Academic journal article South Asian Journal of Management

Luxury Goods Consumption: A Conceptual Framework Based on Literature Review

Academic journal article South Asian Journal of Management

Luxury Goods Consumption: A Conceptual Framework Based on Literature Review

Article excerpt

Luxury goods consumption has received limited attention in marketing literature in spite of the presence of a significantly big luxury marketing industry. Studies focused on the definition of luxury, commented on the characteristics of luxury buyers, researched the buying motivations of luxury consumers; but no study integrated them all to present an integrated framework of luxury goods consumption. Based on review of extant literature on the subject, this paper is an attempt to bridge this gap. The paper primarily serves two distinct but related purposes. Firstly, a comprehensive review of literature on luxury marketing is presented with an attempt to analyze luxury goods consumption from three different perspectives which are product or brand perspective, consumer characteristics perspective and buying motivations perspective. And, secondly an integrated conceptual framework is presented which brings together the three different perspectives of luxury goods consumption.

INTRODUCTION

The concept of 'luxury' exists since a long time and has been aspired by many for ages. At the same time luxury was detested by many others for reasons of its own. In the popular sense of the word, 'luxury' is something related to indulging in self-pleasure and something which is not a necessity. The hedonistic philosophy of Epicurus approves the pleasures of life and hence the enjoyment of luxury. But the Aristotelian philosophy of following the mean course between the extremes condemns the excessive man: 'On small objects of expenditure he spends much and displays a tasteless showiness... And all such things he will do, not for honor's sake but to show off his wealth, and because he thinks he is admired for these things' (Dubois et al, 2001). This history of controversy regarding luxury consumption has been researched and reported by Berry (1994) and has also been studied by Twitchell (2003). Twitchell (2003, p. 43) defines luxury as: "things you have that I think you shouldn't have". But in spite of all the allegations against luxury, it has survived through all these years and is still going strong. The size of luxury goods market was estimated to be around $86 bn in the year 1990 by McKinsey & Co. During the last two decades luxury industry grew at a very fast pace and it achieved sales of $170 bn in 2008 as per Bain & Company.

Luxury as a concept is quite complex and context specific; even one single person might have conflicting opinions about luxury (Dubois et al, 2001). Culture, country and even individual variables have a significant impact on the perception of luxury. Traditionally luxury was meant for the 'happy-few'. But with the growth of luxury industry, currently it is not only restricted to the elite class of the society and the concept of mass-luxury is getting popular (Nueno and Queich, 1998; and Silverstein and Fiske, 2003). As per Perez (2008), "Luxury has always been a relative concept, but there is no doubt that luxury has gone more mass market in recent years". While French designers historically had a majority hold in the luxury market, US designers like Calvin Klein and Ralph Lauren grew in 1970s by promoting leisure-oriented casual elegance as the American style; recently with the right kind of buzz to spread the luxe culture, Italy has become one of the latest fashion centers. In their book called The Cult of the Luxury Brand - Inside Asia's Love Affair With Luxury Chadha and Husband (2006) discusses how luxury is becoming popular in the Asian countries: "94% of Tokyo women in their 20s own a Louis Vuitton piece... 92% own Gucci, 57% Prada, 51% Chanel, and so the list goes on". Luxury product sales are also growing in China. Chinese consumers already account for more than 10% of global luxury brand sales. Other Asian countries like Hong Kong, Singapore, Thailand and Malaysia are also showing increasing appetite for luxury brands. Counterfeited luxury goods and mass marketing of famous luxury brands are two most important aspects in this regard. …

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