Luxury Consumption Motives of Chinese Female Consumers - Research Proposal Example

Luxury Consumption in China xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date LUXURY CONSUMPTION IN CHINA Literature review Definition Definition of the term luxury is rather wide receiving considerably varying definitions from different viewpoints. Vigneron and Johnson (1999) define it as a good or service that is not necessarily a need but is considered valuable as it brings happiness, pleasure and comfort. According to Sulehri et al (2011), luxuries are the extras of life that make it more enjoyable, comfortable, rewarding and fulfilling. In general, luxuries are goods and services that consumers do not necessarily need but they use or buy them with their surplus income for purposes of enjoyment and comfort. There is an emergent interest about luxuries and a correspondingly increasing research regarding this area. This has been prompted by the changing trends in luxury consumption during the recent years as the art of luxury consumption spills over from the elite class to people of all backgrounds. Luxury consumption motives Global luxury consumption has experienced considerable growth over the past decades. With the increasing number of luxury consumers, the future of luxury industries is indeed promising (At-Sahalia et al 2004). Luxury consumption in China clearly justifies this argument with the Chairman of Asian Pacific Consumer Markets KPMG China, Nick Debnam, stating that China is becoming increasingly significant in the global luxury market. In actual fact, China is expected to account for about 20% of the global market by 2015. In 2009, China was ranked world’s second largest luxury market; surpassing the United States for the first time. Recent survey confirms that China is indeed marching towards leading the global luxury market underscored by increasing wealth among citizens, continued confidence in the economy, and increasing favorable attitudes towards luxuries. Salmela (2010) points out that unlike the former years, negative sentiments about luxuries are rapidly declining and people are indulging into luxury consumption irrespective of costs involved. Attitudes towards luxury consumption The graph depicts that negative sentiments about luxuries such as superficial, wasting money and showing off have fallen radically while positive attitude associating luxuries such as success and good quality of life have increased over the past two years. According to Yang (2011) the advent of advanced communication and technology has transformed the buying behavior of luxury buyers in China. Emotive factors such as self-reward, experience, need-based factors and status-seeking factors are now key drivers in purchasing decisions. Economic and social changes in China have refurbished the composition of luxury buyers in China. Contrary to the past statistics, when men buyers overly dominated the market, Chinese women are gaining buying power with increasing economic independence. In 2001, three out of four luxury buyers were men opposed to today’s statistics which portray an equal balance (Jun and Zishi 2007). Luxury consumption motives in Chinese female Communication luxury consumption motive is a key strategy being employed by luxury companies in China in order to attract female consumers in the rapidly growing interest in female luxuries. In addition to gaining financial dependence, Chinese women nowadays receive equal employment chances as men and have access to higher education. Research indicates that income received by women has increased from 20% in 1950 to over 50% in present day. As a result, more and more women are indulging in luxurious activities and buying luxurious goods for the mere purpose of pampering themselves and self-rewarding. Steenkamp et al (2003) notes increased luxury consumption has consequently led to reduced saving levels among women to about 24% in 2009 from 55% in saving rates in 2006. Improved gender equality has created opportunities for Chinese women to move into entrepreneurship, corporate management and other leadership positions and has tremendously increased the number of wealthy women in China. In actual fact, out of the world 20 wealthiest women in the world, 11 are from China. In addition to increased wealth, Chinese women now possess better personalities and social status. Jun and Zishi (2007) therefore, notes that many of these women will consume luxuries as a way of reflecting their social status and personalities. Lu (2008) asserts that Chinese women are spending more money on luxuries in pursuit of quality life. Growing social and economic liberty among Chinese women has intensified the cult of beauty and they are buying more expensive and better quality cosmetic products. China has a long rooted history in gift-giving and this has spilled over in the modern society. It is estimated that about 50% of the total Chinese female luxury consumption is for the purpose of gifting. Louis Vuittons is ranked first among the most desired luxury brands in China according to a survey conducted by Bain survey in 2010. Owing to its comprehensive luxury brand strategy, Louis Vuittons has experienced tremendous brand success in many countries including China. Female consumers of the company’s products, particularly handbags, have termed the products as genuine and incorporating highly innovative features. The luxurious nature of Louis Vuittons products is also reinforced by their e-commerce marketing strategy. The company has a website where customers can select their preferred products and also make orders. Nagasawa et al (2007) maintain that the company’s strategy to target both the middle class and the wealthy clients has also contributed to its brand success. Female consumers of luxury products have an eye of detail which Louis Vuittons centers on. Consumption motives With considerably large varieties of motives driving consumption of luxuries among female buyers in China, companies need to deploy strategies of producing products and services that communicates the motives in order to scale up sales. Essentially, companies should strive to establish popularity for their brands as people are ready to pay premium for well known brands. Most luxury products are associated with certain countries; for instance Switzerland is known for making the most prestigious watches. Therefore, Chinese luxury companies should establish subsidiaries in such countries so as ensure that their brands excel in the country. Yang (2011) suggests that products should incorporate Chinese elements as a way of increasing detail into the products. Cultural heritage is of essence in China and hence Chinese people will be attracted by luxurious products that incorporate their cultural artifacts. Even so, new innovative designs should be crucially considered as it plays a major role during purchase decision. The increasing technological advancement requires companies to venture into internet enabled methods of advertisement, promotion and marketing in order to capture large proportion of the target customers (Jun and Zishi 2007). Specific Research Approach/Methodology Since the applied research methodology determines the accuracy of the results to be attained, it is essential that an appropriate methodology be selected for any research. The subject under investigation is key in determining the appropriate methodology to be applied. In this case, the aim of this paper is to investigate the motives behind consumption of luxury products by Chinese women which include personal, social and taste motivations . As such, qualitative research methodology has been deemed the most appropriate. This is based on the fact that the researcher will be collecting participant’s views and opinions regarding the motive behind consumption of luxury goods by the Chinese women. Qualitative Research Approach The qualitative research approach will be applied in investigating the issue at hand. According to Tewksbury (2009), this research approach unlike statistical analysis provides a clear deeper understanding of social issues. This is based on the fact that collected data is more informed and digs deeper into the issue being investigated. Since the issue under investigation is the motivations for women Chinese consumers purchasing luxury goods, social issues are in play hence demanding the application of a qualitative approach. Quantitative data is only important in determining the current trends in the purchase of luxury goods by women. As such, primary data will not include collection of any quantitative data as this can be established through past literature. As Tewksbury (2009) indicates, the greatest advantage of a qualitative approach lies in its ability to predict the future. In determining motivation for purchasing luxury goods purchase, manufacturing and trading companies will be able to predict the outcome of applying certain marketing strategies as well as market size for the luxury product being produced. Though there are many data collection methods applicable in collecting qualitative data, this research will apply questionnaires and face to face interviews. Questionnaires are preferred where the sample involved is large and time is a limitation (Creswell 2003). In this case, the questionnaire will be applied in collecting data from female consumers of luxury products as the sample will be large. This will save on the time factor. Bruce (2007) argues that face to face interviews offers a wider and deeper understanding of the issues as the researcher gets to know what the participants know how they view things and gets an explanation of the knowledge held. Kvale (2009) holds a similar view when he explains that more information is gathered as interviews present their views, perceptions and beliefs regarding the issue under investigation. These advantages formed the basis under which face to face interviews were selected as the appropriate data collection method. The researcher will apply semi structured interview schedules instead of structured interviews. This will give room for the researcher to collect important information that may otherwise not be possible in a structured interview. A semi-structured interview guide acts as a guide to the participant to ensure that only answers relevant to the questions are given (Radnor 2002). According to Ritchie and Lewis, semi-structured interviews give the interviewer a leeway to ask the main questions and gain further information (Ritchie & Lewis 2003). Other methods such as use of online surveys and telephone interviews will not be applied due to technological limitations and the cost involved. Research design and sampling Phenomenology research design will be applied in this research. This is because this research design seeks to understand a social issue from the perspective of those involved (Groenewald, 2004). Qualitative research designs are faced with the challenge of researcher bias. However, collecting data from the perspective of the subjects under investigation reduces such errors. Phenomenology research design addresses the possibility of researcher bias errors by ensuring that the influence of researcher experience and expectations are limited during data collection and analysis. In selecting the participants to be involved in this research, purposive targeted sampling will be applied. In this regard, only Chinese women purchasing luxury products will be recruited as participants. The participants will be randomly selected from three Chinese luxury products shops. Questionnaires will be supplied to customers after purchasing goods in the main shops trading in luxury goods. A total of 132 participants will be involved in the research. 120 of this will be female clients visiting three different luxury shops. In this regard, 30 female clients will be given the questionnaires to fill. The other 12 participants will be employees working as sales persons in the luxury shops. These 12 participants will be interviewed using the semi structured interview schedule. The interviews will be personal where each participant will be interviewed individually. This will ensure that responses are not influenced by responses from other participants. The interviews will be recorded using an mp3 recorder. Interview will be conducted Selection of a large number of participants increases the area to which results can be generalized as it increases representation of the target group (Saunders, Lewis & Thornhill, 2007). The security of information given by the participants will be assured. As such, participants will be issued with a consent form to sign before being engaged in the research and will not be required to provide their names. Coding of interview schedules and questionnaires will be done instead of participants’ names. This will be done after the purpose of the research and confidentiality of provided information has been explained. According to Belk (2006), respecting participants’ decisions to be involved in a research increases the chance of getting precise and accurate information. As such, no one will be coerced or tricked into participating. Data analysis Content analysis will be applied in analyzing the data. This method involved coding of qualitative data and categorization with regard to the research questions as recommended by Cresswell (2003). In this regard, coding will be done after identifying major themes into which collected information will be categorized. Dissertation structure/ How to work on the dissertation Chapter one of the dissertation will include an introduction whereby definitions will be given and the topic under investigation be introduced. Chapter two of the dissertation will include a literature review or development of ideas regarding motivation factors in the purchase of luxury goods by Chinese women and the changing trends in their purchase patters. Chapter three will include the methodology used in conducting the research. It will include an explanation of how the sample to be involved in the research was be determined and the research instruments applied. Lastly, it will explain the data analysis procedures applied. Chapter four will include a discussion of the results from the primary data collected. In the fifth chapter, a conclusion will be drawn from the literature review and results attained from the analysis of the primary data collected. Recommendations on the way forward will then be given in relation to the conclusion and results. Chapter six will be the last chapter of the dissertation and will involve a review of the findings. References At-Sahalia, Y, Parker, J, and Yogo, M 2004, Luxury goods and the equity premium. The journal of finance, Volume 59, No. 6. Belk, R, 2006, Handbook of Qualitative Research Methods in Marketing. Cheltenham, UK: Edward Edgar. Bruce, B 2007, Qualitative Research Methods for the Social Sciences (6th ed). Boston: Pearson Education. Creswell, J, 2003, Research Design: Qualitative, Quantitative and Mixed Method Approaches. California: Sage Publications. Groenewald, T 2004, A phenomenological research design illustrated. International Journal of Qualitative Methods. Jun, G, and Zishi, X 2007, Luxury consume Behavior in China. Market Modernization. Volume 4, p. 157-159. Kvale, S 2009, Interviews: An Introduction to Qualitative Research Interviewing. London: Sage. Lu, X 2008, Elite China: Luxury consumer behavior in China. Singapore: John Wiley & Sons (Asia). Nagasawa, S, Ohizumi, K, and Maeda, K 2007, The Principles of Louis Vuitton: The Strongest Brand Strategy, Tokyo: Toyo Keizai Shinposha. Radnor, H 2002, Researching Your Professional Practice: Doing Interpretative Research. Burkingham: Open University. Ritchie, J., & Lewis, J 2003, Qualitative Research Practice: A Guide for Social Science Students and Researchers. London: Sage. Salmela, M 2010, Motives for consumption of luxury goods. Degree thesis. Saunders, M, Lewis, P, & Thornhill, A, 2007, Research Methods for Business Students, 4th Ed, Pearson Education, Boston, MA. Steenkamp, J, Batra, R, and Alden, D, 2003, How perceived brand globalness creates brand value. Journal of International Business Studies. volume 34, p. 53-65. Sulehri, N, Malik, F, Qureshi, W and Anjum, N 2011, Consumer behavior slide down for purchase of luxury brands in Pakistan; A conceptual framework. European journal of economics, Finance and administrative sciences, Volume 1, no. 28. Tewksbury, B 2009, Qualitative versus Quantitative Methods: Understanding Why Qualitative Methods are Superior for Criminology and Criminal Justice. Journal of Theoretical and Philosophical Criminology, Vol 1 (1). Vigneron, F, and Johnson, L 1999, A review and a conceptual framework of prestige-seeking consumer behavior. Academy of marketing science review. Volume 1999, No. 1. Yang, G 2011, Thriving China luxury market. Press industry. Volume 3, p. 76-77. Read More