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The Luxury Brand and Its Growing Demand in China ______ THE LUXURY BRAND AND ITS GROWING DEMAND IN CHINA ________ An Investigation into Brands and Branding in Relation to China’s Trend Toward More Individualistic Consumer Behavior with an Increased Affinity for Luxury Products By J. Colin Mangham (Wang Guangyi, Great Criticism: Chanel 2002) A DISSERTATION Submitted to The University of Liverpool in partial fulfillment of the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION 2009 A Dissertation entitled THE LUXURY BRAND AND ITS GROWING DEMAND IN CHINA By J. Colin Mangham We hereby certify that this Dissertation submitted by J. Colin Mangham conforms to acceptable standards, and as such is fully adequate in scope and quality. It is therefore approved as the fulfillment of the Dissertation requirements for the degree of Master of Business Administration. Approved: Dissertation Advisor Date ii CERTIFICATION STATEMENT I hereby certify that this paper constitutes my own product, that where the language of others is set forth, quotation marks so indicate, and that appropriate credit is given where I have used the language, ideas, expressions or writings of another. Signed J. Colin Mangham iii ACKNOWLEDGEMENTS I would like to give my most heartfelt thanks to everyone who gave me advice, support, inspiration and encouragement. Thanks to all my teachers and counselors at Embanet and the University of Liverpool, especially my Dissertation Advisor, Niki Hynes, who was so very gracious with her time, advice and unwavering support in what became a race to the finish line. Thanks to my business partners, clients and other colleagues who have waited patiently for me to return to 100%. Thanks to my parents, who encouraged me, as they always have, to do what I believe is right and worthwhile to the very best of my abilities. Thanks to my daughter, Phoebe, whose beautiful arrival in this world inspired me to pursue this MBA precisely three years ago to the day (March 28, 2006). Thanks to my son, Fox Henry, whose baby-toothed smile fueled my efforts down the final stretch. Time to play, little man. And lastly, most emphatically, to my wife, Missy … wow, what can I say, but thank you, thank you, thank you for all the reasons that should go without saying. iv ABSTRACT THE LUXURY BRAND AND ITS GROWING DEMAND IN CHINA ________ An Investigation into Brands and Branding in Relation to China’s Trend Toward More Individualistic Consumer Behavior with an Increased Affinity for Luxury Products By J. Colin Mangham Brands are not simply products and logos but complex amalgamations of experiences, desires and emotions in a consumer’s mind (Figley 2007; Wheeler 2006). The affinities and loyalties consumers have with favored brands result from their experiences and associations relative to those uniquely differentiated products and services. A sufficiently deep and wide understanding of the above is critical to the success of luxury brand marketers who must ensure that they meet or exceed consumer expectations for quality, design, esteem and social status. This dissertation aims to investigate the fundamentals of brands and branding as related to self-expression and the formation of one’s social identity, with a particular emphasis on luxury brands and conspicuous consumption. The research study will concurrently explore Chinese luxury brand demand and consumption driven by the ‘New Rich’ who are adopting a more brand-oriented culture and buying status symbols to express their intended social identity. v As a result of the research study, which will include extensive review of existing literature (Literature Review) coupled with primary qualitative research (Methodologies; Results and Analysis), this dissertation will provide conclusions and recommendations foremost to luxury brand marketers and others endeavoring to succeed in China or further research the queries and topics herein. vi ACKNOWLEDGEMENTS ................................................................................... IV ABSTRACT .......................................................................................................... V LIST OF TABLES................................................................................................. X LIST OF FIGURES .............................................................................................. XI INTRODUCTION ...................................................................................................1 Aims of the Dissertation ............................................................................................ 1 Luxury Brands and Social Identity ............................................................................ 2 China’s Emerging Market.......................................................................................... 3 Problem Statement ................................................................................................... 4 LITERATURE REVIEW.........................................................................................6 Introduction ..................................................................................................................... 6 Brands and Branding ..................................................................................................... 6 The Brand ................................................................................................................. 6 The Brand Promise ................................................................................................... 8 Emotional Values ...................................................................................................... 8 Symbolism in Popular Culture................................................................................... 9 The Store-Bought Individual ................................................................................... 11 Identity, Self-Expression and Archetypes ............................................................... 12 Magicians, Heroes and Celebrities ......................................................................... 14 Branding and Integrated Marketing......................................................................... 17 Word of Mouth (WOM) and Viral Marketing............................................................ 22 Luxury Brands............................................................................................................... 24 Global Market.......................................................................................................... 24 International Appeal ................................................................................................ 29 Defining the Luxury Brand ...................................................................................... 31 Quality of Materials, Design and Aesthetics ........................................................... 33 Social Identity and the Spread of Conspicuous Consumption ................................ 35 Luxury Brands in China ............................................................................................... 36 Market Overview ..................................................................................................... 36 From Hedonism to Collectivism .............................................................................. 39 Deng Xiaoping’s Reform ......................................................................................... 40 Present Day ............................................................................................................ 41 Confucius Says… ................................................................................................... 42 The New Rich ......................................................................................................... 44 Social Identity.......................................................................................................... 48 Conclusions ............................................................................................................ 52 vii METHODOLOGY AND DATA COLLECTION ............................................................... 53 Overview ........................................................................................................................ 53 Research Design........................................................................................................... 55 Participants ................................................................................................................... 55 Role of the Researcher................................................................................................. 59 Data Gathering .............................................................................................................. 59 Data Analysis ................................................................................................................ 63 Trustworthiness of the Method ................................................................................... 63 RESULTS AND DATA ANALYSIS .....................................................................66 Overview ........................................................................................................................ 66 Presentation of Results................................................................................................ 66 Participants ............................................................................................................. 66 Discovery Stage.....................................................................................................
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