The Impact Of Cultural Factors On The Purchasing Behavior Of Luxury Goods

Consumer Behavior and Luxury Goods

Questions:

1. What is the Impact of Culture on the Decision Making while Purchasing Luxury Goods?

2. What is the Role of Social Media as a Promotional tool?

Introduction

Consumer behavior is influenced by various factors depending on the nature of goods. First of all, luxury goods need to be described. Luxury goods can be referred to the goods which are used in for comfort and extravagant living. However, it must be noted that the concept of luxury goods vary in case of each individual. It has been observed that luxury goods are high priced and designed for the niche market. For example, diamond jewelry, expensive cars etc are the examples of luxury goods. In 21^st century consumption of luxury goods have been increasing across the globe (Luna & Forquer Gupta, 2001). Hence, it is important to assess the major factors that influence the decision making of the consumers. This paper will focus on analyzing the important factors, especially the effect of culture on the consumer behavior of luxury goods.

Consumer behavior refers to the study of the consumers regarding their choice of goods and services depending on the psychology, social influences and other factors of the consumers. It has been found that environmental factors and individual attitudes are responsible for influencing the purchasing behavior of the customers. The individual factors include the personal preference, taste, knowledge, motivation, information search, cognitive skill, problem, lifestyle etc (Jamal & Al-Marri, 2007). However, it has been observed that the environmental factors such as economic, demographic, political, social, cultural and technological factors are also responsible for influencing the consumer behavior regarding the purchase of different products. This paper will focus on analyzing the major impact of cultural factor for influencing the purchasing behavior of the luxury goods.

Purchasing behavior of the consumers has been significantly influenced by the cultural factors across the globe. The cultural factors are consisted of the norms, perception, value system, beliefs, mutually shared process for operation, unstated presumption, communication style etc. It has been found that cultural factors vary among different regions and nations. Hence, understanding the cultural factors influencing the purchasing behavior is a complicated issue. It has been found that the learned belief, customs, values system and perception plays a major role in shaping the need as well as evaluation of goods and services. Thus, the individuals develop a personal belief and perception which leads to particular attitude and it is responsible for influencing the choice of brands, quality etc. Culture is shared among the group of people within a group. This factor has been also found to be significant in case of purchase of luxury goods (Wiedmann, Hennigs & Siebels, 2009).

Human history has depicted that consumption of luxury goods have been a significant practice and the international market of luxury goods have encountered dramatic growth. Cultural factors have been playing an important role in consumer behavior. It has been observed that the sub cultural factors such as religion, gender, social status have significant impact on the purchasing behavior of luxury goods. For example, in India, Hindu widows have less access to the luxury goods. It has been found that the Hindu people from the Asian countries focus on consumption of luxury items at the time of marriage. Exchange of expensive gifts is found to be an important aspect of the Eastern culture at the time of wedding. Hence, it can be found that culture has been significantly influencing the purchasing behavior and consumption of the luxury goods (Luna & Forquer Gupta, 2001).

The Role of Cultural Factors in Consumer Behavior

Additionally, another example can be cited which demonstrates that cultural factors has significant influence on the purchasing behavior of the luxury products. It has been found that one of the important cultural aspect of people from Thailand is extensive emphasize on the collectivism. Thailand has very low dimension of individualism and the people belonging to Thailand prefers to stay in group (Park, Rabolt & Sook Jeon, 2008). Thai people give extensive importance to the close relationship and social bonding. These people feel secure by being connected among the social group. Women from Thailand are found to be very much social oriented. It has been observed that owning luxurious fashion products helps in representing the social status of Thai people. Owning a luxury brand assists in communicating the social status, prestige and success of that person. Additionally, it provides personal satisfaction to the owner as the person gets social admiration (Jamal & Goode, 2001). Hence, the culture has significant importance on the purchasing behavior of the luxury brands which vary according to the social group or nation.

One of the important subculture is gender. Market studies have indicated that women prefer to own luxury fashion brands in order to flaunt their social status. On the other hand, this trend is found to be less significant in case of men. It has been observed that purchasing of luxury fashion brand is predominant in case of women across the globe (Seong & Hong, 2013).

Iranian culture can be studied by applying the Hofstede’s Dimension of Culture. Power distance index is an important cultural dimension. In Iran, power distance index has demonstrated that the power is distributed in unequally among men and women. The high level of power distance has resulted in uneven income distribution which leaded to significant inequality of wealth and power within the Iranian society. This aspect of culture is significant in case of consumption of luxury goods. It has been observed that Iranian men have greater access to the luxury goods in comparison to women (Teimourpour & Heidarzadeh Hanzaee, 2011).

Conclusion

This paper has provided an insight to the impact of cultural factors on the purchasing behavior of luxury goods. Various sub cultural factors such as gender; religion etc has a significant impact on the consumer behavior. From this study, it can be concluded that purchasing behavior of the consumers is significantly influenced by the cultural factors. The examples of Thailand, India and Iran have demonstrated how culture influences the purchase of luxury goods.

References

Jamal, A., & Al-Marri, M. (2007). Exploring the effect of self-image congruence and brand preference on satisfaction: the role of expertise. Journal Of Marketing Management, 23(7-8), 613-629. doi:10.1362/026725707×2266

Jamal, A., & Goode, M. (2001). Consumers and brands: a study of the impact of selfâ€Âimage congruence on brand preference and satisfaction. Mrkting Intelligence & Plan, 19(7), 482-492. doi:10.1108/02634500110408286

Luna, D., & Forquer Gupta, S. (2001). An integrative framework for crossâ€Âcultural consumer behavior. International Marketing Review, 18(1), 45-69. doi:10.1108/02651330110381998

Park, H., Rabolt, N., & Sook Jeon, K. (2008). Purchasing global luxury brands among young Korean consumers. Journal Of Fashion Marketing And Management: An International Journal, 12(2), 244-259. doi:10.1108/13612020810874917

Examples of Cultural Factors’ Influence on Luxury Goods Purchasing Behavior

Seong, S., & Hong, E. (2013). The Influence of Consumption Value and Attitude about Luxury Goods by Women on Consumption Behavior and Satisfaction. The Korean Journal Of Community Living Science, 24(4), 517-536. doi:10.7856/kjcls.2013.24.4.517

Teimourpour, B., & Heidarzadeh Hanzaee, K. (2011). The impact of culture on luxury consumption behaviour among Iranian consumers. Journal Of Islamic Marketing, 2(3), 309-328. doi:10.1108/17590831111164822

Wiedmann, K., Hennigs, N., & Siebels, A. (2009). Value-based segmentation of luxury consumption behavior. Psychology And Marketing, 26(7), 625-651. doi:10.1002/mar.20292

Introduction

Contemporary world is increasingly becoming dependent on technology. Social networking is increasingly utilized by the retailers for enhancing the effectiveness of the marketing communication. Social media marketing has been described as a link between the consumers and brands which provide a personal communication channel focused on social interaction (Gong, 2013). In dynamic and extensively competitive business environment various organizations have been integrating social media in their marketing strategy for achieving competitive advantage. This paper will focus on analyzing how social media has been contributing in enhancing the effectiveness of the marketing strategy of a business firm (Bampo, Ewing, Mather, Stewart & Wallace, 2008).

Social media can be described as an internet application developed on the basis of web 2.0 and permits the exchange of user created contents. Social media is considered to be one of the most popular medium for social interaction for sharing personal contents. Initially, social media provided a web based platform to the individuals for connecting with acquaintances. But, presently the social media has been providing an opportunity to learn about various companies and the products sold by those firms (Kuppuswamy & Narayan, 2010). Hence, the retailers and marketers are emphasizing on utilization of the social networking sites to communicate effectively with the target audience. The major purpose of the promotional activities is to communicate with the target market and make them aware of the brand or product. Promotional activities can be conducted through various promotional tools such as direct marketing, public relations, sales promotion and advertising. Now, social media has been using as one of the most important channels for publishing advertisements and communicating the promotional activities to develop a healthy relationship with the customers (Zhang, Jansen & Chowdhury, 2011).

First of all, the number of internet users is growing rapidly across the world along with number of social media users. People from different age groups are registering in the popular social media networks such as Face book, Twitter, LinkedIn etc (Di Pietro & Pantano, 2012). Presently, the business organizations are focusing on publishing online advertisements on the social networking sites. While the users of social media will sign in to the site, they will get to know about the present activities of the brand. For example, when a particular brand is offering discount it can be published through the online advertisements (Zeng, Huang & Dou, 2009).

Various brands are found to be utilizing social media for fostering brand awareness. Social media has immense potential to reach wide range of population. Additionally, it is not very expensive and increasing number o companies are brands are adopting social media promotional tools in order to enhance the effective communication with the target market and improving the customer service (Melanthiou & Fantis, 2010). For example, various fashion brands have created their face book pages and just giving a ‘like’ on the page will help in getting information regarding that particular brand. The users will get to know about their latest collection, upcoming events and discounts. Additionally, various brands conduct online quizzes and competitors for the social media users. For instance, the users can be asked to upload their picture wearing the dresses of that particular brand. At the end, the photographer which will receive highest number of votes will be selected for the best prize (Wolny & Mueller, 2013). This is an innovative idea for communicating with the target market and making them engaged. In this way, the company will able to meet its marketing objectives. Research studies have provided significant evidence regarding the effectiveness of social media as a promotional tool. One of the important aspects is, the social networking site has enabled the users to access their profile from anywhere. Additionally, the activities of an individual on the social media can be viewed by others. Hence, this has provided extensive opportunity for the brands to connect with large number of audience (Gonzalez, Claro & Palmatier, 2014).  It is evident that social media is the new element of the promotional mix and it has enabled the companies to directly reach the consumers in an easier manner (Thongsuk, Haruechaiyasak & Saelee, 2011).

Opinion leader is referred to the distinguished individual or the organizations which has the potential to influence the public opinion relating a particular matter. Use of the social media as the promotional mix has been providing ample opportunities for interacting with wide range of audience and it has helped the organization in increasing the effectiveness of marketing communication. Integration of social media into the marketing strategy of a firm helps in obtaining a platform for the opinion leaders to communicate with the target market. The other communication channels were less effective compared to the social media. The opinion leaders will have to put less effort to reach large number of consumers. Additionally, various creative approaches can be adopted by the opinion leaders to utilize social media as one of the important promotional tools. Hence, it can be stated that adoption of the social media will contribute in strengthening the influence of the opinion leaders. For example, if a renowned actress promotes a brand as opinion leader, she will be able to reach large number of people conveniently and it will easily influence the psychology of the consumers (Thackeray, Neiger, Hanson & McKenzie, 2008).

Conclusion

This study has helped in gaining insight regarding the utilization of social media a promotional tool. It has been found that social media is very effective to communicate with large number of consumers. The efficient new hybrid element of promotional mix helps the organization or the brand to interact with the target market for fostering brand awareness with less effort and minimum expenditure. Additionally, it has been observed that the social media provides a platform for the opinion leaders in order to strengthen their influence on consumers.

References

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Di Pietro, L., & Pantano, E. (2012). An empirical investigation of social network influence on consumer purchasing decision: The case of Facebook. J Direct Data Digit Mark Pract, 14(1), 18-29. doi:10.1057/dddmp.2012.10

Gong, W. (2013). Factors influencing perceptions toward social networking websites in China.International Journal Of Internet Marketing And Advertising, 8(1), 54. doi:10.1504/ijima.2013.056585

Gonzalez, G., Claro, D., & Palmatier, R. (2014). Synergistic Effects of Relationship Managers’ Social Networks on Sales Performance. Journal Of Marketing, 78(1), 76-94. doi:10.1509/jm.11.0431

Kuppuswamy, S., & Narayan, P. (2010). The Impact of Social Networking Websites on the Education of Youth. International Journal Of Virtual Communities And Social Networking, 2(1), 67-79. doi:10.4018/jvcsn.2010010105

Melanthiou, Y., & Fantis, S. (2010). Using social networks as a promotional tool for higher education institutions. International Journal Of Technology Marketing, 5(4), 303. doi:10.1504/ijtmkt.2010.039733

Thackeray, R., Neiger, B., Hanson, C., & McKenzie, J. (2008). Enhancing Promotional Strategies Within Social Marketing Programs: Use of Web 2.0 Social Media. Health Promotion Practice,9(4), 338-343. doi:10.1177/1524839908325335

Thongsuk, C., Haruechaiyasak, C., & Saelee, S. (2011). Classifying Business Types on Twitter Based on User Influential Analysis. AMR, 403-408, 3719-3723. doi:10.4028/www.scientific.net/amr.403-408.3719

Wolny, J., & Mueller, C. (2013). Analysis of fashion consumers’ motives to engage in electronic word-of-mouth communication through social media platforms. Journal Of Marketing Management,29(5-6), 562-583. doi:10.1080/0267257x.2013.778324

Zeng, F., Huang, L., & Dou, W. (2009). Social Factors in User Perceptions and Responses to Advertising in Online Social Networking Communities. Journal Of Interactive Advertising, 10(1), 1-13. doi:10.1080/15252019.2009.10722159

Zhang, M., Jansen, B., & Chowdhury, A. (2011). Business engagement on Twitter: a path analysis.Electronic Markets, 21(3), 161-175. doi:10.1007/s12525-011-0065-z