Discussion of Chinese luxury consumer behaviorDiscussion of Chinese luxury consumer behavior

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Luxury is a subjective and multi-dimensional construct

Luxury itself is an evolving concept, and it is difficult to have a static and precise definition. The reason for this ambiguity partially lies in the strong involvement of human‘s subjective opinions. Since luxury is a subjective judgment made by individuals and is hardly an academic term, it is very difficult to restrict such a social and dynamic term to a static concept. However, many scholars have attempted to identify common characteristics of luxury products; and thus, luxury has become multidimensional construct. Give the subjective nature of the concept, Kapferer (1997) provides a widely accepted and often cited description: ―it is art applied to functional items‖. Cornell (2002) put forward that the obvious characteristics of luxury products are having ―a strong element of human involvement‖. Regarding the traditional term often used in the field of marketing, ratio of functionality to price, Nueno and Quelch (1998) argue that for luxury goods, the ratio of intangible and situational utility to price is high, while the ratio of functionality to price is low. Concerning characteristics of luxury products, Dubois (1995) and Pantzalis (1995), and Phau and Prendergast (2000) claim that exclusivity is very important for luxury products. Other scholars introduce management points of view, such as Vigneron and Johnson (1999; 2004) and Wiedmann et al. (2007), who from the perspective of brand management define ―luxury as the highest level of prestigious brands encompassing several physical and psychological values.‖ Despite the different opinions, there is unanimous agreement that luxury products are tightly connected with human‘s subjective judgments. This also implies that the acquisition of luxury products satisfies more psychological and social needs than simply fulfilling a utility function, which leads luxury to ultimately be a multidimensional construct. Since the concept of luxury is too dynamic and subjective, value perception is explored as an effective tool to analyze the luxury products by the following scholars. And the value perception analysis in luxury field had been proved to have both academic and practical implications for understanding the essence of luxury.

Luxury value perceptions

Since luxury is a multidimensional construct, the value provided by luxury goods can be characterized from several perspectives. Zeithaml (1988) define value as the overall evaluation of products, including the price, costs and benefits, quality and overall assessment of subjective worth. Based on Zeithaml‘s definition, value is not a single dimension scale to measure consuming goods, and it is a comprehensive evaluation of many features of the products. So the value analysis is quite fitful for luxury goods, since luxury itself is a multidimensional constructs.
Moreover, since luxury products are differ from the common products in many respects, Pathak and Lim (2017) proved that even from the brand name, the consumers can tell if it is a luxury brand or not due to the linguistic characteristics. So the consumer value and utility must differ greatly between luxury goods and common goods. Many scholars try to analyze the special and common values that luxury products may provide. Firstly, Nueno and Quelch (1998) finds that the traditional criterion of the ratio of functionality to price cannot bet used to value luxury goods. Then Phau and Prendergast (2000) and Dubois, B., and Paternault, C. (1995) find exclusivity value is extremely important for luxury goods. And many scholars try to analyze the special feature of luxury goods and put forward the diversified values that the luxury products can provided (see Table 1-1).

Constructs development and Hypotheses proposed

In this section, this research will present the procedure of constructs development and statistical methods used in the procedure, and propose the hypothesis model in the end of the chapter.

The original data collection and development

In order to get more accurate result, this study does exploratory research by interviewing some experts and scholars in the field to obtain useful information to design the questionnaire. So constructs listed in the questionnaire are the result of discussion with experts in the luxury field based on the references of Smith and Colgate‘s (2007) questionnaire. The Table 2.2 shows the details of the questionnaire.
With the questionnaire, this study uses Likert-scale to collect the data. For each construct, the respondents will choose from five points options: from strongly disagree, disagree, neutral, agree to strongly agree. Transforming the data into 1 to 5 points respectively, the study obtains the data of these 20 constructs. Then this study uses factor analysis (Principal Component Analysis) to explore the constructs with the software spss22 (see Table 2.3). Four principal components are extracted with an eigenvalue larger than 1 (KMO (Kaiser-Meyer-Olk) = 0.85; Bartlett‘s test of sphericity=1014.10, sig. =0.000.) The KMO test shows the Principal Factor Analysis has statistically significant. C2, C4, C6 and C8 constructs are not included into these four components.
The scores of the four principal components are saved as new variables for further use in the hypothesis testing. Four constructs C2, C4, C6 and C8 that failed to fall into any of the four components are eliminated.

Further exploring demographic factors in Chinese luxury behavior

This study uses statistical methods to test the demographic factors in Chinese luxury market. The demographic factors discussed in this study mainly include gender, age, income and education level. And this study mainly analyzes the impacts of these demographic factors in attitude towards luxury products, luxury consumer values, etc.
The data is also collected value via internet during the period of May 2016. Altogether 1233 questionnaires are obtained. Table 2.1B provides the summary of the data collected. The demographic information of the questionnaire divides into four parts, the gender, age, educational level and income information. Among the 1233 respondents, 43.6 percent are male respondents and 56.4 percent are female respondents.
For age information, 741 persons are below 25 years old, and 130 persons are between 26 -30 years old, and 134 persons between 31-35 years old, and 92 persons between 36-40 years old, 78 persons between 41-45 years old, 34 persons between 46-50 years old, while 24 persons are above 50 years old. The age of respondents is evenly across different age group. As for the income information, 74.3 percent of the respondents are below 5000 RMB (which is 678 Euros according to exchange rate of June 13), only around 5 percent of respondents are above 15000 RMB (which is 2033 Euros according to exchange rate of June 13). So the income level is not evenly across the different income group, but it reflects the real situation of income level of Chinese consumers.

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Table of contents :

Table of Contents
CHAPTER 1 Literature review and theoretical background 
1.1. Luxury is a subjective and multi dimensional construct 
1.2. Luxury value perceptions
1.3. Income in luxury consumption
1.4. Chinese consumers’ attitude towards luxury products
1.4.1. Luxury brands are imported from western world
1.4.2. New buyers with long tradition of a dmiring art pieces history
1.4.3. Impact of Chinese traditional ideologies on luxury consumption
1.5. The characteristics of Chinese luxury consumers
1.5.1. Government changed attitudes
1.5.2. Increasing number of affluent people in China
1.5.3. Consuming large volume of luxury abroad.
1.5.4. The characteristics of Chinese luxury consumers
1.6. Country of origin (COO) effects among Chinese consumers
1.7. Luxury values perceptions by Chinese consumers under luxury democratization
1.7.1. The luxury democratization tendency
1.7.2. The complexity of social value under luxury democratization
1.7.3. The possible luxury values perceived by Chinese consumers.
CHAPTER 2 Hypotheses Development and Methodology Framework 
2.1. Procedure of Hypotheses Development
2.1.1. Step 1: Identifying Chinese consumers’ va lues on luxury consumption
2.1.2. Step 2: To extract the main dimensions of Chinese consumers’ value perceptions
2.1.3. Step 3: Proposing the hypotheses and model
2.1.4. The influence of demographic factors
2.2. Methodology framework
2.5.1. Step 1: Collecting data of values for luxury consumption in Chinese market
2.5.2. Step 2: Processing data with PCA method to obtain principal dimensions
2.5.3. Step 3: Comparing the value pattern with the sophisticated model
2.5.4. Step 4: Identifying the relationship between values and luxury consumption
2.5.5. Step 5: Using another set of data to test the validity of results
2.5.6. Step 6: Testing the role of the demographic factors in the luxury consumption
2.3. Sample and procedures
2.4. Constructs development and Hypotheses proposed
2.4.1. The original data collection and development
2.4.2. The main factor development and equivalence
2.4.2. The main factor development and equivalence
2.4.3. Income and luxury consumption
2.4.3. Income and luxury consumption
2.4.4. Demographic factors
2.4.4. Demographic factors
2.4.5. Proposed model
2.4.5. Proposed model
CHAPTER 3 R 3 — Results of the researchResults of the research
3.1. Results of the effects of value perceptions on luxury consumption
3.1.1. The results of relationship between consumer values and real consumption
3.1.2 Model modification
3.2. Test of proposed model
3.3. The effects of demographic factors on luxury value perceptions
3.3.1. The demographic factors with consumer values
3.3.2. Further exploring demographic factors in Chinese luxury behavior
3.3.3. Country of origin and luxury consumption
CHAPTER 4 — Discussion of Chinese luxury consumer behaviorDiscussion of Chinese luxury consumer behavior
4.1. Luxury goods are high quality commercial products for Chinese consumersproducts for Chinese consumers
4.2. The luxury value framework of Chinese consumers
4.3. The impacts of luxury values on the luxury consumption
4.3.1 The perception of social value negatively affects luxury consumption.The perception of social value negatively affects luxury consumption.
4.3.2 Financial value has no significant relationship with luxury consumption.Financial value has no significant relationship with luxury consumptio
4.3.3 Individual value positively affects luxury consumption.Individual value positively affects luxury consumption.
4.3.4 Perception of functional value positively affects luxuryPerception of functional value positively affects luxury consumption.consumption.
4.4. The effects of demographic factors on the luxury values
4.5. The effects of income in luxury consumption in Chinese luxury market
4.5.1. Income is decisive factor for luxury consumption
4.5.2. Chinese luxury consumption is the result of increasing income levelresult of increasing income level
4.5.3. Income is indicator of new type of luxury buyers ―excursionist‖
4.5.4 The quantitative relationship between income and Chinese luxury consumption
4.7. Conclusion: The characteristics of Chinese luxury buyers
4.7.1. The luxury business is triggered by the increasing income level
4.7.2 The luxury values perceived by Chinese consumers
4.7.3 The importance of demographic factors on luxury consumption
4.7.4. The effect of country of origin widely exists among Chinese consumersorigin widely exists among Chinese consumers
Conclusions and Managerial Implications
1. The value dimensions perceived by Chinese
2. Values and demographic factors
3. The effects of income and luxury values on the real consumption
4. Theoretical contribution and managerial implicationsons
5. Shortcomings and future research


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