Luxuriousness of Prestige Brands and Effects of Marketing Mix
Authors:   Asia-Europe Perspective Association, Kim Jieun , K. Johnson Kim 
Published: June 2018

Consumers’ belief about how luxurious a specific prestige brand is, influences consumer’s behaviors. To manage the perceived luxuriousness of a brand, marketers of a prestige brand may adopt a variety of marketing actions such as advertising, managing their store environment, conducting promotions, and so forth. In order to build efficient and effective marketing programs, a prestige brand company needs to know how their marketing programs contribute to consumer’s perceptions of their brand. Therefore, our first research question is: “How do the marketing programs of existing prestige brands affect consumer’s perceptions of the luxuriousness of the brand?” In addition, understanding consumer’s behavior is essential for marketers to make strategic and tactical decisions about specific marketing actions. Considering that there are two luxury consumer groups (i.e., the elitists vs. the democratics) who show a different attitude toward a luxury good, a question as to whether applying the same marketing strategies to shape perceptions of the luxuriousness of a brand is effective across these two consumer groups was raised. This reasoning led to the second research question; “do both groups respond similarly to a marketing program or does the program have to be customized for each group?” In order to investigate the research problems, we adopted the modified BLI scale (Kim & Johnson, 2015) to measure the perceived luxuriousness of a prestige brand and a scale to measure consumer perceptions of the five marketing mix elements(i.e., price, store image, distribution intensity, advertising expenditures, and price promotions) developed by Yoo et al.(2000). The modified BLI scale has five dimensions (i.e., quality, extended-self, hedonism, accessibility, tradition).
Online survey was conducted in USA to collect data. 253 responses were used in analysis. MANOVA was conducted to assess if perception about each marketing mix element influenced components of perceived luxuriousness (i.e., quality, extended-self, hedonism, accessibility, and tradition). And ANOVA was used to investigate whether the influence of price, distribution intensity, and price promotions on overall perceived luxuriousness would be moderated by consumers’ attitude toward luxury (i.e., elitist, democratic).
As a result, four marketing mix elements (i.e., price, store image, distribution intensity, and frequency of price promotion) influenced perceived luxuriousness. Only advertising expenditure did not have significant effect on perceived luxuriousness. More specifically, price and distribution intensity influenced all the dimensions of perceived luxuriousness (i.e., consumers’ perception about quality, extended-self, hedonism, accessibility, tradition). In addition, the findings regarding the role of attitudes toward luxury indicated that there are at least two types of consumer groups within luxury market who view luxury brands differently. The impact of the marketing mix elements on perceived luxuriousness of a prestige brand was different for these two groups. The elitists seem to consider high price as a very important attribute of a prestige brand thus they are highly influenced by price when evaluating the luxuriousness of a prestige brand in contrast to the democratic luxury consumer. This result is consistent with researchers (Dubois et al., 2005) who demonstrated there were two different attitudes toward luxury. Dubois and his colleagues (2005) showed that the elitists agreed with the idea that luxury is inevitable expensive while the democratics did not agree.
However, frequent offers of price promotions eroded the degree of luxuriousness for both the elitists and the democratics. The reason why both groups may have had the same attitude toward price promotion —negative effect on perceived luxuriousness—may be because price promotions suggest unstable quality (Winter, 1991).