As Korean market for luxury fashion goods enters into maturity stage and its growth rate slows down with increasing consumption of new luxury goods and contemporary fashion items, existing luxury fashion brands reach a stagnant phase. Under these circ...
As Korean market for luxury fashion goods enters into maturity stage and its growth rate slows down with increasing consumption of new luxury goods and contemporary fashion items, existing luxury fashion brands reach a stagnant phase. Under these circumstances, major luxury fashion brands are actively engaged in marketing campaigns to solidify their identity which is their brand essence and target message and to deliver it to their consumers. Luxury goods are the most representative high-involvement products with personal, social and symbolic significance, and luxury fashion brand is established through interactions amongst brand, consumers and social groups. Accordingly, it would be very important to understand the brand identity as a corporate strategy and various dimensions and elements of luxury fashion brand identity perceived by consumers at the brand-consumer interface. It would be also meaningful to have an in-depth study on brand identity with unique characteristics of luxury fashion products. As the identity of luxury fashion brand is differently perceived depending on motivation for luxury consumption and fashion lifestyle as psychological and social characteristics of individual consumers, and the perceived brand identity can have an influence on the willingness to pay a price premium which is consumers’ strong brand loyalty, the causal relationship among relevant variables have been examined. To identify the elements of luxury fashion brand identity, in-depth interviews were conducted with five experts engaged in global luxury fashion brands who have sufficient expertise knowledge based on 17 to 22 years of experience in the luxury fashion brand management. Main survey to verify the causal relationship among relevant variables was conducted during the period from June 15 to July 5, 2015 targeting women aged in their 20s to 40s in Seoul and Metropolitan area who had purchased luxury fashion products within recent two years. 407 copies of the questionnaire were distributed and 339 copies were used for the final outcome analysis with 68 copies uncollected or excluded for improper responses.
The outcome of the study is summarized as follows. First, based on the brand identity theory, document review on luxury fashion products and in-depth interviews with experts, a measuring tool for brand identity was developed in consideration of the distinct characteristics of luxury fashion goods. Also, the elements constructing the brand identity perceived at the brand-consumer interface were reviewed. Six elements have been identified: product excellence, originality, creativity and innovation, cultural trust, scarcity and reputation and social projection. Among these elements, product excellence and originality are realistic and tangible elements and they refer to a signature with physical excellence and unique spirit and individuality of the brand. Perceived creativity and innovation, cultural trust, and scarcity and reputation are at the dimension of culture and relationship as multi-dimensional intangible elements, perceived at the brand-consumer interface, and social projection represents a symbol at social dimension that the brand intends to deliver.
Second, intrinsic motivation for luxury product consumption turned out to have an influence on various dimensions of the identity, and the survey showed that it affected all elements in the order of scarcity and reputation, cultural trust, social projection, originality, product excellence and creativity and innovation. As the inherent motivation for luxury consumption was stronger, the perception of culture and relationship dimension was higher.
Third, extrinsic motivation for luxury goods consumption had a negative impact on product excellence and originality. If consumers were more self-conscious, wanted social acknowledgement and sympathy and had stronger motivation to express their economic and social status, their perception of the brand’s factual dimension was low.
Fourth, fashion-oriented lifestyle had an impact on creativity and innovation, social projection, cultural trust, product excellence and scarcity and reputation in that order. If consumers were more conscious of the trend and fashion was a high priority in their life, the perception of culture and relationship and social symbol dimension was high.
Fifth, self-enjoyment lifestyle had a positive effect on originality, social projection and cultural trust. With clear view on fashion and stronger tendency for self-presentation, perception of realistic dimension and social symbol was high.
Sixth, various dimensions of the perceived luxury fashion brand identity had an influence on willingness to pay a price premium. Scarcity and reputation, social projection, cultural trust and creativity and innovation affected the willingness to pay a premium. On the other hand, originality and product excellence did not have an influence. Perception of realistic dimension which is an extrinsic clue to surface and sign of the brand identity had no causal relationship with the willingness to pay a price premium. Meanwhile, brand loyalty to pay a premium was formed based on the dimension of culture and relationship and social symbol perceived at the brand-consumer interface.
Seventh, the causal relationship among motivation for luxury product consumption, fashion lifestyle, perceived luxury fashion brand identity and willingness to pay a premium was verified among high/low income groups. In the high income group, extrinsic motivation for luxury consumption had higher impact on perception of creativity and innovation than in the mid/low income groups. Fashion-oriented group with high income showed higher perception level of product excellence. While high income group had higher perception of cultural trust, mid and low income groups showed higher awareness of scarcity and reputation, showing the willingness to pay a price premium.
Through this study, structure and elements
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