Academic journal article South Asian Journal of Management

Factors Affecting Luxury Purchase Intention: A Conceptual Framework Based on an Extension of the Theory of Planned Behavior

Academic journal article South Asian Journal of Management

Factors Affecting Luxury Purchase Intention: A Conceptual Framework Based on an Extension of the Theory of Planned Behavior

Article excerpt

INTRODUCTION

Luxury fashion industry evolved in France in 19th century (Crane, 1997; and Djelic and Ainamo, 1999). The custom made creations of haute couture houses served small elite segment of the society (Gupta, 2009). Veblen (1899) introduced the term "conspicuous consumption" to represent the elite segment of the society who consumed luxury goods and inherited highest status in the society. However, in the 1990s, numerous new alliances and mergers and acquisitions among firms eventuated. Many privately held and familyowned firms transformed into public companies. Simultaneously, large increase in the demand for luxury goods transpired and therefore marked the onset of "democratization" of luxury industry (Dubois and Laurent, 1995; Vickers and Renand, 2003; Ernst and Young, 2005; and Okonkwo, 2007).

In the last few years, luxury is seen as an area of interest to both academicians and marketers due to exceptional growth witnessed in this sector. This market has developed exponentially from US$ 20 bn in 1985 to US$240 bn in 2014 (Okonkwo, 2009; and Bain and Company, 2014). It is estimated that this market would be more than five times in 2025 as compared to its size in 1995 (Bain and Company, 2013). The factors attributing to this growth include globalization, digitalization, new growth avenues and drastic change in socio-cultural, economic and political conditions of the emerging economies.

"The new rich" have phenomenally contributed to "new luxury" (Silverstein and Fiske, 2003). The new luxury markets such as China, Russia, Brazil, India and Mexico are projected to contribute around 36% of global luxury markets by 2015 (Som, 2011). These emerging markets are expected to soon bypass the revenues generated by the established players like Europe, North America and Japan (Okonkwo, 2009).

Luxury is among the most attractive and rapidly growing segments across the globe. The reason behind the sustenance of this growth for years is growing number of young upwardly mobile consumers, increasing number of older premium consumers and continuous rise in high net worth individuals. According to MasterCard Worldwide (2007) sharp increase in the number of young as well as old premium consumers are expected from 2006 to 2016 in various parts of the globe including Japan, China, Korea, India and Australia.

Despite of the fact that luxury industry is one of the major contributors to the economy, very few efforts have been put to understand the luxury consumer behavior. According to Berthon et al. (2009, p. 45), "they [luxury brands] are poorly understood and under-investigated". Further, the ever in creas ing demand for luxury goods emphasizes on the need to conduct research in this sector. Previously, the demand for luxury goods came predominantly from the developed economies like US, Europe, etc. But, with the changing market scenario a large proportion of the demand for these goods is expected to come from BRIC countries (Som, 2011). Consumer behavior differs across var ied cultures. The marketing strategi es whic h were found to be successful in context of western culture may not work effectively for Eastern culture (Wong and Ahuvia, 1998). It is important for marketers "to understand who their customers are, where to find them and the key factors that drives their behavior" (Okonkwo, 2007, p. 70). So far, no study has tried to build an integrated conceptual framework which provides a holistic view on what motivates the consumers' in different cultural settings to buy luxury goods. In past, few researchers have focused on influence of demographic profile of the buyers on their luxury purchase decisions (Dubois et al., 2005; Dubois and Duquesne, 1993; Nueno and Quelch, 1998; Summers, Belleau and Xu, 2006; and Wiedmann, Hennings and Seibels, 2007) and various others concentrated on the role played by the brand in luxury goods consumption (Kapferer and Bastien, 2009; O'Cass and Frost, 2002; Phau and Prendergast, 2000; and Tsai, 2005). …

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