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

Subject: Branding
Pages: 6
Words: 1672
Reading time:
10 min
Study level: PhD

Background and Justification of Research

For many consumers, the country-of-origin is discussed as an important factor that influences their purchase intentions because of certain associations with the quality of the provided services and their status (Garrett, Lee & Chu 2017; Peluso et al. 2017). Therefore, consumers often consider the country-of-origin as a source of information that can be provided to them regarding the selected product (Roux, Tafani & Vigneron 2017; Yang & Mattila 2016). This tendency is also typical for consumers’ choice of luxury products (Chen & Peng 2018; Kapferer & Laurent 2016). However, more attention needs to be paid to examining what particular factors or antecedents can influence consumers’ intentions, how these factors are associated with the country-of-origin concept, and what their effects on purchasing luxury services are in contrast to luxury goods (Janssen, Vanhamme & Leblanc 2017; Ki, Lee & Kim 2017).

In only 3 hours we’ll deliver a custom Impact of Social Cues on Consumers’ Purchase Intentions Regarding Luxury Services essay written 100% from scratch Get help

The problem is that it is assumed that consumers assess the appropriateness of the country-of-origin to choose luxury services similarly to choosing luxury products since this issue is actively discussed in the 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 or expected social status associated with services, and the country of origin. From this point, the current research is important to examine consumer decisions regarding luxury services in the context of choosing the country of origin.

Research Aim and Objectives

This research aims to examine how performance and social cues can influence consumers’ intentions to purchase luxury services in relation to the country of origin for these services. The following objectives can be formulated in order to address this aim in much detail:

  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 examine how the country-of-origin can influence consumers’ intentions when they choose and purchase luxury services.
  3. To analyse how performance and social cues influence choosing the country-of-origin or can be associated with it, and then affect consumers’ intentions to purchase luxury services proposed by this country.

Research Questions

This research will be guided by several research questions that are aligned with the aim and objectives formulated for the study. These research questions are important to be addressed in order to determine specific factors or antecedents that can influence the intentions of consumers regarding purchasing luxury services in relation to the country of origin for these 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 country-of-origin predict consumers’ purchase intentions related to luxury services?
  3. How can performance and social cues predict consumers’ choice of the country of origin and their intention to purchase luxury services?

Literature Review and Research Framework

The existing studies in the fields of marketing and consumer psychology provide evidence in order to support the idea that consumers choose luxury products and services because of certain factors, which include the brand, quality, price, status, and satisfaction (Chen & Peng 2018; Kapferer & Laurent 2016; Parguel, Delécolle & Valette-Florence 2016). 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; Parguel, Delécolle & Valette-Florence 2016; 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 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).

Other researchers found that the country-of-origin also influences the purchase intentions of individuals with reference to rational decision-making, emotional decision-making, and social impacts (Costa, Carneiro & Goldszmidt 2016; Majid 2017). Consumers tend to assess the country-of-origin from several perspectives with reference to their personal experience or their knowledge of the country, its industries, technologies, and manufacturing (Cakici & Shukla 2017; Zolfagharian, Saldivar & Braun 2017). Many studies support the hypothesis that consumers also use their knowledge in order to evaluate all the available information related to the country of origin and in order to make decisions regarding the purchase of this or that luxury product (Andéhn & L’Espoir Decosta 2016; Carlsson Hauff & Nilsson 2017). Individuals assess the image of the country, the brand, physical features of the product, and price (Cakici & Shukla 2017; Herrero-Crespo, San Martín Gutiérrez & Garcia-Salmones 2016).

Academic experts
available
We will write a custom Branding essay specifically for you for only $16.00 $11/page Learn more

These aspects are related to considerations regarding both quality and status, as well as following intentions to purchase or not a product (Andéhn & L’Espoir Decosta 2016; Tang, Hsieh & Chiu 2017). 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). Nevertheless, the question is still about the connection between the country of origin and purchasing luxury services.

There are also studies that tend to discuss the country-of-origin and the factors that predict changes in purchase intentions in their combination (Costa, Carneiro & Goldszmidt 2016; Majid 2017). In the studies, which provide factors for influencing purchases of luxury products, there are references to the quality and status, and in studies, which discuss the country-of-origin concept, there are references to performance and social cues (Balabanis & Siamagka 2017; Heinberg, Ozkaya & Taube 2016; Tang, Hsieh & Chiu 2017). According to Kim, Chun, and Ko (2017), consumers usually have certain expectations regarding the quality of luxury products depending on feedback or previous experiences, and they also have certain experiences associated with using products or services provided in different countries.

Being influenced by high costs of luxury products and by high expectations, consumers often choose goods that are produced in the countries, which are viewed as leaders in this area, as it is in the case of electronics and information technologies (Balabanis & Siamagka 2017; Cheah, Zainol & Phau 2016; Eng, Ozdemir & Michelson 2016). Furthermore, this rule also works for the aspect of status or reputation associated with a certain product or service (García-Gallego & Chamorro Mera 2017; Guesalaga, Pierce & Scaraboto 2016). However, the lack of research related to luxury services (not products) indicates the necessity of examining this topic in more detail (Balabanis & Siamagka 2017; Costa, Carneiro & Goldszmidt 2016). 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, and purchasing intentions regarding luxury services as the constructs identified with reference to the reviewed literature.

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 goods and products that are covered in recent studies in detail (Lee, Lee & Li 2017; Moon & Oh 2017; Shukla, Banerjee & Singh 2016). Furthermore, 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 quality of services (the performance cue) and status of provided services, and status of a consumer (the social cue) are associated with the country-of-origin can influence individuals intentions to purchase luxury services.

Methodology

In order to provide the answers to the set research questions and address the research framework, it is necessary to apply the quantitative methodology to conduct the study based on examining the directional relationships between performance and social cues, the country-of-origin, and consumers’ purchase intentions as the key constructs to measure. The study will involve more than one hundred participants who are regular consumers of luxury services and who will comprise the sample for this research. These persons will be invited to participate in the study with the help of the non-probability convenience sampling and snowball 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, views on the country of origin, and views on purchasing luxury services. The items in the questionnaire will be adapted from measurement scales that are used in other studies on the topic. The data collected with the help of questionnaires will be analysed using structural equation modelling (SEM) analysis to present the model according to which certain antecedents can be related to the country of origin and 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 desired or expected social status positively predict the choice of the country of origin to purchase luxury services. Thus, the country-of-origin can positively predict the actual purchase of luxury service. It is also expected that the study findings will demonstrate how the country-of-origin can work as a mediating variable in the discussed relationships between the antecedents of purchasing behaviour and intentions to purchase luxury services.

15% OFF Get your very first custom-written academic paper with 15% off Get discount

Reference List

Andéhn, M & L’Espoir Decosta, P 2016, ‘The variable nature of country-to-brand association and its impact on the strength of the country-of-origin effect’, International Marketing Review, vol. 33, no. 6, pp. 851-866.

Balabanis, G & Siamagka, NT 2017, ‘Inconsistencies in the behavioural effects of consumer ethnocentrism: the role of brand, product category and country of origin’, International Marketing Review, vol. 34, no. 2, pp. 166-182.

Cakici, NM & Shukla, P 2017, ‘Country-of-origin misclassification awareness and consumers’ behavioral intentions: moderating roles of consumer affinity, animosity, and product knowledge’, International Marketing Review, vol. 34, no. 3, pp. 354-376.

Carlsson Hauff, J & Nilsson, J 2017, ‘The impact of country-of-origin cues on consumer investment behavior: the moderating influence of financial brand strength and investment management style’, European Journal of Marketing, vol. 51, no. 2, pp. 349-366.

Chang, Y & Ko, YJ 2017, ‘Consumers’ perceived post purchase risk in luxury services’, International Journal of Hospitality Management, vol. 61, pp. 94-106.

Charters, S, Spielmann, N & Babin, BJ 2017, ‘The nature and value of terroir products’, European Journal of Marketing, vol. 51, no. 4, pp. 748-771.

Cheah, I, Zainol, Z & Phau, I 2016, ‘Conceptualizing country-of-ingredient authenticity of luxury brands’, Journal of Business Research, vol. 69, no. 12, pp. 5819-5826.

Get your customised and 100% plagiarism-free paper on any subject done for only $16.00 $11/page Let us help you

Chen, A & Peng, N 2018, ‘Examining consumers’ intentions to dine at luxury restaurants while traveling’, International Journal of Hospitality Management, vol. 71, pp. 59-67.

Costa, C, Carneiro, J & Goldszmidt, R 2016, ‘A contingent approach to country-of-origin effects on foreign products evaluation: interaction of facets of country image with product classes’, International Business Review, vol. 25, no. 5, pp. 1066-1075.

Dion, D & Borraz, S 2017, ‘Managing status: how luxury brands shape class subjectivities in the service encounter’, Journal of Marketing, vol. 81, no. 5, pp. 67-85.

Eng, TY, Ozdemir, S & Michelson, G 2016, ‘Brand origin and country of production congruity: evidence from the UK and China’, Journal of Business Research, vol. 69, no. 12, pp. 5703-5711.

García-Gallego, JM & Chamorro Mera, A 2017, ‘COO vs ROO: importance of the origin in customer preferences towards financial entities’, International Marketing Review, vol. 34, no. 2, pp. 206-223.

Garrett, TC, Lee, S & Chu, K 2017, ‘A store brand’s country-of-origin or store image: what matters to consumers?’, International Marketing Review, vol. 34, no. 2, pp. 272-292.

Guesalaga, R, Pierce, M & Scaraboto, D 2016, ‘Cultural influences on expectations and evaluations of service quality in emerging markets’, International Marketing Review, vol. 33, no. 1, pp. 88-111.

Heinberg, M, Ozkaya, HE & Taube, M 2016, ‘A brand built on sand: is acquiring a local brand in an emerging market an ill-advised strategy for foreign companies?’, Journal of the Academy of Marketing Science, vol. 44, no. 5, pp. 586-607.

Herrero-Crespo, Á, San Martín Gutiérrez, H & Garcia-Salmones, MD 2016, ‘Influence of country image on country brand equity: application to higher education services’, International Marketing Review, vol. 33, no. 5, pp. 691-714.

Herz, M & Diamantopoulos, A 2017, ‘I use it but will tell you that I don’t: consumers’ country-of-origin cue usage denial’, Journal of International Marketing, vol. 25, no. 2, pp. 52-71.

Hussein, M & Fraser, I 2018, ‘Hedonic analysis of consumers’ valuation of country of origin of meat in the United Kingdom’, Journal of Agricultural Economics, vol. 69, no. 1, pp. 182-198.

Janssen, C Vanhamme, J & Leblanc, S 2017, ‘Should luxury brands say it out loud? Brand conspicuousness and consumer perceptions of responsible luxury’, Journal of Business Research, vol. 77, pp. 167-174.

Kapferer, JN & Laurent, G 2016, ‘Where do consumers think luxury begins? A study of perceived minimum price for 21 luxury goods in 7 countries’, Journal of Business Research, vol. 69, no. 1, pp. 332-340.

Khalifa, D & Shukla, P 2017, ‘Me, my brand and I: consumer responses to luxury brand rejection’, Journal of Business Research, vol. 81, pp. 156-162.

Ki, C, Lee, K & Kim, YK 2017, ‘Pleasure and guilt: how do they interplay in luxury consumption?’, European Journal of Marketing, vol. 51, no. 4, pp. 722-747.

Kim, N, Chun, E & Ko, E 2017, ‘Country of origin effects on brand image, brand evaluation, and purchase intention: a closer look at Seoul, New York, and Paris fashion collection’, International Marketing Review, vol. 34, no. 2, pp. 254-271.

Lee, R, Lee, KT & Li, J 2017, ‘A memory theory perspective of consumer ethnocentrism and animosity’, European Journal of Marketing, vol. 51, no. 7, pp. 1266-1285.

Liu, MT, Wong, IA, Tseng, TH, Chang, A & Phau, I 2017, ‘Applying consumer-based brand equity in luxury hotel branding’, Journal of Business Research, vol. 81, pp. 192-202.

Maher, AA & Singhapakdi, A 2017, ‘The effect of the moral failure of a foreign brand on competing brands’, European Journal of Marketing, vol. 51, no. 5, pp. 903-922.

Majid, KA 2017, ‘Drawing negative inferences from a positive country-of-origin image: consumers’ use of COI and price levels to assess counterfeit drugs’, International Marketing Review, vol. 34, no. 2, pp. 293-310.

Mandler, T, Won, S & Kim, K 2017, ‘Consumers’ cognitive and affective responses to brand origin misclassifications: does confidence in brand origin identification matter?’, Journal of Business Research, vol. 80, pp. 197-209.

Moon, BJ & Oh, HM 2017, ‘Country of origin effects in international marketing channels: how overseas distributors account for the origins of products and brands’, International Marketing Review, vol. 34, no. 2, pp. 224-238.

Parguel, B, Delécolle, T & Valette-Florence, P 2016, ‘How price display influences consumer luxury perceptions’, Journal of Business Research, vol. 69, no. 1, pp. 341-348.

Peluso, AM, Pino, G, Amatulli, C & Guido, G 2017, ‘Luxury advertising and recognizable artworks: new insights on the “art infusion” effect’, European Journal of Marketing, vol. 51, no. 11, pp. 2192-2206.

Reardon, J, Vianelli, D & Miller, C 2017, ‘The effect of COO on retail buyers’ propensity to trial new products’, International Marketing Review, vol. 34, no. 2, pp. 311-329.

Roux, E, Tafani, E & Vigneron, F 2017, ‘Values associated with luxury brand consumption and the role of gender’, Journal of Business Research, vol. 71, pp. 102-113.

Schade, M, Hegner, S, Horstmann, F & Brinkmann, N 2016, ‘The impact of attitude functions on luxury brand consumption: an age-based group comparison’, Journal of Business Research, vol. 69, no. 1, pp. 314-322.

Shaikh, S, Malik, A, Akram, MS & Chakrabarti, R 2017, ‘Do luxury brands successfully entice consumers? The role of bandwagon effect’, International Marketing Review, vol. 34, no. 4, pp. 498-513.

Shukla, P, Banerjee, M & Singh, J 2016, ‘Customer commitment to luxury brands: antecedents and consequences’, Journal of Business Research, vol. 69, no. 1, pp. 323-331.

Suh, Y, Hur, J & Davies, G 2016, ‘Cultural appropriation and the country of origin effect’, Journal of Business Research, vol. 69, no. 8, pp. 2721-2730.

Tang, YC, Hsieh, YC & Chiu, HC 2017, ‘Purchase decision: does too much choice leave us unhappy?’, European Journal of Marketing, vol. 51, no. 7, pp. 1248-1265.

Yang, W & Mattila, AS 2016, ‘Why do we buy luxury experiences? Measuring value perceptions of luxury hospitality services’, International Journal of Contemporary Hospitality Management, vol. 28, no. 9, pp. 1848-1867.

Zolfagharian, M, Saldivar, R & Braun, J 2017, ‘Country of origin and ethnocentrism in the context of lateral, upward and downward migration’, International Marketing Review, vol. 34, no. 2, pp. 330-352.