Simultaneous Multiple Sales Channel Increasing the Intention of Purchasing Luxury Brand Goods - Dissertation Example

?Simultaneous multiple sales channel increase the intention of purchasing of luxury brand goods Need for Research/Background: The macroeconomic situation around the world in the past couple of years has prompted the relevant businesses as well as the researchers around the world to take note of the falling market for Luxury brand goods. The proliferation of marketing activities in the first half of last decade had ensured a rapid growth in the luxury goods market. This had further fueled the formation of product categories within the luxury segment itself. The Luxury brand goods the world over were being made more accessible to larger percentage of the population (Portfolio 2009). However, all this changed with economic downturn of 2009. The Luxury goods market growth was stunted by the recession. Post recession, the luxury goods industry, seems to have survived the onslaught. However, the industry the market for the so called accessible luxury goods has been subdued. The exclusivity that is so much a part of the luxury brand goods has been restored and now more focused, established and pure luxury brand goods are likely to succeed and sustain themselves in the market. This downside in the Luxury goods business is likely to prompt research into finding ways to increasing and sustain the sales of the luxury goods without really tarnishing the pure luxury image of such goods. As per current economic situation, the brand equity for luxury goods has regained a place of prime importance. This raises the question as to whether there are ways to enhance the purchase intentions for luxury brands while preserving the said equity (Euro Monitor 2010). Further, the sustainability of the luxury brand goods has come into question and found fresh attention from business researchers. Taking a long term view of the marketing efforts, there is a need to investigate the means as to increase the purchase intentions of consumers for luxury brands at a very fundamental level. From a consumer behaviour viewpoint, the effect of the categorization of luxury brands based on the levels of exclusivity needs to be thoroughly investigated. The existing brands will do well to put in a focused research into the level of categorization and corresponding market offering in their brands. This is so, lest it dilutes the brand image. Thus there is a need to find out whether, the more accessible or economic versions of the other wise luxury brand will be sustainable and in line with overall brand value of the luxury goods. The existing sales channels for any given brand typically have their own strengths and weaknesses. Besides, the effectiveness of a channel varies with time. Thus it is important to find out a way to compensate for the effects of decline in sales through a channel. Another pertinent question that arises from the above discussion is whether new sales channels need to be developed to compensate for the downward trends in a given sales channel. Also, it needs to be found whether they can add any real value in terms of the customer experience. It remains to be seen whether any new channels will really be able to have any positive effect on the purchase intentions of the consumers. If yes then how the additional sales channels can be used to maximize the sales by affecting the purchase intentions. Luxury goods businesses need to have a guiding tool to help them decide whether and how the specific brand they are selling will respond to opening of any new sales channels and whether they will really be beneficial for their given brand. In this context its important to note that certain brands resist opening new sales and distribution channels for their brands. For instance the Rolex brand owners are against internet as a means to sell their brand (Brand Channel 2012). At the same time other luxury brands are endorsing internet as a sales channel. This raises questions about the validity of sales channels’ effectiveness for luxury brands. These questions can be answered only with proper research into the topic. The procurement or purchase experience is said to be of prime importance in the sales process of the luxury goods. There is a need to find out whether this experience can be enhanced with increase in sales channels for the same. Also, it prompts one to enquire whether the sales channels will together have any impact on the experiential aspects of the purchase process. The issue of simultaneous use of different sales channels gains importance here particularly from the point of view of the way it will impact the intention to purchase. The intention to purchase does not necessarily translate into a sale. However, it is important to the extent of gauging the potential compatibility of a luxury brand to this arrangement of multi channel approach. The various channels available are: Exploring the psychological aspects of consumer behavior towards luxury brand, an interesting observation about the self preservation aspects of human psyche is observed. Gutierrez (2003) observes that there is a relationship between the self preservation instincts and the intention to associate or proximity with a luxury brand. In the light of the above discussion, one is prompted to ponder over a possible relationship between the needs to self preserve and the increase in opportunities to associate with a luxury brand. An assessment of the psychological reasons for purchase of luxury goods brings up an important area of investigation. The emotions play an important role in purchase of luxury goods. It thus becomes imperative to find out a possible relationship between the emotions and use of simultaneous multi channel usage for selling luxury brands. It has been observed that counterfeits of known luxury goods somehow dilute the brand image of the luxury good. However, they are also known to add another experiential channel, unintentionally though. It is important to raise and enquire an obvious question as to whether the brand presence in counterfeit form, which is still a presence despite its downsides add to the purchase intentions for the brand at an experiential level. The research also needs to chalk out a set of guidelines for finding the best mix of sales channels for a particular luxury brand. The various existing channels are: Outlet stores, Licensing Joint ventures Wholesaling Retail network An upcoming sales channel is the mobile phone or smart phone. The smart phone in particular has the capability to showcase the experiential aspects of a luxury brand and can prove to be an effective sales channel (Mobile Marketer 2010). Thus based on the above observations and discussion, the overarching research objectives for the study are identified and summed up as follows: 1. Falling sales of luxury brand goods in a tight economic situation and how it affects the marketing of luxury goods. 2. Categorization of Luxury brands from a long term sustainability perspective—accessible luxury goods vs pure luxury goods. 3. Need to maximize sales and makeup for occasional slumps in one sales channel with other channels. 4. Need to look for ways to enhance and enrich the procurement experience of the Luxury goods, through a multi channel approach. 5. Self preservation and instinct to associate with luxury brands has been observed. This prompts us to think in terms of investigating the relationship between the self preservation needs and increase in the multiplicity of opportunities to associate with the luxury brands. 6. At a psychological level, does the arousal of emotions, which plays an important role in increasing purchase intentions towards luxury goods have anything to do with the simultaneous use of multiple channels. 7. The counterfeits in certain cases dilute brand image, though they seem to add a procurement experience channel. Does the presence of the brand in counterfeit form add to the purchase intentions though not necessarily from the same channel. Part 2: Survey method Specific research objectives/questions for first research method To gain an insight into the effect of the economic slowdown on the sales of luxury goods, and the need to open more sales channels. To study the balance required between sustainability aspects of luxury brand imgae and their accessibility aspects, such that the brand image can be preserved in the long run. To gauge the need for maximizing the sales in order to compensate for downturn in one sales channel with another. To find the level of activity required in order to attain an optimum mix of the sales activity in the various channels for increasing purchase intentions for the luxury brands to a given level. To identify ways and methods to position the brands within the framework of a multi channel sales approach. To study the relationship between self preservation instincts and tendency for proximity to a luxury brand on one hand and their effect on purchase intentions on the other hand. To gauge to what extent the multiplicity of sales channels serves as abundance of opportunity for association with luxury brands at a psychological level. To find the effect of arousal of relevant emotions on purchase intentions, due to simultaneous use of multiple sales channels for luxury goods. To find whether there exists a significant relationship between the simultaneous nature of the multiple sales channel application on the purchase intentions for luxury brands. To ascertain whether the counterfeits of a luxury brand in the market enhance or hinder the purchase intentions. To find out whether the counterfeits available in the market enhance the brand presence of luxury goods without diluting their brand image. Research model/framework and description of constructs: The research shall be conducted towards the fulfillment of the above research objectives. The study will seek to ascertain the exent of validity of the following hypotheses: The multiplicity of sales channels and the intention to purchase them, share a positive relationship (H1). The simultaneous usage of multiple sales channels is more effective means of ensuring a better purchase experience and hence increase in purchase intentions (H2). The effectiveness of simultaneous application multi channel sales of luxury brands share a positive relationship with: a. The arousal of relevant emotions for luxury brands(H3a) b. The self preservation instincts of the potential purchaser(H3b) The abundance of counterfeits acts another sales channel in terms of increasing the opportunity to experience the luxury brand (H4). Sampling: The sample size for the proposed study shall be 200. Sampling unit: The sampling units for the study will be clusters of following categories of respondents from the Luxury brands industry: Approrpiate individuals/luxury goods purchasers (C1) Individuals representing socio economic groups (C2) Corporate or business heads (C3) The representatives of various sales channels for luxury goods (C4) From the above mentioned clusters, the sample size shall be one. Thus effective sample size shall be 800. Sampling method: Random sampling Research Design of the Survey In order to carry out a survey on the topic, first of all a thorough review of the relevant literature was conducted. Based on the review of literature, the hypotheses as mentioned above and the research objectives were finalized. The research is designed towards establishing the extent of validity of the Hypotheses based on the analysis of the data that will be collected. The macro level data collected will be mostly secondary in nature and will be collected from secondary sources like internet, relevant books, Journals and government publications. However, the micro level data will essentially be primary data collected through suitably designed questionnaires. Designing and construction of Questionnaire: A survey will be made personally with the help of structured questionnaires. To finalize the questionnaire, a panel of experts from the relevant field will be consulted and a pilot study will be done to evaluate the effectiveness of the questionnaire. If required, changes will accordingly be incorporated. Before finally administering the questionnaire, its reliability and validity will be tested. Reliability will be found using the ‘Test-retest’ method. For validity, the questionnaire will be rated by four judges out of the experts involved in the process. Pearson’s product moment correlation coefficient will be computed between the ratings of the experts. Data analysis approach A system of scoring based on the weightages assigned to the responses will be adopted. These scores will be subjected to statistical tools and the results interpreted thereof. Suitable statistical techniques will be employed for analysis and treatment of research data. The study will seek to measure the relative significance of the simultaneous usage of multiple sales channels and the increase in intention for purchase of luxury goods. The measure will be denoted as (I). The items on the questionnaire will strive to measure the awareness/understanding and their endorsement of the factual statements that the items represent. Each item on the questionnaire has been defined to have an equitable relationship with the respective dimension it represents. Each dimension in turn has been defined to have an equitable relationship with the entity (I) as mentioned above. The questionnaire strives to measure the following dimensions D1 through D4 which have been derived from the hypotheses H1 through H4 as mentioned above. Awareness/understanding of the positive relationship between multiplicity of sales channels and the intention to purchase the luxury brands (D1). Endorsement of the simultaneous usage of multiple sales channels as a more effective means of ensuring a better purchase experience and hence increase in purchase intentions than a non simultaneous one (D2). Understanding of the effectiveness of simultaneous application multi channel sales of luxury brands vis-a-vis: a. The arousal of relevant emotions for luxury brands(D3a) b. The self preservation instincts of the potential purchaser(D3b) Awareness/understanding of the fact that the abundance of counterfeits acts as an additional sales channel for increasing the opportunity to experience the luxury brand (D4). The scores will be assigned to responses by respondents as follows: 5=Almost always True 4=Usually True 3=Not Sure 2=Sometimes True 1=Not at all true The weighted mean scores of all the 800 respondents will be calculated to for each dimension and a final mean score representing a measure of the entity (I) will be arrived at. This measure or score will represent the overall endorsement/awareness of the entity (I) as defined above and help us understand the validity of the theoretical proposition of the study. The scores as mentioned above will be subject to the following tests: The mean score (M) and standard deviation (S.D.) will be calculated between the scores of the respondent categories C1 through C4 for each item of the questionnaire. Additionally the respondents will be categorized on the basis of gender that is Male (M) and female (F) and three age groups as follows: A1 (20-30 years) A2 (31-40 years) A3 (41-50 years) The mean and standard deviation will be calculated for the above categories as well for each item of the questionnaire as well as for each dimension. Also, the percentage composition of the various demographic categories among the respondents will be calculated. Analysis of Variance (ANOVA) The mean scores will be subject to the statistical tests measuring the analysis of variance. The values will be subject to t-test and Duncan’s mean test or f-test. The ‘t’ and ‘f’ values will be calculated for the following categories alongside the M and S.D.: 1. Comparisons of dimensions of (I) between male and female respondents, significant at .01 level wherein t values . 2. Comparison of dimensions D1 to D4 among the three age categories- A1 to A3 wherein Duncan’s mean values or ‘F’ value at .01 significance level shall be calculated. 3. Coefficient of Correlation among the dimensions D1 to D6 shall be calculated. Part 3: Case study method: Research questions for Case study: How has the tight economic situation affected the luxury goods market and to what extent has it affected? Why should a luxury brand owner invest in research to find out how the sales will be affected by multi sales approach? How can businesses help ensure long term sustainability of luxury brand sales by categorizing them into accessible and pure luxury goods? How can the sales be maximized by compensating for a slump in one sales channel with another sales channel? How and in what ways could a multi channel sales approach help enhance the procurement experience of the luxury brands? Why does a simultaneous use of multiple channels need to be chosen as way to enhance the purchase experience? How will a simultaneous use of different sales channels influence the customer experience positively? How is customer brand experience over a period of time related to the intention to purchase? How does the self preservation affect the need for a potential customer to be associated with a luxury brand? Why would the self preservation need be a basis for increasing the number of sales channels to sell luxury brands? How is the simultaneous use of the muli sales channels important for the fulfillment of the self preservation need of a luxury brand consumer? How does the arousal of emotions affect the purchase intention of the luxury brand goods vis -a vis the simultaneous use of multiple sales channels for a luxury brand? In what way does the extent of an aroused emotion through increased presence in the form of simultaneously multiple channels influence the purchase intentions? How does a brand benefit from its own counterfeits in the market and why is it not a real cause of worry for the luxury brand goods? Research model/framework and description of constructs: The paradigmatic assumptions or Initial theory of the topic being studied: There exists a positive relationship between the multiplicity of sales channels for luxury goods and the inclination towards them. The simultaneous application of the multi channel approach is more effective than a non simultaneous application in ensuring a better procurement experience. The self preservation instinct of a buyer is positively related to the effectiveness of simultaneous application of multi channel sales of luxury brands in increasing the purchase intentions of the buyer. The emotions arousal is the pivotal point of all the efforts to improve purchase intentions for the luxury brands The counterfeits are the means of attaining better brand presence to the extent they do not dilute the brand image of a luxury brand. The Research Plan or framework: The case study shall be conducted within the framework of the above paradigmatic assumptions or theoretical postulations. These theoretical postulations shall be used as yardsticks to measure the issues raised in the research questions. The units shall be analysed against the purchase intentions of the customers data obtained from the luxury brand for which the case study shall be conducted. The Study shall seek to enquire the History, current business situation as well as the customer perceptions and the brand management aspects of the given brand. A 360 degree view of all the various aspects related to the multiple sales channels for the given brand shall be sought for further enquiry through more systematic or scientific means. The study shall provide flexibility to incorporate any new aspects of the purchase intentions for luxury brands which will have bearing upon the multi sales channel approach. The new ideas so discovered apart from the initial ones shall be subject to rigorous analysis in order to marry them with the overall framework and the thrust areas of the purchase intentions for luxury brands. The luxury brand chosen for study shall be constantly monitored for over period of time during the course of the study. This shall be done to validate and recheck the findings that will be accumulated on various aspects of the different sales channels for the given luxury brand. The experiential aspects of the purchase of luxury brands shall be studied based on the sales and observational data collected during the study. The reports and feedback from the relevant sources like the staff of the concerned luxury goods company. The case shall be selected on the following parameters: The case in question provides opportunity to explore the purchase processes on a social as well as psychological and cognitive level. The case selected is recent and the phenomena being studied are consistent with the current scenario of the luxury brand industry. The case is such that the luxury brand being studied has already tried selling through multiple sales channels, so that the results of the relevant purchase experiences can be analysed from both the seller as well as purchaser point of view. The issues or aspects being uncovered in the case are relevant to the simultaneous use of the said sales channels. The case should be such that the brand has either already applied in last couple of years or plans to employ the sales channels in a simultaneous manner. The luxury brand in the case should have had dealt with the problem of counterfeiting in the recent past. Research Design of the Case Study: Exploratory: The study shall choose a single case for study against the paradigmatic assumptions and will seek to validate the applicability of the assumptions to real scenarios concerning the purchase intentions for luxury brand goods. The study will try to explore the truths pertaining to the topic of luxury brands and purchase intentions of luxury brand buyers with respect to the chosen brand. The study will employ a combination of following three methods for the exploratory study: Extensive review of literature: An extensive review of relevant literature pertaining to the research questions or objectives shall be done. The review will be done in a descriptive manner unfolding the bibliographic works related to the sales channels for luxury brands and related purchase intentions. Within the descriptive structure an order of relevance shall be observed. Within the order of relevance a chronological order of the works shall be observed. Experience survey: An experience survey of the people who have practical experience with respect to the Luxury brand sales and are likely to have exposure to multiple sales channels for luxury brands shall be conducted. An interview schedule shall be constructed for the purpose as seen in appendix…The selected respondents shall be interviewed and the responses recorded. All the respondents will be sent the copies of the interview in advance. Any suggestions or queries during the process of interview shall be incorporated into the findings. Data analysis approach: Data collection: The data collection for the study shall be done primarily through the above mentioned methods. Apart from the above methods other methods shall be used in conjunction which are as follows and shall be required on an as and when basis to further enrich the study: Collection of relevant documents like sales reports, business agendas, results Direct observation of the purchase process of goods of the given luxury brand in action. A database of the data collected from the above mentioned sources shall be created from the main report, which will include case notes, documents, tables, narratives of the interviews. Data analysis: Data analysis units: The data analysis units will be facts in the case which are consistent with the form of the research questions and compatible for evaluation with the questions as mentioned above. The data will analyzed by developing a descriptive framework of the paradigmatic assumptions as described in the Research framework mentioned above. The case will be scanned and the points in the case qualifying for analysis shall be identified. A set of causes linking the assumptions and said points will also be identified and enlisted. The causes and the analyzed units of data together will be used to form a final framework for the accepting or rejecting fully or partially the paradigmatic assumptions. References Brand channel, 2012, Luxury Brands Snub the Web, viewed on April 10, 2012 Euro Monitor, 2010, Global Luxury Goods overview, viewed April 12, 2012 Gutierrez C.C. 2006, Consumer Attraction to Luxury Brand Products: Social Affiliation in Terror Management Theory, viewed on April 9, 2012 Mobile Marketer 2010, Luxury Brands need 360- degree mobile strategy, viewed on April 7, 2012 Portfolio, 2009, Back to back to basics, viewed 14 April, 2012 Read More