So Lai Man, Stella

2012 Cambridge Business & Economics Conference ISBN : 9780974211428
June 27-28, 2012

Cambridge, UK 1
Motivations of Luxury Brand Consumption: A Comparison between
China and Hong Kong Chinese Consumers
So Lai Man, Stella
The Chinese University of Hong Kong

Introduction
As a result of the growing importance of luxury markets (McKinsey & Co. 1990,
2011) over the last two decades, the marketing literature has recently given tremendous
attention in the study of luxury brands. However, little is known on the understanding of
the value of luxury and how to best market to the consumers of luxury brands. The
recent emergence of luxury brand market leads to a new era of luxury consumption
marked by a shift in the dominant consumers moving away from the western countries to
Asian countries, such as China. In China market, we can also see a shift from the
traditional Chinese culture of luxury consumption to a new way of luxury consumption
pattern.
Women luxury brand market is increasingly receiving attention as it represents a
large proportion of luxury consumption in China (McKinsey 2011). In China, womens
role is no longer restricted to their domestic influence. Their influence in the consumer
market is increasingly being felt. The root cause is of course their changing economic and
social role which has evolved extremely rapidly since the 1980s. They acquired a higher
profile, greater demands and increased expectations in the process. Therefore, marketers
are beginning to be aware of the size of this market and to re-evaluate their marketing
strategies in order to position their products/services for this market more efficiently (Sin,
June 27-28, 2012
Cambridge, UK 2
So, Yau and Kwong 2001). As for the luxury consumption, marketers who get their
marketing strategy right can serve a slice of an increasingly lucrative sector of the market.
In views of the importance and the emergence of this market, this study aims to
investigate and examine the concept of luxury brand and how Chinese consumer market
value luxury. This study aims to develop a literature review on academic research work
of luxury branding since the year of 1834 (John Rae). In addition, this research also will
explore Chinese womens attitudes toward luxury brand and their shifting behavior.
Further, this study will also attempt to measure the cross-cultural differences between two
regions of Chinese women: mainland women and Hong Kong women.

Overview of Previous Research on the Value of Luxury Brands
The topic of luxury is not completely new. As for the academic interests in the
concept of luxury, early research on this topic has started from the work of John Rae
(1834), Thorstein Veblen (1899) and Keasbey (1903) and their works have laid down the
foundations of luxury brand consumption. In those days, luxury was the visible result to
fulfill mens need for some form of social stratification. In view of the recent tremendous
growth of research interest in the field of luxury brand consumption, various aspects of
luxury consumption have been addressed, including status and conspicuous consumption
(Mason, 2001; Shipman , 2004; Trigg, 2001; Truong, Simmons McColl and Kitchen
2008); Value of luxury, brands construct and measurement issues ( Dubois & Paternault,
1995; Luxury Institute, 2005; Vigneron & Johnson, 1999, 2004;Wiedmann, Hennigs and
Siebels 2009) and cross-cultural perspectives on motivations for luxury consumption
( Dubois, Czellar & Laurent 2005; Tidwell & Dubois , 1994; Wong & Ahuvia 1998).
June 27-28, 2012
Cambridge, UK 3
Today luxury is everywhere and everyone wants his products to be luxury which
attract consumptions and leads to profits. To be able to market luxury well, we need to
first define what luxury is all about. Why people are willing to spend more for the luxury?
However, it is not easy to understand the meaning of luxury. The term luxury is
subjective that it does not elicit a clear and objective meaning. It takes different forms for
many different people and is dependent on the mood and experience of the consumer
(Wiedmann, Henngs and Siebels 2009). In economic terms, luxury objects are those
price/quality relationship is the highest of the market. In other words, luxury brands can
be described by the nature of high price and rarity. According to Kapferer and Bastien
(2009), luxury is a social maker which leads to a need of brands - the DNA of luxury is
the symbolic desire to belong to a superior class. Bagwell and Bernheim (1996) further
suggested that consuming luxury brands is a means to achieve higher social status rather
than for physiological utility and practical use. This implying that people is seeking for
social status recognition through consumption of luxury.
Branding is an abstract concept, therefore marketers need to understand
consumers perception towards brands and how consumers value them in order to
implement successful brand building strategy. It is generally agreed that prestige is a
benchmark to measure the component of luxury brand. Past studies stressed that the
prestige in a brand consists of perceived hedonic conspicuous value or identity,
perceived unique value, perceived social value, perceived hedonic value, perceived
quality value and high awareness level (Vigneron and Johnon 1999; Biel 1992). Although
it seems that the foundamental motives for acquiring luxury brands were traditionally
regarded as buying to impress others or based on the inter-personal aspects (Berry 1994;
June 27-28, 2012
Cambridge, UK 4
Leibenstein, 1950; Mason, 1992), many research studies suggest that luxury also has a
strong personal and hedonic component. In the study of Wiedmann, Henngs and Siebels
(2009), they pointed out that there are other aspects of motives for luxury consumption.
Hedonism and perfectionism or buying luxury to please oneself (Dubois & Laurent,
1994), and situational conditions (e.g. economic, societal, and political factors) must also
be considered (Vigneron & Johnson, 1999, 2004).
A summary of literature on luxury perception scales and measurement across five
studies (Table 1) demonstrated that based on the two major dimensions of luxury
perceptions, inter-personal orientation and personal orientation, related scales and
measures (Vigneron & Johnson 2004; Kapferer, 1998; Dubois, Laurent & Czellar
2001;Wiedmann, Henngs and Siebels 2009; Wang, Sun and Song, 2010) have been
developed to predict the factors describing luxury brands.

Table 1 Measuring perceptions of luxury brand: review of factors describing luxury
brands across five studies

Vigneron &
Johnson
(1999, 2004)
Kapferer (1998)
Dubois, Laurent &
Czellar (2001)
Wiedman,
Hennigs &
Siebels
(2009)
Wang, Sun, Song
(2010)
Inter-
personal-
orientated
perceptions
Conspicuousness
Elitist
Extremely
expensive
Its price

Conspicuous
Elitist
Very high price
Differentiate
from others
Materialistic
Prestige
Value in
Social
Networks
Other Peoples
Impression
Feel Successful
Increase Self-
Confidence
I want other people
to know that I own
expensive luxuries
Uniqueness
Exclusiveness
Its uniqueness
Scarcity
Uniqueness
Uniqueness
Usable
__
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Cambridge, UK 5
Quality
Craftsman
Best quality
Beauty of
object
Excellence of
products
Not mass-
produced
Rather like
luxury
Excellent
quality
Good taste
Quality
Made of Good
Materials
High Quality &
Worth the Money
Personal-
orientated-
perceptions
Hedonism
Its great
creativity
Its sensuality
Its magic
Pleasure
Aesthetics and
polysensuality
Makes life
beautiful
Self-Identity
Self-Gift
Giving
Extravagance
Life
Enrichment
Exciting
Experience
Feel Different
When I am
depressed, I buy
luxuries to make
feel better
Extended- self Successful
Refined people
Reveal who you
are
Pleasing
Few people
own
Self-Directed
Pleasure
Better Service

Chinas Luxury Consumption Culture

Chinese culture has played an important role in the consumption of luxury brands.
Traditionally, Confucius face concept explains why Chinese consumers value luxury
brands which they believe will bring respects and prestige. China is regarded as a
collectivistic that we-identity symbolizes success and wealth (Hofstede 1991; Triandis
1998). Face or Mianzi is the important concern in a Chinese society which refers to
the social status of a person. Comparing with the American consumers, Chinese are
more influenced by face and peer group (Li and Su 2006). Their consumption is
regarded more as a tool to serve higher-order social needs. It is also argued that face
consciousness relate to product consumption, especially for the high prestige branded
products that would bring face to the consumer (Tse, 1996). This can explain the reasons
June 27-28, 2012
Cambridge, UK 6
of high demand of Louis Vuitton bags and Gucci bags among Asian consumers (Strategic
Direction 2005). Therefore, the Confucian values, such as respect for authority and
desire for harmony explains why people are buying luxury to maintain social position and
prestige (Phau and Prendergast, 2000).
Hong Kong has been a British colony until 1997 has been influenced by the western
culture for many years which can be reflected in their behavior and attitudes toward
consumption of luxury. Research discovered that Hong Kong tops the world of luxury as
most people claiming to buy luxurious brands such as LV, Gucci and Burberry (Nielsen
March 17, 2008). It was argued that luxury brands in China represent middle-class
aspirations, so brands cannot be too hidden. On the contrary, the concept of brand
prominence was studied and observed that prominent brands work better among certain
segments (Han, Y. J.; Nunes, J. C. and Dreze, X. 2010). Therefore, a lot of products
bearing visible logos are the best sellers in China (The Standard January 03, 2007).
In recent years, China is becoming the worlds top luxury market. McKinseys latest
report on Luxury consumption in China (2011), Understanding Chinas Love for Luxury
has forecasted that China will comprise 20 percent of global luxury sales by 2015. The
report further pointed out that, contrary to popular belief, a growing number of Chinese
luxury consumers are exhibiting a noticeable trend away from overt displays of wealth
and moving towards more understated forms of luxury consumption. McKinsey further
classify the Chinese luxury consumers in four categories: 1. Core luxury buyers, 2.
Luxury role models, 3. Fashion fanatics and 4. Middle-class aspirants. In general, people
are not homogeneous in their motives in buying luxury brands. Some might buy for
impressing other while others are buying to achieve self-satisfaction.
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From a cultural prospective, Chadha and Husband (2006) has studied the spread of
luxury culture in Asian countries and discovered a five- stage process classification. It
varies from subjugation to way of life. China is situated at the stage of show off
that people are tripping over each other trying to acquire the symbols of wealth and
displaying them in the most conspicuous manner. On the other hand, Hong Kong is
classified as in the stage of way of life that people are confident and feel perfectly
normal to purchase luxury brands. Shopping is the way of life in Hong Kong, it is as
natural as eating, drinking, sleeping and breathing. Hong Kong people in this shopping
paradise tend to buy more expensive items comparing with other Asians (Chadha and
Husband 2006). These two groups of Chinese women are having different motivations
in luxury consumption. It is expected that the mainland Chinese would value face or
interpersonal motivation more than the Hong Kong Chinese while the Hong Kong
Chinese are expected to value more on hedonic and self-actualization value (Figure 1).

Mainland China Hong Kong
Figure 1: Luxury Consumption Value of Mainland Chinese versus Hong Kong
Chinese
self-
satisfaction
face/status
Face/status
self-
satisfaction
June 27-28, 2012
Cambridge, UK 8
Hypotheses:
Hypothesis 1: China mainland female consumers rate higher on Face/ Status Oriented
Values than Personal/Self Satisfaction Oriented Value

Hypothesis 2: Hong Kong female consumers rate higher on Personal/Self-satisfactory
Oriented Value than Face/Status Oriented Value

Hypothesis 3: China mainland female consumers are expected to rate higher on
Face/Status Oriented Value than their Hong Kong counterpart.

Hypothesis 4: Hong Kong Female consumers are expected to rate higher on
Personal/Self-satisfaction Oriented Value than their China mainland counterpart.

Hypothesis 5: China mainland female consumers who are rated high on Face/Status
Oriented Value is expected to have higher purchase of luxury items than Hong Kong
female consumers who are rated high on Face/Status Oriented Value

Hypothesis 6: Hong Kong Female consumers who are rated higher on Personal/Self-
satisfaction Oriented Value is expected to have higher purchase of luxury items than
female consumers who are rated high on Personal/Self-satisfaction Oriented Value

June 27-28, 2012
Cambridge, UK 9
Methodology
A survey study with a well constructed questionnaire was used to collect data regarding
working female on brand values and purchase in both Mainland China and Hong Kong. A
pretest was conducted in the streets of Hong Kong to test the measurements, and some items
were deleted according to the pretest results. Then a modified version was designed
according to the language and appropriate demographic profile for the Mainland respondents.
In Hong Kong, mall-intercept was being used, aiming at working female from mid-twenties
to mid-forties; in the Mainland, questionnaires were distributed to female staff of both
international and local companies, including Coca-cola and Citi-Group. Total successful
sample for mainland China is 84 while 140 for the Hong Kong sample.
The questionnaire was designed to cover brand values and real luxury brand
purchase. For brand values statements, 6-points scale was being used. The statements
can be further classified into Face/Status Oriented Values and Personal/ Self-
satisfactory Oriented Values (Table 1a and 1b).
As for the luxury brand purchase, respondents were asked to indicate their choice of
brands of handbags when there is no money concerned and the brands of their actual
purchase in the past. In order to measure the relationships between the brand value
motivations and purchase behaviour of luxury brands. It is expected that different
perceived brand values will influence the consumption preference and behaviour. Hence,
it is decided to examine three brands to represent luxury in the questionnaire Louis
Vuitton, Gucci and Prada.

June 27-28, 2012
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Table 1a: Brand Values Statements of Face/Status Orientations

Table 1b: Brand Values Statements of Self-satisfaction Orientations

Results
Hypothesis One and Two
Table 2 and Table 3 show the t- test results of the brand values motivations between
the two sets of samples: mainland Chinese and Hong Kong Chinese. These tests have
employed the group means of brand value statements in Table 1a and 1b in order to give a
general directions and implications on the brand value typology. Paired Sample Mean Test
was used to measure the significant difference between the two typologies of motivations
We should only buy luxury brands that can reflect our self-Identity
We should consider the brand popularity when we purchased.
When buying gifts, we should purchase luxury brands.
It is insulting for both gift givers and receivers if it is cheapbrand.
Using famous brands would make me feel different from others.
Using famous brands would make me feel superior.
Using famous brands would make me feel respected
Feel happy when recognized by others on the brands we purchased.
We do not have to consider others views towards the brands that we purchased.
We feel happy when sales person treated us as VIP.
June 27-28, 2012
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(Face/ Status versus Self-satisfaction oriented) in China and Hong Kong. Table 2
demonstrates that there is a significantly higher mean score for the Face/Status Oriented
(Mean: 4.21) than the mean score of Self-satisfaction Oriented (Mean: 3.95) in China. As
for the Hong Kong female consumers, there is no significant difference (p-value 0.65)
between the two typologies of Face/Status and Self-satisfaction oriented brand values.
Therefore, Hypothesis One can be supported while Hypothesis Two cannot be supported. In
other words, the model proposed in Figure 1 is only partially correct.
Hypothesis Three and Four
As for the comparison between the Mainland China and Hong Kong, Independent
Sample Mean Test was employed to measure the significant differences between samples of
mainland China and Hong Kong (Table3). Levenes Test for Equality Variances was used to
determine the significant differences between the two sets of samples. If the sig. of the
Levenes test is < 0.05, we check the "Equal variances not assumed", while if the sig. of the
Levenes test is > 0.05, we check the "Equal variances assumed". It can be observed that
there is significant difference between Hong Kong and Mainland China in terms of the
females Face/Status Oriented Brand Value (p-value 0.000) while there is less significant
difference between the two places in their Self-satisfaction Oriented Brand Value (p-value
0.025). Hence, Hypothesis Three can be supported while Hypothesis Four cannot be
supported.
Hypothesis Five and Six
It is expected that China mainland female consumers who are rated high on
June 27-28, 2012
Cambridge, UK 12
Face/Status Oriented Value will purchase more luxury items than its counterparts in
Hong Kong. Among those rated as Face/Status female group, there is significant
difference in luxury purchase between Mainland China (19.3%) and Hong Kong females
(44.8%), (Z-value 3.020527**). Significantly larger number of Hong Kong females who
fall into the Face/Status Oriented Group purchase luxury items than the Chinese
Face/Status Group. On the other hand, among those females (both China and Hong
Kong) who are rated high in Self-satisfaction value, Hong Kong females tend purchase
more luxury items (42.7%) than its counterpart in the mainland (11.1%). The Proportion
Test also indicates a significant difference between the two samples (Z-value 3.06778**).
Therefore, Hypothesis Five cannot be supported while Hypothesis Six can be supported.
The results indicate that Hong Kong people tend to purchase more luxury handbags than
its counterparts in mainland China despite their value orientations.

Implications and Conclusions
The results of this study are consistent with five-stage process classification
relating to the cultural development of Asian countries (Chadha and Husband 2006).
China was regarded as in the stage of show off that people are keen in buying luxury
products as a symbol of wealth while Hong Kong market is in the stage of way of life
that people are confident and feel normal to purchase luxury. The findings also observed
that mainland females tend to value Face/status significantly higher than Self-
satisfaction while the Hong Kong females tend to value the two similarly.
Comparing with its counterparts in the Mainland China, the Hong Kong females
are less motivated by Face/Status oriented value; however, they are not placing high
June 27-28, 2012
Cambridge, UK 13
value on the Self-satisfaction oriented value either. In other words, the Hong Kong
females tend to have moved away from the show off stage while not really in the way
of life stage yet. It is also natural to discover that the mainland Chinese females are
valuing the Face/Status oriented value far higher than the Hong Kong females.
As for their consumption for luxury items, it is interesting to discover that the
face- concerned Hong Kong females purchase more luxury items than the face-concerned
mainland Chinese females. One way to explain that could be the economic reason in the
two markets. Although mainland females are very much like the luxury brand, their
actual buying power might be not as high as the Hong Kong females. This can be
reflected in Table 6 that Hong Kong females are higher in proportion for purchase if they
like the brand than the mainland Chinese females.
In conclusion, the two groups of Chinese women are still having different
motivation values in luxury consumption. Hong Kong females tend to be moving toward
the higher level of consumption value that purchase of luxury is not just for impressing
other but more for their own self-satisfaction. As expected, luxury consumption is
regarded as a sign of wealth and status to the mainland Chinese. However, as a general
progress, it is believed that in the near future the mainland consumption value will
undergo a process of change toward the value of self-satisfaction and as a way of life.

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Table 2: T-test results on the differences between the two typologies of Motivations
(Face/Status Oriented and Self-satisfaction Oriented) in China and Hong Kong
China Mean P-Value
China(Face/status Oriented)
China(Self-satisfaction Oriented)
4.21
3.95
0.005 **
Hong Kong
Hong Kong(Face/Status Oriented)
Hong Kong(Self-satisfaction Oriented)
3.66
3.55
.065
Sample size in China = 84
Sample size in Hong Kong = 140
Significant at 0.05 levels
* P-value < 0.05
June 27-28, 2012
Cambridge, UK 17
** P-value < 0.01
*** P-value < 0.001

Table 3: T-test results on differences between China and Hong Kong on Face
Oriented and Self- satisfaction Oriented Brand Value

Face/Status Oriented Value Mean P-Value

China
Hong Kong

4.21
3.66

.000 ***
Self-satisfaction Oriented Value

China
Hong Kong

3.95
3.55

.025*
If the significant of the Levenes test is < 0.05, we check the Equal variances not
assumed while if the significant of the Levenes test is > 0.05, check the Equal variance
assumed
Sample size in China = 84
Sample size in Hong Kong = 140
Significant at 0.05 levels
* P-value < 0.05
** P-value < 0.01
*** P-value < 0.001

Table 4: Brand Preference and Brand purchase of luxury handbags (Mainland
China versus Hong Kong Females)

China HK
fraction percentage fraction percentage
Face /Status Oriented Group
Brand preference only
(with no money concern)
=42/57 73.6% =49/58 84.5%
Purchase =11/57 19.3% =26/58 44.8%
Self-satisfaction Oriented Group
June 27-28, 2012
Cambridge, UK 18
Brand preference only
(with no money concern)
=21/27 77.8% =75/82 91.5%
Purchase =3/27 11.1% =35/82 42.7%

Table 5: T-test results on the differences between Mainland China and Hong Kong
on Luxury Brand Purchase (Face/Status Oriented Value Group versus Personal
/Self-satisfaction Oriented Value Group)

Face/Status Oriented Value Group Z-value Conclusion
Brand Preference (with no money concern) comparing
China(73.6%) vs Hong Kong(84.5%)
1.216894 p2>p1
In Purchase, comparing China (19.3%) vs Hong
Kong(44.8%)
3.020527** p2>p1
Self-satisfaction Oriented Value Group
Brand Preference (with no money concern) comparing China
(77.8%) vs Hong Kong (91.5%)
1.311286 p2=p1
In Purchase, comparing China (11.1%) vs Hong Kong
(42.7%)
3.06778** p2>p1

Hypothesis Testing
Null Hypothesis: p
1
=p
2
vs Alternative Hypothesis: p
2
>p
1
Rejection Rule: reject Null Hypothesis if Z > Z
0.95
=1.645
Number of * = degree of significant where Z-value is more far away from the rejection
Region

Table 6: The actual purchase of luxury brands for those who like the brands (Hong
Kong versus mainland China) Proportion = Purchase/No Money Concerned
Z-value Conclusion
Face/Status Oriented Value Group
June 27-28, 2012
Cambridge, UK 19
China (26.2%)
HK (53.1%)
2.508592** p2>p1
Self-satisfaction Oriented Value Group
China (14.3%)
HK (46.7%)
3.348637** p2>p1

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