KOREASCHOLAR

Luxury industry is one of the fastest growing fields in marketing research in which many studies have examined how consumers' background affects their preference for luxury products and luxury brands. Classical theories focused on the affluent social classes and their tendency to consume luxury products to consciously or unconsciously signal their wealth. Other studies argued that the internalised culture developed during the socialisation years may influence one’s tastes and preferences for luxuries. Whereas, “costly signal theory” and “affirmation resource theory” suggest that luxury consumption extends beyond the traditional symbolic value of luxury brands and the habituated taste consumption drivers. Despite the wealth of current theoretical approaches, there is little research on the context of status rankings of luxuries and luxury brands. Thus, main objective of the present study is to develop and empirically test a conceptual framework that links consumption of at different rungs of the luxury brand ladder to a number of variables that may act as moderators which will be defined below. The key predictors are economic resources, cultural capital, perceived social status and desired status. The dependent variable is consumption of luxury brands at different rungs in the luxury ladder. A number of hypotheses are proposed and empirically tested. The dependent variable was measured by survey data collected from a sample of US consumers. The results confirm that the frequency of luxury brand purchases is significantly and positively related to consumers’ economic resources and desire for status. The hierarchy of luxury brands consumed is driven by consumers’ economic resources, cultural capital and desire for social status. Regardless of economic resources and perceived social status, consumers with high desire for social status are more likely to buy brands which represent high level of luxury. Likewise, people with higher cultural capital would buy higher luxury grading brands regardless of their economic capabilities. Moreover, results showed that perceived social status is negatively correlated with preferences for higher tier luxury brands of cars. In particular, desire for social status seems to moderates the effect of perceived social status on the hierarchy of brand of luxury car preferences. Desire for status combined with high perceived social status leads to higher preference for higher tier luxury products. It can be concluded that economic resources are responsible for the frequency people buy luxury brands, whereas cultural capital is responsible for the luxury hierarchy of the consumed brands. Frequent consumption of luxury brands reflects one’s economic status whereas the grade of luxury brands his/her cultural status. However, desire for status seems to be a key variable as it affects both frequency and the ranks of luxury brands purchased. This is an important variable as desire for status is not related with neither the actual social status (i.e., economic resources and cultural capital) nor perceived social status.

• Thao Nguyen(City University)
• George Balabanis(City University)