The purpose of Sonja Lahtinen’s thesis, Miltton thesis competition winner 2014, was to figure out how young female luxury consumers construct meanings for luxury fashion brands in Finland and China. In this blog post, Sonja examines the main findings of her thesis.
There is a shift under way in brand management from the traditional “features and benefits” mentality to strategies based on “what a product offers and what it means to its customers”. It is time for consumer researchers, as well as marketers, to turn their focus on understanding the perceived personal relevance of the brands from the consumers’ point of view.
The market for luxury goods is continuing to grow globally, despite macroeconomic uncertainty. In the year 2014, according to the Bain & Company, worldwide sales of personal luxury goods reached 223 billion euros, a growth rate of 5%.
The number of luxury goods consumers has more than tripled in 20 years, to around 330 million people, with more than 10 million new customers entering the market each year. Today, Chinese consumers represent the top and fastest-growing nationality for luxury.
Bain & Company estimated that last year Chinese consumers purchased as much as 47% of all the luxury goods worldwide. The growth is fueled by the rising middle class, which is increasingly brand aware and willing to invest in luxury goods.
However, brand managers should keep in mind that Chinese consumers are unique, and will have different preferences than consumers in other countries. Although many of the brands are the same in China as in Western countries, it doesn’t mean that consumers are buying them for the same reasons.
Cultural factors lead consumers to read the world of brands in one way or another
The purpose of my thesis was to figure out how young female luxury consumers construct meanings for luxury fashion brands in Finland and China. Based on the different brand meanings that respondents associated with luxury fashion brands, I formed eight collective themes:
- pursuing hedonistic pleasure
- driving force in life
- appreciating beauty, art and quality
- daydreaming and fantasy world
- connecting and expressing the self
- seeking connection to others
- matter of investment
- valuing sustainability
The eight central themes were similar between the Finnish and Chinese respondents, but differences appeared in the more surface sub-meanings, as can be seen in the Figure 1 (C=Chinese, F=Finnish, pictures are examples of the photos collected by the participants).
Meanings for luxury fashion brands among Chinese and Finnish consumers (click the image for a larger view)
There are several factors explaining the differences in the ways Finnish and Chinese consumers gave meanings for the luxury fashion brands.
1. There is a relatively short history of consumerism in China, compared to the Finnish society, which explains the prevalence of materialist/postmaterialist priorities among the respondents. Finnish consumers have been living in an advanced, wealthy, industrial society since their infancy, so they have already gone through the value shift from the materialist needs to the needs for belonging, self-esteem and intellectual and aesthetic satisfaction, where Chinese respondents, in turn, showed clear signs of materialist values.
2. The Finnish luxury scene is already in its mature stage, when consumers approach luxury as a concept that can be adapted to their lifestyles, compared to China, where the luxury industry is still in its introductory phase. Consumers in China may belong to the first or second generation of their families to purchase brands, rather than buying commodities with trade vouchers, as was common during the Cultural Revolution in the 1970s. The recent history of wars, colonization and communism has disrupted the Chinese history of luxury, which might explain why Chinese respondents found it difficult to relate themselves personally with luxury brands and the overall conventions of identity consumption.
3. The confrontation of individualistic versus collectivist cultures might explain why Chinese respondents sought status and showed sensitivity to prestige and social recognition, while Finnish respondents focused more on personal achievement and harmony between the brands and their own identity and values. Overall, for the Finnish respondents, the brand meanings were more private, subjective and experiential, while for the Chinese, the meanings were more social, objective and utilitarian in their nature.
In her next blog post, Sonja will discuss what Finnish marketers could learn from the findings of her thesis.
Sonja Lahtinen is an internationally oriented young marketer, and a life enthusiast, who is passionate about cultural branding, consumer trends, sustainable business and CSR issues. Her thesis was awarded as the best Master’s thesis in the thesis competition organized by Miltton in 2014.
Read the whole Master’s thesis here