Consumer Behavior in Green Marketing for Luxury Brand: A Cross-Cultural Study of US, Japan and Korea

Abstract This study proposes and tests an integrative model to examine the relations among luxury brand value, brand image, customer satisfaction with green marketing activities, brand attitude and purchase intention. The subjects selected for the present study were undergraduate and graduate students residing in New York, US; Tokyo, Japan; and Seoul, Korea. And in order to help consumers more simply understand the investigation, the present study limited the research brand to Louis Vuitton. The survey was conducted in winter 2009–10, collecting 200, 121 and 203 questionnaires from US, Japan and Korea, respectively. First, the results of SEM analysis involving all the consumers (524 persons) show that all the hypotheses are significant. That is, luxury brand value has positive effect on luxury brand image, and luxury brand image has positive effect on satisfaction with green marketing activities for luxury brand. Significant luxury brand values in green marketing are product integrity, preference for luxury, and specialty, and that such images of luxury brand as honesty, professionalism for luxury, social contribution and high-quality have direct and positive effect on satisfaction with green marketing activity. Since all the factors of green marketing 4P's mix are shown to be statistically significant, it is considered necessary to establish an appropriate strategy for individual marketing mix. Second, the results of SEM analysis involving consumers in US, Japan and Korea, respectively, show that all the hypotheses except one hypothesis “green marketing satisfaction→purchase intention” are significant. It is found that in the case of the consumers in US, the influence of green marketing activities for luxury brand on the improvement of brand attitude and purchase intention is relatively less compared to the cases of consumers in Japan and Korea. Rather, there is strong influence between personally perceived brand value and brand image, and the reason is that US is characterized as probably the best example of the individualist ideology (Lodge, 1990). This is in line with the result of a preceding research that consumers in US estimated a brand highly when the brand provided high profitability and productivity, which are the main responsibilities of the firm, rather than CSR activities. In addition, luxury brands’ marketers should pay attention to the result that in all the three countries green marketing satisfaction has no direct effect on the increase of purchase intention, but indirect effect through the improvement of brand attitude. For there are so many cases where although consumers have high interests in and positive attitudes toward environmentally concerned products, yet such interests and positive attitudes do not lead to purchase. There could be many reasons for attitude toward environmentally concerned products being not in accordance with purchase. One of the reasons is that consumers do not have high confidence in environmentally concerned products and it is not easy to induce consumers’ choice only by the character of being environmentally concerned (Peattie, 2002). It is highly probable that consumers consider not just physical properties of environmentally concerned products but also the values they consider important, while each product has unique consumption values that can have effect on the purchase of and satisfaction with that product (Sheth et al., 1991); therefore it is very important to investigate the values consumer consider important. Accordingly, the results of the present investigation into significant factors of SEM using luxury brand values would be valuable to be utilized as basic data for green marketing for luxury brand. The result of multi-group analysis also shows that there is no significant difference in SEM among US, Japan and Korea. Third, there are significant differences between green consumers and non-green consumers in SEM of green marketing for luxury brands. In case of non-green consumers, green marketing satisfaction has no direct effect on the improvement of purchase intention, and the effect is very low; on the contrary, in case of green consumers, green marketing satisfaction has direct and positive effect on the change in purchase intention. Thus, considering that there certainly exist submarkets of green consumers (Coddington, 1993) and that such markets are expanding more and more, it is necessary to segment consumers who have environmentally concerned propensity, to make categorized targets of them, in order to maximize the effect of green marketing in luxury brand. Fourth, there are significant differences between the group of low purchase frequency of luxury goods and the group of high purchase frequency of luxury goods in SEM. In case of the group of low purchase frequency of luxury goods, all the research hypotheses are adopted; whereas the group of high purchase frequency of luxury goods luxury products shows no significant effect of green marketing satisfaction on purchase intention, and the estimate is negative although not statistically significant. In addition, since the impact on the improvement of purchase intention caused by the effect of the improvement of brand attitude is low, it could be expected that green marketing will be more effective for entry customers than for regular customers of luxury brand. The results offered information on luxury brand's green marketing and provided useful data for luxury brands that are planning to begin green marketing, particularly targeting American, Japanese and Korean consumers similar to the sample of the present study. Considering that there is no significant difference in the SEM of this research among US, Japan and Korea, but that environmentally concerned consumption behavior and luxury product purchase behavior have the moderating effect, it is understood that consumers’ responses to green marketing for luxury brand depend on consumption type rather than nationality. This may be interpreted as the result of the characteristic of luxury brands being reflected in green marketing also-the characteristic that most of them are global brands and in many cases standardizing strategies are used for global consumers. Considering the results of this study along with the fact that homogeneous marketing of luxury brand is being practiced regardless of nationality, it would be necessary, when establishing green marketing strategy, for marketers of luxury brand to pursue targeting based on consumers’ environmentally concerned propensity or luxury product purchase frequency rather than to subdivide consumers by nationality.