Within luxury, an area that is becoming increasingly important due to the visibility of this industry is Corporate Social Responsibility (CSR). While consumers are still not actively demanding CSR in luxury products and services, and there is evidence that CSR is not a key area of interest for the luxury industry; the luxury industry is becoming the target of non-governmental organizations (NGOs) and other stakeholders interested in environmental and ethical practices. Thus, it is essential that luxury companies explore CSR implementation, as neglecting to do so, is likely to affect their brands and their brand value.
Due to the increasing relevance of CSR within luxury, this research explores the role of CSR within luxury and how it, together with other factors, contributes to brand value in luxury. An additional consideration is that despite the importance of brand value in luxury, the industry does not normally measure, manage and leverage brand value. As a result, it is also necessary to examine how brand value is perceived within luxury.
To meet these research goals, a mixed methods approach was selected. More specifically, a theoretical framework was built with input from the literature and interviews with key interviewees from the luxury industry. Then, the theoretical framework was tested quantitatively. The quantitative analysis was conducted with a dataset based on consumer panels, and additional secondary data including Bloomberg, CSRHub, Dow Jones Sustainability Index (DJSI), Interbrand, and company reports. The results were subject to ‘credibility checks’ with interviewees from the industry. It is noteworthy to highlight that for the statistical analysis, one of the largest datasets with US consumer data was used. Similarly, for the qualitative interviews, representatives from some of the largest luxury companies in the world in terms of brand value, and luxury stakeholders were recruited.
Table of Contents
Chapter 1: Introduction
1.1 Research Rationale
1.1.1 Why Luxury?
1.1.2 Why CSR?
1.1.3 Why Brand Value?
1.1.4 Why Focusing on the Entire Luxury Industry Rather Than a Single Company?
1.1.5 Gap in Knowledge
1.2 Statement of Contribution
1.3 Research Questions
1.4 Research Objectives
1.5 Organization of the Thesis
Chapter 2: Literature Review
2.1 Luxury
2.1.1 What Is Luxury
2.1.1.1 Working Definition of Luxury
2.1.2 Luxury – A Business Model of Its Own
2.1.3 Complexity of the Luxury Industry
2.1.3.1 Differences by Category and Type of Product
2.1.3.2 Company and Consumer Perception of Luxury Brands
2.2 CSR and Luxury
2.2.1 Introduction to Business Ethical Concepts
2.2.1.1 Stakeholder Theory
2.2.1.2 Corporate Citizenship
2.2.1.3 CSR
2.2.2 CSR in Luxury
2.2.2.1 Compatibility of CSR and Luxury
2.2.2.2 Consumer Perspectives
2.2.2.3 Company Perspectives
2.2.3 How Can CSR Impact Brands?
2.2.3.1 Need for Further Research on Brand Value in Luxury
2.3 Brand Value in Luxury
2.3.1 What is Brand Value
2.3.1.1 Differences Between Brand Value and Brand Equity
2.3.1.2 How Brand Value/Equity Is Defined
2.3.2 Consumer-Based Brand Value
2.3.3 Company-Based Brand Value
2.3.3.1 Financial Approaches
2.3.3.2 Accounting Approaches
2.3.4 Working Definition of Brand Value
2.3.5 Brand Value in Luxury
2.3.6 Main Contributors to Brand Value
Chapter 3: Methodology
3.1 Research Approach
3.1.1 Epistemological and Ontological Approaches
3.1.2 Methodological Approaches
3.1.3 Selected Approaches
3.2 Qualitative Approach
3.2.1 Selection of US Data for Qualitative Phase
3.2.2 Recruitment Process
3.2.3 Interviewees
3.2.4 Interviewing Approach
3.2.4.1 Selection of Grand-Tour Question
3.2.4.2 Theme Selection
3.2.4.3 Preparing the Interviews
3.2.4.4 Interviewing Process
3.2.4.5 Interview Recording and Transcription
3.2.5 Data Analysis
3.2.6 ‘Credibility Checks’
3.3 Quantitative Approach
3.3.1 Selection of US Data for Quantitative Phase
3.3.2 BAV Database
3.3.2.1 Purchasing Categories in BAV’s Database
3.3.2.2 Brand Selection
3.3.2.3 Consumer Data Extracted from BAV Database
3.3.3 Financial and Additional Company Information
3.3.3.1 Information Extracted from Bloomberg
3.3.3.2 Market Capitalization
3.3.3.3 Number of Employees
3.3.3.4 Tobin’s Q Ratio
3.3.4 Information from Company Reports and Financial Filings
3.3.4.1 Counterfeiting
3.3.4.2 Country of Origin
3.3.4.3 Fully Controlled Distribution
3.3.4.4 Marketing and R&D/Design Expenses
3.3.5 CSR-Index
3.3.5.1 ESG Disclosure Score
3.3.5.2 CSRHub
3.3.5.3 DJSI
3.3.6 Interbrand
3.3.7 Consolidation of Dataset and Handling of Missing Data
3.3.8 Modeling Approach
3.3.8.1 Brand Value and Consumers
3.3.8.2 Brand Value Determinants and Market Capitalization
3.3.8.3 Brand Value Determinants in Luxury
3.4 Results, Analysis and Discussion from ‘Credibility Checks’
3.5 Summary of Variables Included in this Thesis
3.5.1 Excluded Equations
3.5.1.1 First Aim
3.5.1.2 Second Aim
3.5.1.3 Third Aim
3.6 Limitations
Chapter 4: Results, Analysis and Discussion from Qualitative Phase
4.1 CSR
4.1.1 Drivers
4.1.2 Implementation
4.1.2.1 Long-Term Vision of Luxury and CSR
4.1.2.2 ‘Getting Started with CSR Implementation’
4.1.2.3 ‘More Comprehensive CSR Implementation’
4.1.2.4 Barriers to CSR Implementation
4.2 Perceptions of Luxury
4.2.1 Complexity of the Luxury Industry
4.2.1.1 Heritage and Non-Heritage Brands
4.2.1.2 Luxury Goods vs. Luxury Services
4.2.1.3 Brand Category
4.2.1.4 Global Brands
4.2.2 Industry Perception
4.2.2.1 Upper Class and Prestigious
4.2.2.2 Emotion
4.3 How Brand Value is Perceived and Created in Luxury
4.3.1 How Brand Value is Perceived
4.3.2 Factors Creating Brand Value
4.3.2.1 Company Size
4.3.2.2 Control
4.3.2.3 Marketing
4.3.2.4 Product and Customer Experience
4.3.2.5 Consumer-Based Brand Value
Chapter 5: Results, Analysis and Discussion from Quantitative Phase
5.1 Brand Value and Consumers
5.2 Brand Value and Market Capitalization
5.3 Luxury Perception and Relationship with Brand Value
5.4 Factors Correlated with Consumer-Based Brand Value
5.5 Factors Correlated with Country of Origin
5.6 Conclusion
Chapter 6: Results, Analysis and Discussion from ‘Credibility Checks’
6.1 CSR
6.1.1 Limited Genuine Interest in CSR within Luxury
6.1.2 Variation in CSR Interest by Consumer Type
6.1.2.1 Differences by Socioeconomic Level
6.1.2.2 Differences by Consumer Age and Product Category
6.1.3 CSR Perception in the Future
6.1.4 How CSR Can Be Pursued in Luxury
6.1.5 Positioning of CSR Efforts within Luxury
6.2 Brand Size
6.2.1 Increase Brand Awareness, Change Perceptions and Ability to Be More Conservative
6.2.2 Large Does not Always Mean Best
6.3 Controlled Distribution
6.4 Counterfeiting
6.5 Country of Origin
6.6 Marketing and R&D/Design
6.6.1 Marketing
6.6.2 R&D/Design
6.7 Consumer-Based Brand Value
6.7.1 Energized Differentiation
6.7.2 Esteem
6.7.3 Knowledge
6.7.4 Relevance
6.8 Differences within Luxury
6.9 Summary
Chapter 7: Conclusion
7.1 Conclusions Reached As a Result of This Thesis
7.2 Theoretical and Practical Contribution
7.2.1 Theoretical Contribution
7.2.1.1 CSR within Luxury
7.2.1.2 Brand Value in Luxury
7.2.2 Practical Contribution
7.3 Fulfillment of Research Objectives
7.3.1 Industry Perception of CSR and How it is Implemented (RO1a)
7.3.2 Perception of CSR as a Contributor to Brand Value (RO1b)
7.3.3 Perception of Brand Value within Luxury and How It is Managed (RO2)
7.3.4 Consumer’s Role in Brand Value (RO3a)
7.3.5 Companies’ Role in Brand Value (RO3b)
7.3.6 Managerial Implications
7.3.6.1 How the Luxury Industry Can Implement CSR to Create Brand Value
7.3.7 How the Industry Can Manage Brand Value
7.3.7.1 Company Size
7.3.7.2 Controlled Distribution
7.3.7.3 COO
7.3.7.4 Marketing and R&D/Design
7.3.7.5 Energized Differentiation
7.3.7.6 Esteem
7.3.7.7 Relevance
7.3.7.8 Managerial Implications from a CSR Perspective
7.4 Further Research
Research Objectives and Themes
This thesis aims to explore the role of Corporate Social Responsibility (CSR) within the luxury industry and determine how it interacts with other key factors to contribute to overall brand value. The primary research question addresses the role of CSR in luxury, how it is perceived by industry professionals, and whether such actions effectively contribute to brand value, while simultaneously examining broader determinants of brand success.
- The role and perception of CSR implementation within the luxury sector.
- The identification of consumer-driven and company-driven determinants of brand value.
- An analysis of how luxury brands perceive and manage their brand value.
- The investigation of whether CSR actions contribute to brand value in a luxury context.
- The influence of company size, distribution, and country of origin on brand perception.
Excerpt from the Book
Complexity of the Luxury Industry
As discussed earlier in the section 2.1.1, which addresses the attributes commonly found in luxury, there are significant differences among the elements that constitute luxury. In addition to these definitional differences, there are also differences at the industry-level. The understanding of these differences is important, as it helps understand that the luxury industry is not homogeneous, and that the luxury strategies undertaken by luxury brands may need to be adapted, depending on those differences. These differences make luxury a complex industry, despite its relatively small size as compared to non-luxury. In terms of complexity, it is important to highlight that this characteristic is not exclusive to luxury, as complexity also occurs in non-luxury. However, it is striking to find in such a niche industry so many differences, including differences by category and type of product; by degree of luxury; and how it is perceived by consumers and luxury managers. These differences are discussed in the sections below.
Summary of Chapters
Chapter 1: Introduction: Outlines the research rationale, objectives, and the importance of studying CSR within the context of the luxury industry's unique business model.
Chapter 2: Literature Review: Provides a theoretical framework by examining the concepts of luxury, CSR, and brand value, and identifies gaps in current academic research.
Chapter 3: Methodology: Explains the mixed-methods research design, including the qualitative interview process and the quantitative approach using linear modeling on BAV and Bloomberg datasets.
Chapter 4: Results, Analysis and Discussion from Qualitative Phase: Presents insights gathered from interviews with industry experts regarding CSR drivers, luxury perceptions, and brand value management.
Chapter 5: Results, Analysis and Discussion from Quantitative Phase: Discusses the findings from the statistical models regarding the impact of various determinants on brand value, market capitalization, and luxury perception.
Chapter 6: Results, Analysis and Discussion from ‘Credibility Checks’: Reviews and validates the earlier findings through follow-up consultations with industry professionals to provide a more nuanced understanding.
Chapter 7: Conclusion: Summarizes the thesis findings, contributions to the field, research objective fulfillment, and offers suggestions for future academic inquiry.
Keywords
Corporate Social Responsibility, CSR, Luxury Industry, Brand Value, Brand Equity, Consumer Perception, Brand Management, Sustainability, Marketing Strategy, R&D, Country of Origin, Brand Differentiation, Stakeholder Theory, Consumer Behavior.
Frequently Asked Questions
What is the core focus of this research?
The research focuses on investigating the role of Corporate Social Responsibility (CSR) within the luxury industry and analyzing how it impacts brand value when considered alongside other traditional determinants of brand success.
What are the primary themes explored in the thesis?
The main themes include the definition and attributes of luxury, the implementation of CSR within luxury firms, the perception of brand value among industry stakeholders, and the various factors that influence both consumer and firm-based brand equity.
What is the main research objective?
The primary objective is to determine whether and how CSR actions contribute to brand value in luxury, and to identify the key company- and consumer-driven factors that create and maintain this value.
Which methodology was utilized?
A mixed-methods approach was employed, combining qualitative semi-structured interviews with luxury industry experts and a quantitative analysis using linear modeling on a large dataset from BAV Consulting and other secondary sources.
What topics are covered in the main body?
The main body covers the theoretical literature review, the methodological framework, and a detailed analysis of findings from the qualitative interviews and the quantitative statistical phase, followed by a discussion validated through ‘credibility checks’.
How are the keywords defined for this study?
The keywords, such as 'Brand Value', 'Corporate Social Responsibility', and 'Luxury Industry', reflect the central pillars of the research, which bridges business strategy, marketing, and ethical corporate management.
How does the luxury industry currently view CSR implementation?
The industry is identified as a late adopter of CSR, often viewing it as a branding strategy or an 'insurance policy' rather than a core ethical mission, though this is evolving with pressure from stakeholders.
What are the findings regarding counterfeiting in the luxury sector?
The research finds that while widely feared by the industry, counterfeiting's actual negative impact on brand value is often overemphasized; in some cases, it can even serve as an indicator of brand success.
- Quote paper
- Ramon Bravo Gonzalez (Author), 2017, Corporate Social Responsibility and Brand Value in Luxury, Munich, GRIN Verlag, https://www.grin.com/document/369601
