The Role of Brand Prominence in Luxury Goods

Abstract

Luxury goods have always been related with conspicuous consumption, however nowadays in China there is an increasing trend for consumers to choose inconspicuous over conspicuous luxury goods. Therefore, this study mainly focuses on the relationship between brand prominence and purchase intention of luxury goods. Furthermore, this paper examines the mediating effect of social-evaluative concerns as well as a moderator-brand awareness. It is hypothesized that the negative effect of brand prominence on purchase intention of luxury goods might be weaker when the brand awareness is low (vs. high). Data was gathered through an experiment of 202 Chinese participants after being exposed to logo or no-logo luxury goods stimuli. The findings indicate that high brand prominence may lead to less purchase intention of luxury goods, thus proving the hypothesized negative effect of brand prominence on purchase intention. Meanwhile, this effect is partially mediated by social-evaluative concerns over product usage. High brand prominence leads to more social-evaluative concerns, thus negatively affecting purchase intention. As the mediating effect only exists when the brand awareness is high, more potential mediators need investigation in future research. Brand awareness moderates the relationship between the brand prominence and luxury goods purchase intention. When the luxury brand awareness is low, the negative relationship between brand prominence and purchase intention will be alleviated.The contributions of this research are as follows. Theoretically, it deepens the understanding of inconspicuous consumption of luxury goods and provides a new explanation for the changing needs of luxury consumers nowadays in China. Practically, it provides useful suggestions for future directions of luxury goods. For well-known luxury brands in China, it is better to redesign offerings to downplay brand names and luxury products to meet the new trend. On contrary, for new emerging luxury brands, it is might be a good strategy to design their own unique and conspicuous logos on the products to impress the consumers and improve brand awareness.