The Consumption Of Luxury Goods Marketing Essay

Long ago, the consumption of luxury goods was reserved to exceptional people. Now its more like the exceptional consumption of ordinary people. Does the democratization of luxury goods really exist?

The luxury market has experienced a considerable growth in the last decade.

Since a few years, there has been a change in the luxury market. It is not reserved exclusively to the elite as most of the purchases are made by what we can call the occasional clients, which has led the luxury goods companies to adapt and look for new strategies to accommodate to the change. They now need to move away from the traditional few to a bigger audience. Therefore, the luxury sector slowly moved from a time where they were targeting to a small number of “exclusive” people to a time where it’s becoming available to a mass audience (Nueno And Quelch, 1998).

The democratization of luxury brands looks to be harmful for longly established luxury companies as they need to maintain their brand image while enlarging their audience. Every product they might add is a threat to their brand image as a whole and it’s also a danger for their old clients to turn to other companies that still follow the “exclusivity” pattern.

Cartier, Yves Saint Laurent and many others including Swarovski have made their products more accessible by providing accessories, thereby reducing the cost to enter into the brand. This however is not recognized among some companies that still believe that their offers are specifically catered to privileged clients. In this review, the consumers value of perception will be evaluated and a difference between luxury and mass audience consumption will be given, and the impact of this democratization.

In daily marketing usage, Prof. Bernard Dubois defines “luxury” as a specific (i.e. higher-priced) tier of offering in almost any product or service category.

Jean Noel Kapferer (1997) goes to say by defining luxury as items that give people a feeling of extra quality, prestige, above all other items. “Luxury defines beauty it is art applied to functional items. Like light, luxury is enlightening. They offer more than mere objects: they provide a reference of good taste. Luxury items provide extra pleasure and flatter all senses at once”. It can therefore be said that Luxury is something that is more than necessary (Bearden and Etzel 1982, p. 184). Based on this, it can be said that the simple use or display of a branded product brings esteem to the owner, taking aside functional utility (Vigneron 2004). Luxury items therefore satisfy a psychological need. However not everything that is necessary can be called as luxury and that is why, it is regarded that luxury is anything that is more than necessary and ordinary (Meyers 1995, p. 189).

Most of this confusion is behind the growth of the luxury sector. JN Kapferer (2009) suggested that this market grows because the mass audience now want to own a little of what symbolizes the life of the happy few elite. Thus he said, when people are thought to have luxury, for them it delivers rare intense emotions such as love, power, pleasure, and social sign. It also indicates that people like luxury. However, purchasing luxury goods is not simply tied to social aspects like status, power, social sign, but also on the financial, functional and individual utilities of the luxury brand (Sheth et al. 1991).

Gentry et al. (2001) suggested that one reason why consumers buy luxury brands is because of the quality given out by the brand name. This is because in perception, hand crafted goods appearing of better quality than mass produced products.

The luxury sector

Castarede (2008) has divided the luxury sector into three different sectors with each having its own characteristics. The first is the circle of high end products or the super luxury category which is accessible to only a few people. The products are therefore unique and are comprised of transportation like luxury cars, yachts and private jets, luxury watches, glassware and fine jewelry.

The second circle is more affordable where consumers are willing to pay more for an elegant and ‘chic’ product. This is more about the image and social recognition and more importantly the feeling of belonging to a social class. The products in this circle are designer bags, shoes pens etc.

The third circle belongs to the somewhat mass luxury category and can be described as hedonistic, meaning giving a sense of pleasure and good life). It can be called the luxury for oneself. Consists of perfumes, cosmetics, luxury leisure, etc.

Luxury good and the internet

Kapferer and Bastien (2009b, p. 321) suggest that luxury brands today apply the masstige strategy. This means they have extended their product range with products that are accessible to the middle class consumers. This is one of the major growth strategies for them, and many brands communicate with the new age benefit called the internet. E- Commerce has developed quite a lot since a few years now and many companies, well known or ordinary tend to emphasize on their online presence. Luxury brands have also taken a step forward to move into e-commerce.

The luxury market has removed the first barrier of exclusivity. The barrier of entry into a luxury goods boutique can now be crossed by any person due to the online stores now available from almost every great brand. These online stores show their product ranges and the products can also be purchased upfront. This online presence has brought one question. If everyone can have access to the same products and services, what happens to the exclusivity concept these brands continue to establish? The real challenge for them here is to preserve their image of exclusivity (Keller, 2009, p. 292).

Attitudes towards Luxury

Vigneron (2004) and Kapferer (1997) agree to the fact that a luxury brand is different than other types of brands and require a more in depth understanding of the ‘degree’ of luxury in those brands. A scale is therefore required to make an estimate of the perception vis a vis the brand. The scale treats luxury as a matter of degree, ranging from ‘very little’ to ‘a great deal’ (Vigneron, 2004). This would also explain the decision making process of consumers when accessing luxury brands.

Vigneron and Johnson (2004) identified, in addition to other dimensions, the importance of a dimension in terms of uniqueness and singularity of luxury according to consumer perception. This means, that the consumer preference for a brand increases with the perception of their products being either scarce or in limited distribution (Lynn, 1991).

Dubois, Laurent and Czellar (2001), agree with the fact that luxury should be primarily associated with just quality and price (Kapferer 1998), but claim them to be as shortcomings as these studies are more inclined towards the supply side. They therefore decided to consumer based research.

In their studies, they found out that some attitudes of the consumers can be considered as cognitive as it depends on the perceived characteristics of luxury goods and services (Dubois, Laurent and Czellar 2001, p.26). These are excellent quality, very high price, scarcity and uniqueness, connections to aesthetics and sensuality, ancestral heritage, competence and personal history and superfluousness. In here also, it should be noted that the first three, quality, price and scarcity and uniqueness are on top of the scale, meaning these were the first things that the sample group came up with when they were given the thought of luxury items. The last one, superfluousness is more about the usefulness. This showed that many consumers thought that luxury products are not felt to be necessary for survival. This agrees to Berry’s (1994) view of luxury not being a necessity.

However these results were also in contrast with disagreements like uneasiness, personal distance etc. these are however not related and the positive and negative parts of perception are independent. From the results above, it can be seen that when it comes to luxury goods, the same person can have multiple attitudes whether it is positive or negative.

They conducted another study which was based internationally across 12 countries and out of all the attitudes; they came to identify three main facets of attitudes that characterized luxury goods. These were elitism, democratization and distance. This is interesting as it shows a contrast with the luxury market these days.

Elitism represents the category of consumers that have a positive attitude towards luxury. This segment of consumers appreciates the notion of exclusivity that is associated with luxury goods and do not want this category open to mass products. They also judge that certain learning is required in order to appreciate luxury as it represents products of good taste, and that is how users differentiate each other.

Completely opposing elitism, comes democratization which represents the attitudes of individuals that are accepting luxury but are in favor of its democratization rather elitism. It should be noted that they don’t have any restrictions towards luxury and they feel that luxury is good, so there is no reason why there should not be large access to it. This opposes the first tier, the ‘elitists’ who also feel that luxury is good but think that it should be restricted to a small group.

Finally, the distanced individuals are consumers who are not opposed to luxury but have very little interest towards it. They feel it’s a different world, and they don’t belong to that world. This could however lead them to a negative vision as they might easily think that luxury is useless and too expensive. These consumers also have the vision of luxury as being something completely inaccessible.

According to Dubois, Laurent and Czellar, these three tiers can therefore be put into an equilateral triangle, where the sum of each tier is constant.

Distinctions of luxury products

As we saw above, Castarede (2008) provided three sectors of the luxury market. From this, it can be said that luxury items are divided into different categories which can be defined from the lower range of luxury to the upper range of luxury. Nueno and Quelch (1998 ) go forward by saying that luxury brands are those whose ratio of functional utility to price is low, while the ratio of intangible and situational utility to price is high. This can be understood as some brands being luxurious and some not. One brand having a higher perceived luxury in one product category may have a lower perceived luxury in another product category such as a Rolls Royce car (Vigneron and Johnson 2004).

Measures of luxury brands

There is not much literature about the personality of luxury brands but as seen above, three studies have been around the perception of luxury brands: Dubois, Laurent and Czellar (2001), Vigneron and Johnson (2004), Kapferer (1998).

De Barnier, Rodina and Florence (2006), compared these studies and found different objectives in each of them. According to them, the study conducted by Vigneron and Johnson (2004), measures the level of luxury perceived for different brands (ranging from weak to strong), and whereas the studies done by Kapferer (1998), and that of Dubois, Laurent, and Czellar (2001), are more inclined towards a global context, on general luxury.

In saying so, the studies by Kapferer (1998) and Dubois and al. (2001), assembled the dimensions of luxury goods perception without actually confirming the validity (De Barnier, Rodina and Florence 2001). It should be noted that both the studies by Kapferer (1998) and Dubois and al. (2001) represent three dimensions and with the most common dimension being, that of ‘elitism’.

The scale by Vigneron and Johnson (2004) however explores the luxury concept with a very specific tool. They do not take in charge the notion of the personality of the brand, but focalize more on the concept of luxury. They come down to five dimensions which are: Perceived conspicuousness, perceived uniqueness, perceived quality, perceived hedonism and perceived extended self. While the first three are related to the brand or product perception, the last two indicate more about individual and consumer perceptions.

De Banier, Rodina and Florence (2006) conducted further studies about luxury perceptions and consumer purchase behavior in three countries: UK, France and Russia. They confirm the dimensions of Aesthetics, Premium quality, personal history and expensiveness as given by Dubois, Laurent and Czellar (2001). They however found interesting new trends in luxury goods consumption with the emergence of Self pleasure and the lack of importance of Uniqueness and Superfluousness. These news trends were present for all the three cultures probably due to the globalization and the processes that come with that such as advertising, promotion etc.

Conclusion

In this literature review, we came across various studies that explained about consumer’s attitudes and perceptions about the luxury sector. We found that various researchers agree on the main dimensions of luxury goods which are Aesthetics, Premium quality, personal history and expensiveness (Dubois, Laurent and Czellar, 2001). Moreover the research by De Banier, Rodina and Florence (2008), also brought forward more insight in the present literature by adding the new dimensions of Self pleasure and the lack of importance of uniqueness and usefulness. This doesn’t contradict previous research but makes a way for further studies to be established on the same due the globalization of the world.

Democratization has very well made its way in the luxury market and according to Dara Kennedy from Interbrands, this is just a moment. She says it will be a harsh moment for luxury brands but that is not going to stop a brand that has come a long way and still has got a long way to go. The brands nowadays need to look at more ways to give that something special so they can remember, something like a more authentic version of aspiration to consumers (Dana Kennedy, Interbrand).

To survive and maintain their brand image, luxury brands need to lead their management effectively towards the creation of two luxury categories. One that would go towards the democratization and one that would not. As studies suggested, there are still people who believe in elitism and want those rare crafted products just for themselves and the other category of people who are willing to go for products that are of good quality but are not made the same way as they need to satisfy the public’s concern of quantity and price.

The best way to go ahead with that would be to reinstate that clear distinction through communication in consumers’ minds in order to well preserve the brand image. That way, a luxury brand should be able to lead its strategies in an efficient way towards the democratized goods so as to not bring any effect to the products reserved to the other category of consumers.