The luxury industry is built today on a geographical paradox: "The brands are from Europe but the market is in Asia!"

1.0 Introduction

In the advent of growing trends of luxury brand consumption in western cultures, middle east countries are also now roaring the slogan of ‘elegant lifestyle’ in their corporate as well as materialistic life. However, the concept behind these still remains unanswered as to what extent do luxury products and other materialistic goods make us happy and contended in our life? When nations become wealthier, it becomes a common tendency amongst consumers to tilt towards the consumption of luxury products vice-versa with the increase in income. When all the basic necessities are met, individuals try to strive for the consumption of such products which could help in the elevation of their status, success thereby creating unique point of differentiation (Chevalier & Mazzalovo 2006). South Asia is one of main emerging markets of luxury brands as people from this region are now striving to improve their standard of living. Luxury brands with the slogan ‘to improve the overall personality’ of an individual plays an important role in making this effort a success. India is particularly very important in this regard as it is slowly and gradually trying to strengthen its economy and people being literate are turning highly conscious to elevate their living standards. There are so many varieties of luxury items being sold in Indian markets. This competition has even confused the buyers what to select and what to leave. In order to gain success in South East markets, it is very important for the manufacturers of luxury products to have a deep study of the culture, traditions and taste of the people of this region (Ferdinandi, 2014, p-2).

Fig 1.1: Zoya, a luxury jewellery brand owned by the TATA group in India

Source: Som (2013)

Another example is of China, the largest developing country in South Asia, which had a deep impact of luxury brands on the country locals, which not only affected the consumers buying power but also elevated the consumptions habits there. As the Chinese economy is getting stronger, the country is now boasting a new royalty image, thereby portraying its newly acquired wealth (Chandler 2004). As a result, luxury goods are successfully able to hold their presence in Chinese markets, making more and more people to choose and to purchase luxury products that could demonstrate their wealth and living standard by involving brands like Louis Vuitton, Burberry, Prada, Dior, Gucci, Armani, Rolls Royce, Cartier, etc (Chandler 2004).

Fig 1.2: World’s Different Luxury Brands

Source: Researcher (2014)

According to Massimo Ferdinandi’s views about understanding the consumer’s psychology, he said that: “In order to accomplish his/her duties in the most effective way, a manager should be at the same time a lawyer and a psychologist, a tax consultant and a marketing executive, an anthropologist and a IT guy, a statistician and a theologian, a sales man and an organizer.

The phrase illustrated above refers to the emotional typology that consumers have in mind towards certain luxury brands for which the brand leaders should be multi-faceted, in order to provide unique experience to their customers in a blissful manner (Ferdinandi, 2014, p-2). This type of market for luxuries is not only expanding in developed countries but it is also prospering in emerging economies (Galbraith, 2005). Therefore, in order to accomplish this achievement of materialistic affinity towards luxury products, this thesis would focus on all those psychological factors that develop affection by these products in an individual’s life. This is also one of the most important aspects for any business to be successful when striving to expand its chain in other regions apart from its local (Herskovits, 2009). This dissertation would also be an effort in study of the behaviour and motives of people who consider luxury brands as a means to elevate their living standards in South Asia. However this study is not specified to any particular brand; as it takes into account all and every sort of luxury brands/products available in markets such as Louis Vuitton, Burberry, Prada, Dior, Gucci, Armani, Rolls Royce, Cartier, etc. The aim is to study the behaviour of buyers and how luxury brands play an important role in changing the buying behaviour of consumers. However, it is worthy to note the elementary difference that exists between India and other urbanized markets such as the US and Europe, in terms of consumer and demographic profile. About 66.66% of India's population is beneath 30 years in age, which is a major challenge for most brands as these are the main aspirational consumers (Rathore, 2013, p-22). Therefore this study will particularly target the youngsters and new professionals to draw conclusions, as this class of consumers are especially prone to get affected by luxury brands (Maduro, 2010).

People buy international brands considering they would be better than local brands. The quality aspects of luxury brands are normally overlooked as the strong advertisement campaigns of them make a strong psychological impact of these brands on the minds of the consumers. But one thing is for sure that not every luxury brand has high quality and unfortunately there is no strict mechanism to monitor the quality of luxury products in South East markets. Few counterfeiting luxury brands even have created problems for those luxury brand manufacturers who truly bring quality in their products along with policy makers, law enforcement officials and marketers. This is in itself a serious concern where low quality with

Fig 1.3: Luxury Brands of Bags

Source: D'Arpizio (2013)

the tag of luxury product at low prices are being sold worldwide and they are particularly attractive to people having low economic conditions (Maldonado & Hume, 2005). It is equally a fact there has not been any global consensus on the characteristics of brands which claim themselves as “luxury” but all luxury brands (either low or high quality) have been successful in making their impact on the minds of buyers and have invoked brand awareness among people especially people of South Asia (Kim & Karpova, 2009).

Since luxury is the key constituent of almost all international brands therefore people have now developed their preferences for specific brands considering the definite positivity that these brands will bring along with promised attributes of luxury to them (Belk, 1985). People who use luxury brands normally have different views of using them. Some consider them as an individual’s power and achievement and shows how much a person cares for his personality and look (Thomas, 2007). Keeping in mind this notion, people buy luxury brands as a source to display their pride, prestige and wealth. Many researchers have called this consumption of luxury brands as conspicuous consumption in which the sole purpose is to impress others, to enhance their social status within the society and let others praise them for their success and royalty (Kapferer, 1997; Mandel, Petrova, & Cialdini, 2006).

The strong support of media and the advertisement plans have made the luxury brands managers to successfully promote their brands and to sustain their brand equity in the market (Mandel et al., 2006). As a number of luxury brands such as Louis Vuitton, Burberry, Armani, and Gucci have sustained themselves from this strong market competition, though have seen many loses and gains while facing its competitors, are still striving to bring something different from its competition which could appeal consumers more than others. Only for this purpose millions of dollars are spent on strong marketing campaigns just to catch the specific attention of consumers (Thomas, 2007).

According to Bain & company (2013), the worldwide expenditure on luxury products had exceeded $450 billion for the first time in year 2013, giving a growing figure of more than five percent in the next five years, as stated in ‘Luxury goods worldwide market study’. Despite of the long-standing negative impacts of recession leading to detrimental effect on disposable incomes, the luxury market still continued to perform successfully. Even people from under-developed and developing countries, who are seen to be as middle-income public, are eager to pay for luxury products (Van Kempen, 2004). Why are people so eager to wear branded clothes and use branded products in their normal routine life? The answer given to this question by many researchers indicates collectively to gain ‘prestige’ status. Status is generally defined as some higher position in the society as compared to others in the same society. Studies show that expenditure on things which don’t bring any functional benefits will be considered as gaining social status. Psychological research on the same problem has shown that the desire for high status in society is the foremost driving force for the luxury brands to strengthen their feet in markets (Dreze& Nunez, 2009; Griskevicius et. al.2007). Historic study of luxury background showed that human preference for luxury products have evolved from a universal fact for showing personality trait which demands increase in the status (Cummins, 2005; Miller, 2009; Saad, 2007). Some researchers also believe that few people care more about acquired personality traits rather than the natural ones (Miller, 2009).

China after many years of communism and market socialism is now moving towards a wealthy life style and for this purpose it has allowed Western luxury brands to strengthen its roots in Chinese markets (Chandler 2004). In Western countries, the motive behind the consumption of luxury brands has been a sensational topic of study for more than 100 years. From the second half of 19^th century to early 20^th century, England and other Western Union countries emerged as the world’s most dominant and strong economies with the fast industrial revolution. This was the time when Western countries started developing luxury brands and those brands are widely available now in different parts of the world. In the mid-20^th century, U.S. then emerged as the strong economic power and is still enjoying this position. In this time industrial revolution also took place in U.S. along with the manufacturing of luxury brands (Ray Dalio, 2011). Veblen in his book “The Theory of the Leisure Class” analyzed the lavish expenditure of the new in U.S. and clearly stated that people tend to obtain social status and prestige through possessions as a display for wealth (Veblen, 1899). Most of the luxury brand products available in the markets of South Asia are made and exported either by U.S. or Western country manufacturers.

Fig 1.4: Plaza 66, Shanghai Luxury Mall Fig 1.5: Select City Mall, New Delhi, India

Source: Som(2013)

1.1 Concept of ‘Luxury’

Luxury is an analogous term which could be referred to almost everything or nothing, depending on whom it is been asked to. For example, in India, a Maruti Swift could be seen as a luxury car to a college student, Audi A6 on the other hand might be just a normal car for a filthy rich man. Luxury today has become an inflationary used and out-dated label for almost everything (Berry, 1994, p. 3; Vickers & Renand, 2003, p. 460) .According to Oxford dictionary (2014), the term ‘luxury’ in Latin means ‘luxus’, that is ; anything which is in excess. We usually use the term luxury in our routine work to refer to products /services or a certain way of life which brings pride, prestige and royal image to whom so ever associated with it, however, often there is no clear acceptance of the luxury concept as it is perceived in different forms for different people and is relatively dependent on the experience of the consumer. The use of luxury brands and products are in growing demand in this century―Luxury is principally dicey to define. ‘A strong involvement of human element, with limited availability and the value credit by others are its key gears (Cornell 2002, p. 47). The word ‘luxury’ ―defines beauty; it is a form of art applied to useful items. Like light, luxury enlightens life of an individual (Kapferer 1997, p. 253). Many luxury brands have established their image over the past centuries and are still being liked by millions of people due to their durable quality and effect (Kapferer and Bastien, 2009). Globalization has increased the charm of luxury and this has been made possible through vast development in industries, economy, trade and the most importantly, the ‘medium of communication’. There are many European luxury brands being sold in South Asian countries, many Japanese brands are being sold in European markets and even China Silk which is considered as ‘best silk’ in the world is very much popular in European luxury market. Thus in twenty first century people are very well aware of the luxury brands and their different varieties and effects on their lifestyle (Sriviroj, 2007).

Fig 1.6: 1950s Rose Embroidered Silk Satin Custom-Made Sheath and Coat

Source:The Researcher (2014)

According to Smedly (2008), luxury products are typically used as a medium for social interaction amongst people with a desire to look good by the elite class to showcase their wealth and extravagant lifestyle. Luxury being the symbol, eliciting status and wealth, is appreciated by almost every class of people in any society to some extent even though few do pretend not to have any addiction to luxury products but they also praise those who have a pleasing outlook (Ruggiero, 2009). The term luxury may carry different meaning for different people but who so ever uses any luxury product, they have a special intention behind its usage and above all it is to impress others (Chadha & Husband 2008).These perceptions vary not only with age but also with gender. Smart tactics are being used by the luxury brand managers to target specific group of people in any community who represent the vast majority, using their skills to psychologically grasp and bound them for buying their products. These tactics could be well mastered if the managers have carefully studied the flourishing market (Maduro, 2010).

Although people in South Asia are not very well flourished economically but the education, the media and social interaction have made them more concerned about their image and personality in the society. People of India, Thailand, China, Singapore, Indonesia, Philippines and Malaysia are particularly getting more and more inclined towards International luxury brands due to the fact the trade relations of their countries along with continuous urbanization and economic development, is getting stronger with European countries and rest of the developed countries (Som .A, 2013). When a product arrives in these markets, it certainly leaves an impression either good or bad on the people purchasing it. A common impression in these countries is that, International luxury brands are always of high quality; however this may not always be true. Luxury brands must not only be tied to social aspects like status, materialism, accomplishments, distinction etc. but they must be equally bound to financial condition of an individual purchasing luxury products, their functional requirements and importance of the brand (Jonathan , 2010). Purchasing a luxury brand just for lust shows an extravagant life style of an individual sacrificing many other basic requirements of his/her family for the luxury brand while there are people who purchase luxury brands just for comfort not to show off an extravagant life style. This gives a distinct meaning of ‘luxury’ to psychological mind of different people (Keegan, 2008).

1.2 Problem Statement

There are many luxury brands being sold in South Asian markets due to the fact that people are getting more and more attracted towards them. India being taken as the representative of South Asian countries and focus of this study, has tremendous number of luxury brands in its markets from different countries. Any brand that is launched in any society or region enters after a detailed study of its people and cultural boundations. This study will also try to investigate the reasons behind the people’s imagination about luxury brands which they use, how and why such an imagination has been developed by them. The study will particularly target youngsters and new professionals to draw conclusions, keeping in mind their personal likings/dislikes, values, social recognition etc. when it comes to knowing luxury brands. These parameters are very important in studying the behaviour of buyers and in shaping their purchase intentions. In a recent study conducted in Cornell’s university (2002), it has been shown that when the “EGO” of an individual gets hurt, they get more easily addicted to high-status products. But if such people are provided with other means to reduce this pain, people will not get inclined to luxury products. So addiction to luxury products may be linked to a desire to repair one-self from self-threats. Research also shows that when people are given negative feedback about things they care a lot, especially something related to their image and look, then they are easily inclined to buy products which could elevate their image in the society. But when they are given positive feedback or even no feedback, they don’t get attracted towards luxury products that easily. Few researchers think that there is a strong relationship among self-threatened feelings and a desire to use luxury products. But if someone purchases any luxury product without any self-threatened feelings then it is mere for the purpose of comfort. Another study also indicated that people are more attracted towards their relationships, health and well-being and when they have to select amongst luxury brands or these things, majority of them prefer family, health and well-being over luxury brands. Many social and brain theories have discussed luxury as a means of personal desire (Berry, 1994; Van Der Veen, 2003; Twitchell, 2003; Hilton, 2004; Danziger, 2005; Tsai, 2005; Mandel, Petrova, & Cialdini, 2006). People buy luxury products to satisfy or fulfil certain personal desires. Luxury has been defined by a researcher as an increased pleasure and comfort beyond the basic necessity and functionality (Van Der Veen, 2003; Kemp, 1998). Marketing researchers similarly have proved that people don’t buy luxury products just to impress others or increase social status but also to fulfil their self-directed comfort and pleasure (Tsai, 2005; Vigneron & Johnson, 1999). Brain research shows greater linkages between the psychological impact of luxury goods and self-interest (Schaefer & Rotte, 2007).

1.3 Research Questions

In order to conduct this study, only one research question is defined which will be the main focus of this study and its answer would be then further investigated. Following is the research question defined after the problem statement and background study of the problem:

1. “Do the luxury brands serve as the ‘Psychological Armour for South Asian people”?

2. Does younger generation group do focus on the luxury brands? Is there a psyche involved in it?

Young age group is in majority, present in any society and they are highly focused, targeted and ambitious. They have demands which have to be fulfilled. Luxury brands have young people as their major customers and target people due to their higher requirements and expectations (Rathore, 2013, p-22). Organizations introduce and launch their brands in such a way which catches the attraction of young age groups. That is the reason why these luxury brands are introduced, considering the psyche of young people so that maximum number of sales could be made out of it. The age difference plays an ample role in the sales of brands. As the market is focusing on age-specific, the products therefore need to be designed in such a way that it could be reached to its specific customer. However, brands know the demands of consumers therefore they advertise as well as promote their luxury products in the same way.

1.4 Aim and Objectives

A wider range of luxury brands and products available in Indian markets shows that people are explicitly inclined towards them. In this study the imagination of people about the term “luxury” will be understood, how people perceive what luxury is to them. What are the factors which motivate the youth of India to purchase luxury goods, many factors play an important role like social status, personal values, and age factor. Youngsters get more easily attracted towards luxury products so the basic focus of this study will be on people aged between 18-30 considering both males and females: those who prefer luxury and those who don’t prefer luxury when it comes to all essential elements like social status, personal values etc.

However the scope of this study is limited to particular age group forming the youth of any region but the study is not limited to any particular luxury brand. This is a general study taking into account every brand which people consider is luxury for them. The basic objective of this study is to study the behaviour of people who do prefer luxury brands and who don’t prefer luxury and what is the reason behind this preference and non-preference. The results of this study will be beneficial to the marketing researchers helping them in understanding the youth behaviour in India towards luxury brands and how they can formulate excellent promotional strategies in making them inclined towards their products. The results of this study will be equally important and helpful to consumers of luxury brands in order to provide them guidance on how luxury brand managers target their psyche in achieving their goals.

1.5 Significance of the Study

The Luxury brands cannot be denied in any market as their impact on individuals has also shown clear symptoms. The behaviour of buyer and consumer is of utmost importance in identifying the areas which make people to get addicted to luxury products. This study will enhance the need and importance of efficient marketing strategies in order to make the luxury brands ‘psychological armour’ for the people habitual to buy luxury brands especially of South Asia. This study will also help policy makers on how to target people and convince them to purchase luxury products in order to increase their sales. On the other side, this study is of equal significance to the people conducting research on the consumer’s behaviour towards luxury products. Satisfaction of self-esteem is what is generally obtained through luxury brands and this has been embedded in the minds of buyers (Phau, Teah & Lee, 2009). Among luxury brands, maximum population prefer international luxury brand over locals having an unauthenticated fact that international products are always of high quality which is not always true. This urges the purpose of this study to investigate if the luxury brands do have any psychological impact on altering the buying behaviour of people of South Asia. What are those psychological impacts? Either materialistic or some true functional benefits could be achieved from them. A complete analysis of luxury brands is being conducted in this study in order to understand the psyche of buyers especially the youth of India to make a valid statement about luxury brands being ‘psychological armour’ for them. This study is also of great significance for the people conducting similar study as there has not been much literature available on the behaviour of the buyers and how they perceive the luxury brands. This study could also be utilized as literature guidance for conducting further research in the same area and highlight the human psychological behaviours towards luxury brands (Pidgeon & Henwood, 2009).

1.6 Organization of the Dissertation

This study is organized into five chapters:

Chapter 2 is about the “Literature Review”, in this chapter will be subdivided into two literature review I and literature review II to deep analysis of literature related to luxury brands and their impact on consumer purchasing behaviour and overall luxury Brand Industry will be discussed and what sort of results have been drawn from them will be analyzed in order to make a ground for this study.

Chapter 3 is about “Research Methodology” in which the appropriate method of research is explained. For the purpose of this study, quantitative research has been used in which survey method is considered appropriate to collect relevant data to draw conclusions. Survey has been conducted among different university students (male and female) to investigate about the behaviour for luxury brands and purchasing habits.

Chapter 4 is about “Research Findings and Data Analysis” in which the information from the collected data will be analyzed and evaluated and final research findings will be concluded.

Chapter 5 is “Conclusion” showing the results of the study and future recommendations.

CHAPTER II: LITERATURE REVIEW-I

2. 1 Luxury Brand Sector Overview

Luxury brands have been there for centuries as wealthy people all around the world used to buy these expensive brands. Famous luxury brands these days are about 100-200 years old and few of them are more recent but have made their impact very quickly. Most clothing, jewelry and accessary brands like Hermers, Louis Vuitton etc have emerged as small French or Italian family businesses. In 1970s many French firms suffered from management and ownership problems. In 1980s the luxury industry saw revitalization and one reason to this was to use the celebrities to promote brand awareness. The first wave of luxury goods consumption started in Europe 100-200 years ago followed by the same wave in U.S and then the third wave emerged in China which has started 30 years ago. China has been expected to become the leading luxury goods market in the coming four years and is expected to consumer 44 percent of luxury goods by 2020 (Kapferer, 2008).

China and India are the two most important markets in South Asia where luxury brands are striving to thrive. China’s overall economy is expected to grow and this is a positive factor for the growth of luxury market in China where already 9% luxury brands growth have been seen by 2011. Brazil is another prospective market from Latin America for luxury brands where young consumers are especially targeted. The average price of a luxury product in South Asian markets like China or Russia can be 2 to 3 times more expensive than in Western markets like UK or France. Hence the South Eastern markets need to contribute more to the growth of luxury brands. Due to high prices of luxury goods in south eastern countries, many consumers may go to Hong Kong to buy luxury brands (Río, Vázquez, & Iglesias, 2001).

United States still is the largest market for luxury brands which contributes over 33% of the global markets for these products. Comparing different luxury items, the electronic gadgets like luxury MP3 players and luxury mobile phones are the fastest and dynamic growing luxury brands. The worst hit categories of luxury goods include the travel goods. These futures of luxury goods may also be shaped by social media and consumers’ reviews along with the trend of being always green. Brand heritage also is going to play role in the future of luxury goods e.g. brands with strong history will fare better than newer brands (Río, Vázquez, & Iglesias, 2001).

As the countries around the globe have started to recover from the global financial crisis, the luxury industry is recovering as well. Even though the U.S. is the largest market for luxury brands, the consumers there have started to become more price-conscious and are buying one-of-kind items like clothing or accessories etc. holding special emotional ties rather than expensive mass produced luxury products (Kapferer, 2008).

Even though luxury industry is recovering back, it still faces the same challenges as other industries including high commodity prices like cotton, silk, leather and cashmere etc. and this may also be linked to natural and man-made disasters in different regions like floods in Pakistan, China and Australia, loss of silk trees from the urbanization of Shanghai and a harsh winter in Mongolia. These factors affect the supply chain along with high transportation costs due to rising fuel costs (Kapferer, 2008).

There are demographic differences between luxury consumers of China and their U.S. and European counterparts in age and sex; as for example the average luxury goods consumer is china is male and in their 30s-40s. Chinese consumers relate luxury with success and purchase luxury goods to show their success. Luxury markets are spreading not only in cities but also in towns and lesser provincial cities. European fashion brands have been educating the public through multi-million-dollar fashion events in almost many parts of the world (Kapferer, 2008).

Studying the industry, companies who wish to thrive in the luxury goods category will need to focus on creativity, differentiation, social responsibility and costumer relationship.

2.1.2 Purpose & Requirement of Luxury Brand

With the passage of time, brands are being introduced by the organizations. When a product is launched in the market, the organizations are looking for the consumers who can purchase their products. In order to identify how these brands emerged in this highly economic world, the Industrial sector literature review has been conceptualized to understand the various factors that have led to the steady fast growth of these brands, inclining large sections of consumers towards it with a pace of expanding and designing quality. This literature review will focus on the emergence of luxury products and brands along with its Competitors, Strategies adopted Customer segmentation, Current trends and Development. But before putting light into these factors, it is important to first know the views about the luxury product market from the eyes of both consumers and its manufacturers.

2.1.2.1 Consumer point of view

From a consumer point of view, there are some of the considerations that are made in consumer’s mind. The factors that hit the psyche of consumer are the price, quality, fashion and design. All of these factors tend the consumers to go for it. There could be a sense of negativity when there is lack of designing or quality in a product. It could lead to severe decrease of sales and revenue (Malone, 2004).

2.1.2.2 Manufacturer point of view

From a manufacturer point of view, there are certain points need to be discussed. The launch of the brands, pricing, target consumers and consumer segmentation needs to be addressed. These factors are really mandatory for the luxury brands to cover the market for maximum number of sale and revenue generation.

2.1.3 Emerging Luxury Brand Sector

Fashion is a symbol of the social order and has incessantly been persuaded by the historical, social, conventional, spiritual, political, economical, psychological and more recently the technological advancements (Welters and Lillethun, 2011). The fashion companies have also substantiated these countenances of fruition and like superior sculpture; the ancient luxury brands have now become tailored and magnified with age. The newer brands have become extremely appealing with the support of effectual modern techniques (Chevalier and Mazzalovo, 2008). In Today’s modern era, strongest and the most valuable luxury brands like Louis Vuitton, Chanel and Gucci ,originated in France and Italy in the 19thand early 20th century, have a elongated history to back. These luxury brands and their country of origin played an immense vital role in the development of the Global fashion industry (Sengupta, 2009; Kasbekar, 2006). The new era of 21st century has made the luxury brands, which were elite only to European countries have now elongated their charm towards other continents across the globe.

Earlier there was very little number of brands in the market. Consumers did not have various choices to go for a product. As the time passed on, brands started to flourish in the market with variety of designs and fashionable looks. Now the consumer has many options to opt out a product. The consumer information collected from research will tell the complete background of the demand.

Consumer demands the best of the best products as looking at the current trends in fashion. The demands of the consumers could be understood using survey or information analysis. On the basis of the information collected, analysis can be made and further predictions could be proposed. This analysis will tell the company what the demands are in the market and what kind of products should be export to other countries. This will help the brand leaders in designing healthy brands which will not only increase the probability of increase in sales but also target audience could be identified. These marketing strategies and business plan will affect the sales of the products and customer will be benefited by these supplies. The best part of the trend analysis is that, it gives them a prediction of the future requirements of the products and the supplies. This will help a lot in developing the market strategies and approaches (Gentle, 2000).

China and India are the two most important markets in South Asia where luxury brands are striving to thrive. China’s overall economy is expected to grow and this is a positive factor for the growth of luxury market in China where already 9% luxury brands growth has been seen by 2011. Brazil is another prospective market from Latin America for luxury brands where young consumers are especially the main target segment. The average price of a luxury product in South Asian markets like China or Russia can be 2 to 3 times more expensive than in Western markets like UK or France. Hence the South Eastern markets need to contribute more to the growth of luxury brands. Due to high prices of luxury goods in south eastern countries, many consumers may go to Hong Kong to buy luxury brands (Río, Vázquez, & Iglesias, 2001).

Asian luxury brands, especially China made, are often seen as a source of negative alliance. According to a report of World Advertising Research Centre, 81% of Americans prefer Japanese products over Chinese. On the other hand, German consumers, for example, handful are able to accept Chinese brand without eliciting a negative response and 70% have low or negligible affection for brands from emerging markets. Apart from Japan, India, Korea and Taiwan, it is tricky for Western culture consumers to connect Asian countries with an economical advantage other than low price and quality (Martin Roll, 2014).

United States is still known as the largest market for luxury brands, contributing over 33% of the global markets for these products. Comparing different luxury items, the electronic gadgets like luxury MP3 players and luxury mobile phones are the fastest and dynamic growing luxury brands. The worst hit categories of luxury goods include the travel goods. This future of luxury goods however can also be shaped by the use of social media and consumers’ reviews and blogs along with the trend of being always green. Brand heritage plays an important role in the future of luxury goods e.g. brands with strong history will fare better than newer brands (Río, Vázquez, & Iglesias, 2001).

As the countries around the globe have started to recover from the global financial crisis, the luxury fashion industry is recovering as well. Even though the U.S. is the largest market for luxury brands, the consumers there have started to become more price-conscious and are buying one-of-kind items like clothing, accessories, etc. holding special emotional ties rather than expensive mass produced luxury products (Kapferer, 2008).

Even though luxury industry is recovering back, it still faces the same challenges as other industries including high commodity prices like cotton, silk, leather and cashmere etc. which may also be linked to natural and man-made disasters in different regions like floods in Pakistan, China and Australia, loss of silk trees from the urbanization of Shanghai and a harsh winter in Mongolia. These factors affect the supply chain along with high transportation costs due to rising fuel costs (Kapferer, 2008).

2.1.4 Significance 0f Luxury Brands Industry

There are certain business techniques for the brands to extend their business in the most divergent way. Extending good relations with business communities would enhance the improvements in communication. Performance of employee could be really effective and productive if there is appreciation for all. For an example if there are bonus rewards and appreciation for the employers. This would definitely enhance the performance of the employers resulting in great productivity and profit for the organization (Carnall 2007). In the end it could be summed up with the fact that motivation plays a significant role in increasing the performance of employers thus resulting in great benefits for the organization. It is one way of taking on the chances of creating good communications with the global world.

2.1.4.1 Strategies

The efficiency of the brand launch is dependent on the input and outputs given for a specific task. Fast deliverables and on time decision making can enhance the strategy adoption, providing optimistic outcomes of the new –fangled brands to gain strong strength in the consumer market. The implementation of strategy is dependent on the work force input which they are going to chip in. It has to manage it well so that all the work hindrances could be covered and encountered in the most skilful manner (Handy, 1999).

2.1.4.2 Demographic Segmentation

There are demographic differences between luxury consumers of China and their U.S. and European counterparts in age and sex; as for example, the average luxury goods consumer is China are males falling into the age group of 30s-40s. Chinese consumers relate luxury with success and purchase luxury goods to show their success. Luxury markets are spreading not only in cities but also in towns and lower provincial cities. European fashion brands have been educating the public through multi-million-dollar fashion events in almost many parts of the world (Kapferer, 2008). Studying the industry, companies who wish to thrive in the luxury goods category will need to focus on creativity, differentiation, social responsibility and costumer relationship.

2.1.5 Growing Trends In Luxury Industry

Luxury brands have been there for centuries as wealthy people all around the world used to buy these expensive brands. Famous luxury brands these days are about 100-200 years old and few of them are more recent but have made their impact very quickly. Most clothing, jewellery and accessory brands like Hermes, Louis Vuitton etc. have emerged as small French or Italian family businesses. In 1970s many French firms suffered from management and ownership problems. In 1980s the luxury industry saw revitalization; one of the reasons being was the use of celebrities to promote brand awareness. The first wave of luxury goods consumption started in Europe 100-200 years ago followed by the same wave in U.S and then the third wave emerged in China which has started 30 years ago. China has been expected to become the leading luxury goods market in the coming four years and is expected to consume 44 percent of luxury goods by 2020 (Kapferer, 2008).

In today’s economic era, the South Asian, particularly Indian luxury market is mounting at a parallel pace to the Chinese market. Though it is quarter the size of the Chinese market, but still is making a momentous contribution towards the global luxury goods expenditure. Luxury malls in cities like Bangkok are rising at a growing rate of 25 percent a year with numerous new luxury advancements that are coming up in the preceding three years. In fact, Thailand is planning to allow Chinese tourists to enter the popular holiday destination without tourist visas and, at the same time, will significantly cut import duties for luxury brands, helping it compete with places like Hong Kong and Macau in the future.

Elsewhere, the Indian onshore luxury market is expected to double in size, growing at the rate of 15-20 percent, reaching a value equivalent to USD 750-850 billion, according to a report by Retailing Sector Analysis (2014). More significantly, if the offshore spending of India is in Singapore, the figures are even more promising. The "Singonesia" luxury products market should touch around USD 8bn by 2015, indicating the lion's share of the luxury goods market in South East Asia.

The figures in the text are based on information provided by individual companies in the luxury goods industry, research papers by sector specialists and own analyses and estimates (Mendoza, JM, 2014).

2.1.6 Research and Development

There is a great demand of strategy development to flourish the business in the luxury brand market. Business has to be extended throughout the world as one can find numerous customers of our product and there is a great potential for the company too for making good relations with the international market (William, 2005). The business has to be divided location wise so that one can target the specific market and can earn revenue. International market has a potential to purchase the products and there is an ample of customers depending on our products. There has to be a regular check and balance on the tenders that are opening regularly so that one can participate and place its bid to compete with other competitors. Through luxury brand business, one can make healthy relations with the market that would be really beneficial from both ends. If all the activities are carried out in a systematic way then there is a high probability for maximum revenue and profit (Drucker, 2007).

In the luxury brands business, one has to be accurate regarding the demands and needs of the customer. There is a great need of research and study to know the psyche of the customer and what exactly they want in their daily lives (Chandler, 1998). When developing the marketing strategy, one has to ensure that the branding and the advertisement are going in the right direction. The marketing has to directly hit the customer and before that research and hard work is needed. Bar code scanning technology helps to collect the data with in short span of time. When there is a need of collecting information and data then this technology is really helpful and can be really cost effective. The questionnaire will tell the demands and requirements of the customers and will confirm that what really the demand of the customers is. Though the research work, case studies, questionnaires and other study will tell the demand of the customers (McDaniel, 1998).

2.1.7 Summary

This part of literature review has discussed the Luxury Brand Sector Overview; particularly the unique aspects of luxury brands that differentiate it from others. In this respect phenomena of several countries’ have been discussed. The purpose and content that about luxury industry review where both from buyer and manufacturer view have been mentioned. The role that luxury brands play as an emerging industry has been described. In addition to this its competitors, strategies, customer segmentation, current trends and development- research on demographic and their reaction toward luxury brands have been included. Finally as an emerging issue how the growth is being achieved and what are the research that can be carried out to receive more and more customers’ access has concluded this chapter.

CHAPTER II: LITERATURE REVIEW- II

The researcher started the literature review with the multifaceted concept of luxury which means that numerous luxury definitions will be scrutinized. Furthermore, the consumer’s psychological behaviour theories such as Maslow’s Hierarchy Theory (five elementary levels starting from basic needs to highest psychological), Utility Theory ↔ Satisficing Theory (consumer decision process) and Prospect Theory (underlying its concept based on Utility and Satisficing Theory) along with socio economic factors and their psychological impact in the element of luxury consumptions which persuade purchase intentions, will be investigated.

2.2 Introduction

Luxury brands are strongly appreciated by the consumers due to its day by day rapidly increasing demand globally. According to a report by Bain & company, the worldwide revenues of luxury market estimated to be $450 billion in 2013(converted €250 billion) with an expected increase of four to six percent annual average giving a strong tailwind growth with breaking track records of sales threshold by mid-2015, as reported by Forbes (Bain & Company, 2013; Forbes, 2013). Buyers purchase luxury brands for numerous reasons. These products to a certain extent convey a message of royalty, societal status, sex appeal and esteem of the buyer to others. This varying interest of buyers in luxury brands has deliberated the academic scholars to understand and validate the reasons for this holistic interest. Influences of elite people buying these ideas have even changed the buying behaviour of other consumers (Vigneron, F., & Johnson, L.W. (2004). Earlier traditional mind set about shopping was hedonic as buyers used to buy things just to fulfil their esteem needs but the latest shopping sense has completely changed the idea behind this concept. Nowadays shopping is mostly done to impress one-self, to satisfy psychological needs and to portray a royal image in-front of others; in other words just to raise the social status in the society. Modern shoppers buy expensive things and luxury brands merely to show off their elite personality or to boost their self-esteems. Luxury goods have become now an affirmation of psyche (Berry, 1994; Dittmar, 1994; Corneo & Jeanne, 1997; Vigneron & Johnson, 2004).

2.3 Luxury Theoretical Framework

Shopping is generally a way of self-expression. Normally people define their personality through their shopping, their buying behaviour and from where and what they buy as a means to express their desires, needs and status, giving a sense of accomplishment to many people. A successful buyer feels the sense of satisfaction from his/her purchased products. Shopping has become an emotional and psychological phenomenon for modern societies. According to many psychological researchers, life of a consumer constitutes of five levels starting from elementary stage where a person tries to satisfy his/her basic needs like food and shelter and then goes to the highest level where he/she tries to satisfy his/her highest psychological needs like self-emotional satisfaction. Maslow theory of needs defines human’s higher needs which can only be fulfilled if his/her lower needs are met in the best acceptable way (Pooler, 2003).

Fig: 2.1: Maslow Hierarchy of Needs

Source: Saul McLeod (2007)

Maslow stated that people are generally motivated to achieve certain basic needs and when one need gets fulfilled, an individual than seeks to fulfil another need and so on. Maslow’s hierarchy of needs include five basic needs in hierarchy. The five stage model can be divided into basic needs like psychological, safety, love, esteem and growth needs like self-actualization. The basic needs motivate an individual when they are not met e.g. the longer the person goes without food, the more he/she will get hungry. So the basic needs are needed to be satisfied first before proceeding ahead to higher level of needs in the hierarchy (Hughes, 2011).

According to Early economists, followed by Sir Nicholas Bernoulli and John Von Neumann, puzzling thoughts came over to the question on how people direct their decision making process. This study started about 300 years ago; however after an in-depth research on it, Sir Bernoulli stated its first official explanation regarding consumer’s decision-making. Later it was extended by Von Neumann and other economists projecting it as Utility Theory (R.Michael, 2005).

This theory states that consumer makes decisions based on the expected outcomes of their decisions. For example, if a person wants to buy interior decors, he/she would evaluate every decor showroom in the market and then would select the one that would be having the highest utility score among all. Although, as one may anticipate, consumers usually are not complete rationales, neither they are constant nor sensitive about the various fundamentals involved in their decision-making process. Additionally, though consumers are born experts in estimating the relativity of the frequency of actions, they typically face difficulties translating then into actual probability. Therefore this Utility model, even though been considered as a dominating factor in decision making hypothesis, has been accompanied with serious blemishes, failed to be explained by this model (Richarme, 2005).

On the other hand, there is another theory called Satisficing theory given by Nobel Laureate and Herbert Simon (2005), proposing a simpler and a substitution model which was stated during early mid-19^th century. This model was called Satisficing model. In this theory, consumers get proximity where he/she wants to go and then stop at the decision-making process (Rhodes & Dawson, 2013). An example for this would be in the search for good interior decor set. As discussed above in the Utility Theory, consumers would judge every showroom in the market, forming a bee line equalisation resting on all the relevant parables, and then selecting the appropriate that has the maximum Utility Score. In accordance to Satisficing model, however, consumers may just estimate the approximate distance from their location to the showroom, putting a stop when they find the one that is “worth it.” This theoretical model, strengthens enough to cover the limitations of Utility Theory, but is still left with necessary areas for improvement in predictions. Psychologists however also proposed another theory called Prospect theory for better conceptual understanding of consumer’s decision making process resting on both utility and satisficing theory. According to Daniel Kahneman and Amos Tversky, additions and replacements were made to the ‘utility’ word of Utility theory. In prospect theory, certain elements were been reinstated from utility to the concept of ‘value’ and ‘endowment’, in which an item is considered as more precious if one own it than if someone else owns it (Richarme, 2005, p-1).

Two foremost elements were added by Kahneman &Tversky that were the concepts of value (substituting the term utility found in ‘Utility Theory’) and endowment, in which a product is more valued if one inherits it than someone else inheriting it. ‘Value’ supplied attributing points and estimated both profits and losses from that relating point. In lieu of this, there seemed to be insignificant increase-decrease in the profits and losses resulting from those attributing factors. For example, there was a much greater value for the first incremental gain from the reference point than for subsequent gains (Richarme, 2005, p-2).

2.4 Consumer Behavior and Luxury Consumption

Consumer behavior is the factor that affects luxury consumption like individual’s identity, consumption habit etc. (Slama, Wolfe and Clark 1999). The motivation of consumers to buy luxury brands can be identified into two broad categories namely non-personal perceptions and personal perceptions (Vigneron and Johnson 1999, 2004). Non-personal perceptions are based on opinions, influences and suggestion obtained from the interactions with others (Groth and McDaniel, 1993) but on the other hand personal perceptions about luxury brands is based on feelings and emotions (Dubois and Laurent 1996). According to theory of consumer psychology, non-personal perceptions of luxury include: perceived conspicuousness (Veblen 1899; Bearden and Etzel 1982) and this means that possession of luxury identifies the social position, representation and status (Vigneron and Johnson 2004), perceived uniqueness (Lynn 1991; Snyder and Fromkin 1977) and its conveys the sense of exclusivity and generally connected with the expensive pricing of luxury products (Verhallen, 1982; Lynn 1991).Uniqueness is considered as a mean to enhance one’s image by adhering to one’s taste or avoiding similar consumptions (Tian, Bearden and Hunter 2002), perceived quality (Garfein 1989; Quelch 1987; Aaker 1991) gives a greater quality perception from luxury products and a sense of assurance of high quality as compared to non-luxury products (Rao and Monroe 1989).

The personal perception about luxury has two concepts very common; perceived extended self-expression which means to distinguish oneself from others (Belk 1988; Holt 1995), other is perceived hedonism refers to personal rewards and fulfilment of emotional benefits from luxury consumption (Sheth, Newman and Gross 1991; Westbrook and Oliver 1991).

2.5 Socio-economic Factors and Luxury Consumption

Luxury consumers are increasing rapidly as previously communists countries turn to capitalism and third-world countries are getting stronger economically (Dubois and Duquesne 1993; Wong and Ahuvia 1998). A direct relationship is there between economic growth and increasing expenditure for luxuries and this has been contributed with the standard economic price theory stating that the rick consumes more luxuries just because they are wealthier. India has been identified as the next major luxury market after China where many foreign luxury brands have already started to strengthen their roots in Indian markets (Lowther, 2005). Due to strong family structure in India which could be the reason for strong demand and affordability of luxury products although the economic structure of India is not much strong but this family support helps in luxury consumption. Along with this, the prices of luxury products are also lower in South Asia and the reason for this is that American and European luxury products retailers often make a sizeable proportion of their sales to East Asian consumers (Hooper 1997; Powell 1990). Comparing India with China in terms of fast growing population and economies, but still there is a big difference between the both in terms of consumers’ perception about the consumption of luxury products (Lowther, 2005).

2.6 Psychological Impact of Luxury Brands

Many researchers have contributed towards the study of cross-cultural market segments and the value of luxury brands for the buyers (Lindridge and Dibb 2003; Kahle et al. 1999; Hofstede 1994; Djursaa and Kragh 1998). Culture is defined as the collective programming of the mind that segregates the members of one group from another (Hofstede, 1980).Researchers also think culture impact also plays a strong role in consumer buying behaviors but we find different view of different researchers in literature (Dubois and Duquesne 1993). Cultural norms and beliefs are strong elements that shape people’s perception, disposition and behavior (Markus and Kitayama, 1991). Western culture is well established in existing consumer theory with regard to luxury consumption (Wong and Ahuvia. 1998). The differences between Western and Indian concepts of luxury have never been examined empirically although culture play vital role in shaping the buying behavior of consumers. For a business to be successful in any new region, it is very important for the managers to have a detailed study of the culture of that particular region as cultural differences are a mean to make a difference in consumer behavior within and across boundaries (Miller 1995; Shaw and Clarke 1998). Although, there is a lot of stuff available on the study of consumer behavior differences across boundaries but limited studies have been found on behavior difference within culture. Thus globalization is generally considered as a factor to promote the luxury brands and as a mean to globally acceptance of any brand making globalization of customers’ behavior and attitude. Some studies show that certain consumer behavior has limited or no impact of cross-cultural differences (Elinder 1961; Levitt 1983; Ohmae, 1985) and greater similarity in consumer behavior has also been observed among different countries as compared to behavior within a country (Anderson and Hee, 1998).

Personal values greatly influence the buying behavior of an individual. Buying to impress others is the utmost internal personal value that forces an individual to purchase luxury brands. According to researchers, consumers get influences by their internal personal values very easily and the one very important such value is to have a favorable social status in the society (Eagly and Chaiken 1993; Weidmann and Hennigs 2007). Luxury brands and their consumption is highly attributed toward the satisfaction of internal personal values and it is important to discuss those personal values before proceeding ahead to research. One such attribute to represent internal personal value is materialism. Materialism is a belief to have importance of material things by emphasizing on the ability to own expensive things in life (Richin and Dawson, 1992). Materialistic people prefer to wear expensive clothes, prefer to use expensive cars etc. just for show-off and they have an urge to live an extravagant life (Buzzle, 2010). South Asian people have a common psyche and they think that wearing expensive clothes, moving in expensive cars is the symbol of higher status in the society and that is the reason they are especially attracted towards luxury brands as for them luxury brands is a mean to show-off their lavish living style.

Fig 2.2: Conceptual Model

Source: Wiedmann, Hennigs & Siebels (2007)

South Asian people also have string attractiveness towards the display of property involving luxury brands. People often try to remain fit in their society and for this purpose, they lost of stuff and one such struggle is to buy luxury brands to show their physical presence in a group of people. People buy products that convey the status, wealth and power of the owner. Another personal value is a need to be unique from others. This is normally done to enhance personal identity by using such things which could make some difference of the consumer from other people around him/her. For this purpose people purchase luxury brands as luxury brands are perceived not to be owned by many people. The other important factor is the concern of appearance (Roll, 2006).

Many people are too conscious about their physical look and they are constantly in search to look better in front of others and this consciousness makes them turn towards luxury brands just to show some personal achievement (Netemeyer et.al, 1995).

Luxury brands are now not only restricted for the wealthy people but people from any class are now using luxury brands for different purposes. As the world is growing tremendously in technology, more and more people are getting better paid off jobs to fulfill all their basic needs and this has given them a room to accommodate their higher demands as well. Few centuries ago, luxury for people were only counted in wines, champagne, designer clothes and sports cars but now luxury has been south in almost every item ranging from hair brush to tooth brush. Thus luxury can also be called as experience rather than financial value as being stated by few researchers (Ian Yeoman, 2011).

With the more development in living standards, people lay more stress on having things which make life easy and comfortable. Thus consumers want to improve their lives and standard of living. More and more ladies in South Asia are now playing their role in the economy of their country and this thing has also developed luxury brands especially related to ladies like designers clothes, cosmetics, jewelry etc. Indian luxury market has seen tremendous change in recent decades. With the arrival of British reign in India, the concept of luxury has also been introduced there and this term is not new to the people of India. India is a big market for luxury brands. The luxury market of India is expanding and has shown growth of 20 percent in the year 2009 alone and it has reached to USD 7.75 in the year 2010 and this trend is constantly being increasing every year. This shows that people of India have developed a stringer sense of luxury in their lives and they are eager to consume luxury brands for to satisfy their personal esteems especially to satisfy their internal personal values (Łopaciuk and Łoboda, 2013).

Comparing the purchasing behavior of South Eastern people with that of European people, it was shown in a research that the people of England don’t buy luxury products to display their status but the people of South Eastern people do purchase luxury goods by having some sense of status portrayal at the back of their minds (Srichan Sriviraj et al, 2007). Some researchers associate luxury brands with indulgence of the senses irrespective of the price (Bian et al, 2010). They think consumers buy luxury brands primarily to show their status and social goals. Luxury brands have generally low ratio of functionality to price. In India, luxury brands are normally associated with urban youth. Since youth have less liability at early ages so they are happy to spend on luxury brands but Indian luxury consumers are more value conscious and always strive for stylish and aesthetically attractive products. However educating people about the luxury products is a challenge which is yet to be studied (Sinha et.al, 2011). More materialistic people are more luxury consumption innovativeness rather than those of non-materialistic people (Mishra, 2009). Studies show that youth purchase luxury brands to fulfill their dreams of having an aspirational lifestyle. This urge is normally accepted as a pressure from the peers among youths. As youth is more indulged into technology use so this pressure is very easily developed and in order to cope with this pressure, they buy luxury products to keep their image among their peers.

Study of consumer behavior is very important for marketing experts. Consumer behavior comprises of many things including psychological, personal, social and situational elements. Studying this consumer behavior is not only important for larger companies and firms rather it is equally important for small firms to be successful in a market. No doubt the sales of luxury goods are rapidly increasing day by day and they are looking for newer markets in the East. The psychological impact of luxury brands is very strong. It has also been observed that people who are associated with particular luxury brands are keen to remain in contact with only those people who use that particular brand which he/she uses himself (Richins, 1994). Since luxury brands are contributed to two important aspects; one economic and other psychological. The economic aspect shows how much a luxury brand is affordable to particular class of people or an individual (Colin F. Camerer & George Loewenstein, 2003).

Luxury brands mean high prices and sometimes the quality is compromised under the higher prices just to deceive people who link price with quality. It is not always necessary that higher priced luxury products do carry higher quality as well. This impression of buyer to associate the quality of luxury products with higher quality is a false attitude on part of buyers. The other important aspect of luxury brands is that they do have psychological impact on buyers. People who are more concerned and conscious about their status, prestige and image are more attracted towards luxury brands to show off their wealth, achievement or higher social image in the society. Many studies have shown that people mostly purchase luxury brands to satisfy their esteems rather than to achieve any functional benefits (Malone, 2004). Comparing the psychological aspect with economic aspect of luxury brands, it can be cleared drawn that psychological impact of luxury products is very much stronger that even people of moderate or lower income even wish and strive to purchase luxury brands in few items. This is because luxury brands carry an image in minds of people and this image creates such buying behavior among the buyers.

India being the representative of the South East Asia is the largest market for luxury brands and many luxury brands have already strengthen their roots there. People of India are very well aware of the different brands and have developed strong sense of buying behavior especially related to luxury brands. This study especially focuses the youth of India to evaluate their buying behavior as youth have fewer responsibilities and are very easily get attracted towards the strong advertisement campaigns of the luxury brands. The marketing strategies of luxury brands also plays vital role in making luxury brands as psychological armor. Media these days is very strong and is easily accessible in almost every home. The marketing strategies of luxury brands are especially designed to directly attack the psyche of the people especially the youth. The higher status that is being displayed in the advertisements attracts people and they think as if they would suddenly become the people who are being shown in the ads (Senior & Swailes, 2010).

This is the psychological impact of luxury brands which motivate people to purchase these brands as almost everyone has a desire to remain unique among many and to have a good image among people in the same society. Most of the studies related to the psychological impact of luxury brands clearly show that the use of luxury brands is mostly for the display of social status and for show-off purposes, the functional value of luxury products have almost gone to zero and the manufacturers are equally of the same mind set, they concentrate more on the status by focusing on strong advertisement campaigns and less concentration is being paid to the quality of the product. What buyers want is what is being manufactured for them. It is very important for the buyers to understand the functional value of the luxury products besides looking for personal values. This requires a detail analysis of the features and psychological impression of the luxury products by the buyers as well before buying any product (Komin, 1991).

2.7 Conceptual Framework Development

All recent studies have developed models of the consumers demand for luxury brands in the market (Gentry et al., 2006; Grossman & Shapiro, 1988; Kim & Karpova, 2009; Nia & Zaichkowsky, 2000; Penz & Stottinger, 2005). On the average all these models look at various models including psychographic and personality traits like informational and normative susceptibility, value consciousness, risk aversion, willingness to purchase luxury brands, lawfulness, integrity, personal gratification etc. Along with these variables, few authors also have pointed out the importance of values that reflect “honesty” and “welfare of society” (Ravlin and Meglino, 1987).

When a product is launched in the market, the organizations are looking for the consumers who can purchase their products. From a consumer point of view, there are some of the considerations that are made in consumer’s mind. The factors that hit the psyche of consumer are the price, quality, fashion and design. All of these factors tend the consumers to go for it. There could be a sense of negativity when there is lack of designing or quality in a product. It could lead to severe decrease of sales and revenue. From a manufacturer point of view, there are certain points need to be discussed (Hamlin & Ash, 2000). The launch of the brands, pricing, target consumers and consumer segmentation needs to be addressed. These factors are really mandatory for the luxury brands to cover the market for maximum number of sale and revenue generation.

There are certain business techniques for the brands to extent their business in the most divergent way. Extending good relations with business communities would enhance the improvements in communication. Performance of employee could be really effective and productive if there is appreciation for all. For an example if there are bonus rewards and appreciation for the employers. This would definitely enhance the performance of the employers resulting in great productivity and profit for the organization (Carnall 2007). In the end it could be summed up with the fact that motivation plays a significant role in increasing the performance of employers thus resulting in great benefits for the organization. It is one way of taking on the chances of creating good communications with the global world and always aiming high.

The efficiency of the brand launch is dependent on the input given in a specific task and outcomes being presented at the end of the day. Fast deliverables and on time decision making can enhance the strategy adoption and coming up with optimistic outcomes of the new –fangled brands to gain strong strength in the consumer market. The implementation of strategy is dependent on the work force input which they are going to chip in. It has to manage well so that all the work hindrances could be covered and encountered in the most skillful method. The organizations which intend to launch luxury brands in the market must carry the below mentioned attributes.

· Taking initiatives

· Problem solving skills

· Competence

· Courageous

· Understanding

· Leading from the front

· Market knowledge

· Consumer segmentation

· Adaptability

· Intelligent

· Inner strength

· Intelligent

· Dedicated towards the work/assigned

· Leadership ability to counter and solving with the troubles

· Brand awareness

· Strategically approached

· Integrity

· Team player

· Strong reputation

They also have emphasized on responsible and honest individuals as these factors influence the society in a positive manner. But except for integrity and lawfulness, the relationship between consumers’ intention to purchase luxury brands and their ethical concerns and social responsibility has been ignored or rejected. For this purpose, this study is aimed to investigate the psychological impact of luxury brands on human buying behavior. The conceptual model for this study is based on four theoretical frameworks. First, using theory of planned behavior, this study will investigate consumers’ intention to purchase luxury products based on their attitudes, subjective norm and perceived control over purchase of luxury brands. Second, using the value-attitude-behavior system by Homer and Kahle (1988), this study examines consumers’ orientation or their value system as an indirect antecedent to their intentions to purchase luxury brands and original brands with attitude, subjective norms and perceived control acting as mediators.

Third, the bandwagon effect in the Theory of Consumer Demand may explain why consumers want to purchase luxury brands and the fourth, the consumer behavior may also provide the justification that purchasing and consuming luxury brands is an undesirable behavior and needs to be understood in order to suggest strategies to marketers of luxury brand managers. Based on these models, the conceptual framework has been developed in figure 2.2. The variables in the proposed research model are social and personal consumer orientation, attitudes towards the purchase and consumption of luxury brands, subjective norms, perceived control over the purchase of luxury brands, price sensitivity and intention to buy luxury brands (Whipple & Wolf., 2011). Specifically, this model has seven exogenous variables including social conformity, status seeking, fashion consciousness, price quality schema, ethical values, social responsibility and integrity. It also has five endogenous variables like attitudes, subjective norm, perceived control, intentions to buy luxury brands and intentions to buy original brands and one moderator i.e. price sensitivity (Webley, 2013).

Fig 2.3: Development of Conceptual Model

Source: The Researcher

The behavior of the consumer could be analyzed by the following factors. It is very much significant at the location of the consumer and the exact region. When a consumer profile is made then the age, thinking, demands, likeness, postal code for location, the lifestyle that is adopted and the most significant activities that are being done by the consumers, these all factors help to make a complete profile of the consumers. When someone wants to know about the thinking and demand of the consumers then four most important things that needs to be note down are the Geographical information, behavioral information, Psychographic information and the Demographic information of the consumers. These will tell the whole scenario and picture of the consumers and help to expand the business in the world. It is the responsibility of the marketing demand to ensure that what are the current and latest demand of the consumers and what specific strategy could be adopted by the company (Drucker, 2007).

Considering a conceptual model, the consumer information collected from research will tell the complete background of the demand. On the basis of the information collected, analysis can be made and further predictions could be proposed. This analysis of the demand will tell the company that what are the demands in the market and what kind of products should be export to other countries. When the analysis is collected then there is a need of healthy branding of the products. When there is an effective branding then there is a probability of sales and will target the required people. These marketing strategies and business plan will affect the sales of the products and customer will be benefited by these supplies. The best part of the trend analysis is that it gives you a prediction of the future requirements of the products and the supplies. This helps a lot in developing the market strategies and approaches (Gentle, 2000).

2.8 Summary

This literature review has discussed the concept of luxury particularly the unique aspects of luxury brands and consumer behavior in respect to other needs as consumer tries to satisfy his basic needs first.in doing so Maslow hierarchy of needs has been included where luxury has seen as a far reaching phenomena. Later on nature of consumer behavior and the attitude they show for buying luxary products. To help in better understanding the behavior of customers for luxury brands that have been found from different study conducted earlier have been analyzed. More importantly, several factors that cause to people to buy luxury brands and its psychological impact have been discussed. Later on a conceptual model along with the affinity of South Asian people along with evidence of extensive thought related to luxury have been discussed. Earlier study of luxury brands and the affinity of consumer toward luxury brands and thee result found by the study has been discussed. Finally, the chapter concluded with the conceptual framework development and the factors associated with it related phenomena has been mentioned.

CHAPTER III: RESEARCH METHODOLOGY

After analysing the literature about the luxury brands acting as ‘psychological armour’ for the people of South Asia, a methodology needs to be finalised in order to investigate this hypothesis either true or false. At this stage, an attempt would be made to develop a relationship between the psychological impacts of luxury brands over consumers buying behaviour. Whole of this study will revolve around this hypothesis stating:

“Luxury brands acts as Psychological Armour for the People of South Asia”

In order to test this hypothesis, a decision is made to use the quantitative research methodology. Quantitative research method is basically a technique of collecting numerical data which are then analysed using mathematical formulae. For any sort of research methodology, the prior and foremost important step is the selection of the topic on which research is going to be performed. After that different means of collecting data is to be identified and the most appropriate one by which data could be easily gathered is then selected.

Following is the flowchart of all the activities that are going to take place during this research. Topic has already been selected which is in fact the hypothesis for this research. In chapter 1, problem has been defined in detail and aims and objectives of the research have clearly been identified.

Fig 3.1: The Research Process

Source: The researcher

Chapter 2 was a detailed study of literature related to the topic and a good background has already been made for the conduction of this research. In this chapter, the selection of research methodology needs to be finalised which has already been done and quantitative research method will be used to perform this research. As said earlier, there are many techniques to carry out quantitative research including questionnaires (survey), interview and observation and anyone or mix of techniques could be utilised to collect data in quantitative research method. For the purpose of this research, we have selected the Survey method. A survey will be conducted from the people especially been targeted for this study. Since we have already segregated the age group amongst whom the survey will be conducted, concentration will be given to the youth age ranging 16-32. Questionnaires have been designed to collect data from different university students in India (Saunders, Lewis & Thornhill, 2007).

The topic has been selected after considering the larger interest of people in luxury brands especially in South Asia. Consumer behaviour has always been a fascinating topic of study for researchers for many years with the arrival of globalization and branding concepts. Since people are getting more and more attracted towards luxury brands, it was especially appealing to investigate about what the motives behind the consumption of luxury brands are and do luxury brands really have any psychological impact on buying behaviour of consumers or not.

3.1 Data Collection

Data is of two forms, primary and secondary data. For the purpose of this study, both types of data have been gathered to reach to a final conclusion. It is important here to differentiate between primary and secondary data. Primary data is the collection of data through original research techniques like survey, interview etc. while the secondary data is the collection of data through literature like journals, articles, magazines, books and internet sources (Kendall, 2008).

Figure 3.2 Data Collection Methods

Source: The Researcher

3.1.1Primary Data

Primary data has been gathered using survey techniques in order to carry out this research. Survey is a more rigid form of primary data collection technique even more rigid than interview (Sauder, Lewis & Thornhill, 2007). This is an easy mechanism to collect data from larger gatherings and is considered as the strongest type of quantitative research method. This is the reason why survey method has been used in this research. Surveys are normally conducted using questionnaires. Questionnaire has been designed to inquire the youth of India about their purchasing habits and how much they value luxury products in their normally shopping. Different questions have been added in the questionnaire including questions related to the personal value of youth including both male and female, social recognition and their shopping behaviour (Cooper and Schindler, 2008).

3.1.2 Sampling Strategy

The target sample for this research is basically the Indian youth aging between 16- 32. The questionnaires have been distributed amongst university students. Five big universities all over India have been selected for the purpose of this study and the questionnaires have been distributed amongst the young faculty and students. Since the target sample has already been selected for the purpose of this study, non-probability sampling method is then selected in locating the population. Non-probability method is a method of selecting respondents within a population whose answers are more preferred than others (Bryman, 2008). Since the sample comprising of people falling between the ages of 16-32 was already defined, it gave a clear reflection on how the non-probability method was appropriate in choosing to concentrate on the data collected from this age group only (Sauder, Lewis & Thornhill, 2007).

Non-probability sampling method has many types. For the purpose of this study, Purposive sampling method has been used. Purposive sampling is a method to get data from a vast majority of the representative population and the data collected are more authentic (Tashakkori and Teddlie, 2003). Once the characteristics of the target sample population are clear, the purposive sampling technique would be more appropriate in this research.

For this purpose, 250 questionnaires were distributed amongst different educational institutions of India in order to reach an adequate sample size and to cover an adequate data collection .out of 206 questionnaires were returned. The number of received questionnaires was 215, however because of inadequate results and incomplete questionnaires, 9 were eliminated and 206 were used for the analysis. Top universities of India have been selected for the purpose of study just because students studying there are from families who have higher earnings and they can very easily be affected by the luxury brands ideas. This information has been analysed by the tuition fee catalogue of selected universities as their fees are higher than others. The universities selected for the purpose of this study include:

· University of Delhi

· University of Mumbai

· University of Calcutta

· University of Pune

· Indian Institute of Science, Bangalore

3.1.3 Method of Distributing the Questionnaire

There could be many methods of distributing questionnaires among students like online survey, personal distribution etc. The method selected to distribute the questionnaires was through representatives in all selected institutions and the same have been then returned by the representatives for its interpretation. After the questionnaires have been returned, the results are then summarized into charts and graphs by the researcher (Cooper and Schindler, 2008).

3.1.4 Measuring Variable

Survey has been conducted in order to measure the personal variables like materialism, need for uniqueness, status, need to buy luxury brands and demographic features like age (Bradley, 2007). The questionnaires consist of 26 questions divided into 4 parts. Close ended questions are used in which respondents are asked to rate their answer on the scale of 0-5. The distributions of questions are as under:

Part 1: Luxury Definition

In this part, the questions ask were about the perception of youth about the term “Luxury”. The respondents were to choose one answer from the list of options provided

Part 2: Personal Traits

In this part, personal traits like the materialism and social status is measured. The first section of this part inquires about the materialism (Questions 1-7). The seven questions measure the materialism by using the scale developed by Richins and Dowson (1992). The second section of this part consists of questions related to the individual’s desire to look unique (Questions 8-14). Here the measurement method is adopted from Tian et al. (2001). The last section of this part is about the social status (Questions 15-18). The answers will be measured using method from Park et al. (2008).

Part 3: Demographic Factor (age)

The questionnaire is distributed amongst both male and female respondents equally. So the gender of the respondent is been asked in this part. Since the target for this study is the youngsters so the age needs to be known of every respondent. The age set for this study is 16-32.

One question asks “Do you prefer luxury brands?”

Part 4: Purchasing Intentions

Questions 22-26 asks about the purchasing intention like ‘how often luxury brands are purchased by respondents’, what brands they normally purchase, their favourite brands and if there is any particular loyalty with any particular brand. The previous experience of respondents with any brand is also being questioned.

In this research, the Likert scale developed by Rensis Likert (1932) is chosen. Respondent have to give answers, depending on the level of agreement with the questions. Different corresponding options have been assigned to scale the respondents’ answer and these answers show correspondence with the respondents’ answer and this scale has been used in the analysis of the results. There are 5 categories of responses (from strongly disagree (1) to strongly agree (5) that are normally used. The reason for using the Likert scale is because of its advantages. The Likert scale is very useful for gathering participants’ feeling and attitudes. It is also easy and quick to construct. Besides, Likert scales are probably more reliable and provide a greater volume of data than many other scales and the scale produces interval data (Cooper & Schindler, 2008). In other words, the responses for the performance items are labeled “strongly disagree” (1) and “strongly agree” (5) at each extreme. Also, the responses for overall satisfaction question are labeled “very satisfied” (5) and “very dissatisfied” (1) at each extreme.

The scale is given as follows:

Strongly Disagree

Uncertain

Strongly Agree

Agree

Disagree

The questionnaire doesn’t contain any option to express lengthy feelings or opinions of the respondents. This was done deliberately as the lengthy answers are sometimes confusing and it is hard to draw concrete conclusions from them. Not all questions require correspondence with the statements rather there are some questions which requires user to select an appropriate scale in which he/she falls. For example questions about demographic information like age requires respondents to select an age range between 16 to 32, education level needs to be selected between any college degree to master’s degree, either they prefer luxury brands or no, do they intend to buy luxury brands again after one use or not. These are the questions which require selection of an appropriate range which has already been mentioned in the questionnaire.

3.1.5 Secondary Data

It is the study of the relevant research. This data also enhanced the validity of results. For the purpose of this study, author has used the Google and Google Scholar which is the collection of knowledgeable articles. Secondary data is basically the collection of related researches which has already been conducted on similar parameters (Sauder, Lewis & Thornhill, 2007). The secondary data has been acquired through literature review as lot of information was already collected about the purchasing behaviour of customers all around the world and especially people of South Asia. Many of the studies discussed in the literature review for this research clearly shows that luxury brands now have a psychological impact on the shopping behaviour of consumers. Denzin and Lincoln (2000) stated that the main advantages of secondary data are the enormous saving in resources. Many of the people are conscious about their status and people of South Asia are particularly more conscious about their status as compared to European people. Previous results of similar studies indicate that people buy luxury brands just to highlight their social image and to show-off their wealth and to depict their personal achievements. This study will focus on the buying behaviour of people of South Asia related to the luxury brands to show if any different results can be obtained or people are still eager to buy luxury brands just to make their social image better in the society.

The conceptual framework of the complete research is given in the figure below:

Fig 3.3: Conceptual Framework Model: the Relationships of Variables

Purchase Intention

Luxury Brands as Psychological Armour for

South Asian people

Materialism

Desire to look better

Social status

Age

Source: The Researcher

The conceptual framework shows that the luxury brands have great psychological impact on materialistic people who wish to look different from others and to have a high social status and such people normally range between 16-32 years of age. Considering these factors if present, these people will be attracted towards the luxury brands and will develop purchasing intentions for particular brand (Dubois and Duquense, 1993). Looking at the conceptual framework of the research, it is important to consider few important aspects of personal likings and disliking of the consumers. In order to state any concrete statement about the hypothesis, it is important that some of the important aspects of personal value of consumers are considered in detail including the materialistic approach of the consumer, how much he/she values luxury brands in his/her life, the desire of the consumer to look better in front of others which perhaps is the earnest desire in the heart of every person to look good in his/her society. This aspect is especially attributed towards females but males on this concern are equally conscious about their looks and they do have equal desire to look good among their fellow colleagues, students or society in general. Some of the people are also very much concerned about their social status. They wish to show their status and wealth to people around them which comes under show-off and only for this reason such people purchase and use luxury goods. Therefore in this study there will also be a need to know about the consciousness of people about their status, keeping the last thing as age factor. Age factor also plays roles in highlighting all the above given personal values like materialism, desire to look better and social status. Young people are more concerned about these factors and that is the reason a particular age group has been selected for this study. Youth gets easily attracted towards luxury brands as they have no other liabilities or responsibilities to consider (Komin, 1991).

The questionnaire was intended for respondents specifically but if anyone who wishes not to fill it in was not forced to do so. It was assured that answering this questionnaire would not bring any harm to respondents as respondents were not asked to answer their names on questionnaire. Thus this questionnaire will bring no harm and no benefit to any respondent. This survey is conducted just to collect data for this research purpose only and it was openly clarified to all respondents before distributing questionnaires to them. The results of the survey will be opened for the public but no particular questionnaire will be open for public. The collection of data will take few days to be completed and after which graphs and charts will be made by the author to visually compare and contrast all the responses.

3.2 Reliability of Results

In order to generate the reliable results, the accuracy of collected data has been generated and estimated using computer program called as Statistical Package for Social Science (SPSS). This software is generally widely used for statistical analysis all around the globe. In order to do this, each question of the questionnaire and each answer choice will be coded in different letters and numbers representing different meaning. If any option is not been selected by any respondent, it will be coded zero (0). These codes will be then entered into the SPSS software to statistically analyse the data.

Selection of appropriate research methodology is very important in order to carry out a successful research. An inappropriate method may stuck the mind of researcher in the middle. Therefore before starting any practical research it is wisely advised to make a proper selection of research method most suited to the type of research one is going to carry out. Since there are lot of techniques available both in quantitative and qualitative research methods , one has to choose either quantitative method will be appropriate for the research type or the qualitative one and after making this selection, the next step will be to select the appropriate technique within desired research method (Kinnear & Gray (2009). The selection of appropriate research method is of utmost importance and normally it is done with the consultation of an expert. A person who is well versed in the research field is the one who can give proper guidance to individual(s) carrying out research. Any method selected then requires extra care needs to be designed as per research criteria. The questionnaire developed for the purpose of this study have been prepared after deep analysis of the situation and the topic to be studied, as it was important to highlight those factors which may affect the buying behaviour of purchasers, revolving to find out how luxury brands can act as ‘psychological armour’ to bring change in their buying behaviour. For this purpose different aspects of people’s buying behaviour has been considered and different personal values were analysed before designing this questionnaire. It was kept in mind that no minor important element should be left behind which could play role in motivating people to buy luxury brands.

The results of this study will be of equal importance to both luxury brand managers and to the buyers themselves. Luxury brand manager can take benefit from this study by redesigning their products advertisements concentrating on those elements which may highlight their luxury brands to people who are status conscious as discussed in this study. Purchasers can also be benefited from this study by analysing the pros and cons of the luxury brands and not going blindly on the string advertisements, modifying their buying behaviour thereby saving them from being cheated both in terms of loss of money on cheap quality products and from false promises of the luxury brands (Clunas, 1991). One need to buy things to satisfy their personal needs and the buying behaviour must be moulded in such a way that it accommodates only the functional features of the products rather than the social and materialistic features.

This study has deliberately ignored the income level of the respondents and this question has not been added to the questionnaire. The reason for doing so is that normally people having high income rates go for luxury brands and moderate or lower income level people try to prefer their local brands to fulfil their requirements. Although moderate or low income level people are equally concerned about their social image but for this they don’t want to waste their income and prefer family responsibilities over all such expensive luxury brands of any type as this has been highlighted in literature review. When it comes to family and relationships, the lower or moderate income people prefer to fulfil their responsibilities towards their loved ones rather than to waste money on luxury brands. This is the reason why top five universities of India having higher tuition fee have been selected for this research to look into the buying behaviours of that youth whose family income is higher than moderate level. This will bring a real study of the choices and preferences of people towards luxury brands and the effect luxury brands may bring in their lives when it comes to their social status.

3.3 Summary

This chapter has discussed the research methodology of the study, including the research process, sampling strategy, the data collection methods and the methods of data analysis. For the research approaches, the study adopted quantitative approaches to provide a fuller picture of the unit under study. As a result, a survey interview was chosen. The data were collected from both primary and secondary data. The primary data were collected from questionnaires surveys with such people normally range between 16-32 years of age. The Lickert scale was also taken in this study. Finally, by discussing the methods and reliability of data and it analysis concluded this chapter.

CHAPTER IV: FINDING AND ANALYSIS

In this chapter collected data will be analyzed using sampling method. Data has been collected from the students of educational institutions of India particularly universities and the age limit for the students have been fixed from 16-32 years. Students are of different education levels like Bachelor’s degree and Master’s degree. The statistical quantitative data have been collected after conducting survey from these students using specially designed questionnaire for this purpose. Age is the important component of demographic data and this has been asked from the respondents to mention their age as the survey is particularly designed for the youth of India. The attitude and perception of students about the luxury products and their purchasing behaviors have also been analyzed. People are also investigated about the preferences either they prefer luxury brands or not to clear the scenario for the study. Finally, the comparison and analysis of the survey will be given in the discussion to clear the picture for the readers. Below are the all tables and figures are showing the responses of the survey conducted from students of different educational institutions.

4.1 Descriptive Data

Table 4.1: The Frequency and Percentage of Respondents Profile by some Significant Factors on Luxury Brands

		Luxury Preference Person									Total
		Yes			No			Not Sure			Count	Col%
		Count		Col%	Count		Col%	Count		Col%
Education Level	Bachelor’s Degree	26	44.8		26	48.1		56	59.6		108	52.4
	Master’s Degree	32	55.2		28	51.9		38	40.4		98	47.6
Frequency of Purchasing Luxury Products	Once a Month	6	10.3					8	8.5		14	6.8
	Every 3 Month	24	41.4		12	22.2		22	23.4		58	28.2
	Every 6 Month	18	31.0		6	11.1		30	31.9		54	26.2
	Once a Year	10	17.2		36	66.7		34	36.2		80	38.8
Intend to Buy same Luxury Products Next Year	Yes	42	72.4		24	44.4		46	48.9		112	54.4
	No	16	27.6		28	51.9		42	44.7		86	41.7
	May be				2	3.7		6	6.4		8	3.9
Total		58	100		54	100		94	100		206	100

Source: Researcher (result from SPSS)

According Table 4.1, Education level of the people who have participated in this survey are Bachelor’s Degree (52%) and Master Degree (48%). But the luxury-preference people are majority of Master degree holders (55%) while non-luxury preference people have percentage of 51.9% which shows almost equal ratio.

Frequency of purchasing luxury brands showed that 39% youth of India purchase luxury brands once a year (39%), 26% youth purchase luxury brands every 6 months, 28% purchase every 3 months and 7% purchase luxury brands once in a month. 51.7% of people who have affinity to luxury preference purchase luxury products every 3 months, 82.7% of them purchase luxury brands every 6 months but the 66.7% of the non-luxury preference people purchase luxury brands once a year.

54% youth intend to purchase the same luxury brands again. 72.4% of luxury preference people showed tendency to purchase the same luxury brands but 51.9% of non-luxury preference youth don’t intend to purchase the same luxury brand repeatedly.

In short it can be concluded that the luxury preference people have the highest intention to attract towards luxury brands and they have the higher frequency and intention to buy the luxury products again and again.

Table 4.2: The Frequency and Percentage of Meaning Understood of Luxury by

Luxury Fondness Persons

		Luxury Preference Person						Total
		Yes		No		Not Sure		Count	Col%
		Count	Col%	Count	Col%	Count	Col%	Count	Col%
Meaning Understood of Luxury	Comfortable and prodigal items	22	37.9	16	29.6	22	23.4	60	29.1
	Expensive but have yearn	10	17.2	20	37.0	24	25.5	54	26.2
	Best quality items	14	24.1	8	14.8	26	27.7	48	23.3
	Very discriminating items	12	20.7	10	18.5	18	19.1	40	19.4
	Others					4	4.3	4	1.9
Total		58	100	54	100	94	100	206	100

Source: Researcher (result from SPSS)

The Table 4.2 shows the perception of youth about the meaning of Luxury where 29.1 % of youth think that luxury means comfortable and prodigal items, 26.2% youth think luxury is expensive but have yearn for it, 23% youth think luxury items means best quality items.

If we compare the luxury preference people with that of non-luxury preference people, then 37.9% of luxury preference people take luxury items as comfortable and extravagant items, 24.1% of them consider luxury items as best quality items while 20.7 % people take it as very special item.

Non-luxury preference people on the other hand have different minds set. It showed that 37% think luxury items are expensive but desire items and 29.6% of them think it as comfortable and profligate items.

As a conclusion from the above table, it is clear that there is a great difference of opinion about the meaning of luxury to both the luxury preference and non-luxury preference people.

4.2 Hypothesis Testing

The questionnaire consists of many types of questions having options to be selected by the respondent like checklists, range and scale answers etc. I have used different formulas to analyze the respondents’ answers.

4.2.1 Chi-Square Test

This is the statistical testing technique for the comparison of collected data for the hypothesis testing. Generally, Chi-square test is normally used to measure null-hypothesis. The main objective of this test is to find out that if there is any difference between the expected and observed data results (Chi-Square, n.d.)

4.2.2 Analysis of Variance Test (ANOVA)

This test is used to find out the difference between the means in groups or variables. If the null-hypothesis has no difference between means, it will be rejected and ignored while other hypothesis that has difference between mean value will be accepted or taken (Statsoft, 2010).

4.2.3 T- Test

This is the most widely used statistical testing method and this can easily be broadened to multiple conditions. This is used mostly in scientific research to examine the nature of two variables at a time to check either both of them are related to each other or not or there is some other level of association exists between them (Richard Lowry, 2010).

4.2.4 Pearson Correlation Test

This test is used to show the relevance between two variables. The most common correlation term is the Pearson Product Moment Correlation or in short Pearson’s Correlation (HyperStat, n.d.).

Hypothesis 1: There is relationship between the significant factors on luxury brands and purchasing behavior

Statistical Method: Chi-square Test

In order to obtain the accurate and reliable results, I used the Chi-square test. This test clarifies whether the person who prefers luxury brands has any connection with other factors like education and frequency of re-purchasing luxury brands. The results are summarized in the table 5.3

Table 4.3: The Chi-Square Test between Significant Factors on Luxury Brands and

Purchasing Tendency

Factors	Chi-square Value	df	Asymp. Sig (2-sided)
Education Level	3.665	2	0.160
Spending on Luxury brands	41.594	4	0.000
Intention to re-purchase same luxury brand	13.032	4	0.011

Source: Researcher (result from SPSS)

Table 4.3 shows the results from Chi-square test between significant factors and purchasing behavior of people. The significant level is 0.05 is used to compare with Asymp.Sig (2-sided). The results show that factor spending on luxury brands (0.000) and “Intentions of re-purchase of same product again” has value 0.011 which is less than 0.05 but have significant impact for buying luxury products.

Hypothesis 2: There is significant difference between Intention to buy luxury brands again and purchasing intension

Statistical Method: T-Test

Table 4.4: The T-Test Test between Intend to Buy Luxury Brands again and Purchasing Intension

Intention to buy luxury brand again		N	Mean	Std.Deviation	Std.Error Mean
Personal Intentions	Yes	156	2.8999	.60266	.04825
Personal Intentions	No	50	2.4530	.33987	.04806

Calculate t value:

		Leven’s Test for Equality of variances		T-Test for Quality of Means
		F	Sig.	T	df	Sig.(2-tailed)	Mean Difference	Std.Error Difference	95% Confidence Interval of Difference
									Lower	Upper
Personal Intentions	Equal Variances Assumed	16212	.000	4.990	204	.000	.4469	.08956	.27033	.62349
	Equal Variances not Assumed			6.562	149.520	.000	.4469	.08611	.31233	.58148

As per Table 4.4, the result of t-result from the intention to buy luxury brands again and buying behavior of the youth showed that Sig. (2-tailed) Equal Variance assume = 0.000 < 0.05 level of significance. So it can be said that there are differences between the intentions to purchase luxury brand.

Hypothesis 3: Difference between the Luxury brands preference persons and their purchasing intentions

Statistical Method: Analysis of Variance Test (ANOVA)

Table 4.5: The ANOVA Test between Luxury Brands Preference Person and Purchasing Behavior

	Sum of Squares	df	Means Squares	F	Sig.
Between Groups	15.043	2	7.521	28.029	.000
Within Groups	54.475	203	.268
Total	69.518	205

According to Table 4.5, the output from ANOVA between luxury brands preference person and purchasing intentions of Indian Youngsters shown that sig-value = 0.000 < 0.05 level of significance. So it can be concluded that at least one paired among luxury preference person (yes, no, not sure) towards purchasing intentions are different.

Hypothesis 4: There is difference between personal values and social recognition towards buying behavior

Table 4.6: The Person Correlations Test between Personal Values and Social Recognition towards Purchasing Intention

Luxury Preference Persons		Personal Intentions
Personal Intentions	Person Correlation	1
	Sig. (2-tailed)	.
	N	206
Personal Values	Person Correlation	.784**
	Sig. (2-tailed)	.000
	N	206
Social Recognition	Person Correlation	.961**
	Sig. (2-tailed)	.000
	N	206

**. Correlation is significant at the 0.01 level (2-tailed).

Non-Luxury Preference Person		Personal Intentions
Personal Intentions	Person Correlation	1
	Sig. (2-tailed)	.
	N	148
Personal Values	Person Correlation	.739**
	Sig. (2-tailed)	.000
	N	148
Social Recognition	Person Correlation	.945**
	Sig. (2-tailed)	.000
	N	148

**. Correlation is significant at the 0.01 level (2-tailed).

Overall Customers		Personal Intentions
Personal Intentions	Person Correlation	1
	Sig. (2-tailed)	.
	N	58
Personal Values	Person Correlation	.768**
	Sig. (2-tailed)	.000
	N	58
Social Recognition	Person Correlation	.961**
	Sig. (2-tailed)	.000
	N	58

**. Correlation is significant at the 0.01 level (2-tailed).

Source: Researcher (result from SPSS)

The Table 4.6 showed that the correlation of the two main indicators of purchasing intention of customers on luxury products. Personal values have significance relationship with the personal intention approximately 76.8% from the overall while highest on luxury preference person 78.4% which came higher in some amount than non-luxury preference person that is 73.9%. There is an effect of social recognition on purchasing luxury brands. The figure showed a significant effect on personal intention which is 96.1% overall. There is no exact difference from luxury preference person that is having a value 96.1%. In other case non-luxury preference person showed a value 94.5%. If we conclude an overall result, it can be said that that there is a strong relationship between purchasing intentions versus personal values and social recognitions for luxury products.

Hypothesis 5: There is a relationship between personal values and social recognition factors towards the need of purchasing intentions.

Table 4.7: The Person Correlation Test between Personal Values and Social Recognition Factors towards Purchasing Intention

Luxury Preference Person		Personal Intentions
Personal Intentions	Person Correlation	1
	Sig. (2-tailed)	.
	N	58
Ethnocentrism	Person Correlation	-.025
	Sig. (2-tailed)	.853
	N	58
Materialism	Person Correlation	.656**
	Sig. (2-tailed)	.000
	N	58
The Need for Uniqueness	Person Correlation	.382**
	Sig. (2-tailed)	.003
	N	58
Conformity	Person Correlation	.757**
	Sig. (2-tailed)	.000
	N	58
Vanity	Person Correlation	.600**
	Sig. (2-tailed)	.000
	N	58
Social Status	Person Correlation	.961**
	Sig. (2 tailed)	.000
	N	58

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the .0.5 level (2-tailed)

Non-Luxury Preference Person		Personal Intentions
Personal Intentions	Personal Correlation	1
	Sig. (2-tailed)	.
	N	148
Ethnocentrism	Personal Correlation	.215**
	Sig. (2-tailed)	.009
	N	148
Materialism	Personal Correlation	.418**
	Sig. (2-tailed)	.000
	N	148
The Need for Uniqueness	Personal Correlation	.378**
	Sig. (2-tailed)	.000
	N	148
Conformity	Personal Correlation	.499**
	Sig. (2-tailed)	.000
	N	148
Vanity	Personal Correlation	.550**
	Sig. (2-tailed)	.000
	N	148
Social Status	Personal Correlation	.945**
	Sig. (2-tailed)	.000
	N	148

**. Correlation is significant at the 0.01 level (2-tailed)

*. Correlation is significant at the 0.05 level (2-tailed)

Overall Customer		Personal Intentions
Personal Intentions	Person Correlation	1
	Sig. (2-tailed)	.
	N	206
	Sig. (2-tailed)	.907
	N	206
Materialism	Person Correlation	.567**
	Sig. (2-tailed)	.000
	N	206
The Need for Uniqueness	Person Correlation	.456**
	Sig. (2-tailed)	.000
	N	206
Conformity	Person Correlation	.650**
	Sig. (2-tailed)	.000
	N	206
Vanity	Person Correlation	.620**
	Sig. (2-tailed)	.000
	N	206
Social Status	Person Correlation	.961**
	Sig. (2 tailed)	.000
	N	206

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed)

Related to Table 4.7, it is correlation coefficient of 6 indicators on purchasing intentions of young Thai women related to luxury fashion products. Ethnocentrism does not have any relationship with personal purchasing intention overall and also there is no relationship on luxury preference person but there is a relationship in non-luxury preference person that is 21.5%.

Materialism: It has moderate relationship with personal intentions 56.7%. While it can also get affected on buying intentions for luxury preference persons 65.6% and non-luxury preference persons 41.8%.

Need for uniqueness: it has moderate-low relationship with persona intentions 45.6% while both of luxury preference persons and non-luxury preference persons have relationship of about 38%.

Conformity result showed that it has strongly effect on personal intension for the overall (65%). Out of which luxury preference persons have relationship in 75.7%, which is higher than non-luxury preference persons (49.9%).

Social Status: it has the highest relationship with personal intentions 96.1% same both for luxury preference and non-luxury preference persons.

Figure 4.1: Analysis Variables Relationships

Ethnocentrism

Materialism

Need for Uniqueness

Social Status

Education Level

Spending

Purchasing Frequency

Personal Values

Social Recognition

Demographic Information

Purchasing Intentions

Youth Luxury Definition Perception

Psychological Impact of Luxury Brands on People of South Asia

Source: The Researcher

The significant relationship between personal values and purchasing intentions for luxury brands of youth of Indians showed that buying luxury brands can express their values. The results showed that materialism, the need for uniqueness have strong significant values showing that these factors influence highly to Indian youth to buy luxury brands i.e. influence to purchase luxury brands. In other way these factors play positive role in purchasing luxury brands. The consumer ethnocentrism is not related with purchasing intentions showing that Indian youth always think that purchasing luxury brands from foreign countries is better and worth. But there are a few negative impact of importing foreign luxury brands. The results also showed that the personal values of Indian youth’s purchasing intentions towards luxury brands correlate with how they perceive the meaning of luxury. Many people perceive that luxury means Great comfort and profligate items. This whole analysis includes both luxury preference and non-luxury preference persons.

The relationship between social recognition and purchasing intentions towards luxury brands of Indian youth which the social status is a variable shows strong significant value. This suggested that Indian youth prefer to purchase luxury brands to symbolize their status. Both luxury preference and non-luxury preference persons of India consume luxury brands just for the face reason or to show off their wealth and affordability.

The results on demographic profiles show that Indian youth is the highest target for luxury brand managers. The spending and purchasing frequency have significant values with purchasing intentions towards luxury brands. Both luxury preference and non-luxury preference persons prefer to purchase luxury brands more than once in year and also occasionally repurchase these brands. However the education level doesn’t play any role with the purchasing intentions of the respondents.

Figure 4.2: Line Chart between Personal Values and Social Recognition and Types of Luxury Preference Persons

Source: Researcher (result from SPSS)

Table 4.3: Line Chart between Personal Values and Social recognition Factors and types of Luxury Preference Persons

Source: Researcher (result from SPSS)

4.3 Summary

This chapter explained the results of data analysis from interviews. First the summary of data collection methods and mode of selection were reported. Then the quantitative data from surveys were put and analyzed. In the survey data analysis section, the profiles of respondents were analyzed, namely gender, and age, using purpose, time of using, commonly used channels and their opinion about luxury brands. To ensure the selected scales of the main study are reliable, the reliability analysis of scale and various tests have been analyzed. Finally, all the analyzed data has been shown in various tables and this way concluded this chapter.

CHAPTER V: RECOMMENDATIONS AND CONCLUSION

This research is particularly beneficial to luxury brands marketers if they really want to know the buying intentions of South Asia particularly India which is going to be the largest market for the luxury brands in the near future. The information gained through this research shows the youth of India representing youth of South Asia.

In conclusion, we have already observed that there is a big difference in behavior between luxury preference people and those of non-luxury preference people especially in demographic distributions. There are many factors that influence the buying behavior of Indian youth in relation to luxury brands. Those factors must be taken into consideration by the luxury brand marketers in order to target the largest population in India which is the youth.

Based on demographic information, the most common factor that plays role in modifying the buying behavior of Indian youth is the “Frequency of purchasing luxury brands”. Other demographic factors like education level, age, pocket money or monthly income etc. doesn’t play any major role in shaping the buying behavior of Indian youth and those factors can be ignored while planning marketing strategies in this country by the luxury brand marketers. In other terms, these factors have no relationship with the buying intentions of South Asian people. For luxury preference people, they prefer to buy luxury brands every 3 months. Thus this is an indicator for the brand marketers that they should arrange promotion campaigns of their products every 3 months in order to increase their sales. Non-luxury preference persons on the other hand prefer to buy luxury bands once a year having lesser money to spend on luxury brands. Thus this result shows a lean towards supporting brand extension and will help in promotion of a sub-brand keeping the price lower in order to attract the non-luxury preference persons. For example the sub-brands include Marc by Marc Jacobs and See by Chole. Another recommendation for the brand marketers is to reschedule and annual brand campaigning strategy once a year to attract non-luxury preference people and concentration must be given to those brands which are highly popular among the youth.

Social status is particularly important indicator of social recognition variable towards the luxury brands purchasing intentions of Indian youth. This factor has strong correlation among Indian youth both for luxury preference persons and non-luxury preference persons and it acts as a psyche to purchase luxury brands. Luxury brand marketers should aim to build brand image incorporating and highlighting their brands and highest prestige and distinctive style and image in society. This would enhance the popularity of such luxury brands. Marketing communication should focus on the propagation of brand symbol as consumers who purchase luxury brands want social recognition, if luxury brands can fulfil their desire, all those brands will be successful in particular society.

Personal values indicators are categorized as materialism has strong level of significance except for ethnocentrism while The Need for Uniqueness only has moderate to low impact on purchasing intentions. Ethnocentrism has no relationship and effect on luxury brands purchasing intentions especially in India. Results show the Indian youth prefer to buy those brands which symbolize them. Thus the marketing communication should focus on advertising the brands symbolizing the wealth and high class. Such a marketing strategy will increase the social pressure, material interest on luxury brands purchasers who prefer these values.

Other surrounding factors also need to be incorporated in the marketing strategy after getting the perception of luxury from the Indian youth as for them the luxury means “Great comfort, Extravagant and best quality items”. From this perception, the buyers expect that the luxury brands come up with these conditions. Thus the luxury brand marketers should focus their attention towards this perception. When the buyers’ expectations are matched with the real results, they will be more satisfied by such brands and tend to re-purchase them and will prove their loyalty with such brands. But the expectations normally don’t match with the actual performance. Thus marketers should focus on both brand image and product quality in order to match the consumers’ expectation with the real outcome from the luxury brand.

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APPENDIXES

APPENDIX A:

LUXURY BRANDS AS A PSYCHOLOGICAL ARMOUR FOR SOUTH ASIAN PEOPLE QUESTIONNAIRE SURVEY

Dear Participants,

I am a MBA student from the University of Wales and I am currently conducting a research on “Luxury Brands as a Psychological Armour for South Asian People”. I would greatly appreciate if you could take a few minutes of your time to complete this questionnaire.

Thank you very much.

A - PARTICIPANT INFORMATION

Please answer the following question about yourself.

1. Education Level

( ) College Degree

( ) Bachelor’s Degree

( ) Master’s Degree

2. You age

( ) 16-18

( ) 18-20

( ) 20-22

( ) 22-25

( ) 25-28

( ) 28-30

( ) 30-32

3. Do you prefer luxury brands?

()Yes ()No

1. What does ‘luxury’ signify to you?

a. ( ) Comfortable and wasteful items

b. ( ) Expensive but un-required items

c. ( ) Best quality items

d. ( ) Very discriminating items

e. ( ) other (please specify …………………………)

4. How many times do you purchase luxury brands?

( ) Never

( ) Every month

( ) Every Three months

( ) Every Six months

( ) Once a year

5. Will you intend to buy the same luxury brands again?

( ) Yes ( ) No ( ) Maybe

6. Please answer to the questions as directed in the box below:

Strongly Disagree

Disagree

Uncertain/Neutral

Agree

Strongly Agree

MATERIALISM

People should always buy local products

Only those products should be imported to India which are unavailable in India

Local products doesn’t mean luxury product

Very less trading of goods must be there only when necessary

I respect people who own luxury and expensive products

I like to have things which impress and inspire others

I frequently buy things which I need only regardless of luxury in mind

I gain pleasure from buying luxury brands

DESIRE UNIQUENESS

I like to have my life filled with luxuries

I give less weightage to luxury products compared to others

Luxury is the mean to upgrade my life style

I always purchase luxury brands that others admire

I frequently view luxury brands as that inspiring people

I buy luxury products just to express that I am different from common people

I like to boost about me being unique

Luxury brands can express my personality in a better way

When a product gets very common I stop purchasing it

I want to look good and attractive

I must look best when I am around people otherwise I feel embarrassed

SOCIAL

I want appreciation from people around me always

I like to show my purchased luxury products to people

Luxury brands is a mean to show off for me

Is the luxury brand a status symbol for me

S T A T U S

Appendix B: SPSS Output

Reliability Test

Method 1 (space saver) will be used for this analysis

R E L I A B I L I T Y A N A L Y S I S -S C A L E (A L P H A)

Reliability Coefficients

No. of Cases = 206.0 No. of Items = 7

Alpha = .7564

Validity Test

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy		.799
Bartlett's Test of Sphericity	Approx. Chi-Square	247.019
	df	15
	Sig.	.000

Chi-Square Test

Education Level vs Luxury Preference

Chai Square Test

	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	3.665(a)	2	.160
Likelihood Ratio	3.678	2	.159
Linear-by-Linear Association	3.390	1	.066
N of Valid Cases	206

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 25.69.

Monthly Income vs Luxury Preference

Chi-Square Tests

	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	6.351(a)	4	.174
Likelihood Ratio	6.519	4	.164
Linear-by-Linear Association	4.667	1	.031
N of Valid Cases	206

a 2 cells (22.2%) have expected count less than 5. The minimum expected count is 4.19.

Spending vs Luxury Preference

Chi-Square Tests

	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	41.598(a )	4	.000
Likelihood Ratio	43.321	4	.000
Linear-by-Linear Association	19.740	1	.000
N of Valid Cases	206

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.29.

Parents’ income vs Luxury Preference

Chi-Square Tests

	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	9.220(a)	4	.056
Likelihood Ratio	8.939	4	.063
Linear-by-Linear Association	.125	1	.724
N of Valid Cases	206

a 2 cells (22.2%) have expected count less than 5. The minimum expected count is 3.15.

Frequency of purchasing vs Luxury Preference

Chi-Square Tests

	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	34.467(a)	6	.000
Likelihood Ratio	38.731	6	.000
Linear-by-Linear Association	3.776	1	.052
N of Valid Cases	206

a 2 cells (16.7%) have expected count less than 5. The minimum expected count is 3.67.

Intend to buy vs Luxury Preference

Chi-Square Tests

	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	36.489(a)	2	.000
Likelihood Ratio	38.834	2	.000
Linear-by-Linear Association	3.188	1	.074
N of Valid Cases	206

a 0 cells (.0%) have expected count less than 5. The minimum expected count is 13.11.

Re-purchase vs Luxury Preference

Chi-Square Tests

	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	13.032(a)	4	011
Likelihood Ratio	15.071	4	.005
Linear-by-Linear Association	8.484	1	.004
N of Valid Cases	206

a 3 cells (33.3%) have expected count less than 5. The minimum expected count is 2.10.

Purchasing Intentions versus purchasing frequency ANOVA

ANOVA

Personal Intensions

	Sum of Squares	df	Mean Square	F	Sig.
Between Groups	1.327	3	.442	1.311	.272
Within Groups Total	68.190 69.518	202 205	.338

Purchasing Intentions versus spending in one time ANOVA

ANOVA

Personal Intensions

	Sum of Squares	df	Mean Square	F	Sig.
Between Groups	1.327	3	.442	1.311	.272
Within Groups Total	68.190 69.518	202 205	.338

Purchasing Intentions versus intend to buy next year T-Test

Group Statistics

	Intend to buy Luxury Fashion Products Next Year	N	Mean	Std. Deviation	Std. Error Mean
*Personal Intensions*	Yes	156	2.8999	.60266	.04825
*Personal Intensions*	No	50	2.4530	.33987	.04806

Independent Samples Test

Levene's Test for Equality of Variances

t-test for Equality of Means

Sig.

Sig. (2-tailed

Mean Difference

Std. Error Difference

95% Confidence Interval of the Difference

Lower

Ipper

Personal Intensions

Equal variances assumed

16.212

.000

4.990

204

.000

.4469

.08956

.27033

.62349

Equal variances not assumed

6.562

149.520

.000

.4469

.06811

.31233

.58148

Purchasing Intentions versus continue to purchase the same brand ANOVA

ANOVA

Personal Intensions

	Sum of Squares	df	Mean Square	F	Sig.
Between Groups	.746	2	.373	1.100	.335
Within Groups Total	68.772 69.518	203 205	.339

Purchasing Intentions versus luxury preference person ANOVA

ANOVA

Personal Intensions

	Sum of Squares	df	Mean Square	F	Sig.
Between Groups	15.043	2	7.521	28.029	.000
Within Groups Total	54.475 69.518	203 205	.268

Information Fact

LUXURY BRANDS AS A PSYCHOLOGICAL ARMOUR FOR SOUTH ASIAN PEOPLE

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