UNDERSTANDING AND MEASURING LUXURY VALUE: A MULTIDIMENSIONAL MODEL OF CONSUMERS' LUXURY PERCEPTION.

Introduction Past research efforts on the luxury product market have analyzed the consumption behavior of the affluent consumers (e.g., Veblen 1899; Stanley 1988, 1989; Hirschman 1988), the luxury brands (e.g., Dubois and Duquesne 1993a; Andrus et al. 1986), the determinants of the acquisition of the luxury products (e.g., Mason 1993; Dubois and Laurent 1993; Dubois and Duquesne 1993b), the cross-cultural comparison of attitudes toward the luxury concept (Dubois and Laurent 1996; Dubois and Paternault 1997), and the comparison of motivations between Asian and Western societies (Wong and Ahuvia 1998). However, there is currently little agreement about the dimensions that constitute the luxury value of products in the customer's perception. Nevertheless, a review of the existing literature on luxury shows that, in comparison with personal aspects, social and interpersonal orientation dominates luxury-related research. A comprehensive model, which includes all relevant dimensions, is still lacking. Against this background this paper is focused on understanding what is in the consumers' perspective meant by "luxury." By developing a multi-dimensional conceptualization, which encompasses financial, functional, individual, and social value components, it aims at identifying and conceptualizing the dimensions which influence the consumers' individual perception of luxury value. Literature Review In the literature on luxury, a concept of exclusivity or rarity is well documented (Pantzalis 1995). Luxury brands can be defined as those whose price and quality ratios are the highest of the market (McKinsey 1990) and even though the ratio of functionality to price might be low with regard to certain luxury goods, the ratio of intangible and situational utility to price is comparatively high (Nueno and Quelch 1998). Therefore, luxury brands compete on the ability to evoke exclusivity, brand identity, brand awareness, and perceived quality in the consumers' perspective (Phau and Prendergast 2000). Thus, a definition of luxury should not follow a narrow but rather an integrative understanding of the luxury concept, as luxury is a subjective and multidimensional construct. With regard to the motives for consumption of luxury brands, existing research demonstrated that behavior varies between different people depending on their susceptibility to interpersonal influence (Bourne 1957; Mason 1981; Bearden and Etzel 1982; Horiuchi 1984; Bushman 1993; Pantzalis 1995). To explain consumers' behavior in relation to luxury brands, apart from interpersonal aspects like snobbery and conspicuousness (Leibenstein 1950; Mason 1992), personal aspects such as hedonist and perfectionist motives (Dubois and Laurent 1994) as well as situational conditions (e.g., economic, societal, political factors, etc.) have to be taken into consideration (Vigneron and Johnson 1999, 2004). Referring to personal and interpersonal oriented perceptions of luxury, it is expected that different sets of consumers would have different perceptions of the luxury value for the same brands, and that the overall luxury value of a brand would integrate these perceptions from different perspectives. Construct Definition Following a comprehensive understanding of the luxury construct, all relevant actual and potential value sources of the consumer's luxury perception should be integrated into one single model. Pointing to the fact that luxury value lies in sociality and individuality as well as in functionality and financial aspects, it is important to synthesize all relevant cognitive and emotional value dimensions in a multidimensional model.… [ABSTRACT FROM AUTHOR]