Impact of Social Cues on Consumers’ Purchase Intentions Regarding Luxury Services

Subject: Branding
Pages: 5
Words: 1771
Reading time:
11 min
Study level: PhD

Background and Justification of Research

Consumers’ purchase intentions are often influenced by a variety of factors and certain associations with the quality of provided services and their status (Garrett, Lee & Chu 2017; Peluso et al. 2017). Thus, persons’ visions of products and services can be affected by their brand, name, the country-of-origin, logo, packaging, colour scheme, shape, and price among other aspects (Bajaj & Bond 2018). This tendency is also typical for consumers’ perception and choice of luxury products and services (Kapferer & Laurent 2016). However, more attention needs to be paid to examining what particular antecedents can influence consumers’ intentions, how these factors are associated with the luxury branding concept, and what their effects on purchasing luxury services are in contrast to luxury goods (Janssen, Vanhamme & Leblanc 2017; Ki, Lee & Kim 2017).

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The problem is that it is assumed that consumers assess the appropriateness of the brand, country-of-origin, and qualities to choose luxury services similarly to choosing luxury products since this issue is actively discussed in research, but there are no reliable studies to support this idea (Herz & Diamantopoulos 2017; Reardon, Vianelli & Miller 2017). In addition, more attention should be paid to examining the actual relationship between consumers’ vision of services’ quality, the desired social status associated with services, and the variety of variables associated with luxury branding. The current research is important to examine consumer decisions regarding luxury services in the context of many variables that can form perception. These variables include the linguistic nature of brand names, logos and their shapes, packaging, colours, and the country-of-origin.

Research Aim and Objectives

The aim of this research is to examine how performance and social cues can influence consumers’ intentions to purchase luxury services in relation to the elements of luxury branding (logos, shapes, the use of colours, etc.) and the country-of-origin for these services. The following objectives are formulated to address this aim:

  1. To determine how certain performance and social cues work as antecedents to affect consumers’ intentions that are related to purchasing luxury services.
  2. To analyse how the elements of luxury branding (logos, shapes, the use of colours, etc.) can affect consumers’ intentions to purchase luxury services.
  3. To examine how the country-of-origin can influence consumers’ intentions when they choose luxury services.

Research Questions

This research will be guided by several research questions that are aligned with the formulated aim and objectives. These questions are important to be addressed to determine specific factors or antecedents that can influence intentions of consumers regarding purchasing luxury services. Three research questions are proposed:

  1. How can performance and social cues predict consumers’ purchase intentions related to luxury services?
  2. How can the elements of luxury branding predict consumers’ intentions to purchase luxury services?
  3. How can the country-of-origin predict consumers’ purchase intentions related to luxury services?

Literature Review and Research Framework

Luxury products are defined as goods that have a high quality, an exclusive or recognisable style, and a hedonic value. Luxury products are often non-essential, prestigious, expensive, and authentic in their nature (Yang & Mattila 2016). On the contrary, luxury services are described as “less visible than luxury goods” (Chen & Peng 2018, p. 60). They are characterised by unique or superior environments, premium prices, and excellent assistance (Yang & Mattila 2016). The existing studies in the fields of marketing and consumer psychology provide evidence to support the idea that consumers choose luxury products and services because of certain factors. They include not only the brand, quality, price, status, and satisfaction but also the logo, name, shape, packaging, and colours among others (Eisend, Hartmann & Apaolaza 2017; Kapferer & Laurent 2016; Parguel, Delécolle & Valette-Florence 2016). The researchers discuss these elements as important for luxury branding that influences consumers’ psychological responses to proposed services.

According to researchers, consumers select luxury goods because they believe that luxury brands accentuate or elevate social status, they are often sure that the quality of such products is higher, or they rely on a certain type of customer satisfaction (Charters, Spielmann & Babin 2017; Dion & Borraz 2017; Khalifa & Shukla 2017; Schade et al. 2016). From this point, luxury products and services represent a specific category, and consumers often have high expectations regarding these products (Maher & Singhapakdi 2017; Shaikh et al. 2017). The experiential and hedonic values associated with receiving luxury products or services make consumers choose these experiences again (Chen & Peng 2018; Yang & Mattila 2016).

The majority of researchers note that, among the examined factors or antecedents, the key role in influencing purchase decisions belongs to the quality and status associated with luxury products (Chang & Ko 2017; Liu et al. 2017; Maher & Singhapakdi 2017; Shaikh et al. 2017). Thus, being driven by hedonic, social, functional, and financial values, consumers are often interested in buying luxury products that guarantee unique experiences (Hussein & Fraser 2018; Mandler, Won & Kim 2017). Still, researchers note that studies on this relationship between certain antecedents of consumers’ decisions and purchasing luxury services are limited (Chang & Ko 2017; Hussein & Fraser 2018).

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Individuals usually assess the image of the country, the brand, physical features of products, names, logos, and prices among other factors. These aspects are related to considerations regarding both quality and status, as well as following intentions to purchase a product or not (Andéhn & L’Espoir Decosta 2016; Tang, Hsieh & Chiu 2017). Thus, the question about the connection between the country-of-origin and purchasing luxury products is discussed in literature. Being influenced by high costs of luxury goods and high expectations, consumers often choose products from countries which are viewed as leaders in this area, as it is in case of electronics and information technologies (Balabanis & Siamagka 2017; Cheah, Zainol & Phau 2016). For example, currently, the image of China as the country-of-origin is lower than the image of the United States or the United Kingdom in terms of luxury products for Europeans and Americans, and individuals’ assessment of quality or status of products can be both subjective and objective (Eng, Ozdemir & Michelson 2016). Still, there is a lack of research on the situation regarding luxury services in contrast to products.

Studies indicate that consumers’ intentions to purchase luxury goods can be influenced by certain marketing strategies or cues. Thus, companies pay much attention to making their logos and packaging visible, distinctive, and associated with high quality and luxury (Guesalaga, Pierce & Scaraboto 2016; Schroll et al. 2018). There are also studies on the relationship between colours used in logos and consumers’ perceptions of products that demonstrate how purple, violet, and gold colours are associated with luxury (Bajaj & Bond 2018; Nguyen, Zhang & Calantone 2018). Researchers also found the connection between luxurious brand names and consumers’ perception of these names through the theory of sound symbolism. If brand names are created out of late-acquired complex phonemes, they are often associated with luxurious brands (Pathak, Calvert & Velasco 2017). These elements create certain associations making people choose this or that product because of performance and social cues.

Researchers also note that such aspects as packaging, the shape of a product, and the environment of a store can also influence consumers’ perception and intentions. Thus, customers are inclined to associate dark and natural materials for packaging with luxurious goods (Chan, Boksem & Smidts 2018; Heinberg, Ozkaya & Taube 2016). In most cases, forms of products are simple, and brand names are written in classical fonts. All these details are traditionally associated with the high quality and luxury, and consumers refer to these associations when making their decisions (Fang & Wang 2018; Lee, Baumgartner & Winterich 2018). However, there is a gap in research related to luxury services that indicates the necessity of examining this topic in detail with the focus on luxury branding elements that can influence consumers’ decision-making. Figure 1 provides a conceptual framework for this study to demonstrate the anticipated relationships between performance cue (quality), social cue (status), the country-of-origin, luxury branding elements and purchasing intentions.

Conceptual framework.
Figure 1: Conceptual framework.

Contribution to Knowledge

The review of the literature indicates that there is a gap in research regarding particular antecedents that predict the choice of luxury services in contrast to luxury products covered in recent studies (Lee, Lee & Li 2017; Moon & Oh 2017; Roux, Tafani & Vigneron 2017; Shukla, Banerjee & Singh 2016). More research is required to cover the gap regarding the evidence on how different elements of luxury branding, including logos, names, shapes, and others, can influence consumers’ purchasing behaviour. There is also a lack of studies that examine the relationship between the country-of-origin and purchasing luxury services (Suh, Hur & Davies 2016). Thus, the current study will contribute to knowledge in the field by determining how such factors as the quality of services (the performance cue) and status of provided services and status of consumers (the social cue) associated with luxury branding and the country-of-origin can influence individuals intentions to purchase luxury services.

Methodology

To provide the answers to the research questions and address the framework, it is necessary to apply the quantitative methodology to conduct the study based on examining the directional relationships between performance and social cues, luxury branding, the country-of-origin, and consumers’ purchase intentions. The study will involve more than one hundred participants (regular consumers of luxury services), who will comprise the sample for this research. These persons will be invited to participate in the study with the help of non-probability convenience sampling and snow-ball sampling techniques as they will be contacted during professional and personal interactions.

The participants will be asked to participate in a web-based survey and complete a structured questionnaire on their visions of performance cues and social cues, luxury branding elements as variables for this study, the country-of-origin, and views on purchasing luxury services. The items in the questionnaire will be adapted from measurement scales used in other studies on the topic. The data collected with the help of questionnaires will be analysed using structural equation modelling (SEM) to present the model according to which certain antecedents can influence purchase intentions.

Anticipated Outcomes

The potential outcomes of this study include the support for the idea that the desired quality of selected luxury services and the expected social status positively predict the choice of the country-of-origin and certain brands depending on their logos or names, for example, when purchasing luxury services. These luxury branding factors can positively predict the actual purchase of a luxury service. The study findings will demonstrate how luxury branding elements and the country-of-origin can work as mediating variables in the discussed relationships between the antecedents of purchasing behaviour and intentions to purchase luxury services.

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