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Received 14 October 2014
Revised 22 October 2014
Accepted 23 October 2014
Yuri Seo
School of Marketing and International Business,
Victoria University of Wellington, Wellington, New Zealand, and
Margo Buchanan-Oliver
Introduction
Luxury is as old as humanity. Early essays on the meaning and social functions of
luxury had already been written in ancient Greece (Berry, 1994). However, the idea
of luxury brands, as a special form of branding and a cultural force behind fashion
and an affluent consumption lifestyle, is a relatively new concept (Chevalier and
Mazzalovo, 2008). It was not until the late 1990s that the market for luxury offerings
was transformed from a constellation of small, artisan family-owned businesses that
emphasised premium quality and the aesthetic value of their goods into a consolidated
economic sector led by powerful brand-driven luxury corporations ( Jackson, 2002). These
corporations (e.g. LVMH, the Gucci Group, etc.) made substantial investments in strategic
management, product design, marketing, and retail capabilities in order to build and
maintain the luxurious appeal of their brands (Okonkwo, 2009).
This study examines the emergence of a global luxury brand industry and discusses
previous conceptualisations of luxury brands. It does so to illustrate the unique context
of luxury consumption, to highlight several developments in extant literature, and to
advocate for the advancement of the consumer-centric paradigm of luxury branding.
In this endeavour, we will start with a discussion of the evolutionary growth of the
luxury brand industry and market. We will then examine important cultural, social,
and external trends that have influenced the post-modern consumption of luxury
brands. Finally, we will revisit previous conceptualisations of luxury brands and will offer
novel contributions to the current discussions on how to increase our understanding of
this unique phenomenon in the broader context of consumer culture.
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is not enough for it to possess superior quality and distinctive design; it should also
convey a particular symbolic meaning; a story behind the product that can be linked to
the consumers perception of luxury. Branding can add this value to the companys
products (Levy, 1959; Holt et al., 2004). Substantial investment in brand image was,
therefore, an obvious choice for luxury corporations.
Thus, the luxury brand market went through a dramatic transformation in terms of
its identity and focus. A market segment that was formerly linked purely to design and
creativity in production evolved into a consolidated brand-driven economic sector led
by the vision of powerful luxury conglomerates. In the late 1990s, this transformation
caused business and academic circles to take note of the emergence of the luxury brand
industry (Okonkwo, 2009). Strong brand image and identity have become the key
determinants of success in this industry (Kapferer and Bastien, 2009; Keller, 2009).
As a result, luxury brands have now become some of the most remarkable and valued
brands in the world (Kapferer and Bastien, 2009).
Trends influencing luxury brand consumption
The consumption of luxury brands has been influenced by a number of
macro-environmental trends, such as globalisation and cultural convergence (Chadha
and Husband, 2006); the emergence of new market segments (Okonkwo, 2009);
a constant rise in the number of wealthy consumers; the increasing attention that
luxury brands receive from the media (Mandel et al., 2006); the growing popularity of
internet shopping; and increased international travel (Nueno and Quelch, 1998).
Not only do these trends contribute to a rapid growth of the luxury brand industry, but
they also cause important changes in the composition of brands and, in particular,
within the customer base for luxury brands. These trends can be loosely divided into
three main categories cultural, social, and external to the industry trends and they
are explained in more detail below in relation to luxury brand consumption.
Cultural trends
Globalisation, an elusive phenomenon that has been receiving a vast amount of
attention in the last two decades, can be defined as an ongoing process by which
regional economies, societies, and cultures are becoming more integrated through
economic, social, technological, political, cultural, and other exchanges (Robertson,
1992). For the luxury brand industry, the major consequence of globalisation and
multicultural influences (Seo and Gao, 2014) has been a growing appreciation of global
luxury brands (e.g. Louis Vuitton and Gucci) by consumers in Asia, BRIC, CIVETS and
other developing countries (Kapferer, 2012). As a result of this trend, the customer base for
luxury products is becoming more culturally diversified, bringing new opportunities and
challenges for the managers of luxury brands.
The growing popularity of luxury brands in emerging markets seems to make
consumer tastes for these brands increasingly similar around the world (Catry, 2003).
Some common characteristics that consumers seek in luxury brands today include high
perceived prestige, aesthetic value, and their association with fashion and an affluent
lifestyle (Okonkwo, 2007). Brands that successfully convey these characteristics of
luxury to their consumers (e.g. Louis Vuitton and Gucci in fashion, Rolls Royce in the
automobile industry) tend to become leaders in the canon for luxury brands around
the world (Chadha and Husband, 2006). On the other hand, however, it has been noted
that new emerging markets are displaying luxury consumption styles different from
those of more established markets (Shukla, 2012). For instance, Chadha and Husband
(2006) observe that in Asian countries, consumer motivations for purchasing luxury
items are deeply rooted within the cultural traditions of these countries (e.g. Confucianism
in South Korea). It follows that, while consumers may purchase the same brands globally,
the meanings that they ascribe to these brands could be different.
Several researchers have previously attempted to explore luxury brand
consumption in the context of different international markets. For instance,
Okonkwo (2007) identifies six main regional markets for luxury brands Europe,
North America, Japan, China, India, and Russia. According to Okonkwo (2007),
although luxury consumers across the world generally exhibit similar expectations for
luxury brands and their products (e.g. high quality, prestige, and exclusivity),
consumer attitudes and consumption styles may vary from one market segment to
another, reflecting the economic, social, and cultural forces that influence these regions.
For instance, luxury consumers in Europe tend to be much older and have a higher
disposable income than their counterparts in other regions. On the other hand,
American luxury consumers are younger; they are willing to experiment with different
luxury brands, and do not stay locked into loyalty for one luxury brand for the rest of
their lives (Okonkwo, 2007).
Consumers in Japan and other developed Asian countries (e.g. Hong Kong,
South Korea, Taiwan) are reported to be very fashionable and label-conscious (Chadha
and Husband, 2006). According to Okonkwo (2007), about 94 per cent of Tokyo women
in their 20s own a Louis Vuitton product, and 92 per cent own a Gucci product. Consumers
in emerging markets, such as China, India, and Russia, are also characterised by
their unique luxury consumption styles. For instance, China poses challenges and
contradictions for luxury brands that managers have not previously encountered in
other countries (Okonkwo, 2007). Although, due to its rapid economic growth and large
population, China has the potential to become the largest market for luxury brands in
the world, it is also reputed to be the largest supplier of counterfeit luxury goods.
Thus, the potential problem that this contradiction creates for luxury brands is a clash
of the genuine luxury consumers population and the counterfeit consumers who might
dilute the image of the luxury brands to an extent that could drive the genuine luxury
consumers to seek alternatives (Okonkwo, 2007, p. 74).
Moreover, there could also be differences in the luxury consumption styles within
the market segments themselves. Chadha and Husband (2006) have investigated
luxury consumption in Asia. They found that, while the countries of the region
share some common elements of luxury brand consumption (e.g. status-orientated
consumption, extreme label-consciousness), each country has its own endearing
eccentricities that make it unique (Chadha and Husband, 2006, p. 56). In particular, the
markets of Asia varied in terms of their levels of luxury addiction, and consumer
attitudes for luxury brands tended to reflect socio-cultural beliefs that permeate these
countries (Chadha and Husband, 2006).
In another study, Dubois et al. (2005) conducted a cross-cultural study of luxury
across 20 different countries, and concluded that consumer attitudes towards
luxury brands are different. Dubois et al. (2005) identified three types of attitude
towards luxury consumption elitist, democratic, and distant. Within this view, the
elitist attitude proposes a traditional belief of luxury as appropriate for only a very few,
the elite. In contrast, the democratic stance implies that luxury should not be reserved
for refined people; it should be widely accessible and can be mass-produced. Finally,
the distant attitude towards luxury implies that consumers are not very attracted to it
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at all. According to Dubois et al. (2005), different countries and markets vary in terms of
these three attitudes towards luxury. Some countries can display more of one attitude
than another, whereas others can have a mix of two or three attitudes.
Thus, cross-cultural studies investigating luxury brand consumption suggest that
cultural processes, such as historical context and cultural conventions, play important
roles in exploring consumer perceptions and attitudes towards luxury brands.
While globalisation and the consequent global appreciation of European and the US
brands make consumer preferences for luxury brands similar, it is evident that their
consumption is strongly influenced by regional and cultural differences. This also
suggests that, if we accept that the world is moving towards a global culture where
consumers are connected through the consumption of the same brands (Holt et al.,
2004), emergent markets will necessarily bring new connotations to luxury branding
within and beyond those cultures.
Social trends
Traditionally, luxury items were consumed by the wealthiest circles of society to
display wealth and social status (Grossman and Shapiro, 1988). However, the luxury
brand industry is experiencing a rapid expansion of its customer base to include more
modest social classes. This is influenced both by an increasing disposable income
among those less affluent consumers and by the appearance of new luxury brands
which combine a perceived high prestige with reasonable prices to make luxury
products more affordable to a larger circle of consumers (Truong et al., 2009).
This trend is known as the democratisation of luxury (Evrard and Roux, 2005).
According to Silverstein and Fiske (2003), new consumers of luxury buy such products
for different reasons than those of the traditional elite consumers; these include
a desire to emulate the lifestyle of the richest or the social class immediately above
them, the superior quality of the products, or on more hedonic grounds on the basis of
self-rewards (Truong et al., 2009, p. 376). Therefore, the consumption of luxury brands
is not only culturally diversified, but also ranges across different social segments.
Chadha and Husband (2006), consistent with other studies (e.g. Michman and Mazze,
2006; Chevalier and Mazzalovo, 2008), identify three distinct social segments of luxury
consumers: the luxury gourmands, the luxury regulars, and the luxury nibblers:
(1) At the top end are the luxury gourmands, who devour luxury in great big bites,
donning designer labels from head to toe, 24/7. Needless to say these are high
net worth individuals (HNWI), with upwards of a million dollars in financial
assets.
(2) Next you have the luxury regulars, who while not quite in the gourmand league
are nevertheless on staple diet of luxury goods. These are affluent people with
financial assets in excess of US$100,000.
(3) And finally, there are the luxury nibblers, who partake in a few small bites of
luxe every season, a bag here, a watch there, whatever they can afford.
They are typically young people with next to no savings in the bank, but with
an increasing income-generating capacity thanks to a decent education and
well-paying job (Chadha and Husband, 2006, p. 47).
While all three segments are part of the customer base for luxury brands, their
behaviour and lifestyles are significantly different, suggesting that consumer
perceptions, experiences, and motivations for purchasing luxury brands could also
vary across these segments (Chadha and Husband, 2006; Okonkwo, 2009). For instance,
some studies report that while the wealthiest consumers tend to perceive luxury more
as a social badge (Grossman and Shapiro, 1988), middle and lower classes were found
to think about luxury items more as a type of self-reward or a prize (Silverstein and
Fiske, 2003). These differences suggest that consumers in different social segments
look for different things when they purchase a luxury brand and, perhaps, ascribe
different meanings to what brand luxury means.
External trends
Luxury brand consumption is also influenced by a number of factors external to the
industry, such as the growing popularity of internet shopping (Okonkwo, 2007), the
increasing attention that luxury brands receive from mass media (Mandel et al., 2006),
and increasing international travel (Nueno and Quelch, 1998). These trends make
luxury products more accessible, and stimulate the purchasing of luxury items.
In addition, contrary to cultural differences and the democratisation of luxury, these
external trends also encourage communication and information sharing among
the consumers of luxury brands, making consumer perceptions of luxury brands
increasingly similar.
According to Lippmann (1922, 2006) the media defines consumers worlds by
sketching images in their minds. Popular magazines, such as In Style and Vogue, depict
how successful people, such as celebrities, indulge in the consumption of luxury
brands, and so inspire the mass of other consumers to emulate their affluent lifestyles
through clothing and other consumer purchases (Mandel et al., 2006). Luxury brand
web sites and internet shopping make it possible for consumers to interact with each
other via website communities and virtual clubs dedicated to a specific luxury brand;
and increased international travel provides consumers with an opportunity to
experience luxury brands in different cultural contexts and, thereby, understand how
consumers from other cultures perceive luxury brands. These trends indicate that with
such culturally and socially diversified customer bases for luxury brands, we are also
witnessing movements towards a convergence of perceptions regarding luxury brands
across segments and, perhaps, the emergence of a global luxury brand culture.
Therefore, this section highlights that contemporary luxury brand consumption is
influenced by a number of micro-environmental trends, such as globalisation, cultural
convergence, and the democratisation of luxury. These factors are often contradictory
and have different impacts on consumers. On the one hand, consumers from different
cultural and social segments appear to exhibit different perceptions regarding luxury
brands. On the other hand, there are also trends that make consumer perceptions of
luxury brands increasingly similar across these segments.
Previous conceptualisations of luxury brands
The growing importance of the luxury sector has stimulated research into the
marketing and consumption of luxury brands. However, given the multidimensionality
of the brand concept and ambiguity about what constitutes luxury, researchers have
struggled to develop a comprehensive conceptualisation of luxury brands (Kapferer,
2006). Below we discuss several key approaches that have been used to understand
brand luxury, and highlight important aspects of luxury brands that require
further attention due to changing socio-cultural consumption patterns in the luxury
brand industry.
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(1) maintaining a premium image for luxury brands is crucial; controlling that
image is thus a priority;
(2) luxury branding typically involves the creation of many intangible brand
associations and an aspirational image;
(3) all aspects of the marketing programme for luxury brands must be aligned
to ensure quality products and services and pleasurable purchase and
consumption experiences;
(4) brand elements besides brand names logos, symbols, packaging, signage,
and so on can be important drivers of brand equity for luxury brands;
(5) secondary associations from linked personalities, events, countries and other
entities can be important drivers of brand equity for luxury brands;
(6) luxury brands must carefully control distribution via a selective channel
strategy;
(7) luxury brands must employ a premium pricing strategy with strong quality
cues and few discounts and mark downs;
(8) brand architecture for luxury brands must be managed very carefully;
(9) competition for luxury brands must be defined broadly as they often compete
with other luxury brands from other categories for discretionary consumer
dollars; and
(10) luxury brands must legally protect all trademarks and aggressively combat
counterfeits (Keller, 2009, p. 291).
In contrast to Nueno and Quelch (1998), Vigneron and Johnson (2004), made an attempt
to detail the consumer-perceived value of luxury brands. They detail five dimensions
that consumers may use to differentiate luxury and non-luxury brands: perceived
conspicuousness, uniqueness, quality, hedonism, and perceived extended-self. The first
three dimensions (conspicuousness, uniqueness, and quality) reflect non-personalorientated perceptions and the other two (hedonism and perceived extended-self) reflect
personal-orientated perceptions. Perceived conspicuousness refers to the view that
consumers purchase luxury items as a means of asserting prestige and status.
This draws on early studies of luxury brands as conspicuous objects. Uniqueness
incorporates the notion that a limited supply of a luxury brand enhances consumer
preference for that brand because it is perceived to be more exclusive and valued.
Quality is the expectation that luxury brands offer superior quality and performance
over non-luxury brands, as it is unlikely that a luxury image can be sustained when
product quality is inferior. Hedonism refers to an ability of luxury items to evoke
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emotions such as pleasure and a sense of achievement (Vigneron and Johnson, 2004).
Finally, perceived extended-self refers to the view that consumers often integrate the
symbolic meaning of luxury brands into their own identities. This dimension of
consumer-perceived brand luxuriousness draws on Belks concept of extended-self,
where he suggests that our possessions are a major contributor to and reflection of our
identities (Belk, 1988, p. 139).
The dimensions of brand luxury identified by Vigneron and Johnson (2004) have
also been noted by many other researchers (e.g. Dubois et al., 2005; Keller, 2009).
Christodoulides et al. (2009) have replicated the original study by Vigneron and Johnson
(2004) and found that previously identified dimensions of brand luxury may need to be
adjusted depending on the context of their application. In particular, they found that
the original dimension of uniqueness identified by Vigneron and Johnson (2004),
although an important characteristic of luxury brands for western consumers, is not as
important for luxury seekers in Asia. Therefore, Christodoulides et al. (2009) concluded
that additional research is needed in the area to explore these cross-cultural differences
regarding consumer perceptions of brand luxury.
An alternative approach to conceptualising luxury brands is evident in another
stream of research (e.g. Vickers and Renald, 2003; Berthon et al., 2009; Tynan et al.,
2010). The models of brand luxury derived by these authors appear to fulfil calls to
apply a more integrative perspective to brand definition (Tynan et al., 2010), and this
was discussed more generally in the branding domain (Buchanan-Oliver et al., 2008).
In particular, Vickers and Renald (2003) propose that luxury and non-luxury brands can
be differentiated according to the functional, experiential and symbolic interactional
dimensions of a product. They describe the functional dimension as a set of product
features that solve extrinsic consumption needs through physical and service
attributes (e.g. product quality); experientialism as product features that stimulate
sensory pleasure; and the symbolic interactional dimension as product components
that are related to status and affiliation with a desired group. These authors have found
that there is a fundamental difference in the mix of these three components for luxury
and for non-luxury brands. For instance, consumers expect luxury items to be of better
quality than non-luxury products (functional dimension), to include design features
that will provide consumers with a sense of pleasure (experiential dimension), and to
possess a prestigious name that is affiliated with a high level of social status (symbolic
interactional dimension); (Vickers and Renald, 2003). In contrast to Vickers and Renald
(2003), Berthon et al. (2009) argue that there is no absolute differentiation between luxury
and non-luxury brands, but rather that they exist on a continuum. Moreover, they also
note that functional, symbolic, and experiential dimensions of luxury are contextual and
may change over time depending on the individual and on socio-cultural beliefs. Similarly,
Tynan et al. (2010) suggest that brand luxury is a consumer-centric concept and its value
is co-created between a luxury brand and their consumers.
Luxury brand experiences
In some of the most recent approaches to conceptualising luxury brands, researchers
have started to emphasise the importance of consumer experiences in luxury branding
(e.g. Atwal and Williams, 2009). Tynan et al. (2010) note that luxury brand experiences
offer an important way of enhancing the value derived from luxury brands. Gistri et al.
(2009) argue that the hedonic nature of luxury brands provides consumers with an
experience of sensory gratification that is unobtainable from non-luxury brands.
Fionda and Moore (2009, p. 351) also note that consumer experiences are crucial to
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provides limited insights into how consumers emically construct meanings associated
with luxury brands. Thus, one of the major shortcomings of the emerging theory is its
predominant focus on either corporate or consumer-based brand equity. However, brands
do not exist simply as a firms value-adding assets which reflect consumer judgements of
the companys product and services. They are also socio-cultural, ideological, and political
objects that infuse consumption with meaning (Holt et al., 2004; Schroeder, 2009).
Therefore, to understand brands more fully, researchers require an understanding of the
culture and ideologies that surround their consumption, in addition to branding concepts,
such as strategy, equity, and value (Schroeder, 2009).
This is particularly important when exploring brands that have embraced
within their meaning such a central socio-cultural symbol as luxury. According to
Berry (1994, p. 6), luxury provides an illuminating entre into a basic political issue,
namely, the nature of social order. As a result, throughout history the meaning of
luxury has been infused with many ideological agendas. In ancient civilisations,
whether of Egyptians, Mesopotamians, Chinese, or Amerindians, luxury items were
used as symbols of leading groups and power (Kapferer and Bastien, 2009). In the days
of Plato, the Romans and early Christianity, luxury was perceived in a pejorative form
that signified the corruption of a virtuous manly life; and with the works of Adam
Smith, luxury has become a vindication of commercial society (Berry, 1994).
Today, the notion of luxury embraces all of these previous meanings and has also
acquired some new ones, such as being a symbol of fashion and an affluent lifestyle
(Michman and Mazze, 2006). In order to understand the consumption practices of
luxury brands fully, we require an understanding of how consumer interpretation
of luxury brands is influenced by socio-cultural functions of luxury and phenomenological
experiences. Moreover, current cultural, social, and external trends suggest that consumer
perceptions of luxury brands do not depend only on consumer-brand interactions, but are
also influenced by a number of other factors, such as globalisation, cultural differences,
and social class. These factors are often contradictory and have different impacts
on consumers and, therefore, must be taken into account when exploring luxury brand
consumption.
Future directions for research
Luxury brands are a special form of branding that use the socio-cultural meaning of
modern luxury to create an exclusive brand image and appeal. Over the past two
decades, the market for luxury brands has experienced rapid growth brought about by
two major factors. First, the luxury market had been transformed from a constellation
of small, family-owned artisan businesses in Europe into a global consolidated
brand-driven economic sector led by the vision of luxury conglomerates. Second, the
demand for luxury was stimulated by a number of favourable macro-environmental
trends. The outcome of these trends is a complex, sometimes paradoxical consumer
market for luxury brands. On the one hand, the market is culturally and socially
diversified and consumers from different cultural and social segments appear to exhibit
different perceptions and motivations for purchasing luxury brands. On the other
hand, there are also forces that contribute to the emergence of a shared idea of what
a contemporary luxury brand should be, making consumer perceptions increasingly
similar (Catry, 2003; Chadha and Husband, 2006).
Therefore, we believe that this post-modern paradox of luxury brand consumption
calls for investigation of the meanings which consumers emically ascribe to luxury
brands, and the process through which these meanings are emergent in the broader
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activities that will translate the identity into a corresponding brand image (Bengtsson
and Ostberg, 2006, p. 85). Contrary to this firm-centric view, the brand culture approach
(Bengtsson and Ostberg, 2006; Schroeder, 2009) posits that the meanings that consumers
ascribe to brands are highly contextual and constructed by the joint activities of
marketers, consumers, and cultural influences. In particular, Bengtsson et al. (2010,
p. 523) recognise that brand meaning is polysemic in nature and not inherent in the
brand itself, but depends upon the larger socio-cultural context within which the brand
is consumed.
The cultural branding perspective may offer important implications for understanding
brand luxury in a contemporary global marketplace. In particular, it suggests
that rather than considering brand meaning as an internal construct that originates
unilaterally within the company, brand meaning formation should be considered as a
dynamic process to which brand managers and consumers [] contribute (da Silveira
et al., 2013, p. 33). This implies that, while some characteristics of brand luxury could be
preserved over time and constructed by firms, other dimensions are co-created with
consumers, and are influenced by the broader context of socio-cultural meanings (e.g.
cultural mythology and beliefs). Exploring such dynamic processes underpinning the
perceptions of brand luxury becomes particularly important today, in light of luxury
brands being influenced by the conflicting cultural trends (e.g. globalisation vs
localisation) that permeate the global luxury brand industry.
Conclusion
Luxury brands convey unique sociocultural and individual meanings to their
consumers. According to Kapferer (1997, p. 253), these meanings implicitly convey
their own culture and way of life: hence Saint Laurent is not Chanel. They offer more
than mere objects: they provide reference of good taste. As a result, when consumers
talk about the affluent lifestyle, they often talk about particular brands that connote
luxury in their respective product categories. Some of the most prominent examples of
this phenomenon would be Rolex watches, Louis Vuitton bags, and jewellery by
Tiffany. Over the years, we have witnessed a number of cultural, social, and external
trends that have shaped luxury brand meanings, calling researchers and practitioners
to consider the consumer-centric paradigm of luxury branding (Roper et al., 2013).
Overall, this paradigm calls for a shift in the focus from the characteristics of luxury
brands per se, and towards phenomenological experiences and socio-cultural
influences, in our pursuit understanding what brand luxury conveys in the broader
context of post-modern consumer culture.
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