things, including gifts (Mick and DeMoss, 1990) and
celebrities (Slater, 2001). Scholars also recognise that consumers can be attached to brands
(McAlexander et al. , 2002; Park et al. , 2010). An individual emotional attachment to a
person can be seen as the degree to which that individual views the relationship from a
long-term perspective (Van Lange et al. , 1997); consumers' emotional attachment to brands
can be considered from the marketing perspective as a measure of the desire to stay in a
relationship with the brand. Thus, the strength of an emotional attachment to an object
(e.g. a brand) may be associated with investment in that object, that is, the willingness to
promote a relationship with that object (Van Lange et al. , 1997) and to perform consequent
behaviours, such as consumers' actual difficult-to-enact purchase behaviours (due, for
example, to social constraints or price increases) or consumers' increased brand purchase
share (i.e. the share of a brand among directly competing brands) (Park et al. , 2010). Given
these premises, consumers' emotional attachment to a brand may influence their
investment in that brand, such as supporting the brand itself in various ways (e.g. increased
consumers' brand loyalty and willingness to pay a premium price; Thomson et al. , 2005).
Recent literature in fact shows the connection between brand attachment and consumers'
brand-related behaviours (Park et al. , 2010; Thomson et al. , 2005; Van Lange et al. , 1997).
Thus, from the perspective of consumers, especially consumers of non-fakes, we
hypothesise that the emotional attachment to a brand hurt by counterfeiting plays a role in
explaining consumers' advocacy behaviour towards that brand. We expect, in fact, that
consumers will not limit themselves simply to supporting the brand by buying the original
product. Rather, we expect that consumers will engage in brand-favouring relational
actions, expressed in a range of advocacy behaviours (e.g. defending the original brand,
taking part in supporting actions in favour of the brand), depending on their emotional
attachment to the brand. Thus, in line with the attachment-aversion model developed by
Park et al. (2013), we consider the connection between brand attachment and consumer-
brand relationship development in our model. We suppose that to the extent that
consumers perceive the brand to be close and in line with their expectations, they are
willing to strengthen their relationship with it.
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It is especially important for luxury brand firms to maintain their high-end images by
keeping the brands’ exclusivity to their focal demographic segments, such as affluent
middle-to-old age adults. Meanwhile, many luxury brands exert different strategies to
embrace other non-focal demographic segments without having negative spillover effects
on their focal brands. For example, it is imperative for luxury brand manufacturers to spread
awareness and gain likability among young people in advance because they will become the
major customer body later.
Luxury brands serve as a reference point of good taste; top luxury brands such as Louis
Vuitton, Moët & Chandon, Hermes, and others are marketed globally to the most affluent
consumer segments. Therefore, luxury brand marketing usually takes approaches
substantially different from marketing of non-luxury products.
Reason of using
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The world of luxury branding is one of many paradoxes. It is an interesting paradox, as it
challenges the notion of modern-day principles of marketing.
Brand: The consumer in the luxury industry is more conscious of the brand. The story of the
brand is vital for the aspiration it creates. It is never about the functional needs of a product.
The luxury brand translates the essence of the product, the heritage, and the history into
one’s desire to own it.
Schiffman and Kanuk (1991, p. 550-551) stated that a decision is the action performed on
two or more alternative choices and starts when there is a need or problem. Harrison
(1991) indicated that there are different levels of decision making, the most basic being the
individual acting to satisfy his or her own physiological needs.
Shchiffman and Kanuk (1991, p. 121-123) attributed the psycho-ana- lytical theory of
personality, or the belief that unconscious needs act as the impetus for different
personality traits and behaviors, to Austrian neurologist Sigmund Freud. The psychoanalytic
theory describes human personality in terms of three theoretical constructs: the id, the
superego, and the ego.
The superego is conceptualized as an individual’s expression of norms, or morals of social
conduct. The superego ensures the individual’s needs are fulfilled in ways that are socially
acceptable and inhibits the impulsive forces of the id by voicing the social- and moral-
driven impacts that could follow an action. “It defines what is morally right and influences
the individual to strive for perfection rather than pleasure or reality and, in this sense,
serves as an ethical con- straint on behavior” (Williams, 1981, p. 135).
The ego is an individual’s conscious control balancing out the prim- itive and impulsive
needs of the id with the moral and social constraints of the superego. The ego considers the
costs and benefits of an action in terms of what is socially acceptable before deciding to act
upon or to abandon im- pulses. The conflict between the id and superego is illustrated
through the example below.
When an individual is choosing a snack to consume, assuming that there is no knowledge
gap regarding the impacts that packaged snacks have on obesity and weight gain, there is a
conflict between the id and superego: the id dominates when the individual knows that
snacking will contribute to weight gain but still chooses to consume.
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It is important to consider Maslow’s Hierarchy of Needs (1970) when discussing consumer
experiences. In his revised hierarchy, “deficiency needs” that include physiological well-
being, safety, belonging, and self-esteem, arise from deprivation and are necessary to
avoid unpleasant consequences. Usually, when consumers’ deficiency needs are fulfilled,
they next satisfy growth needs. Growth needs pertain to those at the highest level of the
hierarchy and are necessary for self-actualization and peak experiences that include the
need for intellectual achievement, creative expression, and aesthetic appre- ciation. These
needs are never truly met because they are continually refined as people experience self-
actualization. In most post-industrial societies, growth needs, rather than deficiency needs,
dominate consumer motivations. Consumers’ desire to fulfill their growth needs offers
retailers increased opportunities to develop emotional strategies that result in noteworthy
consumption experiences and value.
A brand becomes more prominent in an individual’s self-image than ever. Thus, the strength
of consumer-brand attachment depends on the extent to which consumers believe the
brand reflects themselves (Park et al. 2010). There are two forms of self- concept: “actual
self” and “ideal self.” Actual self reflects present perceived reality of an individual (i.e., who I
am now). In contrast, the ideal self refers to the individual’s aspirational self, which
manifests a vision of ideals and goals related to his or her future self (i.e., who I would like
to be) (Lazzari et al. 1978).
The actual self is closely related to the “authentic self ” that embodies who an individual is
and how he/she discovers his/her true self (Harter 2002). This actual self seems to be
increasingly influential to consumers seeking authenticity in marketing messages (Gil- more
and Pine 2007) that focus their current selves rather than their future, idealized selves.
Therefore, branding campaigns that incorporate authentic self as a central theme stimulate
intimate emotions and trust (Erickson 1995; Harter 2002).
Another example of luxury products have social and psychological meaning relevant in
identity construction (Turunen et al. 2011), luxury consumers do not value counterfeit
fashion brands because these items are fake and not representative of their authentic self
(Turunen et al. 2011). Diesel has a unique campaign, #GoWithThe- Flaw that uses irony. It
sells its own knock off, heavily discounted limited edition, real Diesel jeans in a pop-up store
in New York’s Chinatown where counterfeit products are sold (Megget 2018). This brand
building campaign celebrates individuals who disregard fashion status quo, in this case
shopping at high-end stores for designer products, but value the brand’s authentic image by
appealing to the individuals’ authentic self.
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The luxury item is an object loaded with meaning, to which one becomes attached (to quote
the 19th-century French dramatist, poet, and novelist Alphonse de Lamartine: ‘O inanimate
objects, have you then a soul that attaches itself to our soul and forces it to love?’). The
luxury item is a ‘livedin’ product rather than an undistinguished, utilitarian product that we
would immediately replace, or rather get rid of, as soon as it starts to fail or is technically
superseded. The luxury object is durable and even increases in value with time vintage, like
a wine or a piece of Louis Vuitton luggage. It is technically designed to resist wear, uses
choice starting materials that time only serves to enhance (the patina of old furniture,
Vuitton natural cowhide, vintage-wine grape varieties, etc), and is of a design that also will
stand the test of time (such as Ferrari). Thus, the luxury object is the very opposite of an
industrially manufactured object, which is expected to wear out and go out of fashion in
order to be replaced and keep the production machinery busy – as soon as a new
automobile leaves the showroom it loses 30 per cent of its value.
Brands can influence consumers in several ways, two of the most used are the functional
dimension, and the relational dimension (B. Godey et al. 2012; Rego et al. 2009). According
to Godey (2012; Keller 1993), the development of brand equity strives from brand concept
evolution, linking brand awareness and image, hence brand’s meaning comes from
functional elements of performance or more abstract elements connected to the imaginary.
Consumers who buy noticeable products, from luxury brands, are not only trying to satisfy
their material need, but they are also after satisfying their social need for prestige
(Amaldoss & Jain 2005; Belk 1988; Grubb and Grathwohl 1967).
Some consumers cannot afford to live a life full of luxurious parts, consequently the term
"luxury excursionists” was invented by Dubois and Laurent in 1996 (Amatulli 2015), this
expression aims to explain that there are consumers who cannot afford luxury items daily,
however, they buy them occasionally, providing just a taste of how a luxury object can
enhance their social status. Therefore, these people are contributing to the massification of
luxury items. As Shukla (2011; Hume 2010; Shukla 2010; Leigh & Gabel 1992) puts out, the
internal drive is one of the most powerful tools to affect consumers motivation, due to
creation of a favourable social image from their purchase’s outcome, thus it is thought that
consumption may be influenced by normative and informational interpersonal influences
(Shukla 2011). External motives are also applied to consumers, these can be interpersonal
and extrinsic, for examples the sign of wealth (Eastman et al. 2018; Truong et al. 2008;
Vignernon & Johnson 2004).
The Theory of Leisure, from Thorstein Veblen, originally released in 1899, is still being
applied to today’s buying motivation since it refers to how people use wealth and goods to
enhance their social position in society (Scott 2010). The desire for exclusivity leads to
consumer’s desired to show superiority over others by having products many people yearn
for but cannot have (Kim 2018; Sundie et al. 2011; Girl & Huettl 2010).
And finally, the bandwagon effect, which is mention to be the increase of demand of a
certain commodity, due to fact that other people are consuming the same goods
(Leibenstein 1950), consequently, it shows the need to fit in. It is a positive effect which
increases product consumption, therefore scholars find bandwagon effect one of the most
important types of luxury consumption (Kastanakis & Balabanis 2012; Tynan, McKechnie &
Chhuon 2010; Chaudhuri & Majumdar 2006; Vigneron & Johnson 1999).
As for mass exclusivity clients, we have young adults, millennials, which have a tendency to
spend money and a goal of signalling fashion consciousness and status to other people
(Eastman et al. 2018; Mundel, Huddleston & Vodermeier 2017). This means that once
millennials purchase for status or luxury, they are more likely to repurchase (Eastman et al.
2018).
Asian market
https://sk.sagepub.com/cases/lvmh-is-china-still-a-new-market
Question 3
https://www.emerald.com/insight/content/doi/10.1108/S1474-7979(2012)0000023007/
full/html
In brand extension and co-branding research, a common assumption is that there is a
positive association between the perceived fit of the parent brand with the extension
product category and consumers’ preferences for that extension (Park, Milberg, & Lawson,
1991; Völckner & Sattler, 2006).
In line with the past literature in object categorization (Rosch & Mervis, 1975; Tversky,
1977), prior brand extension research has conceptualized and measured perceived fit as a
function of product-similarity judgments in which consumers compare some aspects of the
existing set of products with those of an extension product. In the co-branding literature,
product fit is defined as the relatedness of the product categories referred to or implied by
the co-branding, irrespective of the brands (Kumar, 2005). In the context of the present
study, product fit specifically refers to the relatedness between product categories that a
retailer carries in its store and the fashion/clothing industry. If a retailer sells broad product
categories (e.g., electronics, clothes, office supply, etc.), the product fit is defined as low. By
contrast, if a retailer carries only clothing and/or accessory products, its product fit would
be considered to be high.
The brand extension literature (e.g., Aaker & Keller, 1990; Dacin & Smith, 1994; Park et al.,
1991) observes that product category fit works through its relationship with brand attitudes:
favorable brand attitudes might not be transferred to the brand extension in the case of ill-
fitting extensions. In general, brand extension studies have found a positive relationship
between product feature similarity and consumers’ evaluations, purchase intentions, and
brand extensions’ purchasing behavior. Specifically, Aaker and Keller (1990, p. 30) point out
that “a poor fit may not only detract from the transfer of positive associations, but may
actually stimulate undesirable beliefs and associations.” Therefore, it is expected that
attitudes toward a co-brand are likely to be enhanced when a relatively high degree of
product fit exists. In the context of this study, a good product fit between the luxury brand
and the co-branded retailer should result in more positive attitudes toward both, while a
poor product fit might result in an undesirable outcome. Thus, we posit thatH2aProduct fit
is positively related to attitudes toward a co-brand.H2bProduct fit is positively related to
post-attitude toward the original luxury brand
https://msbfile03.usc.edu/digitalmeasures/mcoombs/schteach/LVMH%20497%20Final
%20Project-1.pdf
https://thestrategystory.com/2021/01/07/lvmhs-brand-strategies-business-model/
Louis Vuitton
https://www.edrawmind.com/article/louis-vuitton-segmentation-targeting-and-
positioning.html
https://blucactus.blue/whats-louis-vuittons-marketing-strategy/
https://avada.io/resources/louis-vuitton-advertising.html
https://www.mbaskool.com/marketing-mix/products/16755-louis-vuitton.html
https://www.referralcandy.com/blog/louis-vuitton-marketing-strategy
https://epiprodux.com/blog/louis-vuitton-mastering-the-art-of-luxury-brand-marketing/
https://link.springer.com/chapter/10.1057/978-1-137-52343-3_6
https://web.p.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=0&sid=57b4ec47-24c6-495a-
a114-a7b34ab95471%40redis
Fendi
https://blucactus.blue/what-is-fendi-marketing-strategy/
https://www.lectra.com/en/library/fendis-strategy
https://ww.fashionnetwork.com/news/Fendi-thriving-thanks-to-evergreen-product-range-
centred-on-leather-goods,1362326.html
https://www.the-spin-off.com/news/stories/Brands-Fendi-starts-a-new-holistic-journey-
15794
https://web.p.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=0&sid=846399d0-6933-
4b32-ba6c-6901b8ad9889%40redis
Dior
https://go.gale.com/ps/i.do?p=AONE&u=murdoch&id=GALE
%7CA179904861&v=2.1&it=r&aty=sso%3A+shibboleth
https://web.p.ebscohost.com/ehost/detail/detail?vid=0&sid=717e909f-b632-4d4a-824b-
e64735893ba8%40redis&bdata=JkF1dGhUeXBlPXNoaWImc2l0ZT1laG9zdC1saXZl#AN=15785
5322&db=bsu
https://librarysearch.murdoch.edu.au/view/action/uresolver.do?
operation=resolveService&package_service_id=3913376490007891&institutionId=7891&cu
stomerId=7890&VE=true
https://blucactus.blue/diors-marketing-strategy/
https://thestrategystory.com/2023/05/28/dior-marketing-strategy/
https://www.strategyfinders.com/dior-marketing-strategy-success-behind-the-strategy/
https://www.businessoffashion.com/case-studies/luxury/christian-dior-strategy-lvmh-
pietro-beccari-maria-grazia-chiuri-kim-jones/
https://www.marketing91.com/marketing-strategy-dior/
https://www.proquest.com/docview/224198406?accountid=12629&forcedol=true
Hennesy
https://jingdaily.com/hennessy-cognac-drinkers/
https://www.campaignlive.co.uk/article/media-strategy-analysis-targeting-affluent-young-
drinker/538300
https://go.gale.com/ps/i.do?p=ITOF&u=murdoch&id=GALE%7CA143578943&v=2.1&it=r
https://6pillarsmarketing.com/port/lvmh-moet-hennessy/
https://lamaisondesstartups.lvmh.com/innovation-is-everyones-responsibility-a-
conversation-with-david-serre-evp-of-strategy-at-moet-hennessy/#:~:text=We%20are
%20on%20a%20path,the%20acquisition%20of%20new%20Maisons.
https://www.theiwsr.com/lvmhs-champagne-strategy/
https://medium.com/@dashasol/sustainability-strategy-hennessy-d7c2d67c3194
https://www.alistdaily.com/strategy/hennessy-brings-modern-approach-historic-brand/
https://www.thetradedesk.com/us/our-platform/hennessy-crafts-success-with-
omnichannel-campaign
https://embapro.com/frontpage/marketingstpcoanalysis/28844-hennessy-ad
Moet et Chandon
https://brandstruck.co/moet-chandon/
https://www.forbes.com/sites/lizthach/2021/09/21/chandons-global-strategy-finds-
success-with-new-consumers-and-innovative-products/?sh=6d5891d267ea
https://www.marketing-interactive.com/case-study-how-moët-chandon-wowed-
consumers-with-luxury-and-elegance
https://www.thedrum.com/news/2019/01/10/centralising-influencer-marketing-mo-t-
chandon-making-blogger-dollars-work-harder
https://www.wcommunications.sg/case-study/moet-chandon/
https://thechampaignist.wordpress.com/2018/11/24/marketing-strategies-of-moet-and-
chandon-in-china/

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