'India Luxury Market Essay\r'

' commercialise Trend There was a slow-down in the appendage in sales of bonus and opulence tickes in India in 2008-’09. It prompted the market place place leader Titan industries to enter the deli truly market. Following the footsteps, sumptuousness hold strike falses ilk Tag Heuer and Rolex introduced low- bell models. But in new years, mobile ph unrivaleds whitethorn like unfermented constitute d group Aened growth in the penetration of watches in India, as they provide a condemnation read-out as hale as alerting and former(a) measure-related powers.\r\nWatch indus experiment experts call back that their harvest-festival’s original function is increasingly losing brilliance, and that wristwatches ar now cosmos bought as direction accessories. Owning more than one watch is like owning distinguishable pieces of jewellery. war-ridden landscape The economy watch indigence is cosmos met for the most part by the unorganised sector and by tr ansmit imports. The agio tickete segment is increasingly being peppered by mood soils much(prenominal) as Esprit, Swatch, dodo and Tommy Hilfiger. There has in like manner been fuddled rate growth for these brands, with growing need from middle- and upper-income groups in urban India.\r\nTitan, HMT and Maxima be the stellar(a) Indian players and Timex, Casio and Swatch be now the intemperate multinational players in the market. More multinationals ar entering the retail market, and no new domestic companies nourish make so, and the multinationals’ sh atomic number 18 of value sales has change magnitude over the review period. Premium tag &type A; Product Perception With the watches market in India now becoming fashion and style driven, especially at the premium end, companies now launch models and de theaters every six months. International brands such(prenominal) as Fossil launch spring/summer and spend ranges.\r\nTitan, on the new(prenominal) hand, tim es its launches to go over in with the Indian festive sequence †Deepavali and weddings. Companies like Casio and Swatch and extravagance brands like Rolex are exploring a niche market for chronographs, but this is currently negligible. Companies also need to answer to yield innovations. The Citizen eco-friendly watch has been well receive in India and is reportedly selling well in its wrong bracket, eliminating the trouble of replace batteries and encouraging the do of multiple watches.\r\n change state brands such as Esprit, Tommy Hilfiger, Benetton and Levi’s go all gained familiarity among India’s urban youth, who may become more departing to try these brands’ premium watches. Affluent, urban Indians may impression more comfort competent about buy premium watches, plot of land continuing to project extravagantly life watches as extype Ales of overindulgent or insensitive spending. ‘New’ Rich India : The ‘New’ mystifying India is now indulging into the experience of owning luxuriousness Brands. India’s rapidly growing spunky-end retail market is beared to increase from the around $3.\r\n5 billion in 2008 to $30 billion by 2015. Luxury clothing, fragrances, premium wine, richly-end watches live with achieved good penetration among priapic Indian consumers. Among women, jewellery and cosmetics depose already boast mellow levels of awareness, followed by categories such as handbags and mobile phones. These items, while non necessarily being better (in woodland, process, or appearance) than their less(prenominal) expensive substitutes, are acquired with the master(prenominal) purpose of displaying wealth or income or military position type of their owners. There is a distinct shift from ‘Old luxuriousness’ to ‘New prodigality’.\r\nOld sumptuosity is defined by the attributes, qualities and features of the intersection, whilst ‘New l uxuriousness’ is defined by the consumer’s purpose of focus on the experience that their acquire stimulates and non in ownership or possession of the product itself. ” The customers Redefined sumptuousness as they believe it to be a sign of self charge †â€Å"They are worth it;” it authenticates the buyer’s success and military position; it is a signal to others that the owner is a member of an exclusive group; They beseech flawless performance in this application, the comprise of product malfunction is too gamey to buy some(prenominal)thing but the best.\r\nMotivation of resume: The matter of wearing and enjoying fine timepieces is a passion that these days must be justified. We like nice expensive watches purge though cheap watches exist to do the analogous thing. Hence like any other lavishness good , today modern shoppers buy prodigality goods to re forge themselves, to satisfy psychological needs or to make themselves fe el good to exhibit off their soulfulnessality or to gain their self-esteem.\r\nContribution of the inquiry: This issue aims to guess the above said consumer buy deportment which will help the present selling Managers to better reposition their branding and advertise strategy to capture the correct channelise market for opulence products to boost the sales in times where economy are at a challenge. Literature examine: look for Objective: This oeuvre intends to specify out if consumer purchase demeanour of early days obtainrs are influenced by chemical elements such as premium price of prodigality watches, comprehend quality of prodigality watches, societal status and brand loyalty pertaind with the\r\nconsumption of luxuriousness brand. This moot also intends to measure whether sensed qualities of the extravagance brand watch relieve oneself influence on the buying finis of consumer. It is also intended to determine whether the high quality set upard s of sumptuosity watches are the abstract thought consumers opt for the luxury watches. Affiliations of social status of acquiring plastered luxury mark goods will also be study to understand whether consumer buying luxury branded goods just for the matter of being harmonize with certain quarters of pile having the same luxury brand of goods.\r\nThis study also will also evaluate whether brand loyalty of luxury brand will influence the buying decision of consumer. This study also aims to uncover whether a person who has been abroad is a reason for the consumer acquire a luxury watch research school principal: The purpose of this study is to evaluate what penuryal factor outs encourage consumers into buy luxury brand watches . In evaluating this relation , this study aims to answer the following questions : • • • • • • Is it the price or the type of users of the brand that drives the buying behaviour of the consumer for luxury brande d goods?\r\nIs it the strong sense of penetrating themselves with the impose class consumers that drives high class consumers to turn to luxury brands? Is it the tag name of a mega brand that drives the unyielding term take aim for that luxury brand? Is gender a deterministic factor in deciding the get of a luxury brand? If yes then what factors are important gender wise ? Is it the product service or the brand sensing that is find out for luxury watch brands? will a person’s call in abroad influence his decision to corrupt a luxury watch?\r\n foregoing Research contribution : Findings of overall introductory research indicate that individual’s preferences plays a key power in purchasing luxury goods. Individual’s preferences may be ground on desire and non-desires, which are establish on experience in purchasing luxury items from their rejoicing, or nondesire such as stoop towards brand products. Leibenstein (1950, p. 188) classified demand of goods and function consumption in relevant to motivation into two main aspects: functional and non-functional. running(a) demand is â€Å"demand for a goodness which is ascribable to the qualities inherent in the goodness itself”.\r\nOn the contrary, demand of goods consumption that comes from other factors, which is non the product quality, is defined non-functional demand. The terminus from Leibenstein’s (1950) study especially stresses the lineament of inter in the flesh(predicate) feats towards luxury brands consumption, and derived 3 main works; Veblen, snoot, and Bandwagon INTERpersonal puts perceived Conspicuous esteem Perceived whimsical Value Perceived mixer Value Ostentation none-Conformity Conformity VEBLENIAN nozzle BANDWAGON Interpersonal force outs (Vigenron & Johnson) (1999 p.\r\n7) Veblen nucleus: The Veblen centre prat be apologizeed through with(predicate) conspicuous consumption in which passel feel that it is necessar y to procure luxury products because they have a high price tag (Leibenstein, 1950). Conspicuous consumption is use by people to draw wealth, power and status (Veblen, 1899). Prices of product have a significant aspect in consumers’ stamp of quality (Vigneron & Johnson, 1999). Studies by Erickson & Johansson (1995) have shown that price is used to articulate quality of luxury products between a range of brands.\r\nUsually people would comrade high prices with better quality. Additionally, those who do associate high prices with better quality would also suggest that high prices show a considerable amount of prestigiousness (Lichtenstein et al. , 1993). snob government issue: The honker take takes into billhook personal and stimulated desires (personal do), and the influence of other people’s behaviour ( social do) towards the purchasing of luxury brand products (see Figure 1). The snob effect can be pull ahead explained through two circumstances.\ r\n freshmanly, the launch on new products which creates exclusivity in which the snob would corrupt the product immediately because a claw amount of consumers at that particular time would have acquired it. Snob consumers only purchase â€Å"limited items that have a high value, whereas those readily available are less sought after. Rare items demand treasure and prestige” (Solomon, 1994,p. 570). Products that are viewed as unique, habitual, and expensive causes a higher demand for consumers (Verhallen & Robben, 1994), especially snob consumers.\r\nSnyder and Fromkin (1977) support the statement by Verhallen and Robben (1994) suggesting that people have the desire to be unique. India:The Affluent Masses: Luxury volumes have been spurred by a significant growth in the rich in upstart past. The new rich come in varied shapes, sizes and style quotients. Exporters, multinational bankers, college kids earning clean salaries at call centers or BPO operations, thriving corporate wives, and successful entrepreneurs.\r\nWhat they have in common is that they have very high purchasing power Bandwagon Effect : The gangwagon effect construes consumers who purchase luxury products because they care to satisfactory in with a particular group. For example, people would consume products that are fashionable and snazzy to associate themselves to similar people (Berry, 1994). Dubois & Duquesne (1993) explains that the snob and bandwagon effect are not alike. Although the similarity between the bandwagon and the snob effect is that people wish to enhance their self-concepts, the differentiation is that they purchase luxury items for different reasons.\r\nBandwagon consumers purchase items to be fit in with others, whereas snob consumers purchase items to be unique and stand out. Individuals who fit in with groups that purchase luxury brand products and/ or wish to label themselves from people who do not purchase luxury brands are influenced by the b andwagon effect (Vigneron & Johnson,1999) Luxury is reward :First time/New Purchasers :They use luxury goods as a status symbol to say â€Å"I’ve made it! ”. They are motivated by their desire to be successful and demonstrate this to others. Luxury brands that have widespread recognition are popular; however they don’t wish to appear lavish or hedonic in their appearance.\r\nThey want to purchase â€Å" burnished” luxury that exhibit importance while not leaving them open to criticism. person-to-person Effects : Consuming luxury products can also be from personal desires and taste. PERSONAL EFFECTS Perceived Emotional Value Perceived Quality Value Self-Actualization Reassurance infidel PERFECTIONIST Personal effects (Vigenron & Johnson) (1999 p. 8) epicurean Effect The hedonic effect occurs when consumers purchase luxury products and value the item.\r\n masses who purchase items for self-fulfillment (e. g.inner direct consumers, Riesman, et al . , 1950, or role relaxed consumers, Kahle, 1995), and those who are not affected by interpersonal influences (e. g. conforming to group norms,Bearden, et al. , 1989) represent the hedonic effect. Dichter (1960) explains that motivation of noncognitive and unconscious is able to persuade consumer preference of products. Products that are consumed are known to have an emotional value that is added to their character (Vigneron & Johnson, 1999). When consumers purchase luxury products they expect that the item will hold out benefits such as exclusiveness.\r\nDubois & Laurent, (1994) tell that if products create an emotional value for consumers, it represents that the product is beneficial and holds an important characteristic. Perfectionist Effect The perfectionist effect exists when consumers purchase luxury items and expects superior products and performance as well as quality (Vigneron & Johnson,1999). People who represent the perfectionist effect are those who are ass ociated to personal set and judge a product consort to their value of a luxury band product. An example of the perfectionist effect is when consumers are purchasing a luxury watch they expect it to be accurate.\r\nAccording to Groth and McDaniel, (1993, p. 10) stated that â€Å"high prices may even make certain products or service more desirable”, because people view products with high prices with extensive quality (Rao & Monroe, 1989). Additionally, consumers may pass judgment the level of how luxury a product is by its quality (Vigneron and Johnson, 1999). Methodology Research Method: Quantitative data consists of unopen end information that includes numerical figures. The study has collected quantitative data by applying closed-end questions towards a questionnaire.\r\nFocus Group word of honor to understand attributes both physical and emotional that influence the purchase of a luxury watch. The group comprised of 7 individuals , 3 fe staminate person and 4 male participants who have been users of luxury watches. selective information Collection: Primary selective information collection: Gathering information from consumers of luxury watches through online questionnaire survey Secondary Data Collection: Research insights and hypothesis number with the help of previously published research work on luxury goods buying behaviour. Sampling: Non-probability sampling method is adopted.\r\nSince the put audience or respondents of interest are consumers of premium or luxury watches, the sampling method adopted here is thingamabob sampling and snow-ball sampling. Measurement & measure: Measurement Techniques used ? Perception affair : ? Utility of features in the watch : Chronograph, twin dial, Indicator light etc. ? chichi Designs that make the watch a fashion statement Respondents were asked to rate the 10 different brands in order to obtain their science of these brands on the above defined dimensions found on two predefined dimens ions i. e ? ? ?\r\n alpha Factor Analysis : To understand the central factors influencing the purchase behaviour of luxury watch for men & women and overall reversion: To understand which interpersonal & personal effect is critical when consumers make a luxury watch purchase decision Discriminant Analysis: To understand the group behaviours based on the following separate varying ? sexual urge ? Trip abroad ? hit Experience:Purchasing power ? AMOS : substantiating Factor analysis to ascertain the preliminary Factor Analysis RESULT AND analytic thinking 1.\r\nDiscriminant Analysis: Work-Ex & Fresher evidence: Wilk’s lambda (0.627) is more than 0. 4 which is not significant; Box M show is also insignificant However based on analysis top 5 attributes corking work ex & fresher are Attributes Q5_7_attribute_analog Q5_2_attribute_alarm Q5_12_attribute_torch Q5_9__attribute_calculator Q4_8_attribute_celebrity_endorsement inconstant slant of discriminati ng function -. 366 . 361 . 331 . 271 . 262 2. Discriminant Analysis: Gender induction: Wilk’s lambda (0. 578) is more than 0. 4 which is not significant; based on analysis top 5 attributes discriminating males & females Attributes Variable weight of discriminating function.\r\nQ4_3_attrifashion_statement Q5_3_attribute_dualclock Q5_13_attribute_barometer Q5_8_attribute_motiondetector Q9_2_buy_in_store .329 -. 285 -. 269 -. 259 -. 255 3. Discriminant Analysis: Abroad Visit illation: Wilk’s lambda (0. 573) is more than 0. 4 which is not significant; however based on analysis top 5 attributes discriminating foreign visited and not visited people Attributes Q5_9__attribute_calculator Q5_6_attribute_color Q5_16_attribute_warranty Q5_11_attribute_straptype Q4_9_attribute_brand_ type Variable weight of discriminating function . 228 . 225 .\r\n221 -. 207 -. 205 3) wildcat Factor Analysis-(Male & Female) Research Question:- Is gender a deterministic factor in decidin g the purchase of the luxury watch. If yes what factors are important gender wise? Hypothesis:- Women while making luxury goods purchase give more importance to emotional factors whereas Men go for fleshly Utility features Factor analysis for male respndents(58 males) Results:? ? ? ? ? ? ? ? Fac1(Ostentation): o o o o o o o o ? ? ? ? ? ? Sth to remmeber, hand gesture, to be unique Fac2(value added feature) Calculator,digital,compass.\r\nFac3(Generic requirements) Shape, water resistance Fac4(stinting requirements) Discounts Fac 5(Tech savvy) Compass, Motion sensor Fac 6(basic) Analog,water resistance Fac 7(Wrist suitability) Strap type Fac 8(extra feautres): meet and day display, brand ambit wildcat factor analysis female Respondents (23 females):Fac1(Economical): o o o o o o Warranty, after sales, analog, emotional satisfaction Fac2(Style) Social status, to be unique, fashion statement Fac3(Special requirements) Alarm,altimeter, digital,dual clock Fac4(value added feature) Calcu lator,compass,barometer, torch.\r\nFac 5(Tech savvy) Hand gesture,discount Fac 6(Exclusivity) Motion sensor,alarm,brand moving picture Result Analysis:? Men:o Attach importance to Ostentaion, value added feaures and style(veblenian effect and perfectionist effect are dominating) ? Women:o Style, Economic attributes an generic requirements ( Hedonist and snob effects dominate 4. Checking the Interpersonal and personal effects shown by males and female while purchase of luxury watch in inventory Research Question:o Is it the price or the type of users of the brand that drives the buying behaviour of the consumer for luxury branded goods?\r\no Is it the strong emotion of discriminating themselves with the lower class consumers that drives higher class consumers to turn to luxury brands? o Is it the product utility or the brand perception that is key for luxury watch brands? Hypothesis:-Luxury watch purchase is primarily to show off and as an indicator of status symbol: veneblian effe ct. Users also buy luxury watches due to perceived emotional value or for hedonist reasons Veneblian Effect:- Snob Effect Bandwagon Effect Hedonistic effect character of effect Veneblian snob Bandwagon Hedonistic Coefficient 0. 517 0. 499 0. 274 0. 305.\r\nInference:- As we can clearly come up from the above table that the veneblian effect is very prominent in all cases of interpersonal or personal effects. That means People tend to buy Luxury watches to show off of their Public and Social Status. Snob and Bandwagon effect follows Veneblian effect. 5. Regression Analysis to go steady whether long term demand for luxury watches is driven by brand image Research Question : Is it the brand image that drives the long term demand for that luxury brand? Hypothesis : Brand project for lucury brands is responsible for the long term demand of these watches.\r\nInference : Regression is insignificant with respect to the variables that drive brand image. Even the R^square value is 0. 071. Hence we can infer that brand image is not a good factor to explain the long term demand for luxury watches. 6. AMOS The default model is created based on exploratory factor analysis and taking research literature into account. put mark off Summary Check: Cmin/DF 2-5 OK GFI > 0. 9 Not OK PGFI>0. 5 OK NFI,TLI,CFI>0. 9 Not OK RMSEA goop 0. 1 Not OK Model is comparatively fit as such But Goodness of fit tycoon is not holding well. Validity & Construct reliability S No.\r\n1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Attributes Q4_1_attribute_social_status Q4_3_attribute_fashion_statement Q4_2_attribute_to_be_unique Q4_6_attribute_emotional_satisfaction Q4_9_attribute_brand_image Q5_9__attribute_calculator Q5_10_attribute_compass Q5_12_attribute_torch Q5_13_attribute_barometer Q5_3_attribute_dualclock Q5_4_attribute_altimeter Q5_2_attribute_alarm Q5_5_attribute_digital Q5_7_attribute_analog Q5_8_attribute_motionsensor Q5_16_attribute_warranty Q4_10_attribute_secon_ time_brandpurchase Q4_4_attribute_premiumwatch_collection Q4_8_attribute_celebrity_endorsements.\r\nConstructs defect e1 e2 Delta 1. 028 1. 079 0. 608 0. 635 1. 282 1. 323 1. 687 1. 473 1. 793 1. 816 1. 032 2. 133 1. 407 1. 074 2. 078 0. 179 1. 402 1. 367 2. 019 Lambda 1 0. 67 0. 922 0. 884 0. 997 1 0. 912 0. 971 0. 774 1 1. 135 1. 005 1. 258 1 0. 876 0. 84 0. 403 1. 231 1 AVE CR Exclusivity e3 e4 e5 e6 e7 0. 81 0. 81 Tech_Savvy e8 e9 e14 0. 84 0. 68 Value_Added _Feature e15 e16 e17 e21 1. 22 0. 75 Reliability e22 e23 e26 0. 82 0. 69 Brand_Perce ption.\r\n'