Luxury

An Investigation into Motives for Consumption of Luxury Goods in Contemporary Society

CONTEMPORARY PERSPECTIVES
Ben Cox

Contemporary Luxury Perspectives An Investigation into Motives for Consumption of Luxury Goods in Contemporary Society

Author: E-mail:

Ben Cox btccox@aim.com

Design:

Ben Cox

Copyright 2008 Ben Cox

Contemporary Luxury Perspectives

An Investigation into Motives for Consumption of Luxury Goods in Contemporary Society

Master thesis by Ben Cox

Abstract
Trend reports propose new ideas toward the concept of luxury. In addition marketing research addresses a phenomenon described as the new luxury market, often related to the democratisation of luxury. The matter suggests possible new motives for luxury consumption outside the conventional economic luxury sector. This thesis study considers current views on luxury and aims to suggest more holistic motives for luxury consumption in contemporary society. The focal point of the thesis revolves around the following research question: What consumer motives are of signicant inuence when considering contemporary perspectives of luxury consumption?. The study is undertaken with an emphasis on a Western European context. Research concerning dierent viewpoints and areas regarding luxury were analysed to create deeper understanding. This resulted in a framework of what constitutes a luxury product. The holistic denition of a luxury product provided by the framework created the opportunity to frame motivation for luxury consumption accordingly. The framing resulted in two perspectives of luxury: the traditional perspective of luxury and the new perspective of luxury. The traditional perspective of luxury is related to interpersonal motives for luxury consumption, whereas the new perspective of luxury is related to personal motives. Research concerning societal change and values were considered to support the perspectives. Two case studies were conducted to support the thesis ndings concerning the two perspectives. The case studies give practical examples of products perceived as luxurious and exemplify factors that may inuence the perception. The thesis outlines a new approach towards the concept of luxury by providing a framework of what constitutes a luxury product and illuminates two perspectives accordingly, which are then translated into motives for luxury consumption.

Acknowledgements
Before you lies my thesis submitted in the fullment of the Masters Degree: Industrial and Strategic Design, School of Design, University of Art and Design Helsinki. Firstly I would like to thank everyone that made this thesis possible. Foremost I would like to thank two people that guided me through this thesis study. These people are my tutor Prof. Minna Uotila and my professor from Industrial and Strategic Design Prof. Peter McGrory. I would like to thank the following people in particular for various reasons; Su Bing, Korhan Bykdemirci, Heddwen van Gestel, Aila Laakso, Bjrn Saunes and Ryan Sohlden. Finally my gratitude goes to my parents and brother for always being there when I need them the most. Also throughout the time of this thesis they have been invaluable to me.

Table of Contents

1 Introduction ....................................................... 12
1.1 1.2 1.3 1.4 The Subject and Context of the Study ................12 Framework of the Study.......................................13 Realisation and Outcomes ...................................14 Personal Motivation .............................................16

2 Luxury and History ............................................ 20

2.1 2.2 2.3 2.4 2.5 Etymology of Luxury ...........................................20 The Classical Notion of Luxury...........................21 The Luxury Debates..............................................21 Luxury and Availability........................................22 Implications concerning Contemporary Luxury Consumption ...........................................23

3 Theoretical Framework of Luxury Products ..... 28

3.1 Perceived Needs and Desires ...............................28 3.2 Sign-Value .............................................................30 3.3 Price Inuence on Luxury Products....................31 3.4 The Emergence of Luxury ....................................32 3 4 1 Basis of Luxury Products ....................................32 3 4 2 Knowledge Aecting Luxury ..............................32 3 4 3 Context Aecting Luxury ...................................32 3 4 4 Luxury within Communities..............................34 3 4 5 Types of Luxury .................................................35 3.5 Towards a Framework for Luxury Products .......37

4 Perspectives of Luxury ...........................................42

4.1 The Indenable Character of Luxury ..................42 4.2 Consumer Attitudes toward Luxury ...................44 4.3 The Traditional Perspective of Luxury................46 4 3 1 Traditional Luxury and Consumption Today ....46 4 3 2 Dominating Traditional Motives .......................47 4.4 The New Perspective of Luxury...........................49 4 4 1 A New Emphasis in Luxury Consumption .........49 4 4 2 Change of Values ...............................................50 4 4 3 New Consumer Attitudes towards Luxury .........54 4 4 4 Changes in Perception of Quality.......................56 4 4 5 Dominating New Motives ..................................58 4.5 Framework of Motives .........................................60 4.6 Luxury Consumption in Contemporary Society ...................................................................62

6 Conclusions and Reections ................................78

6.1 Conclusions...........................................................78 6.2 Possible Future Directions ...................................80 6.3 Reections regarding the Study ..........................81 References ....................................................................82 List of Figures...............................................................86 Appendices ...................................................................88

5 Manifestation in Society .......................................66

5.1 Market Segments Associated with Luxury..........66 5 1 1 The Economic Luxury Sector ..............................66 5 1 2 The New Luxury Market....................................68 5.2 Luxury Goods within Communities: Two Case Studies ...................................................................69 5 2 1 From Status Symbol to Commodity: case: Motorola RAZR V3 ...........................................69 5 2 2 A European New Luxury Example: case: Innocent Drinks .................................................72

Introduction This chapter describes the outline of the project including the research question and the realisation process.

Introduction

1.1 The Subject and Context of the Study Luxury is a concept, which each and every one of us can relate to in one form or another. Most certainly everyone has some idea or opinion as to what constitutes luxury. Generally it conjures images of comfort, expensiveness and exclusivity. Nonetheless it is a concept that can hold many dierent meanings in different contexts, such as cultural, technological and personal. From a technological point of view luxury could be seen as highly innovative and of high material quality. From an economic point of view luxury could be seen as something highly expensive. In a social context it is more dicult to describe, but it has been associated with the stratication of society. People in higher social classes were traditionally the only ones who could aord or had access to luxury products. Hierarchical structures in social class were often secured through purchasing and conveying luxury items. These views are still apparent today, nevertheless there are several signals that the notion of luxury is changing. The contemporary perception of luxury may be somewhat similar, yet dissimilar from what it used to be, because of a changing array of social, technological and economic factors. Today various perceptions of luxury are directed toward the enriching of the inner-self, placing more emphasis on the personal side of luxury. Self-actualisation and self-pleasure is becoming increasingly important in the consumption of luxury products, whereas before indicating status was seen as the most important factor in consuming luxury. The availability and aordance of luxury products has increased signicantly as well. The market has responded to consumer wants and desires and companies have reacted by making luxury products more accessible to the masses. These changes are often referred to as being related to the democratisation of luxury or the new luxury (Danziger 2005: 1, Silverstein and Fiske 2005: 3). Other terms associated with these changes are experiential luxury (Danziger 2005: 33), and responsible luxury

Chapter one Introduction

(Carlson 2007). Therefore this thesis attempts to look beyond the traditional notion of luxury goods comprising of brands such as Chanel, Cartier and Versace. Because of changes in society presumably resulting in new perceptions of luxury, contemporary luxury consumption may manifest itself dierently. The emphasis of this thesis lies therefore with the social and economic context of luxury. This manifests itself in the consumption of products that are perceived as being luxurious for various reasons. 1.2 Framework of the Study The research question revolves around the notion of luxury and in particular the motives that are related to the consumption of luxury goods. Luxury is a topic that has been revived through discussions related to the changing character of it. This was the starting point of this thesis and resulted in the following research question:
What consumer motives are of signicant inuence considering contemporary perspectives of luxury consumption?

This question considers multiple forms of luxury and asks for an exploration of the general concept in a historical as well as a contemporary view. In order to narrow the study down to t within the scope of this thesis, a focus on Western Europe has been chosen. Nevertheless the ndings may be useful in other contexts as well. The thesis aim is to address motives behind luxury consumption. In order to reach that aim, various literature is investigated concerning the perception, history and development of luxury. The main driver behind the study is the changed perspective of luxury, which has manifested itself in a newly emerged market and changed attitudes toward luxury. The thesis may give an updated understanding of motives concerning luxury consumption incorporating the changing nature of luxury. This study is undertaken in the line of recent studies. The subject has gained great attention due to changes in society and shifts in values it corresponds with. This is often referred to as postmodernisation (Inglehart 1997: 5). These changes may have had a massive inuence on the perception of luxury. A study undertaken by Carbonaro and Votava (2005) suggests a new approach towards marketing. By doing so several models are introduced that reveal new approaches toward consumption. The concept of quality is addressed and translated into categories. These are of direct inuence on the perception of luxury. A study on the phenomenon new luxury has been undertaken by The Boston Consulting Group and has been published in the book Trading Up: Why Consumers Want New Luxury Goods... And How Companies Create Them

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in 2004 and has since received great interest. Mainly marketing strategies are addressed in how to successfully enter the new luxury market. The book focuses on the increasingly auent middle class of contemporary consumption societies. An attempt to categorise luxury in dierent clusters based on the changes in consumption practices has been undertaken by Cautela et al (2007). The paper suggests several luxury categories based on identied descriptors. In the context of the meaning of luxury from a social point of view, a study undertaken by Mortelmans in 2005 aims to outline a denition of luxury in a semiotic way. The concept of luxury is approached as a social phenomenon rather than related to a product segment. As a result he gives examples of stratication processes and suggests a denition of luxury in terms of sign value (Mortelmans 2005). This study suggests that the expression luxury cannot be dened. The history of the notion of luxury in a European context is demonstrated in the book The Idea of Luxury: A Conceptual and Historical Investigation by Christopher Berry (1994), who discusses the topic from a needs and desires perspective. Consumer motives toward luxury consumption have been studied by Vigneron and Johnson (1999). The paper suggests a framework of consumer motives related to the consumption of luxury based on the analysis of previous studies related to the matter. The study is one of the rst that combines luxury for interpersonal and personal use in one single framework. A study by Reinmoeller (2002) focuses on the emergence of luxury. In doing so, several interesting theories are addressed and developed that may help to understand luxury as a social phenomenon and understand the inuence of recent society changes. The study undertaken here contributes to and builds on the studies above by suggesting a framework of consumer motives that signies the most important motives today considering luxury consumption in a Western European context. In addition case studies are undertaken to support the theory discussed. 1.3 Realisation and Outcomes The research question consists of three main following parts that need to be investigated in order to reach a soundly constructed result. Firstly the notion of luxury consumption needs to be claried. Secondly perspectives concerning luxury need to be investigated and proposed. Finally these need to be connected to the notion of consumer motives. The main methods used to achieve the results of this study consist of literature review summarising and synthesising. The nal results were shaped by connecting and reinterpreting

Chapter one Introduction

literature, trends and articles. The proposal of a framework of a luxury product is given to complement the rst part of the research question and help to illuminate the reasoning of consumption of luxury goods. Based on the synthesis of the framework together with literature review and personal insights, perspectives of luxury were formed. These perspectives were projected onto a framework of motives developed by Vigneron and Johnson and adjusted accordingly to propose a revised framework of motives concerning luxury consumption that may reect the identied perspectives of luxury. Connecting ideas from several sources was partially done using the anity diagram method. This method is particularly useful for synthesising large amounts of data. By establishing relationships between sources and ideas, groupings can be made to clarify the material. Headings and subheadings may clarify topics and guide the structuring. The anity diagram method proved to be useful in this thesis. It was used to structure notes derived from literature to categorise corresponding ideas. This was done throughout the study to guide the direction of further research. An example of a grouping constructed using the anity diagram in an early stage of this thesis is demonstrated in gure 1.1. The cut-out material contains notes derived from literature reviews and is structured with headings to link the material according to subject. Headings and subheadings written down on post-it notes suggested possible categorisation of the material.

Figure 1.1 Groupings made with the afnity diagram method

Case studies have been conducted to connect the theories discussed to real life examples. The case studies are designed to provide clarity with practical examples of the theory discussed. They revolve around products that have been carefully chosen to cover important aspects of the thesis.

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1.4 Personal Motivation Personal motivation at the start of this thesis was found on a number of levels. The rst and foremost motivation was providing a thesis that is sucient to graduate as a Master of Arts in Industrial and Strategic Design. In addition this thesis was undertaken to improve and increase personal knowledge useful for successful continuation of a professional career in the design eld. Both new and applied knowledge have been gained with this thesis. The subject of this thesis is of a wide scope, yet covers an interesting area that is useful for several companies that are active in the consumer industry. My understanding of the concept of luxury, both in a historical and contemporary context, has grown substantially. Secondly the review of consumer motives concerning luxury provided me with better insights in what drives consumers. Despite the fact this review was limited to motives in relation to luxury consumption, these insights will undoubtedly be useful in other contexts as well due to the increased insight in consumers drives.

Chapter one Introduction

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Luxury: a Historical Overview This chapter discusses the notion of luxury from a historical perspective and concludes by suggesting the implications historical issues may have had on contemporary luxury consumption.

2 Luxury and History

2.1 Etymology of Luxury The etymology of the word luxury suggests that the meaning has changed throughout time (see gure 2.1). This indicates that luxury was interpreted dierently throughout time and implies a shift in views toward the concept of luxury. In order to understand the concept of luxury, main views in history are addressed.

luxury
1340, lasciviousness, sinful self-indulgence, from O.Fr. luxurie , from L. luxuria excess, luxury,

from luxus excess, extravagance, magnificence, probably a fig. use of luxus (adj.) dislocated, which is related to luctari wrestle, strain. Lost its pejorative taint 17c. Meaning habit of indulgence in what is choice or costly is from 1633; that of sumptuous surroundings is from 1704; that of something enjoyable or comfortable beyond lifes necessities is from 1780. First used as an adjective 1930. (Harper 2001)
Figure 2.1 Etymology of luxury

Thoughts on luxury in Greek and Roman times, as well as Christianity, are addressed. These thoughts approach the concept of luxury from a negative point of view, that is, as a possible threat to society. Secondly views of luxury from luxury debates started in the 18th century are addressed. These approach the concept in an economic way. The dierent views and their implications are elaborated further on.

Chapter two Luxury: A Historical Overview

2.2 The Classical Notion of Luxury According to Plato luxury could lead to the downfall of a society (Berry 1994: 62). In his Politeia (Berry 1994: 45) Plato examined the function of the polis. The basis of an ancient Greek city-state could be found in three basic needs: food, dwelling and clothing as stated by Plato. Fullment of these needs could not be met by oneself; others were required to assure these. The group that formed because of this was called the polis by Plato. Everyone in the polis did a task that tted him best. Furthermore Plato stated that going beyond the basic needs, for example decorating clothing that is not necessary to protect you from the weather, caused the polis to become unbalanced and thus unhealthy (Berry 1994: 51). Following this, the harmony of the basic healthy polis might be replaced by the unending striving for wealth and luxury. This voraciousness might eventually lead to the downfall of society and its citizens, therefore luxury was seen as dangerous to society (Berry 1994: 62). The Romans had a similar interpretation of luxury and saw it as dangerous because it contradicted the natural life of Stoic thought. The natural life meant not exceeding the limits of the bodys requirements and was therefore seen as the simple life (Berry 1994: 64). In both Ancient Greek and Roman thought peoples needs were seen as xed. Sumptuary laws were made in an attempt to control luxury. Despite this the Romans eventually embraced a luxurious lifestyle, which was said to have partly caused the fall of The Roman Empire as stated by Livy in his History (Berry 1994: 68). The second period that condemned luxury because of its apparently society destroying aspects was Christianity. Their beliefs were built on the Romans ones and further developed in the context of moral inappropriateness. Christianity in Medieval Times linked luxury with sins (Mortelmans 2005). This is still found in the French word luxure, which means lechery. These two words were interchangeable in that time period (Berry 1994: 87). In Ancient Greek and Roman times as well as medieval Christian times, luxury was seen as a threat to society and thus was tried to be controlled. 2.3 The Luxury Debates The notion of luxury was discussed from an economic point of view after the classical notion of luxury. This started in the 17th century when benets of luxury for trade were addressed and suggested a positive outlook. Barbon was the rst to state the positive eects of the creation of fashion and luxury goods. He implied that the wanting of luxury goods and changing fashions stimulated trade. Since trade was benecial for the well-being of society, luxury goods had a positive inuence on society as a whole (Berry 1994: 124, 125). In his The Fable of the Bees, Mandeville was the rst to openly proclaim the positive eects on society next to the negative notions of luxury, for example greed. He stated that society would benet from the selsh charac-

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teristics of people aspiring enjoyment by luxury, because this would generate trade and manufacturing of luxury products leading to a powerful society. He hereby tried to destabilise the idea that an austere life assured societal progress (Mortelmans 2005, Berry 1994: 131). In opposition to these views the French philosopher Rousseau had a dierent opinion. He saw poverty as a direct result of luxury in society (Mortelmans 2005). Luxury caused inequality between poor and rich. Because the rich were indulging themselves with luxurious products, the poor did not have enough means for their basic needs (Williams 1982: 44 in Mortelmans 2005). Luxury has always been associated with wasting resources that could have been used for necessities. Nevertheless luxury has been related to stratication processes and thus serves a prominent role in society (Mortelmans 2005). Finally Smith seemed to end the luxury debates with a commonly accepted viewpoint (Hilton 2004). Smiths view on the topic was that greed and the desire to get wealthy, which stimulated individual consumption, was necessary in order to stimulate the economy (Hilton 2004). Smith justied the demoralisation of the concept of luxury from the classical notion with the benets trade brought to society. Moreover Smith believed that it lay in human nature to aspire to improve ones condition. He stated that a commercial society could provide the enjoyment of freedom and opulence (Berry 1994: 154, 172). Christopher Berrys book The Idea of Luxury: A Conceptual and Historical Investigation (1994) provides a comprehensive analysis of the concept of luxury in history and its implications. 2.4 Luxury and Availability Changes in both view and meaning of luxury caused the concept to be available and used dierently according to time and location. The most signicant change in availability is related to trade and commercial society. Related to this a new understanding of luxury emerged. Before the luxury debates and the uprise of capitalism, luxury was inevitably associated with predetermined social order (Shovlin 2000). The main purpose was to distinguish higher social orders, for example the monarchy, from nonnobles, for example peasants. Luxury was used to make a clear distinction between higher powers and normal people, for example in the church to divide the divine from the ordinary. Luxury products used to be only available for few, because social classes were dened in society and it was nearly impossible to move up in social standing. In order to control this, laws were for example made to prevent lower classes to have access to luxury. Luxury was used to convey social order in an inexible manner (Shovlin 2000). Capitalism however, changed the traditional social order structure. The middle classes got more auent through commercial practices (De Vries 1999),

Chapter two Luxury: A Historical Overview

but were not able to raise their positions because of the inevitable link that existed between position and consumer pattern. Capitalism slowly weakened this link, which eventually could be seen in the French Revolution that broke the relation between power, position and luxury and turned luxury into a consumer product that could be obtained by people who were able to aord it (Mortelmans 2005). Shovlin stated that because of this a new way of social structuring appeared. He highlighted that the old use of luxury to indicate social order lost its dominant position. New social dierentiation traits emerged that signied new social identities (Shovlin 2000). This new use for dierentiation caused luxury goods to change their symbolic character (Mortelmans 2005). Luxury became available to those who could aord it and therefore luxury was turned into a consumer product (Mortelmans 2005). Jan de Vries stated that products became increasingly uniform and similar among peoples possessions in 17th century Dutch society. The distinguishing factors were in cost and quality, rather than in owning dierent types of objects according to him. In the 17th century Dutch Republic a new view on luxury, moving away from the classical distinction purpose had emerged, which manifested itself in the production of products with a variety of quality. The owning of similar products, diering only in quality and cost, through all layers of society as a result of economic development, indicated a shift toward achieving comfort (De Vries 1999). 2.5 Implications concerning Contemporary Luxury Consumption The impact of history on the consumption of luxury goods is signicant. The most prominent impact for today is the fact that luxury became part of our consumer culture. Capitalism changed the view on luxury products and linked availability with income, rather than availability based on predetermined social order as seen before the 17th century. Luxury products became available for auent people in general and were used for stratication of society in a dierent way. Consumption patterns were used by social status groups to set themselves apart from other groups (Bocock 1993: 6). Today luxury goods are part of our consumption society. Therefore luxury goods may be used in constructing identity through consumption practices. As mentioned earlier, the meaning of the word luxury developed from sinful in medieval times to a more positive meaning during the 18th century. Even though this is the 21st century, those contradictions still reect the interpretations of most people today. Research conducted in Milan among 292 middle class people showed that luxury is for example associated with personal achievement, but also with the pursuit of vanity and considered an excess (Carcano and Catalani 2005). In another study conducted by Dubois et al (2001) a similar result was found. The results of the study indicated that there are many contradicting views and attitudes concerning luxury present

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among people today, especially between the attitudes towards the general concept and the attitudes towards the products or services that are considered a luxury. Attitudes towards the general concept hold mental reservations opposing conspicuous consumption, which is generally negative. Most of the time luxury is associated with wasting materials and with posh behaviour. On the other hand a deep involvement can be seen among people related to particular products or services associated with luxury, for example the aesthetic value of those products or the pleasure and comfort it may give. This is seen as positive. However, these positive and negative aspects are independent from each other and can be found within the same person (Dubois et al 2001). The consumption of luxury products nowadays may be associated with positive feelings. Considering the scope and aim of this thesis, the emphasis lies with the positive aspects regarding luxury consumption.

Chapter two Luxury: A Historical Overview

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3
Theoretical Framework of Luxury Products This chapter considers theoretical ideas about the notion of luxury from different perspectives. Based on these theories a framework for the conceptualisation of a luxury product is proposed.

3 Theoretical Framework of Luxury Products

3.1 Perceived Needs and Desires From a philosophical perspective luxury has been approached with the needs and desires approach. It would be easy to say that anything that is regarded as a need would be necessary, whereas objects that are desired would tend to be considered luxuries. Nevertheless it is dicult to state it this easily, because clearly needs and therefore also desires are relative. Christopher Berry explores the two concepts thoroughly in his The Idea of Luxury (1994) and denes two types of need (as quoted by Van der Veen 2003):
a) Basic needs, such as sustenance, shelter, clothing and leisure. All four are universally regarded as necessary features of human life, and they can be described as objective or universal, in that they do not refer to the particular requirement of an individual, but to the general needs of all human beings. Following Wiggins (1985: 1523) such needs are described as the way the world is. For example, we all need vitamin C to avoid getting scurvy (that is the way the world is), but this is independent of our desire to eat fruit. In this sense, needs are not intentional and not privileged; they are states of the world, as opposed to principles of action (Berry 1994: 910). b) Volitional or instrumental needs, which are instrumental means to an end. These are often, though not necessarily, utilitarian objects such as a pen or an electric knife, which one needs to full a desire, i.e. to write a letter or to carve a joint of meat. Thus these needs are different from basic needs, in that they arise by virtue of a prior desire (ibid.: 910).

Luxuries are inevitably linked to needs and cannot be dened without them. They represent the renement of basic goods and are an indulgence. A good can be rened more and more, for that reason luxury is liable to change and cannot be dened in a denitive way. If the process of renement is innite, there will always be a desire for that better renement as it typically lies in human nature to strive for a higher status in whatever form that may be. Berry gives as an example that one would desire a cashmere coat instead of a goatskin to full the need for warmth. Moreover the cashmere coat can be

Chapter three Theoretical Framework of Luxury Products

rened further if it is for example handcrafted instead of machine produced (Berry 1994: 11). Needs are dierent in every society and can be identied as social necessities. Therefore luxury is perceived dierently in virtually every society and may change over time. For example a refrigerator was seen as a luxury in Finland some time ago, while now it can be seen as a social necessity. Every society has its own borderline of what is perceived as socially necessary and based on that, luxuries may be dened. Berry eventually describes a luxury good as:
a widely desired (because not yet generally attained) good that is believed to be pleasing, and the general desirability of which is explained by it being a specic renement, or qualitative aspect, of some universal generic need. (Berry 1994: 41)

Because of this luxury goods change over time due to the possibility of continuous renement and can eventually become social necessities (Berry 1994: 18). Examples of this are the television, indoor sanitation, sugar and several spices that changed status due to several circumstances, for example reduction in production costs because of industrialisation (Mintz 1985, 1993 in Van der Veen 2003). Because of the ability by the lower classes to consume these products or adopt certain customs, products moved down the hierarchical ladder as they were not able to express their original meaning anymore (Bocock 1993: 18, 31). This eect is commonly known as the trickle-down eect. An example of this is given by Mennell (1985 in Van der Veen 2003) who argues that in the 17th century in Europe when food became more accessible for the lower classes, it became dicult for the elite to distinguish themselves through quantity of food. As a result the elite shifted their focus to more qualitative aspects of food as well as introducing rituals, for example the introduction of new spices in food preparation and the development of menus (Van der Veen 2003). Over time higher social classes became more sensitive to the qualitative aspect of products to set themselves apart due to increasing availability of similar products (De Vries 1999). Consequently other characteristics became accountable for luxury goods. The most important characteristic that is still seen today is the notion of quality and is almost interchangeable with the notion of luxury from a consumer perspective (Dubois et al, 2001). The renements of luxury goods have been used to reect the dierences between individuals, but are nonetheless linked to basic needs (Berry 1994: 41-42). In the rst half of the 20th century consumption practices became progressively more available in all layers of society (Bocock 1993: 21) resulting in a faster trickle-down eect for products. Today this process is still relevant and is addressed by American Express Vice President Silvia Bass in an interview, who recognises this process of luxury goods turning into standard goods and states this is happening much faster than in the past (Danziger 2005: 5). Another aspect related to luxury is achieving comfort, which was shortly ad-

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dressed in the previous chapter and could be seen rst related to consumption practices in the 17th century Dutch Republic (De Vries 1999). With society becoming more focused on comfort and enjoyment, luxury products acquired integrated qualities concerning these newly arisen notions. Berry describes this as pleasure that is a form of positive desire (Berry 1994: 12, 13). Vigneron and Johnson state that these inherent qualities of luxury products have gained increased interest in research in the last couple of decades. They concluded this based on the research they reviewed and framed this in the term hedonism to highlight a motivation in luxury consumption that is personal and often related to sensory pleasure (Vigneron and Johnson, 1999). Deriving pleasure may be seen as an important aspect in the use of luxury products. 3.2 Sign-Value The rst comprehensive study related to the subject of the upper social class and how they use their wealth to distinguish themselves from others is undertaken by Thorstein Veblen in 1899. He introduced the term conspicuous consumption, meaning the excessive spending on products and services that are for the most part acquired as a purpose to show wealth and status. Veblen (1991) pointed out in his book The Theory of the Leisure Class that being wealthy alone is not sucient to indicate ones position in society, but it had to be shown to guarantee ones position in society. People spend money to attain and maintain their social status. Hence a good becomes a mean to express social standing, which makes it a tangible form of communication (Appadurai 1986: 38 in Van der Veen 2003). Luxury goods are highly symbolic goods that cannot be systematised, because they belong to a category of goods that is cultural (Catalani and Carcano 2005). This suggests that people will interpret a luxury good dierently according to culture, social status, ethics etcetera. If luxury is meant to differentiate oneself from other classes, it can also be used in classes other than the elite to distinguish oneself from dierent classes or groups (Mortelmans 2005). This explains why goods are considered luxurious by some and not by others. Goods can have dierent meanings in dierent contexts when they are perceived or used by dierent people. Mortelmans states that luxury products, in order to dene luxury in contemporary consumer society, are:
those products that have a sign-value on top of (or in substitution of) their functional or economical meaning (Mortelmans 2005).

Sign-value in products is described by Mortelmans as the value that gives additional meaning to a product. He states that multiple goals can be strived for and underlines the polysemic, undened character of it (Mortelmans 2005). Mortelmans argues that the luxury sign-value in products is related to the communication of social stratication. He states that the luxury sign-value

Chapter three Theoretical Framework of Luxury Products

is thus only apparent in interaction processes between people to indicate higher social prestige. In the consumption society of today every product can therefore turn into a luxury when it is used for hierarchical social distinction (Mortelmans 2005). Nonetheless the concept of a luxury product is broader than only the stressed luxury sign-value by Mortelmans. It encompasses other qualities equally important besides the use in distinction processes (Vigneron and Johnson 1999), that is, providing pleasure and self-development. In addition, formed opinions on luxury inuence the perception and therefore motivation of luxury consumption, which is addressed by Mortelmans as well. Hence for our purpose to identify motives of luxury consumption in contemporary society, the sign-value Mortelmans addresses is useful in the description of a luxury product, as well as the suggestion that luxury is seen throughout society as a social phenomenon and is not restricted to a product category. Sign-value on the whole is highly important for luxury goods, but also difcult to control due to the fact that it is interpreted according to context and knowledge (Mortelmans 2005). Furthermore it is unmistakably one of luxury goods most important characteristics and may be a reason for consumers to purchase luxury products. The inuence of context and knowledge is elaborated further on in this chapter. 3.3 Price Inuence on Luxury Products Luxury products are inevitably relatively expensive. Premium pricing is linked with luxury products in the mind of the consumer (Yeoman and McMahonBeattie 2005). A high price implies premium quality. If a similar product is oered by several companies, the most expensive product is considered of a better quality than the cheaper one. Within companies, similar products are often oered with an extensive price dierence. A study by Dubois et al (2001) indicated that the most expensive product within a range is believed to be of the highest quality. They argued that the price value is not restricted to the nancial aspect alone, but also involves a psychological aspect. The eort that has to be undertaken to acquire luxury products contributes to the perception of a product as a luxury (Dubois et al, 2001). Price is a factor that adds to the valuation of a product in the consumer mind and may stimulate the perceived extra sign-value inherent to luxury products. Though other characteristics may be signicant in the perception of luxury products, the psychological factor assures that quality and price are the strongest and often support other characteristics. Consequently they have to be present regardless of community interests or use.

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3.4 The Emergence of Luxury 3 4 1 Basis of Luxury Products Valuation of products is dependent on certain facets. Earlier several relative notions concerning luxury were addressed. This implies luxury is perceived dierently according to, for example, culture. In order to identify the facets that inuence the perception of luxury products, a theory developed by Reinmoeller is addressed that explains the emergence of luxury. He states that luxury products are synonymous with the highest levels of appreciation. Appreciation of product experiences is the enjoying, understanding and judging of products according to him. He states that without appreciation a product cannot deliver pleasurable experiences. Luxury appreciation is inuenced by knowledge and context (Reinmoeller 2002). These two notions are investigated in the next chapters. 3 4 2 Knowledge Aecting Luxury Reinmoeller states knowledge is formed by information, is dynamic, relational and dependent on context. It is created through social interaction between individuals that reect their values and commitment through it (Nonaka and Takeuchi 1995 in Reinmoeller 2002). Reinmoeller states two types of knowledge can be identied: explicit knowledge and tacit knowledge. Explicit knowledge is objective knowledge and can be expressed easily. One can, for example, express the material qualities of a product by saying it is made of a certain kind of material. In contrast tacit knowledge is not easy to articulate due to its subjective nature. As a result the communication of tacit knowledge is complex. This knowledge is personal and is reected in ones actions, contexts and values according to Reinmoeller. Examples he mentions of tacit knowledge are intuitions, preferences, insights and feelings. Both knowledge types inuence each other. Through the interaction between the two, knowledge is formed, according to Reinmoeller. The appreciation of luxury involves both explicit knowledge and tacit knowledge (Reinmoeller 2002). Explicit knowledge of high material qualities is not sucient to qualify a product as a luxury product, but needs to be complemented by some form of tacit knowledge that creates the product sign-value for the consumer. The consumption of the product may then be pleasurable and meaningful. 3 4 3 Context Aecting Luxury Reinmoeller states that interaction processes in context are the basis of appreciation that is created over time with knowledge. Several kinds of contexts may inuence luxury appreciation, for example physical, temporal, cultural, technological, historical, economic and social context. He argues social context is the most important in the emergence process of appreciation of luxury.

Chapter three Theoretical Framework of Luxury Products

The valuation of products is determined by the social contexts in which they emerge according to Reinmoeller. Continuous interaction of people who share interest and knowledge determine the appreciation of products and therefore luxury products (Reinmoeller 2002). Nonetheless other contexts inuence the appreciation of luxury products as well. A need in one society may be a luxury in another as mentioned earlier. Dierent societies have dierent backgrounds and social structures, which aects their idea and perception of luxury. Carcano and Catalani (2005) highlight the importance of cultural context because of the inherent sign-value of a luxury product. For example Chinese travellers with modest means are more likely to pick up expensive luxury brand products to bring back home nowadays unlike their European counterparts (Yu et al 2006: 120). This subsists in their dierent background and valuing of those particular products, but partly also in the fact that China is in a dierent phase of consumerism. Though China, as well as other countries like India, Brazil and Russia, is catching up fast, they are still in an early phase of luxury consumption according to a theory developed by Anterior:Insight, a consumer-focused insight agency. The theory distinguishes four dierent stages of luxury in todays world. The rst stage is conspicuous consumption, which manifests itself in the luxury consumption of the new rich and emerging middle classes in countries like Brazil, Russia, India and China. The second stage is termed selective extravagance by Anterior:Insight and manifests itself in Japan, Europe and the US. Increasing knowledge causes consumers to be more selective in their consumption practices, which is shown through high levels of commitment with goods, services and brands. Thirdly the stage of conspicuous abstention is mentioned by Anterior:Insight. This stage manifests itself in controlled and rened consumption practices based on knowledge. Cultural and intellectual display in products become more important than the conspicuous brand. The last stage is experiential luxury, where the focus shifts from materialism to experiences (Anterior:Insight 2006). The theory developed by Anterior:Insight can be seen as an evolution of luxury, but more so it is interesting to see that these dierent ideas of luxury may exist next to each other. This may be in dierent cultures as mentioned earlier, but also within a society based on dierent knowledge and context. Countries that are in the stage of conspicuous consumption will adopt new thinking of luxury based on their future development, which may manifest itself dierently than in Western Europe. Despite the addressed evolution, traditional luxury consumption in the form of conspicuous consumption is still apparent in Western European societies. The dierent stages of luxury mentioned by Anterior:Insight may thus correspond with various forms of luxury. Luxury may manifest itself in dierent ways, particularly when copious dier-

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ent lifestyles and consumption patterns exist that stimulate diverse knowledge creation and gathering. Thus communities in societies may develop forms of luxury based on knowledge and context and interpret them accordingly. 3 4 4 Luxury within Communities The knowledge creation that is the base for luxury appreciation is formed by communities of interest according to Reinmoeller. He mentions that communities of interest are groups of people that have common interests and knowledge and share a passion for similar products, qualities, ideas and values. Interaction within these communities supports further knowledge accumulation and exchange and supports the self-renement of the individual (Lave and Wenger 1991 in Reinmoeller 2002). Intensied, growing interaction tends to increase size of communities, whereas declining interest and interaction among members tends to decrease size. Reinmoeller states that communities extend their knowledge by direct interaction between members, but also through addressing literature and blogs. Communities can be extremely diverse because of multiple factors, for example cultural background and profession (Reinmoeller 2002). As a result people may be members of more than one community of interest in contemporary society based on multiple interests and situational context, for example when working or spending free time. Instead of traditional layers of social classes, society may be structured through communities of interest (see gure 3.1) where people may move freely between them according to for example increased knowledge or changed interest. The model acknowledges the fact that some communities of interest are not attainable due to for example monetary reasons or restricted access options by members. Furthermore the model is based on a uid hierarchy in society that is made possible by multiple changes in society. These changes are discussed in chapter 4: Perspectives of Luxury.

High Social Class Middle Social Class Low Social Class Rigid society structure based on hierarchy Figure 3.1 Changing society structure Fluid society structure based on communities of interest

Luxury can be seen as pleasure with products that emerges through interaction within communities (Reinmoeller 2002). This interactivity results in a

Chapter three Theoretical Framework of Luxury Products

shared understanding and experiencing of products and therefore the emerging of appreciation of products. This results in appreciation of products that can lead to products becoming seen as a luxury, that is, only if the product is highly recommended and understood within the community of interest according to Reinmoeller. The shared understanding of qualities and meanings of products is important in the individuals appreciation of these products (Reinmoeller 2002). This corresponds with the idea that a luxury product should be widely desirable, at least within the community of interest. The understanding and recommendation of the products by people is dependent on the sign-value that a product oers for the community of interest. If a product is lacking ones interest because of dierent knowledge or dierent context, it will not correspond with the highest levels of appreciation and may not be considered a luxury, attainable or not. This claries Mortelmans ideas about luxury as a social phenomenon apparent in all layers of society. He mentions that every community can have its own dierent type of luxuries. As an example he emphasises that a product that is traditionally considered a luxury good, such as a Cartier watch, does not have to be considered a luxury good in a particular community, whereas a television may be considered a luxury good in that community (Mortelmans 2005). 3 4 5 Types of Luxury Based on the continuous knowledge conversion process theory developed by Nonaka and Takeuchi, Reinmoeller identied four types of luxury knowledge processes, that is, luxury patterns, emerging luxury, new luxury and luxury brands (see gure 3.2). Luxury patterns are criteria for luxury within a community (Reinmoeller 2002).
Tacit knowledge Emerging Luxury New Luxury sharing and articulating tacit creating of tacit knowledge in knowledge reective dialogue through direct (metaphors, experience prototypes) Luxury Patterns learning and acquiring new tacit knowledge in practice Luxury Brands systemising and applying explicit knowledge and information

Explicit knowledge

Tacit knowledge

Source: ReinMoeller 2002

Explicit knowledge Figure 3.2 Types of luxury

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These luxury criteria may vary in importance within dierent communities of interest dependent on for example culture and interest. They are under constant development relative to the continuing development of knowledge and context, which inuence communities. Traditional examples of these criteria are scarcity, exclusivity, quality, aesthetics and price. Often a combination of several luxury patterns is required for a product to be considered luxurious. Emerging luxury is based on tacit knowledge and related to new experiences and new product categories as stated by Reinmoeller. Often this is the result of interaction and sharing of experience within small communities that discloses new pleasure for the members of the community. The sharing of experiences concerning newly discovered tacit knowledge is key in the process of emerging luxury (Reinmoeller 2002). New luxury is making emerging luxury explicit knowledge by articulating related tacit knowledge. Examples of this are the mouth-to-mouth communication and more recently also the distribution of that knowledge through community websites or magazines, although mouth-to-mouth communication remains the most trusted type according to Reinmoeller. Often metaphors, images, concepts, diagrams, narratives or prototypes are used to establish easy communication means. This could be a basis for new luxury products within communities (Reinmoeller 2002). The last type focuses on the building of the brand through visuals, aesthetics, symbols, advertising etc. Luxury brands are therefore reected through explicit knowledge. Usually the more the brand is exposed, the less it will be seen as a luxury (Reinmoeller 2002). The four types of luxury can also be seen in a dynamic approach according to Reinmoeller. They interact and build on each other. Luxury patterns are often platforms for emerging luxury products and may be seen as the starting point of the development of luxury according to Reinmoeller. He states that if communities of interest are appreciating products and share the experience with others, luxury may emerge. Consequently emerging luxury may have the smallest community of interest, because the luxury experience is new and based on tacit knowledge. Emerging luxury can eventually result in new luxury and consequently the community of interest may increase or change. The original community of interest may reject the product as a luxury after it is adopted by another larger community of interest depending on the initial purpose of the luxury product. Continuing developments result in constant adoption and rejection of luxury products in communities. Nevertheless luxury brands can develop based on larger communities of interest and identied luxury patterns. Luxury brands have the largest community of interest, because of fast and wide communication of the concretised luxury experience according to Reinmoeller. The four types of luxury are dierent in nature and therefore dierent strategic approaches are to be considered. The success of these strategies is dependent on the use and facilitation of communities of

Chapter three Theoretical Framework of Luxury Products

interest (Reinmoeller 2002). Luxury perception and motives of societies may be relative to existing and emerging luxury patterns made explicit by luxury brands within communities of interest. 3.5 Towards a Framework for Luxury Products The theory discussed provides an insightful view in recent denitions and opinions of what constitutes a luxury product. The material discussed approaches the concept from dierent angles, nevertheless similarities may be found. In multiple ways they also complement each other. Consequently a framework is developed based on the reviewed literature and insights. The most consistent factor in the theories is the relative factor luxury inhabits, which thus makes the notion of a luxury product also a relative one. The most prominent relative factor is the dependence on knowledge and context within communities of interest. Therefore it is useful to illustrate the process of the emergence of luxury (see gure 3.3).

Community of Interest (CoI) Explicit knowledge Product Tacit knowledge

Highest levels of appreciation within CoI

Luxury product

Contexts
Source: Visualisation by the author based on theory of Reinmoeller (2002)

Figure 3.3 Emergence process of luxury

The model shows the interaction within communities between rstly explicit and tacit knowledge and secondly between knowledge and context. A product that is part of those processes is valued accordingly. The highest levels of appreciation may eventually result in the perception and constitution of a product as a luxury within that particular community. The valuation of a product is thus relative to the same processes. This process is used to investigate the relations between the previously discussed theory and results in a framework for what constitutes a luxury product. A luxury product is a result of the highest levels of appreciation within a community of interest as stated by Reinmoeller (2002). Luxury patterns are a form of explicit knowledge and are used to support the valuation of a product as a luxury. The relative expensiveness of a product is a form of

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explicit knowledge despite the fact it often implies other characteristics that are desired by consumers. Quality may be one of those characteristics. The possible innite renement of a good together with the link of a generic universal need addressed by Berry suggests that a luxury product is of a better quality than a comparable product. Context and knowledge inuence the perceived renement in the community of interest as well. This, together with tacit knowledge of the community, may cause the product to be considered a luxury. Tacit knowledge may be reected in the sign-value addressed by Mortelmans (2005). Sign-value in products is used to give additional meaning and is often of a symbolic character and hard to dene, which may be relative to tacit knowledge. Therefore sign-value of a product may address tacit knowledge of a consumer. Pleasure that is important in a luxury product (Vigneron and Johnson 1999, Berry 1994: 41) may be derived from the sign-value of a product. The fact that a product should be appreciated and therefore widely desired (Berry 1994: 41) in a community of interest may be relative to all previously mentioned notions. Because of the satisfaction a luxury product provides through pleasure and quality and because it comprises the highest level of appreciation, it is widely desired among members of the community. The developed framework (see gure 3.4) proposes universal factors of a luxury product.

Luxury product

Luxury patterns

Sign-value

Qualitative better than a comparable product

Relatively expensive Widely desired

Pleasure

Figure 3.4 Universal factors of a luxury product

Because of the relative notion of a luxury product, the framework helps to clarify what the minimum requirements of a luxury product are based on diverse literature sources. Communities of interest, inuenced by their gained knowledge and surroundings, dene the valuation of a product and therefore a luxury product. Communities of interest may therefore have their own thoughts on what constitutes a luxury product apart from the notions in the initial framework. Therefore, luxury patterns and sign-value may be added to

Chapter three Theoretical Framework of Luxury Products

the framework to further narrow down luxury products in a community of interest. In the remaining chapters two perspectives of luxury are addressed resulting in motives to consume luxury products. The perspectives are rooted in two characteristics of luxury identied earlier: dierentiation and pleasure. Contemporary views concerning luxury and societal change are discussed to frame the perspectives accordingly.

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Perspectives of Luxury Chapter four outlines two perspectives of luxury. These perspectives are partially claried through charting societal change. Each perspective reveals dominating motives for the consumption of luxury. Accordingly a framework of motives is proposed.

4 Perspectives of Luxury

4.1 The Indenable Character of Luxury In the previous chapters the relative character of luxury was addressed. The inuence of history, as well as current analyses of the concept, suggest an indenable character of luxury. Consequently the developed framework of luxury goods is conditional to changing factors, that is, sign-value and luxury patterns related to communities of interest. A recent study by Cautela et al (2007), attempts to provide clarity concerning the many faces of luxury. The study suggests several descriptors from which conventional and new forms of luxury can be claried. They state that a universal denition of luxury is not feasible anymore, because the concept of luxury is associated with diverging notions such as subjective-objective, traditional-contemporary and material-immaterial. Luxury therefore should be approached from a wider scope instead of trying to incorporate it into one concept according to Cautela et al. The feasibility of luxury as one economic market sector is therefore not realistic (Mortelmans 2005). The descriptors have been identied based on conventional ideas about luxury derived from the economic luxury sector and the inuential study of Silverstein and Fiske (2005) concerning the new luxury market. In total six descriptors were found, which are polarised in two clusters: consciousness luxury and following luxury. The descriptors, together with the clusters, have been illustrated in gure 4.1. Following luxury represents a side that is about the communication of status, whereas consciousness luxury is more projected toward oneself (Cautela et al 2007). The rst descriptor is about the receiver of the luxury message. Luxury has been mostly analysed as a hetero-referred product up to the recent past (Vigneron and Johnson 1999, Cautela et al 2007). Whereas in recent times luxury is seen as something that can be for oneself as well, without communication to other people (Vigneron and Johnson 1999, Dubois and Laurent 1996 in De Barnier et al 2006). The second descriptor concerns the deeper meaning

Chapter four Perspectives of Luxury

behind luxury. Traditionally luxury was used to show o. In advanced industrialised societies with mature capitalism this is only present between classes where distance is still wide and dicult to reduce, because the armation of lifestyle is used in society to dierentiate horizontally according to Cautela et al. In the cluster consciousness luxury the meaning of fullment may be given to luxury. Gratifying oneself or rewarding oneself to recover from something is an example of this. The luxury descriptor that describes the relation with time has on one side eternity and on the other the hic et nunc. The eternity relation is closely linked with the fact that luxury is expected to be of endurance and should be able to withstand the passing of time as said by Cautela et al. They state a new arisen thought about luxury is the hic et nunc attitude, where one is able to represent oneself according to the moment, reecting ones emotional state or mood. Whereas luxury used to be about dierentiating oneself from other classes in society, with the arisen auence in advanced industrialised countries, the indication of belonging to a lifestyle, community or movement has become more important and thus the indicating of membership. This describes the fourth descriptor. The relation of luxury with other products or symbols is the fth descriptor identied. Cautela et al suggest luxury used to go only with luxury to dene the social class. Today luxury may be mixed with other products and services. A good example is the fashion world, where for example an extremely expensive Bulgari necklace is worn besides ZARA jeans. The last descriptor is related to access options. Whereas it used to be about ownership, the emphasis changed to possession in the time when you need something. For example rental services for borrowing jewellery or bags have become immensely popular (Cautela et al 2007). One example is the company Bag Borrow or Steal (www.bagborroworsteal.com).

Descriptors self-referred fullment hic et nunc membership co-existence possession Consciousness luxury cluster Figure 4.1 Luxury descriptors and clusters message/addressee deep meaning relation with time relation with reference social groups relation with other products/symbols access option hetero-referred ostentation eternity distinction absence property Following luxury cluster

Source: Cautela et al 2007

The study by Cautela et al indicates the indenable and changing character of luxury. Therefore the analysis is useful, because it supports the idea

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of diverse use of luxury among individuals. The identied descriptors may interweave and go either way depending on the interest of the community. Nonetheless two main purposes can be identied from the study. One is luxury as a means to communicate status or membership and the other is luxury for personal gratication. These two perspectives are investigated further in this thesis. 4.2 Consumer Attitudes toward Luxury In a study conducted by Dubois et al (2005), attitudes were measured toward the notion of luxury within 20 dierent countries. Based on their data they identied three dierent attitudes toward luxury, that is, a democratic, elitist and distance attitude. These attitudes may help to identify changes and clarify general ideas about luxury from the consumers point of view. The elitist attitude toward luxury may be associated with luxury for stratication as well as personal gratication purposes. The beliefs the respondents have is that only a few people should have access to luxury and as a result only few people own luxuries. This view corresponds with the ideas that luxury is very expensive, that one should be educated to enjoy these products and that luxury items can not be mass produced. The democratic attitude opposes the elitist attitude in almost every aspect. People with a democratic view on luxury are very open-minded toward the topic. They think luxury is available for everyone and almost everyone has products that are a luxury. This corresponds with the idea that no special education is needed to enjoy these products, they can be mass produced and that they do not necessarily have to be expensive. This attitude also incorporates the belief that luxury is not an instrument to dierentiate oneself from others in contrast to the elitist view on luxury. Luxury is good and should be available for everyone is a strong belief of people with a democratic view on luxury. The third attitude suggested by Dubois et al is the distance attitude. This attitude is, in contrast to the previous two, negative toward the notion of luxury. Respondents of the study are not attracted to luxury, do not know much about luxury and do not feel comfortable around luxury. They regard luxury as useless, expensive and wasteful and associate it with being old-fashioned and snobbish (Dubois et al 2005). Overall this attitude is negatively directed toward luxury. It is likely that the main idea about luxury, considering this attitude, is based on the general concept rather than on the consumption of luxury products, which could explain the negative character. However, for our study this attitude is irrelevant due to its negative character. Dubois et al projected the average attitude of the twenty countries where the study was conducted in a framework (see gure 4.2). They also briey addressed the possible positive relationship between the democratic attitude toward luxury and a stable society by comparing the levels of uncertainty

Chapter four Perspectives of Luxury

avoidance and power distance from Hofstedes framework with the democratic position in their framework. The results seemed to be in line with their hypothesis. In addition they pointed out the possible inuence of religion seeing that the democratic attitude of luxury correlates with nations that have a strong protestant inuence, while the other two attitudes are closer to historically catholic societies. Societies that have strongly developed postmodern values were in most cases historically protestant (Inglehart 2000). The democratic attitude toward luxury may therefore be particularly evident in societies with postmodern values.

Democratic

Denmark

Elitist
New Zealand The Netherlands USA Norway UK Austria France Australia Canada Germany Hungary Poland Source: Dubois et al 2005

Sweden Switzerland Belgium

Hong Kong Italy Spain Portugal

Distance Figure 4.2 Positioning chart of countries relative to attitudes

The three attitudes represent extremes. Considering people may be members of more communities of interest and may have dierent ideas related to the general concept of luxury, these attitudes may not be rigid and may change according to personal preferences and context. Therefore one may suggest that elitist and democratic thinking toward luxury may intertwine to suit ones personal values and goals. Nevertheless the positioning of the countries shows the commonly present mix of attitudes in a country and may specify the most inuential one of the three. A country that is located close to the democratic attitude toward luxury may most likely be less inuenced by the elitist attitude when consuming luxury and vice versa.

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4.3 The Traditional Perspective of Luxury 4 3 1 Traditional Luxury and Consumption Today The rst perspective that may be identied is the social role of luxury. This perspective of luxury has the most visible link with the use of luxury in history and is therefore named the traditional perspective of luxury. Luxury was used for stratication purposes throughout history. Today this form of luxury is still evident in contemporary consumption society and has developed according to changes in society. Social class dierences today are mostly present in the nancial situations of consumers and have become smaller due to economic growth and prosperity. The phenomenon of trading up, described by Silverstein and Fiske in their book Trading Up: Why Consumers Want New Luxury Goods... And How Companies Create Them (2005: 15, 16) contributed to the decreasing dierence in perceived nancial dierence as well, because consumers were able to spend signicant amounts of money on preferred activities or products. In addition, a phenomenon described as rocketing, could make the visible dierences increasingly smaller as well. Rocketing is the spending of a large part of ones income in only one or two product segments that are considered important (Silverstein and Fiske 2005: 6). Consumption caused people to move away from having an identity through work to creating an identity through consumption (Bocock 1993: 4, 50, 78, 79). The importance of individual expression, and with that style, pleasure and excitement among others, became more evident in the last decades of the 20th century, whereas before the social class boundaries were of more importance according to Bocock. Partly this also caused a shift toward personal use of luxury that is elaborated further on in this thesis. Social class boundaries became thus more uid, causing people to move more freely between them (Bocock 1993: 80, 81). This allowed them to develop knowledge and appreciation for products and become members of communities of interest. Next to class dierences, attaining membership of communities of interest, may be equally or particularly more important concerning the consumption of luxury. The sign-value in luxury products is associated with high levels of appreciation. Thus consumption of luxury products may be used to create an aspired identity by the consumer and reect its values. Membership and differentiation may support this. Mortelmans describes two forms of stratication in society, that is vertical stratication and horizontal stratication. He states that luxury in vertical stratication is used to distinguish oneself from other classes and is also used to indicate this, whereas luxury in horizontal stratication is used to distinguish oneself within the social class itself to indicate exceptional class membership (Mortelmans 2005). The usage of luxury products in horizontal stratication processes can be quite profound within the group, but can usu-

Chapter four Perspectives of Luxury

ally not be recognised outside the social group. An example Mortelmans gives is the use of a technically superior tennis racquet that will give no excessive benets in playing the game, but is primarily used as a sign-value to dierentiate. It requires special knowledge to recognise the dierence from other tennis racquets and that quality is therefore used in the horizontal stratication process. This can also be seen within the car industry, which produces dierent versions of comparable cars. These versions are often used in horizontal stratication processes. For example a BMW 520i has a consumer price of 45.970,-, whereas a BMW 540i has a consumer price of 71.300,- according to a Dutch price list of April 2008 (http://www.bmw.nl/nl/nl/index_narrowband.html). For someone who cannot aord a BMW 5 series sedan, these cars are perceived as being similar. This is supported by the outside form of the car that is almost identical. However, among people that can aord the car, the dierence between a 2.0l and 4.0l engine may be signicant for stratication purposes within the social class. Vertical stratication is primarily focused on the dierences in social class. In contemporary society products to support vertical stratication may be used, for example, to signify wealth. Vertical stratication in society with, for example, uniforms indicating professions is outside the scope of this thesis and may not be relevant in relation to economic luxury consumption practices. Horizontal stratication in order to indicate exceptional class membership may be projected onto communities of interest. This form of stratication is particularly noticeable and may verify the dedication of a member in the community of interest. A high quality lens for a SLR (Single Lens Reex) photo camera may be used to dierentiate among amateur photographers. The lens may indicate comprehensive knowledge and create credibility and status among the members. The posting of a photo on an internet blog dedicated to photography may increase attention and inuence appreciation when the lens is mentioned alongside the photo. The elitist attitude identied by Dubois et al in their study corresponds with consuming luxury for stratication purposes. Luxury is viewed as something exclusive and as a means to dierentiate for consumers that have an elitist attitude. The elitist attitude corresponds with the idea of luxury as a means to distinguish oneself vertically in a social class or community of interest. 4 3 2 Dominating Traditional Motives The motives of luxury consumption innate with the traditional perspective of luxury correspond with the desire to dierentiate oneself from others. The elitist attitude may play a signicant part in the consumption of luxury for dierentiation. Dierentiation is a social phenomenon and involves communication between people. Therefore these motives are hetero-referential. This corresponds with the following luxury cluster of the descriptors identied by

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Cautela et al (2007). From the following luxury cluster, two notions that have a communicative role can be recognised from their study: distinction and ostentation (see gure 4.1). These notions have also been recognised in a study concerning prestige-seeking consumer behaviour by Vigneron and Johnson (1999). Though the addressed study here is directed toward prestige-seeking behaviour, the motives identied are in line with recent research concerning luxury by Cautela et al. Dubois and Czellar (2002) also state prestige is the word that is used most next to luxury to refer to brands and their products that hold extensive intangible value. Although prestige is in some cases interchangeable with luxury (Vigneron and Johnson 1999) and in some not (Dubois and Czellar 2002), prestige is regarded as an essential part of a positive luxury experience as the study by Dubois and Czellar revealed. In addition motives for dierentiation through consumption of luxury may be seen as conveying status to others and may therefore be a form of prestige. In fact prestige is associated with human success (Dubois and Czellar 2002). Therefore the motives identied by Vigneron and Johnson (1999) are useful for our purpose and are elaborated upon further below. The study by Vigneron and Johnson is based upon various inuential works regarding behaviour related to prestige and luxury and may be seen as an extensive summary. Earlier in this thesis conspicuous consumption was already addressed. The main purpose of this is to show others what you have and where you belong or aspire to belong, in other words to impress others. This motivation of why people want to consume luxuries is linked to valuing conspicuousness as said by Vigneron and Johnson. They state conspicuous consumers tend to display wealth and through that power and status. Therefore these consumers have a preference for highly visible characteristics of the product, which can, for example, be indicated by a visible brand name. Increasing the price of luxurious products would increase the amount of goods sold among these customers, because it would be considered more expensive and thus better to indicate status (Vigneron and Johnson 1999). This eect is known as the Veblen eect that is named after the economist Thorstein Veblen (Leibenstein 1950 in Vigneron and Johnson 1999). A second reason to consume luxuries for dierentiation purposes can be found in wanting to be unique. To increase ones status the consumption of goods that are rare or scarce is preferable according to Vigneron and Johnson. The behaviour that is linked to this is the snob eect (Leibenstein 1950 in Vigneron and Johnson 1999). Status seeking consumers will stop buying goods when they consider them too popular or too widely consumed by the mass. Goods that are scarce are perceived with a higher value than goods that are not, they command respect and prestige (Solomon 1994: 570 in Vigneron and Johnson 1999). The snob eect may also occur when a prestige product is

Chapter four Perspectives of Luxury

launched in order to take advantage of the fact that few consumers possess it in the beginning, for that reason the snob will adopt the product (Mason 1981: 128 in Vigneron and Johnson 1999). The main reason again for this behaviour is to dierentiate oneself from others. This behaviour may be especially eective in the horizontal stratication process to indicate exceptional membership in community. Vigneron and Johnson identied another motive regarding prestige-seeking behaviour, which is to secure group membership. Conformation to a community standard may be a motive for luxury consumption as well. Nevertheless this could be a function of dierentiation if the main motive is to distinguish oneself from other classes through membership. Expressing membership for this purpose may t with the elitist attitude and traditional perspective of luxury. The phenomenon related to this is the bandwagon eect (Leibenstein 1950 in Vigneron and Johnson 1999). The bandwagon eect can be described as follows: when preference for goods increases, demand increases as well. This eect is closely related to the snob eect and may trigger snob behaviour. When a product becomes too familiar and is possessed by many, it loses its function to distinguish and therefore its status. Cautela et al (2007) state that expressed membership opposing distinction is a new form of luxury. Belonging to a life-style and sharing the thoughts and pleasure related with it, therefore indicating membership of a community, may be a purpose of luxury opposing status conveying use (Cautela et al 2007). When luxury is used to indicate membership without the purpose of dierentiation from other groups, but for example for constructing self-identity, it may be seen as a motive for luxury consumption relative to the democratic attitude toward luxury. Here the democratic and elitist attitude may inuence the initial purpose of attaining and expressing membership. Sign-value and luxury patterns have to communicate these motives in order to be successfully perceived as a luxury product that is used in dierentiation and membership. According to the luxury patterns and sign-value that conform the perception as a luxury product in a community, other characteristics may be present as well. Nevertheless the luxury patterns and sign-value that communicate dierentiation or membership may be dominant in the initial consumption of the luxury product if dierentiation or membership is desired. 4.4 The New Perspective of Luxury 4 4 1 A New Emphasis in Luxury Consumption The study by Cautela et al (2007) suggested a use of luxury outside the communicative character. Together with the identied democratic attitude in contemporary European society in the study by Dubois et al (2005), these

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studies point to a changing character of the use of luxury. The proposed evolution theory of Anterior:Insight addressed earlier highlights other possible views toward luxury. Luxury is present in many forms because of dierent views and attitudes toward the concept of luxury. Recently these changed views of luxury gained vigorous attention from several sources. Terms like new luxury and responsible luxury represent new ideas about luxury that may have become possible because of an altered perception of luxury. Firstly new ideas about luxury are often associated with the democratisation of luxury, secondly are also linked with feelings and experiences (Danziger 2005: 19). The democratisation of luxury involves the availability of products and services perceives as luxurious to more social classes than only the very auent. Instead of using luxuries primarily for communicative purposes, they are increasingly used for private pleasure and gaining experiences (Danziger 2005: 7, 19, 21). This is also in line with the fact that time is getting more important and seen as a luxury in todays fast paced world. Several changes in society are addressed that presumably have had a substantial inuence on the emergence of a new perspective of luxury in contemporary society in Europe. The Zukunftsinstitut (www.zukunftsinstitut.de) in Germany conducted research related to changed perceptions of luxury in 2005. They identied several aspects that are dierent from the classic notion of luxury that are illustrated in gure 4.3. It suggests that individuality is increasing signicantly in importance in comparison with luxury as a means to convey status. The well-being of the individual is more important, which results in a more inward directed kind of luxury. This is in line with the postmodern values that Inglehart (2006) identied, which are addressed in the following chapter.
New luxury: The diversication of the notion of luxury
Social function Consumption motive Underlying concept Era Objects Object relation Life goal Status luxury Status, prestige Social differentiation Competitiveness Society of the masses Cadillac, Patek, Gucci Fetish More money New luxury More life quality Individual well-being Inner-growth Society of the individual Mass customisation Quality of service and experience More time

Source: Zukunftsinstitut GmbH (derived from Jurik 2006, translated by the author)

Figure 4.3 Status luxury versus new luxury

4 4 2 Change of Values Globalisation is something that has had vast inuence on the perception of luxury. Information became increasingly more easily accessible for people,

Chapter four Perspectives of Luxury

thus increasing knowledge of consumers. This caused consumers to be aware of multiple lifestyles through the media, internet and other forms of mass communication. Increased knowledge and awareness caused people to aspire to and therefore imitate those lifestyles. The Industrial Revolution in the 18th century led to the industrialisation of Europe. Many new technologies were invented and introduced and as a result the economy grew rapidly. The money available for investments rose, resulting in making the economy growth increase more. This resulted in a modern capitalist economy (Bocock 1993: 14, 15). The modern capitalist economy brought great benets with it, for example longer life expectancy and more security (Inglehart 1997: 59, 60). As a result the emphasis was on economic development to improve life conditions. However, when a certain point in the economys development of a society is reached, the benets of a higher life expectancy fade away. When the average income reaches a high level, a higher level comes with minimum benets regarding security and life expectancy in an advanced industrialised society (Inglehart 2000). Therefore the values shift from emphasising economic gains to lifestyle related issues (Inglehart 1997: 64) (see gure 4.4). Money will be less important for people than before, because they dont see economic progress as the most important factor in life anymore. The overall happiness of advanced industrialised nations societies seems to be higher in comparison with other societies, but is approximately the same when a certain level of income is reached according to Inglehart (1997: 61).

Survival and well-being values

Lifestyle Economic gains

Source: Inglehart 1997

GNP/Capita Figure 4.4 From economic gains to lifestyle

Due to several factors, advanced industrialised societies like Western Europe, North America and Japan, have seen a change in values. These factors include the economic growth in the post-war era and a good welfare system that caused a general shift in thinking toward increasing life quality instead of em-

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phasising on generating economic growth (Inglehart 2000). Inglehart suggests two hypotheses that explain the recent shift in thinking that is mostly apparent in the younger generation that gives higher priority to self-expression and the quality of life. He states this is in opposition to the generation that experienced the war, which gives higher priority toward economic and physical security. The rst hypothesis proposes the inuence of scarcity. This suggests that ones individual priorities reect the socioeconomic conditions of society. The highest priorities go to the things that are not present in a large supply. The second hypothesis is a socialization hypothesis, which suggests that a considerable amount of time is needed to change the values that were formed during the pre-adult years of a person. Most likely they will change relatively little after that (Inglehart 2000). Basing his research on data from the World Values Survey, he demonstrates that the older generations values are more pointed towards security and economic growth while the younger generations values are more directed toward self-expression, which manifests itself in materialist and post-materialist value types (see gure 4.5) (Inglehart 1997: 135, 140). If younger generations have been living in a stable society, only experiencing welfare their entire lives, it is feasible to believe they have strongly developed postmodern values, that is, values directed toward self-expression and secular-rationality. Economic growth and security are more or less taken for granted within younger generations. Therefore postmodern values are progressively more apparent in advanced industrialised societies due to the high level of economic security those societies oer (Inglehart 2000).
50%

Percentage of age group in given value type

Materialist value type Post-Materialist value type

40%

30%

20%

10%

Ages 65+

5564

4554

3544

2434

1524
(Postwar generation)

Source: Inglehart 1997

Figure 4.5 Materialist and post-materialist values relative to age

Chapter four Perspectives of Luxury

Another factor in the adoption of postmodern values by society is the authority structure. Secular-rational authority in combination with economic growth and a stable society may result in postmodern values (see gure 4.6). After completion of industrialisation, when society is turning into a knowledge society, peoples values are switching from survival values toward selfexpression and well-being values (Inglehart 2000). Inglehart and Baker (2000) found evidence that orientation of industrialised societies almost always shift from traditional values towards secular-rational values if security in a society increases. Self-expression values can develop in a society of trust and tolerance and therefore postmodern values align well with democracies (Inglehart 2006).

Source: Inglehart 2006

Figure 4.6 Position of countries relative to values

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People with postmodern values, who place emphasis on the quality of life and care about self-expression and well-being, may be present in advanced industrialised societies when the socialization hypothesis is considered. Figure 4.6 illustrates that Northern European societies are among the highest with developed postmodern values. These countries have had a stable society for a longer period including a good welfare system. Most of them also seem to have a historically protestant background that had allowed economic accumulation by individuals, which opened up the way for modern capitalism and industrialisation (Inglehart 2000, Bocock 1993: 11, 39). Industrialisation has had a major impact on society and has given rise to new values of people. Postmodern values are getting stronger in all advanced industrialised societies because of lengthy prosperity resulting in a stable society. Thus postmodern values may have caused the emergence of the democratic attitude toward luxury and may have caused the beginning of the new perspective of luxury. 4 4 3 New Consumer Attitudes towards Luxury The changing values of people in advanced industrialised societies have had a major inuence on the market place. Lewis and Bridger created a framework that suggests dierences between old consumers and new consumers that have been signicantly inuenced by contemporary consumption society (see gure 4.7). They state that the framework should not be seen as rigid, but more or less as two extremes, resulting in exible consumers that can adopt either side (Lewis and Bridger 2001: 19). Therefore this framework may show the inuence of the development of consumers in advanced industrialised societies as postmodern values become increasingly present. One could assume that old consumers are more inuenced by modern values that have been about creating economic growth and security, whereas new consumers are more inuenced by postmodern values that reect individuality and selfexpression.

Old consumers pole Seek convenience Synchronised Less often involved Conformist Less well informed

New consumers pole Seek authenticity Individual Involved Independent Well informed
Source: Lewis and Bridger 2001: 19

Figure 4.7 New consumers vs old consumers

Gilmore and Pine II suggest that after the Agrarian Economy, Industrial Economy and Service Economy, now the era of the Experience Economy

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has arrived. Consumers are increasingly looking for experiences rather than products (Gilmore and Pine II 2007: 2, 3; Danziger 2005: 19; Dryza 2006). This is in line with Ingelharts study that identied a shift away from materialist values. A product may have become a means to an end to reect values and support self-actualisation. The Industrial Economy caused the market to be saturated with goods. A response to the saturation was the transition from controlling costs to improving quality in the Service Economy (Gilmore and Pine II 2007: 3). This led to consumers increasingly demanding better quality as they refused to deal with poor quality. Because of the high level of competition, new forms of selling were established, resulting in companies emphasising progressively on immaterial services and experiences to set themselves apart from the competition. This new capitalism is referred to as the Age of Access by Jeremy Rifkin (Ebel 2004) where producing desires and experiences are stressed instead of merely producing products. This shift may have caused or may cause a change in the luxury patterns of those societies. The identication of luxury atmospherics as an important luxury facet in the UK (De Barnier et al 2006) may be an example of this, because the emphasis is on experience rather than ownership. Services and product surroundings have become more important. Furthermore branding has become essential for the survival of companies and their oerings, because through branding a story and image may be created that is essential for being recognised in todays competitive market. This can be traced back to when producers and merchants began to use symbolism in marketing to express the intangible desires of consumers (Carcano and Catalani 2005). Products may be given sign-value through symbolism and story telling. Thus changing market practices may have inuenced consumers perception of luxury. Gilmore and Pine II suggest that authenticity is what consumers today are increasingly looking for. They base their thoughts on the fact that consumers are purchasing products to conform to and reinforce their self-image. Products that do not reect the consumers image are seen as inauthentic, as a result authenticity should be seen as personal (Gilmore and Pine II 2007: 7). Premium prices are paid for authentic products (Gilmore and Pine II 2007: 10). This corresponds with the changing perception of quality described in the following chapter. Consumers are appreciating real quality more, that is, rationally and emotionally understandable quality (Carbonaro and Votava 2005). The quality segments standard and excellence that are described in the following chapter are convincing for consumers due to their authenticity (Carbonaro and Votava 2005). A new facet that needs to be addressed in a product resulting in the highest levels of appreciation within a community of interest may be authenticity. Thus authenticity may be an increasingly vital luxury pattern in contemporary society for new consumers.

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4 4 4 Changes in Perception of Quality Earlier the phenomenon trading up was addressed. Related to this phenomenon is the actuality that markets in the middle segment are struggling and are forced to choose between the upper or lower segment due to changes in consumer behaviour (Schgel and Schulten 2005). A model by Becker illustrates the principle of trading up for the market (see gure 4.8).

Top market segment Middle market segment Lower market segment

Source: Jochen Becker 2001 (derived from Schgel and Schulten 2005, translated by the author

Loss of the middle market segment

Trading up

Figure 4.8 Trading up for the marketplace

Fundamental to this phenomenon are the changes in buying behaviour by consumers. Consumers today are able to recognise quality better than before, which makes them more aware of highly qualitative products and the intangible benets they provide, for example pleasure and feeling good. Together with the changing gender roles after the Second World War, the change in family structure and increasing lifestyle importance, this caused consumers to question the quality of products in the middle segment of the market (Carbonaro and Votava 2005). Objective quality of products in the lower and middle segment of the market has become of a similar high standard making it dicult for consumers to distinguish products apart by price. Consequently commodities are expected to be inexpensive. Consumers will almost certainly choose the cheapest product available if they have to buy a commodity (Carbonaro and Votava 2005, Schgel and Schulten 2005). On the other hand consumers are willing to pay signicantly more for products that oer sign-value on top of the basic functional features. Sign-value may for example be reected in an oered history, experience or other intangible value and therefore justify the higher price. Meaningful sign-value is reected in personal tacit knowledge of consumers and often hard to concretise. Thus consumers expect high objective quality from commodities and extra added value from luxury products. The model in gure 4.9 shows the transformation of the classic quality perception to

Chapter four Perspectives of Luxury

the new quality perception of consumers (Carbonaro and Votava 2005). The model is related to the model of Becker, but focuses on the quality perception of consumers and may be seen as the cause of the phenomenon illustrated by Becker.

Luxury High quality Standard quality Low quality Standard Value shift Excellence

Source: Carbonaro and Votava 2005

Figure 4.9 A shift in quality categories

The new quality categories correspond better with contemporary society in relation to the changed society structure and new consumer attitudes. Quality for consumers encompasses aspects beyond the tangible quality of for example material quality. Carbonaro and Votava created a model that suggests four value domains with at basis the notion of quality (see gure 4.10). These forms of quality focus on emotional and subjective factors.
Afnity with nature Transparency Knowledge

Trust

Sociability Taste Multi-sensuality

Well-being

Quality

Relationship

Curiosity Dialogue Service

Life philosophy
Health Status/security Ethics Source: Carbonaro and Votava 2005

Figure 4.10 Socio-cultural model of consumption

Consumers are consuming progressively to full their individual expectations of life and support self-actualisation to match their personal values

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(Carbonaro and Votava 2005). The socio-cultural model of consumption suggests that purchase decisions depend on the signicance for consumers and less on functionality or emotional seduction through marketing (Carbonaro and Votava 2005). Moreover the model suggests the motivation of consumers today to buy subjective qualitative products. Trading down supports the trading up principle as cheaper, but qualitatively acceptable products, become less expensive. Therefore a larger part of the income is available for most consumers to purchase excellence products. This is illustrated by Carbonaro and Votava in gure 4.11. The model shows that these two segments are not independent from each other, but complement and are dened through each other (Carbonaro and Votava 2005).

Affective afnity Cultural relevance Strong identication potential

Excellence
Less but better

Enabler
More for less

Challenger

Discount
Denes standard quality Price oriented Product oriented Source: Carbonaro and Votava 2005

Figure 4.11 Trading up and trading down supplement each other

The excellence category represents products with sign-value through which consumers can express themselves, which have become accessible due to discount products and rising auence. All things considered the excellence category allows a shift in the perception of luxury that is less directed toward indicating status and more directed toward self-actualisation (Carbonaro and Votava 2005). The shift of the quality categories suggested by Carbonaro and Votava, together with postmodern values, is related to the new perspective of luxury. The consumption of excellence products that reect the changed quality perception is closely related to self-actualisation. Carbonaro and Votava (2005) describe the excellence category as the new luxury. 4 4 5 Dominating New Motives Recent changes in society have caused the personal aspect of luxury consumption to become signicantly important. Changed quality perceptions as well as a democratic attitude toward the concept of luxury has caused luxury to

Chapter four Perspectives of Luxury

be consumed for self-actualisation. Personal gratication has become increasingly important in luxury consumption. This is in line with recent research that pointed out that luxury products are also consumed for their intangible and subjective benets (Dubois and Laurent 1994, Dubois et al 2001). Luxury products can be bought for ones pleasure and are related to emotional responses such as aesthetic beauty, sensory pleasure or excitement (Alleres 1990; Benarrosh-Dahan 1991; Fauchois and Krieg 1991; Roux and Floch 1996; in Vigneron and Johnson 1999). People that consume luxury mostly because of their personal values and feelings and thoughts may be hedonist type of consumers (Vigneron and Johnson 1999). More than anything people expect quality from a luxury product. It is expected that the quality of a luxury product is signicantly higher than that of a normal product. Because of the quality factor, luxury goods can be bought to be reassured of superior product characteristics and performance (Vigneron and Johnson 1999). Though this is true, the quality value of luxury in contemporary society may be dierent from the quality value identied by Vigneron and Johnson (1999). Quality nowadays manifests itself in a wider scope than objective quality alone. This can be seen in the socio-cultural model of consumption suggested by Carbonara and Votava (2005). The objective quality factor as in for example material superiority loses in importance because of the changed quality categories. High objective quality is taken for granted within luxury; the reason of product quality reassurance may therefore not be valid anymore in contemporary society because this is of a standard high level today. The changed perception of quality interlinks with the perceived emotional value of the personal eects of luxury. The quality lies in the intangible factors that correspond with the personal values of consumers today. These products, rich in quality and identied as luxuries, correspond with the highest levels of appreciation within communities of interest. These intangible qualities reect the motivation of the consumer to consume luxury, which is identied as such within advanced industrialised societies. Therefore consumers that consume luxury goods particularly for objective quality reassurance, identied by Vigneron and Johnson (1999), may not be signicantly present anymore today. The reasoning of hedonist type of consumers addressed by Vigneron and Johnson may be divided into two main notions based on the ndings addressed earlier. That is on the one hand self-actualisation in the form of self-development, which can be for example seen when people are consuming luxury to support their self-image. On the other hand pleasure in the form of indulgence, which can be seen when someone for example wants to physically or emotionally enrich themself. The perceived emotional value corresponds with ones personal values, feelings and thoughts. Therefore these have become highly important in the consumption of luxury. However, luxury that

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is used for self-actualisation, stresses the individual character and therefore reects personal motivation, is not entirely formed by the individual. The motivation and perception of luxury is still reliant on processes that take place within communities of interest (Reinmoeller 2002) to frame the perception of what constitutes luxury. 4.5 Framework of Motives Consumers may use luxury for attaining membership to express belonging, but also for dierentiating oneself. Within lifestyles and social classes luxury may be used to indicate exceptional membership as mentioned earlier. In addition consumers can be part of multiple communities of interest as mentioned earlier and use luxury dierently in those communities. The motives and attitudes identied may therefore be used according to personal circumstances. A product perceived as a luxury in one situation may not be one in another. For example an Armani suit may be successfully used for exceptional class membership and command respect during an individuals day job. The same suit however, may be inappropriate in the individuals living environment, because it may be seen as showing o. If the individual is uncomfortable with that, the suit is not perceived as a luxury in that context, whereas in the context of the day job it is perceived as a luxury. Thus one product may be perceived in multiple ways. According to situational context, one motive is likely to be dominant over the others (Vigneron and Johnson 1999). Even if a luxury product possesses more qualities than one, for example when it can be successfully used for dierentiation, but also for physical pleasure, one is presumably dominant in the initial consumption of the product. The emphasis of the traditional perspective of luxury may lie with dierentiation motives, whereas the emphasis of the new perspective of luxury may lie with personal motives. This may show the diculty and implications of use of luxury by consumers. Two implications innate with luxury can be identied based on the motives of the traditional perspective of luxury and the new perspective of luxury. The rst one is about letting the outside know who you are through individuality or group membership. With these values others are involved. It is about sending messages about you to others. Because perception of others is involved, the consumers motivations are dependent on the consumption of others (Vigneron and Johnson 1999). The second is about self-actualisation and personal enrichment. Carcano and Catalani (2005) dene these two respectively as hetero-referential use and self-referential use. Vigneron and Johnson (1999) talk about interpersonal and personal eects. In this thesis the latter two notions are used from now on. Both inuence the behaviour of the consumer. The main dierences between the motives as a function of self-consciousness and price-as-prestige beliefs are illustrated in gure 4.12. The model clearly

Chapter four Perspectives of Luxury

private

Self-consciousness

Hedonist Type of consumer

Snob

public

Bandwagon

Veblenian

lower

higher

Importance of the perception of price as an indicator of prestige

Source: Framework from Vigneron and Johnson 1999, adjusted by the author

Figure 4.12 Differences in type of consumers

depicts that the personal eects, hedonist motivation for luxury consumption, are less dependent on price and more related to private purposes. This corresponds with the democratic attitude toward luxury where price is less important. People that consume luxury with an emphasis on hedonist purposes may do this for personal development in line with their values. Personal values are directed more inward and are about self-actualisation and personal satisfaction. In opposition to interpersonal values they are not related to the consumption of others (Vigneron and Johnson 1999). Based on the research by Vigneron and Johnson (1999) and previously discussed literature, a framework of luxury consumption motives is suggested (see gure 4.13) that addresses both the interpersonal and personal dimension. The rst dimension may be seen as the semiotic dimension of luxury and is manifested through the interpersonal eects. The interpersonal eects of luxury consumption may be split into three dierent motives, that is, ostentation, distinction and membership. The second dimension addresses the personal eects of luxury consumption and may be divided into self-actualisation and personal pleasure as its two motives.
Motives for luxury consumption
Perceived value Conspicuous Unique Social Emotional Motive Ostentation Distinction Membership Self-actualisation Personal pleasure

Interpersonal dimension Personal dimension

Elitist attitude Democratic attitude

Source: Based on a framework from Vigneron and Johnson 1999, adjusted by the author

Figure 4.13 Framework of motives

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This framework may give insight in what drives consumers to buy and use luxury products. It addresses and makes a distinction between both personal and interpersonal factors that inuence luxury consumption. Although all aspects mentioned in the framework may be inuential in consuming luxury, usually one aspect will be prominently dominant as highlighted earlier. Despite this, luxury products may be used for other reasons as well after the initial motive for consuming luxury has been fullled. The framework may be used as a starting point to position or build luxury brands for marketers and to help researchers understand the consumers behaviour regarding luxury brands as well as researching which behaviour is more present in dierent luxury segments (Vigneron and Johnson 1999) and within dierent types of luxury. The framework is suitable to be used in dierent contexts of luxury consumption and withstands the relative character of luxury. By incorporating both personal and interpersonal eects and taking into consideration that one aspect will be dominant during consumption, together with the dierent attitudes toward luxury, it is possible to identify multiple scenarios in dierent contexts. The personal eects have become stronger in contemporary consumption societies as described earlier. Thus the emphasis of luxury consumption may have shifted for several consumers in advanced industrialised societies to addressing the personal factors rst. Self-actualisation has become increasingly important and may be stronger in the consumption of products perceived as luxurious. Together with the purpose of consumption for forming self-identity, the emerged democratic attitude toward luxury and several society changes, new markets may have emerged. These markets may focus on the self-actualisation of consumers through creating the highest levels of appreciation with their products in communities of interest. Innocent Drinks is a company that successfully addresses one of these markets (see chapter 5: Manifestation in Society). 4.6 Luxury Consumption in Contemporary Society The traditional view and use of luxury was pointed toward status and distinction for high social classes. This way of thinking and the motivation behind it is still apparent in todays societies, even though new ways of thinking concerning luxury have risen in societies that were prosperous and developed postmodern values. Consumer perceptions of luxury dier widely today according to knowledge and context. The shift to postmodern values in advanced industrialised societies as well as other changes mentioned earlier changed the general view of luxury. Rising auence and availability of products also contributed to a dierent perception of luxury. Industrialisation, the opening up of the market due to globalisation, the response of luxury retailers as well as other companies, new marketing practices, heightening inuence of women, changing gender roles, changing perception of social classes, height-

Chapter four Perspectives of Luxury

ening interest in experiences, increasing use of symbolism, all added to the development and current views on luxury. The concept of luxury has been inuenced by multiple factors and is the result of still developing multiple processes that make it dicult to dene luxury in an unambiguous way. Nevertheless the changed view of luxury has been addressed from dierent angles by trend watchers, scholars and institutions. Although many focus primarily on auent people in society, they still demonstrate an altered perception of luxury and are therefore relevant. Clearly a new perception of luxury may not be focused on distinction purposes anymore, but on individual well-being. Price may be increasingly less important for a good to be considered a luxury, which is demonstrated in an extreme way with the emerged democratic attitude toward luxury. However, the status conveying purpose of luxury has not disappeared in contemporary societies. These two views may coexist and may be used by the same person in dierent situations. People tend to distinguish themselves from others and traditionally luxury products have been used for that. With the shift in values due to changes in society, luxury may be increasingly used for personal development. Pleasure has always been an important factor in luxury consumption; nevertheless the main purpose was to distinguish oneself for status purposes. Change in values resulting in a democratic view on luxury may have caused the emphasis to shift from status conveying purposes to pleasure. Postmodern values focus on well-being and self-expression, therefore the notions of pleasure and quality changed accordingly. The change of quality can be seen in the socio-cultural model of consumption addressed earlier. Pleasure is likely to shift to self-actualisation and other forms of pleasure instead of solely the comfort and indulgence that were traditionally associated with luxury. Apart from changes in manifestation related to values and attitudes, luxury may be divided into two parts. The rst part is luxury that is used for distinction or membership purposes and the second part is luxury that is used to enrich oneself through for example indulgence or self-development. These have been respectively addressed as the traditional perspective of luxury and the new perspective of luxury. Considering the uid borders of social class, the trading up phenomenon, the two practically opposing attitudes toward luxury, tacit knowledge inuence in luxury and the dierent motives of luxury consumption in contemporary society, luxury will manifest itself dierently according to the situation and interest of the consumer.

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5
Manifestation in Society This chapter addresses two market segments associated with luxury. Additionally, two conducted case studies illustrate and clarify the previously discussed theory citing practical insights.

5 Manifestation in Society

5.1 Market Segments Associated with Luxury 5 1 1 The Economic Luxury Sector Earlier the economic luxury sector was addressed. This economic luxury sector can be seen as a market segment and is heavily protected to remain exclusive (Mortelmans 2005). One of the measures to protect its exclusivity is The Comit Colbert (www.comitecolbert.com), which is an organization that represents a large part of the companies belonging to the luxury sector. This sector signicantly inuenced the ideas people have about luxury due to branding the concept of luxury to their ideal (Mortelmans 2005). Several ideas framed by the luxury sector are still apparent in consumers ideas about luxury. Among those are the luxury patterns expensiveness and high quality. A luxury brand is often related to this product segment and may be interesting for particular communities that are extremely wealthy. The products are often very expensive and scarce. Nevertheless these brands use several strategies to make their brand available for less wealthy consumers by making less expensive branded products (Carcano and Catalani 2005). For example Bulgari jewellery can be worth over 4 million dollars, while on the other hand branded Bulgari sunglasses can be purchased for less than 250 dollars. The acquired heritage and image of the company is maintained through producing the expensive traditionally produced products, whereas the cheaper branded products purpose is to generate turnover and brand awareness (Carcano and Catalani 2005). However, the common branded products bear the name of the luxury company and imply quality and exclusivity through the brand. The brand could therefore create extra value for the consumer. The dominating motives of consuming these brands are assumed to be ostentation and distinction, which is based on the original use of these products that often have a long history related to the extremely auent in society. Research related to luxury brands is widely available. A study by De Barnier

Chapter ve Manifestation in Society

et al (2006) identied facets of luxury considered important among luxury brand consumers in Russia, France and the UK (see gure 5.1). These facets may be seen as the most important luxury patterns of this segment. These patterns are aesthetics, personal history, premium quality, expensiveness, selfpleasure, aspiration, conspicuousness, functionality, luxury atmospherics and uniqueness.
Luxury perceptions in France, the UK and Russia
60 40 20 Source: De Barnier et al 2006 Personal history Premium quality Functionality Luxury atmosphrics Conspicuousness Expensiveness Self-pleasure Aesthetics Aspiration Uniqueness 0 France UK Russia

Figure 5.1 Important luxury facets in three countries

Because the interviews were conducted in dierent countries, not all of these luxury patterns were seen as important or necessary in every country. The outcome of the study can be seen in gure 5.1 . Though all of the luxury patterns may be relevant for consumers and may exist in their perception of a luxury brand, the study suggests that the general perception of luxury brands diers among countries. For example the study pointed out that in the UK the luxury atmospherics could be of importance, whereas in France and Russia this facet may not be perceived as important. According to consumers of the UK a non luxury product could become a luxury product if the right atmosphere is created through for example shopping experience and high service levels (De Barnier et al 2006). One may suggest that because of the long history of France with the luxury sector (De Barnier et al 2006), the luxury patterns aesthetics, personal history and premium quality are of greater importance than the others in a luxury brand. Though the study focused on consumption of luxury brands of the luxury sector and not on consumption of luxury as a social phenomenon, it still demonstrates the implications and dierences around the concept of luxury among cultures and what stimulates people to consume luxury products. It also suggests that luxury patterns change over time, since the study was based

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on another study by Dubois et al (2001). They identied six main facets of luxury, while this study identied ten among three countries. The pattern superuousness identied by Dubois et al was not seen as important among the interviewees of the study of De Barnier et al. Superuousness may therefore not be an important luxury pattern of luxury brands anymore among luxury brand consumers in the countries studied. According to the dynamic approach of the theory of Reinmoeller (2002) mentioned earlier, emerging luxury in small communities of interest may emerge from these luxury patterns. Together with new, mainly tacit knowledge and new contexts, new luxury may appear resulting in luxury brands and eventually new luxury patterns. The study by De Barnier et al (2006) may have identied new luxury patterns for luxury brands in comparison to the study from Dubois et al (2001). 5 1 2 The New Luxury Market The phenomenon trading up described earlier makes both perspectives of luxury more accessible for consumers in advanced industrialised societies. Consumers are likely to spend considerably more money on things they consider important. Those may correspond with their lifestyle through which they create self-identity. Advanced industrialised societies have a population where the dierences between incomes have become smaller. The middle class of these societies have become more auent and represent a large part of the population. Together with the increasing importance of experience, this has resulted in a new market that has responded to these changes by creating masstige (mass-prestige) products and was described as the new luxury by Silverstein and Fiske (2004). Masstige products are premium products that are placed between common and luxury brand products. They often oer emotional engagement, technical dierences and superior functionality (Silverstein and Fiske 2005: 6). These products can have characteristics of both perspectives of luxury and may be used accordingly. However, most of them may be used for self-actualisation corresponding to the democratic attitude toward luxury. They are attainable for most consumers due to rocketing and trading up. In addition they support establishing or maintaining an identity through intangible value for a relatively high price. Therefore, marketingwise, this is assumably the most interesting segment in contemporary society. An extensive study and related trends concerning the new luxury market is available in the book Trading Up: Why Consumers Want New Luxury Goods-And How Companies Create Them by Silverstein and Fiske (2005). Universal luxury patterns related to the new luxury market are dicult to identify, because new luxury products may be found in all product categories. Nevertheless the notion authenticity may be an increasingly important facet in the consumption of these products (Lewis and Bridger 2001: 6, Silverstein

Chapter ve Manifestation in Society

and Fiske 2004, Carbonaro and Votava 2005, Gilmore and Pine II 2007: 1). 5.2 Luxury Goods within Communities: Two Case Studies 5 2 1 From Status Symbol to Commodity: case: Motorola RAZR V3 This case study gives an example of a product consumed with the dominating motive of distinction. Therefore it belongs to the traditional perspective of luxury. It revolves around the Motorola RAZR V3 (RAZR) mobile phone. The community where the RAZR was perceived as a luxury and used for distinction, was the community of creative and tech savvy people interested in design and technology. The product was perceived as a luxury to convey status within the community at its release in the summer of 2004. A newly released product may be perceived as luxurious because of the yet to discover technology and functionality and often oer social distinction (Carcano and Catalani 2005). The case also gives possible reasons for the quick downfall of the luxury status of the RAZR. In addition a special version of the RAZR, the Motorola RAZR V3i Dolce & Gabbana Limited Edition, is looked into to investigate the inuence of a luxury brand on a commodity.
From Status Symbol to Commodity Case: Motorola RAZR V3 The Motorola RAZR V3 as a status symbol The Motorola RAZR V3 (RAZR) (see gure 5.2) was designed for the purpose of enhancing Motorolas image, which had been suffering from heavy competition from Nokia, as a technologically advanced and innovative brand. Therefore the RAZR was designed to be the slimmest phone on the market. It had to be unique among all other mobile phones at the time of its release and had to have jewellery like characteristics. Several unique and technologically advanced characteristics (see gure 5.3) were developed and designed for the RAZR. The phone was to be commercialised for a niche market to revive the Motorola brand, rather than for increasing turnover (Lashinsky 2006). The unique features caused the RAZR to become highly respected and adopted among tech savvy and creative people. It was regarded as a luxury, a status symbol to support the consumption for distinction within that community to express their particular interest in design and technology (Stone 2007). The expression of status within the community was supported by several luxury patterns of the product. At the release of the RAZR, the price was relatively high in comparison

Figure 5.2: Motorola RAZR V3 mobile phone

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with other mobile phones. Expensiveness was denitely a luxury pattern in the beginning. Together with its aesthetics, advanced technology, functionality, uniqueness and initial scarcity, the RAZR got signicant attention and admiration in its environment. This resulted in the desired effect of status and uniqueness in the community of interest.

RAZRs unique features

Top tier Side keys are on the top half of the phone instead of in their normal place, down below. Researchers said consumers would object. They havent. Tough call The caller-ID panel is thinner and stronger, using pricey glass, not plastic. Under the skin To maximize strength while minimizing weight, the team used magnesium for the housings inside the phone. Plugged in Most Motorola phones have three connectors, for power, data, and earphones. The RAZR has one mini USB side port that does triple duty. Smooth nish The exterior of the phone is anodized aluminium, a superstrong metal that looks way snazzier than plastic. Bright idea Moto turned to a Korean specialist rm to craft the superthin metal keypad. Electroluminescent backlighting added extra cool. Side-by-side RAZRs battery is next to the circuit board, not beneath it, to aid thinness. It also makes the RAZR wider than standard. Big foot Instead of being at the top, the antenna hides in the mouthpiece at the bottom. An engineering challenge, it delivers a sleeker look.
Figure 5.3 (source: Stone 2007)

Figure 5.4: RAZR packaging

ogy of the RAZR developed by Motorola became more available, the RAZR lost its initial appeal among the community to other mobile phones with newer features and aesthetics. Decisions made by Motorola concerning the RAZR assumably accelerated the trickle-down effect of the RAZR and the loss of its status as a luxury among the tech savvy and creative people. With the decision to drop the price of the RAZR supported by a downgrade of packaging illustrated in gure 5.4 (Motorola 2005), the mobile phone became less exclusive due to increasing purchase of the RAZR. In the past four years the price has dropped from 600,- to 100,- (see gure 5.5). The

The accelerated trickle-down effect Products related to technology are often heavily reliant on the trickle-down effect due to the fast development of technology. If the technology becomes old due to improved newer technology, products drop in price and become increasingly available. When the technol-

Figure 5.5: Price drop of the RAZR (Source: http://www.vergelijken. nl/item/19859/pricehistory (18-01-2008))

Chapter ve Manifestation in Society

switch to conventional packaging made the phone less expensive for consumers, but assumably also inuenced the perception of the special unique character of the RAZR. Failing to launch a successful successor The image Motorola had carefully created with the RAZR, was lost again after the company was not able to create a true successor of the RAZR showing its innovative character (Stone 2007). The initial successor was remarkably similar to the original RAZR apart from some technical improvements (see gure 5.6). Also new high-end Motorola mobile phones could not imply innovation, because they stayed to close to the concept of the RAZR and suggested yesterdays technology and style (Stone 2007).

Instead of creating a platform of innovation on the success of the RAZR, Motorola chose to make the RAZR readily available for everyone. The RAZR series as well as other successors were not able to convince the initially intrigued community of interest that Motorola was a highly innovative company. Though the RAZR was a huge success in the mobile phone market segment, the perception of a status symbol within the initial community of interest was lost and was not able to be regained by a new mobile phone from Motorola. Other companies did launch mobile phones that were appealing to creative and tech savvy people and assumably took over the image of highly innovative and technologically advanced companies (Stone 2007). Added luxury value through a brand: Motorola RAZR V3i Dolce & Gabbana Limited Edition In December 2005 Motorola and Dolce & Gabbana, a high end fashion house, announced a collaboration in the form of a limited edition based on the RAZR V3i (see gure 5.7).

Figure 5.7: Motorola RAZR V3i D&G Limited Edition

Figure 5.6: RAZR V3 vs RAZR V3i

The RAZR V3i was customised by the designer duo Dolce & Gabbana. The housing was given a liquid gold nish as its main feature. Besides this some internal software customisation had been done in the form of

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Figure 5.8: Customised packaging

wallpapers, customised sounds and a video clip about the 20-year history of the designer duo. Also special packaging was designed to convey the impression of something special (see gure 5.8). The Motorola RAZR V3i Dolce & Gabbana Limited Edition became available in an edition of 1000 from which 100 units were reserved for promotional purposes. The other 900 units were exclusively sold through Dolce & Gabbana bou-

tiques in Italy, Spain, UK, France and Germany. The cooperation proved to be a success, because the phones sold out immediately despite the high price of more than 2000 euros. The limited edition assumably was successful because of the association with Dolce & Gabbana, who are renowned high-end luxury fashion designers known for their sense of style and attitude. The name Dolce & Gabbana, together with a limited edition of only 1000 units and the high price, made the RAZR V3i Dolce & Gabbana a desired object among consumers active in the luxury sector. Because of the limited amount of phones especially designed and targeted at the high end of the market, this phone was an opportunity to attain a mobile phone that was available only for a few. The motives of the consumer to buy this mobile phone may have been related to conspicuousness or uniqueness factors. The phone is similar to the normal RAZR V3i, apart from the gold liquid nish and some software modications. However, the high price, limited edition and the sign-value the brand Dolce & Gabbana created, made this mobile phone worth the price within the community of interest. Clearly the brand Dolce & Gabbana, together with the scarcity aspect and price, proved to be sufcient to upgrade the Motorola RAZR V3i from a commodity mobile phone to a phone perceived as exclusive among luxury brand consumers.

5 2 2 A European New Luxury Example: case: Innocent Drinks This case study gives an example of a product related to the new luxury market. The products of Innocent Drinks are arguably especially consumed for their healthy character and Innocents responsible way of doing business among consumers belonging to the Lifestyles of Health and Sustainability (LOHAS) (www.lohas.com). The LOHAS signicantly value health, social justice, personal development and sustainability. The consumption of drinks made by Innocent Drinks among members of the LOHAS may be considered to have a dominant motive of self-actualisation supporting their beliefs and personal values. The case is therefore an example of manifestation of the new perspective of luxury. In addition the notion authenticity is highlighted due to its increasing importance in luxury consumption for consumers.

Chapter ve Manifestation in Society

A European New Luxury Example Case: Innocent Drinks The Company Innocent Drinks Innocent Drinks is a company founded in the UK in 1998. They produce smoothies (see gure 5.9), which are drinks made out of crushed and squeezed fruit. Currently they are active in the UK, France, the Netherlands, Denmark, Germany, Sweden and Belgium. More background information can be found on their website (www.innocentdrinks.co.uk). Innocent Drinks as a New Luxury Product The brand Innocent is an example of a product belonging to the new luxury market. Following the framework developed by Silverstein and Fiske, Innocent Drinks falls into one of the Three New Forms of Luxury, that is, the accessible superpremium category (http://www. bcg.com/impact_expertise/publications/Book_Trading_ Up.html). Innocent is one of the most expensive drinks in its category, the smoothie market, which is already a premium division of the fruit drink market. Yet it is affordable to the middle-market consumer, despite the high price in its category. Figure 5.10 shows that the brand Innocent has the characteristics of a new luxury good dened by Silverstein and Fiske (2005: 56). New luxury characteristics: Innocent and new luxury
Affect Availability Price Quality Social bias New luxury Engaging Affordable Premium Mass-artisinal Value driven Innocent Drinks Innocent is emotionally appealing as a brand due to its human touch and lived by values. Innocent drinks can be purchased in selected supermarkets, small convenience stores or cafeterias. Innocent drinks are more expensive than other fruit drinks and compete in the highest division of fruit drinks, the smoothies segment. The highest possible quality of fruit is sought after. No additives are added to their drinks. The only drink that is similar to an Innocent smoothie is a freshly made smoothie. Innocent Drinks has a strong set of core values that are never forgotten. Values are lived by in activities organised around and within the company. Customers identify with those values and support them.
Figure 5.10: Innocent and new luxury

Figure 5.9: Innocent Drinks smoothie

had to consist of 100% natural ingredients and could not be made out of juice concentrate. It had to be 100% good for you, like fruit. Several new smoothie

Besides this, the company has been highly innovative within the smoothie market. They started by convincing people that there was a market for super fresh smoothies with limited shelf life. Innocent smoothies did not compromise with the initial idea. An Innocent smoothie

avours and drinks have been developed throughout Innocent Drinks existence. Next to the product itself, the packaging has been under development from the beginning. The most recent innovations are the 100% recycled, lighter bottle (http://www.innocentdrinks.

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co.uk/us/ethics/sustainable_packaging/PCR_bottle/) and a failed trial of an eco-bottle made out of 100% renewable sources (http://innocentdrinks.typepad.com/ innocent_drinks/2007/10/a-bit-about-our.html). Also the way of doing business is constantly under development. Innovation is a key element in keeping a company on the foreground of the new luxury market. Innovation is a key element in remaining a New Luxury Leader (http://www.bcg.com/impact_expertise/publications/Book_Trading_Up.html) Innocent Drinks and the LOHAS The initial target group of Innocent Drinks was young urban professionals, similar to the founders themselves. Because it is difcult to do something healthy in urban city life, Innocent Drinks tried to make a small difference by making fruit more practically available. Today the company has expanded the target group by addressing kids and people that identify with the brand values of the company. Because of their business approach and activities, the Innocent Brand corresponds well with the Lifestyles of Health and Sustainability (LOHAS). These consumers value health and tness, personal development, social responsibility and sustainability (www.lohas.com). Innocent Drinks as a brand provides the LOHAS an emotionally perceived value by communicating and sharing similar values. The motive for self-actualisation through the consumption of luxury may be apparent in the consumption of Innocent Drinks among the LOHAS. Through the consumption of Innocent Drinks LOHAS members create or sustain their self-identity through consuming what they think is important. Similar values are communicated and valued by Innocent Drinks, which can be seen in the ethics of the company (see gure 5.11). Innocent and ethics: Procurement of ethics
Keeping things natural Responsible ingredients

The premium price of smoothies of Innocent Drinks in comparison with similar beverages is paid by LOHAS members because of the sign-value the company creates for its products through branding and its activities. Consuming the brand Innocent Drinks for LOHAS members ts into the new perspective of luxury to support self-actualisation. Besides premium quality, other values, which create emotional benets for the LOHAS, are considered important and communicated by Innocent Drinks. Communication and Authenticity Authenticity for Innocent Drinks is created through the transparent communication of activities and brand values. Innocent Drinks design platform (see appendix A for Innocents product portfolio and an extensive analysis chart of the packaging) communicates the values transparency, responsibility, easy-goingness and quality. This is supported by the technology platform that looks into more sustainable solutions for packaging. The product that it is all about is made of 100% natural ingredients and is good for your health; everything is done to deliver this message in the best possible way. Besides the design platform of the product portfolio, other measures are taken to make sure the values of the company are reected. The brand values are shown through business activities, communication and organised events. Several examples of those have been collected in a table (see gure 5.12). The table provides a good overview of practices within the company that provides one clear image of the brand. Everything from ingredients to customer service to ethics is perfectly in line with the core values of the brand Innocent. All activities correspond with their brand values, giving them credibility and trustworthiness with the consumers and therefore creating authenticity.

Sustainable packaging Resource-efcient business Sharing the prots

Innocent Drinks uses 100% natural ingredients that are good for people. Innocent Drinks uses ingredients that are grown or produced in a sound working environment and with biodiversity in mind. Farms that are certied by environmental and social organisations, such as the Rainforest Alliance, are favoured. Packaging that has the least impact on the environment is used. The rst aim is the reduction of the total carbon footprint of Innocent Drinks. 10% of the prot goes to charity.
Figure 5.11: Innocent and ethics (source: http://www.innocentdrinks.co.uk/us/ethics/)

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Innocent Drinks business activities: Consistency of showing values throughout all business aspects
Transportation. Environmental issues and working conditions. Quality. Close collaboration with the manufacturer. Supermarkets. Cafeterias. Ingredients. Variety. Flagship bottles. Tetra packs. Transportation boxes. Graphics. Banana phone.

Procurement of ingredients

Drinks production Drinks channeling The products

Packaging

Customer service

B2B communication HR policy

No airfreight, shipping of ingredients is done with either ships, trains or trucks. Preferably business is done with farms that are part of a social or environmental organisation, e.g. the Rainforest Alliance., otherwise own minimum standards have to be met. The highest quality fruit is sought after from around the globe for the best possible taste. Manufacturer is located in the UK for a close cooperation and within close proximity to its clients for fast transportation. Big brand levelled with small brand; products are available in supermarkets in big Cooling departments, but are available in customised freezers in small cafeterias. 100% natural ingredients are used that are tasty and healthy, no additives or concentrates are used to ensure the highest, purest quality. New tastes are constantly developed and temporary smoothies are included in the product range. 250 ml transparent agship bottles to show natural colour of the drink. Bottle is made out of 100% recycled plastic. Striving for 100% paper that is from certies forests. Striving to reduce the kids wedges material by 15% in 2008. Transportation boxes for the cartons and the wedges are made out of 100% post consumer recycled paper. See graphic analysis table of the product portfolio in the appendices of the thesis. The packaging encourages you to call the banana phone. Informal personal communication like talking with a friend. A blog on the web site to encourage discussion about anything. Business cards have made up names on them that are chosen by the employee, e.g. Cherry King Compliment slips have real compliments written on tem, e.g. you smell fantastic. Employees may wear informal clothing. Free breakfast is served at the company. Special events are organised when set targets are made.

Figure 5.12: Innocent Drinks business activities

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Other activities

The meeting room has brightly coloured beanbags and also serves as a chill out space. An open ofce plan stimulates communication and creates an informal atmosphere. Hiring professionals, consultants or regular employees, when they are needed. Employees can apply for grants to do something for them or the community. Organising events for communities to socialise or have fun. Overproduction is given to an organisation that supplies food for the homeless. Innocent Drinks gives 10% of its prot to charity, most of it goes to the Innocent Foundation. this foundation is established by Innocent Drinks and carries out local projects in the countries where they get their fruit . Innocent Drinks strives to reduce its carbon emissions as much as possible.

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Blog. Business cards. Compliment slips Informal clothing. Free breakfast. Celebrations when targets are met. Meeting room. Open ofce plan. Hiring professionals. Grants. Organising community events. Overproduction goes to the homeless. Innocent Foundation.

Conclusions and Reections The concluding chapter summarises the study and discusses the potential for future investigation.

6 Conclusions and Reections

6.1 Conclusions The research question: What consumer motives are of signicant inuence considering contemporary perspectives of luxury consumption? addressed in the rst chapter was attempted to be answered with the study undertaken. Therefore, the notion of luxury was summarised and claried. Relative to a number of studies on and perspectives of luxury, a framework to capture the essence of a luxury product was created in order to frame the consumer motivation. Two perspectives of luxury were then identied based on research related to traditional views of luxury and recent societal changes which may have inuenced these perspectives. Finally these perspectives were translated into motives for luxury consumption. The nal outcome is multidisciplinary in nature and intent and may hopefully be useful for the development and utilisation of ideas and further elaboration within elds of design, marketing and social sciences. Luxury proved to be a dicult and complex concept to concretise, especially when the relative character is recognised. Luxury may manifest itself dierently according to context and knowledge within a community of interest. General luxury patterns may be of inuence in the highest levels of appreciation toward products and may therefore be dierent amongst various communities. The undeniably relative aspect of luxury asks for dierent approaches to address relevant luxury patterns for targeted consumers. In order to make the extensive nature of the concept of luxury visible, a framework was created to illustrate the conceptualisation of luxury product. The characteristics of a luxury product may comply with universal requirements that were distilled into one framework. The universal requirements are based on a number of extensive studies related to the concept of luxury. The framework aims to provide a holistic view of what constitutes luxury and luxury products. The framework itself may be extended according to the particular interests of consumers to dene better the notion of a luxury product within

Chapter six Conclusions and Reections

specic communities. Altogether two main perspectives of luxury were identied that have dierent motives and drivers for luxury consumption. On the one hand there is the traditional perspective of luxury as a communicative means and on the other hand there is the new perspective of luxury as a personal means. These notions may exist next to each other and may manifest themselves dierently according to the goal of the consumer based on context and knowledge within communities. Several previously addressed changes in society, for example the change in perception of quality, but also changed strategies of the economic luxury sector, caused luxury to be perceived dierently and this may have resulted in the new perspective of luxury. Consumption practices have always been present in these developments that aected luxury. This led to dierent attitudes toward luxury of consumers, leading to new possibilities, but also requirements for the marketplace. The study of Dubois et al (2005) identied attitudes today and gave an overview of the general attitude in several European countries. Next to the elitist attitude toward luxury, a democratic attitude was seen. The democratic attitude toward luxury clearly demonstrated a change that took place in the perception of luxury, because beliefs concerning luxury were mentioned that were not seen before. The belief that luxury should be available for everyone and does not have to be necessarily expensive is one of those. When the emphasis of consuming luxury is on stratication purposes, whether vertical or horizontal, these beliefs do not comply. Dierent perceptions of luxury may depict a shift toward an emphasis on a personal dimension of luxury where dierentiation is seen as less important. The shift toward the personal dimension may be explained with the shift toward values concerning well-being and self-expression in advanced industrialised societies. In these societies creating economic gains is replaced by pursuing well-being and a high quality lifestyle. These changes may have created a new perspective of luxury in addition to the traditional perspective. The new perspective of luxury may be a result of multiple processes that occurred in society. The tendency is that luxury may be used signicantly more for self-actualisation in contemporary society. The democratic attitude towards luxury supports this new direction, making luxury for self-actualisation considerably more signicant as a primary purpose. Because class dierences are minimal in contemporary society, lifestyle is getting more important. People may consume luxury to reect their values, which is supported by their lifestyle in contemporary society. Luxury consumption may thus reect values that are highly important to people, which may be moving increasingly in the direction of personal development in contemporary society. An attempt to narrow down the reasoning behind luxury consumption today was done by the development of a framework of motives for luxury

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consumption. The framework considers ve main motives for luxury consumption based on a framework developed by Vigneron and Johnson (1999) and new insights from other studies. This framework may be helpful in determining a dominating motive in the consumption of various luxury products and services. 6.2 Possible Future Directions The wide scope of the study may give possibilities for further development in relation to the theory. The framework of motives for luxury consumption is mostly based on theory set in a Western context. With the increasing importance of consumption in other countries outside the Western societies, points of view from these societies may be investigated to establish a better understanding of luxury consumption in those countries. One of the theories is that developing consumption societies start with conspicuous consumption, supporting the values corresponding with economic gains. They may develop similarly to Western countries. However, because of the rapid development of consumption practices and dierent cultural backgrounds in countries like Russia and China, these countries may develop dierently and establish new perceptions and attitudes toward luxury. The study focused mostly on possible change in luxury consumption. However with addressing luxury as a social phenomenon, the interpersonal eects of luxury consumption are not only present in auent layers of society. Research related to luxury consumption mostly focused on auent layers of society or on the luxury sector. Research addressing the interpersonal eects in other layers of society may help to increase clarication of luxury as a social phenomenon. Possible outcomes may also help to create awareness of possible integration of multiple meanings in products and stimulate development of methods to accomplish this successfully. With, for example, the emergence of a democratic attitude toward luxury and the shift toward values concerning well-being, in many cases the emphasis of luxury consumption has shifted to personal motives for luxury consumption. Nevertheless other motives may be apparent as well. The consumption of an Aston Martin may be done in the rst place to express ostentation, however this does not mean that extensive personal pleasure is not another motive. The interaction between the dierent motives of luxury consumption and especially between the personal and interpersonal eects may be a fascinating topic that may show links between the motives and may clarify processes within luxury consumption. Other possible research directions that may be interesting are the cultural dierences within Europe and how these aect, for example, the attitudes and perceptions of luxury. To further build on and develop this study a specic community of interest could be chosen and analysed to identify context

Chapter six Conclusions and Reections

related attitudes and motives and specic luxury patterns for that community of interest. From an industrial design point of view it would be interesting to link product development theories to outcomes in order to concretise identied luxury patterns for products. Value theories are interesting to link to this study because of an addressed change in luxury consumption that may have been caused by the shift towards postmodern values in advanced industrialised societies. Values or motivational domains could, for example, be associated with motives of luxury consumption. 6.3 Reections regarding the Study The study proved to be dicult due to the indenable character of luxury. Considerable amount of time was spent on interpreting the concept of luxury. Nevertheless it helped to frame current ideas about luxury and separate more traditional and new views concerning luxury. From the beginning an emphasis on luxury outside the equally named product segment was strived for in order to place recent developments within or related to luxury, for example the new luxury market and the experience economy. Due to this, the study remained of a wide scope and it was dicult to frame it thoroughly with concrete examples. The case studies undertaken could have been more extensive. In addition extra case studies could have claried and illustrated more narrowed down trends related to the perspectives of luxury as well as the interaction between the two perspectives. Unfortunately this was outside the time scope of this study. Furthermore it would have been exciting to connect the outcome of the study to a more dened industrial design perspective. The initial plan included a design project based on the outcomes of the study, but because of previously stated reasons, that project proved to be outside the scope of this study. Optimistically speaking, projects related to this study will be carried out in the future.

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List of Figures

Chapter one: Introduction Figure 1.1 Groupings made with the anity diagram method Chapter two: Luxury and History Figure 2.1 Etymology of luxury

Chapter three: Theoretical Framework of Luxury Products Figure 3.1 Changing society structure Figure 3.2 Types of luxury Figure 3.3 Emergence process of luxury Figure 3.4 Universal factors of a luxury product

Chapter four: Perspectives of Luxury Figure 4.1 Luxury descriptors and clusters Figure 4.2 Positioning chart of countries relative to attitudes Figure 4.3 Positioning chart of countries relative to attitudes Figure 4.4 From economic gains to lifestyle Figure 4.5 Materialist and post-materialist values relative to age Figure 4.6 Position of countries relative to values Figure 4.7 New consumers vs old consumers Figure 4.8 Trading up for the marketplace Figure 4.9 A shift in quality categories Figure 4.10 Socio-cultural model of consumption Figure 4.11 Trading up and trading down supplement each other Figure 4.12 Dierences in type of consumers Figure 4.13 Framework of motives

Chapter ve: Manifestation in Society Figure 5.1 Important luxury facets in three countries Figure 5.2 Motorola RAZR V3 mobile phone Figure 5.3 RAZRs unique features Figure 5.4 RAZR packaging

Figure 5.5 Price drop of the RAZR Figure 5.6 RAZR V3 vs RAZR V3i Figure 5.7 Motorola RAZR V3i D&G Limited Edition Figure 5.8 Customised packaging Figure 5.9 Innocent Drinks smoothie Figure 5.10 Innocent and new luxury Figure 5.11 Innocent and ethics Figure 5.12 Innocent Drinks business activities

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Appendices
Appendix A Analysis Innocent Drinks Product Portfolio and Packaging

Innocent Packaging Lay Out and Characteristics

vignette prominently in the middle; colour corresponds with taste

100% fruit and nothing else

information written in an informal way

Innocent logo either black or white

never, never of concentrated juice

smoothie: fruit to drink

taste in text form; colour corresponds with taste as well

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Analysis Chart Innocent Drinks Product Portfolio and Packaging

logo vignette (shape) vignette (colour) the outline colour represents the colour of the smoothie the outline colour represents the colour of the smoothie the outline is black; the colour within is a saturated colour of the smoothie brown/purple/ light brown small carton 180 ml white/creme playful elements in tetra pack 1l the form of drawings and writings plastic bottle 250 ml plastic bottle 250 ml gold tetra pack 1l handwriting to indicate changes or new flavours white plastic bottle 250ml handwriting and tetra pack 1l fruit drawings to tetra pack 1.5l indicate changes or new flavours packaging types specialties apple with halo pure fruit smoothie (black)

complementary logo text packaging notions smoothie of the month (250ml) seasonal smoothie (1l)

smoothies

superfoods superfoods (white) star with halo

smoothie for kids apple with halo line drawings to customise vignette pure fruit smoothie on small carton (black handwriting font) smoothie for kids on big carton (blue handwriting font)

thickies fresh yoghurt thickie breakfast thickie break time thickie (all black) cow with halo bowl and spoon with halo bowl and grain with halo the outline colour represents the colour of the smoothie or one of its ingredients

white logo on a dark background

logo vignette (shape) vignette (colour) to show the colour of the smoothie overall white colour communicates clarity special drawings get attention to highlight changes; more clarity gold symbolises the very best that these drinks represent packaging types

complementary logo text packaging notions

specialties customised graphics emphasise the temporary character of these drinks

smoothies

original apple to indicate the to create a consistent drink type; vignette factor in the design pure fruit smoothies corresponds with that corresponds original drinks corresponds with reliability and clarity the first product type to indicate the drink type; white and big in comparison to the logo to show the special character the star with halo shows the special character of the superfoods drinks to show the colour of the smoothie to indicate the drink type; handwritng font to be more attractive for the target group adjusted apple vignette showing through colour and handdrawings to suit the target group to show the colour of the smoothie, but made more attractive for the target group to show the colour of the smoothie or one of its distinctive ingredients to show the diary influence in these drinks to emphasise special character of each of these drinks within the Innocent Drinks range to indicate the drink type; to indicate the thickie type

the clear bottle communicates transparancy the tetra packs offer convenience and better price value the clear bottle communicates transparancy the tetra packs offer convenience and better price value the small carton with straw offers convenience for children to drink the tetra packs offer convenience and better price value

superfoods

to create a consistent factor in the design that corresponds reliability and clarity

smoothie for kids to create a consistent factor in the design that corresponds reliability and clarity

overall white colour communicates clarity to be more attractive with playful elements for the target group to correspond with one of the ingredients of the drink

thickies

to create a consistent factor in the design that corresponds reliability and clarity

the clear bottle communicates transparancy

general communicates the type of drink

consistent factor in the package design and corporate identity

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halo offers consistency in the vignette vignette communicates type of drink different vignettes communicate easygoingness and informal character

communicates the colour of the drink or its character communicates differences within the drink range

colour communicates character of the drink coloured text on the bottom of the package communicates taste witty notions create an element of fun and informality

flagship bottle communicates transparency 250ml bottle was unique at its introduction in the smoothie market bottles innovation resulted in 100% recycled material big cartons improve the shelf life

temporariness creates a special character for these drinks tastes can be designed according to the time period creates a playful element in the range people can look forward to

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