This paper seeks to contribute to the existing literature on brand value by identifying the factors that create and preserve brand value in luxury, from both, a consumer and company perspective.
It seeks to advance luxury research by identifying the determinants of BV that are overemphasized and overlooked. Brand value (BV) is a key asset in luxury. Given the current pressures facing the industry, it is essential to know which consumer- and company-based factors create and preserve BV in luxury.
This paper seeks to answer two research questions:
1. What are the most important determinants of BV from the luxury industry’s perspective?
2. What are the most important company- and consumer-based BV determinants within luxury?
To conduct the analysis, the author adapts Keller and Lehmann’s Value Chain into a luxury context and then analyzes it statistically using linear modelling (lm). For the statistical analysis, the author builds a dataset using consumer data provided by BAV consulting and complement it with secondary sources including Bloomberg, CSRHub, Dow Jones Sustainability Index (DJSI), Interbrand and company reports.
The results are then subject to expert validation with senior executives and stakeholders from the luxury industry (‘credibility checks’).
Table of Contents
1. Introduction
2. Literature Review
2.1 Attributes of Luxury and Luxury Perception
2.2 What is Brand Value?
2.3 Determinants of Brand Value in Luxury
2.4 Keller and Lehmann’s Brand Value Chain from a Luxury Context
3. Material and Methods
3.1 Dataset
3.2 Statistical Analysis
3.3 ‘Credibility Checks’
4. Analysis of Results
5. Results and Discussion
5.1 Results from Quantitative Analysis
5.2 Discussion from Quantitative Analysis
5.3 Results from ‘Credibility Checks’
5.4 Discussion from ‘Credibility Checks’
5.5 Combination of Quantitative Results with ‘Credibility Checks’
6. Conclusions
6.1 Contribution to the Literature
6.2 Managerial Contributions
6.3 Opportunities for Further Research
7. References
Objectives & Key Themes
This academic paper aims to identify the most critical determinants of brand value (BV) within the luxury industry by integrating both consumer-based and company-based perspectives, addressing a recognized gap in existing literature.
- Analysis of company-based determinants (CSR, company size, marketing, R&D, and distribution).
- Investigation of consumer-based brand value components (energized differentiation, esteem, relevance, and knowledge).
- Application of a dual-method approach using linear modeling on a dataset of luxury brands.
- Validation of quantitative findings through qualitative interviews with industry executives.
- Strategic recommendations for managing luxury brand value in the post-pandemic market.
Excerpt from the Book
Attributes of Luxury and Luxury Perception
One of the reasons that sets luxury apart from non-luxury is that is has both, physical and psychological attributes. Physical attributes include high quality (Hoffmann and Coste-Manière 2012), design (Nueno and Quelch 1998), limited supply (Vigneron and Johnson 2004) and excellence (Hoffmann and Coste-Manière 2012); while psychological attributes are experiential and hedonic value (Chevalier 2012; Tynan, McKechnie, and Chhuon 2010) as well as a dream factor (J. N. Kapferer 2009). In addition to these attributes, from a consumer perspective, luxury differs from non-luxury as it is associated with exclusivity and social status conferral (Chevalier 2012; Okonkwo 2009; J.-N. Kapferer and Valette-Florence 2021); and with upper class and prestige (Okonkwo 2009; Tynan, McKechnie, and Chhuon 2010).
Luxury is subjective, as each consumer has a different perception of luxury (J. N. Kapferer and Laurent 2016). While luxury has different meanings to different people, it can be associated with an upper class and prestige perception (Holmqvist, Wirtz, and Fritze 2020; Lee and Bolton 2020; Liu et al. 2016). Chevalier (2012, 3) defines luxury as something that “carries a brand that is well known, credible and respected”. This definition captures the physical and psychological attributes of luxury and the fact that luxury brands need to be well known, credible and respected. Moreover, it captures the consumers’ perception that a luxury product can have a wide price range, something that expands the frontier of what can be called luxury. Still, this definition fails to acknowledge consumers’ associations towards luxury (Banister, Roper, and Potavanich 2020), and how status, which is synonymous of upper class and prestige, is considered a key characteristic of luxury (Banister, Roper, and Potavanich 2020; Lee and Bolton 2020; Chan and Northey 2021).
Summary of Chapters
1. Introduction: Presents the financial significance of the luxury industry and defines the research gap regarding the determinants of brand value.
2. Literature Review: Examines current definitions of luxury, brand value concepts, and existing models, establishing the theoretical foundation for the study.
3. Material and Methods: Describes the methodology, including the construction of a dataset from proprietary and public sources and the use of linear modeling and expert interviews.
4. Analysis of Results: Outlines the process of identifying key themes from qualitative interviews to complement the quantitative data.
5. Results and Discussion: Details the empirical findings from the statistical analysis and validates them through the credibility check feedback from industry leaders.
6. Conclusions: Summarizes the academic and managerial contributions, emphasizing the core drivers of brand value in luxury and suggesting future research directions.
7. References: Provides a comprehensive list of all academic and industry literature cited throughout the paper.
Keywords
Luxury Industry, Brand Value, Brand Equity, Consumer Perception, Company-based Determinants, CSR, Energized Differentiation, Luxury Strategy, Quantitative Analysis, Qualitative Interviews, Brand Management, Market Capitalization, Tobin's Q, Corporate Social Responsibility, Brand Strategy
Frequently Asked Questions
What is the core focus of this research paper?
This paper focuses on identifying the critical determinants of brand value specifically within the luxury sector, moving beyond general brand equity studies to address the unique attributes of luxury goods.
Which specific factors influence luxury brand value?
The study examines both company-based factors, such as Corporate Social Responsibility (CSR), company size, and marketing/design, and consumer-based factors, including energized differentiation, brand esteem, and relevance.
What is the primary goal of the study?
The primary goal is to answer how luxury brands can strategically manage their brand value by understanding which determinants are most significant and which may be overemphasized in current industry practices.
How was the research conducted?
The research uses a mixed-method approach, combining quantitative linear modeling on a large dataset of luxury brands with qualitative "credibility checks" conducted via interviews with luxury industry executives.
What topics are covered in the main body?
The main body covers the theoretical framework of brand value, a detailed statistical analysis of potential determinants, and a qualitative discussion verifying these findings with industry stakeholders.
How would one characterize this work with keywords?
Key characteristics include Luxury Industry, Brand Value, Brand Equity, Consumer Perception, CSR, and Luxury Strategy.
What role does CSR play in luxury brand value according to the study?
The study finds that while investors may reward CSR activities, its impact varies; it is primarily pursued by large conglomerates and is often viewed more as a branding strategy to drive awareness than as a primary driver of financial value for all firms.
How does the paper differentiate between "overemphasized" and "important" determinants?
The paper categorizes determinants by comparing quantitative results with qualitative expert feedback; for example, counterfeiting is noted as being often "overemphasized" by the industry, while specific consumer perceptions remain crucial.
- Arbeit zitieren
- Ramon Bravo Gonzalez (Autor:in), 2021, A key asset in luxury. What matters for brand value creation?, München, GRIN Verlag, https://www.grin.com/document/1271551
