The Creation of the Extraordinary: Perspectives on Luxury (Applied Marketing Science / Angewandte Marketingforschung) 3658295376, 9783658295370

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Applied Marketing Science / Angewandte Marketingforschung

Hannes Gurzki

The Creation of the Extraordinary Perspectives on Luxury

Applied Marketing Science / Angewandte Marketingforschung Series Editors Dieter Ahlert, Münster, Germany Christof Backhaus, Newcastle, UK Markus Blut, Newcastle, UK Christian Brock, Rostock, Germany Andreas Eggert, Paderborn, Germany Heiner Evanschitzky, Birmingham, UK Ina Garnefeld, Wuppertal, Germany Josef Hesse, Münster, Germany Hartmut H. Holzmüller, Dortmund, Germany Gopalkrishnan R. Iyer, Boca Raton, USA Lou Pelton, Denton, USA Jan Hendrik Schumann, Passau, Germany Arun Sharma, Miami, USA Florian von Wangenheim, Zürich, Switzerland David M. Woisetschläger, Braunschweig, Germany Nancy Wünderlich, Paderborn, Germany

The book series “Applied Marketing Science / Angewandte Marketingforschung” is designated to the transfer of top-end scientific knowledge to interested practitioners. Books from this series are focused – but not limited – to the field of Marketing Channels, Retailing, Network Relationships, Sales Management, Brand Management, Consumer Marketing and Relationship Marketing / Management. The industrial focus lies primarily on the service industry, consumer goods industry and the textile / apparel industry. The issues in this series are either edited books or monographs. Books are either in German or English language; other languages are possible upon request. Book volumes published in the series “Applied Marketing Science / Angewandte Marketingforschung” will primarily be aimed at interested managers, academics and students of marketing. The works will not be written especially for teaching purposes. However, individual volumes may serve as material for marketing courses, upper-level MBA- or Ph.D.-courses in particular. Prof. Dr. Dieter Ahlert, Universität Münster, Deutschland Prof. Dr. Christof Backhaus, Newcastle University, UK Prof. Dr. Markus Blut, Newcastle University, UK Prof. Dr. Christian Brock, Universität Rostock, Deutschland Prof. Dr. Andreas Eggert, Universität Paderborn, Deutschland Prof. Dr. Heiner Evanschitzky, Aston Business School, UK Prof. Dr. Ina Garnefeld, Universität Wuppertal, Deutschland Dr. Josef Hesse, Münster, Deutschland Prof. Dr. Hartmut H. Holzmüller, Technische Universität Dortmund, Deutschland Prof. Dr. Gopalkrishnan R. Iyer, Florida Atlantic University, USA Prof. Dr. Lou Pelton, University of North Texas, USA Prof. Dr. Jan Hendrik Schumann, Universität Passau, Deutschland Prof. Dr. Arun Sharma, University of Miami, USA Prof. Dr. Florian von Wangenheim, ETH Zürich, Schweiz Prof. Dr. David M. Woisetschläger, Technische Universität Braunschweig, Deutschland Prof. Dr. Nancy Wünderlich, Universität Paderborn, Deutschland

More information about this series at http://www.springer.com/series/12293

Hannes Gurzki

The Creation of the Extraordinary Perspectives on Luxury With a foreword by Prof. Dr. David Woisetschläger

Hannes Gurzki Braunschweig, Germany Dissertation Technische Universität Braunschweig, 2018

ISSN 2627-1982 ISSN 2627-2008  (electronic) Applied Marketing Science / Angewandte Marketingforschung ISBN 978-3-658-29537-0 ISBN 978-3-658-29538-7  (eBook) https://doi.org/10.1007/978-3-658-29538-7 © Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, 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 publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this 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. This Springer Gabler imprint is published by the registered company Springer Fachmedien Wiesbaden GmbH part of Springer Nature. The registered company address is: Abraham-Lincoln-Str. 46, 65189 Wiesbaden, Germany

Foreword

The dissertation of Dr. Hannes Gurzki, “The Creation of the Extraordinary – Perspectives on Luxury,” deals with the understanding of luxury. The luxury market has been growing rapidly for years, and many well-known luxury brands are among the strongest brands ever. Against the backdrop of the increasing economic relevance of luxury products and services, this dissertation examines the phenomenon of luxury from various angles and addresses three key research objectives. The first objective is to provide a broad review of the existing research and perspectives within the luxury field. The author presents the multidisciplinary state of research in the form of a bibliometric citation analysis and derives a conceptual framework of luxury research from it. This study provides a comprehensive overview of luxury research across different disciplines and shows how luxury research has evolved over the last decades. Dr. Gurzki develops a holistic framework of luxury research, mapping the different levels of disciplines and topics. The second objective of this thesis is to delineate the diverse perspectives on luxury and show how they illuminate different aspects of the concept. The author traces the historical development of the concept of luxury from antiquity to the present and clarifies the peculiarities of different perspectives on luxury. The different perspectives illuminate the luxury phenomenon in its complexity and contribute to the derivation of practices for the management of luxury brands. The third objective of the dissertation is to shed light on the creation of the meaning of luxury brands. Dr. Gurzki examines how desirability is created in luxury brand communication and contrasts this with mass and premium brand advertisements. A key finding of this research is that luxury brand communication differs significantly from premium and mass brand communication by higher levels of enrichment, the use of distancing techniques, and a higher level of abstraction. This study highlights key differences in luxury brand communication and provides valuable implications for luxury brand communication and the theoretical understanding of the creation of desire. V

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Foreword

With his dissertation, Dr. Hannes Gurzki has made a substantial contribution to the field of luxury that is highly likely to be well received. I wish this worth-reading dissertation a broad dissemination and good reception on the part of science and practice. Univ.-Prof. Dr. David M. Woisetschläger

Preface from the author

Luxury deals with the creation of the extraordinary. The time of my doctorate was the extraordinary opportunity to dedicate myself to the research of the principles of luxury creation. I would like to thank everyone who made this possible. Above all, I would like to thank Prof. Dr. David Woisetschläger as my academic teacher, who has always supported me in my academic development and our research projects. My thanks also go to Prof. Dr. Christof Backhaus for taking over the second opinion and for collaborating in earlier projects. Also, I would like to thank Prof. Dr. Heinz Ahn for taking on the role of the third examiner. This project would not have been possible without great colleagues. Therefore, I would like to thank our team at the Chair of Service Management at the TU Braunschweig. I would also like to thank our Berlin research hub and all my companions, who motivated and supported me in my research projects. Special thanks go to Dr. Antonella Mei-Pochtler for our inspiring discussions and Nadia Schlatter for her support in one of our research projects. My greatest thanks go to my family and friends who have accompanied me on this journey, especially my wife Debora, my parents, and my parents-in-law. Special thanks go to Mirjam, Joachim, Jan, Sreejita, Daniel, Ashok, and Carmen. You have made the time extraordinary for me! This book is dedicated to you. Berlin, October 2019 Hannes Gurzki

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Table of Contents Table of Contents Table of Contents

A Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A.1 Relevance of the Luxury Topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A.2 The Value of a Theory of Luxury and the Contribution of This Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A.3 Structure and Contribution of This Thesis . . . . . . . . . . . . . . . . . . . . . . . .

1 1 5 7

B The State of Luxury Research: A Bibliometric Citation Analysis . . . . . . . . 9 B 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 B.2 Literature Reviews and Bibliometric Citation Analysis . . . . . . . . . . . . 11 B.2.1 Search Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 B.2.2 Methods and Tools Used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 B.2.3 Analysis of the Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 B.3 Analysis of the Key Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 B.3.1 Analysis of the Key Publications . . . . . . . . . . . . . . . . . . . . . . . . . . 16 B.3.2 Analysis of the Network-Structural Properties . . . . . . . . . . . . . . 18 B.4 Co-Citation Network and Research Clusters . . . . . . . . . . . . . . . . . . . . . 21 B.4.1 Analysis within Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 B.4.2 Analysis between Clusters and Development over Time . . . . . 33 B.5 Development of an Integrative Framework . . . . . . . . . . . . . . . . . . . . . . . 35 B.5.1 Conceptual Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 B.5.2 Recent Developments in Luxury Research Field . . . . . . . . . . . . 42 B.6 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 B.6.1 Limitations of this Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 B.6.2 Practical Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

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C A Brief History of Luxury and Consumption . . . . . . . . . . . . . . . . . . . . . . . . C.1 The Beginnings of Luxury: Politics and Morality . . . . . . . . . . . . . . . . . C.2 Luxury and Modernity: The Rise of Commerce and Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.3 Luxury in the Nineteenth and Early Twentieth Centuries: The Emergence of a Consumer Society . . . . . . . . . . . . . . . . . . . . . . . . . . C.4 Luxury in the Late Twentieth and Early Twenty-first Centuries: The Age of Brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.5 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49 49 50 55 57 61

D Perspectives on Luxury: An Integrative Model . . . . . . . . . . . . . . . . . . . . . . . 63 D.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 D.2 Starting Point and Conceptual Frame: The Pragmatic Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 D.3 The Material Perspective: A Rare and a Refined Quintessence . . . . . . 70 D.3.1 The Object: A Quintessence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 D.3.2 The Creation: Qualitative Refinement . . . . . . . . . . . . . . . . . . . . . 72 D.4 The Philosophical Perspective: Desire . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 D.4.1 The Motivation: Creating Desire and Fueling the Imagination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 D.5 The Cultural Perspective: The Magical and Sacred . . . . . . . . . . . . . . . . 79 D.5.1 Luxury: Cultural Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 D.5.2 The Intangible: Creating a Magical and Sacred Aura . . . . . . . . 81 D.5.3 The Story of Luxury: Luxury Myths and Collective Desires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 D.5.4 The Luxury Brand: Authentic Heritage and Symbolic Rarity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 D.5.5 The Meaning Transfer: Elaborating and Co-Creating Luxury Rituals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 D.6 The Social Perspective: Exclusivity and Status . . . . . . . . . . . . . . . . . . . . 92 D.6.1 Luxury and Status: An Aspirational Social Community . . . . . 92 D.6.2 Luxury and Exclusivity: Signaling Prestige and Power . . . . . . . 95 D.7 The Individual Perspective: Aspiration and Feeling Unique and Special . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 D.7.1 Luxury and Identity: Appealing to the Ideal Self . . . . . . . . . . . 104 D.7.2 Luxury Consumption Needs and Values: Satisfying Higher-Level Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 D.7.3 Luxury and Emotions: Feeling Special and Experiencing Pleasure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

Table of Contents

D.8 The Economic Perspective: High Price and Value . . . . . . . . . . . . . . . . D.8.1 Luxury Price Points: A High Absolute and Relative Price Point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D.8.2 Elasticities of Demand for Luxury Goods: Positive Income and Price Elasticities of Demand . . . . . . . . . . . . . . . . . . . . . . . . . D.8.3 Luxury Value: A Perceived High Value . . . . . . . . . . . . . . . . . . . D.9 The Managerial Perspective: Excellence . . . . . . . . . . . . . . . . . . . . . . . . D.9.1 Organizational Culture: Striving for Brand Excellence . . . . . . D.9.2 Execution: Consistency and Control . . . . . . . . . . . . . . . . . . . . . D.9.3 Trade-offs: Growth versus Exclusivity . . . . . . . . . . . . . . . . . . . D.10 Integration of Perspectives: Principles of Luxury . . . . . . . . . . . . . . . . D.10.1 Discussion of the Findings and the Integration of Previous Research on Multiple Perspectives . . . . . . . . . . . . . . . D.10.2 Development of a Conceptual Model and Implications for the Creation of Luxury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D.10.3 Implications for the Creation of Luxury . . . . . . . . . . . . . . . . . . E The Meaning of Luxury: Decoding Luxury Brand Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.2 Theoretical background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.2.1 Meaning in Advertisements and the Creation of Sign Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.3 Method and Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.3.1 Context of Fashion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.3.2 Data collection and sampling . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.3.3 Decoding Procedure and Scheme . . . . . . . . . . . . . . . . . . . . . . . . E.4 Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.4.1 Enrichment: Luxury Signs and Rhetoric . . . . . . . . . . . . . . . . . . E.4.2 Distancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.4.3 Abstraction: Luxury Brand Values, Themes, and Discourses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.5 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.5.1 Research Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.5.2 Managerial Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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114 115 116 119 120 121 123 124 127 127 133 138 147 147 148 148 154 154 154 155 157 160 169 174 181 182 183 185

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F Discussion of Findings and Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . F.1 Discussion of Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.2 Implications for Luxury Brand Management: Principles for Creating the Extraordinary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.3 Development of a Research Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187 187 188 190

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 1 Illustration of advertising sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 2 Literature Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219

Lists of Figures and Tables Lists of Figures and Tables Lists of Figures and Tables

List of Figures Fig. 1 Fig. 2 Fig. 3 Fig. 4 Fig. 5 Fig. 6 Fig. 7 Fig. 8 Fig. 9 Fig. 10 Fig. 11 Fig. 12 Fig. 13 Fig. 14 Fig. 15 Fig. 16 Fig. 17 Fig. 18 Fig. 19 Fig. 20 Fig. 21 Fig. 22 Fig. 23 Fig. 24

Growth of the personal luxury goods market . . . . . . . . . . . . . . . . . . . . 3 Structure of thesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Number of publications in dataset per year . . . . . . . . . . . . . . . . . . . . . 12 Development of key publications’ contribution types over time . . . . 15 Illustration of citation network of document co-citation analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Top 21 references with strongest citation bursts . . . . . . . . . . . . . . . . . 20 Cluster view of citation network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Timeline of cluster evolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Conceptual model of luxury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Overview of the different perspectives on luxury . . . . . . . . . . . . . . . . 70 Dimensions and layers of desire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Consumer taxonomy based on need for status and wealth maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Integrated luxury model based on different perspectives . . . . . . . . 135 Analytical framework for advertising study . . . . . . . . . . . . . . . . . . . . 156 Symbolism – example Hermès . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Codebook complexity of the sign system and rhetoric structure . . 163 Overview of rhetorical devices used by luxury brands . . . . . . . . . . . 165 Storytelling – Visual campaign blueprints . . . . . . . . . . . . . . . . . . . . . 167 Distancing devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Codebook distancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 Establishment of themes: example of two campaigns . . . . . . . . . . . . 176 Discourse levels: differences mass-market, premium, luxury . . . . . 177 Overview of luxury themes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179 Principles for creating the extraordinary . . . . . . . . . . . . . . . . . . . . . . 190 XIII

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Fig. 25 Fig. 26 Fig. 27 Fig. 28 Fig. 29 Fig. 30

Lists of Figures and Tables

Overview of Hermès campaigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of Louis Vuitton campaigns . . . . . . . . . . . . . . . . . . . . . . . . Overview of Burberry campaigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of Valentino campaigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of premium brand campaigns . . . . . . . . . . . . . . . . . . . . . . Overview of mass-market brand campaigns . . . . . . . . . . . . . . . . . .

198 199 200 201 202 203

List of Tables Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16

Overview of the luxury market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Top-30 most cited references ranked by citation frequency . . . . . . . . 16 Overview of clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Mapping of empirically observed clusters to theoretical perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Relation of this thesis to previous research on dimensions of luxury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Overview of existing research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 Mapping of luxury values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Findings of advertising analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Distancing devices used by luxury brands . . . . . . . . . . . . . . . . . . . . . 174 Literature Table 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 Literature Table 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Literature Table 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 Literature Table 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 Literature Table 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 Literature Table 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Literature Table 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

Deutsche Zusammenfassung Deutsche Zusammenfassung Deutsche Zusammenfassung

Die vorliegende Arbeit beschäftigt sich mit der Frage, was Luxus ist, was wir darüber wissen und welche Implikationen dies auf die Forschung und die Unternehmensführung von Luxusmarken hat. Das Luxusphänomen ist zwar schon seit Jahrhunderten bekannt, jedoch ein gemeinsames Verständnis der Charakteristika von Luxus fehlt. Besonders vor der zunehmenden wirtschaftlichen Relevanz von Luxus, einer Industrie, die inzwischen global einen Wert von über 1.160 Milliarden Euro hat und stetig wächst, bedarf es einer Analyse, die sich mit den grundlegenden Fragen des Luxusverständnisses und seinen Möglichkeiten zur Weiterentwicklung beschäftigt. Kapitel A gibt eine Einführung in das Themengebiet und die Fragestellung. Kapitel B untersucht die Historie und den aktuellen Stand des multidisziplinären Forschungsfeldes zum Thema Luxus. Die Studie zeigt dabei die dominierenden Disziplinen, Fachzeitschriften, Forscher und ihre Forschungsansätze, sowie die verschiedenen konzeptionellen Grundlagen des Forschungsgebiets auf. Sie illustriert ihre historische Entwicklung und beleuchtet aktuelle Forschungsthemen. Eine bibliometrische Zitationsanalyse basierend auf 49.139 zitierten Referenzen aus 1.315 Publikationen identifiziert zehn große Forschungscluster. Diese Cluster sind durch unterschiedliche Perspektiven charakterisiert, denen ein bestimmtes Luxusverständnis zugrunde liegt. Um ein holistisches Verständnis von Luxus zu bekommen ist es notwendig, die Charakteristika der einzelnen Perspektiven und deren Beitrag zum Luxusverständnis näher zu beleuchten. Das konzeptionelle Modell der Studie bietet den Rahmen, die verschiedenen Perspektiven näher erforschen zu können und sie in ihrem Kontext einzuordnen und damit einem Luxusverständnis näher zu kommen. Kapitel C illustriert die geschichtliche Entwicklung des Luxusverständnisses anhand der dominierenden Luxusdiskurse von der Antike bis zur Gegenwart. Hierbei wird deutlich, dass Luxus in der Zeitgeschichte immer etwas Außergewöhnliches war, diese Außergewöhnlichkeit jedoch verschiedene Formen annahm. In den Diskussionen der Antike, wurde die Außergewöhnlichkeit von Luxus überwieXV

XVI

Deutsche Zusammenfassung

gend als quantitativer Exzess verstanden, der über die als invariabel angesehenen Bedürfnisse hinausging. Als Konsequenz wurde Luxus moralisch negativ bewertet. In der Moderne hat sich dieses Verständnis zunehmend hin zu einem Verständnis von Luxus als qualitative Veredelung gewandelt. Mit der Ausbreitung einer Konsumgesellschaft und der Verbindung von Luxus und Konsum, wurde Luxus weiter legitimiert und für eine breitere Gruppe an Luxusinteressierten ein zugängliches Mittel zur Auslebung und Definition der eigenen Identität. Kapitel D zeigt aus verschiedenen Perspektiven im wissenschaftlichen Diskurs, was Luxus außergewöhnlich macht und integriert diese Perspektiven in ein konzeptionelles Modell. Aus der umfassenden pragmatischen Perspektive wird Luxus als eine Idee betrachtet und ist etwas Außergewöhnliches, abgeleitet aus der Etymologie und historischen Entwicklung des Begriffs. Die materielle Perspektive betrachtet Luxusobjekte und -erlebnisse und deren Eigenschaften. Hierbei wird argumentiert, dass sich Luxusobjekte von Nicht-Luxusobjekten, insbesondere durch Seltenheit, Veredelung und einen quintessentiellen Charakter unterscheiden. Aus der philosophischen Perspektive wird Luxus als etwas Begehrliches angesehen. Diese Begehrlichkeit ist eine Konsequenz aus der Luxuseigenschaft und umfasst kulturelle, soziale und individuelle Komponenten. Die kulturelle Perspektive betrachtet die zugrundeliegenden kulturellen Mythen und Werte die Luxus verkörpert und zeigt, dass das kulturelle Verständnis von Luxus stark mit der Wahrnehmung einer magischen und sakralen Aura zusammenhängt, die aufgrund ihrer kollektiven Sozialisierung zur Begehrlichkeit beiträgt. Aus der sozialen Perspektive kreiert Luxus Exklusivität und sozialen Status. Dieser Status und die daraus resultierenden sozialen Vorteile tragen ebenfalls zur Steigerung der Begehrlichkeit bei. Aus der individuellen Perspektive ist Luxus erstrebenswert, da es für Individuen besondere Gefühle erzeugen kann. Dies kann beispielsweise durch die Identitätsrelevanz und Einzigartigkeit von Luxus entstehen oder durch die Intensität des Genusses und der erlebten positiven Emotion, die ebenfalls zur Begehrlichkeit beitragen. Die ökonomische Perspektive betrachtet insbesondere den Preis und Wert von Luxus und konzeptualisiert Luxus als etwas mit hohem Preis und Wert. Zuletzt wird Luxus aus der unternehmerischen Perspektive betrachtet, deren Forschung sich insbesondere auf das Verständnis von Managementprinzipien und -praktiken von Luxusherstellern fokussiert. Aus dieser Perspektive kann Luxus als Exzellenz verstanden werden, die Voraussetzung zur Beeinflussung der anderen aufgezeigten Perspektiven aus Sicht der Unternehmenssteuerung ist. Durch die Verbindung dieser verschiedenen Perspektiven, wird das Luxusphänomen in seiner Vielschichtigkeit beleuchtet. Daraus können Praktiken abgeleitet werden, die zur Stärkung des Luxuscharakters aus jeder der einzelnen Perspektiven beitragen.

Deutsche Zusammenfassung

XVII

Kapitel E befasst sich mit der Bedeutung von Luxusmarken und der Kreation von Begehrlichkeit in der Markenkommunikation. Hierbei liegt ein kulturelles Verständnis von Luxus und den damit verbundenen Mechanismen zugrunde. Werbung ist ein zentraler Mechanismus, um Marken mit Bedeutung und symbolischen Werten aufzuladen und in ihren soziokulturellen Kontext einzubetten. Diese Studie analysiert, wie symbolische Bedeutung in der Markenkommunikation von Luxusmarken konstruiert wird und wie sich diese im Vergleich zu Premiumund Massenmarktmarken systematisch unterscheidet. Durch eine vergleichende Analyse der thematischen und formalen Merkmale von 208 Print-Werbekampagnen, bestehend aus ca. 1.700 Einzelanzeigen aus den primären Werbekampagnen von vier Luxusmarken, vier Premiummarken und vier Massenmarktmarken, identifiziert diese Studie drei Unterscheidungsmerkmale der Luxusmarkenkommunikation: Bereicherung, Distanzierung und Abstraktion. Erstens bereichern Luxusmarken den Kommunikationsinhalt ihrer Werbung, indem komplexere Kampagnenvorlagen verwendet werden, die zu einem höheren Grad Geschichten erzählen und stärker auf Symbolik und Rhetorik zurückgreifen. Zweitens nutzt die Luxusmarkenwerbung systematisch Distanzierungsmethoden wie zeitliche, räumliche, soziale und hypothetische Distanzierung. Drittens bieten Anzeigen für Luxusmarken höhere Diskursebenen an, die unterschiedliche Interpretationen ihrer Markenwerbung ermöglichen. Diese Studie bietet somit Einblicke in die Konstruktion von Markenidentität innerhalb des Luxussegments sowie in die breitere sozio-kulturelle Konstruktion von Luxus und der Entwicklung seiner zentralen symbolischen Bestandteile. Kapitel F integriert und diskutiert die Erkenntnisse der einzelnen Kapitel, leitet Implikationen für die unternehmerische Praxis ab und entwickelt eine Forschungsagenda für zukünftige Studien im Luxusforschungsfeld.

XVII

Introduction A Introduction

A.1

A

Relevance of the Luxury Topic

A.1 Relevance of the Luxury Topic

“Who would pay $300,000 for a handbag?” asks Au (2016) after a Himalayan Hermès Birkin bag was recently sold for this price at an auction in Hong Kong. Luxury seems to puzzle us and fascinate us at the same time. The myths surrounding luxury objects further contribute to their somewhat magical aura, which seems to lie beyond rational comprehension. What is it that creates this lure and desire for some consumers? And what do we know as marketers and managers about the fundamental principles that create luxury? Luxury is a large and broad global market. The global market, which spans a wide range of categories from fashion, accessories, and cars to art and luxury experiences, totals €1.5 trillion (Abtan et al., 2014). According to the Boston Consulting Group (BCG), the personal and experiential luxury market segments totaled €845 billion in 2015 and together with cars and yachts (€404 billion) and other sectors (€284 billion) constitute the luxury industry (Pianon et al., 2017). Within personal luxury (€323 billion), the key segments are watches and jewelry (€129 billion), accessories (€77 billion), apparel, and perfumes and cosmetics (€47 billion). Within experiential luxury (€521 billion), the core categories are hotels and exclusive vacations (€399B), fine wines and spirits (€69 billion), and furniture (€53 billion). Other luxury consists mainly of technology (€156 billion) and arts (€73 billion) and several smaller segments (€55 billion in total). Bain & Company used a different market sizing and estimated the total luxury market to be €1,160 billion in 2017 (D’Arpizio et al., 2017). Table 1 summarizes the segments (based on D’Arpizio et al., 2017, Pianon et al., 2017).

© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 H. Gurzki, The Creation of the Extraordinary, Applied Marketing Science / Angewandte Marketingforschung, https://doi.org/10.1007/978-3-658-29538-7_1

1

2 Table 1

A Introduction Overview of the luxury market

Segment

Category

Personal luxury

Accessories Apparel Watches and jewelry Perfumes and cosmetics Furniture Fine wines and spirits Fine food Hotels and exclusive vacations   Technology Arts Other  

Experiential luxury   Cars and yachts Other

Total

Size in B€ (BCG) 2015 77 70 323 129 47 53 69 522 399 404 156 73 55 1,532

404 284 1,532

Size in B€ (Bain & Com­ pany) 2017 262 35 70 49 193a 489   40 23b 1,160

262

347 489 63 1,160

a) Including luxury cruises b) Including private jets Note: Rounded figures Source: The Boston Consulting Group (Pianon et al., 2017), Bain & Company (D’Arpizio et al., 2017)

Luxury is a story of growth. The personal luxury segment has more than tripled in size from 1994 to 2015 (see D’Arpizio et al., 2017, p. 6). Furthermore, the market is set to still grow substantially. Estimates by the Boston Consulting Group expect the personal and experiential luxury segments alone to grow to €1,135 billion by 2022 (from the €845 billion in 2015) (Pianon et al., 2017). Moreover, the total number of luxury consumers is expected to grow globally, increasing from 400 million in 2015 to 480 million by 2022 (Pianon et al., 2017). This growth will come from different types of consumers. The new aspirational consumers trading up to luxury goods (365 million to 435 million) and the top aspirational (20 million consumers in 2015 to 26 million consumers in 2022) and top luxury (from 16 million consumers in 2015 to 20 million consumers in 2022) segments are all expected to grow in size and value (for example, top luxury is expected to grow from €245 billion to €365 billion) (Pianon et al., 2017).

Figure 1 A.1 Relevance of the Luxury Topic

3

250

2016

262

2017E

2014

251

2015

212

224

2013

2011

192

218

2012

173

2010

153

2009

167

2008

2004

2007

2003

2006

128

2005

133

2002

1998

133

2001

1997

128

CAGR 1996-2017E: +6% 170 159 147 136

2000

92

108

1999

85

96

1996

Global personal luxury goods market, 1996-2017E (€ billions)

Source: http://www.bain.com/publications/articles/luxury-goods-worldwide-market-study-fall-winter-2017.aspx

Fig. 1

0

Growth of the personal luxury goods market

Source: D’Arpizio et al. (2017, p. 6)

The luxury industry is of high importance, particularly for the European economy. Luxury brands such as Louis Vuitton and Hermès are among the most valuable and renowned global brands (Interbrand, 2017). According to the European Cultural and Creative Industries Alliance (ECCIA), which coordinates the efforts of the national European creative and cultural industry associations (Circulo Fortuny – Spain; Comité Colbert – France; Fondazione Altagamma – Italy; Meisterkreis – Germany; and Walpole – UK), European brands account for over 70% of the global luxury market and 3% of the European GDP (Economics, 2014). The European luxury industry employed over 1.1 million workers directly and a further 0.6 million indirectly to produce a sector output of €547 billion in 2013, which accounted for 4% of the European GDP in that year (Economics, 2014). Out of the current top 100 personal luxury companies, 26 are from Italy, 10 from Switzerland, 10 from France, 10 from the United Kingdom, 6 from Germany, and 4 from Spain (Deloitte, 2017). The other strong hubs for personal luxury companies are the United States with 15 companies, China (Hong Kong) with 7, and other countries with 12 (Deloitte, 2017). However, luxury is also undergoing major shifts that are driving new forms of consumption (cf. Chandon et al., 2016). The first shift is from products to experi­ ences. Pianon et al. (2017) have forecast that the experiential segment will account for nearly two-thirds of the luxury market in 2022. The second shift is from local to global. Luxury consumers are mobile and often travel and shop while abroad (Pianon et al., 2017). This further facilitates the manifestation of a global consumer society and global luxury consumer clientele in which global consumption values, tastes, and lifestyles and local specificities exist. The third shift is from physical 3

4

A Introduction

to digital interactions and channels. The growth of digital technologies, such as shopping channels and marketing instruments, is changing consumer behaviors. With the development of digital luxury products and the potential of virtual luxury experiences, luxury itself is also changing (Abtan et al., 2016). Before 2000, luxury from a consumer’s perspective was only by in-store physical access. With the emergence of corporate websites, luxury brands have entered the informational stage, followed by the transactional stage with the emergence of e-commerce shops. A recent shift has been the emergence of social media and virtual communities that have opened the possibility for luxury brands to engage with consumers in novel ways. Today, nearly 60% of luxury purchases are digitally influenced, meaning that either the research or the purchase has been carried out online, and this number is expected to grow (Abtan et al., 2016). The new challenge for luxury brands is to reach their consumers through mobile channels while the consumers are on-thego. The future poses new challenges with the potential to create virtual luxury experiences, for example, using augmented or virtual reality. While luxury is a large and growing industry and the fundamental drivers of the luxury markets are set for growth, the nature of luxury is changing, which poses challenges to both luxury brands and academics who are interested in studying and understanding the luxury phenomenon. Thus, luxury provides an interesting area of study. The high margins and high symbolic value lure companies and academics. With the growth of the luxury sector and the emergence of a global luxury consumer base, researchers in academia have gained interest in understanding the luxury industry and luxury consumers. This growth is evidenced by the increasing number of publications in the field of luxury and the new journals that have entered the field (cf. Gurzki and Woisetschläger, 2017). The increasing interest of researchers in the luxury field has advanced our understanding of the field substantially. However, fundamental questions remain and are part of many academic and practice-oriented discussions: What is luxury? And what do we know about it? Despite the high relevance and interest, knowledge about luxury is mostly fragmented. Over the last years, many managerial books have been published that contain best practices and managerial heuristics about luxury (such as Chevalier and Mazzalovo, 2008, Kapferer, 2009, Som and Blanckaert, 2015) and several address the conceptual and definitional questions of the concept of luxury (such as Cristini et al., 2017, Heine, 2012, Miller and Mills, 2012). While these works provide useful managerial guidance and new perspectives on luxury, a comprehensive review encompassing different disciplines and theoretical perspectives on luxury is missing. However, since the nature of luxury seems to be constantly changing, a comprehensive review is particularly challenging. This thesis attempts to review

A.2 The Value of a Theory of Luxury …

5

and synthesize existing research on luxury to understand better the concept of luxury and what luxury could potentially be, thereby opening this topic for future development.

A.2

The Value of a Theory of Luxury and the Contribution of This Research

A.2 The Value of a Theory of Luxury …

The aim of this thesis is to develop a conceptual model of luxury that integrates different perspectives in order to identify the key dimensions and mechanisms behind its creation. To create a model that provides a deeper understanding of luxury and that has value for academics and practitioners, the model must meet several conditions. The conceptual model must possess theoretical and practical relevance (cf. MacInnis, 2011). It needs to focus on key aspects of luxury to reduce the complexity, yet consider the multidimensionality of the concept. Further, to better understand the relativity of luxury to its context, the model needs to identify constants and variables to capture the nature of change and the dynamics. Last, the model needs to work on different levels of abstraction to capture unique aspects of each perspective, yet integrate them in a higher-level framework (cf. MacInnis, 2011). In addition, Lewis and Grimes (1999) proposed that creativity and compre­ hensiveness are important criteria that need to be considered. This thesis has three objectives. The first objective is to provide a broad review of the existing research and perspectives within the luxury field. The concept of luxury has been analyzed in a wide range of contexts, including history, sociology, psychology, economics, business, and marketing. However, a common definition and conceptualization has not yet emerged, which seems crucial to a more thorough understanding of the topic (cf. Königs, 2009). As luxury has a strong philosophical, cultural, sociological, economic, and psychological component, further insight into the different views on luxury would be helpful to understand the luxury phenomenon more holistically. These different viewpoints regarding the conceptualization of luxury, including contemporary views from the marketing and management literature, will provide a broad overview of the concept and thereby will help research the different aspects of luxury. The second objective of this thesis is to delineate the diverse perspectives on luxury and show how they illuminate different aspects of the concept. While the different phenomena of luxury are interdependent and connected, the different perspectives can highlight certain features and mechanisms to unravel the complex interplay. This analysis serves as the basis to construct a conceptual 5

6

A Introduction

model, considering both the commonalities and unique viewpoints of different perspectives to achieve a more holistic understanding of the luxury phenomenon. This understanding can serve as the basis for further academic studies in the field and guide the thinking and decision making of practitioners. The third objective of this thesis is to integrate the perspectives to provide a conceptual model of luxury, based on existing research, for luxury brand managers and to inspire future research on the topic. By delineating the different research streams and by combining them in a comprehensive framework, we believe that we add further credibility to the field of luxury marketing and management, which is guided by its own rules and principles and warrants scientific investigation. MacInnis (2011) proposed that different types of conceptual contributions exist: Envisioning is the first type and involves the proposition of a novel way in which to view reality, which consists of identifying (arguing that a phenomenon exists) and revising (reconfiguring existing views about phenomena already identified). Explicating is the second type and involves articulating and detailing ideas or relationships and consists of delineation (which details an entity) and summarization (which aims at distilling the essence of an entity). Relating is the third type and involves the comparison and identification of the relationship between different entities and consists of differentiation (which highlights the differences between entities) and integration (which shows parallels between entities and shows novel connections). Debating is the fourth type and involves the support of critiquing an idea. It consists of advocating (which takes a normative stance on how a phenomenon should be viewed) and refuting (which critiques a certain view). This research is based mainly on delineation of the different dimensions, summarization of their core dimensions, differentiation of the different concepts identified, integrating the concepts in a conceptual model that shows their connections, and, lastly, revising by reconfiguring the understanding of luxury through the different dimensions. This thesis thereby contributes to the development of a luxury theory by identifying and highlighting different perspectives that shape the construction of luxury.

A.3 Structure and Contribution of This Thesis

A.3

7

Structure and Contribution of This Thesis

A.3 Structure and Contribution of This Thesis

The structure of this thesis is illustrated in Figure 2. Chapter B reviews and maps the existing luxury research landscape in a bibliometric and systematic meta-analysis to the different theoretical perspectives to understand the structure of scientific luxury research. Chapter C traces the key developments in the evolution of luxury, covering the temporal dimension, and provides an overview of the current global luxury market. Chapter D details and delineates the different perspectives on luxury to develop an integrative theory. This theory brings together research and perspectives from different disciplines to better understand the different aspects and their centrality to the concept of luxury. Chapter E investigates how meaning is core to luxury brands and how the creation of meaning of luxury brands differs from non-luxury brands. This chapter develops and applies an analytical framework based on semiotics to understand the cultural construction of luxury in luxury advertisements. It provides insight into the storytelling and the meaning creation of individual luxury brands and the stylistic and thematic genre conventions of luxury. Chapter F discusses the findings of this thesis and provides an outlook. Figure 2: Structure of thesis

A A. Introduction

• •

Highlighting of the relevance of the luxury topic Definition of objectives of this research B. The State of Luxury Research: A Bibliometric Citation Analysis

•

• •

Mapping of the interdisciplinary field of luxury research using a bibliometric citation analysis Identification of research clusters and perspectives Development of conceptual framework that integrates perspectives

C. A Brief History Of Luxury And Consumption

D. Perspectives on Luxury: An Integrative Theory

•

•

•

•

Detailing of historical context and evolution of luxury Identification of conceptions of luxury and the role of consumption over the course of history Identification of the dominant discourses and perspectives

•

•

Detailing of key perspectives of luxury identified in the mapping Identification of the characteristics within each perspectives that make luxury extraordinary and thereby differentiate it from non-luxury Integration of findings into a conceptual model

E. The Meaning of Luxury: Decoding luxury brand communications •

• •

Systematic analysis of thematic and formal features for fashion advertisements Comparative analysis of luxury, premium, and mass market brands Identification of underlying principles and communication codes of luxury brands

F. Discussion and implications • • •

Discussion and integration of findings of different studies Identification of guidelines and principles for managers and creators of luxury Development of a research agenda

Fig. 2

4

Structure of thesis

Source: Own illustration

7

The State of Luxury Research: A Bibliometric Citation Analysis1

B The State of Luxury Research

B 1

B

Introduction

B 1 Introduction

Research in the luxury field is increasing at a rapid pace. Publications of special journal issues focused on luxury consumption and the emergence of new journals in the field confirm luxury as an established area of study, fostering attention within the research communities as well as prompting new researchers to enter the field. But what is really known about the intellectual foundations of luxury research? While early sociological and economic research (Veblen, 1899) describes a number of phenomena associated with luxury consumption, the vast majority of studies in the business literature has been published since the early 2000s. The emerging research field focuses on the investigation of the luxury phenomenon and its implications for consumer behavior and marketing management (Chevalier and Mazzalovo, 2008, Kapferer, 2012b). However, the multidisciplinary scope has resulted in a vast amount of literature, and presents a research challenge—particularly to those new to the field—to achieve an overview of the luxury research landscape and to keep pace with its evolution. Despite this growing body of literature, no study has yet investigated luxury research across disciplines to provide further insights into the intellectual base of this field. While some qualitative overviews of luxury exist, they are limited in scope—they are not interdisciplinary (such as Mason’s (1993) study of the economic perspective of conspicuous consumption), are not up-to-date with recent developments in the research field (Reich, 2005, Valtin, 2005), or lack bibliometric methods (Berghaus et al., 2014). 1

This section is based on Gurzki, Hannes, and David M. Woisetschläger (2017), “Mapping the luxury research landscape: A bibliometric citation analysis,” Journal of Business Research, 77, 147–66.

© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 H. Gurzki, The Creation of the Extraordinary, Applied Marketing Science / Angewandte Marketingforschung, https://doi.org/10.1007/978-3-658-29538-7_2

9

10

B The State of Luxury Research

This study addresses these limitations and provides a multidisciplinary, comprehensive, up-to-date, bibliometric overview of the current state of the luxury research field and its intellectual foundations. To broaden the perspective of luxury research beyond the domains of marketing and consumer behavior, this study includes related fields of research across the range of social sciences and humanities, including sociology, anthropology, economics, psychology, and cultural studies. This interdisciplinary approach supports the discovery of the various intellectual bases of contemporary luxury research, providing further insights into the multifaceted nature of luxury. Using a combination of bibliometric analysis and a systematic review, this paper sets out to answer the following research questions: • Which research areas and journals dominate the luxury research field? • Which articles are most influential? • What are the dominant intellectual foundations, theories, and research clusters in the field of luxury research? • How has the research landscape evolved over time? • What are current evolving topics and promising areas for future contributions? This study advances the luxury research domain in multiple ways. First, using a bibliometric citation analysis, the study contributes to a definition of the inter­ disciplinary field of luxury research, and to a better understanding of its current state, by identifying the key publications and their interrelationships. Second, this study uses a cluster analysis to identify the various intellectual perspectives underlying luxury research and enhances the quantitative analysis with a qualitative interpretation. Third, based on these research clusters, this article develops a conceptual framework that integrates the findings and provides guidelines and directions for the emerging luxury research community, to prevent the inefficiency of repetitive research and to bridge disciplines in order to generate new findings. This section is organized as follows. Section B.2 gives a brief introduction on bibliometric citation analysis to establish the approach and to discuss methodological considerations. Section B.3 examines the intellectual base of the luxury research field through a network-analytical model, based on co-citation of references. Section B.4 conducts a cluster analysis to identify research fields within the luxury domain and discusses the key contributions and views of each cluster. Section B.5 develops a conceptual framework based on the literature review and cluster analysis. Section B.6 discusses the analysis findings and concludes by discussing potential areas for further research contributions and practical implications.

B.2 Literature Reviews and Bibliometric Citation Analysis

B.2

11

Literature Reviews and Bibliometric Citation Analysis

B.2 Literature Reviews and Bibliometric Citation Analysis

In an information age that produces an ever-increasing number of publications, acquiring an overview of the relevant research and the interconnections between studies has become both increasingly challenging and valuable. Thus, a review of the current state-of-the-field that integrates previous findings can provide value to the field as it adopts a meta-perspective. In an interdisciplinary field such as luxury marketing, traditional qualitative literature reviews are limited in the amount of data they handle and are reliant on the author’s subjective judgment (Jacoby, 1978). In contrast, a bibliometric citation analysis offers an approach that is able to handle large sets of data for quantitative analyses, and is able to prioritize and cluster existing publications based on the citation behavior of the overall research community (Zupic and Cater, 2015). Bibliometric methods have a long tradition in the study of the intellectual structure of science (Hood and Wilson, 2001), and are also used in the marketing domain (Baumgartner and Pieters, 2003, Fetscherin and Heinrich, 2015, Huber et al., 2014, Yadav, 2010). Because quantitative bibliometric methods rely on the judgment and citation behavior of the broader scientific community, this approach can help researchers avoid potential shortcomings of traditional methods, such as a limited scope or an individual researcher’s selection bias (Fetscherin and Heinrich, 2015). The meta-analytical and historical views of bibliometric analysis can help to identify the intellectual structure of a research field with its key works and research clusters (Seyedghorban et al., 2015). This study complements the quantitative approach by applying a systematic qualitative study of the key publications and clusters, further detailing the substantive contributions to the field (e.g., as proposed by Börner and Scharnhorst (2009)). Based on these findings, this study develops a conceptual model of luxury and the luxury research field.

B.2.1 Search Strategy Our study uses data from the ISI Web of Knowledge Core collection database. This database has previously been used across a wide range of scientometric studies, and it provides broad coverage in the social sciences and in the arts and humanities (for example Arik (2015), Baumgartner (2010), Fetscherin and Heinrich (2015), Wang et al. (2015)). A broad search strategy that maximizes coverage of relevant publications is ideal for this multidisciplinary study of the luxury domain. The sample includes publications that contain the keywords “luxury,” “conspicuous consumption,” “status consumption,” “prestige brand,” or “status brand,” and is derived from the fields of 11

12

B The State of Luxury Research

anthropology, philosophy, social sciences, history, literature, business and economics, psychology, and sociology, as categorized by the ISI Web of Science (data retrieved Nov. 14, 2015). The retrieval strategy thus extends beyond the term “luxury” to include related terms often used synonymously in academic publications—as, for example, the term “conspicuous consumption” in the field of economics (Mason, 1993, Veblen, 1899). The sample is limited to all available articles in English that comply with the criteria above. This approach generates the broadest sample possible that is still relevant to the research field. As we are primarily interested in recent developments in the field, this analysis focuses on publications since 2000, limiting potential issues arising from unsystematic coverage of earlier years. A timeline analysis of the 1,503 retrieved publications shows that 1,315 (87%) were published after 2000 (see Figure 3). The number of publications has increased substantially, which is likely to be caused by multiple factors such as the growth of the luxury industry, growing interest from management and academia in luxury research, an increase in publication opportunities due to a larger research community with targeted journals. Our focus on publications within the broader luxury domain from 2000 to 2015 leads to a dataset with 1,315 records from 2,425 authors that were published in 533 journals, with 49,139 cited references and 5,028 retrieved keywords. 

 

  

 
The publications in the cited references are not limited to the time period   
 from 2000 to 2015, but can take any value for the publication year.



 

  

 

 

 






 


  










 



Fig. 3

















 









 





 



   



 



 



 







 





 





 



  

























 













  

  




 






 

Number of publications in dataset per year

Source: Own illustration

6

B

B.2 Literature Reviews and Bibliometric Citation Analysis

13

B.2.2 Methods and Tools Used To analyze the key publications, research clusters, and development of the luxury research front and intellectual base, this study uses a document co-citation analysis (DCA) of 49,139 valid references from our sample that have been cited by the luxury publications in this sample (Boyack and Klavans, 2010). A research front represents the articles of the field in a given time period—that is, the articles retrieved by the Web of Science search (Chen et al., 2014). The intellectual base consists of all articles cited by the research front—that is, all cited references (Chen et al., 2014). This study uses Citespace Version 4.0.R3 (Chen, 2006). The software tool is well accepted in the academic literature, freely available for download, relatively easy to use, and constantly updated (Chen et al., 2014, Cobo et al., 2011, Kim and Chen, 2015). In addition to facilitating the analysis of descriptive statistics such as citation count for the individual papers, Citespace facilitates network analytic methods that allow mapping of the interrelationships between scientific publications (Chen, 2006). Within the terminology of network analysis, we will use “node” to refer to individual papers in the network—the references cited by the papers in the sample—and the term “link” (the connection between two nodes) to refer to the co-citation of two papers—two publications that are cited together by another paper, both appearing in the paper’s list of cited references (Chen, 2006). The degree of relatedness of the co-cited papers is measured using their cosine-coefficient of co-citations, which measures how often the papers are cited together in relation to their overall citations (Chen, 2012). To improve the interpretability of the network and to focus on the key publications, we set thresholds to include only papers with at least 5 citations, 5 co-citations, and a co-citation cosine coefficient of >0.15. In order to focus on content contributions, after applying the selection criteria, we manually screened the resulting 133 nodes for methodological papers, which led to the exclusion of 15 highly cited methodological contributions from the network analysis. In order to focus on the most important interconnections between papers and to improve the clarity of the resulting network structure, we applied pathfinder pruning to the 1,646 links in the merged network, thereby retaining only the shortest paths between nodes (Chen, 2005, Chen, 2006). These simplification steps resulted in a final network with 118 nodes and 136 links.

13

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B The State of Luxury Research

B.2.3 Analysis of the Sample Based on the classification of the ISI Web of Knowledge, the sample includes publications from 89 different research fields. The most active research fields dealing with the broader luxury domain are “Business & Economics” (849 publications), “Business” (457), “Economics” (310), “Social Sciences – other topics” (202), “Psychology” (171), “Management” (160), “Hospitality” (112), “History” (95), “Sociology”, (72) and “Social Sciences” (65). The key academic journals in the sample are Journal of Business Research (41 records), Psychology & Marketing (28), Journal of Consumer Research (27), International Journal of Hospitality Management (23) and Journal of Consumer Psychology (20), Applied Economics (19), European Journal of Marketing (18), Harvard Business Review (18), Journal of Marketing Research (16), and Journal of Personality and Social Psychology (14). Identifying the top journals (excluding books) by the number of citations they received from publications within the sample, the top-ranked journals are Journal of Consumer Research (296 citations), followed by Journal of Marketing Research (286), Journal of Marketing (224), American Economic Review (221), Journal of Personality and Social Psychology (215), Quarterly Journal of Economics (196), Journal of Business Research (193), Psychology & Marketing (182), Journal of Consumer Psychology (181), Journal of the Political Economy (174), Advances in Consumer Research (170), Psychological Bulleting (168), Econometrica (134), European Journal of Marketing (132), and Journal of the Academy of Marketing Sciences (131). This analysis shows that leading marketing, economics and social psychology journals, particularly, are heavily cited by publications in the luxury field, which gives an indication of the importance of these publication outlets as contributors to the intellectual base of luxury research.

B.3

Analysis of the Key Publications

B.3 Analysis of the Key Publications

This study conducts a content analysis of the 118 key publications in the network in order to identify the research approach and the type of contribution of each publication. We then distinguish between four different types of study (cf. Yadav, 2010). The first type is conceptual studies, including review studies and mathematical models that develop and establish a theory. The second category is qualitative empirical studies, including interviews, focus groups, or ethnographic field studies that contribute to theory development or theory testing. The third type includes empirical studies based on secondary data, survey data with exploratory-descriptive

B.3 Analysis of the Key Publications

15

or confirmatory purposes, as well as scale development studies aimed at delineating and establishing theoretical constructs. The fourth type is experimental studies that test theories and aim to identify causal relationships. Excluding books from the study, the remaining 106 publications have been primarily quantitative (42 publications that include 26 surveys, 10 scale development papers, and 6 papers analyzing secondary data), followed by experimental (28 papers), conceptual (27 papers), and qualitative empirical papers (9 papers). Looking at the development over time (Figure 4), we notice both an increase in the number of publications over time and a shift in the contribution type. The number of publications has increased over time, with the most heavily cited contributions found in the period from 2005 to 2009. This is in line with the logic of the bibliometric analysis and the number of total citations as an indicator as, while the number of publications after 2000 has been increasing, it takes time for the contributions to be reflected in the scientific discourse and for the publications to receive a sufficient number of citations. The contributions have shifted from more conceptual and theoretical contributions to explorative-descriptive research and, more recently, to experimental, causal-inferential research. This development hints at a maturing research field and a solid conceptual base (Kuhn, 1969), yet can also Figure 4: Development keyoverall publications’ types over time be seen as reflective ofofthe declinecontribution of conceptual articles in the broader marketing field (MacInnis, 2004, Yadav, 2010).

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 4) Experimental 3) Quantitative 2) Qualitative 1) Conceptual

Fig. 4

Before 1980

1980-1984

1

1

2

4

1985-1989 1 3 1 4

1990-1994 2 8 4

1995-1999 8 2 5

2000-2004 5 9 3

2005-2009 12 9 4 4

Development of key publications’ contribution types over time

Source: Own illustration

2010 to date 8 3 2 1

7

15

B

16

B The State of Luxury Research

B.3.1 Analysis of the Key Publications This section examines both structural properties and temporal properties of the individual papers. The structural properties help to identify each paper’s enduring significance for the research field, while the temporal properties highlight the paper’s significance for a specific time interval. The structural properties used in this study are derived from the citation count to identify landmark publications—the publications considered most important by the research community (Chen, 2004). Betweenness centrality is a measure for identifying pivotal publications—the publications that connect research nodes or clusters. A high betweenness centrality can indicate an intellectual turning point in the field (Seyedghorban et al., 2015). The temporal properties are captured by burst values which identify trending articles in a specific time period, and also give indications about emerging research fronts (Chen, 2006). Table 2 provides an overview of the Top-30 publications ranked by their citation frequency, including the structural characteristics of the network analysis. Figure 5 provides a graphical illustration. Table 2 Rank 1 2 3 4 5 6 7 8 9 10 11 12 12 14 15 15 17 18 19 19 21 21 21

Top-30 most cited references ranked by citation frequency

Reference Veblen, 1899 Belk, 1988 Bagwell & Bernheim, 1996 Bourdieu, 1984 Leibenstein, 1950 Corneo & Jeanne, 1997 Bearden & Etzel, 1982 Griskevicius et al., 2007 Han, Nunes, & Drèze, 2010 Wong & Ahuvia, 1998 Vigneron & Johnson, 1999 Frank, 1985 Wiedmann, Hennigs, & Siebels, 2009 Fournier, 1998 Sundie et al., 2011 Eastman, Goldsmith, & Flynn, 1999 O’Cass & McEwen, 2004 Wilcox, Kim, & Sen, 2009 Blomqvist & Carter, 1997 Keller, 1993 Newhouse, 1977 Duesenberry, 1949 Vigneron & Johnson, 1999

Freq. 122 94 76 65 64 53 52 50 49 46 44 43 43 40 38 38 37 35 34 34 33 33 33

Centrality 0.00 0.96 0.70 0.03 0.19 0.52 0.00 0.39 0.00 0.52 0.10 0.10 0.80 0.00 0.35 0.24 0.23 0.25 0.00 0.00 0.00 0.03 0.31

Burst 9.86 5.27 3.43 4.85 3.51 7.55 4.64 5.45 3.73 -

Cluster 1 6 1 1 2 3 4 9 2 4 5 3 7 6 9 2 2 8 Other 7 Other 3 7

B.3 Analysis of the Key Publications

24 25 25 27 28 29 30 30 30

Richins & Dawson, 1992 Zeithaml, 1988 Aaker, 1997 Dubois, Czellar, & Laurent, 2005 Nueno & Quelch, 1998 Charles, Hurst, & Roussanov, 2009 Bearden, Netemeyer, & Teel, 1989 Escalas & Bettman, 2005 Amaldoss & Jain, 2005a

17

32 31 31 30 29 28 27 27 27

0.00 0.04 0.00 0.16 0.04 0.00 0.00 0.00 0.00

3.24 -

2 7 7 5 10 2 4 2 2

Source: Own illustration

Fig. 5

Illustration of citation network of document co-citation analysis

Source: Own illustration based on Citespace 17

18

B The State of Luxury Research

B.3.2 Analysis of the Network-Structural Properties B.3.2.1 Landmark Publications in the Luxury Domain (high citation count) Citation frequency is often used as an indicator of the works’ importance and adoption in the research field (Garfield, 1979). For this study, citation frequency is measured by the total number of citations for a document found in the 49,139 cited references from the 1,315 publications within the sample. In Citespace, nodes with a high citation frequency are also called landmark nodes, as they provide intellectual landmarks for the research field (Chen, 2004). While it is easier for older works to receive a high total citation count, some of the most cited papers are recent publications, which confirms their high relevance and fast adoption within the scientific community (such papers as Griskevicius et al. (2007) and Han et al. (2010)). The most cited study is Veblen’s (1899) study on conspicuous consumption (122 citations), in which he claims the emergence of the leisure class that spends their “unproductive” time in conspicuous consumption of goods, and thereby demonstrates their wealth and status. The second most cited paper is Belk (1988)’s paper on possessions and the extended self (94 cit.), which proposes that possessions are relevant to the construction of identity, and has consequently spurred high interest, particularly among consumer researchers. The third most cited paper, that of Bagwell and Bernheim (1996), reflects an economic perspective and discusses the prerequisites and consequences of Veblen effects for luxury brands, as well as implications for public policy (76 cit.). From a sociological perspective, Bourdieu (1984)’s work on the role of economic, social and cultural capital in the construction of social class has been heavily cited, as it extends the sources of status construction into the social and cultural realms (65 cit.). Leibenstein (1950)’s work is the fifth most cited (64 cit.), and extends classic economic theory to integrate social utility. Among the other most cited works are Corneo and Jeanne (1997)’s model of conspicuous consumption (53 cit.), Bearden and Etzel (1982)’s study of reference groups (52 cit.), the work of Griskevicius et al. (2007) on luxury goods as costly signals (50 cit.), the work of Han et al. (2010) on status signaling (49 cit.) and the taxonomy of luxury consumers, and the paper by Wong and Ahuvia (1998) on cultural differences between Western and Eastern cultures and their impact on luxury consumption (46 cit.).

B.3.2.2 Pivotal Publications (High betweenness centrality) A high betweenness centrality in the context of this citation analysis can indicate pivotal publications and intellectual turning points (Chen, 2005, Chen, 2006).

B.3 Analysis of the Key Publications

19

Betweenness centrality is a graph-analytic metric that measures the number of shortest paths that pass through that node, and thus gives an indication of the probability that the node acts as a gatekeeper between different nodes and clusters (Chen, 2005, Freeman, 1979). In this study, a high betweenness centrality indicates that the paper has been cited together with publications from different research clusters. The publication of Belk (1988) has the highest betweenness centrality, with a centrality score of 0.96, and is thus a pivotal publication for the field. The paper connects various research streams from economics, social psychology, and marketing to the concept of the extended self and the importance of consumer choice for the formation of self-concept. Belk’s paper connects research on materialism (Richins, 1994a), conspicuous consumption (Bagwell and Bernheim, 1996), reference groups (Escalas and Bettman, 2003), status signaling and compensatory consumption (Rucker and Galinsky, 2008, Sivanathan and Pettit, 2010), identity signaling (Berger and Heath, 2007), and consumption values (Wiedmann et al., 2009). The 2009 study by Wiedmann et al. has the second highest centrality score (centrality of 0.80). It develops an integrated framework on consumer value, and is often co-cited with publications from a diverse range of clusters that connects the fields of consumption and self-concept (Belk, 1988) with branding (Aaker, 1991), early luxury marketing literature on prestige-seeking (Aaker, 1991), cultural values (Wong and Ahuvia, 1998), and conspicuous consumption (O’Cass and McEwen, 2004). The paper by Bagwell and Bernheim (1996) has the third highest centrality score (centrality of 0.70) and connects economic literature on status signaling (Amaldoss and Jain, 2005a, Ireland, 1994) with early work on hedonic consumption (Hirschman and Holbrook, 1982) and on the self-concept (Belk, 1988).

B.3.2.3 Trending Articles (High burst count) The burst value is a temporal property that indicates high citation values during a specific time period, and thus highlights trend articles for certain time periods (Chen et al., 2014, Kleinberg, 2003). Figure 6 shows the articles with the strongest citation bursts in chronological order. An external influence in the advancement of various fields comes into effect here. In the early years of luxury research, the research field mainly focused on economic studies modeling conspicuous consumption (Bagwell and Bernheim (1996), burst strength 9.86; Corneo and Jeanne (1997), 4.85), general marketing publications and their application to the luxury context, for example Zeithaml (1988)’s means-end model on service quality or Lichtenstein et al. (1993)’s work on price perceptions and shopping behavior. As well, Berry (1994)’s historical analysis of the luxury concept has been notable in shaping the domain. In the years from 2000 to 2010, economic publications dominate, with the works of Ireland (1994) (3.87), Duesenberry (1949) (3.73), Leibenstein (1950) (3.43), Frank (1985b) (3.92), 19

20

B The State of Luxury Research

Top 21 References with Strongest Citation Bursts References Berry (1994) Gerdtham et al. (1992) Bagwell & Bernheim (1996) Newhouse (1977) Blomqvist & Carter (1997) Zeithaml (1988) Corneo & Jeanne (1997) Lichtenstein et al. (1993) Ireland (1994) Duesenberry (1949) Bourdieu (1984) Leibenstein (1950). Keller (1993) Frank (1985) Frank (1999) Li et al. (2002) Roney (2003) Buss & Schmidt (1993) Li et al. (2002) Sundie et al. (2011) Berger & Ward (2010) Fig. 6

Strength Begin End

2000 - 2015

3.1308 2000 2010 4.909 2000 2010 9.8637 2000 2009 5.4527 2000 2010 7.5505 2000 2009 3.2414 2000 2008 4.8474 2000 2006 2.891 2001 2005 3.8687 2002 2009 3.7345 2004 2009 5.2741 2005 2010 3.4332 2005 2009 4.6417 2005 2009 3.9179 2008 2011 3.7015 2009 2011 2.9885 2011 2012 3.1141 2011 2012 3.0795 2011 2012 3.4921 2011 2012 3.5062 2012 2015 3.3511 2013 2015

Top 21 references with strongest citation bursts

Source: Own illustration based on Citespace

and Frank (1999) (3.70) among the other publications with high spikes in citations. Between 2005 and 2010 the cultural capital view of Bourdieu (1984) (5.27) and the brand-equity view of Keller (1993) (4.64) received strong citation bursts with a shift of the field toward the luxury brand and the consumer’s perceptions as central elements of luxury consumption, and toward a broadened view that not only takes economic and social class variables into account in the construction of status, but turns to different ways to symbolize status, such as aesthetic tastes and cultural capital. The most recent five years have been dominated by high citation

B.4 Co-Citation Network and Research Clusters

21

rates from publications in the fields of social psychology and consumer research. Much research has examined luxury consumption from an evolutionary perspective—for example, how mate preferences influence consumption choices, which is studied in the papers of Buss and Schmitt (1993) (3.08), Roney (2003) (3.11), Li et al. (2002) (3.49), Li and Kenrick (2006) (2.99) and more recently Sundie et al. (2011) (3.51). Another new stream that has recently received attention is the research on inconspicuous consumption Berger and Ward (2010) (3.35).

B.4

Co-Citation Network and Research Clusters

B.4 Co-Citation Network and Research Clusters

To identify related research clusters within the luxury field, this study conducts a cluster analysis based on the co-citation patterns of the papers in the sample. The analysis of the network reveals both structural properties of the network as well as of the clusters. At the global network level, the key measures are density and modularity. Density measures how well connected a network is. The network has a density of 0.0197, which shows that the network is relatively sparse, with few connections among the key publications (Albert and Barabási, 2002, Börner et al., 2007). Modularity measures how well the network can be partitioned into clusters. In the clustering procedure, the modularity of the network is maximized using a smart local moving algorithm for community detection to identify clusters within the network of cited references (Waltman and van Eck, 2013). Within the network, the analysis identifies 10 major clusters, as illustrated in Figure 7 (cluster view). The cluster solution has a modularity of 0.79, which shows that the network has relatively clear partitions (cf. Newman and Girvan, 2004). The silhouette value is a measure for the validity of the obtained cluster solution. All major clusters have a silhouette score greater than 0.85, indicating the high quality of the obtained cluster solution and revealing that the clusters are fairly homogenous (cf. Rousseeuw, 1987). The mean year of a cluster is the mean year of the publication dates of the papers within this cluster. Table 3 provides an overview of all clusters and their characteristics. The following section briefly describes the different clusters and provides a qualitative assessment of the cluster content. In order to trace the development of the field within and between clusters, the clusters are presented in chronological order based on the mean year of publication of the cluster members.

21

22

Fig. 7

B The State of Luxury Research

Cluster view of citation network

Source: Own illustration based on Citespace

B.4 Co-Citation Network and Research Clusters Table 3

23

Overview of clusters

Cluster Size number 1 9

Silhouette

Label

0.874

Mean Year 1978

2

14

0.934

1991

Signaling / Consump­ tion as social interaction view

3

14

0.972

1995

Economic Macroview: Pub- perspeclic policy tive: Income, materialism and welfare

Foundations

Description Luxury consumption as a social phenomenon

Luxury goods as a status signal

Papers in cluster and citation count Veblen (1899, 122 citations); Bagwell & Bernheim (1996, 76 cit.); Bourdieu (1984, 65 cit.); Lichtenstein et al. (1993, 25 cit.); Amaldoss & Jain (2005b, 24 cit.); Hirschman & Holbrook (1982, 23 cit.); Ireland (1994, 23 cit.); Holt (1998, 21 cit.); Levy (1959, 12 cit.) Leibenstein (1950, 64 cit.); Han et al., (2010, 49 cit.); Eastman et al. (1999, 38 cit.), O’Cass & McEwen (2004, 37 cit.); Richins & Dawson (1992, 32 cit.); Charles et al. (2009, 28 cit.); Amaldoss & Jain (2005a, 27 cit.); (Escalas & Bettman (2005, 27 cit.); Mason (1981, 25 cit.); Tian & Hunter (2001, 25 cit.); Belk (1985, 18 cit.); Fishbein & Ajzen (1975, 13 cit.); Holbrook & Hirschman (1982, 12 cit.); Belk (1984, 10 cit.) Corneo & Jeanne (1997, 53 cit.); Frank (1985b, 43 cit.); Duesenberry (1949, 33 cit.); Hopkins & Kornienko (2004, 26 cit.); Frank (1985a, 26 cit.); Chao & Schor (1998, 23 cit.); Solnick & Hemenway (1998, 19 cit.); Griskevicius, Tybur, & Van den Bergh (2010, 17 cit.); Easterlin (1995, 17 cit.); Frank (1999, 16 cit.); Alpizar, Carlsson, & JohanssonStenman (2005, 14 cit.); Dupor & Liu (2003, 13 cit.); JohanssonStenman, Carlsson, & Daruvala (2002, 10 cit.); Solnick & Hemenway (2005, 9 cit.)

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B The State of Luxury Research

Cluster Size number 4 14

Silhouette 0.885

Mean Year 1997

5

6

0.961

1999

6

13

0.901

2000

7

14

0.876

2001

Label Intercultural view

Description Culture as key determinant of luxury consumption

Papers in cluster and citation count

Bearden & Etzel (1982, 52 cit.); Wong & Ahuvia (1998, 46 cit.); Dubois & Duquesne (1993, 30 cit.); Bearden et al. (1989, 27 cit.); Markus & Kitayama (1991, 21 cit.); Tynan, McKechnie, & Chhuon (2010, 21 cit.); Tsai (2005, 19 cit.); Hofstede (1980, 19 cit.); Kapferer (1998, 14 cit.), Shukla (2010, 12 cit.); Kastanakis & Balabanis (2012, 12 cit.); Commuri (2009, 12 cit.); Dubois & Laurent (1994, 9 cit.); Schwartz (1992, 8 cit.) Luxury Luxury Vigneron & Johnson (2004, 44 cit.); culture goods as a Dubois et al. (2005, 30 cit.); Berry and mean- carrier of (1994, 21 cit.); McCracken (1986, ing meaning 21 cit.); Phau & Prendergast (2000, 21 cit.); Atwal & Williams (2009, 10 cit.) Self-con- The brand Belk (1988, 94 cit.); Fournier (1998, cept and as an 40 cit.); Rucker & Galinsky (2008, brand rela- identity- 24 cit.); Rucker & Galinsky (2009, tionships source 23 cit.); Escalas & Bettman (2003, 23 cit.); Berger & Heath (2007, 21 cit.); Richins (1994, 20 cit.); Braun & Wicklund (1989, 19 cit.); Berger & Ward (2010, 17 cit.), Sivanathan & Pettit (2010, 15 cit.); Sirgy (1982, 15 cit.); Brewer (1991, 13 cit.); Nelissen & Meijers (2011, 12 cit.) Brand The brand Wiedmann et al. (2009, 43 cit.); equity as the Keller (1993, 34 cit.); Vigneron source of & Johnson (1999, 33 cit.); Aaker financial (1997, 31 cit.); Zeithaml (1988, value 31 cit.); O’Cass & Frost (2002, 26 cit.); Aaker (1991, 24 cit.); Vickers & Renand (2003, 21 cit.); Truong, Simmons, Mccoll, & Kitchen (2008, 13 cit.); Ajzen (1991, 12 cit.); Husic & Cicic (2009, 10 cit.); Sweeney & Soutar (2001, 9 cit.); Amatulli & Guido (2011, 5 cit.); Hennigs et al. (2012, 5 cit.)

B.4 Co-Citation Network and Research Clusters

Cluster Size number 8 9

Silhouette

Label

0.95

Mean Year 2001

9

14

0.972

2003

Evolution- Luxury as ary view a costly signal to indicate reproductive value

10

8

0.866

2004

Brand management

Principles to create luxury value

 

 

 

 

Other

Health care expenditures

Counterfeiting

Description Legitimacy and authenticity of luxury signals

25

Papers in cluster and citation count Wilcox et al. (2009, 35 cit.); Nia & Zaichkowsky (2000, 26 cit.); Grossman & Shapiro (1988, 21 cit.); Bloch, Bush, & Campbell (1993, 15 cit.); Ang, Cheng, Lim, & Tambyah (2013, 13 cit.); Tom, Garibaldi, Zeng, & Pilcher (1998, 13 cit.); Phau & Teah, (2009, 11 cit.); Gentry, Putrevu, & Shultz (2006, 7 cit.); Eisend & Schuchert-Güler (2006, 5 cit.) Griskevicius et al. (2007, 50 cit.); Sundie et al. (2011, 38 cit.); Trivers (1972, 21 cit.); Li et al. (2002, 17 cit.); Saad (2007, 16 cit.); Buss & Schmitt (1993, 16 cit.); Kenrick, Griskevicius, Neuberg, & Schaller (2010, 14 cit.); Griskevicius, Goldstein, Mortensen, Cialdini, & Kenrick (2006, 14 cit.); Durante, Griskevicius, Hill, Perilloux, & Li (2011, 12 cit.); Roney (2003, 11 cit.); Janssens et al. (2011, 10 cit.); Li & Kenrick (2006, 9 cit.); Griskevicius et al. (2009, 9 cit.); Wilson & Daly (2003, 8 cit.) Nueno & Quelch (1998, 29 cit.); Kapferer & Bastien (2009b, 23 cit.), Fionda & Moore (2009, 12 cit.); Silverstein & Fiske (2003, 18 cit.); Berthon, Pitt, Parent, & Berthon (2009, 15 cit.); Parasuraman, Zeithaml, & Berry (1988, 13 cit.); Truong, McColl, & Kitchen (2009, 12 cit.); Schau, Muñiz, & Arnould (2009, 10 cit.) Blomqvist & Carter (1997, 34 cit.); Newhouse (1977; 33 cit.); Gerdtham et al. (1992, 16 cit.)

Source: Own illustration

25

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B The State of Luxury Research

The following section discusses the 10 clusters in chronological order, by the mean year of publication of the cited references. For the cited references in the citation network, the description highlights key intellectual contributions to the research field. The ten major clusters focus on the foundations of luxury research (Cluster 1), a signaling view closely related to conspicuous consumption (Cluster 2), an economic view with a strong focus on public policy (Cluster 3), an intercultural research stream that investigates how luxury differs between countries and cultures (Cluster 4), a stream dealing with luxury consumer culture (Cluster 5), the consumer’s self-concept and the formation brand relationships (Cluster 6), brand equity (Cluster 7), counterfeiting as an applied topic (Cluster 8), the evolutionary view based on costly signaling theory (Cluster 9), and luxury brand management (Cluster 10).

B.4.1 Analysis within Clusters Cluster 1 (Foundations), with 9 cluster members and a silhouette score of 0.87, has a mean year of publication of 1978 and is, thus, on average the oldest cluster. It contains a broad range of publications, setting up a theoretical basis for luxury research and outlining the theoretical bases for luxury consumption on various dimensions. The publications have in common that they extend the former perspective on consumer behavior, which focused on functional utility and rational decision making, by stating that consumption is a social phenomenon (Veblen, 1899). Consumers are driven by a variety of non-functional needs such as the symbolic meaning of goods (Levy, 1959), the hedonic aspects of consumption—that is, to experience pleasure, emotions through consumption, and use symbolic resources to construct an identity (Hirschman and Holbrook, 1982). The idea of signaling status through consumption is most prominent and most distinguishing, compared to non-luxury goods and necessities. Because social codes and traditional conceptions of status and identity are not determined by a closed social group, with the transformation from a traditionally structured society to a consumer society, those social codes and conceptions of identity change. They become more variable, and consumption provides a new way of constructing identity and interacting with others through the symbolic codes of consumption (Veblen, 1899). The choice of products and their salient and implicit characteristics also have a symbolic content. The prices of goods, themselves, can have a meaning, as when they signal quality or prestige (Lichtenstein et al., 1993). In the basic argument, the price paid for a good is an indicator for the prestige and economic capital of its owner, and thus is an indication of its social class (Amaldoss and Jain, 2005b). Yet the association of

B.4 Co-Citation Network and Research Clusters

27

social class goes beyond economic capital. Particularly, cultural capital and taste can create social class distinctions through the possession and consumption practices of luxury (Bourdieu, 1984). Cultural capital shapes consumption practices through aesthetic preferences, the mode of interpretation, materialistic orientation, tastes, consumer subjectivity, or the use of leisure time, and thus plays an important role in the construction of social class (Holt, 1998). Recognition of the changing nature of consumption and luxury also raises normative questions that trigger discussions about implications for public policy (Bagwell and Bernheim, 1996) and taxation (Ireland, 1994). The contributions in this research cluster are mainly conceptual in nature and come from a variety of different perspectives, that all recognize the inadequacy of previous purely economic models to understand luxury consumption. This study terms cluster 1 “foundations,” as the papers in this cluster bring together the diverse intellectual ideas to build the luxury research field. Cluster 2 (Social consumption and signaling) has 14 cluster members, a silhouette score of 0.93, and a mean year of publication of 1991. This cluster builds heavily on the ideas that luxury consumption is a social activity, and luxury goods can act as a signal for associating with another group of consumers (also called the bandwagon effect) or dissociating from others (also called the snob effect (Leibenstein, 1950)). From a social perspective, therefore, both the conformity and the uniqueness needs (Tian and Hunter, 2001) of an individual can provide explanations for conspicuous consumption, which is seen mainly as externally motivated and with goods overtly displayed (Amaldoss and Jain, 2005a), and status consumption, which can include subtler ways of gaining prestige (O’Cass and McEwen, 2004). The reference group itself is a source of brand meaning that consumers can try to affiliate with by conforming to their consumption choices (Escalas and Bettman, 2005). Based on their need for status and wealth, luxury consumers can be classified into four types that show the social dynamics behind their consumption motivations and behavior: The Patricians, who convey subtle signals of group membership to each other; the Parvenus, who use loud signals to dissociate themselves from groups at lower wealth levels; the Poseurs, who mimic the loud signals of the parvenus in order to symbolically associate themselves with their aspired target community; and the Proletarians, who do not engage in signaling (Han et al., 2010). How and to what extent luxury goods can act as a status signal depends on the society (Charles et al., 2009, Mason, 1981) and the cultural environment (Belk, 1984, Belk, 1985)—the degree to which materialism plays a role, for instance (Richins and Dawson, 1992). Social consumption motives can be understood both from an information processing view (Fishbein and Ajzen, 1975) or from an experiential perspective (Holbrook and Hirschman, 1982). Research in the social consumption and signaling cluster draws heavily on the concepts of status consumption, self-concept, and signaling 27

28

B The State of Luxury Research

theory. It contributes to subsequent research, both through a better understanding of the theoretical processes behind social signaling, and of personal orientation to materialism or the need for uniqueness, as exemplified by the high number of scale development articles in this cluster. Cluster 3 (Economic view: public policy) has 14 cluster members, a silhouette score of 0.97, and a mean year of publication of 1995. The cluster members come mainly from the economic perspective and have a strong public policy focus. The consumption for status motive is also core to the research in this cluster (Duesenberry, 1949, Frank, 1985a), yet most publications are concerned with the ways in which this status consumption affects society at a macro level, as in the example of social welfare and happiness. A key idea is that relative income, not absolute income, is key to happiness and well-being, as social consumption choices are interdependent (Duesenberry, 1949). A key term used by this research cluster of research is that of positional goods—that is, goods that decrease in utility as they become more widely available (Frank, 1985b, Solnick and Hemenway, 1998), because availability alters the signaling value (Corneo and Jeanne, 1997). The positional character and the consumption motivations are also determined by the product category (Alpizar et al., 2005). While visible goods are particularly suited for status consumption (Chao and Schor, 1998), other products can also act as status signals as long as the signal is recognized (Griskevicius et al., 2010). The importance of luxury consumption for public policy is underlined by the observation of many authors that the “positional” aspect of goods and the consumers desire to “keep up with the Joneses”, which can create an upward spiral that forces individuals to spend more and more resources on consumption in order for individuals to maintain their social position in the status game (Hopkins and Kornienko, 2004). From a public policy view of consumption, this cluster examines how consumption, material possessions, and income affect happiness (Easterlin, 1995, Solnick and Hemenway, 1998) and social welfare (Dupor and Liu, 2003, Johansson-Stenman et al., 2002), and discusses potential implications for public policy (Frank, 1999). The research in this cluster is based mainly on economic theories and measures, such as the effects of relative income on well-being—conceptual studies that develop mathematical economic methods or use secondary data for econometric analyses. Cluster 4 (Inter-cultural view) has 14 cluster members, a silhouette score of 0.89, and a mean year of publication of 1997. The main literature in this cluster examines how culture influences luxury consumption through different norms, reference groups and self-concepts, and specifically addresses the influence of different cultures. Across markets, income and cultural affiliation seem to be positively related to luxury consumption (Dubois and Duquesne, 1993). However, this cluster recognizes the complexity of the luxury concept and the various meanings that luxury

B.4 Co-Citation Network and Research Clusters

29

can have, depending on the cultural and social environment (Dubois and Laurent, 1994). Different cultures have varied cultural values and norms (Hofstede, 1980) that influence individual behavior (Schwartz, 1992). An example of this influence is susceptibility to interpersonal influences (Bearden et al., 1989) such as reference groups (Bearden and Etzel, 1982) or self-concepts (Markus and Kitayama, 1991). Thus, while some characteristics of status consumption such as the brand are stable across cultures, their impact differs across countries (Shukla, 2010). Particularly, the concept of an interdependent Asian self-concept compared to an independent Western self-concept is investigated as a key variable for understanding the extent to which personal and interpersonal motives such as conformity and uniqueness play a role in different markets (Kastanakis and Balabanis, 2012, Tsai, 2005, Wong and Ahuvia, 1998). The luxury brand is an important carrier of meaning (Kapferer, 1998) that can be appropriated to construct the self-concept in either a genuine or non-genuine way (“non-genuine” referring to the use of counterfeit goods (Commuri, 2009)). Understanding how these cultural differences influence consumer behavior is specifically important because the perceived value of luxury goods is co-created by the consumer (Tynan et al., 2010). A social psychology view constitutes a strong basis for research in this cluster, and the method applied is largely empirical research that explores and tests the theoretical propositions in various cultural contexts. Cluster 5 (Luxury culture) has 6 cluster members, a silhouette score of 0.96, and a mean year of publication of 1999. This cluster is related to the intercultural cluster through its focus on culture, yet from a theoretical position it is more closely associated with consumer culture theory, drawing on philosophical, historical, and anthropological concepts. The concept of luxury has been a source of public discourse since the era of ancient Greece, yet it has been transformed through the emergence of a consumer society in which status is no longer only ascribed, but can also be achieved and signaled through luxury consumption (Berry, 1994). Consumption is seen as a cultural activity in which consumption objects have become bearers of cultural meaning. McCracken’s model of meaning movement proposes that meaning moves from a culturally constituted world to consumer goods through the fashion and advertising systems, and ultimately moves to the individual consumer through rituals of possession, exchange, grooming, or divestment (McCracken, 1986). The conditions of postmodernity, particularly hyper-reality and the concern for personal image, have led to an increased focus on brands as carriers of meaning, and real or imagined experience as a mode of consumption (Atwal and Williams, 2009). Meanings carried by consumption codes create cultural contexts that, in turn, influence consumption. Other research in this cluster is applied research, focusing on identification of cultural codes and understanding their generalizability across contexts (Dubois et al., 2005). Western consumers, for 29

30

B The State of Luxury Research

example, consider rarity to be a fundamental code of luxury, but this is not necessarily true for Eastern consumers (Phau and Prendergast, 2000). This cluster also includes the study of Vigneron and Johnson (2004) that identifies different luxury dimensions and measures the luxuriousness of brands based on their potential to fulfill needs for conspicuousness, uniqueness, quality (non-personal), hedonism, and extended self (personal). Cluster 6 (Self-concept and brand relationships) has 13 cluster members, a silhouette score of 0.91, and a mean year of publication of 2000. The main theme of the cluster is the investigation of how possessions and brands create meaning and are used to construct personal identity. Material possessions can become part of an extended self-concept, and thereby can influence identity construction (Belk, 1988). The cluster thus builds on materialism (Richins, 1994a), how consumers form relationships with brands (Fournier, 1998) and how the self-concept influences consumption choices (Sirgy, 1982). This research cluster proposes self-protection and self-enhancement as primary motivations for luxury consumption. In the case of compensatory consumption, when consumers use luxury goods as a means to restore feelings of power, luxury goods are serving as protection for the self-concept (Rucker and Galinsky, 2009, Rucker and Galinsky, 2008, Sivanathan and Pettit, 2010). In a similar way, luxury goods can also serve to construct and communicate a desired social identity (Brewer, 1991). In areas that are relevant to identity, consumers are more likely to diverge from others to signal the desired identity (Berger and Heath, 2007). Using luxury goods as a signal can even lead to social benefits if the receiver understands the signal (Nelissen and Meijers, 2011). Recent research has also challenged the view that the signal needs to be conspicuous, which has been a major focus of previous studies before (see Cluster 2). If the receiver has the necessary knowledge and ability for decoding, the signal can be subtle—a condition referred to as “inconspicuous consumption” (Berger and Ward, 2010). The papers in this cluster are largely experimental studies testing the various conditions and mechanisms under which these social-psychological effects take place. While the foundational stem dates from the 1980s and 1990s, this cluster has recently garnered renewed attention, particularly for studies on compensatory and inconspicuous consumption. This cluster is thus related to Cluster 2. Though material possessions can serve as signals to others, this cluster focuses primarily on perceived meaning from the consumer’s individual perspective, rather than on the socio-psychological processes of interaction with others. Cluster 7 (Brand equity) has 14 cluster members, a silhouette score of 0.88, and a mean year of publication of 2001. This cluster frames the brand as a central element of luxury, and provides a conceptual foundation for understanding cus­ tomer-brand equity and its dimensions. Customer-based brand equity stems from

B.4 Co-Citation Network and Research Clusters

31

brand awareness and strong, unique, and favorable brand associations (Keller, 1993). Non-product-related brand associations, such as the symbolic content, the brand personality, feelings, the status and conspicuousness or the congruence with the consumer’s self-image, play a particularly important role for status brands (Aaker, 1997, O’Cass and Frost, 2002, Truong et al., 2008). Related studies have proposed several concepts for characterizing luxury brands. Vigneron and Johnson (1999) suggest that luxury brands differ from non-luxury brands by having greater perceived conspicuous value, uniqueness value, social value, hedonic value, and quality value. Luxury brands can be understood as having mainly functional, experiential, and symbolic value dimensions (Vickers and Renand, 2003), quality, emotional price, social (Sweeney and Soutar, 2001) or alternatively financial, functional, individual and social value dimensions for the consumer (Wiedmann et al., 2009). The conceptualization of value dimensions by Wiedmann et al. (2009) has also been shown to be stable across countries (Hennigs et al., 2012). This cluster has a strong managerial orientation: The brand is an asset that translates into the consumer’s greater willingness to pay, and the company’s financial value generation (Aaker, 1991). Thus, research in this cluster also explores the factors that determine luxury consumption (Husic and Cicic, 2009) and how the consumer perception is linked to behavior (Ajzen, 1991, Zeithaml, 1988). The research in this cluster is often conceptual or takes the form of empirical surveys, and has a strong consumer behavior orientation. The cluster is linked to a variety of clusters, most prominently Cluster 6 to uncover the motivational underpinnings and Cluster 10 to derive managerial implications. Cluster 8 (Counterfeiting) has 12 cluster members, a silhouette score of 0.95, and a mean year of publication of 2001. This cluster studies a specific practical phenomenon of luxury brands—consumer attitudes, preferences, and purchase behavior regarding counterfeit luxury brand products (Eisend and SchuchertGüler, 2006). Many consumers are willing to pay higher prices for counterfeits of prestige brands than for authentic generic brands (Grossman and Shapiro, 1988). Consumers often buy counterfeits willingly and knowingly, and may be motivated by a lack of financial resources or need to increase confidence through the appearance of owning luxury brands (Bloch et al., 1993). Conversely, high perceived risk and moral concerns can act as deterrents (Gentry et al., 2006). The consumption of counterfeits is greater for less functional products such as fashion (Tom et al., 1998), and when the consumption is socially motivated (Wilcox et al., 2009). Sometimes even consumers who buy genuine luxury brands will engage in counterfeit consumption (Nia and Zaichkowsky, 2000). Due to the strong application focus of this cluster, the studies are mainly empirical surveys. The research can be closely linked 31

32

B The State of Luxury Research

to the theoretical bases of Cluster 2 and Cluster 6, dealing with social signaling and the consumer’s self-concept, respectively. Cluster 9 (Evolutionary view) has 14 cluster members, a silhouette score of 0.97, and a mean year of publication of 2003. Evolutionary theory proposes that beyond immediate physiological needs and self-protection, the key motivations for humans to act are survival and reproduction (Kenrick et al., 2010, Trivers, 1972). This thinking has more recently been applied to consumer behavior, and has been investigated as a fundamental motivation for consumption (Saad, 2007). The core idea of the publications in this cluster is that short-term and long-term mating goals can influence consumption choices (Buss and Schmitt, 1993). The research in this cluster uses “costly signaling theory” as one of their key theories. The theory, originally dealing with reproductive fitness, proposes that mate quality cannot be observed directly. Yet someone who possesses these qualities can use credible signals in order to communicate them. In order for the signal to be credible, only someone who possesses the underlying characteristic should be able to afford the signal due to their high social or economic cost (Griskevicius et al., 2007, Li et al., 2002). Conspicuous goods can act as such costly signals in a mating context, as they increase intersexual attraction, and they can also spur intrasexual competition. It has been shown that mating goals can lead to a heightened perceptual readiness for status products (Janssens et al., 2011). The signaling mechanisms largely happen subconsciously (Roney, 2003), and differ both by mating goal and sex (Durante et al., 2011, Griskevicius et al., 2006, Griskevicius et al., 2009, Wilson and Daly, 2004). Status goods have been found to be particularly relevant for short-term mating goals (Kenrick et al., 2010, Li and Kenrick, 2006, Sundie et al., 2011). The research in this cluster is strongly influenced by evolutionary theories from the natural sciences, and applies theories of mating behavior to the context of luxury consumption, mainly in experimental studies. Cluster 10 (Luxury brand management) has 8 cluster members, a silhouette score of 0.87, and a mean year of publication of 2004. The cluster has a strong managerial focus and combines publications in the field of luxury marketing and brand management to identify management principles of luxury brands. In order to build and maintain their legitimacy, luxury brands need to follow different management principles than non-luxury brands—for example, in their management of customers, products, services, communication or distribution, and may even invert the managerial principles of non-luxury brands (Kapferer and Bastien, 2009, Nueno and Quelch, 1998). For example, a key value of luxury brands is exclusivity, which presents challenges to strategy and management, as growth of the brand needs to be managed differently than non-luxury brands (Fionda and Moore, 2009, Kapferer and Bastien, 2009). One way for luxury brands to grow is to extend the brand to lower

B.4 Co-Citation Network and Research Clusters

33

price points for example through line extensions (Silverstein and Fiske, 2003) or to a masstige concept (Truong et al., 2009). However, Berthon et al. (2009) propose that not all luxury brands are the same, but that they can be segmented along two dimensions: their ontological mode (whether they are enduring or transient, such as experiences) and their aesthetic mode (whether they appear on the surface as do highly conspicuous brands, or whether they require the deep knowledge of an expert or connoisseur). The cluster is linked to the brand equity research in Cluster 7, but deals more specifically with the managerial challenges and specificities of luxury brands. The papers in this cluster have often been co-cited with publications on brand community (Schau et al., 2009) and service quality (Parasuraman et al., 1988), showing their link to managerial and consumer research literature. This cluster is a recent cluster, as indicated by the recent publication dates and the relatively high share of conceptual contributions.

B.4.2 Analysis between Clusters and Development over Time While most research streams have been developing in parallel, and nearly all co-citation clusters include works that were published long before 2000, some temporal shifts within the research field can be identified (see Figure 8). The field evolved from early sociological works that provide the theoretical underpinnings of luxury consumption as a social activity to a focus on economic studies, to cultural research, consumer psychology, and applied managerial research focused on company decision making. The foundational works of Veblen (1899), with his first observation of conspicuous consumption, and later Bourdieu (1984), with his cultural capital account of status construction, have provided the theoretical foundations for many works in the luxury research area (Cluster 1). The research in the early clusters was more strongly focused on how status is constructed and signaled (Cluster 2), and on the implications of status consumption for social welfare (Cluster 3). The research front then evolved to recognize differences not only between social classes, but also between different cultures (Cluster 4). This has led to a view of consumption as a cultural activity, and particularly luxury goods as a source of cultural meaning (Cluster 5). The fields of cultural studies and psychology have come together to study how the cultural environment influences self-concept and, consequently, how culture affects consumption behavior and the formation of relationships to possessions and brands (Cluster 6). The brand has emerged as a central symbol of luxury and is seen as a key asset that creates brand equity and financial value for the company (Cluster 7). This brand focus has also spurred research in the field of counterfeiting, with the motivations and consequences of legitimate and illegitimate 33

Fig. 8

Source: Own illustration

Timeline of cluster evolution

2000s

1990s

#4: Intercultural view

#2: Signaling view

#9: Evolutionary view

Goods & Brands as an identity-source

#6: Self-concept & brand relationships

Culture as key determinant of luxury meaning

Micro-perspective: Luxury goods as a status signal

Luxury good as a costly signal for indicating reproductive value

1970/1980s

#10: Brand management

The brand as the source of financial value

#7: Brand equity

Macro-perspective: Income, materialism and welfare

Principles to create luxury value

Authenticity

#8: Counterfeiting

Luxury goods as a carrier of meaning

#3: Economic view: public policy

Luxury consumption as a social phenomenon

#5: Luxury culture

#1: Foundations

Figure 8: Timeline of cluster evolution

13

34 B The State of Luxury Research

B

B.5 Development of an Integrative Framework

35

brand usage (Cluster 8). More recently, the status signaling perspective (Cluster 2) has been complemented by a “costly signaling” perspective based on evolutionary theory (Cluster 9). Finally, management-oriented publications have emerged, presenting key findings and best practices for managers in the luxury industry (Cluster 10). A comparison of the field’s evolution with other areas, such as the evolution of the marketing field in general, reveals several parallels. Marketing as a field has moved from its fundamentals to an applied economic view (see #3) to a managerial view (#7, #8, #10) to a quantitative science (#7) to a decision science to an integrative science that brings in insights from related research fields (#5, #9) (Kumar, 2015). The evolution of the luxury research field demonstrates a much stronger focus on the consumer and cultural aspects (#2, #6, #4, #5). Both recently and currently, the marketing field has further evolved along the resource-conscious view, the investment approach, and very recently the emerging approach of a new media age, where marketing is an integral part of the organization that manages a wide variety of stakeholders to better understand consumer phenomena such as customer engagement and social media in order to continuously improve the effectiveness and efficiency of the marketing activities (Kumar, 2015).

B.5

Development of an Integrative Framework

B.5 Development of an Integrative Framework

In order to add further depth and breadth to the findings of the quantitative and qualitative literature review on the luxury field, we develop a conceptual frame­ work of the dimensions and different levels of luxury. This framework shows the different theoretical perspectives and entities as well as their dominant underlying conception of luxury (luxury definition). The previous section shows the clusters of co-cited papers which are based on the actual citing behavior within the research field and are shaped both by intellectual linkages and the social nature of science and research (Merton, 1957). Thus, there are strong interconnections between some clusters that the framework below illustrates conceptually.

B.5.1 Conceptual Model The conceptual model developed in this chapter consists of three levels (macro, meso and micro) that comprise different perspectives, that is the philosophical, the historical, cultural, social, and economic perspectives as well as the luxury 35

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B The State of Luxury Research

consumer (individual), the luxury producer (managerial) and the luxury realization (material) perspectives. The macro-level includes the philosophical perspective of luxury, which is shaped by its historical and cultural context. From a philosophical perspective, the fundamental characteristic across all studies and perspectives on luxury is that luxury is the “extraordinary” (Berry, 1994, Grugel-Pannier, 1996, Heine, 2012). Thus, the definition is relative and depends on the conception of the ordinary within its historical-cultural (macro), socio-economic (meso), and individual (micro) context (cf. Heine, 2012). While the historical context of luxury has evolved over time, luxury has always spurred discussions about the role of luxury for individuals and society (for an overview see Berry (1994)). Often these discussions have an implicit normative view, in which many classical discussions (such as Plato and Aristoteles or Seneca and Cicero) morally condemn luxury as something unnecessary and wasteful (Berry, 1994). Thus, discussions of luxury were strongly centered around morality and negative connotations of the “extraordinary” as exceeding social norms. With the transition to modernity and the emergence of a market society in the seventeenth century, the debate shifted from a moral (mainly criticizing the excessive consumption and thus highlighting a quantitative understanding of luxury) to an economic level, highlighting consumption as a democratic instrument of choice (e.g., Adam Smith) the positive economic consequences of trade for society (cf. Berry, 1994, Valtin, 2005). In line with this change in perspective was an increasing focus on the qualitative material aspects of luxury and its refinement (e.g., David Hume, see Berry (1994)). With the emergence of a consumer society, the debate shifted to the relation between consumption and production of luxury and the marketplace as a mediator (for example with the emergence of department stores and the industrial production of goods (cf. Kroen, 2004, Slater, 1997). Some of the foundational works in cluster #1 such as the key work of Veblen (1899) explicitly deal with these phenomena. The other research in cluster 1 also builds on the strong link between luxury, culture, economy and society in its historical context and thus builds the conceptual foundations for many of the other research clusters. From a historical perspective, the most recent shift has been the emergence of a global luxury consumer group and the paralleling institutionalization of the luxury industry with the emergence of large luxury corporations and conglomerates such as LMVH, Kering or Richemont (Som and Blanckaert, 2015). During all these historical developments, the cultural context and cultural changes have played an important role, which highlights the importance that the context plays in the construction of luxury. Today, in a consumer culture, the boundaries between culture and commerce are vanishing (cf. Lury, 2011). Culture is consumed and consumption has become a

B.5 Development of an Integrative Framework

37

cultural activity. Luxury draws on both, culture and consumption, as particularly culture is an integral part of luxury brands. Luxury goods are thus dependent on and reflective of cultural values (see cluster #5). From a cultural perspective, luxury has been a place for collective desire and luxury goods its material realization (Belk et al., 2003, McCracken, 1990). Moreover, producers of luxury build on cultural codes and myths to endow their brands and products with symbolic meaning and to set them apart from the profane (Belk et al., 1989). In this process, the dream value of luxury brands is created, which is an important part in the seduction of luxury consumers (Dubois and Paternault, 1995, Kapferer and Valette-Florence, 2016). Research in this perspective is centered around the link between culture, consumption and luxury (Cluster #5, which also includes Berry’s historical work) and how differences in cultural values influence the construction of desire, the self-concept and consumption choices. The meso-level includes the social and economic environment of luxury. One fundamental constant on the social perspective is that luxury consumption is shaped by its social environment and particularly its construction and signaling of status through consumption (cf. Kapferer, 2009). The emergence of a consumer society challenged the view that social status is externally determined and inherited (with luxury objects as material reflections) to a view that status is socially constructed and that luxury goods provide an appropriate medium to construct and signal status (cf. Kapferer, 2009). Thus, the idea of signaling status through consumption has gained popularity in the research field (Cluster #2). This also traces back to many of the fundamental works in cluster #1 such as Bourdieu (1984)’s forms of economic, social, cultural and symbolic capital in the construction of status. More recently evolutionary psychology has provided a new theoretical explanation for the motivation of this social status-seeking behavior and thus can also be conceptually related to the social-interactionist perspective on luxury (Cluster #9). The economic conditions also shape the concept of luxury and highlight, that to remain extraordinary, the concept of luxury must continuously evolve. The eco­ nomic perspective predominantly focuses on the high price of luxury goods as an extraordinary characteristic. This high price is seen as having a signal value to signal social status and illustrate status-seeking behavior within a rational expectations framework (Cluster #3). Moreover, discussions in the economic perspective link back to socially-normative discussions such as the implication on welfare and consequently public policy decisions. The micro-level includes the luxury consumer and the luxury producer. The luxury consumer perspective highlights the subjectivity and multidimensionality of the luxury concept, as a result of the complex interplay between the individual and contextual influences. It is mainly rooted in the psychological tradition and 37

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the most prevalent field in luxury research. Key to the conceptualization of luxury is the emotional and cognitive base of the consumer, in which luxury is mainly conceptualized through pleasure and feeling special (and thus different to ordinary experiences (McFerran, 2013)). Much research has focused on understanding consumption through concepts such as identity, values, motivation and the role of cognition and emotion in consumer behavior. Key questions of this perspective are the stability of phenomena, for example, which of the factors that influence luxury perception are stable across contexts (e.g., the identity or values), or highly situation-dependent (e.g., situational factors influencing the luxury perception in a retail environment). Moreover, research in this perspective emphasizes the importance of understanding unconscious factors that influence these perceptions (e.g., store scent (Madzharov et al., 2015)). Other examples comprise values and identity (e.g., socio-culturally created myths and conceptions of desire or the influence of culture on the self-concept as in cluster 4 and 5). In addition, research has contributed to an understanding of the consumer’s perception of luxury’s dimensions and attributes and actual consumer behavior. Research in this area has largely emphasized the formation of identity through consumption, such as the formation of brand relationships from a consumer perspective (Cluster 6), the underlying values and motivations for luxury consumption and the dimensionality of brand equity (Cluster 7). The luxury producer perspective focuses on the management of luxury brands and the creation of a brand symbolism that is core to the value of luxury brands. This encompasses multiple dimensions from strategy, to product and service design, to marketing and sales, operations, and organizational questions. A dominant view on luxury of this perspective is that luxury firms are selective and manage exclusivity and rarity which differentiates them from mass-market brands. This also poses the unique challenge for luxury brands of growing while remaining exclusive (Kapferer and Valette-Florence, 2016). Another central aspect is the focus on creative processes and the creation of extraordinary customer experience and symbolic values through storytelling (cf. Fuchs et al., 2013). Much of the recent literature, particularly in the marketing and management fields, has focused on this managerial perspective, particularly with a focus on brand management (as the brand is seen as a key asset for luxury brands) as well as its operationalization in management practices (such as product design, pricing, communication, distribution, and service management). It has strong interactions with the consumer perspective and research on consumer perception, particularly on topics such as brand equity (Cluster 7). Several theoretically interesting phenomena emerge out of the interplay between the managerial and consumer perspective, such as counterfeiting which is particularly prevalent in the context of luxury brands (Cluster 8).

B.5 Development of an Integrative Framework

39

At the core of the framework is the concrete luxury realization, which is defined through the codes (underlying values) and signs (materializations, such as objects, products and experiences) that signify a luxury essence. This is most often the concrete material luxury object in the form of luxury products and experiences. The symbolic content of a brand stands for a context-dependent conception of luxury. The further abstraction which we term luxury essence are the luxury factors that descend the world of material objects, immaterial values and ideas, and represent the constants in the conception of luxury. They are linked to the philosophical idea of luxury within a broader discourse about the nature of existence and being. Figure 9 provides an overview of the different perspectives (entities – e.g., consumer perspective), their relationships (e.g., the relationship between a consumer’s self-concept and the social environment) and phenomena emerging from their interaction (e.g., the counterfeiting). The position of the research clusters within this framework indicates their focus and their shading indicates the dominant perspective, as the empirically observed clusters may encompass different theoretical perspectives. Table 4 provides an overview of the dominance of these perspectives within each cluster.

39

40

Fig. 9

B The State of Luxury Research

Conceptual model of luxury

Source: Own illustration

B.5 Development of an Integrative Framework Mapping of empirically observed clusters to theoretical perspectives

6 7 8 9 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Degree of influence for each cluster

high

medium

Luxury producers

Luxury consumers

5

Economic environment

4

Social environment

3

Micro

Cultural context

2

Foundations Signaling / Consumption as social interaction view Economic view: Public policy Intercultural view Luxury culture and meaning Self-concept and brand relationships Brand equity Counter­ feiting Evolutionary view Brand management

Meso

Historical context

1

Label

Cluster number

Philosophical concept

Macro

Luxury object

Table 4

41

low

Source: Own illustration

41

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B The State of Luxury Research

B.5.2 Recent Developments in Luxury Research Field Based on a qualitative analysis of recent research in the luxury field and the conceptual model, we identify several streams that have recently emerged and gained prominence. In this summary, we group the studies according to the main conceptual contribution. From a methodological standpoint, we see a trend towards more qualitatively oriented studies, more research across clusters and viewpoints and new methods such as neuropsychological research (Pozharliev et al., 2015) and data sources such as social media (Kim and Xu, 2013). Moreover, special issues (such as Chandon et al., 2016) have contributed to the institutionalization of the field. Studies from a philosophical or conceptual perspective remain rare. Nevertheless, there have been theoretical advancements and developments in this direction and attempts to find definitions for luxury (Cristini et al., 2017, Wierzba, 2015, Wilson, 2014). In the historical perspective some recent studies have traced the evolution of luxury, often through specific case studies such as a study of seventeenth-century Paris (DeJean, 2014, Faiers, 2014, Kovesi, 2015). Recent studies from a cultural perspective have studied the role of luxury in a consumer culture (Armitage and Roberts, 2014, Featherstone, 2014) or specific cultural phenomena such as the construction of luxury sites such as the supercar (Warren, 2014), wristwatches (Oakley, 2015), the Napa Valley Wine region (Taplin, 2015). Moreover, recent research from a cultural angle has been applied to managerial settings, for example to understand brand meaning (Al-Mutawa, 2013, Roper et al., 2013), the cultural construction of luxury brand myths in a retail environment (Dion and Borraz, 2015, König et al., 2016) or advertisements (Freire, 2014), often through interpretative research. Research in the intercultural perspective has particularly been interested in luxury markets in Asia (Shukla et al., 2015), and specifically China (Forêt and Mazzalovo, 2014, Liu et al., 2015, Liu et al., 2016), yet has also been carried out in developed markets (Chattalas and Shukla, 2015). Recent studies from an economic perspective have continued to study conspicuous consumption in emerging economies (Jaikumar and Sarin, 2015), social influence (Amaldoss and Jain, 2015) or market models for fashion products (Kuksov and Wang, 2013). Within studies from a social and socio-psychological perspective, the social construction of status and social class and its implications on consumers (Bellezza et al., 2014, Ivanic, 2015, Lee and Luster, 2015, O’Guinn et al., 2015) as well as studies within the field of evolutionary psychology have retained its popularity (Butori and Parguel, 2014, Durante et al., 2014, Wang and Griskevicius, 2014). How status is constructed is undergoing a change reflected in the emergence of studies on inconspicuous consumption (Eckhardt et al., 2015). Moreover, research on the

B.5 Development of an Integrative Framework

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decoding of conspicuous symbols used by other consumers (Scott et al., 2013) and their effects on self-brand relations (Ferraro et al., 2013) have gained popularity. The vast majority of recent studies have contributed to the consumer perspective. Transformational consumer research has emerged as a new topic (Llamas and Thomsen, 2016). New cognitive theories such as construal level theory (Hansen and Wänke, 2011) have gained popularity to provide explanations for phenomena associated with luxury such as money (Hansen et al., 2013), hedonic consumption and indulgence (Mehta et al., 2014), or gift-giving (Baskin et al., 2014). Moreover, new methods have been adopted, for example to study neural reactions to luxury brands and how they are influenced by their social context (Pozharliev et al., 2015). While the predominant focus is on purchase decisions, recent research has also started to study luxury disposition (Lee et al., 2015). Other researchers have used socio-demographic variables to study generational effects (Schade et al., 2016) or the role of gender (Stokburger-Sauer and Teichmann, 2013) on consumer behavior. Research that builds on existing clusters includes research on brand relationships (Kessous et al., 2015), brand personality (Sung et al., 2015) and brand archetypes (Kim and Xu, 2013) or consumer-related factors such as intrinsic or extrinsic motivations (Huang et al., 2014, Kastanakis et al., 2014), self-esteem (Loughran Dommer et al., 2013), pride (McFerran et al., 2014) or identity and self-definition (Bhattacharjee and Mogilner, 2014). Research from a managerial perspective has strongly focused on retail settings as well as brand management and new production and communication technologies. Research in the retail domain has established a link to the cultural perspective and for example studied luxury stores as art institutions (Joy et al., 2014). Other studies have studies new distribution concepts such as pop-up stores (Klein et al., 2016), in-store preference formation (Ardelet et al., 2015, Madzharov et al., 2015) and retail interactions such as employee arrogance (Wang et al., 2013) and consumer rejection (Ward and Dahl, 2014) or commercial friendships between sales persons and customers (Rosenbaum et al., 2015). Research on luxury brand management has focused on general managerial principles (Berghaus and Bossard, 2015, Kapferer and Valette-Florence, 2016), brand extensions (Albrecht et al., 2013a, Dall’Olmo Riley et al., 2015, Som and Pape, 2015), pricing research (Hwang et al., 2014, Kapferer and Laurent, 2016, Parguel et al., 2016, Rao and Schaefer, 2013), or success factors for ingredient branding (Moon and Sprott, 2016). Research on production technologies as investigated the opportunities and risks of mass customization (Yoo and Park, 2016) and user design (Fuchs et al., 2013) for luxury brands and contrasted them to traditional manufacturing (Fuchs et al., 2015, Lee, 2015). Research on marketing communications has focused on emerging media such as social media marketing (Godey et al., 2016), traditional 43

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advertising (Barry and Phillips, 2016), explored the value of partnerships between luxury brands and charity organizations (Hagtvedt and Patrick, 2016) or revisited scarcity effects in communication (Jang et al., 2015). Moreover, applied research has been conducted, mainly in the setting of the luxury services and hotel industry (Riscinto Kozub et al., 2014, Rishi et al., 2015) or the fashion industry (Hanslin and Rindell, 2014). Research on luxury phenomena has continued to be dominated by counterfeiting (Amaral and Loken, 2016, Chen et al., 2015, Hennigs et al., 2015, Meraviglia, 2015, Randhawa et al., 2015, Stöttinger and Penz, 2015, Teah et al., 2015). With sustainability (Cervellon, 2014, Kapferer and Michaut, 2015) and ethical considerations in production, new socially relevant and overarching topics have emerged (Phau et al., 2015). Based on the combination of the previous analysis, future research can adopt four strategies: (1) deepening understanding, (2) bridging clusters, (3) growing emerging views, (4) reinventing the dominant view. Firstly, research could deepen our understanding of theoretical clusters in the framework that are not yet well understood, such as the neurophysiological response to luxury brands, differences in cognitive processing between luxury brands and non-luxury brands. Secondly, future research can advance our knowledge of the luxury domain by connecting clusters that are thus far unconnected. Examples could be applying a cultural perspective to the analysis of luxury advertisements or investigating how consumers decode luxury codes in different social and cultural settings. Thirdly, research can identify and contribute to emergent research clusters such as new technologies such as digitalization and social media on the creation and management of luxury brands or transformational consumer research. Fourthly, research could bring in new perspectives from other fields such as methods using big data to identify trends in the luxury segment.

B.6 Discussion B.6 Discussion

The concept of luxury is as old as humankind and has evolved substantially over the course of the last centuries (cf. Kapferer, 2009). While a treatment of such a complex, multifaceted, and ever evolving topic can never be exhaustive, this analysis attempts to provide a historical overview of the luxury literature and to develop a comprehensive framework. This paper thus contributes to an understanding of the research field itself—to its key research areas as well as their historical development. Our research shows that a wide variety of research fields, from psychology, sociology, cultural studies, economics, or business and management contribute

B.6 Discussion

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to the advancement of the luxury domain and are representative of both the long tradition as well as the intellectual diversity of the field. This paper identifies ten major document-co-citation clusters that represent the key research areas within the luxury field, as seen by the broader scientific community. The clusters show an evolution from early sociological research to managerial and applied topics that have recently begun to dominate the research field. While research activity is ongoing across clusters, the current and trending publications come mainly from applied research investigating managerial issues such as counterfeiting or brand management, or from new perspectives on luxury consumption such as the evolutionary view. Moreover, this study develops a comprehensive framework that integrates the findings of the quantitative and qualitative study and highlights dominant viewpoints and discourses. The next section briefly acknowledges the limitations of this study, before the paper concludes with implications for further research and management practice.

B.6.1 Limitations of this Study A bibliometric analysis can be a good starting point for research in the business domain, particularly for interdisciplinary topics, and should be complemented by a systematic review of papers as in this study. While the bibliometric citation analysis provides quantitative evidence about the importance and connection of the papers in the research field, qualitative analysis continues to involve subjective judgments by the researcher as well as an explorative approach for interpreting the findings (Fetscherin and Heinrich, 2015). While bibliometric methods cannot substitute for a qualitative judgment, they work as a complement toward a more objective assessment of the research field. We believe that the combination of quantitative and qualitative methods can help researchers to overcome the limitations of traditional qualitative or systematic reviews, as well as the shortcomings of solely quantitative analyses. Nevertheless, this study has certain limitations that are important when considering the method and findings. While bibliometric citation analysis is a valuable tool in prioritizing important contributions based on the importance of the work assigned by the research community and identifying the structural relationships between works, it is based on actual citation behavior. Citations are influenced by scientific factors such as the work’s importance, but also by non-scientific factors such as the author’s knowledge of the literature or the availability of the article (Bornmann et al., 2008). It is thus possible that publications are cited together not only for purely theoretical considerations. Moreover, the focus on citation count as 45

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an indicator of a work’s importance can lead to the inclusion of niche articles that can be highly relevant to a specific subfield, yet have not gained wider popularity (e.g., Mortelmans, 2005). This can be due to the dominance of certain research approaches in a field, such as an orientation toward empirical quantitative and experimental papers rather than conceptual contributions or qualitative research. It is also likely to be linked to the size of the readership of a certain publication and the “winner-takes-it-all” phenomenon that publications that are already highly cited get read more often, and thus reach a wider target audience (Aksnes, 2003). Moreover, because the document co-citation analysis uses real citation behavior, its focus is backward-looking, which has several implications. First, it has a bias toward older publications, as scientific findings and publications need time to be accepted within the scientific community and to receive a high number of citations. However, as we see in the analysis, even relatively recent publications such as (Berger and Ward, 2010, Han et al., 2010, Hennigs et al., 2012) have quickly gained popularity in the scientific community. Second, citation behavior is dynamic, so that the citations and co-citations of papers will evolve over time, potentially connecting unconnected clusters, identifying new ones and re-arranging the map as the scientific community grows and the field matures. Regarding this study, further studies can refine the scope of the research—for example, either focusing on just a specific subfield or specific journals or extending the scope to include further research fields or keywords (e.g., such as “hedonic consumption,” which is also related to luxury consumption but not equal, which is why this study excludes the keyword). Moreover, with the advance of computer technologies, new methods of automatic text analysis and natural language processing are likely to advance studies in the science of science (Garfield, 2009).

B.6.2 Practical Implications While this study is mainly situated in the tradition of scientometrics and the exploration of the research field, it also delivers practical implications. Brand managers can use this fact base to better understand the prevailing paradigms in their companies, and thereby challenge the fundamental assumptions by which they operate to bring in new perspectives. Every practitioner interested in the history of luxury consumption and the current academic thinking could benefit from this paper and particularly the framework to gain a better understanding of the fundamental principles and complex interrelationships within the luxury field. Luxury brand managers could use the building blocks from this framework to understanding for

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example, how to create an extraordinary customer experience as well as design cues that could help to charge their products with symbolic meaning. Luxury brands could use this framework to test their relevance with their target group on several dimensions: On an individual dimension, brands could probe deeper to understand the relationships they build with their consumers (brand relationships). Particularly for luxury brands, the balance between a creative design-driven approach from luxury brands could create tensions with consumer co-creation, such in the case of identity marketing where recent studies have highlighted the need for consumer agency (Bhattacharjee et al., 2014). Brands could use the methods and findings from research to understand how their brand creates meaning for consumers and how consumers extract, develop, and exchange meaning (self-concept and materialism). This could also help them to review their symbolic inventory and understand current cultural trends, emerging luxury codes and myths that they could leverage in their storytelling. Understanding cultural influences can be crucial to the success of a product, such as the use of sensory metaphors in marketing communication (Akpinar and Berger, 2015). From a social perspective, although not necessarily voiced in traditional market research, status is an integral component of luxury. Yet its construction might have changed and shifted from economic to social and symbolic capital as indicated by the emergence of inconspicuous consumption codes and the recent popularity in academia (Berger and Ward, 2010). More recently, the topic of transformational consumer research has emerged, which can also be an interesting area for practitioners to study (Llamas and Thomsen, 2016). From a brand management perspective, brand managers could review their business practices and strategy and compare them with findings from previous academic research such as the literature in cluster 10. Recent research has had a particularly strong focus on strategy (Kapferer, 2009) or retail management (Chevalier and Mazzalovo, 2008). Recent research has also highlighted the importance of the cultural background and intercultural research for consumption in a diverse range of markets, including key luxury markets such as Asia (Chadha and Husband, 2006), China (Chevalier and Xiao Lu, 2009, Lu, 2011) or India (Boroian and de Poix, 2009). Moreover, brand managers could also review the philosophical foundations of the field—as outlined in this study— to think about new conceptions of luxury or their underlying values and discourses. This can also include understanding the role of luxury producers in society (such as the impact on public welfare) and to understand the various needs of the stakeholders in a social environment. An understanding of the different research clusters and their interconnection can help managers to gain both a broader and deeper understanding of the key concepts that have shaped the discussions of luxury in the academic luxury literature. While 47

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most of the research we identified as the intellectual base of the luxury domain is concerned with fundamental mechanisms behind luxury, and thus is not a direct applied research, it can provide managers a theoretical base for evaluating their strategy and adapting the core ideas to their business context. Based on the luxury framework, we propose several directions for brand building that could be relevant to managers. Luxury is about the extraordinary. Thus, brand managers should ask themselves what makes their brand, their products, and services extraordinary. Luxury brands are extraordinary in at least one dimension which sets them truly apart from the mass-market, adds to their incomparability and thereby preserves and builds their aura (cf. Kapferer, 2009). Luxury has material, individual, social, economic, managerial and cultural components that need to be interconnected. How they together form luxury can depend on the situation, for example as they can appeal to different need states and consumer values (cf. Albrecht et al., 2013a, Wiedmann et al., 2009). At the material level, these states could be the functionality, aesthetics, performance, convenience, quality and comfort of use. At the individual level, they comprise internally oriented needs such as pleasure and well-being and externally focused needs such as self-expression. On a social level, they can be focused on distinction and status motives or the desire to connect with and belong to a specific social community. On an economic level, luxury consumers may seek financial value, often as a purchase justification and rationalization, underlined by the longevity and durability of the products. On a cultural level, luxury brands are about the creation of desire and the building of an aura, often through their reference to values, myths and dreams, and the incorporation of their symbolism into their brand storytelling. Thus, luxury is about making the customers feel special, and providing unique and pleasurable experiences. Hence, customer experience management is a key prerequisite. Today, this requires a clear strategy, an agile and aligned organization, a holistic understanding of consumer interactions and behavior across touchpoints, and an integrated omnichannel approach. Luxury brand building is about storytelling. Stories can inspire or seduce consumers (Kapferer and Valette-Florence, 2016) and thereby fuel their desire for the brand. In order to make the story relevant and interesting, luxury brand managers need a deep understanding of the codes and symbolic value of luxury in its socio-cultural context. Luxury brand managers should be aware of and closely follow emerging trends in the codes and nature of luxury consumption. New emerging research topics and phenomena such as consumer co-creation, new forms of consumption such as collaborative consumption and the emergence of the sharing economy, changing ways of interacting with consumers, such as the rise of digital media are likely to change the nature and conception of luxury in the next years and thus should be key considerations in the strategic and creative process.

A Brief History of Luxury and Consumption C A Brief History of Luxury and Consumption

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Luxury is an idea with a long history. The concept is as old as humankind and has been an integral part of the history of civilizations from ancient Egypt, Rome, and China (Kapferer, 2009). People’s desire for immortality and life after death might be one of the oldest theories about luxury and material possessions (Kapferer, 2009). This section gives a brief overview of the history of luxury and consumption. Luxury is a complex phenomenon that has long been the subject of philosophical, moral, political, and social debates and encompasses a broad scope of different viewpoints. A variety of discourses has been present throughout history. To understand the dominant discourses and thoughts in a historical context, we provide in this section a historical overview to trace the evolution of the luxury concept and its dominant view across time, from ancient times to the twenty-first century, and the global luxury industry that we see today. While different views on luxury have been present throughout history, the identification of dominant dimensions is chosen to highlight the crucial changes in conceptualizing luxury. The chapter concludes by providing an overview of the main arguments to highlight dominant dimensions within each period regarding the key discourses, ideological values, innovations, and needs and how they impact the role of consumption, the codes of luxury, and the luxury dimensions.

C.1

The Beginnings of Luxury: Politics and Morality

C.1 The Beginnings of Luxury: Politics and Morality

Throughout history, luxury has had a social function and with this has come moral standpoints of how luxury contributes to society. Plato believed that the insatiable appetite for luxury and pursuing bodily pleasure has negative implications for © Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 H. Gurzki, The Creation of the Extraordinary, Applied Marketing Science / Angewandte Marketingforschung, https://doi.org/10.1007/978-3-658-29538-7_3

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society as these pleasures exceed the basic needs, which, he claimed, have fixed limits based on a universal consensus (Berry, 1994, p. 45ff.). This pursuit of luxury and excess leads to envy and social disharmony, which can cause warfare and political instability (Berry, 1994, p. 45ff.). According to Plato, this self-interestedness also endangers society as it substitutes other virtues, such as the warrior’s courage (Berry, 1994, p. 53ff.). As a consequence, Plato viewed desires as immoral and needs to be moderated and controlled with legal and fiscal measures in order to preserve the social order. Aristotle, in contrast, viewed the social function of money and possessions as means to achieving a good life (Berry, 1994, p. 53ff.). For Aristotle, only the pursuit of money as the ultimate goal and an end in itself is the cause for the limitless excess (Berry, 1994, p. 53ff.). For the Roman thinkers, especially Cicero and Seneca, luxury also had an important political dimension. They viewed human needs as being naturally determined and governed by frugality and self-control (Berry, 1994, p. 63ff.). Humans lose this self-control and exceed their natural limit through luxury and a focus on the body and adornment (Berry, 1994, p. 63ff.). This excess also leads to the irreversible loss of their freedom as they become obsessed by a desire to prolong life and accumulate material possessions (Berry, 1994, p. 63ff.). Pursuing luxury is thus seen as reducing humans to their animalistic character and their pursuit of uncontrollable desires provides a threat to the individual and society (Berry, 1994, p. 63ff.). These morally-condemned and socially-detrimental views of Roman luxury, of using private wealth for private satisfaction, are seen to have three forms: self-indulgence (including pursuing bodily pleasures), greed, and the pursuit of power (Berry, 1994, p. 78ff.). Anything non-functional was seen as contradicting the natural needs and became subject to censorship and sumptuary laws, which were used to restore the politically good habits and to protect society against losing morals and weakening of character (Berry, 1994, p. 74ff.).

C.2

Luxury and Modernity: The Rise of Commerce and Trade

C.2 Luxury and Modernity: The Rise of Commerce and Trade

Around the sixteenth century, with the rise of commerce and trade, new discourses gained popularity. Mercantilists and Calvinists proposed that economic activity, including the purchase of luxury goods, promotes saving and investment, which is beneficial for society (Patsiaouras and Fitchett, 2012). This demoralized the discussions about luxury and created a shift towards a discussion of economic trade and the societal consequences (Berry, 1994, p. 101ff.). Early writers still viewed trade as

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a zero-sum game compatible with the moral critique of luxury that now shifted to the consequences of debt at a macro level, which is needed to acquire luxury goods and its harmful consequences (Berry, 1994, p. 101ff.). Only later were the positive consequences of trade for employment and well-being acknowledged with a shift to an understanding of the consumer as an active subject that pursues the fulfill­ ment of his imaginative desires (Berry, 1994, p. 112). For example, Hobbes argued that desires are characterized by the wanting of an absent object whose absence causes a perceived lack, which the imagination fills and leads to action to relieve the uneasiness, which is beyond rationality (Berry, 1994, p. 119). The object is mostly something that is rare and could be used for personal adornment. This shifted the focus of discussion in the classical period from the normative deficiency that harms society to the individual who accepts desire as a legitimate means to pursuing pleasure (Berry, 1994, p. 113). These desires are infinite and self-generating through the own imagination in the process of what Berry termed ‘qualitative refinement’ of the basic needs (Berry, 1994, p. 116ff.). Based on the argument of Barbon, these desires are also socially generated, whereby the rare and highly priced purchase serves as a badge of social distinction and a source of comfort (Berry, 1994, p. 116ff.). Compared to the classical period, the mainframe and judgment shifted from luxury as a source of social and individual corruption to a source of well-being through the benefits generated from trade (Berry, 1994, p. 124). The activity of consumption of the aristocracy and noble class in England in the sixteenth century was the first shift toward a consumer society that considered this moral change (McCracken, 1990, p. 11). For example, Elizabeth I used consumer goods and theatrical staging of luxury to manifest her power. The noble class participated in her ceremonial consumption and competed in their spending to be part of her realm, thereby raising the social standing and status of their families (McCracken, 1990, p. 12). With this need to continuously keep up with fashion trends, the spending patterns and status signals changed (McCracken, 1990, pp. 15–16). The focus had previously been on family heritage and status and had been communicated through the “patina” of an object, which proved that the family had possessed their wealth and social standing for generations. However, the fashion system and imitative behavior of the noble class shifted the focus to novelty and new trends and a focus on spending on oneself rather than on the family or community (McCracken, 1990, pp. 13–16). This focus on individuals’ possessions rather than the community made it even more difficult for the subordinates to live up to the spending behavior of their superiors and led to a visible increase in the social distance and a profusion of different lifestyles (McCracken, 1990, pp. 13–16). The patterns of spending and fashion were dictated by the upper class whose spending patterns evidenced the value of luxury (McKendrick et al., 51

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1982). Luxury consumption in this period was still largely restricted to the political authorities who used taxation and sumptuary laws to control consumption and maintain power (Kroen, 2004). A key change in the role of luxury occurred during the Enlightenment age and the French and American Revolutions. As the ‘natural’ or ‘divine’ order of society was questioned, luxury was democratized and moved from a mere signifier of status for the select few to a creation mechanism that everyone with access to the available resources could recreate their own social identity (cf. Kapferer, 2009). Up to the eighteenth century, luxury had been a marker of the leading classes, embedded in symbolic objects, lifestyles, rituals, ceremonies, and myths that were inaccessible to most people and thus manifested power. Luxury was no longer merely a reflection of the status of the aristocracy and leaders but was democratized so consumers could selectively engage in the consumption of luxury within certain constraints of the respective context (Kapferer, 2009). In the eighteenth century, a consumer society was developing with people’s lives and aspirations becoming oriented towards the possession of consumer goods (Graeber, 2011, p. 493, McKendrick et al., 1982). The range of goods available for purchase, the places where they could be purchased, and the financial resources of the public expanded substantially, allowing many more people to engage as consumers in the marketplace and access new goods (McCracken, 1990, pp. 16–17). The concept of the self in the romantic period was focused on authenticity and individuality for which consumption provided a sphere of creative personal expression (McCracken, 1990, pp. 20–21). In a society growing more individualistic and anonymous, individual consumption emerged as a social activity (McCracken, 1990, pp. 19–21). Aesthetics and style gained importance over functionality and allowed for new ways in which to construct social identity and create new codes (McCracken, 1990, p. 19). The fashion adaption process was driven largely by a “trickle-down” effect, whereby the subordinate classes tried to imitate their superordinates who, in turn, simultaneously strived to differentiate themselves (McCracken, 1990, p. 18, Simmel, 1957). To keep up with the fashion trends, consumers had to invest time to learn about the latest trends and understand the symbolic messages carried by the goods. Consumers also needed money to keep up with the rate of obsolescence and repurchase (McCracken, 1990, pp. 19–20). Along with these discussions, a further shift in how needs are viewed occurred. While the classical view grounded needs in space and proposed that they have a fixed nature that could only change through corruption, the modern view ground­ ed needs in time and highlighted the temporal relativity in which needs could change over time (Berry, 1994, p. 177). This points to a crucial distinction: While some needs can be seen as naturally fixed in quantity (such as the need for food) and independent of social influences, others are potentially infinite (such as the

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need for ornamentation and material possessions) (Berry, 1994, p. 177). For example, Adam Smith defined a necessity as something that people cannot be without based on social conventions and moral judgments—the focus is on the object needed (Berry, 1994, pp. 183–184). Other thinkers, such as Hegel contextualized needs further and argued that human needs are culturally, socially, and physically determined and go beyond the need for food for survival, but include social needs (Berry, 1994, p. 185ff.). Karl Marx even argued that in a capitalist system even luxury could become a need in a specific historical context (Berry, 1994, p. 185ff.). Berry (1994, p. 56) proposed that due to their universally experienced nature, four basic categories of human needs can be distinguished: sustenance (for example, food and drink), shelter (for example, accommodation and hotels, spas), clothing (for example, apparel, accessories, jewelry), and leisure (for example, entertainment). Luxury goods provide refined versions to satisfy these needs. As this refinement can take on many different forms, almost anything can potentially become a luxury as long as it exceeds the ordinary or necessary (Berry, 1994, p. 6). Moreover, luxury is always open to change as the levels of refinement (such as material, experiential, or linguistic refinement) can always be surpassed (Illouz, 2009, pp. 401–403). This led to a further de-moralization and an expansion of the understanding of luxury (Berry, 1994, p. 126ff.). For example, Mandeville argued that everything could potentially be a luxury as long as it improves the manner of living of the individual within the social environment (cf. Berry, 1994, pp. 128–129). Desires are learned from individual experiences and developed through acquiring luxuries, whereby the positive pleasure reinforces the learning (Berry, 1994, p. 130). On an ideological level, this transition from a feudal to a commercial society enabled social and financial mobility and challenged social hierarchies based on existing definitions of class, based mainly on genetic lineage (Berry, 1994, p. 139ff.). According to Hume, luxury is “great refinement in the gratification of the senses,” whereby the refinement and consequent cultivation of mind and body is the crucial distinction to a mere indulgence (cited in Berry (1994, p. 143), Hume (1760, p. 268)). After a society has passed the basic economic stages of hunting and farming, the excess labor can be used for artistic purposes that increase the overall happiness, which, according to Hume, consists of indolence, action, and pleasure (Berry, 1994, pp. 143–144). This view that legitimizes the pursuit of personal and private pleasures and consumption starkly contrasts the classical view and its emphasis on public service (Berry, 1994, p. 144). The role of public policy is consequently not to condemn and ban these desires but to channel them constructively to promote the overall well-being (Berry, 1994, p. 150). For example, Adam Smith viewed consumption and choice as a democratic instrument (based on Kroen (2004, p. 711), Smith (1776). He even claimed that opulence and freedom are key 53

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to achieving liberty and yet within confined rules apply to everyone (Berry, 1994, p. 152ff.). This overturns the earlier views of liberty as self-control and rationality (Seneca) or purposeful realization of the own and common good (Cicero) (Berry, 1994, p. 153). Smith viewed the modern commercial society as the natural form of personal expression in which everyone is a merchant (Berry, 1994, p. 153). For Smith, commercial activity driven by the individual’s selfish pursuit of desires improves social well-being and individual independence (Berry, 1994, p. 154f.). Smith proposed four categories of consumption: the necessary (to maintain life), the basic (for normal growth and prosperity of people and communities), the affluence (goods that are not essential for growth and prosperity), and the luxury (goods in limited supply, difficult to produce, and/or very expensive) (cited in Berthon et al., 2009, p. 46). There seems to be agreement that the emergence of a consumer society has brought fundamental changes to the organization of everyday social life, changing fundamental cultural concepts of time and space and also society and individuals (McCracken, 1990, p. 3). The transition to modernity changed the view of consumption and helped the emergence of an active consumer subject. Firat and Venkatesh (1995, p. 247) proposed three factors that have contributed to the rise of a consumer society: (1) the separation of the private (consumption) and public (production) domain, accompanied with a clear gendering (assignment of men to production and women to consumption), (2) the institutionalization of mass media, and (3) the increasing influence of marketing and conversion of consumers into shoppers. The separation of production and consumption has been an enabler for the consumer revolution in which consumers’ needs have become shaped by the creation of new needs, particularly related to constructing identity (Firat and Venkatesh, 1995, pp. 246–247). Through industrialization and lower manufacturing costs achieved through mass production, new consumer groups beyond the leading class gained access to consumer goods (Kroen, 2004, p. 717). This resulted in new business practices and new fashions and a blurring of pre-existing visible status codes, which forced the consuming subject to transcend the clear and strict rules that previously governed consumption and make their own choices (Kroen, 2004, p. 718). Some authors have argued that consumerism is a key feature of modernism itself as the market-mediated social order together with the free and rational consumer subject are central to the modern period (for example, Slater, 1997, p. 9). The promises of modernity (personal freedom, economic progress, and democracy) have become tied to the material commodities traded in the marketplace (Slater, 1997, p. 11). Consumption has become a central social activity through which cultural values are negotiated and enacted, including the creation of status and identity through economic, social, and cultural resources (Slater, 1997). With the traditional stable

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cultural categories having become more and more blurred, the freedom of choice offered the individual a wide range of possibilities to establish and negotiate their identity and cultural categories through consumption (Slater, 1997, pp. 31–32). The consumers’ political understanding also changed and consumption became increasingly seen as a democratic process with productive consumption being deemed beneficial to the public (Kroen, 2004).

C.3

Luxury in the Nineteenth and Early Twentieth Centuries: The Emergence of a Consumer Society

C.3 Luxury in the Nineteenth and Early Twentieth Centuries

Until the nineteenth century, four trends characterized the early development of luxury (Valtin, 2005): (1) domestication (luxury was becoming more private and more related to the home), (2) objectification (luxury was becoming more strongly oriented towards material possessions), (3) aestheticization (luxury goods were becoming increasingly refined and of better material and sensory quality), and (4) compression (a faster pace of innovation to bring more new luxury products to the market in a shorter time). In the nineteenth century, commodities and goods became strongly emotion­ alized and commercialized. This occurred, for example, through the creation of a marketing system and advertisements, the emergence of department stores, the creation of consumable experiences, and the introduction of price tags (McCracken, 1987, p. 155ff., Slater, 1997, pp. 14–15). The product assortment increased, and new categories of goods appeared (for example, imported coffee and leisure and entertainment activities) (Slater, 1997, p. 18). The choice of lifestyles was no longer determined only by religion, politics, and wealth but by markets and exchange that facilitated the own construction of status, leading both to the threat and chance of consumer choice (Slater, 1997, p. 22). Collective value systems have increasingly become replaced by personal value systems based on personal authenticity and creativity (Slater, 1997, p. 16). Consumption now was part of everyday social life, as well as an engine for continuous social change (McCracken, 1990, p. 22). The consumer culture gained prominence, in which markets increasingly facilitated the interaction between the private and public, as well as the material and symbolic world (Slater, 1997, p. 8). The forces of luxury and the luxury market were unleashed when the concept of luxury met the consumer society. This became apparent mainly in the nineteenth century when new forms of consumption and new understandings of the consumer emerged. In this process, luxury became inextricably linked to consumption and 55

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an important element of contemporary culture (Trentmann, 2004). Whereas in the fourteenth century “to consume” meant ‘to destroy, to waste’ and had a strong focus on the object, consumption became more positively connoted by the end of the nineteenth century as it became seen as a way of personal liberation and a pleasurable activity (Gabriel and Lang, 1995, p. 7). Graeber (2011, p. 491) defined consumption as “any activity that involves the purchase, use, or enjoyment of any manufactured or agricultural product for any purpose other than the production or exchange of new commodities.” This can be derived from the Latin verb consumere, meaning “to seize or take over completely” (Graeber, 2011, p. 491). In the twentieth century, consumption received a prominent role in daily life and became seen as a leisure activity (Veblen, 1899). Several factors contributed to this institutionalization of luxury and the rise of brands (Kroen, 2004): (1) A changing consumer subject—the consumer was liberated as consuming and citizenship were seen as being compatible (Kroen, 2004); (2) Urbanization—the urbanization and growth of cities changed the number of consumers that could buy the products and the speed at which fashion trends could spread (Kroen, 2004); (3) The emergence of department stores—through the emergence of department stores, shopping became a leisure activity (Kroen, 2004); (4) The institutionalization of advertising—the media industry and advertising media flourished, giving brands with their messages a way to reach consumers on a large scale (Kroen, 2004). Another key change was that consumption, which previously was focused mainly on private consumption for the home, moved into the public sphere, which provided fruitful ground for luxury manufacturers that catered to the consumers’ status needs (McCracken, 1990, p. 23). The luxury makers addressed the aristocracy, the new elite striving for luxury influenced by aesthetic and artistic taste (McCracken, 1990, p. 23). However, at the beginning of the century, the Great Depression and the world wars reduced spending, particularly on luxury goods, and daily commodities assumed luxury status (Patsiaouras and Fitchett, 2012, pp. 160–161). The post-war period (1945–1975) led to an increase in consumption that was driven by the rise of organizations and emulative social pressures to conform (Slater, 1997, pp. 11–12). The development of new technologies and electronics led to the popularity of cars or durables and their increased importance for the luxury market (Slater, 1997). The increasing circulation of aspirational images in mass media, the stronger prosperity, and the previous frugality facilitated the upsurge of ostentatious luxury goods and their social display to establish class distinctions (Patsiaouras and Fitchett, 2012, p. 161). Particularly sensuous products, such as elegant cars, exotic food, elaborate entertainment, and clothing, were luxuries (Patsiaouras and Fitchett, 2012, p. 165). The Cold War and Soviet system challenged the consumer ideology and substituted personal choice by social planning (Gabriel and Lang, 1995, p. 14). After the end of

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the Cold War, the newly gained freedom of consumers resulted in a high need for finding their social identity through consumption and the purchase of visible status goods, a similar mechanism observed earlier with the emergence of the consumer society (Kapferer, 2009).

C.4

Luxury in the Late Twentieth and Early Twenty-first Centuries: The Age of Brands

C.4 Luxury in the Late Twentieth and Early Twenty-first Centuries

The 1980s with the rise of neo-liberalism made consumer choice the guiding principle for social relations in which both group affiliation and distinction and the own identity were constructed (Slater, 1997, p. 10). The 1970s and 1980s also brought the emergence of the luxury industry with the formation of large luxury conglomerates. More recently, with the end of the twentieth century and the credit boom, consumer spending and luxury consumption reached new heights (Gabriel and Lang, 1995, pp. 16–18). New spending power from emerging markets such as China and India, new marketing and distribution channels, and a vast array of products from diverse categories have shaped the consumer society and market environment for luxury brands today (Gabriel and Lang, 1995, p. 18). These new forms have also led to new ideologies of consumption (such as environmentalism) and new political implications, especially regarding consumer rights and privacy. Some ideologies, on the other hand, aim at escaping the world of branding and consumption altogether (Gabriel and Lang, 1995, pp. 16–18). In the second half of the twentieth century, a turn toward market and customer orientation took place and marketing as a discipline took over as the dominant business paradigm (Firat, 2006, p. 124). Several authors have proposed that the emergence of postmodernism in an environment characterized by strong interconnections and complexity has changed the way through which identities are constructed and, consequently, in a consumer culture, the meaning of consumption (Atwal and Williams, 2009, Brown, 1993, p. 22, Firat and Venkatesh, 1995, p. 257). Firat (2006, p. 126) proposed that these new postmodern tendencies and changes in everyday life, such as hyper-reality, fragmentation, decentering, juxtaposition, and difference, redefine the role of the consumer and of marketing. In contrast to modernity, which is often characterized by a single ideological order or “meta-narrative” that often lies in the past or future, the postmodern is characterized by the co-existence of multiple realities and conceptions with a focus on the present and the critical and reflexive engagement with it (Firat, 2006, pp. 125–126). This leads to a “blurring of distinctions that were fundamental to the constitution of modernity: the distinctions between reality and fantasy, mind and 57

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body, subject and object, material and symbolic, production and consumption, order and chaos.” Firat, 2006 #2752@128} Postmodern discussions on consumption and luxury (such as Baudrillard) have focused strongly on the sign values and experiences of the marketplace in which consumption provides a vast space to construct identity (Slater, 1997, p. 32). The cognitive-rational modernist world has been replaced by a semiotic world of symbols and meaning that has led to the rise of the contemporary consumer culture (Venkatesh, 1992, p. 199). Lury (2011) proposed the following key characteristics of a consumer culture: the availability of a large and increasing number of types of goods for sale (extending to nearly all areas of human life); a proliferation of spaces, platforms, and modes of consuming (such as shopping for leisure); the rise of brands; the ease of credit; the emergence of political and ethical regulatory mechanisms for consumption; and the expansion of marketing systems. In a consumer culture, consumers use material culture together with immaterial culture and experience to construct their identity (Lury, 2011, p. 9). This is a dynamic process of continuous self-creation that is always linked to the fashions in the social environment and thus is infinitely expanding (Slater, 1997, pp. 9–10). This was noted by Simmel (1957, p. 541) who characterized the paradox of fashion as one of imitation and social equalization and at the same time of differentiation by the elite to create social distance. Slater (1997, p. 24ff.) proposed that consumer culture is a culture of consumption in a market society that is universal and impersonal yet leaves individuals the freedom of private choice in constructing their identity and status. With the professionalization and globalization of luxury firms, which started in the 1980s and 1990s, the global luxury market has evolved over the last years and decades, from family-owned businesses to global conglomerates. Growth of the luxury market has been driven by several structural factors, such as the democratization of luxury and stronger globalization, as well as social and political changes. The democratization of luxury with new aspirational consumers entering the luxury market is a key driver for the growth of the luxury market. The growth of real incomes leads to higher spending power and an expanding consumer base (Kapferer, 2009, Silverstein and Fiske, 2003). The trading up phenomenon has also been spurred through the emergence of what (Silverstein and Fiske, 2003, Silverstein et al., 2008) called ‘new luxury goods’, which cater to the excursionist—an aspiring middle class—through accessible super-premium products, brand extensions from traditional luxury brands, and so-called masstige products, which command a premium over conventional goods. Many luxury brands have created offerings that target the needs and budgets of these new aspirational consumers and thereby have further contributed to the democratization of luxury (Kapferer, 2009). Globalization is another fundamental driver of market growth. While the majority of luxury brands has a European origin, luxury is a global phenomenon.

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Kapferer (2009) argued that the world peace today is a key enabler of international trade. The ongoing globalization and increasing mobility of luxury consumers give consumers access to a wide variety of products globally (Kapferer, 2009). Today, according to D’Arpizio et al. (2017), the largest personal luxury goods markets are the USA, Japan, China (incl. Hong Kong), Italy, France, UK, Germany, South Korea, Middle East, and Russia. Due to the increasing mobility and shopping behavior of luxury consumers, it is important to distinguish between the place of the purchase and the nationality of the consumer since luxury consumers spend a considerable amount while traveling abroad (Achille, 2016). For example, while China as a country ranks only third in terms of value, the number of Chinese consumers has grown substantially, and Chinese luxury consumers are estimated to have made up one-third of the global luxury market in 2017 (D’Arpizio et al., 2017). This discrepancy is driven by high tourist spending, as well as political, legal, and economic considerations, such as price differentials between markets (Achille, 2016). In addition, social changes contribute to changes in the way the luxury market operates, especially with younger consumers entering the market. Changes in family structures, such as later marriage caused by a focus on work and earning money, are leading to a higher amount of wealth and discretionary income (Silverstein and Fiske, 2003). Younger generations, such as the Millennials, are emerging with the taste for luxury and the financial means to afford it (Pianon et al., 2017). More and more women are entering the luxury market as shoppers and the rise of the female consumer is a key sociological driver of the luxury market and its development today (Kapferer, 2009). Changing values drive the market growth and the nature of the luxury markets. An increasing maturity of consumer markets and a higher standard of living lead to a change of function of consumption in which higher-level needs, such as self-expression, that gain further importance as basic needs are satisfied (Meffert and Lasslop, 2004). Consumers demand higher levels of quality and service to cater to their educated tastes (Silverstein and Fiske, 2003). Kisabaka (2001, p. 39) proposed that the change in luxury values can be characterized through three trends: increasing hedonism of consumption, sublimation, and individualization. The hedonic orientation drives consumers to focus more on the shopping experience or experiential luxury. The sublimation orientation shifts the consumer’s focus from achieving a certain standard of life to adopting a certain lifestyle that goes along with the cultivation of taste and connoisseurship. The individualization orientation leads to the desire to consume high-quality products with personal relevance. In line with this conceptual model, consumers seem to adopt a stronger lifestyle focus in their purchases and seek products that satisfy them emotionally. For example, Silverstein and Fiske (2003) proposed that the key needs of new luxury consumers 59

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are taking care of themselves, questing and exploration, connecting with others and building relationships, and expressing individual styles and values. In addition, with a higher market maturity and changing consumption values, consumer behavior shifts from owning products and a focus on extro values (that is, “luxury for others”) to being and a shift to intro values (that is, “luxury for oneself”) (Pianon et al., 2017). Chadha and Husband (2006, p. 43) proposed a five-stage model to describe the adoption of luxury in Asia. The first stage is subjugation and is driven by poverty and deprivation of consumer goods and is often accompanied by an authoritarian regime, such as in Communist China or post-war Japan. When liberalization and economic growth sets in, the elite consume luxury whereas the middle class focus on consuming functional goods, such as televisions or washing machines. The third stage is characterized by showing off the newly acquired wealth by consuming and showing socially conspicuous luxury goods, as occurred in Japan in the 1980s. In stage four, luxury consumption becomes a mass phenomenon and is now more about consuming to belong and fit into a social context than to distinguish oneself from a lower social class. Chadha and Husband (2006) suggested that particularly in collectivist cultures such as Japan, this need to conform considerably fuels the adoption of luxury goods. In the fifth stage, which, according to Chadha and Husband (2006), characterizes Japan today, the consumption of luxury goods has become a habit and consumers learn and adapt to more refined tastes. Along with the changes in consumer demand, the luxury industry has further professionalized from a dispersed number of small family brands to a landscape of global brands and luxury conglomerates (Som and Blanckaert, 2015). The global luxury brand groups, which have been created mainly through acquisitions of smaller brands, have become conglomerates managing a broad portfolio of companies across many luxury sectors. While many fashion houses have emerged as early as the late nineteenth century, the emergence of luxury as an industry started in the post-war 1950s (Kapferer, 2009, p. 17). Luxury brands have been expanding their product portfolio horizontally and vertically to become more accessible to a broader consumer base and to cater to a larger scope of lifestyle needs (Kapferer, 2009). For example, the world’s leading luxury group in terms of sales, LVMH Moët Hennessy – Louis Vuitton, covers, with the brands in their portfolio, sectors from wines and spirits to fashion and leather, perfumes and cosmetics, watches and jewelry, selective retailing, hospitality, and even media (Som and Blanckaert, 2015). Achille (2016) proposed an evolution from the design era in the 1980s to the brand era—with a rise of global brands—in the 1990s, to the retail era in the 2000s and the consumer era in which we live today. In addition, mid-market players are trying to increase their luxuriousness interest to benefit from price premiums through further product differentiation (cf. Nueno and Quelch, 1998). New forms of

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luxury are emerging today, particularly with the emergence of digital technology, which is changing consumer lifestyles, advertising systems, business models, and the offerings of luxury brands (Abtan et al., 2016).

C.5 Discussion C.5 Discussion

The concept of luxury and the concept of consumption have both undergone substantial changes over the last decades and centuries. Luxury has always been a complex phenomenon encompassing many perspectives, ranging from the philosophical, cultural, social, individual, economic, and the material to the managerial sphere. It has been about fundamental questions of existence, cultural myths and rituals, social order, identity and experience, the institutional environment, goods, services, and brands and the creation and maintenance of a consumer culture and the systems that support it. What has changed during history is that the consumer has become an active agent in the symbolic marketplace and that luxury has been democratized to be available to a broader class of consumers. What becomes evident from each of the different perspectives is that luxury throughout history has always been something extraordinary. The moral and ethical debates around luxury are revealing as they show how closely luxury is interlinked with a society’s conception of a good society, its values, and its social order, highlighting the social nature of the phenomenon (Berry, 1994, p. 199). The early writings focused on the normative aspect of luxury consumption and its potentially harmful effects on society (for example, Plato and Aristotle). The non-necessity of luxury and intentional consumption have also led to associating luxury with superfluity and quantitative excess, which has been the main root of social and political criticism. From the Greeks to the Romans, through the Middle Ages to early and late modernity, sumptuary laws have prescribed what the legitimate possessions or behaviors for each social group are, depending on their status and occupation (cf. Berry, 1994). This is especially noticeable with clothing, which is a personal and publicly visible category (Berry, 1994). This also highlights the potency of luxury goods in influencing this order and its role in creating social stratification (cf. Berry, 1994, p. 30ff., Kapferer, 2009). With the rise of Christianization, particularly in the fourteenth century, luxury adopted the meaning of lasciviousness, lust, and sexuality and was regarded as one of the deadly sins (Berry, 1994, p. 87ff.). Only in the transition to modernity and the emergence of a consumer society has luxury come to be seen as a source of self-expression and experience rather than 61

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an immoral act, and on a macro-level as a promoter of trade and commerce (see Berry, 1994, Venkatesh, 1992, p. 199). Throughout time, luxury has been something extraordinary. Most discussions have ranged around the distinction of luxury compared to the necessary and ordinary, often accompanied by a discussion of human needs and wants (cf. Berry, 1994). In the classical period, legitimate needs were seen to be natural and functional needs and anything that went beyond needed to be controlled by the individual or the public with self-control and restraint. Underlying this was the conception of needs as being fixed and grounded in space, implying there are determinable limits. This conception has changed with the transition to modernity, which grounded needs in time and proposed that while there are some fixed needs with a natural limit (such as the need for food), others are open without a limit, particularly cultural and social needs (such as the need for status). This change also changed the view on luxury from one in which luxury was linked to quantitative excess to a view that emphasized the qualitative aspects and refinement of luxury. In this new view, personal needs and desires are seen as legitimate pursuits and means of personal expression and enjoyment. The consumer emerged as an active subject in a marketplace in which they had access to all kinds of objects and experiences that would satisfy their individual and experiential needs and that would help them create their identity through consumption. Not only did status expressed through consumption and the price of the goods matter, other aspects such as aesthetics, style, and novelty gained importance as signs in the consumer society. With the emergence of a global luxury industry, the needs have become more refined and increasingly linked to luxury products and experiences and the luxury industry. With the emergence of new ways of life (for example, technological change), luxury will evolve further. For example, Kozinets et al. (2016) linked desire with technology and opened new spaces to understand the complex interplay between traditional human and new robotic actors in the market society. The mechanics and principles that shape the extraordinary seem to have been relatively stable over time and will be explored in depth in the next chapter, which explores in-depth the different perspectives and conceptions of luxury. While this short historical overview is by no means exhaustive and cannot consider the plurality of thoughts that have prevailed at any point of time in history, this section should have given the reader a brief overview and an understanding of the interplay between luxury and consumption and its implications for individuals and society over the course of history. Readers interested in the historical analysis of luxury and consumption are encouraged to read the historical works on which this chapter is based which provide excellent overviews of the history of consumption and luxury (such as Adams, 2012, Berry, 1994, Graeber, 2011, Lury, 2011, McNeil and Riello, 2016, Slater, 1997).

D

Perspectives on Luxury: An Integrative Model

D Perspectives on Luxury: An Integrative Model

D.1 Introduction D.1 Introduction

What is luxury? This question is a fundamental question for research and yet the only agreement reached is that its answer remains unclear (cf. Bastien and Kapferer, 2013, Brun and Castelli, 2013, Godey et al., 2013, Roper et al., 2013, Wiedmann et al., 2009). Terms such as prestige (for example, Vigneron and Johnson, 1999), conspicuous consumption (for example, Wang and Griskevicius, 2014), and status consumption (for example, Eastman et al., 1999, Shukla, 2010) have all been used when discussing luxury. Furthermore, terms have often not been defined precisely and have been used synonymously or inconsistently in practice and in the studies (Brun and Castelli, 2013, Dubois and Czellar, 2002, Vigneron and Johnson, 2004, Vigneron and Johnson, 1999). Thus, a theoretical clarification is needed to understand more clearly the central characteristics of the luxury concept. Different disciplines ranging from philosophy, anthropology, sociology, psychology, linguistics, economics, and religious studies to marketing and management have dealt with the phenomenon of luxury over the last centuries (cf. Gurzki and Woisetschläger, 2017). This has resulted in different views on luxury, which all highlight unique aspects of the phenomenon. However, due to the different questions asked by the disciplines about the luxury phenomenon, the ontological, epistemological, and methodological assumptions differ on how the luxury phenomenon can and should be conceptualized. While some conceptual systems exist that show the interrelations between focal concepts of different disciplines, an integrative synthesis is missing (cf. Berthon et al., 2009, Kessous et al., 2016). Each perspective individually adds valuable insight to understanding the different facets of the luxury phenomenon and contributes to an understanding of its entirety. As the focus of this thesis is to understand the luxury phenomenon from © Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 H. Gurzki, The Creation of the Extraordinary, Applied Marketing Science / Angewandte Marketingforschung, https://doi.org/10.1007/978-3-658-29538-7_4

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different perspectives, the vast amount of literature and viewpoints must also be conceptualized and simplified. Why is luxury so difficult to define? Kapferer (2006, p. 67) stated that “luxury is a concept with fuzzy frontiers. No definition will strictly delineate it.” This difficulty in defining luxury lies in the complex, context-dependence, and dynamic nature of luxury, as well as the subjectivity and obscurity of the concept itself (based on Heine, 2012, Jaccard and Jacoby, 2010, loc. 257, Königs, 2009, pp. 22–23). Luxury is a complex phenomenon with many different facets. Luxury can be both personal (luxury for self) and interpersonal (luxury for others) (Kapferer, 2009), as well as qualitative (if linked to refinement) and quantitative (if linked to excess) (Königs, 2009, pp. 22–23). Luxury can also refer to the object that is consumed or to the behavior of luxury consumers (Königs, 2009, pp. 22–23). Luxury can be material (such as products) or immaterial (such as experiences) (Königs, 2009, pp. 22–23). Thus, luxury is a multi-faceted concept that encompasses psychological, economic, social, material, political, and moral elements and, often, a normative judgment (cf. Königs, 2009, pp. 15–24). Luxury is relative to its context. That is, luxury can differ from one culture to another, among different social groups, and even between individuals (cf. Heine, 2012, p. 43). Luxury depends on its structural (cultural, regional, socio-economic, or political) context, which shapes both the availability and the desirability of resources (Heine, 2012). Economic resources, for example, determine which resources are available in a specific context and thus shape the views of non-luxury (ordinary) and luxury (extraordinary). Cultural differences in the motivation for luxury consumption and attitude toward luxury exist, for example, between Western individualistic traditions and South East Asian Confucian traditions (Wong and Ahuvia, 1998), and even within a consumer society (for example, Dubois et al., 2005, Wiedmann et al., 2009). Luxury is a dynamic phenomenon. While luxury seems to have been a societal constant over the course of human history, its manifestations, moral evaluations, and connotations have changed over time (Adams, 2012, Berry, 1994). Thus, luxury is relative to its temporal (historical and situational) context (Heine, 2012, p. 43). It is created in a dynamic process and is influenced by changes in society and culture and situation-specific factors. Luxury is a subjective concept as it can mean different things to different individuals (Heine, 2012, p. 43, Kapferer, 2009, Kisabaka, 2001, p. 77). The facets and attributes can, thus, be judged differently by different individuals and can be given both positive and negative connotations. Even a single individual can have ambivalent attitudes toward luxury (Dubois et al., 2001, p. 3). Nevertheless, it seems and is pragmatic to assume that luxury has a socially shared meaning that transcends

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the individual, potentially idiosyncratic meaning (Jaccard and Jacoby, 2010). This shared meaning is the focus of this analysis. Luxury is also obscure because it is an abstract concept, meaning that it is not directly perceivable or comprehensible but only indirectly through ideal or physical manifestations that we individually or collectively assign the label luxury to (Jaccard and Jacoby, 2010, loc. 257). Thus, luxury is a concept that is only experienced and perceived through its realizations, such as through luxury goods or experiences. Therefore, while we can experience realizations of luxury, “luxury” as such is a term used to describe an abstract concept used to categorize the experienced reality (Rosch, 1973). While this argument might seem very technical, it highlights an important feature of language and theory formation (Jaccard and Jacoby, 2010, loc. 257). This thesis aims at understanding the meaning and mechanisms of the concept of luxury rather than identifying all instances and prototypes that exist. Thus, luxury is a dynamic, complex, context-dependent, unique, subjective, and obscure concept, which could explain the difficulty in defining it and the multiplicity of conceptions that exist. This thesis proposes that a combination of the different perspectives and mechanisms can be a way to identify and reassemble the different “puzzle pieces.” While some authors deny the specificity of luxury and render that a definition is an impossibility (for example, Kapferer, 2009), this thesis proposes that certain fundamentals do shape luxury, both its characteristics and its consequences. The relativity of luxury at different levels and its conception and function within each context should be considered for a deeper understanding of the phenomenon. For example, while the understanding of luxury is likely to vary from one individual to another, it is likely to be more stable across members of a social group and even more stable within a culture. All these observations have implications for the definition and the development of a theory of luxury. However, as Jaccard and Jacoby (2010, loc. 257) argued, these characteristics are a basic feature of how individuals experience the reality of their internal and external environment. Jaccard and Jacoby (2010, loc. 257) proposed that reality, as experienced by an individual, is complex, dynamic, unique, and often obscure. Due to the complexity and multiplicity of phenomena and their interdependencies, a detailed description of all aspects is impossible but does require a focus and abstraction. Due to the dynamic nature of reality, the phenomena change and undergo transformations, which might alter each phenomenon. Due to the unique nature of any concept, a phenomenon might not be recreated identically. Capturing a phenomenon in all unique aspects would limit the applicability of the resulting theory, and while it might be good in reproducing the exact conditions, it might not have high explanatory power for related phenomena. Finally, due to the obscurity, which is the difficulty to directly sense or perceive the phenomenon, a single per65

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spective to capture a phenomenon might not suffice (cf. Jaccard and Jacoby, 2010, loc. 257). As a solution, Jaccard and Jacoby (2010, loc. 343) proposed the creation of a theory to better understand and “identify, describe, classify/organize, segregate, predict, [and] explain” experiences and phenomena. Such a theory can then act as a map and provide guidance about the phenomena and relationships through a conceptual system. MacInnis (2011) proposed several entities that could form the basis for conceptualization: (1) constructs, as abstract hypothetical concepts, (2) relationships/theories, which can specify why phenomena occur or how they are related, (3) procedures that propose normative methodological guidelines, (4) domains, a broad area of study within which the different constructs, theories, or procedures are embedded, and (5) science, as the highest level spanning multiple disciplines. In line with this terminology, this research aims at understanding the luxury domain, its focal constructs, and theories. While procedures are not a specific focus, they implicitly guide and shape the process of discovery and, therefore, are included where relevant. The folktale of the blind men and the elephant provides an analogy (Chen, 2013). In this tale, the men are trying to understand how the elephant looks. The first man touches the elephant’s body and claims that the elephant is like a wall. The second man touches the tusk and proposes the elephant is like a spear. The third man touches the trunk and proposes the elephant is like a snake, and so on. While this does not, of course, suggest that the previous research has been blind, it should illustrate how different perspectives can lead to different perceptions and interpretations of the same phenomenon. This is true in studying a complex concept such as luxury. However, thanks to substantial research within each of the different perspectives, certain elements of luxury are known and provide a basis for the integration, which is re-assembling the elephant called “luxury.”

D.2

Starting Point and Conceptual Frame: The Pragmatic Perspective

D.2 Starting Point and Conceptual Frame

Based on the discussion above, different ways to define and conceptualize luxury exist that provide a starting point for the conceptualization of luxury. Brun and Castelli (2013) proposed that what luxury is, depends ultimately on the individual. Thus, asking consumers can yield a variety of responses with different denotations and connotations. A pragmatic way to define luxury could, thus, be to acknowledge the subjectivity of the term and concept and define luxury as whatever an individual or group, such as potential clients, define it as (cf. Kapferer, 2009, pp. 39–40). While

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theoretically everything could be a luxury, practically, it cannot. The context and its social and cultural conventions underlying the structural patterns narrow down the pragmatic meanings and realizations of luxury. Dictionary definitions show a wide range of attributes ranging from comfort, elegance, and refinement to wasteful abundance, great expense, and non-necessity. While these characteristics show certain aspects of luxury, they lack clear implications for brand managers. Looking at the academic research, the existing definitions of luxury focus mainly on either the characteristics of luxury (what luxury is) or the consequences (what luxury does) (cf. Heine, 2012, p. 32). Typically, characteristic-based definitions focus on single or multiple characteristics of the producer or its products and services, such as brand, price point, product category, aspirational image, a selective channel strategy, premium pricing (Keller, 2009), excellent quality, scarcity and uniqueness, aesthetics and polysensuality, ancestral heritage and personal history, and superfluousness (Dubois et al., 2001). The European Cultural and Creative Industries Alliance (ECCIA) proposed that high-end cultural and creative industries exhibit certain key features: (1) They have an aura of prestige and are based on their cultural heritage, superior quality, and retail service. (2) They rely on craftsmanship and creativity and emphasize training. (3) They generate substantial intellectual property and focus on non-technological innovation. (4) They put a strong emphasis on controlling the retail service and experience and are organized around the principles of selective distribution. (5), And, they have a strong orientation toward global markets (Economics, 2014, pp. 6–8). The consequence-based definitions often focus on the creation of status (Grossman and Shapiro, 1988) or the type of consumer value it creates (Wiedmann et al., 2009). This thesis proposes that a holistic definition of luxury needs to consider both antecedents and the consequences of luxury. From the etymology of the term, luxury is the extraordinary (which we term the pragmatic perspective). This meaning can be derived from the Latin words “luxus” and “luxuria” meaning a deviation from normal standards (Grugel-Pannier, 1996, p. 19, Valtin, 2005, p. 19), exceeding the ordinary (cf. Heine, 2012, p. 46). This definition is relative as it depends on the historical, cultural, social, and individual context. It is also one-sided as excess implies it needs to be above the normal standards in either a quantitative or qualitative way. This deviation can be referring both quantitatively to the amount consumed and qualitatively to the qualities of the consumed object. Luxury can hence receive both negative connotations (such as excess) and positive connotations (such as qualitative refinement) (Valtin, 2005, p. 21). This basic definition is relative to its context, which defines the normal standards. Theoretically, any idea could be perceived as a luxury, including abstract concepts such as love and time (cf. Heine, 2012). Practically, luxuries are 67

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goods and services, often branded, which can be exchanged in a network, such as a marketplace. Experiences, products, and brands can act as materializations and symbols of more abstract concepts such as love and time (cf. Heine, 2012). This study proposes that the extraordinary nature of luxury encompasses many different perspectives from which luxury is extraordinary. These standpoints all highlight certain aspects that can be integrated into an overall theory of luxury. While there is no single definition of a luxury brand, we can identify different perspectives and discourses that all shed light on some aspects of luxury (cf. Roper et al., 2013). For this study, a basic tenet is that luxury is not an objective and independent reality but rather something socially and culturally constructed and, thus, requires interpretative paradigms to uncover regularities and generalizations (cf. Gioia and Pitre, 1990). We treat the term luxury broadly to encompass all concepts and ideas, such as time and love. The managerially relevant realizations are luxuries for exchange in a network, such as a marketplace. This study proposes that different theories and perspectives of luxury exist, which can be integrated to form a holistic understanding of the luxury phenomenon. The integration of the different perspectives illuminates characteristics of luxury for the luxury object, consumer and environment, commercial outcome, and management of the extraordinary. The different perspectives all illuminate a certain aspect of luxury (see Figure 10 for an overview). The pragmatic perspective proposes that luxury is something extraordinary. In this perspective, luxury is conceptualized by its etymological meaning and common use in everyday life. As evidenced in Chapter C (A Brief History of Luxury and Consumption), the extraordinariness of luxury has been a constant throughout history and has framed how different discourses have understood luxury. Thus, we propose that being extraordinary is integral to all perspectives and conceptualizations of luxury and, thus, the pragmatic perspective is the encompassing one, unifying the other perspectives. From the other perspectives, luxury is something that is in some way extraordinary when compared to non-luxury, which will briefly be introduced within this encompassing perspective as it provides the structure of the following sections. The material perspective proposes that luxury is something that is rare and a refined quintessence with extraordinary characteristics. The focus of understanding is the luxury object (including products and experiences). From the material perspective, the qualitative aspects of luxury objects compared to non-luxury goods are what makes them extraordinary. The philosophical perspective proposes that luxury is something that creates desire. Thereby, luxury is conceptualized through the different cultural, social, and individual consequences that the luxury object creates and that can be used

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to explain motivations for its consumption and desirability. From the philosophical perspective, the strong motivational forces that underlie desire driven by the complex interplay of cultural, social, and individual imagination are what make luxury extraordinary. The cultural perspective proposes that luxury is something magical and sacred, the meaning of which is built through cultural myths. It thus focuses on culturally embedded meanings that luxury objects are able to evoke. From the cultural perspective, the intangible meaning and symbolism that underlie the creation of desire are what make luxury extraordinary. The social perspective proposes that luxury is something that creates status and prestige and thereby deals with the creation of symbolic capital and power. The social perspective thus focuses on the consequences that luxury has for social interactions. From the social perspective, the ability to act as a status signal that is learned and socialized are what make luxury extraordinary. The individual perspective proposes that luxury is something aspirational that makes a consumer feel unique and special, which strongly highlights the emotional basis of luxury. The individual perspective thus deals with the consequences that luxury has on the individual, such as in the construction of identity or the experiencing of emotion. From the individual perspective, the aspirational aspects and experienced emotions are what make luxury extraordinary. The economic perspective proposes that luxury is something that has a high price and value. It thus focuses on a visible characteristic of luxury, which is the high price. We will argue in Section D.8 that this high price is a consequence of the high value that luxury creates. From the economic perspective, the perceived value that luxury has is what makes it extraordinary. The managerial perspective proposes that luxury is something that is created through fostering a corporate mindset and culture of excellence. It focuses on the principles that luxury brands adopt in managing the creation of luxury and the associated luxury values. From a managerial perspective, the focus on excellence in management philosophy, strategy, and execution is what makes managing luxury extraordinary.

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70 10: Overview of the different perspectives D Perspectives on Luxury: An Integrative Model Figure on luxury

Material

Excellence

High price and value

Rare and refined quintessence Philosophical

Managerial

Pragmatic Luxury: The extraordinary

Economic

Aspiration and feeling unique and special

Individual

Social

Cultural

Desire

Magical and sacred aura

Exclusivity and status 18

Fig. 10 Overview of the different perspectives on luxury Source: Own illustration

The following sections will start by detailing the nature of the luxury object (mainly products and experiences) and the codes and principles that it embeds. It goes on by explicating the process of creating desire, which is fundamental for luxury, and highlights different mechanisms that underline the process. This starts with the philosophical perspective and goes on to detail certain aspects of desire from the cultural, social, and individual (including identity and experiential views) perspectives. This thesis then moves on to look at the visible outcome of the desire-creation process in a market and the price and value of the luxury object, which is the focus of the economic perspective. Then, this thesis details luxury from a managerial perspective, which claims that luxury can be characterized through the management principles that its producer adopts. Finally, this thesis synthesizes the different perspectives into an integrative model.

D.3

The Material Perspective: A Rare and a Refined Quintessence

D.3 The Material Perspective

The material perspective focuses on the luxury object (luxury product, experience or creative idea) and its extraordinary characteristics. The perspective is largely based on different research findings from luxury marketing and management research. From a material perspective, luxury is a rare, refined quintessence, in the extreme

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case a singularity that is unique in time and space. Thus, the luxury object has several characteristics that make it extraordinary: (1) rarity, which is its limited availability (for example, through natural limitation due to availability of resources, manufacturing rarity, artificial limitation); (2) high quality, which is a prerequisite for luxury goods and contributes to its rarity; (3) authenticity, which is it being what it ought to be with an affecting presence that often goes beyond commerce. The luxury object is created through qualitative refinement, which amplifies its rarity. This refinement includes the identification and selection of essence (such as materials, experiences, ideas, time, and space), craftsmanship and manufacturing quality (such as human touch), aesthetics and beauty (such as design, polysensuality, creativity, functionality, and innovation), limitation (such as artificial rarity through limited editions), or customization and personalization. A luxury object can be a product or experience that typically can be purchased in a marketplace. This object’s several abstract and concrete characteristics form the luxury prototype in the consumer’s mind and can evoke certain associations (Mervis and Rosch, 1981, Rosch, 1973). Product attributes, experiential attributes, and symbolic attributes (such as brand) can make something a luxury. What differentiates luxury from non-luxury is that the characteristics and attribute values of luxury goods are extraordinary either in their nature (such as rare materials) or their magnitude (such as the highest quality level). This extraordinariness is in line with existing characterizations, such as the one of Kapferer (2009, p. 49) who proposed that “luxury is superlative, not comparative.” For luxury goods, the extraordinary characteristics are created through qualitative refinement, the “qualitative or adjectival aspects of goods” (Berry, 1994, p. 11). Once a quantitative limit is reached (for example, in the satisfaction of hunger through food), the only way to create something more extraordinary is through qualitative refinement (Berry, 1994). The result of the characteristics and the process of creation is in the extreme case a unique realization that only exists once in a certain time and place, which makes the luxury object extraordinary. This quintessence is a key feature of luxury goods (Belk et al., 1989).

D.3.1 The Object: A Quintessence Luxury goods have quintessential characteristics in that they are what they ought to be (Belk et al., 1989). They are authentic, of high quality, and rare or even unique, all of which gives them an affecting presence (Belk et al., 1989). Rarity and uniqueness are key characteristics of luxury goods from a materials perspective and are interrelated with the other perspectives. Different ways to create extraordinariness 71

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and uniqueness exist (cf. Catry, 2003, Kapferer, 2009). Various systems of characteristics have been proposed to show how luxury goods differ from non-luxury goods. Kapferer (2009, p. 76) proposed that price, rarity, exclusivity, perfection, history, art, time, and dreams are among the common terms associated with luxury. Dubois et al. (2001) found that respondents often associate excellent quality, a high price, scarcity and uniqueness, aesthetics and polysensuality, ancestral heritage and personal history, and superfluousness with luxury. Similarly, Heine (2012, p. 67) proposed that luxury brands are characterized by their high price, quality, rarity, extraordinariness, aesthetics, and symbolism. For Kisabaka (2001), high quality and scarcity are particularly central characteristics of luxury, whereas a brand and the public visibility are additional characteristics. Chevalier and Mazzalovo (2008, p. xi) proposed that craftsmanship, artistic content, and an international company are prerequisites to creating luxury. What is common to all these systems is that they emphasize characteristics that make luxury stand apart from non-luxury products and, thus, extraordinary. These characteristics are closely associated with luxury and can highlight commonly existing associations and expectations regarding the luxury realization. From a material perspective, luxury brands use several mechanics to create extraordinary characteristics for their products and services, including the selection of a unique essence, craftsmanship and product quality, aesthetics and beauty, and the engineering of a rarity. What they have in common is that they all build on the principle of refinement to create an elaborate lexicon to finely differentiate perceived emotions and link them to product attributes (Illouz, 2009, pp. 401–403). By using this lexicon, these elements work together to create an extraordinary story for consumers to build a luxury object. The ultimate goal is the creation of a refined singularity as a reflection of one’s taste in which the interplay between sensory perception and linguistic articulation are key to the imaginative process (Illouz, 2009, pp. 401–403). Through their refinement, luxury goods synthesize different modes of consciousness that create emotions and provide the basis to create desire, as will be detailed in the next sections (Illouz, 2009).

D.3.2 The Creation: Qualitative Refinement Luxury starts with an essence of high quality and at its extreme case is a unique original that exists only once in space and time and is thus something special. For example, natural rarity, which is the limited availability and scarcity of the resources that are needed to manufacture the item, can create this uniqueness (cf. Catry, 2003). The same applies to experiences, such as a visit to a unique place (Kisabaka, 2001,

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p. 77ff.). While high quality is a prerequisite for any luxury ingredient, the highest quality itself can create a unique essence. Age is another example. An object can be singularized as it encompasses a history that has allowed it to become a unique piece. This history and authenticity of the object also allow the perfection of it to lie in unique flaws that tell a story, which further enriches its singularity (Pricken, 2014, p. 45ff.). Quality is a prerequisite for luxury. Quality includes many dimensions, such as the quality of the raw materials and the quality of the design and manufacturing. Quality leads to durability, longevity, or value, which are characteristics that are strongly associated with luxury (for example, Atwal and Williams, 2009, Heine, 2012, Husic and Cicic, 2009, Kisabaka, 2001). Quality can be conceptualized in different ways, such as absolute and universal quality (transcendental view), measurable and characteristic-based quality (product-based view), the fit of the product to the consumer’s specific needs (consumer-based, subjective quality), the correspondence of the product to exact specifications (process-based view), or the relation between quality, price, and manufacturing costs (cost-utility-based view) (Kisabaka, 2001, p. 77ff.). For luxury, typical characteristics are quality of the materials and ingredients, the principles of design, and the product’s features or complexity, which influence its durability and value, comfortability and usability, functionality and performance, and safety (Heine, 2012, Kisabaka, 2001). Craftsmanship and manufacturing quality are further key distinguishing factors for luxury goods. These qualities create manufacturing rarity through the limited availability of skilled artisans and craftsmen to manufacture the product, such as the skills needed to manufacture a luxury watch (cf. Catry, 2003). The complexity of the manufacturing process, the expertise of the manufacturer, and the existence of quality controls are key aspects for manufacturing quality (Heine, 2012, Kisabaka, 2001). This manufacturing in luxury most often has a strong human element, such as the craftsmanship or personal service interactions, which sets it apart from mass manufacturing and contributes to its individuality (Kapferer, 2009). Studies have shown that handmade products are more attractive than mass-produced products as consumers imagine the love that has become part of the handmade product, ruling out alternative explanations such as higher effort, higher quality, uniqueness, authenticity, and pride (Fuchs et al., 2015). Aesthetics and beauty that reflect the artist’s creative influence also add to the uniqueness and creative rarity of the object. Dion and Arnould (2011) emphasized that the singularity of the artist and his magical creative powers are fundamental for establishing and securing the artistic legitimacy of the luxury brand. At the end of this dimension are artworks as “skillful and creative expressions of human experience” (Hagtvedt and Patrick, 2008, p. 380). Hagtvedt and Patrick (2014) 73

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even proposed that aesthetics and the appreciation of beauty are universal human experiences. This is further supported by the work of Kumar and Garg (2010) who suggested that aesthetics primarily operates subconsciously and hence is more universally shared than more conscious cognitive appraisals. While art can be considered a luxury, references to art can also trigger a spillover of the perception of luxury to other consumer products, a process that Hagtvedt and Patrick (2008) termed art infusion. This can work both through transferring aesthetic associations or transferring the associations of high-culture and arts to the product. Kumar and Garg (2010) adopted the view that aesthetics is a form of sensory gratification. Aesthetics can elicit sensory, affective, behavioral, and intellectual experiential responses from consumers (Brakus et al., 2009). For Atwal and Williams (2009) and Pine and Gilmore (1999), aesthetics is one of four areas of luxury experience, besides entertainment, education, and escapism. Artists and designers who focus on the creative expression and the craftsmen who focus on the translation of the creative idea into a marketable product through their skillful work, need to work together in creating luxury goods (Becker, 1978, Hirschman, 1983). The luxury industry could also be seen as following an ideology of “commercialized creativity” (Hirschman, 1983, p. 49). Their aesthetic principles and styles also affect the other touchpoints of a luxury brand, such as the retail stores, which also contribute to the brand’s overall image (Godey et al., 2009). Besides aesthetics, design-driven innovation, enhancing the functionality to an extraordinary level, could enhance the extraordinariness of a creation (Pricken, 2014, p. 201ff.). Another way to create a certain uniqueness and rarity is through the limited availability of a product. This engineered rarity refers to the managerial decision to limit production volumes, which artificially creates rare products. One example would be a limited series that could be available only in a certain quantity (volume based) or be limited for a certain amount of time (time based) (Catry, 2003). In addition, the limitation of distribution and information-based rarity, such as advertising, can also enhance the perceptions of exclusivity for the luxury object (Catry, 2003). Customization, which is the opportunity for the user to personalize the product, also adds to the uniqueness and personal relevance and subjectively-perceived quality (Kisabaka, 2001, p. 109). It is frequently used by luxury brands to make products both more personally relevant and unique. However, for luxury brands, it is important that the brand remains the authority in the design process, as studies have shown that user-designed products undermine the uniqueness and exclusivity associated with the luxury brand and consequently can harm its desirability (Fuchs et al., 2013).

D.4 The Philosophical Perspective

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The Philosophical Perspective: Desire

D.4 The Philosophical Perspective

From a philosophical perspective, luxury creates desire. The perspective is centered on the consumer in the consumer’s lifeworld and considers the individual, social, and cultural contexts. The perspective is largely based on theories of needs and desires. Desire can exist because something is either widely desired (social agreement) or is intensely desired by the individual (Berry, 1994, pp. 5–6). Desire is a state and a process. It creates an infinite loop through passionate imagination, emotion, and frustration, as will be detailed in this section. The infinity of desire has two important implications for luxury. First, if the process of desiring takes place, anything can become an object of desire and thus luxury. Second, there is no limit to desire as any imagination and realization can always be surpassed by another level of refinement, which can serve as the new object of desire. The philosophical discourses underlying the construction of desire are manifold, ranging from metaphysical to aesthetic and moral questions. Desire is a concept amongst the cultural, social, and individual spheres, such as between an individual and the social sphere (for example, the desire for relationships and belonging), the conscious and unconscious (for example, collective imagination and deeply held cultural desires), the mind and the body (for example, the emotional and passionate experience), and the imaginary and the real (for example, fantasizing about the ideal self and experiencing pleasure). Moreover, it has moral implications as highlighted in the historical perspective. Figure 11 provides a schematic overview Figure 11: Dimensions and layers of desire D of the dimensions that will be highlighted from the consumer’s point of view in

Cultural: Collective imagination Social: Relationships

Unconscious Collective

Individual – Identity: Ideal self Individual – Experience: Pleasure

Conscious

Mind Individual Body

19

Fig. 11 Dimensions and layers of desire Source: Own illustration 75

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the philosophical perspective and the related cultural, social, and individual perspectives, which can all be conceptualized using the unifying concept of desire.

D.4.1 The Motivation: Creating Desire and Fueling the Imagination Desire has always been fundamental to social life and is a key driver of today’s consumer society (Belk et al., 2003, p. 326). According to Belk et al. (2003, p. 327), desire goes beyond high involvement and hedonic, aesthetic, or symbolic consumption; desire encompasses the passionate aspects of consumption. Belk et al. (1996, p. 368) defined desires as “ever-changing, infinitely renewable wishes inflamed by imagination, fantasy, and a longing for transcendent pleasure.” Desire can be distinguished from needs and wants (Belk et al., 2003, Berry, 1994, Graeber, 2011, p. 494). The difference between a need, which is universally held and unintentional, and a desire is that desire is more specific and created through qualitative refinement of a universal need that creates positive pleasure (Berry, 1994). Whereas needs are internal and rational acts, desires are created externally and have a strong emotional and even partly irrational nature (Belk et al., 2000, p. 99). Whereas needs are relatively fixed, desires are infinite and fueled by imagination (Belk et al., 2003, p. 328). Thus, desires are always open to change and can always be surpassed (Illouz, 2009, pp. 401–403). Compared to wants, desires are created through fantasies and are often more irrational and unplanned (Belk et al., 2003, p. 333). Desire is directed towards a specific goal, including the desire for otherness and personal transformations, which are projected onto the consumption objects (Belk et al., 2003, p. 345). For luxury, this means that potentially anything, as long as it is desired, can become a luxury object if it provides a more refined version to satisfy the desire (Illouz, 2009, pp. 401–403). As such, it is both an individual and a social process that is inherently dynamic and is subject to change over time. For example, through increasing popularity, an object can lose its specificity and luxury status and become a social necessity (“drag effect”) (Berry, 1994, p. 18). Desire can exist because an individual desires something intensely or because of social agreement on the desirability (Berry, 1994, p. 5). Desire is, hence, created among cultural, social, and individual spheres in the mind and body (Belk et al., 2003, p. 329). Desire is created through a negotiation of the individual identity and its social environment. An underlying driver of desire is the desire for social relationships and recognition. Based on the work of Girard, Belk et al. (2003, p. 329) proposed that the competition from others to possess an object increases an object’s desirability because possessing the object becomes a fight for prestige

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and social recognition (“mimetic desire”). The desired objects become a marker of group membership and the relationships within the group (Belk et al., 2003, p. 336). The more the object is desired by others, the higher is its luxury status (Berry, 1994). Therefore, luxury goods symbolize the desired social relationships and the consumer goods imagined to bring the love, respect, and recognition they are thought to embody (Belk et al., 2003, p. 344). Desire refers both to an emotional state and the process itself of desiring, with its emotional and bodily reactions (which Belk calls embodied passion, cf. Belk et al., 2003). It goes beyond the mere satisfaction of needs and exhibits a mix of complex and even paradoxical emotions (Belk et al., 2003, p. 344). The guiding forces of desire have been conceptualized as lack (Belk et al., 2000, Illouz, 2009) or energy (Kozinets et al., 2016, p. 3). Illouz (2009) proposed that the perception of a lack and the frustration that the desired object is out-of-reach creates insecurity that motivates consumption. Belk et al. (2000, p. 100) proposed that desire can be derived from the Latin desiderium, meaning a “grief for the absence or loss of a person or thing,” particularly a “yearning for the unreachable stars.” Kozinets et al. (2016, p. 5) proposed a different conceptualization of desire in that desire is energy that stems from the innovative and creative capacities of consumers. Imagination is essential for the creation of desire. Desires are created by imagining idealized versions of aspired states (Belk et al., 2003, p. 330). Rather than the actual possession, the intense longing for the desired object and fantasizing about possessing it and its imagined characteristics create the attraction (Belk et al., 1996, p. 368, Belk et al., 2000, pp. 99–100, Illouz, 2009). The more difficult the desired object is to access, the more desirable the object becomes, as long as there is still hope that the object of desire can eventually be reached (Belk et al., 2003, p. 340). For a desire to be kept alive, the distance between the individual and the object of desire needs to be maintained (Belk et al., 2003). Barriers such as personal sacrifices ensure the distance is kept (Belk et al., 2003, p. 340). If the object of desire is attained, a new desire must be found for the consumer’s fantasies (Belk et al., 2003). Belk et al. (2003, pp. 342–343) proposed that the desire to desire can even be a source of happiness. The process of desiring is itself pleasurable, and the fear of being without desire can lead to negative feelings of emptiness and disappointment (Belk et al., 2003). For Illouz (2009, pp. 401–403), the cycle of desire necessitates imagination, emotion, and frustration as the refinements are inherently unstable. To nurture their hope and sustain their desire, consumers actively work on bringing the object to within their reach (such as saving money, devoting time, or sacrificing other things) (Belk et al., 2003, p. 343). The cycle of desire is infinite: The object is desired but loses some of its desirability once it is acquired; thereafter, re-enchantment and desire for the object are again reformulated. This ritualistically repeats the satisfaction or 77

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a new object of desire is found (Belk et al., 2003, pp. 341–342). The cycle of luxury, therefore, has to be fueled by further refinements in an infinite process in which something can always be added on top. This is supported by recent empirical studies, which have shown that non-consumption can increase the desire for the object (Dai and Fishbach, 2014, p. 936). Desire works through promising transformations, such as an escape from reality and playful transgressions and bodily pleasures (Belk et al., 2003, p. 335). Another proposed etymological route of luxury derived from luxuria (lust) also hints at the bodily nature of desire (Grugel-Pannier, 1996). Enlightenment thinking has prioritized mind over body and, hence, neglect of the bodily sensations (Belk et al., 2000, p. 114). Sensory experiences and their imagination are essential, be it for social contact or the consumption experience (Belk et al., 2003, p. 345). Belk et al. (2003, p. 329) proposed that “passionate imagining” is crucial to the creation of desire in which not only the desired state but also the fantasizing about it is pleasurable. Campbell (1987) distinguished between traditional hedonism rooted in the direct experience of pleasure and modern hedonism, which is founded in the imaginary fantasizing about a product, which can lead to a self-illusion. Desire can create pleasure and even physiological states similar to sexual arousals, such as increased heart rate and blood pressure (Belk, 2001, Belk et al., 1996). Going back to thinkers such as Augustine and Hobbes, Graeber (2011, p. 492) proposed that humans have an unlimited desire for sensual pleasures, wealth, and power, which also leads to social competition. Desire can be linked to erotic theory in which sexual attraction is key to social power (Graeber, 2011, p. 496). Further extending the analogy from human relationships, an object can only be embraced and not possessed or destroyed, giving the object an agency. The domination of an object, such as its destruction, would prove its possession yet would also annihilate its existence (Graeber, 2011, p. 498). Belk (2001, p. 197) proposed that the desire for desire itself is an essential feature of contemporary consumerism. While these fantasies are created by the individual, they often have a cultural basis of shared aspirations and a collective imagination (Belk et al., 2003, p. 329, Illouz, 2009). Even the bodily reactions are shaped by the symbolic values and cultural ideals, such as in food preferences (for example Belk et al., 2003, p. 331). Belk et al. (2003, p. 347) proposed that the existence of consumer desire marks the membership in a global consumer culture. While the control of desire has long been at the core of religion, desire has been set free in the modern consumer society in which objects of desire are sacralized so as to preserve their extraordinariness (Belk et al., 2000, p. 111). Graeber (2011, p. 495) proposed that the system of a consumer society is oriented towards the circulation of these consumption fantasies in which pleasure lies not in the actual consumption but the imagination. Through desire,

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the consumer becomes an active subject that allows himself to be seduced by the myths of the marketplace and engage in imaginary transformations (Belk et al., 2003, p. 346). The material manifestations of cultural desires in the semiotic system of consumer goods and its power for symbolic self-construction are strong drivers of consumerism (Graeber, 2011, p. 503). Taste becomes the space to construct desires through fashioning experiences (Graeber, 2011, p. 497). Kozinets et al. (2016, pp. 18–19) expanded the concept of desire to include networks of relations between actors, including technology. The ever-changing nature of desire makes innovation and creativity critical factors for controlling desire (Kozinets et al., 2016, pp. 18–19). Desire thus provides a complex yet useful frame to understand the interplay of cultural, social, and individual perspectives on luxury, which will be detailed in the following sections. From the cultural perspective, desire is realized in a desire for the magical and sacred, based on cultural values and collective imagination. From the social perspective, desire manifests itself in the desire for social relationships and status. The individual perspective comprises two views: the identity-oriented view and the experiential view. In the identity-oriented view, desire is essential through the promise of self-transformation and transcendence. The experiential view looks more closely at the experience of desire and the emotional and bodily reactions.

D.5

The Cultural Perspective: The Magical and Sacred

D.5 The Cultural Perspective

The cultural perspective, rooted in anthropology and cultural studies, highlights the role of cultural categories and principles in the creation of desire. The perspective is based on literature related to consumer research and consumer culture theory, which deals with “sociocultural, experiential, symbolic, and ideological aspects of consumption” (Arnould and Thompson, 2005, p. 868). Culture provides a referent system with principles and categories that consciously or unconsciously structure human thinking and action (McCracken, 1987). Central to the cultural perspective is the meaning and symbolism of consumer goods and the cultural construction of luxury. It is concerned with the meaning of consumption in a consumer culture, the system of producing cultural meaning and its objectification, and the negotiation of meanings by the individual in the socio-cultural environment (McCracken, 1990). Consumer goods are a visible part of the culture and can become concrete materializations of abstract cultural fantasies (Belk et al., 2003, p. 346). They form a symbolic sign system and can objectify cultural myths that help humans to make sense of the world and which guide social life. This symbolic understanding of consumption and goods has led consumer and luxury researchers to recognize the 79

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importance of the meaning of consumption symbols and to propose that “people buy things not only for what they can do but also for what they mean” (Levy, 1959, p. 118). The cultural view can illuminate how culture provides the templates for the collective imagination that are essential for the creation of desire (Belk et al., 2003). From the cultural perspective, luxury is something magical and sacred. This magic and sacredness are reflected in an intangible aura, above the empirical, that distances luxury from the ordinary and profane of everyday life. Luxury goods have symbolic meanings and embed cultural myths. The brand and the narratives and stories surrounding an object are particularly important for carrying the meaning and myths. A fundamental myth that is related to luxury is one of heritage that provides the brand with authenticity, legitimacy, and authority to act as a creator of cultural meanings. The meanings are strongly co-created by the consumers in their social environment. Rituals thereby guide the interaction with the magical and sacred and provide guidance and meaning (public or private, collective or individual). The performance of luxury rituals to singularize the luxury object requires the co-creation with the consumer. This section aims at detailing the meaning of luxury and its roots in collective cultural values and dreams, whereas the other sections focus more closely on the social and individual aspects of desire.

D.5.1 Luxury: Cultural Production Luxury with its high artistic and aesthetic appeal is a form of cultural produc­ tion and is an integral part of contemporary consumer culture (cf. Venkatesh and Meamber, 2006). According to Venkatesh and Meamber (2006, p. 12), “cultural production is the process by which cultural products (including goods, artifacts, visual and experiential objects, services, and art forms) are created, transformed, and diffused in the constitution of consumer culture.” It has long been proposed that consumer goods are the visible part of a culture that form a communication system created through its cultural community (Douglas and Ishwerood, 1979). Consumer goods are signs in the cultural sign system from which consumers draw conscious and unconscious meanings to construct their identity (Elliott and Wattanasuwan, 1998, p. 134, McCracken, 1987, p. 145). Culture industries, through their production of symbolic meanings, are central in shaping the cultural order of a society (based on the argument of Adorno and Horkheimer, cf. Venkatesh and Meamber, 2006, pp. 12, 18). As the importance of traditional, social, and religious institutions in providing guidance on fundamental existential questions is declining, individuals are seeking new ways of creating meaning and forming an identity. In one such

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way, individuals are looking to the marketplace for providing a new ideological foundation (McAlexander et al., 2014). Cultural principles provide the organizing framework for cultural categories and prescribe how meaning can be derived from them to “organize the phenomenal world” and can become embedded in the symbolic properties of consumer goods (McCracken, 1986, p. 74). Consumer goods shape the construction of distinctions, such as class or occupation in the social world, and the construction of identity (McCracken, 1987, p. 144). Through advertising and the fashion system, categories of cultural meaning such as space, time, or even existence can be transferred to consumer objects (McCracken, 1986, p. 72). For example, in advertising, the advertiser aims to establish a symbolic equivalence that joins the attributes of the consumer good with the symbolic properties of the culturally constituted world (McCracken, 1986, p. 74). These processes can transfer and transpose existing meanings or invent new meanings that can become part of the material world (McCracken, 1986, p. 76). The object thereby enriches its object code, which has several functions: it enacts cultural beliefs (performative), stabilizes material relations, and provides reference points for social interaction (conservative, mnemonic); it can also act as a change agent in transformation (transformative) (McCracken, 1990). To appropriate the meaning from the consumer object, the individual consumer engages in various rituals, such as possession, exchange, grooming, and divestment rituals (McCracken, 1986). More recent studies have built on this framework and have proposed that meaning from consumer goods also feeds back into the culturally constituted world (Oswald, 2012).

D.5.2 The Intangible: Creating a Magical and Sacred Aura Luxury can be understood through processes of sacralization or magic as a way to create, experience, and enact the extraordinary (for example, Dion and Arnould, 2011, Dion and Borraz, 2015). Special possessions and items have magical properties that cannot easily be grasped with rationality (Belk, 1991a). For example, consumers are unwilling to sell special possessions for market value, have a high desire for them regardless of price, perceive no substitutes, are unwilling to discard them, have feelings of elation or depression regarding them, and personify these possessions, which all counter the expectations of a rational decision-making process (Belk, 1991a, p. 35f). For luxury, the specialness and potential magical powers play a substantial role (Dion and Arnould, 2011). Sacralization is one process through which consumer goods can be endowed with meaning and distanced from the ordinary. Luxury goods as special possessions can create a magical and sacred aura 81

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by evoking, for example, a nostalgic sense of the past (Belk, 1991b). Luxury goods have a sacred dimension and express their relationship with time, history, life, and death (Roux and Lipovetsky, 2003). Through ritualistic consumption, consumption experiences and goods can also become vehicles for transcendent experiences and acquire sacred status (Belk et al., 1989). In the fundamental search for meaning, the realm of the sacred has been extended from formal religion and belief systems to the sphere of consumer goods, which can become the focal object of respect and reverence and a source for self-transcendence (Belk et al., 1989). In contemporary society, consumption itself may have become a vehicle for self-transcendence and luxury goods through myths of the singular and extraordinary (Belk et al., 1989, p. 2). Places, times, tangible things, intangibles, and experiences commonly become the domain of sacred consumption (Belk et al., 1989). Many researchers have studied the role that consumer goods play in quasi-re­ ligious experiences. These consumer goods share features of extraordinariness, uniqueness, and non-rationality (for example, Belk et al., 1989, p. 6, Tian and Belk, 2006). Belk et al. (1989) proposed that sacredness has distinct properties that distinguish it from the profane: hierophany (in which a supernatural, different, and unique reality reveals itself), kratophany (the ambivalence of approach and avoidance, simultaneously separating us from the material world and binding us to it), opposition to the profane (the ordinary part of everyday life), contamination through contact (blessing through sacred rituals), sacrifice, commitment (emotional attachment), objectification (abstraction to a higher timeless frame of reference), rituals (rules of conduct), myths (collective socialization of the sacred), mystery (beyond rational and cognitive understanding; desire for profound meanings and experiences), communitas (community that transcends normal social roles and structures), ecstasy, and flow (transcendence of self, matter and mortality). Sacred possessions can acquire their status through many processes, such as rituals, pilgrimage, quintessence (be exactly what they ought to be; affecting presence; branded commodities beyond commerce; authenticity—temporal dimension), gift giving (expression of connection between people; handwork and labor; expressions of deeply held cultural values), collecting (combination singularizes whole), inheritance (singularizing through age), and external sanction (sanction by external authority) (Belk et al., 1989). Belk and Wallendorf (1990, p. 38) stated the following: What is seen as sacred inspires extreme commitment and sacrifice; belief in its sacred status is sustained by myth and ritual. Because of its power, the sacred is believed to be able to contaminate (in a positive sense; that is, spread its power to) the people, places, and things it touches. However, the sacred may be destroyed by contact with the everyday world of the profane unless proper purification and preparatory rituals are first performed. (p. 38)

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Money can acquire a sacred meaning and can also acquire the connotations of good and evil, depending on the source of the money and the nature of the exchange (Belk and Wallendorf, 1990). Through its high price, luxury goods can be endowed with the aura of a piece of art, if the artistic and commercial spheres remain separate (Belk and Wallendorf, 1990, p. 59). “The separation of the service from the money transaction preserves the altruistic, aesthetic, or sacred interpretation of the service-givers actions.” (Belk and Wallendorf, 1990, p. 53) Beyond consumer goods, extraordinary experiences are also created through myths (Arnould and Price, 1993). Llamas and Belk (2011, p. 258) argued that both globalization and commoditization have led to disenchantment of the world and, therefore, the search for authentic meaningful experiences. In a world that is increasingly being rationalized, magical myths and their embodiment in consumer goods offer a way for consumers to experience for themselves the magic and enchantment and some distance from the ordinary sphere (Belk, 1991a, Tian and Belk, 2006). Consumer choices can provide a way to symbolically access and interpret the magical, supernatural, and metaphysical phenomena (Tian and Belk, 2006, p. 272). They can also provide and create a sense of purpose and meaning in life that previously had been the sphere of religion, which raises criticisms about the forms of contemporary consumption (Tian and Belk, 2006, p. 272). Sacralization is one way through which these extraordinary experiences can be created (Llamas and Belk, 2011, p. 257). This thinking relates the magical to quasi-religious experiences shaped through the experience of the sacred. Belk et al. (1989, p. 1) proposed that the “two processes at work in contemporary society are the secularization of religion and the sacralization of the secular. Consumer behavior shapes and reflects these processes. For many, consumption has become a vehicle for experiencing the sacred.” This distinction between the profane or ordinary and sacred or extraordinary is one of the key propositions of the sociology of religion and can shed light on how the extraordinary is constructed (Belk et al., 1989, p. 2). Based on the work of Durkheim and Eliade, Belk and Wallendorf (1990, p. 38) claimed that self-transcendence is a central motive behind the experience of the sacred and its uniqueness and its power to create a myth of something more powerful than any individual. Belk and Wallendorf (1990, p. 38) proposed: The sociology of religion suggests that we regard as sacred that which we define as extraordinary and set aside from everyday experience. In the realm of religion, particular persons, social groups of castes, things, places, and times are collectively defined as sacred. Collectively shared definitions of the sacred serve to bind the society together in a celebration of that which has been separated from the profane realm of everyday life. (p. 38) 83

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Tian and Belk (2006, p. 250) have gone as far as to propose that the commercial world of the mystical, magical, and spectacle fulfill a fundamental human desire for miracles. This desire had previously been fulfilled by religion but is increasingly shifting to alternative narratives and institutions, each with their own value and belief systems. A related concept is the concept of fetish, which has been conceptualized in anthropology as religious fetishism, in Marxist economics as commodity fetishism, and in Freudian psychoanalysis as sexual fetishism in which abstract concepts become materialized in concrete objects (Belk, 1991a, p. 38). Fetish can be understood as “magical objects of extraordinary empowerment and influence” in which consumer goods are endowed with an aura (Fernandez and Lastovicka, 2011, p. 278). Through ‘imitative magic’, replicas can be charged with an aura and transformed into something magical (Fernandez and Lastovicka, 2011, p. 278). While in contemporary discourse the term fetish often receives a negative connotation, it originates from the Latin word facitus, which can mean “to do” or can refer to “a thing made by art” (Fernandez and Lastovicka, 2011, p. 279). Central to the concept of fetish is the concretization and materialization of an abstract concept, its animation (i.e., the ascription of animate characteristics), the conflation of the meaning of the signifying object and the signified abstract idea, and an ambiguity of control in which the power in the relationship between object and subject becomes unclear (Fernandez and Lastovicka, 2011, pp. 279–280). Through the processes of similarity (imitative magic) and contagion (contagious magic), the fetishization of objects takes place, which creates a perpetual cycle (Fernandez and Lastovicka, 2011, pp. 280, 283). This is related to what Pricken (2014, p. 121ff.) called transfer. Here, the symbolic and cultural meanings are brought to life through storytelling and reference to a quasi-religious set of practices and rituals through which the meaning is created and transferred to the goods and ultimately to the user.

D.5.3 The Story of Luxury: Luxury Myths and Collective Desires Myths are the narratives and stories that help humans make sense of the world and that guide social life (cf. Stern, 1995). Based on Levi-Strauss, Levy (1981, p. 51) proposed that “the purpose of myth is to provide a logical model capable of overcoming contradictions or paradoxes in natural and social experience.” Myths are commonly shared within social groups and structural analyses can reveal the underlying implicit and often unconscious cultural categories (Levy, 1981). Dion and Borraz (2015, p. 79) proposed that myths relate back to the founding narratives

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of our societies and through their timeless character give meaning to our behavior in that “myths are an attempt to make sense of our origins, existence, and future.” Myths can become “[…] a portal to both the unconscious and the transcendent […]” (Sherry and Schouten, 2002, p. 230). Gabriel and Lang (2015, p. 8) proposed that consumerism itself shapes the myth of a good life and provides the ideological foundation for conspicuous consumption. Myths have the function to bridge the real and the imaginary or fantasy. Myths also provide a basis for the creation of consumer fantasies and imaginations and “can become a major focus for our thoughts, energies, hopes, desires, and expenditures of time and money” (Belk and Costa, 1998, p. 219). Consumer objects or brands that encapsulate these myths can act as bridges themselves to the imaginary and help individuals or even social groups and cultures substantiate their existential and structural myths. McCracken (1990, p. 105) proposed that “the gap between the ‘real’ and the ‘ideal’ in social life is one of the most pressing problems a culture must deal with.” If these ideals cannot be achieved directly, their meaning might be “displaced” to another time and place to preserve the ideals, dreams, and hopes (McCracken, 1990, p. 105). Consumer goods and their symbolic power can act as a material bridge and symbolic reminder of the aspired lifestyle or world. They offer a way to access these displaced ideals and preserve the hope that these ideal states can be obtained (McCracken, 1990, p. 104ff.). Luxury goods are well suited to act as such bridges since they are extraordinary and out of reach and thus out of the empirical testability and potential falsification of these cultural ideals. Moreover, they are concrete and enduring signs for an imagined and aspired lifestyle. They are also scarce and desirable and, in principle, infinitely expandable in that a higher level of consumption or alternatives—such as collecting—exist to which the displaced ideals can be relocated should the purchased item not stand the empirical tests (McCracken, 1990, p. 104ff.). The difficulty in obtaining luxury goods makes them a suitable container for dreams and displaced meaning as long as the hope to possess them is kept alive. Luxury goods and their symbolic character can act as the materialization of these cultural desires and dreams. “When goods serve as bridges to displaced meaning they help perpetually to enlarge the individual’s taste and preferences and prevent the attainment of a ‘sufficiency’ of goods.” (McCracken, 1990, p. 105) In striving to access the displaced meaning, they create a never-ending cycle that can always reach higher levels. The desire is created through their collective aspiration and the balance between being out of reach but not too far to lose hope (cf. McCracken, 1990). If the luxury goods and the myth of endless displacement onto the next signifier fail to stand the empirical tests, then the projection and metonymical function might be transferred to the entity of objects rather than onto a new signifier. Rather than buying something 85

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new, a consumer collects things, hoping that through the collection the dream can be maintained and accessed through its materialization as an object. Belk (1995a) proposed that collecting is itself a form of luxury consumption that sets apart the objects from the ordinary world. Belk (1995b, p. 67) defined collecting as “[…] the process of actively, selectively, and passionately acquiring and possessing things removed from ordinary use and perceived as part of a set of non-identical objects or experiences”. By removing the object from ordinary use, the object can acquire an extraordinariness that is a core feature of luxury. “Collections incorporate possessions that are revered for more than just the objects themselves; their value in completing a set raises them above their ordinary status as disparate objects.” (Belk and Wallendorf, 1990, p. 39) Cayla and Arnould (2008, p. 99) proposed that myths have several characteristics, including having a long history, being anonymous and shared, and providing templates on which cultural products are reproduced (such as movies). Furthermore, myths are related to the social life of the communities in which they exist, are constructed through binaries such as nature and culture or good and evil, and are believable through the identification with the mythical heroes that enact certain archetypes. When applied to creative advertising design, myths can succeed toward creating successful advertising that appeals to fundamental cultural patterns (Johar et al., 2001). Brown et al. (2013) proposed that myths develop through three main principles: (1) vagueness, which is the existence of ambiguities that allow for personal interpretation, (2) paradox, which is the existence of contradictions to provide tensions that call for a resolution, and (3) accumulation, which is the existence of multiple layers of meaning that allow for different modes of reading.

D.5.4 The Luxury Brand: Authentic Heritage and Symbolic Rarity Many authors view brand as a key constituent of luxury because the brand carries meaning beyond the object. Luxury brands often have a global reputation (Nueno and Quelch, 1998), a high awareness, and exclusivity (Dubois and Paternault, 1995). Moreover, Nueno and Quelch (1998) proposed that a strong luxury brand has a strong brand identity with a recognizable style or design that is often linked to the personality and values of its founder. The creation of a brand story and using symbolic narratives (allegory), a brand essence or sense of authenticity (aura), an idealized community (Arcadia), and the creation of a brand paradox that nurtures the brand myth (antinomy) can be important factors that luxury brands are built on (Brown et al., 2003). Holt (2004) proposed that the myth of a brand and its cultural

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meaning are key to creating iconic brands with a high cultural value (see also Holt and Cameron, 2010). Iconic brands offer an ideology that helps to resolve cultural tensions by offering an alternative communication system with its own myths and cultural codes (Holt, 2004). Luxury brands use several methods to create their myths: the personality and story of the creator, the difficulty in accessing the brand, the history and authenticity of the brand, and the individual stories that charge the brand with symbolic meaning (Kapferer, 2012b, p. 55). The consumers’ involvement and identification with these myths lead to higher desirability and liking of the brand (Holt, 2004). Holt (2006, p. 300) proposed that “a brand becomes an economic asset for the firm when people come to count on the brand to contribute to social life when it is embedded in society and culture.” The brand becomes a social actor that is part of the cultural discourses, everyday practices, and social institutions, such as today’s media (Holt, 2006). Previous research has emphasized the importance of a cultural understanding of the luxury brand and its context to create an authentic and desirable brand core (Kisabaka, 2001, p. 104ff.). Authenticity plays a strong role for luxury brands as it highlights the company’s heritage and history and can provide an anchoring point in a fast-lived global environment (Wiedmann et al., 2011, p. 190). Brand authenticity comes from the quality of the brand, its tradition, and the values that the brand embodies (Napoli et al., 2014). Underlining this authenticity are factors such as sincere communication, commitment to quality, historical evidence, formal and informal classifications (such as awards), a strong link to the product’s origin and place together with the use of historical and cultural referents of production methods, stylistic consistency, and the emphasis of non-commercial motives (Beverland, 2005, Beverland, 2006). This is why, particularly for luxury brands, an association with the country of origin, the design, and the manufacturing plays an important role (Aiello et al., 2009). The heritage of a brand also underlines its authenticity and cultural legitimization (Penaloza, 2000). Heritage is created through a strong identity that manifests itself in symbols and core values. These symbols and values guide the company’s actions and highlight the longevity of the brand (Urde et al., 2007, p. 9). Brand heritage that is rooted in a strong and credible identity and has cultural meaning is a substantial contributor to cognitive, effective, and intentional brand strength (Wiedmann et al., 2011). Through the heritage of the brand, the luxury object is symbolically enriched with time, similar to the process of aging, and thus emphasizes the longevity of the luxury object (Pricken, 2014, p. 107 ff.). Leigh (2006) differentiated among different forms of authenticity. Objective authenticity is authenticity that is created in reference and comparison to a specific place of origin. Subjective or constructive authenticity is authenticity that is based on the experiences, dreams, or fantasies and the authenticity is a way of augmenting 87

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and extending them. Existential authenticity takes a postmodernist stance and views authenticity as the consumer’s motivation for pleasure and fun, for example, through the immersion experience. Existential authenticity has the potential to create a sense of reality, both of the world and the consumer. Moreover, existential authenticity can be intrapersonal (physical or psychological) or interpersonal in emphasizing a collective sense of the self (Alexander, 2009, Leigh, 2006). Consequently, the sources of authenticity can come either from the object, the individual, or the social environment and community (Alexander, 2009, Leigh, 2006). While legitimizing the brand’s authenticity, heritage can also be an important aspect to revitalize brands that have been inactive. This history can symbolically bridge the past and its collective memories with the present for reinterpretation of the brand (Dion and Mazzalovo, 2016). Alexander (2009, p. 551) proposed that “brands seek their aura of distinction and pedigree through allusions to time and place. For luxury products, the importance of heritage or pedigree is an almost self-evident imperative.” This aura can either be based on facts or constructed to at least be conceivable, thereby creating a myth. One such example is the myth associated with the brand Dom Perignon, in which a monk is proposed to have discovered the method of champagne making. However, the myth only spread following the commercialization of champagne in the 1860s (Beverland, 2005). The mythic aura of heritage brands is constructed, emphasized, and showcased across touchpoints, such as in stores. Showcasing is done through reference to the brand’s founders and to collections and products that refer to its origin or through stylistic and architectural elements (Dion and Borraz, 2015).

D.5.5 The Meaning Transfer: Elaborating and Co-Creating Luxury Rituals Rituals help to extract meaning from the world of consumption. Rituals also help to establish social relationships around the consumption communication system (Lury, 2011, p. 14). To understand the meaning through its visible and hidden codes, the consumer must decode the symbolic properties of the goods (McCracken, 1986, p. 78). To appropriate the meaning, the consumer can engage in different rituals, which, according to McCracken (1986, p. 78), is: […] a kind of social action devoted to the manipulation of cultural meaning for purposes of collective and individual communication and categorization. Ritual is an opportunity to affirm, evoke, assign, or revise the conventional symbols and meanings of the cultural order. (p. 78)

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Rituals are related to cultural myths. (Stern, 1995, p. 165) proposed that rituals are “the repetitive sequence of behaviors referenced in mythic narratives.” Rook (1985, p. 252) defined ritual as: […] a type of expressive, symbolic activity constructed of multiple behaviors that occur in a fixed, episodic sequence and that tend to be repeated over time. Ritual behavior is dramatically scripted and acted out and is performed with formality, seriousness, and inner intensity. (p. 252)

A ritual encompasses ritual artifacts such as consumer products, ritual scripts on the use of the artifacts, ritual performance roles, and a ritual audience that goes beyond the participants in the ritualistic performance (Rook, 1985, p. 253). These dimensions differ in the extensiveness to which they relate to the ritual and the extent to which they are scripted (Rook, 1985, p. 256). Rook (1985, p. 254) proposed that there are different areas for ritualistic behavior such as cosmology with religious, magic, and aesthetic rituals (such as arts performances), cultural values with cultural rituals or rituals marking the rites of passage, group learning rituals (such as rituals within the family, a small group, or a larger social group), individual and personal rituals (such as grooming rituals) and, finally, what he called biological rituals related to mating behavior. Rituals guide the interaction with the sacred and can serve as heuristics in decision making (Dion and Borraz, 2015, Rook, 1985). Sherry et al. (1993, p. 237) proposed that “ritual behavior generally serves a positive function as an automatic decision maker, and traditional ritual helps to give meaning to contemporary personal and social life.” McCracken (1986) distinguished four types of consumption rituals: exchange, possession, grooming, and divestment rituals. Exchanges are often ritualized, such as the purchase of an item or gifting (McCracken, 1986). Gifting has often been studied as a way to establish a relationship between the gift giver and gift receiver and transfers the symbolic properties from the consumer good. These gift exchanges are often highly ritualized and follow certain rules. Sherry et al. (1993, p. 228) stated that “gift giving may be one of the few remaining critical incidents of true significance or sufficient periodicity that tests the social ties that consumers have formed in their relationships with others.” Sherry (1983) proposed a model of gift giving that highlights the complexity of the processes involved. The process starts with the gestation stage in which the gift giver selects an appropriate gift. The process then proceeds to the prestation stage in which the gift is presented and then to the reformulation stage in which the gift is evaluated by the receiver and the relationship reevaluated, which describes conditions for future gift exchanges. The gifting process itself encompasses social dimensions (such as the relationship between the gift giver and receiver), personal dimensions (such as the influence of one’s self-concept on the choice of the gift), and 89

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economic dimensions (such as the value of the gift and its economic and symbolic properties) (Sherry, 1983). Examples of the cultural norms and rules that govern the gifting process abound. For example, often social norms imply that the gift needs to be reciprocated with a similar value or can hardly be denied or thrown away (Giesler, 2006, Sherry, 1983). Gifts thus have a profound influence on individuals and their social relationships (McCracken, 1990, p. 118ff.). Gifts can also exhibit a dark side as the fantasies triggered can be negative or the gift might even weaken rather than strengthen the social relationship if the implicit conventions are violated (Sherry et al., 1993). The relation to consumer desires and fantasies makes luxury an important element in gift exchanges. Sherry et al. (1993, p. 240) stated that “the gift may function as a transitional object as consumers forge a sensual relationship with the world.” Or, framed in a more macro perspective, “through these imaginative fantasies, respondents are able to liberate what cultural ideology (and conventional research design) represses: the love/hate relationship that the moral economy of gift exchange enjoins upon consumers” (Sherry et al., 1993, p. 242). Other examples of cultural gifting rituals and how they construct status come from the field of anthropology. Several researchers have documented potlatch rituals in which the gifter needs to reciprocate the gift and outdo the gifter, leading to competition for status and competitive altruism (Boone, 1998, Mauss, 2002). Research has shown that when evaluating gifts, gift givers focus more strongly on the gift’s desirability whereas gift receivers focus on the feasibility and usefulness of the gift (Baskin et al., 2014). For luxury brands, self-gifts also play an important role (Kauppinen-Räisänen et al., 2014). Mick and DeMoss (1990, p. 325) proposed that self-gifts and interpersonal gifts have several similarities: Whereas the communicative aspect for interpersonal gifts is focused on the symbolic exchange between the giver and the receiver, the self-gift giver engages in a symbolic self-dialogue around identity and self-esteem; whereas for interpersonal gifts the exchange focuses on social obligations, self-gifts focus on indulgences and their justification; last, whereas the specialness and meaningfulness of interpersonal gifts come from the emotions and relations fostered, self-gifting stems from the uncommonness linked to escapism, perfectionism, or discovery. Kauppinen-Räisänen et al. (2014) found that while experiential self-gifts are context bound, they are not limited to the typical purchasing situations. Instead, self-gifting can occur at different steps of the consumption phase and the self-gifts are highly emotional and can be either predetermined or impulsive. Self-communication motivations can range from utility, indulgence, or celebration, to self-regard, self-reward nostalgia, or consolation to the social motivations of impression, confidence, credibility, belonging, or approval (Kauppinen-Räisänen et al., 2014).

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Belk and Wallendorf (1990, p. 56) proposed that the rituals of gift-giving also have important relational and social functions: “In gift-giving, love and connection to others are expressed by transforming some of one’s own money into a gift object.” and “Through this action, not only was the hand labor of the quilter conveyed, but also the giver’s money was transformed into a gift of love.” In the context of luxury brands, Kessous et al. (2016) who studied gifting rituals from father to son for luxury watches proposed three stages with distinct motives. In the gestation state, the significance of luxury watches for the gift giver (father) is in the foreground. In the prestation stage, the transmission process and the interaction between the gift giver and receiver are central. In the reformulation stage, the gift receiver and the consequences of the gift—such as the benefits accruing from it and also the obligations that the receiver feels and its role for the self-image of the receiver—play a strong role (Kessous et al., 2016). Another exchange is the commercial exchange, such as the purchase of an item. Through ritualization, money can acquire a sacred meaning and thereby distance the exchange from the ordinary sphere of commerce (Belk and Wallendorf, 1990). Possession rituals encompass many ways to claim the symbolic ownership of a consumer object, such as a personalization by the owner (McCracken, 1986). Grooming rituals are carried out to renew the meaning transfer on a repeated basis in a continual process, as the symbolic transfer can be short-lived (McCracken, 1986). This could be related to the investments and sacrifices that the user undergoes to preserve the nature of the product, such as cleaning or protecting it or could also be related to the social aspect of maintaining and showcasing the consumer objects in their best attire (McCracken, 1986). For Rook and Levy (1983), grooming rituals relate not only to personal hygiene and the attractiveness of appearance but also to the preparation for a social role and comprises numinous elements (related to transformation and even magical experiences), judicious elements (related to the appropriateness and its evaluations as right or wrong), dramatic elements (related to playfulness), formal elements (the performance to certain standards), and ideological elements (the formation of identity). Divestment rituals shape the symbolic departure from an object. These rituals occur to remove traces of the previous owner from resale objects and to avoid “meaning contagion” (McCracken, 1986, p. 80). These divestment rituals also highlight the importance of objects in the formation and linkage to identity, as the owner might use them as materializations of certain social roles and with a loss or transfer of the goods might even experience identity confusion (McCracken, 1986). McCracken (1986) cited the study of Sherman and Newman in which the elderly try to extract meaning from objects (decathecting) before their death, highlighting the relationship between materialism and the formation of identity (Belk, 1995a). 91

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The Social Perspective: Exclusivity and Status

D.6 The Social Perspective

The social perspective highlights the role of social processes in the construction of luxury, especially of exclusivity and status. This perspective is based on theories of social interaction and, most prominently, the signaling theory. Status is fundamental to all social structures and, similar to prestige, is created by luxury, which is something exclusive. Individuals use their resources (economic, cultural, and social capital) to appropriate and influence the practices and codes that create status and thereby gain the social benefits of esteem and recognition (Bourdieu, 1984). From the social perspective, luxury is most often concerned with the reflection, construction, and signaling of social status and power within a society, social class, or community. Many authors have proposed status to be the dominant and differentiating factor that distinguishes luxury from non-luxury (cf. Kapferer, 2009, Langer and Heil, 2015). Luxury goods are the visible symbols and materialization of wealth and power and possessing such goods is proposed to be a fundamental human motive that has been present throughout history and across different societies (Anderson et al., 2015). Luxury goods symbolize social relationships and act as symbolic markers of group membership. Thereby, they balance the different relational motives of affiliation (belonging to the aspirational target group) and distinction (dissociating oneself from other non-aspirational groups and showcasing their uniqueness and status within a target group). The luxury object thereby can act as a signal and symbolic marker of group membership. The quality of the luxury signal is strengthened through exclusivity to reflect the selection and status of its possessor. This section illuminates how status is constructed and enacted through codes that signal the individual’s symbolic capital, as well as the role of luxury goods in this process.

D.6.1 Luxury and Status: An Aspirational Social Community The social comparison theory states that people compare their own abilities with similarly abled individuals from their social environment (Festinger, 1954, p. 117ff.). This results in a continuous upward and downward comparison and creates status for the desired groups (cf. Arbore and Estes, 2013, Festinger, 1954, p. 124). If a group is seen as being particularly desirable, the pressure on an individual to conform to the group’s norms increases (Festinger, 1954, p. 130). The resulting status hierarchies are maintained by the groups exhibiting the status and the lower status groups that ignore or violate the signals as they show their non-conformance and exclusion from the group (Festinger, 1954, p. 124). Bourdieu (1984) proposed that life itself is

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a competition for status in which people use their economic (financial resources), cultural (knowledge, taste, skills, cultural objects, degrees, etc.) or social capital (relationships, affiliations, etc.) to influence the tastes and practices within a social group in order to build symbolic capital and status (cf. Firat and Venkatesh, 1995, p. 249, Holt, 1998, p. 3). While all social interactions are ways to express and reproduce status relations, Holt (1998, p. 4) proposed that “consumption is a particular status game” that is reflected through the choice of the consumption goods and constellations. A wide variety of studies across sociological and socio-psychological perspectives have shown that luxury creates status (Goffman, 1951, Mason, 1985). Status is constructed in a social environment and is dependent on the evaluation of other members of the social system. Status can be either ascribed status (if this status is inherited) or achieved status (if it is earned through qualification) (cf. Goffman, 1951). While other means also exist to create social status, such as inheritance of social power or education, luxury goods play a special role as they can be consumed and purchased in the marketplace. In ancient times, luxury goods were a reflector of the ascribed status; however, with the emergence of a global consumer society, luxury goods have become a way for individuals to create and maintain their social status (Kapferer, 2009). Luxury today is thus closely linked to discourses of consumption (or the impossibility of true luxury to be consumed), as consumption itself as a social phenomenon has become a part of everyday life. New forms of consumption and a shift from possessions to experiences have given rise to new research fields, such as transformational consumer research (Llamas and Thomsen, 2016). With the growth of the luxury market, inconspicuous signals are becoming more important as markers of symbolic capital and group membership. With the shift towards experiences, immersion and the meaning that the experiences provide are becoming new ways in which to learn about status codes and to perform them. With the proliferation of digital technologies, the sharing of stories via social networks has become a new way in which to build symbolic capital and construct status. Cova and Cova (2002, pp. 597, 616) proposed that the rise of postmodernism and the search for identity and an increased individualism has led to the emergence of different social arrangements or “neo-tribes” that create a source for identification. Individuals form communities that are based on shared commonalities, such as leisure activities or occupation, and build a network to share cognitive, emotional, and material resources (McAlexander et al., 2002, p. 38). In the case of “subcultures of consumption”, people organize themselves around specific consumer goods, consumption activities, or brands based on a shared symbolic system of values, codes, rituals, and beliefs (Schouten and McAlexander, 1995, p. 43). Each community’s social norms guide the thinking and acting of its members, which Bourdieu 93

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described as their habitus (Bourdieu, 1984, McAlexander et al., 2014). Cultural values and groupings exist on many levels and in many degrees of formality. An individual can be part of different cultures and subcultures that can be stable or temporary (McAlexander et al., 2002). These new forms of social arrangements have come to challenge the previous idea of social class (Holt, 1998). Communities provide an area to signal field-specific capital resources, such as cultural capital, and thereby construct status (Holt, 1998, McAlexander et al., 2014). The different social networks and groups form domains that provide a space to enact and perform the practices that form symbolic capital. Through tastes, consumers can thereby negotiate the dominant codes for status construction in the marketplace (cf. Üstüner and Thompson, 2012, p. 800). The habitus dictates these practices and tastes and “[…] organizes how one classifies the universe of consumption objects to which one is exposed, constructing desire toward consecrated objects and disgust toward objects that are not valued in the field” (Holt, 1998, p. 4). However, the capital is domain-specific and possesses signaling value only within a specific field, such as the field of consumption, in which capital is transformed into tastes (Holt, 1998, p. 4). The status hierarchy is influenced by each member’s commitment and the judgment of authenticity by others (Schouten and McAlexander, 1995). These subcultures have a strong ethos, which, as Schouten and McAlexander (1995) proposed, has almost religious aspects and creates a sacred space for its members that is governed by a value system and corresponding rituals. To become a community member, an individual has to undergo several stages from an initial experimentation phase to a conformity phase to mastery and internalization of the community’s rules and principles (Schouten and McAlexander, 1995). Individuals have certain rights and obligations that depend on their status, position, and role in society (Goffman, 1951). The different statuses bring with them different degrees of social value, can be ranked on a prestige scale, and can bring esteem to the individual depending on the individual’s performance compared to the expectation of the status (Goffman, 1951). While status can be constructed in many ways (Bourdieu, 1986), consumption has today become an important domain in which to construct status and identity (Berger and Heath, 2007). Consumer goods, especially branded ones, can serve the social functions of self-presentation and self-expression and express group membership and social stratification (Dittmar, 1994, Wilcox et al., 2009).

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D.6.2 Luxury and Exclusivity: Signaling Prestige and Power Luxury goods serve as status symbols and visibly mark the social categories (Goffman, 1951). Kapferer (2009) claimed that anything that can become a social signifier and luxury through its signal of affiliation to higher classes. Bearden and Etzel (1982, p. 184) stated that “by definition, necessities are possessed by virtually everyone while luxuries have a degree of exclusivity.” This exclusivity, which is the exclusion of certain consumers, adds to the value of the status signal that the possession carries. Vigneron and Johnson (2004, p. 486) proposed that luxury goods can be defined as “[…] goods for which the simple use or display of a particular branded product brings esteem to the owner, apart from any functional utility.” Research in the luxury domain has investigated the ability of luxury goods to bring status or prestige to its owners and to create social value (for example, Eastman et al., 1999, Han et al., 2010). As social beings, individuals constantly need to balance the tension between the fundamental need to belong to a community and their need for uniqueness and differentiation; these needs take place simultaneously (cf. Holt, 1998). This challenge is heightened in a society where clear socio-economic boundaries have been superseded by a network of temporary alliances, communities, and tribes in which the individual participates in his/her own identity projects. The social perspective can provide important insight into the social nature of luxury consumption and its driving forces. Luxury goods can symbolize different social relations. Goffman (1951) distinguished among status, collective, and esteem symbols. Whereas status symbols symbolize a social position and make individual differences visible, collective symbols are used to affirm group membership, and esteem symbols are rewards from within the group based on the individual’s performance on group standards. Status becomes the result of a complex social interpretation process of multiple symbols based on implicitly agreed rules by the community that always carry the danger of misinterpretation (cf. Goffman, 1951). Related to luxury goods and the desire for money and status, Lasaleta et al. (2014) showed that feelings of social connectedness weaken the desire for money, whereas feelings of social exclusion heighten it. The signaling theory has often been used to explain luxury consumption. Reference groups, that is social groups, influence the consumer’s purchase decision, such as through the motivation to associate with or dissociate from these groups (Bearden and Etzel, 1982). In a marketing context, Han et al. (2010) studied how the association and dissociation with certain reference groups are mediated by the signal of a prominent (conspicuously visible) brand. They identified four groups that differ in wealth and the need for status (Figure 12). The first group, the patricians, cares most about affiliation to their group and use mainly inconspicuous signals 95

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that only a connoisseur of their likes could decipher. This group also has a higher willingness to pay for less conspicuous goods, independent of gender or product quality. The parvenus have a high need for status and strive to dissociate themselves from groups with lower wealth while associating themselves with higher-wealth groups. For this to happen, the signal has to be very visible and recognizable across segments, which would explain this group’s preference for very well-known and conspicuous luxury products. The poseurs are the third group and are driven by status consumption; however, while they attempt to associate themselves with the wealthier groups, they lack the financial resources and, therefore, they are likely to buy fake products instead of the original. This imitative consumption at lower prices can explain the emergence of the counterfeit market. The fourth group, the Consumer taxonomy need forconsumers statuswho and wealth proletarians, describes less based affluent, lesson status-conscious are not a core segment of the luxury conception of (Han et al., 2010).

Haves

Patrician Patricians signal to each other. They use quiet signals.

Parvenu Parvenus associate with other haves and want to dissociate themselves from have-nots. They use loud signals.

Havenots

Proletarian Proletarians do not engage in signaling.

Poseur Poseurs aspire to be haves. They mimic the parvenus.

Low

High

Wealth

12:

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Need for status Associations Disassociations

Fig. 12 Consumer taxonomy based on need for status and wealth maturity Source: Han et al. 2010

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For the brand consumers and its core users, both the presence and motives of noncore users can thereby affect the brand evaluation and status perceptions. Bellezza and Keinan (2014) distinguished between brand immigrants who claim to be part of the inner circle of the brand and brand tourists who do not have a membership claim. While brand immigrants can have a negative effect on core users as they threaten the exclusivity perceptions of the brand’s core users, brand tourists can have a positive impact on the brand as they increase the feelings of pride for their core consumers (Bellezza and Keinan, 2014). Thus, both the context and reference groups and the choice of the signal influence one’s social status within a group. For luxuries, and particularly for public luxuries, the influence of the reference group on product and brand choice is high (Bearden and Etzel, 1982). This is especially true for cultures with a high degree of conformity and an interdependent self-concept (Wong and Ahuvia, 1998). Kastanakis and Balabanis (2012) proposed that an interdependent self is positively related to status consumption. In a later study, Kastanakis et al. (2014) showed that seeking status, a high susceptibility to normative influence, and a need for uniqueness lead to a positive tendency to engage in luxury consumption, yet in different ways. They proposed that a stronger normative influence leads to bandwagon consumption conforming to the group norms, whereas a higher need for uniqueness leads to snob consumption and differentiation motives (Kastanakis et al., 2014, p. 1467). In a different study, Yi-Cheon Yim et al. (2014) showed that vertical orientation of individuals in a social environment, which is the focus on hierarchies and achievements, is positively related to luxury consumption as they are more susceptible to normative interpersonal influences. Besides a utilitarian economic explanation, Mason (1993) proposed three social psychological explanations for luxury consumption: a Pavlovian explanation of a conditioned response, a Freudian explanation of the subconscious, and a Veblenian explanation focused on the interpersonal processes. As such, status symbols can acquire a socially shared meaning because of their features or the combination of features. How status is signaled is also relative to the local circumstances in time and space. For example, while patina, the visible aging of the material substance of things, was a status marker in the Elizabethan era, its status marking function has disappeared with the increasing commercialization and breadth of novel marketable products (McCracken, 1990, p. 32ff.). While patina was previously considered as a credible status signal—as only someone who had accumulated the possessions over time could possess this status—with the anonymization of society, the legitimacy and authenticity of this status claim has been challenged because someone else could acquire this product and pretend to have the associated status (McCracken, 1990, p. 33). This early example of what McCracken called “status forgery” is a 97

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similar phenomenon to counterfeiting today, which has received a lot of attention in practice and research (for example, Nia and Zaichkowsky, 2000). McCracken (1990, p. 34) used the semiotic terms to distinguish the signifier “patina” from the signified “status.” With the emergence of the consumer society, the signifier patina has been replaced by the signifier novelty since the ability to afford a range of new products is a more credible signal of wealth and status (McCracken, 1990, p. 39ff.). Early research on conspicuous consumption has emphasized the role of price as a signal for underlying wealth and status (Veblen, 1899). According to Veblen (1899), members of the leisure class signal their wealth and status through the consumption of conspicuous luxuries and thereby affirm their class membership. Luxury goods also require connoisseurship that can only be built by investing leisure time, which signals status. However, with an increasing degree of anonymity, leisure time is more difficult to observe and, thus, is losing its signaling value compared to the consumption of goods. Simmel (1957) proposed in his trickle-down model that the status symbols are created by the highest class in the status hierarchy and then become adopted by the classes lower in the hierarchy who wish to emulate the upper class. Bourdieu extended the model to include social and cultural capital besides economic capital and showed their interaction in constructing status (Bourdieu, 1984, Bourdieu, 1986). The signaling theory rests on four key assumptions (Bird and Smith, 2005): (1) The individual has an unobservable quality that can be signaled (others can observe and understand the signal); (2) signaling that quality would be beneficial for the individual (such as status); (3) the signal receivers benefit from correctly interpreting the signal (and identifying deceit); (4) the signal is harder to imitate/ more costly or yields less benefit for someone who does not possess the underlying trait (condition dependence). To endow the signal with meaning, a code, which is based on social practices and negotiated meanings, is generated and embedded in the signal (cf. Bird and Smith, 2005). This is closely related to cultural views and the examination of how meaning is taken on. The sender then uses the code to signal the unobservable underlying quality. The receiver in return needs to decode and contextualize the signal. The ability to code and decode the signal depends on both the signal’s clarity and the unambiguity of its message and the knowledge of both the coder and decoder to decipher the signal correctly (cf. Bird and Smith, 2005). Applying the signaling framework to luxury consumption comes from the field of evolutionary biology and costly signaling. Applying the costly signaling theory to the context of luxury proposes that luxury goods act as a costly signal that signals an individual’s underlying reproductive value, status, and wealth and generates advantages within social interactions (Nelissen and Meijers, 2011). The costly signaling theory originates from the context of evolutionary biology and

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has certain parallels with the sociological view as proposed by Veblen, Mauss, and Bourdieu (for an overview see Bird and Smith, 2005). The theory goes back to Charles Darwin’s theory of sexual selection and, more recently, to the explanation by Zahavi (1975) of the handicap principle. Zahavi (1975) suggested that finding a suitable mate is necessary for survival. In this process, the selected sex needs to convey certain qualities (reproductive fitness) and the selecting sex needs to be reassured of them. He proposed that the characteristic handicaps the owner. For example, the colorful tail of a peacock tests the ability of the individual to survive but also gives the peacock signal quality. While many individuals might have the desirable characteristic, it is observable only to those to whom the handicap is visibly advertised. This advertising carries a risk for the individual’s survival as, for example, predators can spot them more easily. Thus, only the strongest individuals can survive, and the survival acts as a marker of strength and reproductive fitness. Bird and Smith (2005) suggested that practices such as artistic elaboration, religious rituals, monumental architecture, or body modifications can all be seen as a costly signal to demonstrate personal qualities, availability of resources, or commitment to a community. Luxury signals differ from other signals because they are costly and difficult to acquire and they provide higher credibility in signaling resourcefulness, especially status and wealth. The costly signaling theory claims that individuals possess traits, unobservable to outsiders, which are relevant in social contexts, for example, which members should be part of a group or who is a suitable mating partner. While it might not be possible or desirable to disclose the underlying trait directly (for example, wealth or social status), signals can be used. Costly signals are difficult or expensive to achieve and thus lend the signal high credibility (for example, the consumption and display of luxury goods). While the possibility of deceit still exists (for example, counterfeit consumption), the cost of the signal should make it undesirable for someone without the underlying characteristic to fake (Bird and Smith, 2005). However, which signals are effective and how they are used depends heavily on the cultural context as the signal needs to be understood by the members of the community. For example, Griskevicius et al. (2007) examined how a luxury brand signals mate quality to romantic partners. Those authors suggested that status and wealth are a desired trait in the context of mating and that conspicuous consumption can act as a costly signal. They showed that men with a mating goal in mind consume more conspicuously, whereas the mating goal does not affect a women’s spending. In addition, a mating goal increased women’s benevolence whereas this was only the case for men if this benevolence could be publicly displayed to signal wealth, prestige, and dominance. In a series of experiments, Nelissen and Meijers (2011) demonstrated that costly signals in the form of branded luxury products 99

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increase the perceived status of the individual and lead to social benefits, such as increased compliance with requests, higher preference for job candidates, or donations to charity. For this process to work, the perceiver needs to perceive the signal as being costly and intentional. Another research stream in economics has also been dealing with the signaling theory in parallel to explain decision-making behavior under uncertainty (for example, Connelly et al., 2010, Spence, 1973). They further distinguished between signals (which can be influenced by the individual (such as education)) and indices (which are beyond the individual’s control (for example, age)). Here, the individual can choose to invest time and resources into a certain signal. For the signal to be effective as a selection criterion, it is crucial that the cost of the signal is lower to individuals that possess the underlying unobservable characteristic. A further extension of the signaling theory has recently spurred interest in marketing around inconspicuous consumption (for example, Berger and Ward, 2010, Eckhardt et al., 2015). Here, the role of expertise and domain-specific knowledge is highlighted in coding and decoding the signal content. Rather than using explicit and loud signals, subtle signals can be effective when the objective is to communicate with a specific group of insiders that can decode the signal, whereas non-insiders are likely to misperceive the signal. The clarity, strength, and consistency of the luxury status signal within the reference group are key for it to endow the owner of the luxury item with status and the “added luxury value” of an item (Langer and Heil, 2015). The symbols are dynamic and change with their degree of social adaption, for example, through new power relations in society that privilege a different set of dominant codes (cf. Goffman, 1951). As social actors, individuals are constantly engaged in the interpretation and creation of positional signs (cf. Goffman, 1951). Moreover, new symbols are continuously invented or reinterpreted and allow for new meanings to be constructed (cf. Goffman, 1951). Simmel (1957) described the fashion process as a dualistic process of imitation and differentiation that is concerned with the superficial appearance. It is a key instrument of social stratification. One way to spread symbols has been proposed by Simmel (1957) in his trickle-down theory. In his trickle-down theory, a new fashion trend is initiated by the elite before it trickles down to other classes. Simmel (1957, p. 541) noted the following about fashion: Fashion is a form of imitation and so of social equalization but, paradoxically, in changing incessantly, it differentiates one time from another and one social stratum from another. It unites those of a social class and segregates them from others. The elite initiates a fashion and when the mass imitates it in an effort to obliterate the external distinctions of class, abandons it for a newer mode. (p. 541)

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Only the symbols that endure over time can become a classic and immune to change rather than being a short-lived fad (cf. Simmel, 1957). However, with the multiplicity of communities and fashion trends that exist today, this trickle-down theory has become challenged. Fashion trends and symbolic meanings can adopt a diverse range of processes through which they spread independently of social class (Atik and Firat, 2013), yet are still related to power and influence of the agent who proposes the symbol (for example, Kozinets et al., 2016). While the term conspicuous consumption has traditionally been used to denote the signaling of wealth and status through consumer goods, research has recognized that conspicuous consumption is only one way of signaling status. Notably, inconspicuous signals have increased, which provide support to treat status and conspicuousness as distinct yet potentially related dimensions (Mason, 1993, O’Cass and McEwen, 2004). Inconspicuous consumption is not a new phenomenon. For example, Kroen (2004, p. 714) noted that inconspicuous consumption appeared in England in the eighteenth century as a reaction to differentiate the rising upper middle class from the extravagantly spending aristocracy. Bellezza et al. (2014) showed that non-conformity could also act as a costly status signal if the observers attribute it to the autonomy of the sender rather than a lack of knowledge of the codes of conduct. However, as anything can potentially become a signal and have a different message depending on the context, the signal can also be interpreted negatively. For example, Van Boven et al. (2010) found that materialistic possessions, including luxuries, can create negative evaluations of the sender from the receiver and even lead to stigmatization. In addition, the way in which they are consumed and the constellations in which they occur (Solomon, 1983) can act as symbolic codes and markers to distinguish the in-group from the out-group (McCracken, 1990, p. 33). McCracken (1990, p. 34) proposed that the knowledge and habits that are needed to consume the product can act as a differentiator through the “invisible ink” that only in-group members can read and correctly decode. These signals are subtler and require insider knowledge, which has recently spurred interest in marketing around inconspicuous consumption (for example, Berger and Ward, 2010, Eckhardt et al., 2015). Here, the role of expertise and domain-specific knowledge is highlighted in coding and decoding the signal content. Rather than using explicit and loud signals, subtle signals can be effective when the objective is to communicate with a specific group of insiders who can decode the signal; non-insiders are likely to misperceive the signal. The role of cultural and social context for status construction through luxury purchases plays an important role, particularly for inconspicuous codes. Holt (1998) has highlighted how in the USA, tastes and cultural capital can create and reflect social class differences through consumption. He proposed that the consumption 101

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choices of individuals with a high cultural capital (HCC) compared to a low cultural capital (LCC) differ in preference for ideas and pleasures and thus taste becomes the status signifier. For example, Holt (1998, p. 8) found that individuals with low cultural capital, value commodities for their material and utilitarian value, whereas individuals with high cultural capital prefer formal aesthetics and fashionability over practicality and material characteristics. Also, their interpretation of cultural texts differs: While LCCs interpret texts referential and realistic and have more material and extravagant conception of luxury. In contrast, HCCs abstract in their interpretation from the empirical world and form an idealized and metaphysical conception of luxury that emphasizes creativity and a subjective appreciation and refinement of the own tastes (Holt, 1998). In relation to their lifestyle and work, HCCs have a much stronger global orientation and have more creative and self-expressive work compared to local and more routinized work. HCCs also have a cosmopolitan expression of tastes, such as exoticism, which becomes a status marker (Holt, 1998). Constructing their identity through consumption is expressed differently because, compared to the more collective orientation of LCCs, HCCs emphasize their subjectivity mainly through authenticity (avoiding contact with mass cultural objects) and connoisseurship (reconfiguring mass cultural objects) (Holt, 1998). Finally, regarding leisure activities, HCCs focus on experiences that are self-actualizing and meaningful and that are often related to the creation, learning, or a sense of achievement rather than the intrinsic enjoyment and pleasure that comes from the activity itself and potentially its social nature, which dominates for LCCs (Holt, 1998). Üstüner and Holt (2010) extended this research and investigated how status is constructed through consumption choices in less industrialized countries (LICs). They proposed that the classical trickle-down model with the adoption of Western status goods is a myth that shapes luxury consumption for HCCs, yet is “indigenized” and adapted to local practices and customs (Üstüner and Holt, 2010). Üstüner and Holt (2010, p. 40) proposed the following regarding consumer culture in LICs: […] ‘the West’ soon came to be reframed in terms of the ‘good life’ to be had through consumerism. Today, at the center of this discourse sits the American ‘way of life,’ the lifestyle imagined to exist in the nation with the greatest material abundance and the most unabashed celebration of consumerism. LICs that once embraced the productionist ideology, such as India, Brazil, and Turkey, have increasingly focused on consumption as the dominant index of modernity. (p. 40)

Üstüner and Holt (2010) found that for LCCs, the focus of status consumption is local rather than global and that the local upper class provides the symbolic reference group. The metropolitan cities provide the fashion hubs whose lifestyle the

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LCC consumers seek to emulate. The various areas of consumption range from the home to clothing to vacations and interior decoration (Üstüner and Holt, 2010). For example, the difficulty in acquiring goods (for example, because of its foreignness) or focusing on experience rather than value for money are signals for LCCs to associate themselves with the upper class and dissociate themselves from the lower classes (Üstüner and Holt, 2010). However, in contrast to the HCC, LCCs do not pursue the Western lifestyle myth but shop locally and prefer as a status indicator the superior treatment that they receive in local shops (Üstüner and Holt, 2010). HCCs, on the contrary, live the Western lifestyle myth and build “deterritorialized cultural capital,” which poses the challenge to them that while certain visible aspects can be imitated, the unconscious aspects of their habitus are more difficult to learn (Üstüner and Holt, 2010, p. 50).

D.7

The Individual Perspective: Aspiration and Feeling Unique and Special

D.7 The Individual Perspective

The individual perspective highlights the role of identity, consumer needs, and consumption emotions. This perspective consists of various theories such as the identity or self-concept theory but also theories of experiential consumption. The individual is at the center of the desire-creation process, whereby the individual’s identity, needs, and desires are influenced by the cultural and social context. In contrast to the social perspective, which focuses on the decoding aspect of luxury, the individual perspective is more focused on the encoding aspect and provides an individual view on the complex interplay among the symbolic use of luxuries, their signal value, and the underlying motivations. From the individual perspective, luxury is something aspirational that makes the consumer feel special. Luxury goods are extraordinary objects (special possessions or experiences) that provide resources for the construction of identity, especially the ideal and aspirational self, and offer a chance for identity play (McCracken, 1990). Luxury satisfies a wide range of needs from self-protection to higher-level needs, such as self-enhancement and transformation. Luxury elicits strong emotions and makes consumers feel special and unique. The experience of pleasure, sensuality, and immersion thereby plays a strong role for the consumer and helps to build an emotional relationship with the brand.

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D.7.1 Luxury and Identity: Appealing to the Ideal Self Consumption in a consumer society can be a central means to construct one’s identity or to enhance one’s self-concept (Elliott and Wattanasuwan, 1998). Consumption “involves the search, choice, acquisition, possession, and disposal of goods and services” (Hogg and Michell, 1996, p. 629). Hogg and Michell (1996, p. 633) proposed that consumption is shaped by the symbolic functional force (products and services), the expressive instrumental force (activities), and the physiological force of esteem and self-actualization. Consumers use the symbolic properties of consumer goods and their meaning to express cultural categories and construct their self, for example, through their lifestyle (cf. Hogg and Michell, 1996, p. 630, McCracken, 1990). Different theories have been proposed to understand the interplay between identity and consumption, such as the identity theory and the social identity theory (Hogg et al., 1995). Whereas the identity theory more strongly emphasizes the effect of society on the individual and self through social role identities, the social identity theory focuses on the intergroup processes and categorization of the self in relation to reference groups (in-group and out-group) (for a detailed account see Hogg et al., 1995). Central to all these theories is that identity is formed in the interplay between the individual and his/her social and cultural context. This identity is often reflected through a certain lifestyle and the symbolic resources it carries. Gabriel and Lang (1995) proposed that the conceptualization of the role of a consumer in a consumer society also has different aspects, of which identity-seeking through consumption is only one. However, other conceptualizations, such as the consumer as a chooser, a communicator, an explorer, a hedonist, a victim, a rebel, an activist, or a citizen, also imply either conscious or unconscious roles that shape the consumers’ roles (Gabriel and Lang, 1995). An identity-oriented view sees consumers from a macro perspective within their broader environment and is closely related to the cultural perspective. Hogg and Michell (1996, p. 633) proposed that the self-concept is nested within the social roles and role repertoires of the individual, which constitute the social identities. In this view, these layers of the self are interlinked with the embodiment of the symbolic materializations, which can be enacted through consumption. At the basic level is the product and brand, which on the second level evokes choice sets that correspond to self-images and self-concepts (cf. Solomon, 1983). They are embedded in the social roles and positions of an individual and influence material product constellations and anti-constellations. The social roles form role repertoires that can be enacted through consumption constellations and anti-constellations. At the highest level, encompassing the other dimensions, social identities are formed

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or reflected by consumption configurations (Hogg and Michell, 1996, p. 633). In enforcing these identities, consumer goods play a large role, which has been emphasized in research on materialism (for example, Belk, 1990, McCracken, 1990). Mehta and Belk (1991, p. 398) proposed that consumer goods are “the things to which we are attached, help to define who we are, who we were, and who we hope to become.” They provide a physical mnemonic device for the individual and collective history and a reminder of one’s identity and of individual and collective aspirations, which as myths are projected on the product (McCracken, 1990, p. 124). In phases of identity transitions, these meanings are likely to become salient (Mehta and Belk, 1991, p. 398, Schouten, 1991, p. 412). Belk (1990, p. 674) proposed that “a sense of past is essential to a sense of self” and that material artifacts play a crucial role in creating our identity. Personal possessions, such as photographs, can act as an anchor to access memories and are also affected by the passing of time (Belk, 1990, p. 670). Recent research has shown that compared to material purchases, experiences can have a stronger impact on self-definition, particularly as experiences more strongly facilitate interpersonal relationships (Bhattacharjee and Mogilner, 2014). The role of consumer goods in identity formation also has a social dimension through which the identifying characteristics of others are inferred through their product choices. This can trigger approach or avoidance reactions depending on the selves activated in the consumption situation (public or private) and the environment (social, individual, marketing) (Hogg et al., 2009, p. 150). Based on the self-concept theory, individuals aim to create a positive self-concept and enhance their self-esteem while striving for self-consistency (Sirgy, 1982, p. 287, cf. Valtin, 2005, p. 41ff.). Self-enhancement can occur through both the individual’s belief that the goods are publicly recognized and the actual recognition in a social interaction (Grubb and Grathwohl, 1967). Sirgy (1985) proposed that several types of congruity exist, which influence the purchase decision: self-congruity, the congruity between product image and actual self-image; ideal congruity, the congruity between product image and the ideal self-image; and social congruity, the congruity between product image and ideal social self-image. Rosenberg (1979, p. 7) defined the self-concept as “the totality of the individual’s thoughts and feelings having reference to himself as an object” (cited in Sirgy, 1982, p. 287). Symbolic interactionism is based on the foundational work of Mead (1934). Blumer (1969) posed that the self is the result and is dependent on interpersonal interactions (Leigh and Gabel, 1992, Sirgy, 1982, p. 287). Individuals act based on the meaning of symbols, which is negotiated through a process of social interaction (Blumer, 1969, cf. Valtin, 2005, p. 43ff.). The meanings are created and defined by society and affect the formation of the self-concept of an individual and the impression to others (Leigh and Gabel, 1992) (Goffman, 1951). Cultural literacy becomes a key 105

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prerequisite for participating in the consumer culture and plays with the symbolic meanings of brands and products to construct one’s identity (Bengtsson and Firat, 2006). The self has different states of realization: the actual self refers to the current state and is based on the own perception; the ideal self refers to an idealized and desired state of the self and how the individual wants to be; and the social self refers to how the person presents these internal facets of the self to others (Sirgy, 1982). Hogg et al. (2000) proposed that the self-concept can refer to the private self, the public self or the collective self with implications on the main motivation for luxury consumption. Meffert and Lasslop (2004) proposed that the private-self is more strongly related to self-realization whereas the public-self is more strongly related to distinction and affiliation motives. The collective-self is more strongly related to recognition motives. Symbolic goods can be used to reflect the actual self-image, to restore the self-image, and to enhance the self-image by constructing the desired image (Grubb and Grathwohl, 1967). For example, to enact the role identities and lifestyle that individuals use to define themselves, they strive to attain the symbolic resources associated with that lifestyle (Wicklund and Gollwitzer, 1981). This is closely related to materialism that also posits that possessions have a meaning and can express and communicate the material values of individuals (Dittmar, 1994, Richins, 1994a, Richins, 1994b). Luxury goods play a strong role due to their symbolic content, expressive function, and role as special possessions. The ideal self might thus be a key driver of luxury consumption. Products can act as social stimuli to define and enact the social role of an individual or they can be a response to enhance or restore the self-image (Solomon, 1983, cf. Valtin, 2005, p. 46). In an extension, products can even become an extension of the own self both as a creator and a reflector of one’s identity (Belk, 1988) (see also Csikszentmihalyi and Halton, 1981, Rochberg-Halton, 1984, Simmel, 1957). With the emergence of digital technologies (such as virtual avatars) and new forms of consumption (such as sharing), collaborative consumption and co-creation have multiplied how individuals can extend their selves through consumption (Belk, 2013, Belk, 2014). Belk (1988) proposed that this integration of concepts into the self-concept is strongest for body parts, psychological processes, personal characteristics, and attributes and followed by material possessions that rank ahead of abstract ideas or even other people. The extension of material possessions and materialism goes as far as feeling a loss of the self when possessions are lost or the sensation of physical pain when a possession considered to be a part of the extended self is damaged (Belk, 1988). Another related phenomenon is the endeavor for symbolic consistency (Solomon, 1983). To illustrate symbolic consistency, McCracken (1990, p. 118ff.) referred to the story of Denis Diderot who was once gifted a scarlet robe to replace his old gown.

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Based on the new gown, Denis Diderot reevaluated his environment and noticed that the objects formed no harmonic unity; therefore, he replaced the other objects to match the new status of his robe and create symbolic consistency. However, once the robe became lost and he realized that the aspired unity had again collapsed, his entire symbolic environment was changed (McCracken, 1990, p. 118ff.). This led McCracken (1990, p. 118ff.) to propose that “highly consistent consumer goods” should be called Diderot unities. In line with the relevance on consumer goods and consumption choices, Berger and Heath (2007) showed that particularly when consumption is relevant to the identity, consumers are more likely to make distinct consumption choices compared to other consumers. Similarly, for luxury goods, Silverstein and Fiske (2003) proposed that trading up is likely in categories with high personal relevance to the consumers. This is in line with prior research (Snyder and Fromkin, 1977, Snyder and Fromkin, 1980) on consumers’ need for uniqueness, which is demonstrated by the acquisition and usage of luxury goods (Snyder, 1992). The cultural environment also shapes and influences the self-concept and self-construal. Wong and Ahuvia (1998) contrasted the impact of cultural influences on luxury consumption in an East Asian Confucian context and a Western individualistic context. They proposed that the interdependent self-concept in Eastern cultures emphasizes the relational aspect of consumption through publicly visible possessions and practices (for example, gift exchange). Furthermore, the stronger orientation towards social norms and conformity creates a stronger hierarchical society with a focus on brand shape luxury consumption. Western cultures, on the other hand, are more individualistic and view consumption experiences and private possessions as being more important.

D.7.2 Luxury Consumption Needs and Values: Satisfying Higher-Level Needs Symbolic goods and luxury goods in particular typically satisfy higher-level needs, such as esteem and self-actualization, even if lower level needs might not be satisfied (Csikszentmihalyi, 2000). Based on the hierarchy of needs (Maslow, 1943), several researchers have argued that luxury caters to higher-level needs, such as self-expression (Albrecht et al., 2013a), self-definition (Kisabaka, 2001), self-actualization (Wong and Ahuvia, 1998), self-realization (Lasslop, 2002), and self-transformation (Llamas and Thomsen, 2016). Kenrick et al. (2010) proposed a revised hierarchy of needs to integrate more recent findings from evolutionary biology, anthropology, and psychology. Building on Maslow’s hierarchy, who posited that multiple inde107

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pendent motivational systems exist in which motives are hierarchically related, Kenrick et al. (2010) proposed a functional perspective in which behavior is goal oriented and certain motivations are triggered depending on the domain-relevant goals. In line with the research on evolutionary psychology, luxury goods serve many fundamental motives from self-protection to affiliation, status/esteem, mate acquisition, and mate retention (Kenrick et al., 2010, Sundie et al., 2011). Whereas the social perspective has a stronger focus on the social perceptions of status of a particular individual, the individual perspective has a stronger focus on status and related motives for explaining consumer motivations. The incongruity between ideal self and actual self can lead the consumer to purchase luxury goods in order to feel special (by compensating for the lack of power or through self-enhancement), either through social status (externally) or self-fulfillment (internally) (cf. Sirgy, 1982). Luxury consumption can satisfy a large scope of fundamental needs: • Self-protection: Several studies have investigated the effects of self-protection and particularly powerlessness on consumption choices and have shown that products with high status can restore feelings of powerlessness (Rucker et al., 2012). If a relevant identity is threatened, individuals are committed to restoring that identity (for example, through material and non-material symbols) and are likely to engage in compensatory consumption (Braun and Wicklund, 1989). This compensation effect is higher for individuals with higher discrepancies between the actual and ideal self, for materialists, and for individuals with recent changes in socioeconomic status (Carr and Vignoles, 2011). Madzharov et al. (2015) provided further support for the preference for prestige products to compensate for lack of power. They showed that a perceived high social density could induce feelings of powerlessness, which can be influenced by many factors, such as a warm store scent. Even rejection from the sales staff in a retail store can lead to a more favorable attitude and higher willingness to pay for a luxury brand if the brand is aspirational and appeals to the ideal self-image (Ward and Dahl, 2014). • Recognition and esteem: Luxury goods can create the feeling of recognition and esteem as they endow status, as discussed in the social perspective (Drèze and Nunes, 2009, McFerran, 2013). One application is an exclusive loyalty program (Arbore and Estes, 2013). For example, eligibility for a higher status tier in a loyalty program, particularly where soft benefits such as recognition play a large role, can create the feeling of superiority for the eligible members (Drèze and Nunes, 2009). McFerran (2013) showed that the enjoyment of preferential treatment in the presence of others (“entourage”) creates stronger feelings of status for the individual, even if the preferential treatment becomes less exclusive. Another important feeling related to luxury consumption is pride. The feeling

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of accomplishment (authentic pride) increases the desire for luxury brands (McFerran et al., 2014). However, it can be a double-edged sword as luxury purchases for others might also signal arrogance (hubristic pride) and, thus, depend on the decoding of the signals (McFerran et al., 2014). • Self-enhancement: Depictions of successful persons who share characteristics with oneself can increase the desire for luxury brands, giving further evidence to the role of enactment models (Mandel et al., 2006). Based on the self- determination theory, humans have a fundamental need for competence, autonomy, and relatedness, which can influence consumption choices (Deci and Ryan, 2000). However, in their empirical study, Truong et al. (2010) found a negative relation between intrinsic aspirations and the preference for luxury brands. This highlighted the fact that for many consumers, luxury brands might still be more strongly related to external and status motives than to individual motives. While this finding might be related to their sampling approach (21- to 40-year-old French nationals surveyed in a study in 2010), the results hint to the complexity of uncovering the multifaceted motivational constructs and the context-boundedness that might reflect the social understanding of the luxury concept. In a different study, Truong (2010) showed that the intrinsic motivations are strongly associated with quality and self-directed pleasure, which is in line with the separation between social, individual, and material dimensions that underlie this thesis. Townsend and Sood (2012) have shown that the choices of aesthetic products can also lead to self-enhancement. • Self-transformation: Transformational experiences can be a luxury, such as the “luxury of giving,” which can make individuals feel special (Llamas and Thomsen, 2016, p. 166). Altruistic acts, such as donating one’s economic, social, and cultural resources to others, can create feelings of pleasure, purpose, and a sense of human connectedness and are experienced as luxuries (Llamas and Thomsen, 2016, p. 166). It is, however, important that the consumer remains in control of the aspired identity. If the brand is too prescriptive in promoting a certain identity, the consumer perceives a threat in his agency that undermines the value of the identity promoted by the brand (Bhattacharjee et al., 2014). • Self-transcendence: Some researchers have argued that the awareness of the own mortality or the desire to transcend one’s lifetime can be a key driver of materialism and luxury (conspicuous) consumption (Arndt et al., 2004a, Arndt et al., 2004b, Kapferer, 2009, Maheswaran and Agrawal, 2004, Mandel and Heine, 1999, Rindfleisch and Burroughs, 2004). Based on the terror management theory, they proposed that anxiety about death can trigger cultural values and beliefs as culture provides a shared system of beliefs on the fundamental questions of existence (Arndt et al., 2004b, Rindfleisch and Burroughs, 2004). Materialism and 109

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acquiring “wealth and culturally desired commodities” are ways to cope with these fears (Arndt et al., 2004b, p. 198). Besides other belief systems, such as religion, money and luxury goods as desired resources can function as protection and a coping mechanism against existential threats, whereby the individual activates dominant cultural beliefs and worldviews (Arndt et al., 2004b). The pharaohs in ancient Egypt used luxury to demonstrate their power and to visibly show the endurance of their possessions as a part of their extended self after death (Kapferer, 2009). Thus, luxury goods propose something eternal. This might even be the case for short-lived experiences, which create memories and lasting traces that endure. Increased self-esteem, which can also come from materialist possessions, further reduces the perceived threat potential (Arndt et al., 2004b). Possessions and experiences or ideas can become a part of our identity, and an embodied extended self as their meaning provides a resource for constructing our self and reflects who we are (Belk, 2013, Belk, 1988, Rochberg-Halton, 1984, Sirgy, 1982). This symbolic self-extension can occur in various ways, such as through contamination or the control, the creation of knowledge and mastery of an object (Belk, 1988). Luxury goods can act as special possessions that form a part of the self through the individual’s investment of resources to gain control (high prices), creativity (personalization), and knowledge (consumption codes and rituals). This appeal to higher-level needs and the ideal self also indicates that the derived benefit from luxury goods differs compared to non-luxury goods. Nueno and Quelch (1998, p. 62) proposed that “luxury brands are those whose ratio of functionality to price is low while the ratio of intangible and situational utility to price is high.” Several works coming from the consumer value literature have investigated the underlying motivations for luxury consumption and the drivers of perceived consumer value (for example, Hennigs and Wiedmann, 2012, Tynan et al., 2010, Valtin, 2005, Vigneron and Johnson, 1999, Wiedmann et al., 2007, Wiedmann et al., 2009). One theoretical foundation is the means-end approach, which is rooted in cognitive psychology and is where products are bought as a means to achieving a desirable end (Gutman, 1982, cf. Valtin, 2005, p. 52). Vigneron and Johnson (1999) proposed five key values and motivations that distinguish luxury brands (which they call prestige brands) from non-luxury brands: conspicuousness (Veblenian motivation), uniqueness (snob), social (bandwagon), emotional (hedonist), and quality (perfectionist). (Wiedmann et al., 2007), Wiedmann et al. (2009) proposed four value dimensions that consumers perceive in luxury brands: functional (usability, uniqueness, quality), financial (price), indi-

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vidual (self-identity, hedonic, materialistic), and social (conspicuousness, prestige). Hennigs and Wiedmann (2012) showed that this structure is similar across cultures. Tynan et al. (2010) proposed a different customer value framework for luxury goods based on Smith and Colgate (2007) with five sources of value: utilitarian, symbolic/expressive, experiential/hedonic, relational, and cost/sacrifice. They proposed that the symbolic/expressive, experiential/hedonic, and relational values are the key differentiators for luxury brands and advocate a shift from a product-centric view to a customer-centric view that considers the nature of value co-creation in designing luxury experiences. Choo et al. (2012) adapted these frameworks to the context of fashion brands and proposed that they possess a utilitarian (excellence, functional), hedonic (aesthetics, pleasure, experience), symbolic (self-expressive, social) and economic value. They also highlighted the importance of feelings and affective states and the epistemic value that stems from novelty or knowledge. Vickers and Renand (2003) proposed that luxury goods can be defined along the dimensions of symbolic interactionism, experientialism, and functionalism. Similarly, Berthon et al. (2009, p. 49) proposed that “[…] we can conceptualize a luxury brand as a differentiated offering that delivers high levels of symbolic, experiential, and functional value at the extreme end of the utilitarian-luxury continuum” and proposed that luxury exists in the interaction between material social and individual. These studies are in line with mainstream marketing literature on customer value and brand concept (for example, Park et al., 1986), which propose that while the functional aspects are assumed to be given for luxury brands, symbolic aspects of goods (Levy, 1959, Solomon, 1983) and experiential aspects (Hirschman and Holbrook, 1982, Holbrook and Hirschman, 1982) also play an important role. While luxury goods generally have a higher degree of non-functional value, different value-orientations exist between consumers, which can be used as the basis for segmenting luxury consumers. For example, Hennigs and Wiedmann (2012) conducted a global segmentation and derived four clusters: luxury lovers (relatively high on all four dimensions), status-seeking hedonists (low on functional and financial value), satisfied and unpretentious (mainly financial, functional), and rational functionalists (mainly functional, financial low).

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D.7.3 Luxury and Emotions: Feeling Special and Experiencing Pleasure The experiential view focuses on the consumption experience itself and the emotions that are experienced. Consumers have both existential and experiential needs (Csikszentmihalyi, 2000). Luxury makes people feel special and unique. A fundamental distinction between luxury and non-luxury goods is the emotions and feelings that luxury can elicit. Bhattacharjee and Mogilner (2014) found that extraordinary experiences, such as life milestones or travel and culture (uncommon and infrequent), provide greater happiness than ordinary experiences (common and frequent), particularly for younger people for whom these experiences define their identity. Moreover, extraordinary experiences, such as aesthetic immersion, make people feel special and experience intense emotions and bodily reactions (Venkatesh and Meamber, 2006, pp. 22–23). Extraordinary experiences are a source of pleasure or personal growth and transformation and lead to the experience of flow (Arnould and Price, 1993, p. 25). These experiences have a high emotional intensity, require strong integration of the consumer, a strong awareness, and focus and are often spontaneous and emerge from dynamic interpersonal interactions (Arnould and Price, 1993, p. 25). While they can be based on cultural scripts such as stories that consumers enact with within the system in which the experience takes place, often the expectations are vague as the experience itself is spontaneous and immediate (Arnould and Price, 1993, pp. 24–25). The extraordinary nature of luxury is reflected in extraordinary emotions that do not come from ordinary purchases. The emotion may be extraordinary as it is not experienced otherwise or held with stronger intensity. Feeling special, instead of feeling ordinary, could be an appropriate conceptualization of the different affective states related to luxury consumption, such as the effects of superiority and power (coming from social recognition and status; real or imagined) or the pleasure created through the experience of luxury itself. Bagozzi et al. (1999, p. 184) noted the importance of emotions for marketing and defined emotions as: [A] mental state of readiness that arises from cognitive appraisals of events or thoughts; has a phenomenological tone; is accompanied by physiological processes; is often expressed physically (for example, in gestures, posture, facial features); and may result in specific actions to affirm or cope with the emotion, depending on its nature and meaning for the person having it. (p. 184)

Emotions differ from mood as emotions are intentional; that is, they have a focal object (such as a luxury brand), are more intense, and usually more short-lived (Bagozzi et al., 1999). Together with attitudes, which are mainly seen as evaluative

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judgments (such as good or bad, pleasant or unpleasant), they form categories of affect (Bagozzi et al., 1999). The enjoyment of luxury can be intrinsically motivated with no external need to impress anyone, highlighting the experiential nature (Husic and Cicic, 2009). Nia and Zaichkowsky (2000) viewed these psychological benefits as a key difference compared to non-luxury brands, for example, to enhance the consumer’s self-concept as outlined above or to create positive emotions. Berry (1994) proposed that the ability to create positive emotions and states of comfort and pleasure is central to luxury goods. Moreover, this promise of positive pleasure fuels both the individual and shared desires specific to luxury from a philosophical perspective (Berry, 1994, p. 12). Luxury is pleasurable and personalized (Kapferer, 2009, p. 20). The consumption experiences have high relevance for luxury brands as luxury encompasses many factors that have been core to the experiential paradigm, such as multisensory compression, rich imagery, fantasy, a strong emotional basis, aesthetics, and pleasure (Holbrook and Hirschman, 1982, p. 139). The meaning of goods and the symbolic value they possess (for example, for identity construction) also contribute to the complex emotions that luxury brands elicit. While luxury might create negative or ambivalent emotions (for example, Dubois and Laurent, 1994), the majority of studies have investigated the positive and strong emotions that result from luxury consumption (such as Drèze and Nunes, 2009, Hagtvedt and Patrick, 2009). Hagtvedt and Patrick (2009, p. 609) highlighted the importance of pleasure and emotions as a consequence of luxury and proposed that a luxury brand “[…] has premium products, provides pleasure as a central benefit, and connects with consumers on an emotional level.” Luxury brands seduce their clients and create a feeling of elevation for their consumers (Kapferer and Valette-Florence, 2016). The phenomenon of hedonic or experiential consumption has particular importance for luxury brands (Hirschman and Holbrook, 1982, Holbrook and Hirschman, 1982, Vigneron and Johnson, 2004). The source of this pleasure can be multifold, such as the brand and the consumer-brand relationship, the social environment and recognition, the symbolism and meaning of the brand, the aesthetics of the product, the convenience and comfort, the novelty and curiosity it sparks, and the pleasurable experience. For example, the product design and aesthetics can cause positive emotions, enjoyment, pleasure, and arousal (Kumar and Garg, 2010). This leads to an emotional brand connection, which is relevant for luxury brands. This emotional connection is a key driver of the extendibility of a brand as the feelings associated with the luxury brands can easily be transferred to other products (Hagtvedt and Patrick, 2009). This phenomenon might also be related to the more abstract mental construal of luxury brands (Hansen and Wänke, 2011). Previous research has shown that emotions can alter cognitive construal 113

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levels (Han et al., 2014). The more abstract high-level construal influences the decision-making process in that desirability plays a stronger role compared to feasibility considerations (see also Fiedler, 2007). One reason for the more abstract construal level could be the higher perceived psychological distance that is created through the social, temporal, hypothetical, and spatial distance of luxury brands (Trope and Liberman, 2000, Trope et al., 2007). While the research of Han et al. (2014) focused on the construal of guilt and shame, positive emotions could also influence the cognitive construal of luxury brands. Investigating the neural processes of luxury consumption using EEG (electroencephalogram) recordings, Pozharliev et al. (2015) has shown that luxury brands elicit a stronger emotional response than products with a basic branding. They proposed that luxury goods are emotionally significant stimuli whose potential to create emotional arousal can be amplified by the presence of others in a social context. Similarly, aesthetics can elicit a subconscious emotional response to provoke an intense and measurable emotional reaction (Kumar and Garg, 2010). Research investigating the relationship between luxury and perceived risk has found that the luxuries that evoke positive emotions are associated with lower risk compared to other brands in their category (Chaudhuri, 1998, p. 165).

D.8

The Economic Perspective: High Price and Value

D.8 The Economic Perspective

The economic perspective focuses on price and demand for luxury goods and the interrelationship between them. This perspective is based on economic theories of demand, or theories such as the commodity theory, linking the rarity of an object to perceived value. This relationship can be analyzed from a micro perspective, which focuses on the relationship between price and quantity on an individual demand level, and from a macro perspective, which is more concerned with societal effects of luxury consumption on social welfare. The focus here is on the micro perspective as this is the perspective that is most closely related to the creation of luxury2. From an economic perspective, luxury is something that has a high absolute and relative price and a high perceived value, as well as positive income and price elasticities of demand. In addition, luxury is characterized by its high share of non-functional demand, which has challenged economic theories. The economic perspective focuses on observable effects and defines luxury as anything that 2

The key arguments of the macro perspective, particularly its moral-normative evaluation, can be found in the historical perspective.

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exhibits these characteristics. While the exact price points for the definition of a luxury item varies, the price is a relatively objective and pragmatic indicator as it requires no qualitative assessments. There is a debate about the causality or price and luxury. Theories based on conspicuous consumption argue that a high price creates luxury as price signals wealth and creates exclusivity. Theories that focus more strongly on intrinsic value argue that luxury has a high price as the result of the processes of refinement and desire creation. The interplay of several factors, as seen in the other chapters, contribute to a perception of a high value and the ability to charge a high price. However, pricing is crucial for luxury brands and it can add to the perceived exclusivity of the luxury object.

D.8.1 Luxury Price Points: A High Absolute and Relative Price Point Within the economic view, goods and entire product categories with a high abso­ lute and relative price point are classified as luxury. Allérès (1990) distinguished between three levels of luxury: (1) inaccessible luxury, which is the highest level of luxury for the social elite, (2) intermediate luxury for the professional social class, and (3) accessible luxury for the middle class (cf. Vickers and Renand, 2003, p. 462). Langer and Heil (2015, loc. 249) proposed that the highest tier of any category can become a luxury category. A key indicator of luxury categories is a high absolute price differential between the cheapest and the most expensive product. In addition, the median consumer price in the category should be low, which indicates that the “added luxury value” at the upper end of the category is high Langer and Heil (2015, loc. 249). For example, Langer and Heil (2015) observed that lingerie, cell phones, watches, and wine have the highest luxury index based on the multiple between the lowest and highest price. They proposed that typical characteristics of luxury categories are an absolute price of about $1 million, an index >100,000, a strict limitation of the number of items, a strong artistic value, craftsmanship, and a unique story Langer and Heil (2015, loc. 369). This is in line with other studies that proposed that luxury is mainly found in specific categories and refers to the highest end in that category. The ECCIA proposed watches and jewelry, fashion, perfumes and cosmetics, accessories, leather goods, hotels (and leisure experience), gastronomy, furniture and furnishing, design household equipment, cars and yachts, wines and spirits, retail, art and antiques, and publishing as the key high-end industry sectors (Economics, 2014, p. 2). (cited in Braun, 1997, p. 279), McKinsey&Company (1990) proposed 35 potential product categories for luxury goods from fashion to cars and wine that, according to Braun 115

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(1997, p. 28f.), should fulfill the criteria that the product is directed towards the final consumer and that applied art, and a strong creative impact should be part of the offer. Heine (2012) proposed that the likelihood of finding a luxury category is high if the category is personally relevant and publicly consumed. Within the category, several levels of accessibility, uniqueness, and conspicuousness can then be distinguished (Heine, 2012). Many studies emphasize the importance of a high price for an item to be a luxury item, yet the rationales are different. For example, Dubois and Duquesne (1993, p. 36) proposed that “luxury goods are expensive in relative and absolute terms.” Others define luxury brands as “[…] those which have constantly been able to justify a high price; i.e., significantly higher than the price of products with comparable tangible functions” McKinsey&Company (1990), (cited in Reich, 2005, p. 35). While some studies view a high price as a signal for underlying wealth and status and constitutive of luxury (for example, Leibenstein, 1950), others view price as one of many characteristics (for example, Dubois et al., 2001) or the outcome of the quality and material value of the luxury product (for example, Kapferer, 2009). While luxury evokes high prices, luxury seems to have a certain expected minimum price below which the purchase is no longer considered as extraordinary (Kapferer et al., 2013). Stronger brands seem to have higher flexibility when setting accessible prices without losing their aura of luxury (Kapferer et al., 2013). Price also plays a crucial role in creating desire. The investment of personal resources and the required sacrifice such as time (for example, education and learning about the products and rituals) and money (for example, a high price) can increase the desirability of the luxury object, building on the principles of desire creation and sacralization (Belk et al., 1989). To substantiate the perception of economic value, Kapferer (2009, p. 70) proposed that luxury brands should strive to raise average price perception. This also includes a strict limitation of discounts, a discrete communication of the price to preserve the price illusion of a higher expected price, and the maintenance of the price differential compared to other brands in their category (Kapferer, 2009, p. 177ff.).

D.8.2 Elasticities of Demand for Luxury Goods: Positive Income and Price Elasticities of Demand Many economists have proposed defining luxury (in opposition to necessity) by the price elasticity of demand (for example, Kemp, 1998). Different to normal goods, for luxury goods, an increase in price can lead to an increase in demand; that is, a price elasticity is greater than zero, violating the classic microeconomic law of

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demand (for example, Kemp, 1998). While both Giffen and luxury (Veblen) goods exhibit this property, they differ in that luxury goods are normal goods (consumption rises with income) and Giffen goods are inferior goods (consumption decreases as income increases) (Varian, 1992). For Veblen goods, the price increases the utility due to its status signaling function, increasing demand. For Giffen goods, the positive price elasticity is caused by a price increase of necessities, which cannot be substituted and which under budget constraints make up a higher overall share of the spending (Varian, 1992). A related conceptualization of luxury goods is through the income elasticity of demand (income effect). From this perspective, luxury goods are defined as the goods for which the proportional share of the overall spent rises as income rises, that is, goods with an income elasticity of demand greater than one (for example, Ait-Sahalia et al., 2004, Kemp, 1998, Varian, 1992). Dubois and Duquesne (1993) showed that both higher income and a positive mindset towards cultural change positively influence luxury consumption. Related evidence also comes from a financial analysis of stock market data. Ait-Sahalia et al. (2004) showed that the consumption of luxury goods is more strongly related to stock market returns, highlighting their discretionary spend nature. Explanations for these effects come from economic theories on conspicuous consumption, which are based mainly on the utility theory and are closely related to the discussion on social status through conspicuous consumption. The economic perspective examines the relationship between price, income, and demand and the moderating effects on luxury consumption. The economic perspective distinguishes between outcomes on two levels of analysis: the micro level, which analyzes individual consumption decisions, and the macro level, which analyzes its implications on markets and social welfare. Whereas the classical economists focused on the production (for example, Ricardo and Marx), the neoclassical economists (for example, Marshall and Hicks) shifted their focus to the demand (cf. Pöll, 1980). The economists following Keynes focused on public policy outcomes (Pöll, 1980, p. 13). Luxury in most of the theories on economics describes a phenomenon that is hard to grasp within the homo economics paradigm and assumption of rational behavior. The literature largely refers to the economic explanation of Veblen (1899). In his theory of the leisure class, he claimed that ‘conspicuous consumption’ signals wealth to others (cf. Leibenstein, 1950). Veblen (1899, p. 50) wrote that “in the nature of things, luxuries and the comforts of life belong to the leisure class,” that “conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure” Veblen (1899, p. 56), and “as wealth accumulates, the leisure class develops further in function and structure, and there arises a differentiation 117

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within the class. There is a more or less elaborate system of ranks and grades” Veblen (1899, p. 56). One stream within economics has analyzed why people consume luxury goods in a rational choice framework. The social nature of status consumption has challenged classical economic theories of demand as they needed to incorporate the interpersonal nature of utility (Leibenstein, 1950). Morgenstern (1948) observed the non-additivity of demand curves (i.e., the market demand is not the aggregation of the individual demand), which can be caused by social consumption behavior and interdependencies; for example, someone is buying because someone else has bought the same thing. The consumption behavior of one individual can depend on what others buy. Leibenstein (1950) proposed distinguishing between the functional and non-functional demand for a good. Whereas the functional demand is inherently related to characteristics of the commodity, the nonfunctional demand is due to other factors, such as external effects on utility, speculative behavior, and irrational demand, all of which can be present in luxury goods. Leibenstein (1950) identified three external effects on the utility that shape nonfunctional demand: the bandwagon, snob, and Veblen effects. The bandwagon effect refers to a rise in demand because others are consuming the same product; it is motivated by an affiliation need (Leibenstein, 1950). Later research from a psychological perspective has shown that the bandwagon effect is influenced through the consumer’s susceptibility to normative influence and desire for status consumption, which depends on an interdependent self-concept (Kastanakis and Balabanis, 2012). In contrast, the snob effect refers to a decrease in demand due to the fact that others are consuming the same product as the dissociation motive and need for uniqueness prevails (Leibenstein, 1950). Contrary to bandwagon behavior, snob behavior is linked to seeking status and uniqueness and is more strongly related to an independent self-concept (Kastanakis et al., 2014). The Veblen effect refers to an increase in demand because of a higher price that displays the conspicuous consumption. Leibenstein (1950, p. 203) argued that the utility of the goods depends on the price paid for it or, more precisely, what others think the user paid for it (what he called conspicuous price, which can differ from the real price). Speculative demand is the demand for goods because of the expectation that the price will increase (Leibenstein, 1950). Irrational demand captures all other phenomena, such as “[…] purchases that are neither planned nor calculated but are due to sudden urges, whims, etc., and that serves no rational purpose but that of satisfying sudden whims and desires” (see Leibenstein, 1950, p. 189).

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D.8.3 Luxury Value: A Perceived High Value There is extant research available showing that rare objects are valuable (for example, Eisend, 2008, Gierl and Huettl, 2010, Lynn, 1992a, Lynn, 1991, Lynn, 1992b, Verhallen, 1982, Verhallen and Robben, 1994). Several theories have been proposed to explain why scarcity works. The most prominent is the commodity theory, which states that “any commodity will be valued to the extent that it is unavailable” (Brock, 1968, p. 246, cited in Brock and Brannon, 1992, p. 126). A commodity must be useful, transferable, and has to potentially be possessed (Lynn, 1991). The extension of Brock and Brannon (1992) broadened the scope further to include not only products, experiences, and messages but also traits and skills. Value refers to the desirability and perceived utility (Lynn, 1991). Unavailability can be caused by scarcity induced by the type of scarcity mentioned above, such as natural limitations of resources, a limited number of suppliers, or limitations of supply on the product. Moreover, the unavailability can be related to limited personal resources and a high price for the commodity. It can also be related to legal or other restrictions that limit the possession of the commodity or to temporal factors (supplier and demand based) that make the product unavailable (cf. Lynn, 1991). Studies have shown that scarcity appeals to increase both the perceived value of a product and purchase intentions (Eisend, 2008). For conspicuous luxury goods, Gierl and Huettl (2010) found that supply-induced scarcity, such as limited editions, results in more favorable product evaluations than demand-based scarcity (which is inverse for non-conspicuous products). Besides the commodity theory, (Lynn, 1992a) proposed other potential explanations, such as the consumer’s need for uniqueness, opportunities for self-enhancement or status display through the possession of an unavailable resource, or feelings of power and control coming from the possession. Hwang et al. (2014) showed that a chronic desire for rarity influences the product choice for luxury products. As an alternative explanation, Lynn (1992b) proposed that consumers might have internalized the heuristic to link scarcity with a higher cost and price, and consequently believe a higher price must correspond to a higher quality or investment value (cf. Lynn, 1992a, Rao and Monroe, 1989). Another explanation could be based on the reactance theory (Brehm, 1966) in which consumers feel that their freedom is restricted through the unavailability of the resource and they want to restore their freedom through possession of the resource (Lynn, 1992a). Moreover, creating a barrier to the possession can itself create arousal and lead to a higher perceived value that fuels the desire for the commodity (Lynn, 1992a).

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The Managerial Perspective: Excellence

D.9 The Managerial Perspective

The managerial perspective focuses on the principles and practices of luxury brand management. This perspective is based on different phenomena and concepts from luxury marketing and management research. Several authors have argued that luxury brands are managed differently to non-luxury brands and that luxury brands can be defined by their specific management approach (for example, Kapferer, 1997, Kapferer, 2009, Keller, 2009). The managerial perspective highlights how luxury brands manage or normatively should manage and tackle specific challenges and trade-offs. The managerial perspective is most closely related to the material perspective as it is strongly concerned with the creation of the luxury object and its characteristics. From a managerial perspective, luxury is characterized by its managerial requirements and principles. These require a culture of excellence based on a strong brand and identity, a consistent execution of customer experience and control of the key touchpoints, and the management of specific trade-offs, such as the tradeoff between growth and exclusivity, which differentiates luxury brands from any other business (Albrecht et al., 2013a). Luxury brands have special managerial characteristics, such as the high degree of immaterial and creative value creation, a strong global orientation, and broad competition or the high need to protect brand assets, including illegal appropriation through counterfeits. The managerial perspective needs to orchestrate the management of all other perspectives. It is thus an enabler to transform the insight from the creation of luxury into action. Therefore, it requires a specific management approach and culture. Managing luxury brands requires a culture of excellence with a long-term orientation and commitment to a strong brand identity. Luxury execution requires control to ensure consistency and the highest level of quality across touchpoints. This is especially important when considering growth options or partnering options to extend the luxury ecosystem and innovation. This section focuses on the managerial requirements and the literature, while the implications section will derive managerial implications from the other perspectives. The managerial perspective is the perspective that has received most prominence in the field of business and marketing. Many practical books exist on how to manage luxury brands in general (Chevalier and Mazzalovo, 2008, Kapferer, 2009, Som and Blanckaert, 2015), specific parts of luxury (such as product design) (Pricken, 2014), retail (Chevalier and Gutsatz, 2012) or human resources (Auguste and Gutsatz, 2013, Merk, 2014), and managing luxury in specific environments such as Asian markets (Chadha and Husband, 2006, Chevalier and Xiao Lu, 2009). Due to the vast amount of insightful literature, this section of the thesis will focus only on the

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managerial requirements and challenges that most strongly characterize luxury brand management and that are needed to orchestrate the other perspectives. This section focuses on the requirements needed to build these characteristics.

D.9.1 Organizational Culture: Striving for Brand Excellence Luxury brands need to have a strong purpose and vision that guides their actions and establishes them as a clear leader in their category (Schaefer and Kuehlwein, 2015). This requires an organization with a strong culture to execute the luxury brand principles in a consistently high-quality manner, while always striving for perfection and excellence. A value-driven culture oriented towards the brand, its values, and its identity is particularly relevant for luxury brands. Kapferer (1997) distinguished four levels of brands depending on their level of exclusivity: the brand, the upper-range brand, the luxury brand, and the griffe. Key characteristics of luxury brands are that the manufacturing is done in small series in a workshop, is done by hand, and is based on craftsmanship. It is distinguished from the upper-range brand by its further limitation and production process and to the griffe, which has a stronger creative aspect and uniqueness. Kapferer (2006, p. 72) proposed that two different business cultures prevail among luxury brands. One culture is centered on the history of the brand and the crafts production (“European classic model”) and the other culture builds on storytelling and the creation of shopping experiences (“US-type model”). The European model is structured mainly along the pyramid, which is from the most exclusive top-range (called “griffe”) to the more accessible manufactured products or even mass produced. The US model is centered more on a certain lifestyle and typically is structured more horizontally (Kapferer, 2006). Fionda and Moore (2009, p. 355f.) proposed that luxury requires a culture that is committed to the brand, both internally and in partnership with external parties. This culture of excellence is required to execute the principles of luxury brand management and to stay disciplined. According to Kapferer (2012a), luxury brand management rests on a strict set of principles that characterizes the luxury business model, for example, making it difficult for clients to buy, no de-localization of production, communication to non-target groups to increase admiration, full control of the whole value chain, and direct relationships with clients. Whereas premium aims at superior quality, luxury is more strongly oriented towards exclusivity and creativity. Similarly, and integrating insight from the other perspectives, Som and Blanckaert (2015, p. 233) proposed that luxury brands have certain characteristics that need to be managed differently from non-luxury brands. Such characteristics include consistent premium quality across all producers, limited production and 121

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distribution, emotional appeal, product excellence, a global reputation, or the ability to time design shifts3. Ricca and Robins (2012) proposed that a luxury management culture is based on four pillars: craftsmanship, focus, history, and rarity. Kapferer and Valette-Florence (2016) proposed that from a managerial perspective, besides high quality and physical rarity, luxury brands can be built through the principles of selection and seduction as both influence desirability. They show that selection is related to the brand’s objective rarity (product superiority and selective distribution) and the exclusivity (“not for everybody”, “very actual still unique”) whereas seduction, stems from the brand’s prestige (“elitist” and “glamor”) and creative leadership (“fashionable and creative” and “class and status”) (Kapferer and Valette-Florence, 2016, p. 127). The brand and its values are at the center of luxury management. Several classification schemes for luxury brands, depending on their luxuriousness and price points, have been proposed. Berthon et al. (2009) proposed that four types of luxury brands exist, which can be segmented along two dimensions (aesthetic and ontological mode), crossing the cultural, managerial and individual perspectives: the classic brand, the modern brand, the postmodern brand, and the Wabi-Sabi brand. The classic brand requires expert taste and focuses on the enduring as an aesthetic possession. In contrast, the modern brand does not require expertise but does require money to be admitted to the commercial world of conspicuous possession. The postmodern brand is driven by fashion and chases the latest ephemeral and superficial trends. The Wabi-Sabi brand combines transience with expertise and emphasizes the aesthetic appreciation of consumption, which requires the taste of a connoisseur. This typology has clear implications for the management of luxury brands and the identification of their target segments. Whereas for the classic brands the core challenge is to educate its consumers to develop an appreciation for its products, the challenge for modern brands is to strengthen the product’s exclusivity. Postmodern brands need to become more popular and visible, and Wabi-Sabi brands need to guide their target customers on a quest for knowledge experience (based on Berthon et al., 2009). Kapferer (1998) proposed a different scheme of four luxury types based on the different consumer segments and the needs to which they cater (cf. Kapferer, 2009). 3

In addition, they propose that luxury brands have a strong association with the country or origin, an element of uniqueness, a strong link to the personality and founder of their creator, a heritage of craftsmanship, a recognizable style or design, and premium pricing Som, A. and Blanckaert, C. (2015), The Road to Luxury: The Evolution, Markets and Strategies of Luxury Brand Management. Singapore: John Wiley & Sons.. These characteristics are treated as parts of the other perspectives in this thesis to highlight the unique aspects illuminated by each perspective.

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The first type is built around authentic experiences and emphasizes the aesthetic qualities and beauty of a product and the product’s excellence, uniqueness, and magic. The second type emphasizes the creativity, the product’s sensuality, and its magic and beauty. The third segment is focused on prestige and assurance values, the magic and beauty, the international reputation of the brand, and the contemporary nature of the product by never being out of fashion. The fourth type focuses on exclusivity and the brand that the product carries, such as the fact that there are only a few buyers and the owners belong to a select minority and the magic of the product (cf. Kapferer, 2009). Regarding the personality of luxury brands, Heine and Trommsdorff (2010) found that the key dimensions of luxury brand personality are modernity (which captures the temporal dimension of the brand (traditional vs. modern)), eccentricity (which captures the deviation from social norms (eccentric vs. reputable)), opulence (which captures the conspicuousness of the brand (opulent vs. discreet)), elitism (which captures the status and exclusivity the brand displays (elitist vs. democratic)), and strength (which captures the toughness and masculinity associated with the brand (strong vs. soft)).

D.9.2 Execution: Consistency and Control One major distinction between luxury and non-luxury brands is the high imma­ terial nature of value creation and brand equity (Kapferer, 2010), created mainly through managing the brand’s identity, exclusivity, and heritage, which poses both strategic and operational challenges to growth and go-to-market management (Albrecht et al., 2013a, Dubois and Paternault, 1995, Yeoman and McMahon-Beattie, 2013). Luxury brands need to control the individual touchpoints and the customer relationship in order to manage the exclusivity and total customer experience. This can be seen in their high degree of vertical integration and close operational management of the value chain (Godey et al., 2009). The control and consistent delivery of superior quality along the entire supply chain is a critical success factor for luxury brands in combining functional product quality with emotional appeal and creating a superior technical performance at the same time as a unique lifestyle (Brun and Castelli, 2013, p. 830f.). Consistency and control are crucial for executing the different dimensions of a luxury brand. These dimensions include the management that Fionda and Moore (2009, p. 355f.) proposed as being a clear brand identity (emotional appeal/aspirational, brand values/global marketing strategy), a luxury communications strategy (direct marketing, sponsorships, fashion shows, celebrity endorsement, advertising, PR), product integrity (functional, quality, and craftsmanship, innovation, 123

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and seasonal offer), a brand signature (iconic products, brand livery, recognizable style, creative direction), a prestige price (consistent with positioning), exclusivity (limited editions, controlled ranges and locations), luxury heritage (brand history or story), the environment, and the consumption experience (globally controlled distribution, superior service, flagship stores). Moreover, it is crucial for luxury brands to remain relevant to broader cultural trends and environment (such as sustainability or globalization) and integrate them into their strategic considerations (Cavender and Kincade, 2015). Control includes a focus on quality and consistency, yet also cost management. Langer and Heil (2015) proposed that consistency includes reliability, validity to the luxury concept, social compatibility, consistent price positioning, and consistent portfolio management. Kapferer (2009, p. 122ff.) proposed that a coherent identity of a luxury brand expressed through the brand’s storytelling is key to its proposition. It is built through the brand physique, the brand personality, the relationship mode with its clients, the brand culture, the customer-reflected self-image, and the brand’s self-concept, which all contribute to the singularity and uniqueness of the luxury brand (Kapferer, 2009, p. 122ff.). Luxury brand management thus requires a strong internal consistency to manage the desire creation process. To manage the brand and the value creation process, Nueno and Quelch (1998) proposed four management areas as being key for luxury brands: the design and communications management (for example, design innovation, characteristics image and style, legitimacy, and fashion authority), the product line management (for example, authority/legitimacy, simplification of offering), the customer service management (for example, customer intelligence, customer service), and the channel management (for example, choice of store format, retail productivity). Each dimension provides certain guidelines on how to create luxury, and each needs to integrate luxury characteristics. For example, in the service encounter in luxury brand stores, luxury brands actively manage status, such as by selectively rejecting consumers to mark their position in the social hierarchy (Dion and Borraz, 2017).

D.9.3 Trade-offs: Growth versus Exclusivity Key challenges for a luxury brand are to maintain its excellence and remain true to the luxury proposition while enabling growth and the creation of shareholder value (Albrecht et al., 2013a). The corporate environment with the company history, brand portfolio, and financials provides the boundary conditions for the company’s strategy and trade-offs that the brand faces, such as the trade-offs between classic and contemporary and customer acquisition and retention are the most crucial for

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luxury brands, as well as the trade-off between exclusivity and accessibility (Cavender and Kincade, 2015). Brand extensions are a way to grow a brand in different categories or segments while remaining exclusive to the brand’s core (Albrecht et al., 2013b). Brand extensions are core to the business model of luxury brands for several reasons. They allow the brand to preserve its exclusivity in its core range while pursuing growth with adjacent offerings around their brand proposition (Albrecht et al., 2013a). This is particularly crucial for retail-intensive brands to maximize their sales productivity through cross-selling opportunities. However, they always bear the risk of diluting the brand equity of the parent brand if not managed well. Luxury brand extensions have thus been a major area of study in the luxury management field both from a managerial (for example, Riley et al., 2004) and a consumer perspective (Albrecht et al., 2013a). Kapferer (2009) proposed that there are two models for building luxury brands: the pyramid model and the galaxy model. The pyramid model focuses on vertical extensions by extending the brand downwards to new price points with more accessible luxury products. The galaxy model focuses on horizontal extensions around the brand’s lifestyle to expand the territory. Horizontal brand extensions are a way to expand the brand to new categories to both increase the portfolio and lifestyle choices for existing customers and to appeal to new target groups. Park et al. (1991) showed that for extensions consistent with the brand concepts, prestige brands have a greater extendibility than functional brands and even for far extensions the consumer’s evaluation can still be positive. Lau and Phau (2007) found that personality dimension fit leads to brand image fit; they found no difference between functional and prestige brands. Reddy et al. (2009) showed that the gross margins for extensions increase with the premium degree of the brand, yet only if there is high fit (adjacency) between the brand and the product extension categories. Hagtvedt and Patrick (2009) showed that the higher perceived hedonic value of luxury brands compared to value brands could explain their greater extendibility and more favorable evaluation. Monga and John (2010) proposed that the differential extendibility of luxury and functional brands is moderated by thinking style. While both holistic and analytic thinkers respond positively to brand extensions of prestige brands, only holistic thinkers respond favorably to extensions of functional brands since it might be easier for holistic thinkers to perceive a fit. Albrecht et al. (2013a) analyzed both the forward effects and the reciprocal effects of brand extensions for luxury brands and provided a comprehensive model. They found that similar to non-luxury brands, perceived fit, the consumer’s involvement in the extension category, and the functional value of the parent brand are key drivers of extension success. Compared to non-luxury brands, hedonic value has a higher importance for the extension evaluation of 125

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luxury brands. While evaluating the extension influences on the evaluation of the parent brand (reciprocal spillover), this effect is weaker for luxury brands. Using a semiotic approach, Veg-Sala and Roux (2014) analyzed the extendibility of luxury brands based on the type of brand contract offered and its openness. They defined three contracts based on where the brand is anchored: the contract of delimitation anchored in time and place, the contract of determination anchored in characters or life states, and the contract of mastery anchored in know-how and materials. An open contract is discontinuous and embraces innovation of the core brand whereas a closed contract values tradition. Veg-Sala and Roux (2014) proposed a typology based on case study research in which open determination and mastery contracts lead to a high extendibility whereas a closed mastery contract and an open determination contract lead to a low extendibility. These results highlight the role of material innovation and competence in brand extension planning. Vertical brand extensions are a way to make the brand more accessible and thereby to appeal to new customer segments, particularly in categories with a high degree of non-functional utility (Nueno and Quelch, 1998). Vertical extensions need to be carefully managed by luxury brands as especially downward extensions potentially threaten their exclusivity, which is core to the luxury value proposition (Kirmani et al., 1999). Whereas owners respond more favorably than non-owners to upward extensions of both prestige and non-prestige brands, they only respond favorably to downwards extensions of non-prestige brands (Kirmani et al., 1999). A possible strategy to shield the brand from negative spillover effects is the use of a sub-brand. Contrary to this, Kim et al. (2001) found that all vertical line extensions lead to a decrease in attitude towards the parent brand. Those authors also proposed that distancing the extension—i.e., low typicality between the brand and the extension—can reduce the negative effect on the parent brand (see also Kim and Lavack, 1996). Magnoni and Roux (2012) studied the impact of downward extensions for luxury brands and found that self-brand connections, brand commitment, brand trust, and brand attachment are negatively affected, particularly for luxury brands. Both the brand attitude and perceived fit influence the extension attitude, which is a key driver of perceived value and purchasing intentions (Dall’Olmo Riley et al., 2015). Considering the increasing accessibility of luxury brands and the emergence of new players, Silverstein and Fiske (2003) proposed the differentiation between old luxury brand extensions, new luxury goods, and middle market (masstige) goods. The old luxury brand extensions are lower-priced versions of the traditional luxury brands. The new luxury goods are accessible super-premium products that are at the top of their category. The “Masstige” (Mass Prestige) products are priced below the other new luxury categories, yet command a price premium compared

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to mass-market goods. An empirical study by Truong et al. (2009) has shown that the new luxury brands have a prestige level closer to luxury brands and a price level closer to middle-range brands. Chevalier and Mazzalovo (2008, p. Viii) defined a luxury brand as “one that is selective and exclusive and which has an additional creative and emotional value for the consumer.” Phau and Prendergast (2000, p. 123–124) proposed that “in sum, luxury brands are competing based on the ability to: (1) evoke exclusivity, (2) a well-known brand identity, (3) increase brand awareness and perceived quality (increasing brand preference and purchases), and (4) retain sales levels and customers’ loyalty.” The dream formula developed by Dubois and Paternault (1995), gives a pragmatic guideline: Desired brands are known by many people but consumed by only a few. While a high awareness is key for luxury brands to create their “dream value.” Dubois and Paternault (1995) proposed that the brand must remain exclusive. In a study in Asia, Phau and Prendergast (2000) validated the importance of awareness and found that the possession and popularity of luxury brands do not harm and might even propel the dream value.

D.10 Integration of Perspectives: Principles of Luxury D.10 Integration of Perspectives

D.10.1 Discussion of the Findings and the Integration of Previous Research on Multiple Perspectives The previous sections have outlined the different perspectives on luxury. The proposed perspectives aim at highlighting and disentangling the complexity of the luxury phenomenon for conceptual clarity. What unites the dimensions is that in each, luxury is something extraordinary, opposite to the profane and ordinary of everyday life (Belk et al., 1989, Kapferer, 2009). This thesis thereby builds on, integrates, and expands findings from previous research by providing a unifying frame around which the perspectives can be organized. This section aims to assist and support the comparison of studies that have used different but related terms to refer to the underlying principles and mechanisms that are outlined in this thesis. The pragmatic and encompassing perspective of luxury as being something extraordinary links to previous research from the marketing and management areas that identified luxury as something superlative, exceptional, non-comparative, or incomparable (for example Kapferer, 2009). The material perspective that focuses on the luxury object and proposes that luxury is a rare, refined quintessence has received the most attention in previous 127

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research. This includes several related concepts and terms, such as rarity, paucity, and scarcity (for example, the use of rare ingredients or technological innovation, but also individualization or even illegality, which influences the rarity of the object), the principles of elaboration (for example, craftsmanship, the expertise of the manufacturer, manufacturing complexity, or the fact that the object is handmade), high quality (for example, the superior quality of products and services, product integrity, usability, durability, or functionality and performance), the aesthetics, design or polysensuality (such as the creativity, beauty or recognizability of the design), or the authenticity, essence, or uniqueness (for example, the presence of unique flaws, genuineness, honesty, or originality) of the luxury object. The collection of characteristics is underpinned by several phenomena and effects, yet no comprehensive theory has yet emerged. The philosophical perspective views luxury as something that creates desire and the process of creating desire is linked to the concepts used in previous research, such as dreams, imagination, inaccessibility, or even irrationality. Prominently, theories of needs or desires explain the complex creation of desire. From a cultural perspective, luxury is characterized through its meaning and the magical and sacred aura that luxury radiates. This is created through the myths, magic, and stories that surround particularly the luxury brand (also related to the legends, mystique, secrets, or mythical reputation), the aura and symbolism (including discussions around the string brand identity, symbolic value, selective codes, or secondary associations of the brand), the heritage (including provenance, ancestral heritage and personal history, tradition, or even symbolic enrichment with time), the seduction (through closeness to the arts or highly creative and selective branding), or elaborate consumption rituals (including sophisticated scripts, staging, or sacralization), which all provide further lenses to understand how luxury brands create their meaning. The various cultural phenomena underlying consumption are subsumed in a conglomerate of theories within consumer culture theory. From a social perspective, luxury is characterized by its exclusivity and ability to create status. Related concepts are prestige and reputation (building on concepts such as brand recognition, social approval, or endorsement), exclusivity and selection (including terms such as inner circle, elitist, or keeping out non-enthusiasts), or the social dynamics related to the creation of status (such as social stratification, social respect). Most prominently, the signaling theory is used to explain the social interaction effects of luxury as a status signal. From the individual perspective, luxury is characterized by its aspirational character, particularly with relevance to the consumer’s identity and the power to make consumers feel unique and special. Related concepts are the aspirational or emotional appeal (such as self-expressive benefits or creative and emotional value,

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but also the brand relationship) or a special feeling and experience (with concepts such as sensual pleasure, hedonic experience, or life enrichment). Various theories underlie the individual perspective, such as identity or self-concept theory but also theories of experiential consumption. From an economic perspective, luxury is characterized by its high price and value. This is related to conceptions and guidelines such as high price (high cost or very / overly expensive), premium pricing (such as price increases over time with few discounts or markdowns), high financial value (and the willingness to pay price premiums), or the positive price elasticity of demand, and the positive income elasticity of demand. Popular theories underlying this cluster are, thus, theories of demand, or theories such as commodity theory linking the rarity of the object to a perceived value. From a managerial perspective, luxury is characterized through the management principles of excellence and the strive for perfection, which underline all managerial activities. This includes a luxury culture (including an internal and external commitment to the brand, a long-term orientation or a dominance of the brand), excellence, focus, and consistency (such as consistently delivering premium quality in all products in a line and along the entire supply chain, or relatively small company size), control (such as the control of creative processes, control over environment and consumption experience, or control over production), the establishment of legitimacy and a global ecosystem (global business scope, worldwide presence, institutional brand), or specific business challenges (such as balancing growth, broad competitive set, or a high threat of counterfeiting). The collection of characteristics is underpinned by several phenomena and effects, yet no comprehensive theory has yet emerged. Table 5 shows how the dimensions identified in this study link to the dimensions and components of previous research that investigated multiple dimensions of luxury, such as Allérès (1990), Beverland (2004), Braun (1997), Brun and Castelli (2013), Büttner et al. (2008), Chevalier and Mazzalovo (2008), Corbellini and Saviolo (2009), Dubois et al. (2001), Fionda and Moore (2009), Heine and Trommsdorff (2010), Hennigs et al. (2012), Kapferer (2009), Keller (2009), Kisabaka (2001), Kolliopoulos (2016), Langer and Heil (2015), Moore and Birtwistle (2004), Moore and Birtwistle (2005), Nueno and Quelch (1998), Okonkwo (2007), Phau and Prendergast (2000), Pricken (2014), Ricca and Robins (2012), Schaefer and Kuehlwein (2015), Som and Blanckaert (2015), Valtin (2005), Wetlaufer (2001), Wittig et al. (2015). Table 10 to Table 16 in Section G.2 provide a detailed overview of how this framework integrates previous multidimensional frameworks.

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D Perspectives on Luxury: An Integrative Model Relation of this thesis to previous research on dimensions of luxury

Perspective Pragmatic: Extraordinary Material: Rare, refined quint­essence

Philosophical: Desire Cultural: Magical and sacred aura

Characteristics Superlative, exceptional, non-comparative, incomparable Rarity / paucity / scarcity: rare ingredients, rare human capacity; techno-rarity (innovations, new products and features); limited editions, custom-made orders, bespoke, 1-to-1 relationships; distribution-based rarity; information-based rarity (marketing, brand, secrecy), individualization; uncertainty, illegality Elaboration: Craftsmanship, expertise and delicacy: expertise of manufacturer, manufacturing complexity; handmade; intriguing and sophisticated sourcing/manufacturing High quality: Superior quality of products and services, product integrity, high quality materials, quality controls, durability; high quality components used in elaboration process, reliability, durability, trust in product and service, comfortability, usability, functionality and performance (technology, vision, design), highest (security) standards, superior technical performance Aesthetics / design / polysensuality: Affecting product, identifiable product, recognizable style or design, superfluousness, intangible aspects beyond functionality, practical, beautiful, creativity, artisans, timeless, trends are irrelevant, perfection in every aspect, creations Authenticity / essence / uniqueness: product with unique flaws, flaws authenticity, original, made by the master, purity, innovative, original and classic, genuine, honest and authentic Desire: Dream, distant, desirable, longing & belonging, hope, imagination, irrational, inaccessible Magic, myth, story: legend, mystique, myths and secrets (e.g., origination, creation, destiny, discovery), cryptic, mythical reputation Aura, symbolism: Strong brand identity, strong brand equity, symbolic value, selective media and codes, universally accepted, clear brand identity (emotional appeal / aspirational, brand values / global marketing strategy), brand signature (iconic products, brand livery, recognizable style, creative direction), transfer (insignias, reliques, reputation, history, symbolism), strong brand (legitimacy), brand elements besides name (logos, symbols, packaging, ...) and secondary associations (personalities, events, countries, ...) Heritage: provenance (strong association with the country or origin), luxury heritage (brand history or story), ancestral heritage and personal history (tradition, legend), strong link to the personality and founder of their creator, pedigree, provenance, history, tradition, enriched with time (old, new, matured, life work, tradition, for eternity) Seduction: cultivating closeness to the arts, highly creative and selective branding, role of advertising is not to sell, keeping stars out of advertising Elaborate consumption rituals: sophisticated scripts, staging (experiences, staging, rituals), transgressing boundaries, sacralization of stores

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Perspective Characteristics Social: Exclusiv- Prestige / reputation: brand recognition, well-known brand identity, high visibility, communicating to non-target consumers to establish ity and status reputation, protects in public, triggers envy, consistent with social values, high awareness, social approval, endorsement, recognition symbols Exclusivity / selection: exclude non-enthusiasts (limited editions, controlled ranges and locations), elitist, inner circle, conspicuous, differentiation, connoisseurship, difficulty to obtain, snob, dominant, selective / inaccessible (waiting lists, limited distribution, ...) Enhances social status: Creates social stratification, social respect, achievement, sense of belonging, social identification Individual: Aspirational / emotional appeal: Self-expressive benefits, creative Aspiration and and emotional value, enhances self-esteem, attractiveness, individualism, creation of a unique lifestyle, uniqueness, security, warmth, feeling special self-respect, element of uniqueness, difficulty to consume, perceived privilege, enhances self-concept, intimate relationship to brand and product, brand relationship, materialism, collecting Special feeling / experience: pleasurable purchase and consumption experiences, feeling of refinement and well-being, facilitates new experiences, sensual pleasure, hedonic experience, hedonic (pleasure, self-gift giving, life enrichment, extravagance), indulgence, experience as true product, feel good, fun, excitement Economic: High High price: high cost, very / overly expensive price and value Premium pricing: Premium pricing with strong quality cues, luxury sets the price (price does not set luxury), price as consequence of luxury, presumed price higher than actual price, price increases over time (incl. average price of product range), few discounts and markdowns High financial value: willingness to pay price premiums Positive price elasticity of demand, positive income elasticity of demand Managerial: Luxury culture: internal commitment to the brand, external partnership commitment to the brand, long-term orientation (vision Excellence and behavior), staying on top of social trends / ability to time design and strive for shifts, innovation & entrepreneurship, ability to manage cultural perfection complexity, passionate and open-minded to diversity ability to manage highly creative people understanding of luxury DNA and luxury sector, company spirit, strong company culture (adherence to values and standards), rule maker and rule breaker; Brand dominance: brand dominates clients, not pandering to customer wishes, making it difficult for clients to buy, low promotional activity, no response to rising demand, limitation (production, distribution, availability) Excellence / focus / consistency: Experience in selling and marketing; marketing approach that combines product excellence with emotional appeal, consistently delivering premium quality in all the products in the line and along the whole supply chain, relatively small company size (limited number of staff); product excellence, 131

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Characteristics innovation; a drive to reinvent oneself to be the best, all aspects of marketing program need to be aligned to ensure quality products and services Control: control of creative process, control over environment and consumption experience (globally controlled distribution, superior service, flagship stores), control over production / product manufacturer (no relocation of factories), selective channel strategy, tightly controlled distribution, limited distribution, flagship store and store brand concept, strong need for brand protection (incl. counterfeiting), control of luxury communication activities (fashion shows, store displays, PR, product packaging, direct marketing, sponsorship, advertising, celebrity endorsement, designer PR face of the brand), strong legal protection of all trademarks and aggressive combatting of counterfeits, careful management of brand architecture Global ecosystem and legitimacy: Global reputation of the brand, global business scope, worldwide presence, global reach, world-class excellence, institutional brand (long-term benchmark in category; timeless symbol), fortification (brand extensions, legitimization), worldwide / international significance (critical size) Specific business characteristics / challenges: Balancing growth, retain sales levels and customers’ loyalty, broad competitive set, high threat of counterfeiting, very high break-even, limited cash need / low capital intensity, high added-value

Source: Own illustration based on Allérès (1990), Beverland (2004), Braun (1997), Brun and Castelli (2013), Büttner et al. (2008), Chevalier and Mazzalovo (2008), Corbellini and Saviolo (2009), Dubois et al. (2001), Fionda and Moore (2009), Heine and Trommsdorff (2010), Hennigs et al. (2012), Kapferer (2009), Keller (2009), Kisabaka (2001), Kolliopoulos (2016), Langer and Heil (2015), Moore and Birtwistle (2004), Moore and Birtwistle (2005), Nueno and Quelch (1998), Okonkwo (2007), Phau and Prendergast (2000), Pricken (2014), Ricca and Robins (2012), Schaefer and Kuehlwein (2015), Som and Blanckaert (2015), Valtin (2005), Wetlaufer (2001), Wittig et al. (2015)

While some characteristics can be argued as belonging to a different perspective, we propose that the simplification this section provides still adds value in linking this research to previously identified dimensions and terminology used in previous studies. The main reason for the allocation to each perspective was to group concepts that have similar underlying principles and mechanisms to the ones outlined in detail in the chapter about the respective perspective. Moreover, the question could arise whether the theories and concepts discussed in the different sections are compatible. While an in-depth discussion of the ontological, epistemological, and ontological assumptions for the theories introduced is beyond the scope of this thesis, this thesis proposes that the different perspectives can be integrated into a conceptual model to understand the luxury phenomenon more holistically, as

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will be outlined in Section D.10.2. As the focus of this thesis is to understand the luxury phenomenon more holistically and discuss the different perspectives that have been used in previous research, the argument has focused on the elements of the theories and concepts that facilitate this objective. It might be the case that the ontological, epistemological, and methodological assumptions are not fully compatible when comparing the different theoretical foundations by itself. However, this thesis proposes that this does not affect the argument outlined here as the focus of the argument is not the theory in itself but its elements that contribute to the research objective of providing a more holistic understanding of luxury. For example, it is likely that core assumptions of the neo-classical economic theory, such as rational individuals and anthropology, which underlies different concepts of the cultural perspective, do not require this assumption and might even question whether the rationality is needed in scientific research itself (cf. Nickles, 2017). Thus, while rationality is important for the assumptions of the neo-classical economic theory—and also shapes their view on luxury—it is not necessary that a different perspective shares this assumption. Moreover, with the evolution of each research field, some of the core assumptions of the different perspectives are changing. New paradigms are developing—such as behavioral economics, which shares many of the core assumptions underlying the economic theory—that are challenging the assumption of rationality and integrating insight from related research fields, such as psychology and even cultural studies in the field (Kahneman and Tversky, 1979, Kuhn, 1969). This example should serve to illustrate the challenges in connecting such diverse perspectives. It should also serve to reassure the reader that these discussions do not limit the effort of this thesis to bridge and connect different perspectives, but rather support this approach in the endeavor to create scientific progress by highlighting and combining different paradigms (Kuhn, 1969). The different underlying assumptions might even contribute to the richness that multiple perspectives bring to illuminate the topic as compared to a single perspective.

D.10.2 Development of a Conceptual Model and Implications for the Creation of Luxury While the previous sections aimed at disentangling the different perspectives of luxury, this section aims at relating and integrating them into a conceptual model that could serve as a theory of luxury and, thereby, enhance the understanding of the concept and mechanics for academics and practitioners. We propose that conceptually the highlighted perspectives can be linked to provide an understanding of the principles of luxury creation. Moreover, we propose that the perspectives 133

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need to be understood holistically in that their successful combination and interplay creates the extraordinary nature of luxury that fuels desire, which each dimension on its own is unlikely to create. These perspectives can be combined to form a conceptual model of luxury (Figure 13). While this thesis proposes that the model applies to any extraordinary or luxury beyond consumption, the explanation is focused on consumable luxuries. The overarching principle of luxury is that the extraordinary guides each of the dimensions, distinguishing luxury from the profane and ordinary of everyday life. It also considers the relativity and subjectivity of luxury and focuses on the consumer and the processes that take place in the creation of luxury. Luxury has a luxury object (which can be a product, experience, or even an idea) that is a rare and refined quintessence. This refined quintessence makes the object extraordinary and is required for the creation of a desire to occur. While rarity is a necessary condition, not anything that is rare is a luxury. With a qualitative understanding of luxury that underlines this thesis, a high quality and authenticity is needed to manifest the luxury character. This is created thorough the principles of refinement, starting from the educated selection of high-quality raw materials and a creative idea to refining them with expertise in craftsmanship and manufacturing, to refining their aesthetics and beauty, or refining and rarifying their lexical properties, for example, through limitation or customization. These objects are the focus of desire. Thus, we propose that desire is a consequence that is created by the luxury object. Desire is created within the consumer and the consumer’s environment as a consequence of the object. Creating desire is a complex process that takes place on a cultural level (magical and sacred), a social level (exclusivity and status), and an individual level (feeling special and unique). To become a location for desire, the desire needs to be linked to an object of desire, such as the luxury object (objectification). Moreover, it triggers a cycle of longing for the desired object, imagination of the possession or experience of the desired object, mixed with frustration that the desired object is out of reach, and hope that it can still be reached (philosophical perspective). The magical and sacred aura adds to the desirability (cultural perspective) by creating intangible meaning, often deeply embedded in and intertwined with cultural values, myths, dreams, and principles. The brand is most often seen as the source of this magical meaning and is enriched with the brand’s heritage and authority to transfer the desirable luxury myths and symbolic powers to the luxury object and thereby create desirability. The social dimension and particularly the exclusivity of the luxury object create status within the social community. This status enhances the desirability for its imagined beneficial social consequences.

Philosophical: Desire • Location: Objectification • Process: Longing and imagination Cultural: Magical and sacred aura • Intangible: Creating a magical and sacred aura • Story: Luxury myths • Brand: Luxury brand heritage and authority • Meaning transfer: Luxury rituals Social: Creating exclusivity and status • Status: Social community • Exclusivity: Status signals Individual: Aspiration and feeling special • Identity: Ideal self • Consumer value: Higher-level needs • Emotions: Feeling special and unique

Managerial: Excellence and strive for perfection • Organizational culture: Excellence • Execution: Consistency and control • Trade-off: Growth vs. exclusivity

Material: Rare, refined quintessence • Object: Quintessence – Authenticity – High Quality – Rarity • Creation: Qualitative refinement – Quality of the raw materials – Craftsmanship and manufacturing – Aesthetics and beauty – Limitation – Customization

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Economic: High price and value • Pricing: A high absolute and relative price point • Resources: Positive elasticities of income and price • Value: Perception of stable value

Figure 13: Integrated luxury model based on different perspectives D

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Fig. 13 Integrated luxury model based on different perspectives

Source: Own illustration

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Desire creates for the consumer the perception of high value with a willingness by the consumer to pay, which, consequently, allows the luxury creator to charge a high price. Thus, the high price and perceived value is a consequence of the desire. From the economic perspective, it could be argued that a higher price creates the desire and thus the relation could also be that desire is a consequence of a high price. This model proposes that the main relationship is from a desire to the commercial outcome. This follows the rationale of intrinsic value in which other characteristics create a perception of high value. While there is evidence for both relations, this thesis proposes that the managerially relevant relation is the one from desire to price. Otherwise, simply setting a high price would allow any manufacturer to create luxury goods. While this high price might cause people to call it luxury, its connotations are likely to be negative and the value creation for the luxury creator would be low, which is why we exclude this relationship from the model. Managing these relationships requires a culture of excellence, consistency, and control that influences the luxury object, the luxury consumer and environment, and the commercial outcome. This includes managing the key trade-offs that luxury brands face, such as the trade-off between exclusivity and growth. As this culture of excellence enables luxury brand managers to manage all other dimensions, this thesis proposes that it is an enabler that influences the creation of the material dimension and luxury object, the creation of desire, and the creation of value. Combining these perspectives provides a deeper understanding of the mechanics behind the creation of luxury and its applicability. With this theoretical background, we propose that luxury can be understood and defined as follows: ▶ Basic definition: Luxury is something extraordinary that creates desire. ▶ Extended definition: Luxury is something extraordinary that creates desire. The extraordinariness is created through the process of refinement to create a rare quintessence. The desire is created on the individual, social and cultural level by charging the luxury object with cultural meaning, endowing the individual with social status, and making an individual feel special. As a consequence, luxury objects have a high value and can command a high price, which in turn increases their extraordinariness. The first sentence states two necessary conditions: being extraordinary and the ability to evoke desire or to be desirable. This thesis proposes that these two conditions together are sufficient to consider something as a luxury in its broadest sense. Extraordinariness is thereby a more objective or, at least, intersubjectively verifiable proposition about the luxury object’s characteristics, whereas desirability encompasses a subjective consequence of the extraordinariness. While not all ex-

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traordinary things are desirable, this thesis proposes that, based on the argument in Section D.4, to be desirable, something needs to be extraordinary as something ordinary is rarely desired. It could be argued that desire alone makes something a luxury and any object that is desired can be seen as a luxury. The difficulty with this argument is a practical one in that desirability is highly subjective and also situationally dependent. Thus, while any object of desire could be a luxury at that moment, it is not stable as the luxury object might change and, hence, does not provide a basis on which creators of luxury can operate. Moreover, this definition chooses the more abstract extraordinary (pragmatic perspective) over the rare and refined quintessence in the material perspective. The reason for this proposition is to broaden the scope to be able to include not only marketable luxury objects such as products, experiences, or ideas, but also to include concepts such as time or love (which can become embodied in luxury objects in the material perspective, such as through the processes of aging or the fact that the product is handmade as outlined in Section D.3). This is thus similar to the definition of Heine (2012, p. 40) who proposed that “luxury is anything that is desirable and more than necessary and ordinary.” It differs however slightly in that it allows for a luxury to be seen as a (social and personal) necessity depending on the context (as argued in Section C). In referring to the extraordinariness of the luxury object, the more extensive definition includes three qualifications: being rare (quantitative), being created through the process of refinement (qualitative aspect; process), and being a quintessence (qualitative aspect; state and nature of object). This thesis proposes to consider all three quantitative and qualitative (process and state) dimensions of the luxury object to reflect better the creation process of the extraordinary. Concerning the creation of desire, this thesis proposes that desirability is created through the interplay of cultural (meaning), social (status), and individual (feeling special) dimensions. This extension provides guidance on how to create desire and how luxury is extraordinary from each of the perspectives. Lastly, the definition proposes that by creating something extraordinary and desirable, the luxury objects acquire value that allows luxury manufacturers to command a high price as a consequence, which in turn adds to the extraordinariness. Considering this definition, this thesis also is compatible with the notion that different levels of luxury exist depending on the extent to which something is extraordinary and desirable. The more widely something is desired, the higher its luxury level. Here also the distinction between extraordinariness and desirability becomes clear. A unique piece of art is extraordinary (for example through its uniqueness and refinement). While it might not be widely considered as desirable, it might be seen as being desirable by a few people or even an individual and would 137

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thus count as a luxury. On the other hand, if something is not in its strict sense extraordinary (in a sense that it is not based on a unique) but is seen as extraordinary compared to the reference frame of a large number of individuals, it would also count as a luxury (such as an entry-level luxury handbag). The stronger the degree of extraordinariness and the stronger and broader the desirability, the higher the level of luxury. This creation of the extraordinary and desirability is directly linked to the application of the principles identified in this thesis. The more principles that a brand adopts to increase the extraordinariness and desirability, the higher the level of luxury.

D.10.3 Implications for the Creation of Luxury The integration of the different perspectives illuminates characteristics of luxury for the luxury object, consumer and environment, commercial outcome, and management of the extraordinary. These characteristics have implications for the creation of luxury as they can help luxury managers to construct a certain luxury prototype. The extraordinary can also exist beyond these dimensions because there is no limit to it by definition. These instances are, nevertheless, exceptions that are likely to still follow many of these principles and thereby prove that a general rule exists, as derived from this research.

D.10.3.1 Implications for the Creation of Luxury Goods (Material Perspective) Finding a luxury essence and enriching it with time and space: The luxury product or experience must have a unique essence or quintessence to the extreme of a singularity. The product should be what it ought to be, be authentic and true to its origins, have a strong and affecting presence, and go beyond commerce (Belk et al., 1989). This quintessence is often built by anchoring luxury in time and space, such as referring to specific materials or experiences. It bridges the apparent paradox between being in the present through its concrete materialization yet being timeless in its appeal. Luxury brands often enrich their objects with time, for example, by referring to its past, rooting it in the present, and evoking a sense of the future. Similarly, luxury brands enrich their objects with space. This is particularly apparent in their retail environment and flagship stores, in luxury service sectors (such as hotels), and in the use of white space in print advertisements to evoke a luxury impression.

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Mastering refinement: The luxury quintessence is created through refinement, which can be the material refinement or the linguistic refinement to add more sophisticated layers of codes to the product or experience (cf. Berry, 1994). The semantic compression of abstract ideals into a product or experiential code can stimulate and trigger consumer fantasies. This is closely related to the aesthetic dimension of luxury with its striving for perfection exhibited in its craftsmanship and artistry, such as through attention to detail. Promoting rarity and product excellence: To make luxury products and services extraordinary, they need to have superior quality and an affecting presence. From a material perspective, several tactics have been identified that add to the rarity of the product and experience and promote a certain exclusivity (Catry, 2003): • Natural rarity, which is the limited availability and scarcity of the resources needed for manufacturing, such as high-quality materials • Manufacturing rarity, which is the limited availability of skilled artisans and craftsman to manufacture the product (for example, the skills needed to manufacture a luxury watch) • Engineered rarity, which is the limited amount of product due to limited numbers (quantity based) or from seasonal effects (time based) • Innovative rarity, which comes from technological innovations and their early adoption; the particular challenge for luxury brands is to master the balance of being both innovative and timeless • Customization and personalization, which is the opportunity for the user to personalize the product and add to the uniqueness, personal relevance, and subjectively perceived quality (Kisabaka, 2001, p. 109) • Creative rarity, which is the aesthetic appeal and design of the product that distinguishes the product from other products, and at the extreme case is a unique work of art • Individualization and recognition, which is the personal service, exclusive membership, lifetime relationships, a strong sense of privacy, and the availability of certain privileges that adds to the feeling of exclusivity (Langer and Heil, 2015) Adding a human touch: A strong human touch and personal involvement occurs through the luxury manufacturers, artists, and craftsmen. However, in line with the creation of desire, the brand must be dominant in the client relationship and always provide an aspiration to strive for (such as through the portfolio tiering or collector’s items).

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D.10.3.2 Implications for the Creation of Consumer Desire (Philosophical, Cultural, Social, and Individual Perspective) Fueling desire to make consumers dream: Desire and the aspiration that it creates is at the core of what luxury is. It is what makes consumers dream. To fuel consumers’ desires, a luxury brand needs to seduce its consumers (Kapferer, 2009). Through objectification, a collection of impressions is abstracted to a higher frame of reference and concretized in an object (Belk et al., 1989). For example, through the creation of a myth, the consumption object can take on the magical properties associated with that myth and stand for more than its mere materialization. This can also include the appeal to a higher-level purpose, including aesthetics. By preserving the distance, continually enriching and refining the brand, and being innovative, a cycle of longing can be triggered (Belk et al., 2003). The self-seduction works if the object of longing is out of reach, yet not too far that the consumer loses hope (Belk et al., 2003). The object needs to pose a challenge to the consumer and thereby strengthen its mysterious and magical aura. Through continuous enrichment and refinement, brands ensure there is always something more for the consumer to reach out to. For example, through new stories around the product, a clear tiering of its portfolio (with up-sell paths), or introducing collections and collector’s items, brands can provide a new object for desire when the old focal object is at risk of losing its charm. Fueling this infinite cycle of desire requires continuous innovation. This requires creativity to explore the boundaries of the extraordinary and the opportunities for transgression. This might even include danger and immorality, which are found to be a strong source of desire, and its paradoxical relationships (Belk et al., 2003). Uncovering the magic and mystery of the brand: The magic reveals itself to those who believe in its imaginative power. Luxury brands and experiences can act as hierophanies (that is, appearances of the supernatural and sacred in the world of consumption) (Belk et al., 1989, p. 861). For example, brands that are built on myths can have the power to provide answers to deeply rooted cultural tension and thereby assume an iconic status (Holt, 2004, Holt, 2006). Brand myths can tap into the collective imagination and socialization of the sacred and magical (Belk et al., 1989). Luxury brands enchant and fascinate with their mystery, which embodies the creative spirit and the ideals of the brand. This goes beyond rational calculations and triggers the desires for profound meanings and experiences. Luxury brands need to tap into or even create their own myths, for example, around its history and heritage, purpose, personality, origin, creator, its products, or its consumers (Kapferer, 2009, p. 55). Myths typically employ different narrative devices, such as confusion (vagueness), contradiction (paradox), and accumulation (multiple layers

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of meaning) to build their mysterious and magical aura to further fuel the imagination of the consumer (Brown et al., 2013). However, they need to be authentic and hence believable, which can be objective (an authenticity manifested in the object), constructive/subjective (such as collectively- or individually-shaped experiences, dreams, or fantasies), or existential (such as the direct experience of pleasure or fun) (Leigh, 2006). This myth can be enriched with a story and intangible value by adding fiction and imaginary elements. This can create a hypothetical distance to the consumer and, thereby, fuel longing and desire. Enacting brand rituals: Brand rituals prescribe the rules by which to interact with the sacred and magical and provide a code of conduct on how to discover the magical properties of luxury (Belk et al., 1989). For example, heritage stores and the place of the brand’s origin are enriched with meaning through ritualistic performances and interaction rules (Dion and Borraz, 2015). The brand rituals extend into the social realm, along the entire customer journey, and also provide a territory to construct and show cultural capital to consumers. For example, in the acquisition stage, the product is being “contaminated” through contact with the magical brand rituals (Belk et al., 1989). Through gift giving, the rituals contribute to the formation of social relationships and their embedment in a broader social and cultural community. Myths of inheritance or the human content as expressed in handwork or labor nurture deeply-held cultural and relational values that foster an emotional, social connection (Belk et al., 1989). Possession rituals, such as personalization by the user or collecting (in which the combination becomes singularized into a whole), also contribute to the sacralization (Belk et al., 1989). The ongoing grooming rituals with interaction with the product charge the brand and experience with meaning, from numinous (transformation, magic), judicious (right/wrong), dramatic (play), and formal (adherence to standards) to ideological (formation of identity) (Rook and Levy, 1983). Creating an institutional network and expanding the magical aura: For myth creation to work, the brand needs to be embedded in a cultural ecosystem. This system provides the cultural blueprints in which the myths work and are enacted and the metaphysical and moral principles (what is allowed and forbidden) of the system that contribute to the magic and sacralization of the luxury. For example, cultural curators or institutions can sanction the brand and award it their sacred status until the brand becomes such an institution and authority itself (Belk et al., 1989). This magical aura can also be expanded beyond the original. While originals possess a magical aura, this aura can be transformed through similarity (imitative magic) and contagion (contagious magic) (Fernandez and Lastovicka, 2011). In this process, the abstract ideals are transferred to the replica to establish a symbolic relationship between the idea and the signifying object (Fernandez and 141

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Lastovicka, 2011). Due to the strong magical power of luxury brands and abstract brand construal, they can span a broad range of product categories (Albrecht et al., 2013a, Hansen and Wänke, 2011). Constructing symbolic capital: Luxury brands need to understand the specific dimensions of symbolic capital (economic, cultural, social,) required to succeed with their target customers and design the appropriate products and interactions (Bourdieu, 1984). While conspicuous and highly priced products are typically understood to signal economic capital, the adherence to cultural scripts and rituals, including the ones authorized by the luxury brand, can signal cultural capital and provide a different area for status construction. The knowledge required to consume the product and the implicit rules that guide the brand and social interactions build important areas to construct cultural capital that luxury brands need to understand and shape. These shared experiences and conventions can also lead to a feeling of communitas, which is the freedom and transcendence of normal social roles and the acceptance into the community (Belk et al., 1989). Establishing a system of status codes: The luxury signals provide an opportunity to signal affiliation and distinction, depending on the recognized conventions within the target segment (Han et al., 2010). Selecting and promoting the correct and relevant luxury signals within the target community can help the luxury brand enrich its products and services with social recognition and can also provide a space for symbolic status construction and the symbolizing of social relationships. A basic distinction is a differentiation between conspicuous (extro) codes (such as price) and inconspicuous (intro) codes (such as the authenticity and heritage). Establishing a clear tiering of status levels within the brand and defining consumer evolution paths (upsell) can help brands to manage their code system. This can range from visible and tangible status privileges (such as in frequent flyer programs) to discreet personalized service interactions (private sales and trunk shows) or invitations to exclusive events. Promising transformation and creating aspiration: Offering the chance for identity play and appealing to a consumer’s ideal self are tactics that luxury brands can employ to create the aspiration. By offering a symbolic inventory, they allow the consumer to playfully engage in identity transformations that are consistent with their aspired lifestyle. Leveraging the social environment and aspirational target groups create approach reactions that lead the consumer to strive for symbolic consistency with the possible self. Catering to higher-level needs: Luxury brands offer a means to satisfy a large range of needs, wants, and desires from self-protection to recognition and esteem, self-actualization, self-transformation, self-enhancement, and self-transcendence. However, the higher-level needs such as self-enhancement or self-transcendence

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play a strong motivational role for luxury consumption. Transcendent experiences that allow the consumer to experience fundamental tensions of life and death can create awe and fascination and lead to the experiences of ecstasy and flow (Belk et al., 1989). Staging the experience and enriching it with emotions: To make customers feel privileged and special and in shaping the social construction of status, the luxury experience must be exclusive and selective (Dion and Borraz, 2017). Staging the experience with symbolic meanings needs to be closely managed (Pricken, 2014, p. 147ff.). Management of customer experience across all brand touchpoints and a true omnichannel mindset are key to succeeding. Several exclusivity tactics exist that luxury brands can make use of to elevate their brand, products, and services to consumers. These tactics include distribution-based exclusivity—the limitation of purchasing opportunities to specific geographies or channels, such as using a selective channel strategy (Keller, 2009), access-based exclusivity—the pre-selection of eligible customers based on certain criteria by the brand, such as VIP status, and communicative exclusivity—the communicative creation of rarity (for example, through advertising, using specific brand spokespersons or ambassadors, exclusive events or placements) (Kapferer, 2009, p. 177ff.). Another form that adds to communicative exclusivity is the storytelling of the unique and extraordinary brand myths, its heritage and location in place and time or its creative genius. Making consumers feel special and appealing to their emotions: Emotions are the heart of luxury. Luxury brands intensify the felt and imagined emotions of its consumers. While emotions can be complex and even contradictory, passion and passionate imagining are crucial elements in the creation of desire. Creating positive emotions with the promise of pleasure can lead to arousal and transferring this effect to the desired object charges the object with emotion. Within this process of seduction, a particular tension that luxury brands can play on is the ambivalence between approach and avoidance (Kratophany) in which fascination and devotion to the sacred are mixed with fear and repulsion of its controlling power (Belk et al., 1989). The power of luxury to elevate the consumer, provide a stimulating experience, and fuel the consumer’s imagination distinguish luxury from ordinary experiences. An immersive and polysensual experience that appeals to all senses and the intellect can create an emotional aura (Keller, 2009). Building an emotional connection between consumers and the brand: Commitment and emotional attachment are key to building desire (Belk et al., 1989). However, particularly for luxury brands, the relationship needs to exhibit a strong dominance of the brand to create longing and trigger self-enhancement motives. It is crucial to stay relevant to the consumer’s lifeworld while maintaining the distance needed to create desire. This is particularly challenging with new emerging 143

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lifeworlds, such as digitalization. Digitalization is substantially changing the daily life of consumers. Thus, digitalization is also influencing the ways through which luxury brands relate to their consumers and might even have an impact on the nature of luxury itself, such as through the emergence of new product categories, for example, luxury technology (Abtan et al., 2016). The accessibility and transparency of the internet could potentially endanger the exclusivity of luxury brands; the exclusivity is essential for the value proposition of the brand (cf. Kapferer, 2009, p. 193ff.). The virtualization of interactions and even products and the immediacy and possibility of two-way interaction of digital channels require new capabilities in building and maintaining brand relationships with the consumer (cf. Annie Jin, 2012). In addition, the possibilities for the consumer to (co-)create brand experiences are much higher, providing risks and opportunities simultaneously. However, research has shown that the different social media marketing activities of luxury brands contribute to brand equity, the customer–brand relationship, and lead to favorable consumer responses (Godey et al., 2016, Kim and Ko, 2012).

D.10.3.3 Implications for Pricing Luxury Setting the price high: A luxury good has a high absolute price point and is the highest price tier within its category (Langer and Heil, 2015). This is particularly effective if the presumed price is higher than the real price as this leads to the perception of higher economic value and creates stronger status signals (Kapferer, 2009, p. 69). A high price also has a selection function, adding to the exclusivity of the brand (Kapferer and Valette-Florence, 2016). In addition, the requirement of personal sacrifice, for example, through the investment of personal resources such as time and money, can increase the desirability of the luxury object, building on the principles of desire creation and sacralization (Belk et al., 1989). Raising the price perception over time: Luxury brands should strive to raise average price perception over time to substantiate the perception of economic value (Kapferer, 2009, p. 70). This also includes a strict limitation of discounts, a discrete communication of the price to preserve the price illusion of a higher expected price, and the maintenance of the price differential compared to other brands in its category (Kapferer, 2009, p. 177ff.).

D.10.3.4 Managerial Requirements Adapting a long-term orientation and nurturing the brand through creative innovation: A long-term orientation and consistency is key to building a luxury brand. Only through time can the myths and legends unfold their social and cultural value and act as aspirational myths in the marketplace. The challenge is

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to be both true to the brand identity and its core values and relate to the always changing consumer lifestyles. This requires creativity and innovation to bridge the brand’s past with its future. This also includes the ability to engage in newly emerging topics (such as sustainability) and media (such as social media or even virtual reality). In addition, it requires careful business decisions regarding quick and profitable growth opportunities; brands need to have the courage to skip quick profits to preserve their identity. Creating a culture of excellence and orchestrating the different perspectives: Luxury strives for perfection and ideals and requires a management culture of excellence that embraces complexity, change, and diversity in its pursuit of the extraordinary (Som and Blanckaert, 2015, p. 233). This also requires a customer-centric mindset rooted firmly in the brand ideals and values and strives for consistent execution across touchpoints. Building a global luxury ecosystem: Luxury brands are global brands and they need a global presence in the key luxury hot spots to legitimize their institutional presence (Som and Blanckaert, 2015, p. 233). For a brand to be customer-centric, luxury brands need to build a global ecosystem with their resources. Brands also need to strategically select partners that would offer relevant lifestyle experiences and products to their target consumers, as well as facilitate individual and social experiences. This requires not only global thinking but also an entrepreneurial spirit to react to the changing environment and local market conditions while ensuring the global consistency of the brand. This global ecosystem can help to orchestrate the customer experience or legitimize the brand in new target groups (Belk et al., 1989).

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The Meaning of Luxury: Decoding Luxury Brand Communications4 E The Meaning of Luxury

E.1 Introduction E.1 Introduction

Luxury brands, such as Louis Vuitton and Hermès, are among the most valuable and renowned global brands (Interbrand, 2018). A large part of their value stems from the symbolic value they have built systematically over time. This symbolic value has also enabled luxury firms to grow in a broad range of diverse categories (Albrecht et al., 2013a). Advertising is one of the key instruments that luxury firms can leverage to confer their brands with meaning. It plays an important role in the creation, development, and management of the overall brand image. Yet scant research has investigated how luxury brands differ from premium and mass-market brands in creating their symbolic value in advertising, which is surprising given that brand meaning might be the essence of creating the luxury dream for consumers (Dubois and Paternault, 1995). Researchers have called for further work in this area to understand the cultural foundation of luxury through its creation in advertising and through values and storytelling (e.g., Bulmer and Buchanan-Oliver, 2006, Gurzki and Woisetschläger, 2017). Previous research conducted on the meaning of luxury has mainly focused on analyzing consumer perception and the reaction to luxury ads (e.g., Kwon et al., 2016) or the interpretation of a limited sample of advertisements, such as single ads (e.g., Freire, 2014). However, no research to date has investigated the structural 4 This section is based on Gurzki, H., Schlatter, N. and Woisetschläger, D. M. (2019), “Crafting Extraordinary Stories: Decoding Luxury Brand Communications,” Journal of Advertising, 40 (3), 401–414. © Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 H. Gurzki, The Creation of the Extraordinary, Applied Marketing Science / Angewandte Marketingforschung, https://doi.org/10.1007/978-3-658-29538-7_5

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patterns underlying the cultural construction of luxury in luxury brand adver­ tising compared with premium and mass-market brands advertising. Against this background, this study conducts a comparative systematic analysis of 208 print advertising campaigns consisting of about 1,700 individual ads from the primary advertising campaigns of four luxury brands, four premium brands, and four mass-market brands to identify the commonalities and luxury-specific differences. The study integrates and extends the previous research conducted on luxury and fashion advertising (e.g., Brioschi, 2006, Freire, 2014, Kim et al., 2015, Mortelmans, 2014, Mortelmans, 1998), visual rhetoric (e.g., McQuarrie and Mick, 1999, Phillips and McQuarrie, 2004), advertising values (Belk and Pollay, 1985), and luxury values (such as Gurzki and Woisetschläger, 2017, Tynan et al., 2010, Vigneron and Johnson, 2004, Vigneron and Johnson, 1999, Wiedmann et al., 2009) to better understand the cultural foundation and construction of luxury. To identify and illustrate the underlying structures and patterns that shape the socio-cultural construction of luxury, we focus on two interconnected dimensions: content, especially the themes and values that luxury brands emphasize in their advertisements, and the formal execution of this content through the construction of the sign system, use of rhetoric, and storytelling.

E.2

Theoretical background

E.2

Theoretical background

E.2.1 Meaning in Advertisements and the Creation of Sign Systems Advertising provides a rich source to understand the cultural construction of luxury because it mirrors the societal understanding of luxury (Belk and Pollay, 1985). This construction rests on the underlying codes that luxury advertisers systematically use to create the aspirational image of luxury. A key differentiating factor that sets luxury brands apart from non-luxury brands is their extraordinary nature, which results in high desirability and ultimately justifies their high price point (Gurzki and Woisetschläger, 2017). To convey their extraordinary nature and create desirability, luxury brands use specific thematic and formal communication codes. This study uses semiotics as a theoretical background to study how luxury brands make use of signs in their communication to create meaning. Semiotics is the study of sign relationships and is fundamentally concerned with the processes of meaning creation (Mick, 1986). The sign consists of a signifier, or the concrete image, and the signified, or the abstract concept that the signifier can express

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(Chandler, 2007, König et al., 2016, Mick, 1986). In the process of signification or meaning creation, a sign is interpreted in relation to other signs in the sign system (König et al., 2016). The conventions for interpretation are based on codes that facilitate the encoding and decoding of meaning and thus suggest a preferred reading (Chandler, 2007, König et al., 2016). Semiotics, and particularly its application to the sociocultural context of advertising, rests on several key assumptions (see Chandler, 2007, Kress and Van Leeuwen, 2006). First, we assume that advertisements contain and convey meaning (Williamson, 1992). Second, we assume that firms actively construct meaning to communicate with their target audiences. This choice reflects the managerial understanding of the brand identity that resonates with the consumer target group to construct the desired brand image. Third, we assume that meaning exists on multiple levels and are created through the relationships of signs in a specific context. The different signs form a structural sign system, in which the higher-level meaning is determined through the interrelationships between the different signs and their context. We propose that signs and their combination form codes that relate to content (what is being communicated; e.g., themes and values) and form (how it is being communicated; e.g., templates and rhetoric). Both semiotic codes (formal elements) and semantic codes (thematic codes) influence the meaning of the sign system (Oswald, 2012). It is, therefore, crucial to integrate both thematic and formal elements into the analysis (Cho et al., 1999). A semiotic approach is particularly well suited to this study for two reasons. First, the research stays close to the advertising execution in the analyses. This is particularly useful to derive templates for the managerial practice of luxury brand advertising from an expert assessment to uncover structural similarities across a large number of ads. Second, while asking consumers is likely to capture the evaluation of an ad, it is unlikely to reveal structural patterns used in the composition of the campaign. Marketers can build on structural templates that influence the consumer on a subconscious level as the consumer might either not be aware of the template and meanings or not possess the knowledge to directly uncover the underlying patterns (Gkiouzepas and Hogg, 2011, Goldenberg et al., 1999, Woodside et al., 2012). By tapping into cultural and social communication conventions, marketers can predictably convey their intended meanings in their marketing communications, despite the polysemic nature of ads (Scott and Vargas, 2007). Previous research has called for further investigation into the codification rules that marketers employ (e.g., Gurzki and Woisetschläger, 2017). Past research has identified a multiplicity of code systems which are used in luxury brand advertising. In his interpretative studies of watch and perfume ads, Mortelmans identifies four luxury-specific codes (golden code, 149

 

 

 

X

X

X

Mortelmans (1998, 2014)

Vigneron and Johnson (1999, 2004) Brioschi (2006)

Wiedmann, X Hennigs and Siebels (2009)

 

 

 

Tse, Belk and Zhou (1989)

 

 

Belk and Pollay (1985)

 

X

 

X

X

X

X

 

 

 

 

 

 

X

 

X

X

X

Context of study Type of study LuxFash- Adver- ConInterpreury ion tising sumer tative / survey Content analysis     X   X

Overview of existing research

Pollay (1983), Pollay and Gallagher (1990)

Study

Table 6

 

 

X

 

 

 

 

Conceptual

Luxury values, themes, appeals, codes identified

198 magazine ads (year 2000), 10 product categories, 112 brands; single researcher as interpreter 750 interviews

Functional (usability, quality, uniqueness); Social (conspicuousness, prestige); Individual (self-identity, hedonic, materialistic); financial (price)

Veblen code, snob code, quality / functionality code, emotion/hedonism/experiential code, aesthetic/artistic code, tradition code, modern/fashion code and country-of-origin-code

2000 advertisePractical (effective, durable, convenient) – ornamenments (1900–1980), tal; Cheap, unique popular; traditional – modern; random sample natural – technological; wisdom – magic; productivity – leisure; maturity – youth; mildness – wildness; sexy/vain, pride, status; Belong, family, community; healthy, neat 411 ads with Having, being, doing, luxury/pleasure, practical/ homes portrayed functional, beautiful/pretty (1900–1980) 964 ads (1979– Technology, modernity, hedonism, product perfor1985, all categories) mance, ingredients, product variety, distribution, value of purchase, image 145 watch Four luxury-specific codes (golden code, emptiness magazine ads, code, technology code (quality based), dandy code); 197 perfumes, 61 five non-luxury codes (taboo code, leisure code, relihousehold appligion code, family code, technology code (time based) ances N/A Conspicuous, unique, social, emotional, quality

Sample

150 E The Meaning of Luxury

Source: Own illustration

X

 

X

X

X

X

Ahn and Mundel (2015) Christini et al. (2017)

 

X

Kim, Lloyd X and Cervellon (2015)

X

X

X

Gurzki and Woisetschläger (2017) This study

 

X

Tynan, McKechnie and Chhuon (2010) Freire (2014)

X

 

 

X

X

X

 

 

 

 

 

X

 

 

X

 

 

X

 

X

 

 

X

X

 

 

 

X

Utilitarian, symbolic/expressive (outer-directed / self-directed), experiential/hedonic, relational, and cost/sacrifice

208 campaigns (1700 ads): mass-market, premium, and luxury

Transformational / historical (about change); Cultural / Natural (about cultural context); Philosophical; Social (about social context); Relational / Managerial (about company); Financial / economic (about value); Individual (about consumer); Material / Functional (about product); Formal codes

2 fashion ads; Authenticity (creativity, tradition, innovation), legacy single researcher as / heritage, beauty/rarity/exceptionality (refinement, interpreter uniqueness, prestige), longevity, respect (confidence, reliability / credibility), customer respect and loyalty 2 ads as stimuli; Status aspirations (exclusivity and uniqueness); ro270 women (84 mance (seduction and porn-chic); fantasy (Adventure, Australia, 106 travel); other-directedness (needs for attraction, France, 80 South attention, acceptance, comparison, and competitiveKorea) ness); self-esteem, power and success; sensory references (body feelings, nature, beauty, and heritage); activation (Consumption, ownership, spending, and shopping) 398 luxury fashion Accomplishment, classic, modern, originality/ ads (Argentina) uniqueness, performance, safety, sexuality, social (2009–2012) approval, technological N/A Place: public – private; Quality: excellence – mediocracy; Creativity: artistic – profitability; Spiritual: feeding – pandering; Time: long-term – short-term N/A Macro (Philosophical, historical, cultural), Meso (social, economic), Micro (material, individual, managerial)

N/A

E.2 Theoretical background 151

151

152

E The Meaning of Luxury

emptiness code, technology code (quality based), dandy code) and five non-luxury codes (taboo code, leisure code, religion code, family code, technology code (time based) that distinguish luxury advertisements from non-luxury advertisements (Mortelmans, 2014, Mortelmans, 1998). In her analysis of 198 magazine ads across 10 product categories, Brioschi (2006) identifies several codes made up of references and signs that luxury brands often use, such as the Veblen code, snob code, quality / functionality code, emotion / hedonism / experiential code, aesthetic / artistic code, tradition code, modern / fashion code and country-of-origin-code. Freire (2014) applies a semiotic analysis to two luxury advertisements to understand the signs, codes, images, and connotations which luxury brands use to illustrate how advertising underlines the identitary values of luxury brands. The study finds that luxury ads make use of rhetorical images that are often polysemic and use implicit symbolism to convey their identitary values (Freire, 2014). For example, Freire (2014) proposes that letters LV can stand for both the company name of “Louis Vuitton” and implicitly also “Le voyage” meaning the trip, thereby using an implicit and elliptic abbreviation to underline the central theme of traveling of the campaign he analyses. Looking at two advertisements, one of Louis Vuitton, one of Hermès, he proposes that authenticity (creativity, tradition, innovation), legacy / heritage, beauty/rarity/exceptionality (refinement, uniqueness, prestige), longevity, respect (confidence, reliability / credibility), customer respect and loyalty are core luxury brand values that the luxury brands use in their communication to create their brand identity (Freire, 2014). Kim et al. (2015) identify seven themes in luxury brand ads: 1) status aspirations; 2) romance, seduction and porn-chic; 3) involvement with a fantasy world or adventure; 4) other-directedness; 5) self-esteem, power and success; 6) sensory world of beauty, nature, body and feelings; 7) activation. While the codes differ across studies, they can be subsumed under three levels of discourses, that is macro, meso, and micro-level discourses (cf. Gurzki and Woisetschläger, 2017). For an overview of the values identified in previous research see Table 6 and Table 7.

X

X

Christini et al. (2017)

Source: Own illustration

X

X

Gurzki and Woisetschläger (2017) This study

X

Kim, Lloyd and Cervellon (2015) Ahn and Mundel (2015)

X

X

X

X

X

X

Wiedmann, Hennigs and Siebels (2009) Tynan, McKechnie and Chhuon (2010) Freire (2014)

X

X

Vigneron and Johnson (1999, 2004) Brioschi (2006)

X

X

Cultural (about cultural context)

Macro

Mortelmans (1998, 2014)

Tse, Belk and Zhou (1989)

X

Transformational (about change)

Mapping of luxury values

Pollay (1983), Pollay and Gallagher (1990) Belk and Pollay (1985)

Study

Table 7

X

X

X

X

X

X

Philosophical (about reality)

X

X

X

X

X

X

X

X

X

X

X

X

Social (about social context)

X

X

X

X

X

X

Economic (about value)

Meso

X

X

X

X

X

X

X

X

X

X

X

Individual (about consumer)

X

X

X

X

X

X

X

X

X

X

X

X

X

Material (about product)

Micro

X

X

X

X

X

X

X

X

X

X

Relational (about company)

E.2 Theoretical background 153

153

154

E The Meaning of Luxury

E.3

Method and Data Collection

E.3

Method and Data Collection

E.3.1 Context of Fashion

We focus our analysis on fashion advertisements, as fashion provides a theoretically rich and relevant setting to understand the symbolic construction of luxury. First, the most valuable and renowned luxury brands are active in the fashion category; therefore, understanding the evolution of these successful brands requires focusing on their primary image-building and most economically relevant categories. Second, fashion is a highly symbolic product category, which makes it a theoretically interesting context to assess the cultural construction of luxury and its meanings within its sophisticated sign system (Belk and Pollay, 1985, Phillips and McQuarrie, 2011). Third, fashion itself, as a category, poses challenges to the existing theory, as ads diverge from idealized conventions (e.g., the presence of grotesque images) (Phillips and McQuarrie, 2011). Finally, as product categories themselves have certain category-specific codes, it is crucial to remain within a single product category, particularly when comparing the differences among luxury, premium, and mass-market brands, so as not to confound the category-specific with luxury-specific effects (Belk and Pollay, 1985).

E.3.2 Data collection and sampling We based the sample for this study on theoretical considerations. The study analyzes the largest and commercially most relevant European luxury and fashion brands with a global presence. To determine how values, themes, and formal features are different for luxury brands, we contrast luxury brands with premium and mass-market brands. This classification is commonly used in both practice and academic research to distinguish among different price points within a category (Kapferer and Bastien, 2009a, Vigneron and Johnson, 1999). Given the polysemic nature of advertising, focusing on the campaign level helps overcome the idiosyncrasy of individual advertisements by contextualizing them and identifying shared signs and codes across ads to converge with a dominant reading and thematic focus for the campaign. For each level, we use a constant comparative approach to compare the similarities and differences across the ads to build an emerging theory. By doing so, we can identify the dominant values at the brand level. The same applies for a comparison across brands at the category level. This approach results in an overall sample of 208 advertising campaigns consist­ ing of about 1,700 ads from four luxury (2000–2015), four premium (2011–2015),

E.3 Method and Data Collection

155

and four mass-market (2011–2015) brands. The sample includes the main campaigns (spring–summer [SS] and autumn–winter [AW]) for four leading luxury brands (Burberry, Hermès, Louis Vuitton, and Valentino), four leading premium fashion brands (Lacoste, Michael Kors, Tommy Hilfiger, and Ralph Lauren Collection), and four mass-market brands (H&M, Zara, GAP, and Mango). We selected these brands for their size and commercial relevance as well as their different communication styles and positioning to generate a large set of potentially relevant categories in our category formation process. We verified their positioning using industry classifications and their average price point. As most luxury brands communicate globally, we selected the global lead campaigns for the brands (see Kim et al., 2015). In collecting the data, we used the U.S. Vogue archive as the main source.

E.3.3 Decoding Procedure and Scheme This study builds on grounded theory and employs a constant comparative method to derive the codes (Glaser and Strauss, 1967). In the decoding process, we undertook the theoretical considerations and initial readings of the data to define a code scheme for the thematic and formal features. We use the term code herein to refer to the structural, thematic, and formal patterns as well as values that the brand uses in its advertising communication across campaigns. These codes facilitate dominant readings and underscore the identitary values and discourses of luxury brands (Freire, 2014). Three researchers conducted the decoding in multiple rounds of joint discussion and interaction with the data (Arnold and Fischer, 1994). For the formal features, templates, signs, and rhetoric as the indicators of enrichment, different facets of distancing, and thematic codes at the macro-, meso-, and micro-levels of abstraction, we used a deductive decoding scheme based on theoretical considerations. In the analytical approach, this study proceeds at four levels (ad, campaign, brand, and category). This distinction is important to differentiate between the systematic and idiosyncratic elements used in advertising execution. For example, if an element such as an object is used systematically within a single ad or across multiple advertisements, it can be considered a purposeful choice within the context of the campaign. Similarly, the elements used across campaigns can be considered more relevant to the construction of the brand’s identity in the advertisement compared to those elements that are only used in single instances. At a category level, the elements used consistently and systematically across brands can be considered

155

Fig. 14 Analytical framework for advertising study



Source: Own illustration

2000 SpringSummer

SpringSummer

Category Brand Campaign Individual Ad

…

Premium

AutumnWinter

3 categories 12 brands 208 campaigns 1700 ads

Luxury

AutumnWinter

Sample

2015

Mass market

SpringSummer

This study

AutumnWinter

Levels of Analysis

Figure 14: Analytical framework for advertising study

Content and form of individual ad

Commonalities and differences across ads

Commonalities and differences across campaigns

Differences between Luxury, premium, and mass market

Analytic focus

156 E The Meaning of Luxury

E.4 Findings

157

category codes and illuminate communication strategies within the fashion category. At the category level, the differences among luxury, premium, and mass-market highlight luxury-specific codes (for an illustration, see Figure 14).

E.4 Findings E.4 Findings

This study finds noticeable differences in luxury print advertisements that can be classified in three dimensions: enrichment, distancing, and abstraction. First, luxury brands use enrichment to provide the brands with meaning, mainly through symbolism, rhetoric, and storytelling. Second, luxury brands more often use distancing techniques (temporal, spatial, social and hypothetical distancing) than non-luxury brands. Third, luxury brands create discourses on a more abstract level, leaving open multiple routes of interpretation. Table 8 contains counts of the most important characteristics.

157

Distancing

Enrichment

Sample

     

Table 8

5 2

Temporal distancing (Count)

Social Distancing (Count)

Hypothetical distancing (Count)

4

0.3

Spatial Distancing (Count)

Distancing (Average of Dimension sum; 0–4)

1.4

Rhetorics (Average; 1 – low; 3 – high)

1 1.4

Product & Model / Object & Setting & Story (Count)

Symbolism (Average; 1 – low; 3 – high)

17 22

Product & Model / Object & Setting (Count)

-

Product only (Count)

Product & Model / Object (Count)

 

Dominant template used

40 472

Number of individual ads (% of total ads)

#

5%

13%

0%

10%

-

-

-

3%

55%

43%

0%

 

28%

19%

%

5

17

4

26

1.3

1.4

1.7

2

30

8

-

 

313

40

#

13%

43%

10%

65%

-

-

-

5%

75%

20%

0%

 

19%

19%

%

22

26

16

24

2.2

2.1

2.3

6

25

9

-

 

319

40

#

55%

65%

40%

60%

-

-

-

15%

63%

23%

0%

 

19%

19%

%

39

73

17

27

1.8

1.9

2.2

13

52

23

-

 

587

88

#

44%

83%

19%

31%

0%

-

-

15%

59%

26%

0%

 

35%

42%

%

Mass Luxury Luxury Premium Market main extended (2011–2015) (2011–2015) (2011–2015) (2000–2010)

Number of campaigns (% of total campaigns)

Findings of advertising analysis

68

121

37

81

1.5

1.7

2.0

22

129

57

-

 

1691

208

#

%

33%

58%

18%

39%

0%

-

-

11%

62%

27%

0%

 

100%

100%

Total

158 E The Meaning of Luxury

Abstraction

Social (about social context)

8

-

Relational (about company)

32

32

Material / Functional (about product)

Individual (about consumer)

Micro

8

-

Meso

Transformational (about change)

-

Cultural (about cultural context)

Macro

#

0%

0%

80%

80%

20%

20%

0%

0%

0%

% -

-

-

-

17

17

23

23

#

0%

0%

43%

43%

58%

58%

0%

0%

0%

%

5

3

8

-

2

12

14

18

18

#

0%

5%

30%

35%

45%

45%

13%

8%

20%

%

2

-

51

53

25

25

2

8

10

#

Source: Own illustration

2%

0%

58%

60%

28%

28%

2%

9%

11%

%

Mass Luxury Luxury Premium Market main extended (2011–2015) (2011–2015) (2011–2015) (2000–2010)

Explanation Use of symbolism, rhetorics: 1 – low; 3 – high Distancing: Average of dimension sum [0 – no distancing dimension present; 4 – all distancing dimensions present] Distancing Dimensions (Spatial, temporal, social, hypothetical): 0 – not present; 1 – present #: Average or Count of Campaigns %: Share of Category total (Mass Market, Premium, Luxury)

     

2

2

112

116

74

74

7

11

18

#

%

1%

1%

54%

56%

36%

36%

3%

5%

9%

Total

E.4 Findings 159

159

160

E The Meaning of Luxury

E.4.1 Enrichment: Luxury Signs and Rhetoric E.4.1.1 Signification: The Sign System of Luxury. Luxury brands construct more complex sign systems to enrich the advertising message with meaning. We find a gradual increase in the complexity and richness of the sign system from the mass-market, to premium, to luxury brands and the differences in the signs used. In addition, the type of signs used differs among the brand types. In this study we code the complexity of the sign system from low (1) to high (3) for each campaign find that there is a gradual increase from mass-market (1.4) to premium (1.7) and luxury brands (2.3 main; 2.2 extended). Mass-market brands use a less complex system and often take signs from everyday life occasions in which object and setting do not play a prominent role (e.g., H&M SS2012). Premium brands mainly use signs of an aspirational lifestyle, such as small and easily identifiable sets of status symbols (e.g., use of country houses by Ralph Lauren, luxury vehicles by Michael Kors, or modern architecture by Lacoste). Luxury brands have a much broader set of both brand-related signifiers (e.g., the color orange, a horse, a butterfly, a path for Hermès; signs associated with travel for Louis Vuitton; signs from the art world for late Valentino campaigns; symbols that stress the British heritage of Burberry) and luxury-related signs (e.g., references to crafts and arts, references to exotic places). These signs carry specific cultural meanings that are connected with the brand values in various ways. For example, Hermès SS2009 uses multiple distinct signs across the campaign and relates them in a way that visually evokes further signification, such as the iconic arrangements of the plates to form a path or the balloon bags to resemble a scale. Such signs can carry multiple meanings depending on the context in which they are shown or viewed, thus enriching the ad and campaign offering multiple possible readings. While we find that the use of specific signs is more closely related to an individual brand than to the luxury category as a whole, we find structural similarities across brands, and most prominently with references to art as expressed by the visual style and creative construction (versus direct depiction of artworks). One example of a brand that has systematically built its sign system over time to establish its brand identity is Hermès (for an illustration, see Figure 15). Through its systematic and consistent use of thematic and formal devices, Hermès has built a set of visual characteristics that emphasize its brand values. Many of its thematic signs come from nature, such as animals, most prominently butterflies and horses. For example, horses are often featured as companions to the protagonist and thereby can potentially be interpreted as a friend or someone with a special relationship. Another symbol that Hermès frequently uses is the butterfly, which could stand for transformation or ephemerality, particularly if contrasted with a tree, which

Fig. 15

Horse: Heritage, companionship

SS 2000

AW 2006

SS 2008

AW 2014

Butterfly: Transformation

SS 2009

SS 2014

SS 2012

AW 2012 SS 2013

AW 2009

SS 2009

AW 2000

Path: Progress

Thematic

Figure 22: Symbolism - example Hermès

SS 2006

AW 2004

SS 2010

SS 2009

AW 2005

SS 2001

SS 2002

AW 2002

Dynamics: Movement

Hand: Craftsmanship

Formal

SS 2010

SS 2008

AW 2007

SS 2004

Color: Orange

32

E

E.4 Findings 161

Source: Own illustration

Symbolism – example Hermès

161

162

E The Meaning of Luxury

could symbolize permanence and stability (as in SS2012). This combination of signs can further point to more abstract identitary values of the brand, such as artistry, tradition, and heritage, or even trust, as analyzed by Freire (2014). Another more abstract symbol that frequently occurs is the path (e.g., footprints as in AW2000 and AW2009, plates as in SS2009), which could be interpreted as progress and change, marking a symbolic transition from past to future. A final thematic reference that Hermès often uses is the hand, potentially signifying craftsmanship and human touch, which on a more abstract level could be interpreted as creating discourses about tradition and progress or crafts/art and science/technology. Of the formal dimensions, the systematic use of implied movement and the color orange are characteristic of Hermès across ads, which thereby acquire a symbolic property and recognizable code in their language. These formal devices can also carry a meaning of their own and interact with other signs. For example, movement and dynamism could signify progress, thereby providing a formal correspondence to the iconic path often featured.

E.4.1.2 Rhetoric: The Rhetoric of Luxury. This study mainly builds on the rhetorical framework of McQuarrie and Mick (1996). Figure 16 shows an example of the codebook to assess the complexity and richness of the overall rhetorical structure. For example, Zara SS2001 exhibits a low rhetorical complexity, as it only features a model in different poses; yet, other than a potentially repetitive image, there is little evidence of more complex rhetorical operations across the images. An example of medium rhetorical complexity that uses a selective set of signs in dominant rhetorical devices across a campaign would be Louis Vuitton SS2011. In this campaign, the repetition and juxtaposition of the model in real life and on billboards help create a rhetorical tension. An example of high complexity and richness would be Hermès AW2003, which uses multiple complex and distinct rhetorical devices across a campaign. For example, image (a) uses the repetition of a flying cloth within a picture, and images (b) and (c) use substitution (ellipses) and destabilization (paradox) by replacing roots with a bag and a trunk with a model. Luxury brands use rhetorical devices and particularly complex rhetoric more frequently in their communication than do premium and mass-market brands. In this study we code the overall complexity of the rhetorical structure from low (1) to high (3) for each campaign find that mass-market and premium brands are similar in the use of rhetorical devices (both 1.4), whereas luxury brands make a more elaborate use of rhetorical devices (2.1 main; 1.9 extended). We find that premium and mass-market brands are similar in rhetorical complexity while luxury brands employ a more complex rhetorical structure. While premium and mass-market

Low

H&M: SS 2012

• Presentational mode for new collection (shopping window)

• Color: red • Contrast model in foreground, white neutral background

• Creation of aspirational setting (vehicles, private pilot)

• Setting: Outdoor • Objects: Luxury vehicles (Sports cars, helicopter) • Models: Couple • Colors: Red, Yellow (Dress vehicles), • Blue sky • Use of space: high

Michael Kors: SS 2013

• Some use of symbolism to establish setting and context

Medium

b

c

Setting: Desert, beach; Sunny Objects: Several (bags, flying carpet, plates, cloth, butterflies) Models: Mixed (prominent female model & model hardly seen) Colors: Bright sand; light blue (sky) Lighting: Contre-jour

Hermès: SS 2009

d

• Different symbolic messages • Observations Title: "La belle evasion" – Beautiful escape a) bags are calibrated in a way that resembles a scale b) Flying carpet c) Collection of pieces of tableware forming a path; model at the end of path walking on it, toughing the plates only with her tiptoes d) Flying cloth featuring suitcases that is carried by butterflies; in front of sun – hiding the sun, yet letting light through; hand nearly touching the cloth • Interpretation a) possible interpretations: Journey; Balanced, Equilibrium, Justice, .... b) Magic, 1001 nights, dream, travel c) Path (below the water surface) d) Dreaming of ; balance between holding on and letting go Possible story themes "Escape" – going away to extraordinary places; 26 "Progress": Balance, Movement forward (left to right)

• • • • •

a

• Strong use of symbolism beyond requirements by template

High

Complexity of sign system and significance for advertisement (iconic, indexical or symbolic references apart from model and setting)

• Little use of additional signs in ad system beyond contextual factors



Symbolism – complexity of sign system

Figure 16: Codebook symbolism E

E.4 Findings 163

Fig. 16 Codebook complexity of the sign system and rhetoric structure

Source: Own illustration

163

164

E The Meaning of Luxury

s mainly use schemes characterized by excess regularity, especially variants of repetition, luxury brands use more tropes characterized by excess irregularity, such as substitution and destabilization. Figure 17 showcases examples of commonly used rhetorical devices (without striving to be comprehensive) by luxury brands. McQuarrie and Mick (1996) propose to differentiate between two figurative modes (schemes and tropes) and four categories of rhetorical operations (repetition, reversal, substitution, and destabilization). Schemes are characterized by excess regularity, such as repetition and reversal (e.g., antithesis [the use of binary opposites]). Tropes are characterized by irregularity, such as substitution (e.g., ellipsis [omission] or metonymy [a part versus whole relationship]) and destabilization (e.g., metaphor [substitution based on underlying similarity] or paradox [a self-contradictory statement]). In this sample, we find the use of repetition of different ad elements such as models (Valentino AW2015) or models and elements in the setting (e.g., background shapes in Louis Vuitton SS2013). For the reversal of elements, the antithesis is most apparent in luxury advertisements. It is especially used as a device to contrast or incorporate binary opposites and thereby facilitates a preferred reading. For example, the Hermès SS2001 campaign features a face and splashes of water with a hand in between to separate the two. This separation could be interpreted as the hand shielding and protecting the face from water. Going one level deeper and taken in the context of the entire campaign that employs similar rhetorical structures, the water splashes could be interpreted as nature and the face as a human being standing for culture, thereby creating an antithesis between nature and culture. Similarly, the Hermès SS2012 ad featuring a woman wearing cloth that resembles the wings of a butterfly standing next to a solid tree could be interpreted as an antithesis of nature (tree) and culture (human being). One alternative interpretation could also include the reading of ephemerality as symbolized by the butterfly and permanence as symbolized by the tree, thereby creating a discourse about fundamental existential questions (Freire 2014).



Valentino: AW 2015

Louis Vuitton: S/S 2013

Repetition of advertising elements

Repetition

Hermès: SS 2012

Hermès: SS 2001

Antithesis

Reversal of advertising elements • Antithesis: Incorporation of (binary) opposites in a picture

Reversal

Scheme (excess regularity)

Hermès: AW 2006

Louis Vuitton: A/W 2008

Hermès: SS 2004

Metonymy

Valentino: SS 2013

Ellipsis

Destabilization of meanings through combination of ad elements

Substitution of elements in an ad • Ellipsis (presence or absence): A gap or omission that has to be completed • Metonymy (center or periphery): Use of a portion, or any associated element to represent the whole

Hermès: AW 2009

Hermès: SS 2003

Hermès: AW 2003

Paradox

Hermès: SS 200328

Hermès: AW 2006

Metaphor

Similarity • Metaphor: Substitution based on underlying resemblance Opposition • Paradox: A self-contradictory, false or impossible statement

Destabilization

Substitution

Trope (excess irregularity)

Figure 18: Overview of rhetorical devices used by luxury brands E

E.4 Findings 165

Fig. 17 Overview of rhetorical devices used by luxury brands

Source: Own illustration based on (McQuarrie and Mick, 1996)

165

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Within the category of substitution, two commonly used devices are ellipses and metonymy. Ellipses highlight the presence or absence of certain elements in the ad, mainly leaving a gap that needs to be completed. For example, Valentino SS2013 uses two pictures for each ad, one with a model and the product on a transparent chair and one with the product only. While the absence of the model is noticeable in itself, it is further highlighted by the presence in the picture next to it, hinting at the use of ellipses. More commonly used are metonymies, in which a part serves to represent a whole. For example, Hermès AW2006 features a hand offering a ring to a horse close to its mouth. This picture resembles a picture of a hand giving a piece of sugar or food to the horse, with the difference being the substitution of the sugar with a ring. This substitution thus acquires special significance in which the ring can be interpreted as a sign of manifesting a relationship, similar to an engagement of humans. Following this interpretation, the horse can again be viewed as a substitute for a human being and, at a further level of significance, can be judged as representing the Hermès brand; that is, the horse attains a symbolic meaning through its consistent use. Last, destabilization is often used in luxury advertising. Metaphors based on similarity and underlying resemblance appear, for example, in Hermès SS2003, in which cloth with a thread is staged under water and arranged in a way that resembles a stingray. Conversely, a paradox (i.e. a self-contradictory or impossible statement) can be created in the campaign. For example, Hermès AW2003 features a person holding the branches of a tree with his hands arranged in a way that the entire composition resembles a tree, but with the difference that the tree stem is a human being, which thereby becomes a self-contradictory statement.

E.4.1.3 Storytelling and Mise en scène: The Templates of Luxury Advertising. In this sample, we can identify four structural templates (see Phillips and McQuarrie, 2011): (1) product only; (2) product and model/object; (3) product, model/object, and setting; and (4) product, model/object, setting, and story (for an overview of the visual campaign blueprints, see Figure 18). The choice of template reflects the various aspects of the mise en scène of the campaign. Mise en scène refers to the formal dimensions that contextualize and arrange the systematic relationships between the signs (e.g., through their spatial arrangement). These dimensions can also have a meaning of their own (e.g., the cultural meaning of space). Mise en scène encompasses a wide range of formal considerations such as color, light, contrasts, use of space, movement, and perspective. For example, previous research has shown that color can have many different functions, such as symbolically evoking cultural associations surrounding a particular color or serving metafunctions, such as creating mood through the use of warm or cold color palettes (Kress and



Mass Market

Premium

Luxury

GAP: SS 2014

Mango: SS 2014

Tommy Hilfiger: AW 2013

Ralph Lauren: SS 2014

Product + model + setting

Louis Vuitton: S/S 2004

+ Setting

Burberry: SS 2008

Product + model

Figure 15: Storytelling - visual campaign blueprints + Story

H&M: SS 2015

Michael Kors: AW 2012

Hermès: AW 2008

25

Product + model + setting + story

E

E.4 Findings 167

Fig. 18 Storytelling – Visual campaign blueprints

Source: Own illustration

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Van Leeuwen, 2002). Space also has certain semantic meanings beyond its syntactic functions. For example, white space in advertising can influence consumer perceptions of quality, prestige or trust (Pracejus et al., 2006). Positioning in space also has certain cultural connotations. For example, in a Western cultural context, the horizontal axis typically marks the change from old (left) to new (right), while the vertical axis is associated with the real (bottom) and the imaginary (top) (Kress and Van Leeuwen, 2006). Luxury brands use richer and more complex templates than premium and mass-market brands, often engaging in storytelling (see Figure 2). The simplest template is the product only. While previous studies have shown the existence of this template in other luxury categories (e.g., Mortelmans, 2014, Mortelmans, 2005), our findings consistently show that within the fashion category, brands rarely rely on product-only templates, with few exceptions for individual ads, primarily of handbags and shoes within a campaign. This notable difference is due to our focus on the campaign level but might also be explained by the product category. Other product categories, such as fragrances and watches, often do not have as many different individual ads but focus instead on one or a very limited number, with a stronger product focus. All campaigns in our sample feature at least a product and a model or object. Mass-market brands often use a simple product & model template (43%), which is a striking difference, compared to premium brands (20%) and luxury brands (23% in main sample, 26% in extended sample). A characteristic of this template is that the ads are set in a neutral space, such a studio with a white background, and the models often directly look at the camera. More advanced versions of this template feature different objects that can serve as meaning carriers (e.g., a snake, sand, water). This template is comparable to a portrait. The third identified template includes a setting other than the product, model, or objects and is most commonly used across brands. A setting such as a desert or city scene serves to provide further context and meaning. Premium brands in particular rely heavily on this template to provide a richer reference system and enrich the content of the ad and campaign (75%; compared to 55% for mass-market brands and luxury brands with 63% in the main and 59% in the extended sample).. Storytelling templates show different settings or scenes in individual ads that are connected across a campaign. Thus, they provide richer opportunities for interpretation. Viewed within the context of the entire campaign, this visual template evokes the impression of cinematic movies. In comparison with simpler templates, it more often uses the camera view of a passive observer. Models do not directly look at the camera, which is more common in less enriched templates. While most luxury campaigns also use a template including the setting, some go beyond this to

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tell a story across a whole campaign, adding narration and dynamism (15% in main and extended sample; 3% mass-market brands; 5% premium brands). Hermès most often uses this template, adding its own visual style, for example characterized by dynamism and lightness (see Figure 15).

E.4.2 Distancing We differentiate among four distancing dimensions: temporal (focus on temporal setting: references to tradition, and the past or the future), spatial (focus on spatial setting: extraordinary places such as exotic or remote locations), social (focus on models: status references, and model appearance and behavior), and hypothetical (focus on the overall image and degree of realism: surrealistic scenes, and art). We included distancing as a dimension given the theoretical considerations and emergent findings after the initial rounds of coding. The dimensions are in line with the dimensions identified in the previous research conducted on construal-level theory (Trope and Liberman, 2000, Trope et al., 2007). Previous studies have shown that luxury brands have a higher psychological distance, leading to more abstract mental representations (Hansen and Wänke, 2011). Figure 19 and Figure 20 illustrate the distancing dimensions.

169



Fig. 19 Distancing devices

Source: Own illustration

Hermès: SS 2008

Hermès: SS 2006

Burberry: AW 2005

Specific places

Valentino: SS 2014

Remote locations

Louis Vuitton: SS 2003 Burberry: SS 2003

Louis Vuitton: AW 2012

Burberry: AW 2001

Hermès: AW 2012

Bridging time periods

Louis Vuitton: SS 2012 Burberry: AW 2006

Valentino: SS 2005

Valentino: AW 2001

Hermès: SS 2011

Hermès: SS 2010

Hermès: AW 2010

Hermès: SS 2000

Hermès: AW 2000

29

Hermès: SS 2002

Hermès: AW 2006

Hypothetical behaviors

Valentino: SS 2015

Valentino: AW 2013

Fictive personas

Valentino: SS 2007

Unusual behavior

Valentino: AW 2000

Hypothetical events

References to status motives and aspirational target groups

References to past

Abstract / fictional places (non-studio / neutral background)

Hypothetical Creation of hypothetical distance compared to ordinary consumer world

Creation of social distance compared to ordinary consumer world

Temporal Creation of temporal distance compared to ordinary consumer world

Spatial

Social

E Exemplary

Creation of spatial distance compared to ordinary consumer world

Figure 19: Distancing devices

170 E The Meaning of Luxury

• Social distancing: aggressive behavior

Valentino: AW 2001

H&M: AW 2014

• No visible distancing to contemporary consumer lifeworld

Distancing in one dimension

No Distancing

Figure 20: Codebook distancing

• Spatial distancing: Bed of roses and field of flowers • Hypothetical distancing: Lying in dream-like bed of roses setting

Valentino: SS 2006

Distancing in two dimensions

• Spatial distancing: Fictive forest setting, incl. interior furniture • Temporal distancing: Different seasons • Hypothetical distancing: Two seasons at the same time

Hermès: AW 2012

Distancing in three dimensions

30

• Spatial: Abstract geometric setting • Temporal: Retro look • Social: Social distance • Hypothetical: Situation is constructed and unlikely to occur in reality

Louis Vuitton: S/S 2013

Distancing in all dimensions

E

E.4 Findings 171

Fig. 20 Codebook distancing

Source: Own illustration

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Counting the four different distancing dimensions used, this study finds that mass-market brands hardly use any distancing (0.3). If they use distancing, it is mainly spatial (10%) or social (13%). Premium brands make a more frequent use of distancing (1.3), particularly spatial (65%) and social (43%). Luxury brands make the most frequent use of distancing operations (2.2 main; 1.8 extended sample). For nearly all luxury brands, we find a frequent use of distancing devices in one or more dimensions, particularly social (65% main, 83% extended), hypothetical (55% main, 44% extended), spatial (60% main, 31% extended), and temporal (40% main, 19% extended) distancing. Comparing the two luxury samples with different time periods with the main sample from 2011-2015 and the extended sample from 2000-2010, we can see a slight shift from social towards spatial, temporal and hypothetical distancing in the recent years. Luxury brands, use certain tactics to distance themselves from the realm of the ordinary (Kapferer and Bastien, 2009a, McCracken, 1990). The use of distancing devices in luxury brand ads is another striking difference from premium and mass-market brands. Considering the four distancing dimensions used, we find that mass-market brands seldom use any distancing. If they do so at all, it is mainly spatial or social distancing. Premium brands make more frequent use of distancing, particularly spatial and social distancing. Luxury brands use distancing the most. For nearly all luxury brands, we find a systematic use of distancing devices in one or more dimensions, particularly social, hypothetical, spatial, and temporal. For temporal distancing, mass-market brand ads are most often set in a contemporary environment, with only a few evoking references to the past or nostalgia through composition and symbolism (H&M AW2015, with its antique car). Premium brands sometimes use temporal distancing (Ralph Lauren AW2015, AW2012) but are also often set in a contemporary environment. By contrast, luxury brands often position their advertisements in the past (through symbolism and visual style), evoking feelings of nostalgia, implicitly emphasizing the brand’s legacy and heritage through this connectedness (Burberry AW2004, AW2002; Louis Vuitton SS2007, AW2012; Valentino SS2001). Another way to create temporal distancing is by evoking narrative transportation to, for example, childhood memories (Hermès SS2000). For spatial distancing, mass-market brands seldom use a setting and are often set in a studio. If a setting is used at all, it is most often a realistic depiction of an everyday life setting. A few exceptions include Zara AW2015 and SS2014 with an indoor garden, mirroring earlier campaigns by luxury brands such as Burberry SS2009. Premium brands tend to use spatial distancing to portray socially aspirational lifestyles, such as the global jet-set (Michael Kors), or to connect with traditional activities of the upper class (Ralph Lauren). Luxury brands often depict aspirational settings that are remote locations, feature nature, or are even entirely imaginary

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(often combined with hypothetical distancing). For example, Hermès often uses nature as a place of aspiration (e.g., the 2003, 2008, and 2009 campaigns). Though aesthetic, these natural settings also give the impression of being quite distinct from one another and of being more remote than the global cities of consumption, where the brand and a large part of its consumers are present (e.g., staging in the mountains, desert, or arctic). Valentino distances many of its ads, spatially staging them in surroundings that trigger associations with mystic places (supported by the behavior and looks of the models) (SS2014, AW2012, SS2012). Another method of spatial distancing is to place the models and products in the context of artworks or architectural settings dominated by abstract geometric shapes (Valentino AW2013, AW2015). This is often underscored with formal codes reminiscent of fine arts and thus hint at an art theme. Mass-market brands rarely use social distancing. Only the infrequent use and referencing of status symbols such as sports cars (Mango AW2011) or models with slightly discrepant behavior (Zara AW2015) appear in the ads. Instead, mass-market brands feature relatable models, looking at the camera, which may be at eye level, and sometimes even smiling. By contrast, premium brands make more frequent use of social distancing devices, for example through arrogant model looks or the use of status symbols such as helicopters, boats, and sports cars (Michael Kors SS2013, AW2013). Luxury brands often emphasized social distance in earlier years by, for example, creating symbolic exclusion from the group (Valentino AW2000, SS2000), discrepant model behavior such as models fighting with each other (Valentino AW2001), openly sexual appeals (Valentino SS2003, AW2006), social domination (LV SS2000, AW2003), or group identities (Burberry AW2006). For hypothetical distancing, mass-market brands mainly use a high degree of realism in scenes taken from everyday life. Premium brands also depict realistic or at least conceivable scenes from the lives of their target consumers or their aspired lifestyles. Luxury brands differ substantially in this regard, as they often possess a high degree of fiction, showing scenes that are impossible or at least difficult to conceive in everyday life – for example, models dancing with a fictive ribbon (SS/ AW2007) or a woman riding on a magic carpet (SS2009). Hypothetical distance can also be created through the use of mystical settings (Hermès SS2014, SS/AW2015; Valentino AW2012, AW2011), staging in a surreal setting such as an artwork (Valentino AW2013; LV SS2013, SS/AW2015), or exaggeration and displacement (e.g., the candy shop scenes in LV SS2012). Formal features, such as frames, prints, or paintbrushes on the picture, can also add to hypothetical distancing through the exposure of the advertisement not as a depiction of reality but as an artistic construction (Burberry SS2004, SS/AW2003, Hermès SS/AW2011). 173

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Looking at the different distancing techniques used by luxury brands, our findings show that the distancing dimensions differ between brands (see Table 9). Hermès makes the most frequent use of distancing across dimensions (on average distancing in 2.5 dimensions per campaign), followed by Louis Vuitton (2.2), Valentino (2.0) and Burberry (1.0). Hermès makes frequent use of hypothetical distancing (100% of their ads), social distancing (66%) and spatial distancing (59%). Louis Vuitton and Valentino have fairly similar profiles with a strong focus on social distancing (Louis Vuitton 100%, Valentino 94%). Louis Vuitton also makes a comparably frequent use of temporal distancing (38%), mainly references to the past (e.g., AW 2012), whereas Valentino more frequently uses spatial distancing (44%), often featuring their campaigns in exotic locations (e.g., SS 2014). Burberry makes comparably little use of distancing compared to the other luxury players and in their communication style more closely resembles a premium brand, with the exception of their occasional use of hypothetical distancing. Table 9

Distancing devices used by luxury brands

Distancing Burberry Hermès Louis Vuitton Valentino Total

Temporal # % 4 13% 9 28% 12 38% 8 25% 33 26%

Spatial # % 6 19% 19 59% 12 38% 14 44% 51 40%

Social Hypothetical Total # % # % Average % 16 50% 5 16% 1.0 24% 21 66% 32 100% 2.5 63% 32 100% 13 41% 2.2 54% 30 94% 11 34% 2.0 49% 99 77% 61 48% 1.9 48%

Explanation Distancing Dimensions (Spatial, temporal, social, hypothetical): 0 – not present; 1 – present Distancing Total: Average of dimension sum [0 – no distancing dimension present; 4 – all distancing dimensions present] Source: Own illustration

E.4.3

Abstraction: Luxury Brand Values, Themes, and Discourses

For the thematic analysis, we identified the dominant and supporting themes and assigned them to the theoretically identified luxury perspectives and values grouped on three discourse levels (macro, meso, and micro) based on the framework of Gurzki and Woisetschläger (2017). The different signs employed in a campaign (including formal elements) form motives, and the combination of motives forms

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the theme of the campaign. We assume that the themes directly support certain luxury values and discourses. In this study, we use the term value to describe the general appeal and the term theme to describe the concrete realization in the advertising campaign. For the analysis of luxury values, we used a list based on the dimensions identified in the previous literature and an initial review and inductive coding of the advertisement sample. On the macro-level, examples of transformational codes are modernity (Tse et al., 1989), legacy, and heritage (Freire, 2014). Cultural codes comprise, for example, art or cultural scripts such as tales (Hagtvedt and Patrick, 2008, Hetsroni and Tukachinsky, 2005, Huettl and Gierl, 2012). Examples of philosophical codes are spirituality (Cristini et al., 2017) and wisdom (Pollay, 1983, Pollay and Gallagher, 1990). On the meso-level, examples of economic codes are values of purchase (Tse et al., 1989) and sacrifice (Tynan et al., 2010). Social codes comprise aspects such as popularity (e.g., Pollay 1983; Pollay, and Gallagher 1990), conspicuousness and prestige (Wiedmann et al., 2009), and social approval (Ahn and Mundel, 2015). On the micro-level, examples of individual codes are hedonism (e.g., Brioschi, 2006), self-esteem, power, and success (Kim et al., 2015). Material codes relate to technology (Mortelmans, 2014, Mortelmans, 1998), practicality (e.g., Pollay, 1983, Pollay and Gallagher, 1990), functionality (e.g., Belk and Pollay, 1985) and quality (e.g., Vigneron and Johnson 1999, 2004). Examples of relational codes are distribution (e.g., Tse et al., 1989, Vigneron and Johnson, 2004, Vigneron and Johnson, 1999) and country of origin (e.g., Brioschi, 2006). Figure 21 illustrates how in the context of the entire campaign, themes can emerge by comparing similarities and differences across individual ads. In the example of the Hermès SS2010 campaign, the contextualization of any single ad helps identify the dominant fairy tale theme, which underscores the cultural luxury values and provides a macro-level discourse that is rich in symbolism and allows consumers to immerse themselves in each of the individual story worlds conjured by the tales. From our systematic analysis of the thematic and formal dimensions, we can identify dominant themes and codes. For example, we characterize Hermès SS2010 as showcasing a fairy tale theme that employs cultural codes from a macro-level discourse. Within the context of the entire campaign, a striking similarity of the individual ads is their thematic link to fairy tales, in which each individual picture can be interpreted as resembling iconic scenes from fairy tales that are part of a shared cultural community. Similarly, employing formal codes, Valentino AW2013 appears to make reference to the style of seventeenth-century Dutch paintings of artists, such as Vermeer or Rembrandt, thereby encouraging the interpretation of the main theme as art and, consequently, as a dominant cultural discourse within the macro-level. 175

31

E

* Menswear campaign

Frog King* Alice in Wonderland* Alice in Wonderland

Cinderella Cinderella Rapunzel / Princess and the pea

Aladdin The little mermaid

HERMÈS SS 2010: Fairy tale

Valentino AW 2013: Art

E The Meaning of Luxury

Sleeping beauty



Example of two campaigns

Figure 21: Establishment of themes - example of two campaigns

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Fig. 21 Establishment of themes: example of two campaigns Source: Own illustration

Through the use of enrichment and distancing, luxury brands construct their discourses differently from premium and mass-market brands. Luxury brands have a broader set of themes and allow a more abstract way of reading. Campaigns predominantly featuring codes that belong to transformative, cultural, or philosophical values are characterized as macro-level discourses; campaigns featuring



Zara: SS 2013

32 (80%)

Mango: SS 2014

Lacoste: SS 2013

Michael Kors: SS 2014

Ralph Lauren: AW 2014

17 (42%)

Tommy Hilfiger: SS 2013

23 (58%)

8 (20%)

H&M: SS 2013

0 (0%)

0 (0%)

Zara: AW 2013

Premium

Mass market

Number of campaigns (% of campaigns within brand type) Note: Analysis on campaign level

Micro

Meso

Macro

Hermès: AW 2013

Hermès: AW 2006

Hermès: AW 2012

Valentino: AW 2013

Hermès: SS 2006

14 (35%)

Valentino: AW 2000

18 (45%)

8 (20%)

Luxury

Figure 23: Discourse levels - differences mass-market, premium, luxury

33

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E.4 Findings 177

social or economic values as meso-level discourses; and campaigns emphasizing individual, material, and relational values as micro-level discourses (see Figure 22).

Fig. 22 Discourse levels: differences mass-market, premium, luxury

Source: Own illustration

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Comparing luxury, premium, and mass-market brands, we find a clear trajectory toward higher-level discourses. Mass-market brands are dominated by micro-level discourses (80% micro, 20% meso), particularly about the individual, premium brands are dominated by meso-level discourses (58% meso, 43% micro), particularly about the social sphere, to luxury brands that engage in discourses at all levels (20% macro, 45% meso, 35% micro) Luxury brands are the only brands in our sample to engage in macro level discourses, such as transformation, metaphysical questions, or cultural myths, emphasizing luxury core values, particularly those related to higher-level needs (e.g., transformation, self-expression, even existential tensions). Premium brands tend to predominantly use social codes. Mass-market brands mainly build on individual codes at the micro-level. While mass-market brands are mainly monothematic and use similar structural templates, luxury brands have a much broader thematic repertoire. Figure 23 illustrates which themes luxury brands use to emphasize their macro-, meso-, and micro-level values. Macro-level values refer to the philosophical, historical, and cultural context; meso-level values to the social and economic context; and micro-level values to the individual context of luxury brands. Digging deeper into the discourses in which luxury brands engage provides additional insights into their communication strategies. At the macro-level, luxury brands employ a code system linked to the collective aspirations and desires of consumers. Luxury brands create these discourses by, for example, emphasizing transformational and cultural values, while these values seem to be largely absent in premium and mass-market advertisements. Transformational themes highlight the nature of change and the fundamental tension between ephemerality and permanence — for example, the emphasis of transformation through the recurring motif of a butterfly (as in Hermès SS2014) or the passing of time and seasons (as in Hermès AW2012). The contrast of a butterfly as something vulnerable and ephemeral and a tree as something stable and permanent as in Hermès SS2012 adds further depth to the transformational interpretation. This balance between stability and change, tradition and innovation, is the core of luxury brands. Cultural themes often center on cultural myths, the tension between nature and culture, or the nature of reality and fiction (e.g., as illustrated by stories about magic and fairy tales). Hermès is an example of a brand that often creates this discourse in its advertisements, either in a symbiotic way by showing the harmony of nature and culture or in opposition. Cultural themes can either be featured directly (e.g., by referencing cultural stories such as fairy tales; Hermès SS2010, Louis Vuitton SS2002) or work on a meta-level (e.g., by referencing formal codes of art in the visual style of the advertisement; Valentino AW2013, Louis Vuitton SS2013). Philosophical themes include metaphysical and moral questions. Metaphysical themes are fundamentally concerned with the



Micro

Meso

Macro

Hermès: AW 2012

Hermès: AW 2013

Hermès: SS 2006

Enjoyment

Hermès: AW 2006

Friendship

Louis Vuitton: S/S 2012

Hermès: SS 2014

Change, ephemerality & permanence

Transformative

2010

Louis Vuitton: A/W 2008

Hermès: AW 2005

Family

Louis Vuitton: S/S 2003 Valentino: AW 2006

Material

Louis Vuitton: A/W 2003

Dominance

Hermès: SS 2011

34

Hermès: SS 2002

Craftsmanship

Valentino: AW 2000

Status / Success

Valentino: AW 2012

Moral

Valentino: AW 2012

Philosophical

Hermès: SS 2015

Burberry: SS 2000

Hermès: AW 2011

Metaphysical

Seduction / Sexuality / Provocation

Burberry: SS 2008

Community

Social

Discovery / Adventure

Individual

Burberry: AW 2012

Nature & Culture

Hermès: SS 2003 2001

Cultural Tales

Love & romance

Valentino: AW 2013

Art

Figure 24: Overview of luxury themes E

E.4 Findings 179

Fig. 23 Overview of luxury themes

Source: Own illustration

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state of existence and the nature of reality. These themes are often secondary and evoked by the hypothetical distancing of many luxury brand ads. Meso-level values center on social values. Social themes capture different types of relationships between groups and individuals and different underlying social motivations. The social discourses encompass both distinction motives, such as status and dominance, and affiliation motives, such as love and romance or community and family (Albrecht et al., 2013a, Gurzki and Woisetschläger, 2017, Han et al., 2010). In their visual execution, social themes are mainly emphasized using groups (i.e., depicting more than one individual in a single ad). This can be in the form of a community or family (Burberry SS2008, SS2000), a romantic relationship (Burberry AW2012), or clear status references (early Valentino AW2000). Economic themes refer to appeals to the products’ cost and financial value, which in turn can also be a status code. However, this dimension is rarely depicted explicitly in luxury advertisements, instead being inferred by other characteristics, such as the artistic value of the product or the social environment in which it is featured. Given that the focus is on luxury advertising, this sparse occurrence is not surprising and falls in line with standard managerial practices, such as the view that price should not be communicated directly (see Kapferer and Bastien, 2009a). Micro-level values center on the individual and material dimensions. Individual themes can be split into intrinsic luxury (for self) and extrinsic (for others) themes (see Kapferer and Bastien, 2009a). The main individual-intrinsic themes identified in the campaigns are enjoyment (Hermès AW2013) and discovery/adventure (LV AW2008). They often have supporting motifs of independence, experiences, leisure (e.g., relaxation), states of mind (e.g., nostalgia, longing), confidence, productivity, and modesty. The individual-extrinsic themes revolve around seduction, sexuality, and provocation, drawing on motives such as vanity and beauty (LV SS2003). Material themes focus on the product itself, its properties, and functional characteristics. However, similar to economic themes, these are usually only indirectly shown and mainly in combination with relational themes, highlighting the craftsmanship and expertise of the manufacturer (Hermès SS2011). We also find a few direct appeals to exclusivity and rarity, such as the limited nature of the product or the use of rare materials (see Kapferer and Valette-Florence, 2016). More commonly, exclusivity is underscored by the formal codes used to create the visual execution of the ad. Another theoretically relevant dimension used only sparsely is appeals to technology. This could be because technology is more closely associated with mass production than craftsmanship, which is more typically associated with luxury brands. Technology is also less relevant for fashion than for technical products such as watches.

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E.5 Discussion E.5 Discussion

The creation of meaning and desire is central to the communication of luxury brands. This study shows how luxury brands draw from and contribute to the creation of luxury and the establishment of a code system. First, luxury brands use enrichment, or the frequent use of signs and rhetorical structure, particularly rich and complex ones as a key principle of luxury brand communication. This complements the previous research that has shown the use of rhetorical devices leads to more elaborate processing and higher engagement with the advertising and can facilitate a stronger emotional connection with the brand through narrative transportation (Bulmer and Buchanan-Oliver, 2006, Kim et al., 2015, McQuarrie and Mick, 1992, Phillips and McQuarrie, 2004, Phillips and McQuarrie, 2010, Stathakopoulos et al., 2008). Second, luxury brands use distancing, or the temporal, spatial, social, or hypothetical distancing from the consumer’s ordinary life world. Previous studies using construal level theory have shown that distancing can lead to a higher-level brand construal and influence consumer decision making (Trope et al., 2007). For purchase decisions with high-level construal, consumers focus more on desirability than feasibility criteria, which are more relevant for low-level construal processes (Baskin et al., 2014). Moreover, high-level construal leads to lower price sensitivity and higher price acceptance (Liberman et al., 2007). Third, luxury brands use abstraction, or the purposeful use of polysemy to engage in higher-level and more abstract discourses. The different discourse levels, values, and scope of themes offered by luxury brands allow for different modes of reading and provide consumers a space for their own imagination. Previous research has shown this increases the desirability of brands (Kim et al., 2017, Kim et al., 2015). Therefore, we propose that the three dimensions identified in this study (enrichment, distancing, and abstraction) are central to the creation of the desirability of luxury brands. The findings have relevance for many areas of consumer behavior and luxury research, including the construction of cultural capital and status (Gurzki and Woisetschläger, 2017, Han et al., 2010). To act as a symbolic agent in the construction of luxury and foster their own identity, luxury brands need to create a rich sign system with luxury- and brand-specific communication codes. These communication codes can serve to signal social status and affiliation, depending on social context. The findings of this study can enhance the understanding of how the sign system of luxury is constructed and how it is managed by luxury brands in advertising. The relevance of the codes reaches beyond the consumer target into the social and even cultural sphere. Communication of luxury brands is not limited to their target consumers; it also targets a broader base of consumers to familiarize them with the symbolic luxury codes that are intended to confer status (Kapferer and Bastien, 181

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2009a). Luxury brands offer multiple levels of discourse and, therefore, different ways of reading between, for example, novice and experienced luxury consumers. Novice consumers are not familiar with the code system and, therefore, might focus more on personal values and the aesthetic appeal of the advertising. By contrast, expert consumers might engage in a more sophisticated narrative processing, taking into account the nuances of the code system, its symbolic meanings, and interpretative options (see Freire, 2014). Linking this to the broader social development with the increasing democratization of luxury and increasing sophistication of consumers, we could expect the luxury code system to become even more differentiated and a space for symbolic innovation in the future. This study shows that some codes, such as social distancing, become more broadly adapted by premium brands. Therefore, they might lose their ability to act as a luxury-specific code. Luxury brands may, therefore, need to find and establish new codes that clearly position them in the sphere of the extraordinary.

E.5.1 Research Implications This study provides the first systematic and comparative analysis of luxury brands advertisements and the specific codes that they use. Further research could leverage the findings of this study to test its implications as well as generalizability across contexts. Further research could test the implications of enrichment, distancing, and abstraction on consumer responses to luxury brands compared with premium and mass-market brands, to examine the mechanisms behind them. For example, do the templates luxury brands use lead to more elaborate cognitive processing, more narrative transportation, more abstract brand construal, and more favorable consumer responses? Would the application of these luxury templates by premium and mass-market brands lead to the same responses, higher perceived desirability, and a greater willingness to purchase? Another useful investigation would be to assess the potential downsides that might occur from using different templates. For example, would using non-luxury templates backfire for luxury brands? With the emergence of new values, such as transformative consumption or the rise of inconspicuous consumption, analyzing the resulting changes in these systems could be a particularly fruitful avenue for conducting further research. To understand the cultural meaning of luxury brands, we used advertisements as a source and material artifact of the brands’ cultural values. This approach is particularly well suited to historical analysis, as advertisements and publicly available secondary sources are relatively more easily retrievable than other data

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sources such as consumer surveys or internal company data. Further studies could extend this research to other contexts to understand how brand storytelling works in different formats, such as in retail or social media. Research could also build on the principles of enrichment, distancing, and abstraction to investigate how they are used in social media. While most platforms are dominated by pictures, textual narration and text posts play a larger role than print advertisements. In addition, short videos enhance the complexity of the medium. While our findings derive from an analysis of flat visuals, we propose that the fundamental principles of enrichment, distancing, and abstraction also persist in other formats, such as video and textual narration. However, the narration of luxury values through text, music, voice, movement, and other elements used in filmmaking employs domain-specific codes that complement the visual coding scheme in print advertising. Extending this study to new media would serve as a complement and help guide both researchers and practitioners.

E.5.2 Managerial Implications Brands are increasingly moving toward storytelling to construct their symbolic value. Recent practitioner-oriented research has provided guidelines for creating persuasive brand stories (Aaker and Aaker, 2016). This research deepens the understanding of the executional tactics used by luxury, premium, and mass-market brands to bring their brand values to life and stage their stories. The core focus of luxury brand communication is to seduce the consumer into the dream world of the brand to create desire and thereby ultimately sales (Kapferer and Bastien, 2009a). Understanding how to employ codes at different levels can be a strategic advantage for firms wanting to improve their brand desirability. To do this, luxury brands not only use stories to bring their identity and values come to life but also build a sophisticated and rich symbolic code system comprising thematic and formal codes. Most brands have a history and story, part of which is materialized in advertisements to construct an identity and confer the brand with meanings that are relevant to consumers. Managers can use this framework to understand the essence and codes that they can use to assess the current semantic system of their brand as well as their competitors’ brands. Depending on their strategic positioning and stories, they could then devise ads using luxury templates and codes. In addition, brand managers could review the suitability of their campaign executions to their strategic brand positioning using these templates. For example, the use of storytelling templates can lead to higher consumer engagement and increase the set of brand associations. 183

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Brand management could also use this process to review their thematic and formal repertoire, to uncover the inherent meanings and codes compared with competitors and identify opportunity spaces for their storytelling. Temporal analysis could help understand how consistently these stories have been built over time and their implications for brand equity and option spaces. In terms of formal features, advertising practice suggests that mass-market brands use far less semantic richness, complexity, and distancing than luxury brands. Brand managers could thereby also analyze the consistency of their communication style with current practice and also the created advertising conventions. This could be valuable input in campaign planning and the creative process, before engaging in consumer research on the encoded meanings and narrated stories. The findings of this study can also be used in communication planning and the design of advertising campaigns. This study identifies a broad repertoire of the themes and communication styles that luxury brands use to communicate their brand stories and increase the desirability of their brands. Other brands within and beyond luxury could use this toolkit to guide the creative process and collaboration among designers, advertising agencies, and other creatives involved in the campaign planning process. Particularly for luxury brands, the challenge is to innovate their values to stay relevant to today’s consumers and zeitgeist, while remaining true to their heritage and making use of the rich storytelling potential it provides. Luxury brands often do this in a way that balances the consistency of advertising elements, such as visual execution tactics or themes, but also deconstructs the advertising template or subverts the relationship between elements in the advertisements to create distance to the current live world of their target consumers. Therefore, luxury brands could, for example, introduce new themes and discourses with high social relevance to the target group, such as transformation. Brands could also innovate within a theme and select new symbols to enact the brand story. For example, the art code is predominantly created through references to visual arts, especially paintings and photography. To reinvent the symbolic relationships within this code, brands could extend their symbolic repertoire to incorporate recent cultural trends and changes. This could be particularly helpful for brands that have a strong communicative focus on a theme or distancing technique that competitors have adopted or that is eroding in the consumer value scheme. Emerging themes, such as technology, are gaining increasing prominence and importance in everyday life. Luxury brand management could aim to integrate these themes into their brand world and the relevant life worlds of their consumers to remain at the forefront of symbolic innovation.

E.6 Conclusion

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E.6 Conclusion E.6 Conclusion

Luxury is about the creation of the extraordinary. Luxury brands use a rich set of thematic and formal codes to create their luxury aura and dream and enrich their products with immaterial value. We find that luxury brands use enrichment, distancing, and abstraction to create their luxury aura. They also make use of richer symbolism, more complex rhetoric, and more storytelling in their ads, which potentially facilitate aesthetic immersion and the narrative transportation of the consumer into the created fiction. They systematically use distancing devices to distance their brand world from the everyday world of the consumer and create extraordinariness. In addition to preserving their extraordinary aura, luxury brands also support their creative, artistic, and cultural legitimacy. Moreover, luxury brand advertisements feature brand discourses on various levels, including the macro-level, whereas premium and mass market brands stick with the meso- and micro-levels more. The use of macro-level discourses also potentially invites multiple modes of reading, inviting different viewpoints, and providing a projective space for consumer fantasies. These factors can potentially lead to more elaborate processing, aesthetic immersion, and narrative transportation by consumers and a more abstract brand construal, thereby increasing the desirability of luxury brands.

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F

Discussion of Findings and Implications F Discussion of Findings and Implications

F.1

Discussion of Findings

F.1 Discussion of Findings

This thesis has briefly introduced its research objectives and contributions (see Section A). The existing literature and luxury knowledge were then mapped to discover different research clusters and their viewpoints on the luxury phenomenon (Section B). Section C detailed the evolution of the concept of luxury from its beginnings until its current role in a globalized consumer society. The main part of the thesis (Section D) detailed these different perspectives and integrated them into a comprehensive framework. This has highlighted both the unifying aspects of the perspectives in how they create the extraordinariness of luxury and the specificities that each perspective contributes. Focusing on the symbolic creation of luxury, which has received little prominence in previous research, this thesis has analyzed (Section E) how luxury brands construct luxury in print advertising through specific luxury codes. This thesis, therefore, contributes to an integrative and holistic understanding of luxury by having traced the scientific history of the subject, delineated its research clusters and intellectual foundations, and integrated them into a comprehensive framework encompassing different perspectives of luxury. This thesis has also shown how luxury brands in advertising practice create luxury discourses and has emphasized how luxury values shape the collective construction and imagination of luxury. The contribution is both theoretical (by showing the conceptual creation of luxury) and practical (by developing an integrative framework and testing it with empirical evidence from advertising practice). While the findings and implications of the individual studies are discussed in the respective sections, this section briefly summarizes the limitations and implications across the studies.

© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2020 H. Gurzki, The Creation of the Extraordinary, Applied Marketing Science / Angewandte Marketingforschung, https://doi.org/10.1007/978-3-658-29538-7_6

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The initial selection of theories and concepts used to detail the different perspectives on luxury was based on a bibliometric analysis and an evaluation of importance by the research community. However, their detailing and delineation have been an interpretative process that has rested largely on subjective judgment and conceptualization due to the qualitative nature of the research process. This involved the selection, interpretation, integration, and derivation of implications for theory and practice. While not all theories could be covered, the scope, despite being intentionally broad, needed to be narrowed to the perspectives with the highest likelihood of contributing new and insightful findings to the academic discourse on luxury and luxury brand management. A further complication was the interconnectedness of the different dimensions. Constructing a conceptual model requires simplification, which can never fully capture the phenomenon itself, but only an abstraction of it. Thus, this structure is not intended to be exhaustive but comprehensive. In a sense, it provides a skeleton that will likely remain stable over time as it covers fundamental principles that have been proven to be effective in creating luxury based on previous research. However, it also invites the addition of new perspectives over time.

F.2

Implications for Luxury Brand Management: Principles for Creating the Extraordinary

F.2 Implications for Luxury Brand Management

Navigating the territory of luxury requires a diverse skill set from the managers of luxury brands. Luxury brands need to be seducers, cultural agents, storytellers, community managers, experience managers, artists, artisans, and global citizens, among many things. The conceptual model outlined above has several implications for luxury creators and brand managers, which will be briefly summarized and recapped. From integrating the findings of luxury characteristics from the different perspectives, and particularly the process of meaning creation, this thesis proposes that certain principles guide the creation of the extraordinary: singularizing, personalizing, enriching, abstracting, distancing, rationalizing, and perfecting and legitimizing (see Figure 25). These principles, which underline the creation of luxury and its characteristics, as previously illustrated, will be briefly outlined here. Similar to Kapferer (2012a), these principles are not limited to luxury brands but can be applied to companies outside of luxury that are aiming at increasing their appeal and value. The first two principles, singularizing and personalizing, aim at creating an extraordinary luxury object with a rare and refined quintessence. Singularizing is

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the first principle in creating the extraordinary and encompasses the mechanisms identified in Section D.3, such as finding a unique and authentic essence of high quality, anchoring and elevating it with space and time, mastering qualitative refinement (human touch, craftsmanship, design), or amplifying rarity (for example, through limited editions). Personalizing is the second principle and aims at increasing the personal relevance and extraordinariness for consumers mainly through the mechanisms identified in Sections D.3, D.5, and D.7. It is created by customizing and personalizing the experience, staging of pleasurable, immersive, and sensual experiences, and performing the experience. It involves the consumer in the co-creation through luxury rituals, facilitates relationship management by building an emotional connection with strong emotional intensity, offers exclusive benefits that make the consumer feel special, and stays relevant to the consumer’s lifeworld (for example, through the adaption of digital and technology). Enriching, abstracting, and distancing are three principles that work together in the creation of desire, as discussed in Sections D.4 to D.7, as well as identified in the empirical analysis of luxury brand advertisements in Chapter E. Enriching helps to create desire through objectification by concretizing and linking the aspired meaning with the object, enriching the luxury object with a story and myth (based on authenticity and heritage such as provenance and place),sacralization of the luxury object and transferring imitative magic, and a continuous refinement (including lexical refinement) of the brand and its manifestations. Abstracting contributes to a desire by creating a magical and sacred intangible aura by offering higher-level meaning above the empirical, which is constructed through multiple ways of reading and fueling the imagination, as well as connecting the meaning to the consumer, such as through appealing to the identity and higher-level needs. Distancing is used to generate feelings of specialness. It does this by maintaining distance and exclusivity (for example, hypothetical, social, temporal, spatial distance), which is done by creating a strong aspirational community, setting a high price that requires sacrifice and status, or limiting access and requiring qualification in stores (availability, access) or the service encounter (waiting lists, domination of clients). Rationalizing is used to create the perception of high value and price as identified in Section D.8 and justifies the value, for example, through status and reputation (see Section D.6). This includes creating the perception of stable value (for example, conspicuous/expected price higher than real price; raising price perception over time; avoiding discounts) and educating consumers: establishing the code system for symbolic capital (for example, rituals and signals) for consumers and non-consumers Perfecting and legitimizing are the final principles that contribute to crafting a culture of excellence, which is identified in Section D.9 as a crucial requirement. This entails fostering a culture of excellence based on a strong brand identity with 189

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a long-term orientation, executing the strategy with consistency and control to ensure the highest level of quality across touchpoints, deepening the consumer base, and innovating the brand while remaining true to its identity (including the management of brand extensions, and tiering). Lastly, this requires building a global luxury ecosystem and legitimizing the luxury brand authority by embedding the brand in an institutional context.

Figure 25: Principles for creating the extraordinary

Singularizing

Personalizing

• • • •

Finding a unique and authentic essence of high quality Anchoring and enriching it with space and time Mastering qualitative refinement (human touch, craftsmanship, design) Amplifying rarity (for example, limited editions)

Customizing: Personalizing the experience Staging: Creating pleasurable, immersive, and sensual experiences Performing: Involving the consumer in the co-creation through luxury rituals Relationship management: Building an emotional connection with strong emotional intensity; offering exclusive benefits that make the consumer feel special • Staying relevant to the consumer’s lifeworld (for example, digital and technology) • • • •

Enriching

• Objectification: Concretizing aspired meaning in the object in which it reveals itself • Enriching the object with a story and myth: Authenticity, heritage (provenance, place) • Sacralization of the luxury object and transferring imitative magic • Continually enriching and refining the brand and its objects/manifestations

Abstracting

• Offering higher-level meaning: A magical and sacred intangible aura, above the empirical • Offering multiple ways of reading and fueling the imagination • Connecting the meaning to the consumer (identity appeal and higher-level needs)

Fig. 24 Principles for creating the extraordinary Source: Own illustration

F.3

Development of a Research Agenda

F.3 Development of a Research Agenda

Luxury has evolved over time as a concept and research field. This thesis provides a state-of-the-art review of the research field, its different perspectives and underlying foundations, and provides a conceptual framework that can serve as a starting point for further research to advance the luxury field. This can be insightful for established researchers within the domain to identify white spots for potential contributions, as well as for new researchers entering the field who want to gain

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a broad overview of existing studies. Many interesting areas could be explored further. We will provide some research opportunities along three dimensions: Research on the evolution of luxury and the context of luxury, research into the different perspectives of luxury, and research evolving the perspectives of luxury (cf. Gurzki and Woisetschläger, 2017).

Research on the evolution of luxury and the context of luxury Historical context: Several great works have contributed to our understanding of the evolution of luxury over the last centuries (such as (Adams, 2012, Berry, 1994, Graeber, 2011, Lury, 2011, McNeil and Riello, 2016, Slater, 1997) which have been briefly recapped in this thesis). Historical investigations are particularly interesting for understanding the dynamism and context of luxury phenomena, and since history is continuously written and sometimes even rewritten, they will always have their place in the research canon. One potential area to explore further, taking a historical perspective, is the systematic analysis of the principles proposed in this thesis in different historical contexts. For example, the extent to which the principles could explain the evolution of the global luxury industry before the 1980s that led to the rise of conglomerates could be explored. Geographical context: Based on the observation that most luxury brands operate globally and largely also without much local or regional adoption, such as in their advertising campaigns, this thesis has assumed that there is a global consumer society. Nevertheless, the cultural context and geographic context play a strong role in shaping what is extraordinary and desirable. Research into different geographical contexts such as Asia (Shukla et al., 2015), and specifically China (for example, Liu et al., 2015, Liu et al., 2016), is being carried out. This will deepen our understanding of geographic and potentially cultural adaptations to the luxury code or even boundaries of the phenomenon. While this thesis proposes that the conceptual model that was developed in this thesis, together with its underlying principles and mechanisms, holds across contexts, further research could investigate how the codes differ between different cultural settings. For example, interesting studies could come from comparing similar target groups in different cultural settings with regard to a specific phenomenon, such as differences in the principles of status construction among Chinese Millennials and European Millennials.

Research into the different perspectives Philosophical perspective: The philosophical debates about luxury and its role in society have a long history. Based on the work of this thesis, there is reason to believe that the discussions will continue. New and emerging societal trends can inspire 191

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further research on luxury. For example, one could ask what luxury means in a post-human world. This might include questions such as the ability and legitimacy of machines and robots to experience desire and the consequences for society and our understanding of luxury. Material perspective: This thesis proposes that the underlying principles of the construction of luxury hold across industries and product categories. Further research could test this proposition and understand industry- and segment-specific codes. Particularly, the area of luxury services has received little attention compared to luxury goods and could serve as an interesting field for investigation. For example, one interesting area to explore would be the differences in luxury codes between product and service categories, to understand which aspects of luxury are category specific and which are generalizable across different categories of products and services. Cultural perspective: This thesis proposes that particularly the cultural perspective has a strong potential to unveil and decode the hidden meanings that underlie the construction of luxury, which shape our unconscious desires (see the advertising study in part E). Further research could test the implications of the study with consumers, for example, to bridge cultural and individual (psychological) perspectives and approaches. Moreover, further research could extend the study to new types of brand communication, particularly social media, and investigate how digitalization has changed the way luxury brands construct their identity and magical and sacred auras. Social perspective: The social perspective is strongly popular, presumably as it has a clear theoretical underpinning in signaling theory and theories about social status that lend itself to applications in a broad range of areas. Particularly, research in the area of unconscious consumption has gained popularity. However, most research still focuses on status signals linked to physical goods, such as subtler design cues. However, and linking the social perspective to the cultural perspective, the performance of consumption codes and rituals might also be an interesting way to study inconspicuous consumption signals, for example, through observing client behaviors in a service context and understanding the status codes embedded in the service rituals. Potential further questions might be around the luxury adoption process in times of digital media. For example, research could investigate how status signals spread through the Web, thereby providing new conceptualizations and updates of the diffusion of symbolic luxury innovations and revisions for Simmel (1957)’s trickle-down model. Economic perspective: The economic perspective is closely related to the social perspective. Linking economic theories with social or individual (especially psychological) research provides interesting research opportunities for economists and

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business researchers alike. For example, the recent study of Bursztyn et al. (2017) highlighting the purely status-driven demand for platinum credit cards in Indonesia or the research of Gutsatz and Heine (2018) identifying the role of price for luxury goods where they argue that prices for luxury goods have remained relatively stable over the last decades. Integrating luxury in behavioral economics studies or identifying phenomena in the field, such as identifying potential differences in Veblen effects across product and service categories, could be interesting endeavors. Individual perspective: The individual perspective and its vast range of viewpoints from identity to experiential consumption provide an exciting area for further research. For example, research could further investigate the co-creation of luxury experiences. Another interesting area would be the exploration of transformational luxury experiences and how they differ compared to transformational non-luxury experiences. Moreover, research on consumer behavior has mostly focused on the pre-purchase and purchase phases, with little attention given to the continuous use and disposal phases. Interesting research questions might address the impact of sharing and access-based consumption on luxury brand usage or the disposal and second-hand market for luxury goods, which, in practice, have spurred the interest of newly-found startup companies. Managerial perspective: Recently, this perspective has also grown in popularity with further potential in certain areas such as customer experience and service management. Research on the managerial perspective could provide insight into, for example, how luxury brands make use of new technologies in production, marketing, and sales, or how they manage and orchestrate a network of partners to deliver their customer experience. Understanding the development of luxury ecosystems and business models from different types of the partnership could be interesting to identify potential scenarios and strategic options for the different players in the industry (such as the recent study of Depeyre et al. (2018)). Moreover, new methodological advancements could provide contributions to the field across perspectives. The study in Section B shows a high number of empirical and experimental studies and a limited and declining number of conceptual studies and qualitative studies. The field is dominated by hypothetico-deductive approaches, which is likely related to the dominant conventions in the theoretical disciplines mentioned above that constitute the core of luxury research. To further evolve the research field, the adaption of different methods and approaches, such as field-theory validation and applied empirical generalization for relevant topics, could be promising (cf. Pham, 2013). Thus, working with real-life data as well as exploring new phenomena using qualitative approaches such as ethnographies or observational methods, or an increasing focus on conceptual contributions to develop and test generalizable theories that are specific to the luxury context, could 193

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be promising. Other fields in consumer research have already begun to shift toward a perspective in consumer research that is less mechanistic and more individual and contextualized with non-positivist assumptions, have foundations in sociology or anthropology, and are focused on macro and cultural phenomena (Ekström, 2003). For example, consumer culture theory could provide an interesting angle for adoption in a broader set of luxury publications (Arnould and Thompson, 2005). Another promising method could be the combination of big data analytics with data that is publicly available, proprietary online data, or customer data to understand luxury preferences and consumption patterns in a real-life context.

Research evolving the perspectives of luxury Based on this thesis, further research could add to the plurality of luxury discourses by bringing in new perspectives to enlighten our understanding of the luxury phenomenon. For example, further research could conduct empirical research on the different dimensions used in the conceptualization of luxury in this thesis or test the interconnections between the key variables proposed from the different perspectives in this model, such as how cultural, social, and individual relations influence the construction of desire. Some research fields that are still underrepresented in the luxury discourses could contribute to further develop the luxury field, such as cultural studies, cognitive psychology, and neuropsychology. Theories from anthropology or cultural studies could be interesting to improve our understanding of the cultural context of luxury brands and their relativity. Likewise, the meaning creation process that companies use to construct a luxury brand or the cognitive and neuro-psychology for understanding the mechanical core could be interesting areas of study. However, this has been only sparsely investigated in the luxury context—for example, to understand the applicability and generalizability of existing findings. Based on the observations from this study and the comparison to other fields, we speculate that the luxury field will continue to grow and will likely evolve into more sub-specializations, bringing in new methods and theories from other fields (as luxury provides an interesting study context across a wide range of disciplines). We further speculate that the luxury field will grow to solidify its own theoretical basis to highlight the uniqueness of the research fields from the perspectives mentioned above. Thus, luxury offers many fruitful avenues for future research. Brand managers and researchers in luxury and beyond can use the findings of this thesis as a con­ ceptual model to challenge their own thinking about luxury and their mana­ gerial practices in its construction. These findings help toward understanding the institutional creation of desire and the extraordinary and have relevance beyond

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luxury, for example, in the fields of (high-end) cultural industries, highly symbolic product categories, experiential brands, premium brands willing to trade up, and even mass-market brands in product and service sectors wanting to “luxurify” their brand. What is key for both theory and practice is that while some of the fundamental rules for luxury have not changed for thousands of years, the concrete realization of luxury and its communication system have inevitably changed and will continue to do so due to the dynamic nature of luxury. Defining the future of luxury and remaining at the forefront of creative innovation is both a challenge and a duty for luxury brand managers and scientists alike and will continue to shape luxury in practice and research.

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Appendix

Literature Overview

2 Literature Overview

This Appendix shows how major previous multidimensional frameworks fit into the integrative model outlined in this thesis. Some aspects might be assigned to multiple dimensions as they can be derived from different theoretical foundations. Table 10 Literature Table 1 Perspec­ tive Prag­ matic Material

This study

Kapferer (2009)

Extra­ ordinary Rare and refined quint­ essence

• non-comparative

Philo­ sophical Cultural

Desire Magical and sacred aura

• seduction: role of • symbolism advertising is not to • strong brand sell; do not sell (legitimacy) • keep stars out of advertising • cultivating closeness to the arts • aura

Social

Exclusivity and status

• selection: exclude non-enthusiasts • communicate to those whom you are not targeting • social status: stratification • exclusivity

• product with flaws (authenticity) • rarity: ingredients, rare human capacity; techno-rarity (innovations, new products and features); limited editions, custom-made orders, 1to1 relationships • intangible aspects beyond functionality • affecting product • dream

Chevalier and Som and Blanckaert Mazzalovo (2008) (2015)

• craftsmanship • identifiable products (design) • aesthetics

• selective and exclusive

• a heritage of crafts­ manship • a recognizable style or design • paucity • performance exceeding functionality

• heritage of crafts­ manship • strong association with the country or origin • strong link to the personality and founder of their creator • provenance • strong brand identity • highly creative and selective branding

2 Literature Overview

205

This study

Kapferer (2009)

Aspiration and feeling special

•

Economic High price and value

•

Perspec­ tive Individ­ ual

• •

Manage­ rial

Excellence and strive for perfec­ tion

• • •

• • • •

Chevalier and Mazzalovo (2008) pleasure • creative and emotional value • self-expressive benefits luxury sets the price • high price; high (price does not set cost luxury) presumed price higher than actual price raise prices over time (incl. average price of product range) distribution-based • relatively small rarity company size information-based (limited numrarity (marketing, ber of staff) brand, secrecy) • very high brand dominates break-even, clients (not limited cash pandering to need customer wishes) • long-term no response to orientation rising demand: • limited limitation distribution, making it difficult low promotionfor clients to buy al activity don’t relocate • strong brand factories (legitimacy) brand extensions • staying on top of social trends • worldwide presence • control of creative process • strong need for brand protection (incl. counterfeiting)

Som and Blanckaert (2015) • emotional appeal • element of uniqueness • premium pricing

• consistent premium quality across all products • limited production • limited distribution • product excellence • global reputation • ability to time design shifts • innovation & entrepreneurship • long-term focus • ability to manage cultural complexity • global business scope • passionate and open-minded to diversity • -ability to manage highly creative people • understanding of luxury DNA and luxury sector

Source: Own illustration

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Appendix

Table 11 Literature Table 2 Per­ This study spective Prag­ matic Mate­ rial

Philo­ sophi­ cal Cul­ tural

Social

Schaefer and Langer and Heil Kuehlwein (2015) (2015) Extra­ • extra­ ordinary ordinary • incomparable Rare and • practical • rarity & refined essence uniqueness quint­ • high quality essence • scarcity • make the beautiful • quality and aesthetics • individualization • highest (security) standards • private / discreet • one-of-a-kind Desire • dream • dream • longing & belonging Magical • magic • heritage and sacred • myth • difficulty to aura • seduction obtain • symbolism • universally accepted • legend

Exclusivity • prestige and status

Kisabaka (2001)

Fionda and Moore (2009)

• quality (materi- • product integals, manufacrity (functional, turing, quality quality, and controls, duracraftsmanship, bility) innovation and • rarity (objective seasonal offer) • natural limitation, codified limitation, procedural limitation, artificial limitation; subjective) • individualization

• luxury brand (competence, history, authenticity)

• exclusivity • conspicuous• enhances ness social status • conspicuous • differentiation • consistent with social values • protects in public • triggers envy

• clear brand identity (emotional appeal / aspirational, brand values / global marketing strategy) • brand signature (iconic products, brand livery, recognizable style, creative direction) • luxury heritage (brand history or story) • exclusivity (limited editions, controlled ranges and locations)

2 Literature Overview

Per­ This study spective

Schaefer and Langer and Heil Kisabaka (2001) Kuehlwein (2015) (2015) Individ­ Aspiration • special ual and feeling experience special • difficulty to consume • enhances self-esteem, attractiveness, individualism • facilitates new experiences • enhances individualism • perceived privilege Eco­ High price • very expen• high price nomic and value sive • overly expensive • willingness to pay price premiums Mana­ Excellence • balancing • experience in • limited gerial and strive growth selling and distribution for perfec­ making tion • strong brand equity

207

Fionda and Moore (2009) • environment and consumption experience (globally controlled distribution, superior service, flagship stores)

• prestige price (consistent with positioning)

• luxury communications strategy (direct marketing, sponsorships, fashion shows, celebrity endorsement, advertising, PR) • luxury culture (internal commitment to the brand, external partnership commitment to the brand) • controlled ranges and locations

Source: Own illustration

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Appendix

Table 12 Literature Table 3 Perspec­ This study tive Prag­ Extra­ matic ordinary Material Rare and refined quint­ essence

Philo­ Desire sophical

Brun and Castelli (2013)

• superior quality of products and services • heritage of craftsmanship • exclusivity obtained: use of naturally scarce materials, limited editions, limited production runs (scarcity and rarity) • recognizable style and design • superior technical performance

• desirability

Phau and Pren­ Dubois et al. dergast (2000) (2001)

Heine and Trommsdorff (2010) extraordinariness • excellent • quality quality (manufac(ingredients, turing charcomponents acteristics): used in expertise of elaboration manufacprocess) turer, man• expertise ufacturing and delicacy: complexity crafts• quality (conmanship, crete product perfection; characreliability, teristics): durability; material & trust in components; product and construction service & function • scarcity and principle; uniqueness work(special charmanship; acteristics, features; skills needed, product size; price, ...) service • aesthetics and • quality polysensu(abstract ality product • superfluouscharacness (beyond teristics): functional durability & needs) value; comfortability & usability; functionality & performance; safety • aesthetics • rarity

2 Literature Overview

Perspec­ This study tive

Brun and Castelli (2013)

Cultural Magical and sacred aura

• brand aura • association with country-oforigin • heritage of craftsmanship

Exclusivity and status

• reputation • social status • exclusivity: selective distribution, creation of waiting lists • emotional appeal • creation of a unique lifestyle

Social

Individ­ Aspiration ual and feeling special

Eco­ nomic Mana­ gerial

High price and value Excellence and strive for perfec­ tion

• price premium • high price • excellence • consistently delivering premium quality in all the products in the line and along the whole supply chain • marketing approach that combines product excellence with emotional appeal • global reputation of the brand: worldclass excellence

209

Phau and Pren­ Dubois et al. dergast (2000) (2001)

• evoke exclusivity • well-known brand identity

• ancestral heritage and personal history (tradition, legend) • elaborate consumption rituals; sophisticated scripts • symbolic value • connoisseurship • selectivity

• feeling of refinement and well-being • sensual pleasure, hedonic experience • enhances self-concept • intimate relationship to brand and product • very high price

Heine and Trommsdorff (2010) • symbolism

• price

• increase brand awareness and perceived quality (increasing brand preference and purchases) • retain sales levels and customers’ loyalty

Source: Own illustration 209

210

Appendix

Table 13 Literature Table 4 Perspec­ tive Pragmatic Material

This study Ricca and Robins (2012) Extra­ ordinary Rare and • craftsrefined manship quint­ • rarity essence

Philosoph­ Desire ical

Cultural

Magical and sa­ cred aura

Social

Exclusiv­ ity and status

Individual

Aspira­ tion and feeling special

• history

Hennigs et al. (2012)

Pricken (2014)

- luxury has 4th dimension • quality • highest quality • usability • handmade • uniqueness • intriguing and sophisticated sourcing / manufacturing • unique (original, made by master, purity, unique flaws...) • beauty • rarity (natural, artificial, uncertainty, illegality) • aesthetics • functionality (technology, vision, design) • enriched with time (old, new, matured, life work, tradition, for eternity) • irrational (hope, imagination, ...) • materialism • myths and secrets (e.g., origination, creation, destiny, discovery) • transgressing boundaries • magical • legends • transfer (insignias, reliques, reputation, history, symbolism) • staging (experiences, staging, rituals) • sacralization of stores, red carpet • prestige • elitist, inner circle • inaccessible (waiting lists, limited distribution, ...) • self-identity • experiences • hedonic • collecting (pleasure, self-gift giving, life enrichment, extravagance)

Kolliopoulos (2016)

• unique

• distant • desirable

• cryptic

• snob • dominant • emotional

2 Literature Overview

Perspec­ tive Economic Manage­ rial

This study Ricca and Robins (2012) High price and value Excellence • focus and strive for perfec­ tion

211

Hennigs et al. (2012)

Pricken (2014)

• financial value: price

• priceless • irrational (price) • distribution (location)

Kolliopoulos (2016)

Source: Own illustration

211

212

Appendix

Table 14 Literature Table 5 Perspec­ tive Prag­ matic Material

This study

Valtin (2005) Braun (1997)

Nueno and Quelch (1998)

Extra­ ordinary Rare and refined quint­ essence

• quality • functionality • aesthetics

• premium • product quality quality • heritage of • creativity craftsmanship • element of uniqueness to each product • recognizable style or design • limited production run

Philo­ Desire sophical Cultural Magical • and sacred aura

Social

Exclusivity • and status •

Individ­ Aspiration • ual and feeling special • • Eco­ High price • nomic and value

• elaboration • special and limited editions, re-edition of historical pieces, unique pieces, customization • rarity • authenticity, integrity • real craft • customization • strong function • superior quality • style brand • pedigree, proveheritage nance • myth; mythical reputation • symbolism • selective media and codes (indirect and implicit) • brand: ritual, symbol, heritage, snob, belonging, legend brand rec- • social respect, ognition achievement, sense prestige of belonging • exclusive and selective (distribution) • high awareness self• feel good expression • self-respect uniqueness • emotional benefits hedonic price • expensive, inaccessipremium ble, high price • positive price elasticity

• personality and values of its creator

Wetlaufer (2001)

• brand image

2 Literature Overview

Perspec­ This study tive Mana­ Excellence gerial and strive for perfec­ tion

213

Valtin (2005) Braun (1997) • availability • • innovation •

• • • • • •

•

Nueno and Quelch (1998) fortification (ex• relevant tensions, legitimimarketing zation) program institutional brand: • global repulong-term benchtation mark in category; • ability to time timeless symbol; design shifts mythical reputation; when categooriginal and classic; ry is fashion genuine, honest and intensive authentic low capital intensity; high added-value; global reach consistency creativity long-term vision, behavior world-wide, international significance (critical size) strong company culture (adherence to values and standards) rule maker and rule breaker

Wetlaufer (2001) • a drive to reinvent oneself to be the best • company sprit

Source: Own illustration

213

214

Appendix

Table 15 Literature Table 6 Perspec­ tive Prag­ matic Material

This study Extra­ ordinary Rare and refined quint­ essence

Philo­ Desire sophical Cultural Magical and sacred aura

Social

• quality products and services

• intangible brand • associations • aspirational image history and heritage

Exclusivity • social approval and status

Individ­ Aspiration ual and feeling special Eco­ nomic

Keller (2009)

High price and value

• pleasurable purchase and consumption experiences • fun, excitement, security, warmth, self-respect • premium image • premium pricing with strong quality cues, few discounts and mark downs

Wittig et al. (2015)

Okonkwo (2007)

• superlative exceptional • artisans • design: timeless, trends are irrelevant, perfection in every aspect • manufacture: highest quality, innovative, limited edition, craftsmanship, bespoke, handmade

• innovative, creative, unique and appealing products • consistent delivery of premium quality • heritage of craftsmanship

• story & mystique appearance of culture • historical aspect of product • tradition • exclusivity status • indulgence emotions • experience as true product

• a distinct brand identity • a global reputation • heritage of craftsmanship • high visibility • exclusivity in goods productions • emotional appeal • premium price

2 Literature Overview

Perspec­ This study tive Manage­ Excellence rial and strive for perfec­ tion

Keller (2009)

215

Wittig et al. (2015)

• all aspects of marketing • tradition program need to be aligned to ensure quality products and services • brand elements besides name (logos, symbols, packaging, ...) and secondary associations (personalities, events, countries, ...) • careful control of distribution: selective channel strategy • careful management of brand architecture • broad definition of competition • strong legal protection of all trademarks and aggressive combatting of counterfeits

Okonkwo (2007) • consistent delivery of premium quality • tightly controlled distribution • a global reputation

trade-offs: • strategic: retaining customers vs acquiring customers; brand expansion vs brand fortification; product performance vs brand image; points of parity vs points of difference • financial: short-run vs longrun objectives; sales-generating vs brand-building activities; accountable or measurable tactics vs non-measurable tactics; quality maximization vs cost minimization • tactical: push vs pull; continuity vs change classic vs contemporary image; independent vs universal image • organizational: global vs local; customization vs standardization; top down vs bottom up; internal vs external

Source: Own illustration

215

216

Appendix

Table 16 Literature Table 7 Perspec­ tive

This study

Prag­ matic Material

Extra­ ordinary Rare and refined quint­ essence

Philo­ sophical

Desire

Cultural

Social

Individ­ ual

Econom­ ic

Corbellini and Saviolo (2009)

Allérès (1990)

Beverland Moore and (2004) Birtwistle (2004), Moore and Birtwistle (2005)

• quality products and services

• creations

• product • product integintegrity rity • iconic products/design • control over product manufacturer

• intangible brand associations and an aspirational image Magical • strong • the and sacred brand brand aura elements name besides • history brand name, secondary associations Exclusivity • recogand status nition symbols Aspiration • pleasurable and feeling consumpspecial tion experiences High price and value

• premium image • premium pricing

• culture • history • marketing

• culture • heritage • marketing

• endorsement

• endorsement

• premium price

Büttner et al. (2008)

• social identification • brand loyalty • brand relationship • price

2 Literature Overview

217

Perspec­ tive

This study

Corbellini and Saviolo (2009)

Manage­ rial

Excellence and strive for perfec­ tion

• • • •

Allérès (1990)

Beverland Moore and Büttner et (2004) Birtwistle al. (2008) (2004), Moore and Birtwistle (2005) selective • the cre- • value • fashion shows, channel ators driven store displays, strategy • locaemerPR, product brand artions gence packaging chitecture • designer PR broad face of the competibrand tive set • flagship store high threat and store of counterbrand concept feiting • controlled distribution of the brand

Source: Own illustration

217

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