As the rapid adoption of the Internet around the globe made digital marketing an indispensable means of gaining competitive advantage for many sectors (Leeflang, Verhoef, Dahlstrom, & Freundt, 2014), its appropriateness for luxury products remains debatable. The main lures to luxury products for many consumers are their exclusivity and rarity, two valuable attributes that are at odds with digital medias’ ubiquitousness and pervasiveness (Hennigs, Wiedmann, & Klarmann, 2012). The main purpose of this paper is to examine the effects of online promotion of luxury brands on different aspects of their brand image. Additionally, the paper checks how the impact of the Internet on luxuries’ brand image varies across different segments of luxury consumers and levels of brand luxuriousness.

The main hypothesis of the study, that the Internet affects luxury brand image, is grounded in the McLuhan’s (1964) assertion that "the medium is the message". The congruence of the medium to the advertised brand has a positive effect on brand evaluations (Dahlén, 2005). Given that the Internet could serve as a tool for luxury firms to enhance their creative aspects (Okonkwo, 2009), the question arises as to how congruent the Internet is as a medium to luxury brands that sell on the basis of their exclusivity. The congruence of the Internet to the luxury brands is moderated by: the level of luxuriousness of the brand and the perceived luxury values.
Dahlén, Granlund & Grenros (2009) have shown that the use of new media benefit more the “low reputation” brands rather than the “high reputation” ones. In high reputation brands consumers have expectations of higher standards from the medium and are more attentive to changes in the advertising medium. Moreover, by definition the higher the level of brand luxuriousness the higher its exclusivity and rarity. Hence, it is hypothesized that the Internet’s appropriateness as a medium will be negatively related to the luxuriousness of the brand.

Luxury values influence consumer choices for luxury brands and brand image perceptions. Luxury value activation by contextual cues like the advertising medium is expected to align image perceptions to the expressed values. As a result, we expect brand image attributes that express specific luxury values to be influenced by the extent to which the medium promotes or inhibits the expression of such values. In luxuries, Wiedmann, Hennings and Siebels (2007) identified four categories of luxury values (financial, functional, individual and social) that are hypothesized to have a differential impact on the effect of the Internet to luxury brand image.

To test the hypothesized relationships, an experimental design was used. Facebook was selected as a platform for “online” promotion and the stimuli were luxury watches. The results indicated online luxury promotion adversely affects luxury brand’s perceptions hedonism and uniqueness. The effects were more pronounced to the most luxurious brands and to specific luxury value segments. The results provide useful insights for the development of luxury brand strategies.

• Alexandra Karpova(Cass Business School- City University London, UK)
• Thao Nguyen(Cass Business School- City University London, UK)
• George Balabanis(Cass Business School- City University London, UK)