Professional Documents
Culture Documents
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Introduction
By a study of Bain & Company, in 2011, the luxury world market is predicted to grow
by 8% to 124 billion euro (http://www.bain.com/about/press/bain-news/2011/worldluxurymarket-to-grow-8-study.aspx). According to Reuters (2011), the share of global
shares of the Russian luxury market is 3%.
Today, the concentration of millionaires in Moscow is considerably higher than, for
example, in Paris. As portrayed by magazines such as Forbes or Fortune, Businessmen
from Russia and their companies take high rankings in the list of the richest people and
the most successful corporations of the world.
In the previous Soviet societies, the aspiration to luxury and moneymaking was
officially condemned. Luxury was considered to be bourgeois redundancy, therefore, it
was restricted to public architectural monuments such us palaces, museums and pieces of
art. Only the emerging soviet elite could access luxury goods. The products offered to the
ordinary Soviet citizen were primarily intended to meeting functional needs. With the
collapse of the Soviet Union the changing trading system made a considerable amount of
luxury products accessible to the Russian market and also appeal to the emotional,
experiential and symbolic (status) needs.
To delineate the luxury market in terms of product categories or price range is quite
difficult, as the definition of luxury is related to the respective market segment. For a
millionaire, a car costing $90,000 might just be a routine consumption whereas for the
manager of a major company such a car represents luxury. However, both segments are
targeted for luxury products without any conspicuous difference. Luxury products
typically refer to tangible product categories such as transportation, real estate, household
items, artwork, clothing accessories, food, healthcare products as well as intangible
services such as a private club membership, sports leisure projects, or professional
services.
An interesting aspect of consumer behaviour has always been to investigate the
factors that drive people to spend a considerably high amount of money for luxury goods,
and the topic is well researched. However, most of the studies on luxury consumption
focus on the context of Western countries. In-depth studies on the motivation and
perception of consumers in Eastern European transition countries such as Russia still are
Perception of luxury
211
212
transform into a luxury one depending on the mood, experience, culture and location of
the individual consumer (Vickers and Renand, 2003).
The concept of luxury is the main factor that distinguishes a brand in a product
category (Kapferer, 1997) and is regarded a central driver of consumer preference and
usage (Dubois and Duquesne, 1993). Definitions connote luxury brands with high levels
of quality or excellence, popularity, recognition, exclusivity, awareness, customer
patronage, price (Phau and Prendergast, 2001; Dubois and Czellar, 2002; Dubois and
Laurent, 2003, in Tartaglia and Marinozzi, 2007), psychological and prestigious
(symbolic and hedonic) rather than economical or functional value (Nueno and Quelch,
1998; Vigneron and Johnson, 1999; Dubois and Laurent, 2003, in Tartaglia and
Marinozzi, 2007), international reputation, elements of fantasy and desire (Kapferer,
2001). Based on early influential writers in the field (Mason, 1981; Leibenstein, 1950, in
Vigneron and Johnson, 1999; Veblen, 1899, in Rozmarinskiy and Holodilin, 2006),
Vigneron and Johnson (1999) combine five values of prestige with the five value and
motivations for prestige seeking behaviour (Table 1). Veblens Snob and Bandwagon
factors applied by Mason (1981) to the business discipline are non-functional, and rely on
external effects for utility (Leibenstein, 1950 in Vigneron and Johnson, 1999). Snob
buyers are motivated to buy luxury products because their high costs and relative rarity
make luxury products inaccessible to the average consumer, hence, allowing them to feel
superior and unique. Bandwagon, on the other hand, refers to a pattern according to
which consumers buy luxury products in order to be accepted or belong to a certain social
group. Bandwagons are followers of snobs, which are the trendsetters, whilst snobs
abandon trends that become mass-adopted by bandwagons (Mason, 1981, 1995;
Leibenstein, 1950, in Vigneron and Johnson, 1999; Heinemann, 2008). The concepts of
Veblen, Snob and Bandwagon were developed further by Vigneron and Johnson
(1999) believing that there are motivations and behaviours of an alternative personal
nature, from within the consumer. Thus, hedonic and perfectionist luxury purchase
motivations were proposed: hedonic, where a consumer is motivated to purchase a
luxury product because it produces positive emotions and perfectionist where the
consumer is motivated for the safety a luxury product will bring in its quality or design
(Vigneron and Johnson, 1999).
Prestige values and motivations of prestige-seeking behaviour
Table 1
Values
Motivations
Conspicuous
Veblen
Unique
Snob
Social
Bandwagon
Emotional
Quality
Hedonic
Perfectionist
Although not being considered as exhaustive (Moore and Birtwistle, 2005), Beverland
(2004, in Moore and Birtwistle, 2005) interrelates six of previously mentioned
dimensions consisting of brand heritage (history culture), product quality, credibility
and excellence (product integrity), personality and consumer group support
(endorsements) as well as brand image investments (marketing).
Perception of luxury
213
In addition to the aforementioned factors, Dubois and Laurent in their research (op
cit) mention the brand characteristics of uselessness and futility with the product having
no real function. Although the preference of hedonic compared to functional values has
been acknowledged, a total lack of functionality of luxury products might be debatable
referring to factors such as quality or product integrity. Contradictory research findings
are concerning the effect of perceived quality on purchase intention. Some researchers
support a positive direct effect of perceived quality on purchase intentions, others report
only an indirect effect through satisfaction and yet others argue that both relationships
exist (Tsiotsou, 2005).
Inspired by the work of authors such as Dubois and Laurent (1994), Kapferer (1997),
Eastman et al. (1999), Phau and Prendergast (2001) on the evaluation of luxury brands,
Vigneron and Johnson (2004) have developed a brand luxury index for measuring the
amount of luxury that is contained in a particular brand. Implying an effect of identity,
these authors propose that the luxury-seeking consumers decision-making process can be
explained by five main factors that form a semantic network including personal
perceptions (perceived extended self, perceived hedonism) as well as the more usual
non-personal perceptions (perceived conspicuousness, perceived uniqueness, perceived
quality).
Stegemann et al. (2007) confirmed that adequate measures of brand luxury exist [i.e.,
the Brand Luxury Index of Vigneron and Johnson (2004)], however, argued that the
extant measure of consumers attitudes to luxury is inadequate and suggested new items to
be required to provide adequate coverage of the concept. In addition to the factors already
mentioned, Berrys (1994), Rolf-Seringhaus (2002), Hauck and Stanforths (2007) as
well as Wards and Chiaris (2008) findings suggest to differentiate luxury consumers as
to gender, age and cultural background. Whereas motivations have been tested for Asian
and Western societies, they have not been validated yet for the Russian market.
214
avoidance of similarity.
The All-Russian Public Opinion Research Centre held an opinion poll of Russians, trying
to reveal symbols that most of the population considered as indicators of luxury resulting
in luxury cars, big apartments and travelling abroad as being mostly highly ranked.
Later, the Institute of Socioeconomic Problems for the population of the Russian
Academy of Science (http://www.marketing.spb.ru/read/m7/11.htm) interviewed experts
(1,130 entrepreneurs, clerks, deputies, lawyers, etc.) that are mostly addicted to status
consumption. According to the interview results, the main indicator of wealth and luxury
is a bodyguard (77%) followed by symbols such as a country house (76%), prestige
apartments (76%), luxury cars (71%), deposits in international banks, helicopter or
aeroplane. Only one-third part of the respondents mentioned luxury apparel as the
indicator of wealth (http://www.marketing.spb.ru/read/m7/11.htm translated by the
authors).
Conclusively, the symbolic meaning of products and brand images are used by
consumers in their search of identity through consumption (Elliot and Wattanasuwan,
1998; Vickers and Renand, 2003).
Perception of luxury
215
to impress others or to impress oneself, becomes more important than the ability to do so
(Dubois and Duquesne, 1993).
Due to the shaping implications of globalisation leading to an increased mix of people
with diverse linguistic, national cultural, educational or professional backgrounds, the
traditional definition of culture focusing on national cultures is increasingly challenged
(Holden, 2002). This view as well as current research increasingly applying the identity
concept to explaining consumer behaviour, led the authors to focus on the identity
concept rather than on the culture concept. The concept of identity has become ubiquitous
within the social and behavioural sciences in recent years, spreading across disciplines
such as psychology, political science and sociology. A chronological literature review on
the identity concept is provided by Kaufmann et al. (2008). The concept identity is an
important one in behavioural science in the field of consumption, as it influences the
choice of lifestyles and determines everything from the clothes people wear to the
entertainment. The basic question of identity theory is how and why individuals select
roles given in a set of alternatives. Identity is a set of meaning applied to the self in a
social role or situation. When persons are asked what their identity is, they can categorise
themselves in terms of desirable values (I believe that), as members of social groups
such as nation, social class, subculture, ethnicity, or gender (e.g., father, a student) or by
personality traits, for example ambitious, cheerful (Camilleri and Malewska-Peyre, in
Berry, 1994; Burke and Tully, 1977; Stryker, 1980, in Burke et al., 2003; Cote and
Levine, 2002 in Kaufmann and Kitsios, 2009). Thereby, two components/elements of
identity should be considered mostly when examining consumer behaviour: personal
identity and social identity (Deaux and Reid, 1996). For example, pieces of research often
refer to the identity salience approach when examining the concept of identity. They are
using the term salience to indicate the activation of an identity in a situation. Following
from the previous definitions, each individual has a number of identities. Past research
has shown that each of these identities can be more or less salient at any given moment of
time, and the salience or hierarchy of respective identities can significantly affect
behaviour (Arnett et al., 2003; Burke et al., 2003; Akerlof and Kranton, 2004, in McLeish
and Oxoby, 2008). Hence, besides being dependent on the respective situation, the degree
of salience of an identity role is influenced by the engagement of an individual for a
specific relationship (Kaufmann et al., 2008).
Arnett et al. (2003) examined the identity salience theory in the context of
relationship marketing in non-profit business. The authors suggest that identity salience
can be an important characteristic of successful relationship marketing, if two criteria are
met: We argue that in contexts in which one partner is an individual, for example,
business-to-consumer marketing, identity salience may be an important construct that
mediates relationship-inducing factors, such as reciprocity and satisfaction, and
relationship marketing success [Arnett et al., (2003), p.90]. The second criterion is the
consumer has to receive significant social benefit through the relationship: We argue
that identity salience may play a crucial role in contexts in which one of the partners to
the exchange receives substantial social benefits. For example, in the clothing industry
many consumers use strong brand names as social symbols, which can affect the
formation and maintenance of identities (Laverie et al., 2002; Solomon, 1983, in Arnett
et al., 2003). Reed and Forehand [2003, in Kaufmann et al., (2008), p.245] summarises:
... identity salience a temporary state during which the consumers identity is activated
... can bring to mind attitudes and behaviours consistent with the social identity. This is
216
Perception of luxury
217
Hypothesis 2
Hypothesis 3
Hypothesis 4
Methodology
Moscow was chosen as the research setting as it is economically the most active city in
Russia. The Russian capital is now internationally considered a Mecca for buying and
selling the highest of the high-end. The research aim is to understand the factors that
influence a modern Russian consumer to purchase luxury goods. In order to achieve this
aim, a blend of qualitative and quantitative market research methods and techniques was
used, also, to achieve higher levels of validity (Denzin and Lincoln, 1994).
This multi-method approach applies questionnaires and interviews as the research
techniques. Using multiple sources of evidence is rated more highly in terms of their
overall quality than those that rely only on single sources of information (Yin, 1994).
218
Existing scales were used to measure the four main constructs with a five-item scale:
ranging from strongly disagree (1) to strongly agree (5) with higher scores indicating
higher tendency measured. Six items measured status/symbolic brand consumption, four
items measured consumers need for uniqueness (Tian and McKenzy, 2001), and four
items measured brand perceptions that including perceived quality (Dodds et al., 1991,
in Cheng et al., 2006), seven items measured the identity. The last four questions
measured purchase intention. The SPSS+ statistical package was used to evaluate the
results.
Analysis/research findings
Perception of luxury
219
analysis were used to test hypotheses and to reveal the interrelationship and relative
importance of the determinants.
220
social groups perceived luxury to be as above necessity. The age cohorts 16 to 35 and
above 55 are undecided if luxury goods contain fantasy and vision whilst people aged 46
to 55 and with an income of more than 150,000 rub agree on it. 32.3% of females
disagree concerning this question whereas males show the highest percentage of
agreement. The young generation, more than 50% of men and women, do not think that
luxury is something unobtainable, though this feeling is changing with age, but even half
of people with an income of less than 50,000 rub have an enthusiastic attitude
considering that luxury is obtainable.
Perception of luxury
221
3.5 Regression
To identify the relative importance of the independent variables on purchasing luxury
goods included in this study, a multiple regression analysis was conducted using
purchasing of luxury goods as a dependent variable. For independent variables, all the
determinant variables could be used because they were significantly related to purchasing
of luxury goods (Appendix 4). Appendix 5 shows that 6 variables (The luxury products I
buy reveal a little bit who I am, status consumption, Status enhances my image, Luxury
brand satisfies my motive, Consumption of luxury is symbol of success, purchasing
luxury brand produces positive emotions for myself) explained 31.1% of the variance in
purchasing of luxury goods by Russians. Thus, identity including the statements The
luxury products I buy reveal a little bit who I am; Luxury brand satisfies my motive;
purchasing luxury brand produces positive emotions for myself influences on
purchasing of luxury goods by 14.7%. In addition, status/symbolic consumption that
comprise status consumption, status enhances my image and consumption of luxury is a
symbol of success, influences on Russian consumers consumption of luxury products by
16.4%.
Interview findings
222
Perception of luxury
223
the person, his/her wealth, and social class. Nowadays, people first of all, strive to
pamper them and to feel an aesthetical satisfaction from the luxurious products or
services. This discussion confirms the influence of the same independent factors elicited
by the quantitative findings. Overall, the interviews reflected identity features and
attitudes toward luxury products. The luxury goods are regarded more sophisticated,
emotional, various and perfected than usual products. Going far beyond objects of mere
consumption, they take the role of a symbolic, non-verbal form of self-expression and
social dialogue which, often seem to have a normative character as one of respondent
stated: formed stereotypes dictate us the necessity of surrounding ourselves with luxury
goods in accordance with strained standards that is called by fashion world glamour.
224
following characteristics of luxury brands (Product) are most important: price (65.3%
agree/strongly agree), hedonic experience (61.2 agree/strongly agree), valuable (59.5%
agree/strongly agree), quality (45.4% agree/strongly agree) and expressing individuality
(44.6% agree/strongly agree). These are the top 5 characteristics that Russian people
consider luxury products to possess. Luxury marketers in Russian market need to make
an emphasis on consumers` sensory connection with their products, and should also
consider emotional appeals in their marketing campaigns.
In this ongoing transition of consumption trends and processes, marketers should
continuously research the lifestyle and identity patterns of their target audience.
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Appendix 1
Russian consumer behaviour towards luxury brand
Dear Sir/Madam
I am Yulia Manakova, a student of the University of Nicosia. I am doing research on
The influence on the perception of luxury goods on Russian consumer behavior.
This questionnaire will be only used for academic research and all answers are
anonymous. It will take three to five minutes to answer all the following questions.
Part A
1 Age
1625
2635
3645
4655
Above 55
2 Gender
Male
Female
50.001100.000
Above 200.000
100.001150.000
150.001200.000
Part B
4 Do you think luxury goods are? (Please, circle the most suitable option by 5 point
scale; 1 = strongly disagree, 5 = strongly agree)?
Strongly disagree
Strongly agree
Extremely expensive
For showing-off
Valuable
Unique
Best quality
229
Perception of luxury
Sophisticated
Beautiful
Expressing individuality
Indulging
Fashionable
Functional
Above necessity
Something unobtainable
Please point any item that you think was not provided
___________________________________________.
Please state your level of agreement to the following questions (from strongly agree to
strongly disagree)
5
10
11
12
13
14
15
16
17
18
19
230
20
21
22
23
24
25
26
Yes
No
28
if your answer is Yes please continue; if your answer is No, you already finish all
the questions
12 times a month
34 times a month
56 times a month
29
Yes
No
30
What percentage of your income are you going to spend to the luxury product?
< 5%
5% to 10%
> 10%
231
Perception of luxury
Appendix 2
Table A1
Component
1
Total
% of
Variance
Cumulative
%
Total
% of
Variance
Cumulative
%
3,936
18,741
18,741
2,450
11,667
11,667
1,804
8,591
27,331
1,996
9,505
21,172
1,684
8,021
35,352
1,917
9,127
30,299
1,453
6,917
42,269
1,816
8,648
38,947
1,375
6,547
48,816
1,744
8,304
47,250
1,203
5,727
54,543
1,380
6,571
53,821
1,147
5,462
60,005
1,299
6,183
60,005
974
4,637
64,641
952
4,533
69,174
10
848
4,040
73,214
11
768
3,658
76,873
12
679
3,234
80,107
13
641
3,051
83,158
14
595
2,835
85,993
15
564
2,684
88,677
16
522
2,485
91,161
17
479
2,280
93,441
18
435
2,071
95,512
19
362
1,721
97,234
20
310
1,477
98,711
21
271
1,289
100,000
232
Appendix 3
Table A2
0.672
0.074
0.054
0.114
0.153
0.094
0.109
0.730
0.042
0.154
0.148
0.030
0.001
0.275
0.664
0.053
0.166
0.035
0.100
0.054
0.037
0.464
0.029
0.132
0.089
0.152
0.532
0.159
0.269
0.009
0.326
0.063
0.621
0.020
0.206
0.112
0.208
0.083
0.121
0.789
0.062
0.094
0.123
0.231
0.242
0.474
0.209
0.083
0.149
0.062
0.108
0.033
0.745
0.109
0.175
0.085
0.019
0.064
0.046
0.177
0.036
0.687
0.089
0.050
0.083
0.055
0.036
0.013
0.076
0.819
0.002
0.235
0.006
0.655
0.312
0.136
0.060
0.282
0.163
0.362
0.005
0.170
0.510
0.329
0.158
0.019
0.785
0.016
0.032
0.051
0.192
0.033
0.055
0.825
0.067
0.144
0.010
0.065
0.501
0.275
0.224
0.098
0.326
0.069
0.177
0.130
0.637
0.093
0.099
0.135
0.329
0.189
0.318
0.504
0.125
0.276
0.142
0.031
0.232
0.084
0.755
0.067
0.158
0.114
0.090
0.055
233
Perception of luxury
Table A2
0.060
0.295
0.392
0.209
0.491
0.136
0.278
0.358
0.146
0.074
0.547
0.190
0.329
0.256
I achieve a sense of
belonging by buying the
same luxury brands that
others purchase
0.297
0.606
0.009
0.211
0.194
0.190
0.077
symbolic consumption
identity
uniqueness
perceived quality
status consumption
prestigious brands
durability.
11
0.085
0.092
0.150
0.045
0.043
0.039
0.021
0.122
0.152
0.073
0.250**
0.017
0.146
0.118
0.001
0.259**
0.028
0.117
0.087
0.024
0.018
0.096
0.071
0.139
0.207*
0.004
0.021
0.049
0.211**
0.044
0.093
0.067
0.017
0.009
0.036
0.062
0.058
0.085
0.059
0.076
0.012
0.008
0.025
0.002
0.003
0.011
0.090
0.220*
0.042
0.027
0.015
0.005
0.045
0.005
10
0.003
234
Appendix 4
Table A3
1
Do you buy luxury branded
products? (1)
235
Perception of luxury
Appendix 5
Table A4
Model
Regression analysis
R
R square
Adjusted R square
0.309
0.096
0.088
0.37058
0.444b
0.198
0.184
0.35756
0.484c
0.234
0.215
0.35018
0.510d
0.260
0.234
0.34403
0.534e
0.286
0.254
0.33947
0.558f
0.311
0.275
0.33382
Notes: aPredictors: (Const) The luxury products I buy reveal a little bit who I am.
b
Predictors: (Const) The luxury products I buy reveal a little bit who I am, REGR
factor score 5 status consumption
c
Predictors: (Const) The luxury products I buy reveal a little bit who I am., REGR
factor score 5 status consumption, status enhances my image
d
Predictors: (Const) The luxury products I buy reveal a little bit who I am., REGR
factor score 5 status consumption, status enhances my image, luxury brand satisfies
my motive
e
Predictors: (Const) The luxury products I buy reveal a little bit who I am., REGR
factor score 5 status consumption, status enhances my image, luxury brand satisfies
my motive, For me, consumption of luxury is symbol of success.
f
Predictors: (Const) The luxury products I buy reveal a little bit who I am., REGR
factor score 5 status consumption, status enhances my image, luxury brand satisfies
my motive, For me, consumption of luxury is symbol of success, For me, purchasing
luxury brand produces positive emotions for myself.
g
Dependent variable: purchasing of luxury goods.