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Value Based Segmentation of Luxury Consumption

Behavior among Iranian Employed Women

Written by S. Mehrabi, R. Zahedi

Paper category

Master Thesis

Subject

Business Administration>General

Year

2016

Abstract

Master Thesis: What is luxury? An old general view is that luxury goods or status goods belong to special brands, which dedicate prestige to the owner regardless of their function (Husic & Ciic, 2009). Some similar viewpoints also point out that if things are only measured in terms of their value, and logically speaking, there is no luxury, this topic will become meaningless; but when social relations and their consequences are considered, their Related dynamics, such as conspicuous consumption and comparing yourself with others in social groups, make luxury goods meaningful and give them social functions (Kapferer J.-N., 2010). In addition to all the definitions and expressions of luxury goods, the famous LVMH founder Bernard Arnault expressed the modern definition of luxury goods as: "The ordinary of extraordinary people and the extraordinary of ordinary people." ( Kapferer J.-N. Luxury goods after the crisis: Pro logo or no logo., 2010) 2.2. Luxury consumers According to the growing nature of the luxury goods market, business owners, marketers and researchers seem to have Accurate information about luxury consumers and their perceptions, behaviors, and attitudes toward luxury goods. Concepts and consumer segmentation in the market (Wiedmann, Hennigs, and Siebels, 2009). Dubois and Duquesne also believe that in order to better understand the luxury market, the relationship between consumers and brands should be determined. (Vigneron & Johnson, 2004)) As mentioned earlier, luxury goods are difficult to define, although the basic concept of luxury goods is based on the definition based on its price, a more accurate definition is inferred from the following main components : (Vigneron & Johnson, 2004)•Human participation•Limited number of production projects•People's recognition of its value The term "more luxurious" interestingly used in the luxury world shows the slippery nature of the definition of luxury (Vigneron & Johnson, 2004); For example, in the luxury fashion industry, Luis Vuitton handbags may be considered more luxurious than other similar luxury brands (such as Prada). Luxury brands are defined as brands with higher prices and higher quality of goods than other brands, but they are not necessarily the best in terms of functionality. (Wiedmann, Hennigs, Siebels, 2007) Although luxury goods are assumed to be consumed by the elite, 30 years ago, a new development of “democratization” began, that is, luxury brands produce more affordable goods for the middle class (Vigneron & Johnson, 2004); This shows that luxury consumption is not only for the rich. 2.3 Value and consumer perceived value are similar to the theme of this research "luxury", scientific research cannot clearly define "value" and "consumer perceived value", so a variety of methods have been chosen to define these concepts (Sánchez-Fernández & Iniesta -Bonillo, 2007). However, marketers have found that cognition of "value" and "consumer perceived value" is very important in strategic management (Mizik & Jacobson, 2003); they can create a competitive advantage for business owners (Wang, Po Lo, Chi, & Yang, 2004), thereby bringing them customer loyalty and profit (Khalifa, 2004). In general, the results of various definitions proposed by researchers and scholars define value as the result of "assessment and judgment", which is naturally cognitively effective, perceptual and prioritized (Sánchez-Fernández & Iniesta-Bonillo, 2007) (Holbrook, 1986) (Zeithaml, 1988) (Babin & Attaway, 2000). According to the definition of “value”, the interaction between customers and products or services can be implicitly called “consumer perceived value” (Payne & Holt, 2001) (Sánchez-Fernández & Iniesta-Bonillo, 2007). 2.4. Value Dimension Several studies related to luxury consumers and their behavioral characteristics show that the value of luxury goods has multiple dimensions in personal and contextual aspects. These dimensions include salience and snobbery that are considered interpersonal dimensions, hedonism and perfectionism related to personal aspects, and other components such as social and political aspects related to context. (Wiedmann, Hennigs, & Siebels, 2009) According to the microeconomic consumer theory, the model defined in conspicuous consumption can divide consumers into two different groups: "submissives" and "snobbers" (Dubois, Laurent, & Czella, 2001). Submissives buy products mainly because other people buy the same things; snobbish people tend to buy products that others buy less. In any case, the reason for these two behaviors is that they want to be seen as the rich in the upper class rather than the poor (Dubois, Laurent, & Czella, 2001). The value dimension extracted from most of the early days, the personal aspects (Vigneron & Johnson, 1999) and the interpersonal aspects (Mason, 1992) are researches on saliency, uniqueness, quality, hedonicity and extended self, which will be carried out in the next part. The description. 2.5. Framework The earliest framework proposed by Vigneron and Johnson is named "Prestige-Consumer Seeking Behavior" (Vigneron & Lester, 1999), which describes the behavior of consumers in terms of personal perception. This framework is basically inspired by Manson's “Status Seeking Behavior” framework (Mason, 1992), which is based on the interpersonal aspects of consumer perception. Based on the previous research results, a more comprehensive framework is proposed, as shown in the following subsections. Read Less