Motivation and emotion/Book/2015/Luxury good purchase motivation

Luxury good purchase motivation:
What motivates people to buy luxury goods?

Overview

'Luxury isn't just a question of expensive and beautiful things for the rich and powerful - it feeds into ideas about democracy, patriotism and social harmony, as well as our values and our relationships with the divine. …

The power of luxury is its relativity. It is not confined by a thing, a time or a period. That means it's probably here to stay'.

(Michael Scott) (University of Cambridge, 2011) Click here to view [BBC documentary]

The challenge addressed in this chapter is to understand luxury good purchase motivation (LGPM). This chapter draws on the work of psychologists who have argued persuasively about the diversity and complexity of motivations (Deci & Ryan, 1985; Deci, 1992). Given the stunning increase in the number of consumers of luxury goods over the past 15 years from 140 million worldwide to over 350 million (Bain & Company, 2015), psychologists need to understand the potential benefits and harms associated with LGPM.

Viewing LGPM as driven solely by status and conspicuous consumption is limiting. Few studies have tested claims about the diversity of motivations associated with LGPM (Truong & McColl, 2011). However, new knowledge is emerging about the range of consumers who purchase or aspire to purchase luxury goods (Schmitt, 2012) and cross-cultural differences (Godey et al., 2013; Griskevicius & Kenrick, 2013; Wang, Sun, & Son, 2011). Empirical studies, including experimental work, have identified potential benefits and harms associated specifically with LGPM.

The following section draws on three [which?] contrasting approaches to human motivation which have the potential to deepen our knowledge about LGPM. This is followed by a section on potential benefits and harms associated with LGPM.

What are luxury goods?

Although luxury goods have existed for millennia, since the nineteenth century luxury has been increasingly portrayed as part of consumer society. Luxury goods have been defined as expensive 'in relative and absolute terms', trivial and 'without any clear functional advantage over their "non-luxury" counterparts' (Dubois & Duquesne 1993, p.36). Luxury goods have been seen as unnecessary or extravagant (Tynan, McKechnie, & Chhuon, 2010).

For over a century the concept of extravagance has formed the basis of one of the most influential ideas about LGPM, the idea of conspicuous consumption. Veblen (1899/1994) coined this term to describe the LGPM of the wealthy 'leisure class' and behaviour aimed at impressing others about their social status.

Although ideas about consumerism and social status still strongly influence understandings of LGPM, some researchers argue LGPM is more complex and diverse (Tynan et al., 2010; Smith & Colgate, 2007).

The growing popularity of luxury goods

Significant changes over recent decades have influenced conceptions of luxury. Many more people have access to luxury goods than in Veblen’s time. This has been accelerated by the growth of the middle classes with purchasing power and emerging luxury goods markets, especially in Asia and the Middle East.

In 2014 the worldwide luxury market was worth over €850 billion (or A$1.3 trillion) (D'Arpizio, Levato, Zito, & de Montgolfier, 2014). This chapter focuses on the personal luxury goods segment of this market, which grew from €73 billion ($A114 billion) in 1994 to €223 billion (A$348 billion) in 2014. This is projected to grow to €265 billion (A$414 billion) by 2017[factual?].

Three contrasting approaches to understanding luxury goods purchase motivation (LGPM)

The first approach is Self-Determination theory (SDT), which focuses predominantly on conscious and immediate (or proximate) motives. The second approach is based on evolutionary theories and focuses mainly on unconscious and fundamental (or ultimate) motives driven by evolutionary needs. The third approach combines the first two by acknowledging the potential importance of both genetic and immediate environmental influences. The following discussion draws on empirical and theoretical research.

Self-Determination Theory (SDT)

SDT is a highly influential macro-theory of human motivation which considers the relationship between extrinsic and intrinsic sources of motivation and links them to psychological well-being (Ryan & Deci, 2000) (Figure 1). SDT argues that money, beauty and popularity are less important to well-being than 'goals involving growth, connection and contribution' and that these goals should be 'interesting and personally important' to people rather than what they 'feel forced or pressured to pursue’ (Sheldon, Ryan, Deci, & Kasser, 2004, p.485). This suggests that being motivated to purchase things, including luxury goods, is detrimental to people’s well-being.

Figure 1. Self-Determination continuum with regulatory styles, loci of causality and regulatory processes (Ryan & Deci, 2000)

Despite this, the picture becomes more complex when we examine an important sub-category of SDT, namely, cognitive evaluation theory (CET) (Deci & Ryan, 1985). CET retains the primary focus of SDT on intrinsic motivation, which is supported by the three powerful psychological needs for autonomy, competence and relatedness. These three needs are all seen as essential for 'optimal functioning of the natural propensities for growth and integration, as well as for constructive social development and personal well-being' (Ryan & Deci, 2000, p. 68). Intrinsic motivation is also seen as an 'inherent tendency to seek out novelty and challenges, to extend and exercise one’s capacities to explore, and to learn' (Ryan & Deci, 2000, p. 70).

Despite the emphasis by SDT on intrinsic motivation (and the view that pursuing money, beauty, and popularity may adversely affect well-being), the development of CET as a sub-theory makes a key distinction about the impact of extrinsic motivators on well-being. That distinction, according to CET, is between whether the behaviour is influenced by either 'controlling' or 'informational' aspects of external events. This has significant implications for understanding how LGPM affects well-being.

Under conditions of control someone does something because they feel they have to do it. Under conditions of information, someone feels free (autonomy) to do something and the event provides them with information about their competence (Deci & Ryan, 1985; Ryan & Deci, 2000; Sheldon et al., 2004). If an external event is aimed at controlling behaviour it will impact negatively on autonomy and intrinsic motivation, and if it is not aimed at controlling behaviour, intrinsic motivation will be maintained. If the purpose is mainly to provide positive feedback on competence, it will enhance competence and intrinsic motivation, whereas if it provides negative feedback on competence, it will impact negatively on competence and intrinsic motivation (Reeve, 2015, p. 141).

A multifaceted approach: Capturing the complexity of LGPM

The value of SDT/CET is in providing a framework for analysing LGPM. Does this incorporate the wide range of contributions by researchers who have focused specifically on LGPM?

Five types of value for luxury goods

Tynan et al. (2010) have argued LGPM includes interpersonal effects (conspicuous consumption and social status) and personal effects (pleasure derived from owning something of high quality). Summarising an extensive literature review by Smith and Colgate (2007), Tynan et al. (2010) identified five types of value for luxury goods:

Utilitarian (focusing on excellence and quality)
Symbolic/expressive. This comprises outer-directed motivations (conspicuous consumption, bandwagon effects, status/esteem, prestige, social identity and uniqueness) and self-directed motivations (personal identity, aesthetics, self-gift giving, uniqueness and nostalgia)
Experiential/hedonic (aesthetics and the experience of owning luxury goods)
Relational (consumer-brand relationships and a brand community)
Cost/sacrifice (perfectionism, exclusivity and rarity)

These values relate closely to SDT, which recognizes the diversity of motivations and goals (Deci, 1992; Deci & Ryan, 1985). SDT makes the crucial distinction between intrinsic and extrinsic motivations and the range of regulatory processes involved in different types of extrinsic motivation (see Figure 1). There are strong parallels between these motivations and the ones identified by Smith and Colgate (2007). For example, extrinsic motivations are similar to outer-directed symbolic/expressive values. There are also parallels between 'identified', 'integrated' and even 'intrinsic' regulation on the one hand and self-directed motivations, experiential/hedonic values and relational values on the other.

Types of customer commitment and processes of connecting to brands

Schmitt (2012) provides another example of diversity and complexity of motivations when purchasing brands. He identifies three types of consumer engagement related to utility of products, relevance to concept of self and socio-cultural significance. This engagement arises from five different motivational processes (identifying, experiencing, integrating, signifying and connecting with the brand) (Schmitt, 2012). There are again strong parallels with the model developed by Ryan and Deci (2000) and the regulatory processes of personal importance, congruence and inherent satisfaction.

Placing LGPM on a continuum: Is there a dichotomy between experiential and material purchases?

Luxury watches may be purchased for material and experiential reasons

One area of potential confusion relates to arguments about whether LGPM should be placed along a continuum[explain?]. Schmitt, Brakus, & Zarantonello (2015) question this idea. They challenge the argument by Gilovich, Kumar and Jampol (2015) that purchasing products for 'material' reasons will detract from well-being by comparison to purchasing for 'experiential' reasons. Gilovich et al. (2015) argue that material purchases evoke 'social comparisons' (concerns about status) and are less effective in improving social relations (relatedness). Schmitt et al. (2015) regard this as a false contrast or dichotomy between material and experiential purchases. They argue material and experiential purchases are not at opposing ends of the same spectrum. Instead, a product may have material and experiential meaning to the same person. They illustrate this with the example of a watch which, in material terms, may have been purchased for its monetary value, precision in keeping time and enduring resell value. However, the same purchaser may value the watch for experiential reasons, including excellent design, aesthetic quality and the experience of purchasing it.

They back their argument by drawing on Ryan and Deci (2001), who differentiate between hedonic and eudaimonic paths to happiness. Hedonic paths lead to pleasure (eating delicious food) and eudaimonic paths lead to fulfilling meaningful goals (climbing a difficult mountain) (Schmitt et al., 2015).

SDT and the diversity of LGPM

Although some research on LGPM captures the diversity and complexity of motivations, few studies have drawn on SDT/CET to challenge the predominant view of LGPM as driven by primarily conspicuous consumption. Truong and McColl (2011) address the question of whether people with highly intrinsic aspirations are less likely than those with highly extrinsic aspirations to be attracted to luxury goods. Their study of middle-class and wealthy consumers (N = 587) used an intrinsic aspiration index (based on Deci & Ryan, 2000; and Sheldon et al., 2004) to measure intrinsic motivations (personal growth , relatedness, community feeling, and self-esteem). Intrinsic motivations were used to predict an interest in product quality, conspicuous consumption and self-directed pleasure.

The results showed significant positive relationships between people who purchased luxury products for intrinsic reasons and an interest in product quality and self-directed pleasure. Self-esteem was also strongly linked to self-directed pleasure. Perhaps not surprisingly, there was a negative relationship between intrinsic motivations and conspicuous consumption. Overall, the findings provided strong support that self-esteem can be enhanced by purchasing luxury goods. They also showed that even those with extrinsic motivations (conspicuous consumption) were interested in quality and self-directed pleasure. This further confirms the argument that motivations are both complex and diverse.

Evolutionary theories

People may purchase handbags for conscious and unconscious motives

This [what?] argument is reinforced by evolutionary theories, which provide a contrasting approach to LGPM by focusing on unconscious rather than conscious motivators. Griskevicius and Kenrick (2013) do this by differentiating between proximate and ultimate motivations. Proximate motivations include many characteristics of SDT (for example, needs for novelty, value, self-esteem, identity, meaning, quality and happiness). By contrast, evolutionary theorists focus on ultimate (or, fundamental) motivations (which relate to self-protection, avoiding disease, affiliation, status, mate acquisition, mate retention and caring for family) (Griskevicius & Kenrick, 2013).

For example, motivation to attract or retain a mate may underlie behaviours usually categorised as conspicuous consumption. This motivation can also express itself in both intrinsic and extrinsic ways. In reviewing numerous studies, including experimental ones, Griskevicius and Kenrick concluded that, when attracting a mate, men displayed behaviour that could variously be seen as creative, charitable, manipulative, socially dominant, heroic and independent (2013, p.379). For women who are motivated to retain a mate, LGPM may manifest itself differently. Studies by Wang and Griskevicius (2014) showed that women, through purchasing luxury handbags and shoes, may be seeking to deter rivals who want to seduce their partner.

Genetic and environmental influences

Griskevicius and Kenrick (2013) acknowledge that in many situations motivations are likely to reflect genetic and environmental influences. For example, the proximate motivation for owning a sports car may be to enhance well-being, whereas the ultimate motivation may be to attract a mate. They also acknowledge environmental influences on LGPM including life cycle, sex, individual differences in life history and culture.

For example, in relation to life cycle, D’Arpizio (2014) found LGPM differences between generations (highly educated Gen X and Gen Y consumers, Babyboomers and older customers). Moreover, individual differences and life history may mean that some people are opportunists seeking immediate results by purchasing highly visible 'flashy' products like colourful sports cars, whereas others are strategists who are interested in longer-term rewards and purchase less noticeable products (Griskevicius & Kenrick, 2013).

Cultural differences also have huge impacts LGPM. Some people engage in conspicuous consumption by purchasing luxury goods only for themselves, others gain social recognition by gifting them. Another difference is between Western countries (where eroticism is linked to LGPM) and Middle Eastern countries (which ban sexual images) (Griskevicius & Kenrick, 2013).

Brun and Castelli argue that perceptions of luxury in Asian markets may 'differ considerably from Western attitudes' (2013, p.884). Studies of Chinese consumers have produced mixed results. Hung et al. (2011) found tensions between traditional Chinese collectivist values and Western individualism. Godey et al. (2013) found that Chinese consumers scored higher than Westerners on the importance of prestige and extravagance when describing luxury. Wang et al. (2011) argue that in China extrinsic motivations are central and derive from external social needs rather than internal individual needs. These needs include 'saving face' and gifting. However, they also acknowledge motivations can be diverse and include a focus on quality, social comparison and self-actualization.

LGPM and well-being

Hundreds of millions of people worldwide experience LGPM. This section focuses on some potential benefits and harms of LGPM based on recent empirical research.

Benefits and harms 1: Targeting our senses

Schmitt et al. (2015) cite studies which show how people relate to brands and how emotional attachments to a brand become an expression of personality and social self (see also Schmitt, 2012). These attachments are strengthened by 'sensory, affective, intellectual, bodily and social experiences', which are seen as fostering 'consumer well-being' (Brakus, Schmitt, & Zarantonello, 2009, p.53).

Marketing researchers also recognize potential harms arising from marketing strategies targeting our senses. These include using nanotechnologies by stimulating smell and touch sensations and advances in neurophysiology to target specific areas of the brain (Achrol & Kotler, 2012). Using fMRI, Schaefer (2009), has demonstrated how luxury brands evoke distinct and powerful emotional responses in the brain.

This raises questions about whether these developments signify the development of control/manipulation or autonomy/freedom. There is a danger these advances in knowledge can be used by advertisers to manipulate consumers and engage in unethical behaviour (Achrol & Kotler, 2012). Consumers are therefore understandably sceptical and negative about the aims and intentions of some companies (Heath & Chatzidakis, 2012). This also relates to the issue of social power.

Benefits and harms 2: Social power

Wearing luxury clothing can provide social benefits

In a series of experiments, Nelissen and Meijers (2011) demonstrated how people conspicuously wearing luxury brands were more likely to receive social benefits than people wearing ordinary clothing. The former were perceived to be of higher status and wealth. People were much more likely to comply with requests they made for potential respondents to participate in a survey. They were more likely to be deemed suitable for employment and be placed on higher salaries. They were on average likely to raise more money when they asked others for donations to a charity. The authors concluded these results support arguments for introducing measures to protect the public against marketers who exploit the tendency of people to respond to signals about someone’s status (Nelissen & Meijers, 2011).

Benefits and harms 3: Low and high status conditions

Social status was also explored in experiments by Rucker and Galinsky (2008; 2009). They assigned participants to low and high power conditions. They found that people assigned to low power conditions were more willing than those assigned to high power conditions to pay for products at an auction when these products signified higher status. They argued that people in lower socio-economic groups were therefore more likely to get into debt as they compensated for their powerlessness through 'compensatory consumption'. By contrast, individuals assigned to higher status conditions were less prone to compensatory consumption since they preferred the functional features of a product (its usefulness and quality). Overall, their results suggested low status people are susceptible to experiencing detrimental effects to their well-being, including accumulating debts.

Benefits and harms 4: Materialism and well-being

There are conflicting arguments about the influence of materialist motivations on well-being. Some writers found that, even when people purchase luxury goods for extrinsic motivations, there were short-term or immediate benefits to well-being. Hudders and Pandelaere (2012) found that among materialistic people consumption of luxury goods is associated with short-term improvements in positive mood and life satisfaction. However, they argued this may 'lock' them into a materialistic lifestyle with negative long-term consequences for them and society.

Social comparison especially with people in your neighbourhood can lead to dissatisfaction

Reflecting these arguments, Sheldon et al. (2004) found that well-being was inversely related to extrinsic motivation. However, they qualified this by demonstrating that well-being depended hugely on why someone pursues extrinsic goals (see also Figure 1). Thus, pursuing extrinsic goals for autonomous motives significantly predicted well-being. Their key argument was that well-being was reduced if extrinsic goals were overvalued relative to intrinsic goals. They described the consequences of such behaviour as follows: 'when people strongly pursue extrinsic goals they tend to have more superficial relationships, operate within contingent self-worth, engage in more frequent social comparisons, and allow extrinsic pursuits to crowd out enjoyable and satisfying activities' (Sheldon et al., 2004, p.484). Their argument about social comparison and well-being is supported by a study in Switzerland (Winkelmann, 2012) . This demonstrated that people living in municipalities in which conspicuous consumption (measured by the number of Porsches and Ferraris) was greater than in other municipalities were progressively less satisfied with their income than people living in municipalities where conspicuous consumption was less evident.

Conclusion

References

Achrol, R., & Kotler, P. (2012). Frontiers of the marketing paradigm in the third millennium. Journal of the Academy of Marketing Science, 40(1), 35-52. doi:10.1007/s11747-011-0255-4

Bain & Company. (2015). Global luxury goods market expected to sustain steady momentum with 2-4 percent real growth in 2015. Retrieved from Bain & Company website: http://www.bain.com/about/press/press-releases/spring-2015-worldwide-luxury-goods-update-press-release.aspx

Brakus, J. J., Schmitt, B. H., & Zarantonello, L. (2009). Brand Experience: What Is It? How Is It Measured? Does It Affect Loyalty? Journal of Marketing, 73(3), 52-68. doi:10.1509/jmkg.73.3.52

Brun, A., & Castelli, C. (2013). The nature of luxury: a consumer perspective, International Journal of Retail & Distribution Management, 41(11/12), 823-847. doi: 110.1108/IJRDM-01-2013-0006

D'Arpizio, C. (2014). Luxury Goods Worldwide Market Study Winter 2014. Retrieved from Bain & Company website: http://www.bain.com/publications/articles/luxury-goods-worldwide-market-study-winter-2014.aspx

D'Arpizio, C., Levato, F., Zito, D., & de Montgolfier, J. (2014). Luxury Goods Worldwide Market Study Fall-Winter 2014: The rise of the borderless consumer. Retrieved from Bain & Company website: http://www.bain.com/bainweb/PDFs/Bain_Worldwide_Luxury_Goods_Report_2014.pdf

Deci, E. L. (1992). On the nature and functions of motivation theories. Psychological Science, 3(3), 167-171.

Deci, E. L. and Ryan, R. M. (1985). The general causality orientations scale: Self-determination in personality. Journal of Research in Personality, 19(2), 109-134. doi: 10.1016/0092-6566(85)90023-6

Deci, E. L., & Ryan, R. M. (2000). The 'What' and 'Why' of Goal Pursuits: Human Needs and the Self-Determination of Behavior. Psychological Inquiry, 11(4), 227-268.

Dubois, B., & Duquesne, P. (1993). The Market for Luxury Goods: Income versus Culture. European Journal of Marketing, 27(1), 35 – 44. doi: dx.doi.org/10.1108/03090569310024530

Gilovich, T., Kumar, A., & Jampol, L. (2015). A wonderful life: experiential consumption and the pursuit of happiness. Journal of Consumer Psychology, 25(1), 152-165. doi: 10.1016/j.jcps.2014.08.004

Godey, B., Pederzoli, D., Aiello, D., Donvito, J., Wiedmann, K., & Hennigs, N. (2013). A cross‐cultural exploratory content analysis of the perception of luxury from six countries. Journal of Product & Brand Management, 22(3), 229-237. doi: 10.1108/JPBM-02-2013-0254

Griskevicius, V., & Kenrick, D. T. (2013). Fundamental motives: How evolutionary needs influence consumer behavior. Journal of Consumer Psychology, 23(3), 372–386. doi: 10.1016/j.jcps.2013.03.003

Heath, T. A., & Chatzidakis, A. (2012). The transformative potential of marketing from the consumers' point of view. Journal of Consumer Behaviour, 11(4), 283-291. doi: 10.1002/cb.1387

Hudders, L., & Pandelaere, M. (2012). The silver lining of materialism: the impact of luxury consumption on subjective well-being. Journal of Happiness Studies, 13(3), 411-437. doi: 10.1007/s10902-022-9271-9

Hung, K., Chen, A. H., Peng, N., Hackley, C., Tiwsakul, R. A., & Chou, C. (2011). Antecedents of luxury brand purchase intention. Journal of Product & Brand Management, 20(6), pp. 457-467. doi: 10.1108/10610421111166603

Nelissen, R. M. A., & Meijers, M. H. C. (2011). Social benefits of luxury brands as costly signals of wealth and status. Evolution and Human Behavior, 32(5),343–355. doi: 10.1016/j.evolhumbehav.2010.12.00

Reeve, J. (2015). Understanding Motivation and Emotion. (6th Ed.). Wiley: Hoboken NJ.

Rucker, D. D., & Galinsky, A. D. (2008). Desire to Acquire: Powerlessness and compensatory consumption. Journal of Consumer Research, 35, 257-266. doi: 10.1086/588569

Rucker, D. D., & Galinsky, A. D. (2009). Conspicuous consumption versus utilitarian ideals: How different levels of power shape consumer behaviour. Journal of Experimental Social Psychology, 45(3), 549–555. doi: 10.1016/j.jesp.2009.01.005

Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist, 55(1), 68-78. doi:10.1037/0003-066X.55.1.68

Ryan, R. M., & Deci, E. L. (2001). On Happiness and Human Potentials: A Review of Research on Hedonic and Eudaimonic Well-Being. Annual Review of Psychology, 52(1), 141-166.

Schaefer, M. (2009). Neuroeconomics: in search of the neural representation of brands. Progress in Brain Research, 178, 241–252. doi: 10.1016/S0079-6123(09)17817-2

Schmitt, B. (2012). The consumer psychology of brands. Journal of Consumer Psychology, 22(1), 7-17. doi: 10.1016/j.jcps.2011.09.005

Schmitt, B., Brakus, J. J., & Zarantonello, L. (2015). From experiential psychology to consumer experience. Journal of Consumer Psychology, 25(1),166–171. doi: 10.1016/j.jcps.2014.09.001

Sheldon, K. M., Ryan, R. M., Deci, E. L., & Kasser, T. (2004). The Independent Effects of Goal Contents and Motives on Well-Being: It’s Both What You Pursue and Why You Pursue It. Personality and Social Psychology Bulletin, 30(4), 475-486. doi: 10.1177/0146167203261883

Smith, J. B., & Colgate, M. (2007). Customer value creation: a practical framework. Journal of Marketing Theory & Practice, 15(1), 7-23. doi: 10.2753/MTP1069-6679150101.

Truong, Y., & McColl, R. (2011). Intrinsic motivations, self-esteem, and luxury goods consumption. Journal of Retailing and Consumer Services, 18(6), 555-561. doi: 10. 1016/j.jretconser.2011.08.004

Tynan, C., McKechnie, S., & Chhuon, C. (2010). Co-creating value for luxury brands. Journal of Business Research, 63(11), 1156–1163. doi: 10.1016/j.jbusres.2009.10.012

University of Cambridge. (2011, June 27). How luxury became a four-letter word [Web log post]. Retrieved from http://www.cam.ac.uk/research/news/how-luxury-became-a-four-letter-word

Veblen, T. (1994). The Theory of the Leisure Class. New York: Penguin Books. (Original work published 1899)

Wang, Y., & Griskevicius, V. (2014). Conspicuous Consumption, Relationships, and Rivals: Women's Luxury Products as Signals to Other Women. Journal of Consumer Research, 40(5), 834-854. doi:10.1086/673256

Wang, Y., Sun, S., & Song, Y. (2011). Chinese Luxury Consumers: Motivation, Attitude and Behavior. Journal of Promotion Management, 17(3), 345-359. doi: 10.1080/10496491.2011.596122

Winkelmann, R. (2012). Conspicuous consumption and satisfaction. Journal of Economic Psychology, 33(1), 183–191. doi: 10.1016/j.joep.2011.08.013

External links

[Provide more detail]