City Research Online City, University of London Institutional Repository Citation: Stathopoulou, A. The effect of cultural value orientation on consumers' perceptions of luxury value and proclivity for luxury consumption. Journal of Business Research, 102, pp.053 This is the accepted version of the paper. This version of the publication may differ from the final published version.
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Provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. City Research Online: http://openaccess.uk/ publications@city.uk The effect of cultural value orientation on consumers’ perceptions of luxury value and proclivity for luxury consumption ABSTRACT This paper investigates the effect of Schwartz’s (1992) four cultural value orientations on the values consumers ascribe to luxury products. In response to well-documented criticisms of assessing cultural values as aggregates measured at the nation level, this study examines the effects of value orientation measured at the individual level. Using survey data from U.
consumers, the study shows that cultural values influence consumers’ perceptions of the usability, uniqueness, quality, and social luxury values. Self-enhancement and social luxury values are the key drivers of consumers’ proclivity for luxury consumption. A post hoc analysis reveals four luxury consumers groups: “unconcerned,” “functionalists,” “moderately-eager,” and “luxury-enthusiasts.” People with high self-enhancement and self- transcendence values are more likely to be luxury-enthusiasts, whereas functionalists and unconcerned share similar cultural value profiles. Luxury-enthusiasts have the highest proclivity for luxury consumption, followed by moderates and functionalists.
These findings have marketing implications for segmenting luxury customers in a cross-cultural setting. Keywords: Value orientations; Luxury values; Proclivity for luxury; Luxury consumption The effect of cultural value orientation on consumers’ perceptions of luxury value and proclivity for luxury consumption 1. Introduction Recent statistics suggest that luxury items have a strong appeal in almost all countries of the world, reaching staggering sales figures of €1.2 trillion globally in 2017 (Bain & Co., 2017), with further estimated growth in 2018 (Boston Consulting Group, 2018; Roberts, 2017). Luxury consumption is present in both mature and emerging markets (Deloitte, 2017), which has increased competition among luxury brands worldwide and has made luxury products more accessible to a wider audience.
A closer examination of luxury consumption figures across countries reveals that income disparities do not necessarily explain the varying levels of luxury consumption. For example, wealthy Scandinavian countries, boasting a very high gross domestic product per capita, have among the lowest luxury consumption per capita in Europe (Bernstein Research, 2010). Thus, to explain cross-cultural variation in luxury consumption it is important to look beyond the sociocultural variables (e. income) and investigate the effects of other variables like human values (Dubois & Duquesne 1993; Dubois, Czellar, & Laurent, 2005).
Luxury consumption can be instrumental for people to achieve goals or aspirations (Vigneron & Johnson, 1999; Wiedmann, Hennigs, & Siebels, 2009; Wong & Ahuvia, 1998). Grouzet’s et al. (2005) work on individual’s goal content shows that different cultures emphasize different goals. In other words, normative pressures from one’s culture will affect the goals he or she is expected to achieve via consumption and, specifically in our context, via luxury consumption.
However, numerous cross-cultural studies (e. Dubois & Laurent, 1993; Dubois, Czellar, & Laurent, 2005; Gentina, Shrum, & Lowrey, 2016; Godey et al. 2013; Hennigs et al., 2012; Le Monkhouse, Barnes, & Stephan, 2012; Shukla, 2010, 2012; Shukla & Purani, 2012; Tidwell & Dubois, 1996; Tsai, 2005; Vigneron, 2006) which are based on national culture have failed to offer meaningfully consistent results regarding how culture affects people’s motivations to buy luxury items (see an overview in Hennigs et al. The focus on most of these studies is on the individualism versus collectivism dimensions of Hofstede (1980) or on Western versus Eastern cultures.
Dubois & Laurent, 1993; Dubois, Czellar, & Laurent, 2005; Godey et al. 2013; Le Monkhouse et al., 2012) reveal that across cultures there are no significant differences on the values consumers attach to luxury consumption. Gentina et al., 2016; Hennigs et al., 2012; Tsai, 2005) find that all luxury values under investigation are important in all cultures but may vary in strength. Another group of researchers (e.
Shukla, 2010, 2012; Shukla & Purani, 2012) identify some differences across cultures but they cannot detect a clear cultural pattern. Taking as an example the importance of uniqueness value or exclusivity of luxuries across cultures the following contradictory findings are observed: (i) Gentina et al. (2016) findings show that these values are more important in individualistic countries; (ii) Shulkla (2012) shows that these values are significant only to UK consumers and not to US consumers (who are both individualistic cultures); and, (iii) Godey et al. (2013) shows that these values do not differ between collectivistic versus individualistic cultures.
In addition, regarding cultural differences in the social type of values derived from luxuries: (i) Shulkla (2012) shows that conspicuousness of luxuries (a dimension of social value) is equally unimportant to both individualistic (USA and UK) and collectivistic (India and Malaysia) cultures; (ii) Shukla and Purani (2012) find that the other-directed symbolic value of luxuries (a type of social value) is equally important to both individualistic (UK) and collectivistic (India) cultures; and (iii) Hennigs et al. (2012) show that there is no clear cultural pattern in the appreciation of social value of luxuries. In this study the collectivistic Japanese seem to appreciate more the social value of luxuries than the individualistic Americans and French, and in the same study the individualistic Americans and French appreciate more the social value of luxuries than the collectivistic Spaniards. Finally, regarding the cross cultural differences in the quality value of luxuries: (i) Tsai (2015) shows that quality is equally important across Asia Pacific, Western Europe and North America; (ii) Shulka (2012) finds that quality is more important in individualistic (UK and USA) than collectivistic (India and Malaysia) cultures; and (iii) Shukla and Purani (2012) find that quality is significant in individualistic (UK) cultures but not in collectivistic (India) ones.
Thus, the above results indicate that cultural differences in the value derived from luxury consumption cannot be explained by the cultural profiles of the countries these studies have used. One reason for these inconclusive results may have to do with the lack of consensus on values within a given culture, as empirically demonstrated by Fischer and Schwartz (2011). 1) warns that these findings “pose a serious challenge to theories that view cultures as shared meaning systems.” In the literature there is evidence that there is within-country variation and between-country similarities in terms of cultural values (Kaasa, Vadi & Varblane, 2014; Taras & Steel, 2009; Taras, Steel & Kirkman, 2016), which weakens the explanatory power of the country-level or national-level differences, especially in luxury consumption where there are many similarities across the luxury segments cross-culturally (Hennigs et al. Schwartz (2014) further criticizes models based on the assumption that values are shared and on the practice of averaging values across countries to determine culture.
He proposes that culture operates as a latent, normative system of pressure on individuals. Building on Schwartz’s (2014) criticism, the present study examines the role of luxury consumption in a country in such a way as to challenge models that conceptualize culture values as country-level aggregates. Specifically, we employee Schwartz’s (1992) conceptualization (shown in Fig. 1) of value orientations (openness to change, conservation, self-enhancement and self-transcendence) and apply these at the individual consumer level.
[Figure 1 here] In doing so, we provide a fresh view on the influence of cultural orientation at the individual level on luxury valuation and the propensity to purchase a luxury product over a nonluxury product with an eye to reconciling the discrepancies identified in cross-cultural studies of luxury that have viewed culture at the aggregate country level. Value orientation There are many studies showing that one of the most potent influences on consumers’ motivations, attitudes, and behaviors is cultural value orientation (e. de Mooij, 2017; Schultz & Zelezny, 1999; Terlutter, Diehl, & Mueller, 2006; Zhang, Beatty & Walsh, 2008). In the cross-cultural field, there are three main frameworks that have been used extensively to explain how cultural value orientations can influence consumers’ choices.
These are the frameworks provided by Schwartz (1992, 1994a, 1994b, 2006), Hofstede (1980, 2001), and project GLOBE (House, Hanges, Javidan, Dorfman, & Gupta, 2004). Both the Hofstede and GLOBE frameworks focus mainly on values at the national level (Taras, Steel, & Kirkman, 2016), whereas Schwartz’s framework conceptualizes values at an individual level (Sousa & Bradley, 2006), focusing more specifically on human values (Pepper, Jackson, & Uzzell, 2009). This study employs Schwartz’s (1992, 1994a, 1994b, 2006) framework. Hofstede’s (1980) original framework postulates four bipolar cultural dimensions, individualism/collectivism, high/low uncertainty avoidance, masculinity/femininity and high/low power distance.
The conceptualization was based on cross-cultural data collected around 1970 in the IBM Corporation among its employees in more than 50 countries worldwide. Later on, Hofstede, Hofstede and Minkov (2010) included two more dimensions: long/short term orientation, and indulgence/restraint. Schwartz (1992, 1994) tried to overcome many of the limitations he identified in Hofstede’s framework (e., non- exhaustive cultural dimensions, use of unrepresentative sample of countries not reflecting the full spectrum of national cultures and unrepresentative respondents) by developing his own framework. He (1992; 1994) first identified a comprehensive set of 56 individual human values observed in a wider set of cultures.
The initial 56 values were decreased to 45 that had equivalent meaning across countries. Based on a sample of school teachers and college students from 67 countries, with the help of smallest-space analysis identified 10 individual level human values (explained later) which are organized along four higher order dimensions: conservation, openness to change, self-transcendence and self-enhancement. The GLOBE project (House et al., 2004) aimed to extend Hofstede’s framework by adding dimensions focused on understanding cultural values and leadership attributes. It was based on data collected from 62 cultures from managers in the telecommunications, food, and banking industries.
The GLOBE project (House et al., 2004) characterized cultures according to nine dimensions identified: performance orientation, assertiveness, future orientation, human orientation, institutional collectivism, in-group collectivism, gender egalitarianism, power distance and uncertainty avoidance. The effects of these dimensions were used to analyze the expectations of leaders and organizational practices in each society. There has been a well-publicized criticism casting doubts on the appropriateness of GLOBE framework in this type of research based on conceptual and measurement grounds (Brewer, & Venaik, 2010; Hofstede, 2006, 2010; Smith, 2006; Taras, Steel, & Kirkman, 2010) that gives good reasons for not using this framework. Hofstede’s (1980) and Schwartz’s (1994a) frameworks that applied at a national level were found by Steenkamp (2001) to have some overlaps.
However, Imm Ng, Lee and Soutar (2007) compared these two frameworks at a national level and their results lead to different predictions. Schwartz’s (1992) framework performed better in international trade predictions than that of Hofstede’s framework. The reason that we preferred Schwartz’s framework over Hofstede’s has to do with Hofstede’s (1980, 2001) warning that his country-level cultural dimensions cannot be used to individuals and cannot be used for inter-individual comparisons. Hofstede’s view is reinforced later on by Fischer, Vauclair, Fontaine and Schwartz (2010) and de Mooij (2013).
On the contrary, Schwartz (1994a) suggests that in his typology the individual and country level value structures are considerably similar, which is also confirmed later empirically by Fischer et al. However, Fischer et al. (2010) advised against the use of country-level constructs to compare individuals across countries because the two levels although configurally similar they are not identical and exchangeable.
