The Consumption of Luxury Goods by the Consumers - Research Paper Example

The Motivation of Consumers to Purchase Luxury Goods Siqiao Zhao Consumer Behavior of Manchester-IFR 04/21/2015 Abstract Regardless of the current worldwide economic recession in almost every part of the world, luxury goods are still maintaining their popularity as the most popular goods in the whole world. Most recently, most of the people know the value and the importance of luxury goods and are getting interested in their consumption (Hausman, 2000). This research will aim at finding the factors that affect buying of luxury goods by the consumers all over the world. The paper is very much particular in discussing the facts about the attitude and the motivations that influence a majority of the people who consume luxury goods (Hausman, 2000). With the rapid growth of national economies in most of the world countries, the purchasing power of the people in the countries has also improved and luxury consumption has improved. The consumption of luxury goods by the consumers calls for guidance in most of the countries. The study will involve data collection, analysis and presentation of findings in the form of a discussion. Introduction Based on the rapid development of most of the country’s economy and the improvement of the purchasing power, the consumption of luxuries also has some development. In an example, in 2006, an estimated population of 320,000 Chinese consumers who spend their money on luxury products on an estimated 10% of all the global luxury brand sales (Arifoglu, 2012). After six years, the numbers of consumers went up by double or even triple (Hausman, 2000). The change made the number of consumers rise by a 10% making the Chinese consumers become the largest in the world. A report send by the world luxury association indicated that Chinese overseas luxury goods consumption during 2013 totaled to about $8.5 billion, the Chinese shopping on luxuries increased to 68.8 in 2011 (Hidayat and Diwasasri, 2013). Presently, there has been an understanding that the local indicators of consumer attitudes do not sufficiently to the different volitional, internally motivated, avoidance response tendencies in different consumption or acquire situations (Hausman, 2000). A general critique is that these attitude measures are based on the conceptualizations that are too narrowly focused (Hidayat and Diwasasri, 2013). One area of the criticism has indicated that the symbolic, hedonic, and the esthetic facets of consumption are not adequately shown in these conceptualizations and accordingly in the resultant operationalizations (Arifoglu, 2012. Literature Review 1.1 Luxury products The body of literature that relates to luxury products crops up when another related literature from a broad range of business fields, which also focus on luxury products is put together to make a broad literature group (Arifoglu, 2012). The compilation is given the name luxury literature. The literature tends to represent a mixture of different pieces of literature from different businesses that include marketing, management, branding, advertising and also strategic planning. Luxury literature is therefore characterized by various elements like discussed in the literature. The literature will discuss more on the motivations that marketers need to employ in trying to win their potential customers and make reasonable profits (Hausman, 2000 This type of literature is always industrial focused. Though the literature deals with a variety of issues that are evident in the business, the literature composed through a focus on the luxury industry, as an opposition to a particular industry discipline (Chen and Kim, 2013). The literature consists of a group that comes from an assortment of disciplines; individual literature pieces are hybrid in nature in cases that they operate with a particular discipline along with a luxury company direction. The literature is often, although not always, empirically based (Jiang, 2012). 1.2 Motivation From the various literatures that relate to business, the researcher will look at those that could motivate the customers who consume luxury goods all over the world. There are five groups of motivations that the producer may use to improve the morale of the customers in buying their luxury goods and their products (Hidayat and Diwasasri, 2013). The groups are categorized as the writing perspective, subject and the context of the motivations being given. Group one refers to the basic human motivations and argues that the psyche of humans combined with their interpersonal needs is the ones that are responsible for luxury purchase motivations. Group two refers to the motivation of the society as a group and it argues that, the place that the consumer holds in the society is always responsible for their motivations in purchasing luxuries (Jiang, 2012). The other group refers to the international or global motivations and the group argues that the general human desires are always shared across the border and they are always responsible for luxury purchase motivations. The fourth group refers to the culture based motivations and it tends to argue that, unique and independent culture elements for the given culture are responsible for purchase motivations (Meng Fang Yuan, 2013). The review will lead the researcher to notice and identify several motivations that are conveyed by varied authors as being the same and all interrelated, since the writers link their publications and findings with the earlier ones (Meng Fang Yuan, 2013). Hedonic perspective 2.1 Definition of Hedonic The hedonic perspective does not usually limit its scope of interest only to the attitudes, but it extends to lots of other aspects of the consumer behaviors. Some of the notable interests comprise of several cognitive and behavioral responses plus the effective ones. Again, lots of attention is directed towards the customer and the environmental variables that are in existence (Meng Fang Yuan, 2013). Scholars have discussed in their previous works some concepts such as esthetic products, response and aesthetic criteria without fully giving the meaning of these terms. The contributions of this literature presently is that it has convincingly brought to light the issue of the dominant view of being too limited and has given out some direction that might lead to different solutions being found (Modi et al., 2014). Again, (Chen and Kim, 2013) have made it clear that products can easily be classified as utilitarian and aesthetic. The normal and traditional marketing research has concentrated more on the utilitarian products as per the arguments of these scholars and the instruments used to measure given that as a fact. They have argued that emerging methods and apparatus for measurement need to be devised in order to study the customers consumption of esthetic products. Again, they argue that, old attitude measures like expectancy-value multi-attribute models, measure only influence that is principally a subcategory of emotional feedback, and it is again a subcategory of hedonic feedback (Nwankwo, Hamelin and Khaled, 2014). Hirschman and Holbrook (1982) have made some several points that describe the conceptual variations between some characters like that of buying a washing machine and attending an entertainment concert. The only thing that remains not to be clear is the issue of whether the attitudes towards various product brands of the washing machines are somehow naturally utilitarian as contrasted with esthetic (Modi et al., 2014). The implication of this is that, the authors try to find out any difference in the attitudes toward utilitarian products versus the esthetic products. The authors without any doubt are implying that the preferences among what they tend to refer as utilitarian luxury products are always not sensitive (Nwankwo, Hamelin and Khaled, 2014). They also try to explain that traditional attitude measures measure affect that is always a sub-construct of character. To be clear, the qualitative disparity in the evaluative feedbacks is clearly shown by other scholars. (Hidayat and Diwasasri, 2013) Expressive and epistemic feedbacks usually communicate, respectively, to the utilitarian and esthetic value judgments. Although, the parallelism experienced is not usually perfect, the values of utilitarian tend to obtain results from the common beliefs on how the product imagery attends to consumption needs. While on the other hand, esthetic values always pivot on an emotional response to the sign (Son, Jin and George, 2013). These criticisms are not oriented to the direction of the behaviors of the utilitarian and it does not accurately show the purpose of the scholars who came up with the techniques (Chen and Kim, 2013). The existing attitude measurement apparatus have entirely been developed by psychologists who have shown interest in behaviors like giving the Communists a chance to talk in the public and also sexual behavior (Southerton, 2011). – An attitude with utilitarian and hedonic components It is imperative to fathom the difference between the utilitarian and the hedonic motives that underlie the decisions that relate to consumption. The motives make most of the aspects of character towards behavioral acts. The utilitarian facet of a given attitude directed towards usefulness, value and the intelligence of the character as seen by the consumer of the products. The hedonic feature relates to the pleasure that is anticipated or even experienced. Hedonic facet relates to the pleasure that is most anticipated from the behavior of the consumers. The hedonic feature tends to result from the feelings of a person such as love, joy, hate, fear, boredom amongst others like the dislikes and the likes of a person. Again, both the hedonic and the utilitarian facets are bipolar in nature and they vary in their magnitude (Son, Jin and George, 2013). Hedonic feature entails painful and unpleasant emotions as well as the pleasant one. Again, the utilitarian facet entails judgments about foolishness, irrationality as well as rationality and wiseness. The above statements talk about the past, present and or, the near future and it is not necessarily a process (Zhou and Lu, 2015). Hence, most people view of utilitarian facet tends to differ from that of other major scholars. Most of them seem to talk more about rational processing of information while am concentrating on the effective state (Hidayat and Diwasasri, 2013). The states whether utilitarian or hedonic in nature may come out from rational or irrational, Gestalt or components processing. Therefore, there is a call for a clear distinction to be drawn between information processing and the nature of the resultant state (Southerton, 2011). Most people do not believe in hedonic or utilitarian behavioral divisions to be conceptually sound, but some feel that each practical behavior has both elemental facets (Nwankwo, Hamelin and Khaled, 2014). Consequently, it is neither theoretical to classify behaviors to utilitarian and hedonic nor clear that some behaviors are more hedonically aggravated than some others are. If by any chance it is true that the real meaning of hedonic feedback can be determined by the pleasure reactions, then we are probably very close to developing a mechanism that determines total effect, than if we are forced to include multisensory and fantasy measure (Zhou and Lu, 2015). If the main purpose is to identify expressive reactions and also understand their determinants, there is then a need to develop an instrument and new methods to study these phenomena (Nwankwo, Hamelin and Khaled, 2014). In addition, even though it is important to determine emotional reactions at the time of purchase and consumption behavior for better diagnostic, for the purpose of determining affective predispositions, it should be sufficient to determine the anticipated pleasure reactions (Hausman, 2000). The hedonic feature, however, does not necessarily incorporate all the motivational force. There is, therefore, the need to measure the utilitarian facet and the general feature (Southerton, 2011). At its center, luxury must focus on the motivation of the consumers and make them have that feeling of being desirable. After detailed market research by some scholars undertaken by added value, consumers gave their relationship with luxury goods in five different ways (Yang and Mattila, 2013). The comments that the consumers gave indicated that the luxuries make them feel taller, sexier, have a high degree of commanding respect, living their dreams and the feeling of being complete. Since the major motivation for luxury is to create the required desire to the consumers, the major behavior of the consumer works in very interesting ways. The main elements that drive the consumers of luxury products are the show and to know. Methodology Research design 3.1 Quantitative Data The study aims at analyzing luxury consumer behavior that majorly focuses on motivation, cultural factors and even the equity of the brand towards the purchase of luxury products (Nwankwo, Hamelin and Khaled, 2014). The questionnaire will be first developed in English and then translated into the local language of the area where the study will be taken. This will be followed by data collection that will examine the influence of customer’s behavior towards luxury products (Hidayat and Diwasasri, 2013). Experiments and Data Collection The data to be used will be collected primarily using a questionnaire. The researcher will first of all choose a website for investigation in order to make a formal questionnaire. The made questionnaire will be distributed via online channels and other social networks (Hidayat and Diwasasri, 2013). The respondents will then give their responds to the researcher. Other questionnaires will be printed and sent as hard copies to various groups all over the world depending on the sample size of the study (Jiang, 2012). Data Measurement and Analysis There are three parts that will be analyzed respectively and they will include among others, consumer motivation, cultural factors and the brand equity that will be used to measure the behavior of the consumers (Yang and Mattila, 2013). The fields may be aimed at specifying the feelings of the consumers as strongly agree, neutral, either disagree or strongly disagree. The items to be used will be ordered ranging from most agree to the least in the category.The first part will comprise of the ordinal scale, the second, third and fourth parts will be the interval scale and the fifth part will give nominal scale. The data that will be collected using the questionnaire will be processed using the statistical program and Chi-Square methods to analyze the data (Jiang, 2012). 4.1 Limitations of the study A major constraint to this study will be time as the respondents may not have enough time to complete their questionnaire and they may fail to pay attention to the questions fully. Choosing the best sites to carry out the study may be a great challenge to the researcher because the behavior of the consumers differs greatly (Yang and Mattila, 2013). 4.2 Implications of the business From a practical viewpoint, the study entails some inspirations for both businesses and the consumers too. Those companies that are involved in producing luxury goods need to improve the quality of their luxury equity and individual characterization of the products so that they change the attitude of the consumers of luxury products (Yang and Mattila, 2013). The attitude of the consumers can be improved by raising the consumer’s perception of luxury in conspicuity and scarcity that is important to the consumers face and giftings. The process of marketing luxury products is not only about selling the products, but it also entails the process of guiding the consumers to agree with luxury brand crafts and also the perception of brand value, and also willing to pay for it (Chen and Kim, 2013). The perception of the consumers can be improved by enhancing the brand value of the luxury products and the cultivation of consumers brand loyalty. The companies must also create a good corporate image for the consumers to understand the products constant positioning within their common status. The best way to meet improve the loyalty of the consumers is by making products that meet the consumers demand for improved services (Hidayat and Diwasasri, 2013). Again, the research came out with the finding that social symbol is the second largest reason that prompted the buying of luxury goods. The person who is engaged in marketing the product is supposed to manage the product as a core point and make the brand concept to be deeply rooted in the hearts of the customers (Chen and Kim, 2013). The luxury products design is supposed to be more humanization be in a position to be combined with different cultural aspects from the aspects of the targeted consumers in the development of their products. The marketer must also put into consideration to various levels during the pricing of the products to motivate the consumers psychologically. Lastly, the marketers are supposed to come up with better promotional strategies so that they successfully market their products (Jiang, 2012). 4.3 Recommendation It is without doubt considered a concern for marketers to find the best way of reaching their target customers in the existing luxury markets with the greats degree of efficiency. The paper has revealed to the marketers the soft corners of consumers that can be easily targeted via varied strategies. It also shows the method of making decisions and purchasing of luxury goods as a direction for the marketers to target accordingly (Hidayat and Diwasasri, 2013). The consumption of luxury goods in the world varies greatly from one region to the other as the consumption of the west greatly differs with that in the east. The consumption of the eastern customers through calls for an improvement in the knowledge that they have about luxuries and avoid their practice of showing off what they earn by engaging in over-spending. People also need to be equipped with knowledge about the culture and the history of luxury spending. The reason for the knowledge is to make people understand the luxury culture and at the same time learn how to match the varied luxury lifestyle. Conclusion To conclude, there should be successive studies that need to be carried out about customer satisfaction that will show the emotional response of the customer after making a particular purchase. The experiences of the customers such as their experiences concerning the purchase of luxuries might bring a different effect on their attitudes towards and purchase intent of luxuries. The luxury consumers spur is about elevating them to the desirable position. Consumers tend to think that they have the knowledge of their luxury and majority of them tend to enjoy showing it. Some of the consumers are always well versed with their brands and they like to display it to the others. References Arifoglu, K. (2012). 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Nwankwo, S., Hamelin, N. and Khaled, M. (2014). Consumer values, motivation and purchase intention for luxury goods. Journal of Retailing and Consumer Services, 21(5), pp.735-744. Son, J., Jin, B. and George, B. (2013). Consumers purchase intention toward foreign brand goods. Management Decision, 51(2), pp.434-450. Southerton, D. (2011). Encyclopedia of consumer culture. Thousand Oaks, Calif.: SAGE Reference. Williams, C. and Martinez-Perez, A. (2014). Why do consumers purchase goods and services in the informal economy?. Journal of Business Research, 67(5), pp.802-806. Yang, W. and Mattila, A. (2013). The Impact of Status Seeking on Consumers Word of Mouth and Product Preference: A Comparison Between Luxury Hospitality Services and Luxury Goods. Journal of Hospitality & Tourism Research. Zhou, Y. and Lu, C. (2015). Construction of Buying Intention Model on Counterfeit Luxury Goods Based on Motivation of Consumption. SASS, 2(1). Chen, J. and Kim, S. (2013). A Comparison of Chinese Consumers Intentions to Purchase Luxury Fashion Brands for Self-Use and for Gifts. Journal of International Consumer Marketing, 25(1), pp.29-44. Journal of Consumer Marketing, 17(5), pp.403-426. Hidayat, A. and Diwasasri, A. (2013). Factors Influencing Attitudes and Intention to Purchase Counterfeit Luxury Brands among Indonesian Consumers. IJMS, 5(4). Hirschman, E. and Holbrook, M. (1982). Hedonic consumption. [S.l.]: [s.n.]. Nwankwo, S., Hamelin, N. and Khaled, M. (2014). Consumer values, motivation and purchase intention for luxury goods. Journal of Retailing and Consumer Services, 21(5), pp.735-744. Yang, W. and Mattila, A. (2013). The Impact of Status Seeking on Consumers Word of Mouth and Product Preference: A Comparison Between Luxury Hospitality Services and Luxury Goods. Journal of Hospitality & Tourism Research. Read More