The Value of Luxury: An Emerging Perspective

452 Pages·2020·5.056 MB·English

by  Beata Stępień

PALGRAVE ADVANCES IN LUXURY
The Value of Luxury
An Emerging Perspective
Beata Stępień
Palgrave Advances in Luxury
Series Editors
Paurav Shukla
Southampton Business School
University of Southampton
Southampton, UK
Jaywant Singh
Kingston Business School
Kingston University
Kingston Upon Thames, UK
Thefieldofluxurystudiesincreasinglyencompassesavarietyofperspec-
tives not just limited to marketing and brand management. In recent
times, a host of novel and topical issues on luxury such as sustain-
ability, counterfeiting, emulation and consumption trends have gained
prominence which draw on the fields of entrepreneurship, sociology,
psychology and operations.
Examining international trends from China, Asia, Europe, North
America and the MENA region, Palgrave Advances in Luxury is the first
series dedicated to this complex issue. Including multiple perspectives
whilst being very much grounded in business, its aim is to offer an inte-
gratedpictureofthemanagementenvironmentinwhichluxuryoperates.
Itexploresthenewer debatesrelatingtoluxuryconsumptionsuchasthe
signalsusedinexpressingluxury,thesociallydivisivenatureofluxuryand
the socio-economic segmentation that it brings. Filling a significant gap
in our knowledge of this field, the series will help readers comprehend
the significant management challenges unique to this construct.
All submissions are single blind peer reviewed. For more information
onourpeerreviewprocesspleasevisitourwebsite:https://www.palgrave.
com/gp/book-authors/your-career/early-career-researcher-hub/peer-rev
iew-process.
For information on how to submit a book proposal for inclu-
sion in this series please contact Liz Barlow: [email protected].
For further information on the book proposal process please visit
our website: https://www.palgrave.com/gp/book-authors/publishing-gui
delines/submit-a-proposal.
More information about this series at
http://www.palgrave.com/gp/series/15396
Beata Ste˛pien´
The Value of Luxury
An Emerging Perspective
Beata Ste˛pien´
Poznan´ University of Economics and Business
Poznan´, Poland
ISSN 2662-1061 ISSN 2662-107X (electronic)
Palgrave Advances in Luxury
ISBN 978-3-030-51217-0 ISBN 978-3-030-51218-7 (eBook)
https://doi.org/10.1007/978-3-030-51218-7
©The Editor(s) (if applicable) andThe Author(s), under exclusive license to Springer Nature
Switzerland AG 2021
This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher,
whetherthewholeorpartofthematerialisconcerned,specificallytherightsoftranslation,reprinting,
reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical
way,andtransmissionorinformationstorageandretrieval,electronicadaptation,computersoftware,
or by similar or dissimilar methodology now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publicationdoesnot imply,evenintheabsenceof aspecific statement,thatsuch namesareexempt
from the relevant protective laws and regulations and therefore free for general use.
Thepublisher,theauthorsandtheeditorsaresafetoassumethattheadviceandinformationinthis
book are believed to be true and accurate at the date of publication. Neither the publisher nor the
authors or the editors give a warranty, expressed or implied, with respect to the material contained
herein or for any errors or omissions that may have been made.The publisher remains neutral with
regard to jurisdictional claims in published maps and institutional affiliations.
Cover illustration: MirageC/Moment/Getty Images
This Palgrave Macmillan imprint is published by the registered company Springer Nature
Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Acknowledgements
ThisbookistheresultofaprojectfinancedbythePolishNationalCentre
of Science (DEC-2013/11/B/HS4/01484).
v
Introduction
Since the early 1990s the production and sale of luxury goods in the
world has been growing rapidly. The main force behind this impressive
growth has been the so-called new, fast-growing luxury markets: a group
of aspiring consumers from emerging economies led by China (see e.g.
Delloite2019;KPMG2019;Bain2020).Chineseconsumers’purchases
have already exceeded the annual sales value of the USA, a country
that for decades has been the leading market for luxury consumption.
TodaywhentheluxurybusinesshasbeensufferingfromtheCOVID-19
pandemic with more than 30 percent drop in sales in comparison with
thefirstquarterof2019(seeBain2020)everybody’seyesaresetonChina
and new luxury markets as these can help to speedily make up losses.
The increase in demand from aspiring consumers mainly from gener-
ation Y (the so-called Millennials) is leading to the extension of the
production of goods and services to the lowest level of the luxury
pyramid.Itisgoodsproducedwithinsupplychainsdispersedworldwide
and offered on a large scale, at relatively low (for luxury goods) prices
that drive the luxury market today. Strategies to expand segments and
extend brands are aimed at maintaining a global group of consumers
vii
viii Introduction
who, as wealth increases, buy more expensive products from the higher
levels of the luxury pyramid (Vigneron and Johnson 2004; Okonkwo
2007; Kastanakis and Balabanis 2014).
We are therefore faced with a global wave of the democratization of
luxury and new target groups. Their expectations may be high (due to
high professional and social aspirations) but different from the expec-
tations of the previous, traditional group of luxury consumers living in
matureeconomies.Newaspiringconsumersareyoungerandlesswealthy
thanthosefromWesternEuropeortheUSAandliveincountriesthatare
economically, institutionally and culturally diverse (Shukla and Purani
2012). Empirical research focusing on the perception of luxury or atti-
tudestowardsluxurybrandsinrelationtothegroupofso-calledaspiring
consumers,focusesprimarilyontheanalysisofthebehaviourofChinese
consumers, which is understandable because of their importance for the
growthofthismarket.NeverthelessChinaisnottheonlycountrywhere
demand for luxury is growing rapidly and research findings so far clearly
showthatthenewglobalconsumergroupisheterogeneousinthepercep-
tion of luxury. This book attempts to empirically examine what is the
perception of luxury goods by consumers in emerging luxury markets
(Poland, Turkey, Saudi Arabia, India and Portugal) and what factors
(market,socio-demographic,economic,psychographic)differentiatethis
perception in terms of the values they symbolize in comparison with
consumersintheso-calledoldcradlesofluxury(Germany,France,USA,
etc.).
However the luxury business is still universal and global. Standard-
ized goods are sold with the use of globally selective distribution chains,
mainly situated in first-order cities around the world (Liu et al. 2016;
Moore et al. 2000; Kapferer et Bastien 2009b). The high mobility of
luxury consumers additionally legitimizes universal marketing strategies.
The demographic, economic and market diversity of new consumers
in relation to existing groups of buyers from the “old luxury base”,
combined with the observed democratization of luxury, raises the
following questions:
Introduction ix
1.What is the hierarchy of luxury value components for consumers in
luxuryrisingmarketsandwhatarethemostinfluentialfactorsshaping
this perception?
2.How creation, communication, distribution and monetization of the
value proposition by companies influences the consumers’ perception
of luxury?
3.Who creates the value of luxury according to consumers and compa-
nies from within the luxury business segment?
4.What are the marketing and business consequences of the trans-
formation of luxury business models and the growing discrepancy
between what is proposed, communicated/expected and then received
by consumers?
The book reviews first and foremost the perspective of aspiring
consumers from new luxury markets: their perception of the value of
luxury is examined. However the analysis from a consumer perspective
wouldbeincompleteandflawedifitwerenotcontrastedwithadescrip-
tion of luxury as a global business and a demonstration of how compa-
nies create, communicate, distribute and monetize a value proposition
for consumers within a value system.
As both value and luxury are individually and socially constructed
terms the book utilizes the achievements of philosophy, sociology, social
psychology and economic sciences to describe these constructs as fully
as possible. In order to provide a comprehensive presentation of how
consumers perceive luxury (from the point of view of the value it
provides)andthepremises,manifestationsandconsequencesofthisvalu-
ation,thebookrecallsanddiscussestheresultsofresearchpublishedelse-
where and the author’s own empirical research on the perception of the
value of luxury.
The author’s own research was conducted using a mixed research
methodology combining the quantitative (an international survey
conductedwiththeuseofanelectronicquestionnaireaddressedtoluxury
consumers in twenty countries with more than 1400 responses) as well
as qualitative research: interviews with consumers (individual and focus
group interviews), representatives of companies offering luxury goods
x Introduction
and research in the form of so-called mystery shopping aimed at luxury
fashion retailers.
Thebookconsistsofthreepartsandeightchapters.Figure1showsthe
connections between the parts, the relevance of the individual chapters
to specific parts and the logic of the argument.
Fig. 1 Book structure. (Source Own calculations)