An empirical study of the intention of vietnamese consummers to purchase luxury goods

An empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goodsAn empirical study of the intention of vietnamese consummers to purchase luxury goods

International School of Business

-

Truong Thi Xuan Thao

AN EMPIRICAL STUDY OF THE INTENTION OF VIETNAMESE CONSUMERS TO PURCHASE

LUXURY GOODS

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2014

International School of Business

-

Truong Thi Xuan Thao

AN EMPIRICAL STUDY OF THE INTENTION OF VIETNAMESE CONSUMERS TO PURCHASE

LUXURY GOODS

ID: 21110021

MASTER OF BUSINESS (Honours)

SUPERVISOR: Dr NGUYEN THI MAI TRANG

Ho Chi Minh City - Year 2014

Firstly, I would like to express my gratefulness to my supervisor Dr Nguyen Thi Mai Trang for her professional guidance, intensive support, valuable suggestions, instructions and encouragement during the time of doing my research

I would like to express my deepest gratitude to Professor Nguyen Dong Phong, Professor Nguyen Dinh Tho, Dr Tran Ha Minh Quan for their valuable time as the members

of the proposal examination committee Their comments and meaningful suggestions were contributed significantly for my completion of this research

My sincere thanks are given to all of my teachers at International Business School – University of Economics Ho Chi Minh City for their teaching and guidance during my Master course

In recent years, the strong development of economy has increased significantly the number of rich people in Vietnam Higher disposal income together with economic globalization leads to more concern to luxury products among Vietnamese people, especially

in Ho Chi Minh City This trend opens many opportunities and challenges for international luxury companies who plan to enter Vietnam’s market In an effort to help luxury companies have an overview about consumers’ behavior in such market, this study examines influencing factors that affect Vietnamese consumers’ attitude towards purchasing luxury goods and their purchase intent of luxury goods Employing regression analyses, the research findings indicate that brand consciousness, materialism, and the need for uniqueness have significant impact on attitude towards purchasing luxury goods among Vietnamese consumers In addition, consumers’ purchasing intention of luxury goods is affected by their attitude towards buying luxury goods Practical and managerial implications are also further discussed

Keywords: luxury goods, attitude towards purchasing luxury goods, purchase intent

ACKNOWLEDGEMENT

ABSTRACT

TABLE OF CONTENTS

LIST OF FIGURES

LIST OF TABLES

CHAPTER 1: INTRODUCTION 1

1.1 Research background 1

1.2 Research gap 3

1.3 Research objectives 5

1.4 Research methodology and research scope 6

1.5 Research contribution 6

1.6 Research structure 7

CHAPTER 2: LITERATURE REVIEW 8

2.1 Luxury goods 8

2.2 Attitude towards purchasing luxury goods and purchase intent 9

2.3 Brand consciousness 11

2.4 Social influence 13

2.5 Materialism 15

2.6 The need for uniqueness 17

2.7 The conceptual model and hypotheses of the research 18

3.1 Sample 21

3.2 Data collection and procedure 22

3.3 Questionnaire design 25

3.4 Data analysis method 28

CHAPTER 4: DATA ANALYSIS AND RESULTS 30

4.1 Respondents’ demographics 30

4.2 Reliability Analysis 31

4.3 Exploratory Factor Analysis (EFA) 34

4.3.1 EFA for Independent variables 34

4.3.2 EFA for Dependent variables 36

4.4 Regression Analysis 37

4.4.1 Simple Regression Analysis 37

4.4.2 Multiple Regression Analysis 39

CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATIONS 47

5.1 Conclusion 47

5.2 Managerial Implications 48

5.3 Limitations and future research 52

REFERENCES 53

APPENDICES 59

Figure 2.1: A theoretical model 19

Figure 3.1: Research Process 24

Figure E1: Histogram of Attitude 68

Figure E2: Normal Plot of Attitude 68

Figure E3: Scatter Plot of Attitude 69

Table 3.1 Source of data collection 25

Table 3.2 Source of measurement scale 27

Table 4.1 Respondents’ characteristics 31

Table 4.2 Reliability test result 33

Table 4.3 KMO and Bartlett's Test of Independent Variables 34

Table 4.4 Rotated Component Matrix of Independent Variables 35

Table 4.5 KMO and Bartlett's Test of Dependent Variables 36

Table 4.6 Rotated Component Matrix of Dependent variables 37

Table 4.7 Model Summary of simple regression analysis 37

Table 4.8 ANOVA of simple regression analysis 38

Table 4.9 Coefficients of simple regression analysis 38

Table 4.10 Correlations matrix 41

Table 4.11 Model Summary of multiple regression analysis 42

Table 4.12 ANOVA of multiple regression analysis 42

Table 4.13 Coefficients of multiple regression analysis 43

Table 4.14 Summary of hypotheses testing result 46

Table D1: Total Variance Explained of Independent Variables 67

Table D2: Total Variance Explained of Dependent Variables 67

Table D3: Model Summary of multiple regression analysis 67

CHAPTER 1: INTRODUCTION 1.1 Research background

For many years, people around the world have satisfied themselves with the possession of beautiful and valuable products As a result, luxury goods have become the hot issue of many discussions and debates Today, consumers have at higher discretionary income than ever before Income has increased throughout social classes, but dramatically in the wealthiest groups (Husic & Cicic, 2009) Current consumers are willing to spend significantly more amounts of money for luxury products

Luxury products are known as the products that perceived premium quality, unique style, designed by well-known luxury brands, and limited accessibility (Hung et al., 2011) In recent years, luxury products have now become easily affordable to more consumers, especially for consumers from the middle class who make more money than ever before (Sun, 2011) and therefore luxury brands have the chance to develop and establish their brand-name worldwide Especially, the fast growth of economy in Asian countries has opened more opportunities for consumers in those countries accessing luxury products According to Zhang and Kim (2013), Asia is starting to be recognized as a growing market in luxury sales besides traditional markets such as Europe and the U.S Increasing exposure to global media and the popularization of Western lifestyles through local media seem to have increased the desire for high-quality goods and services among consumers in emerging markets (Belk, as cited in Shukla, 2012) Moreover, around 61 percent Asia-Pacific customers show their willingness of spending their hard-earned money on luxury products, higher than any other area in the world, according to the result of a survey done by Nielsen (Moodley, 2013) With regard to luxury products and services, studying the consumers‟ attitude towards luxury goods in emerging markets is particularly important due to the tremendous growth of luxury

consumption among consumers in those markets Researchers believe that the rapid increasing of new rich consumers in emerging markets is one of the determinants that makes these markets become attractive to luxury firms around the world (Shukla, 2012) China, India, Malaysia, Thailand, and Turkey are out-standing representatives of emerging markets

in terms of luxury goods consumption (Shukla, 2012) Especially, China in recent time has become one of the biggest luxury markets in Asia-Pacific region (Zhang & Kim, 2013)

Although Vietnam is not a potential market of luxury products like China is, many luxury brands determine to choose Vietnam as destination for their market expansion strategy Most of well-known luxury brands worldwide such as Mercedes Benz, Apple, particularly fashion luxury brands as Louis Vuitton, Hermes, Rolex, Calvin Klein, Christian Dior…have already announced their entry in the Vietnam‟s market There are some reasons that make Vietnam be more attractive to luxury brands According to a report of Lee (2012), Vietnam has seen rapid aurbanisation, rising new wealth and higher disposable income among population Those are significant advantages together with the perception of luxury goods as the driving factor in the “tangibalisation of success” that make Vietnam become a hot destination for the luxury market (Lee, 2012) The desire of showing success and wealth

is generally driven by a small of group of rich people, as well as younger population in Vietnam who are trying to make a social recognition through what they wear outside Hence, using luxury products will be the best way to help Vietnamese people fulfill such desire This trend has already supported by a research of Nguyen and Tambyah (2011) In their research, they argue that in Vietnam the consumption of luxury goods, brands, and symbols that are associated with status has rooted in hearts and minds of a large part of Vietnamese population, and the trend is becoming widespread (Nguyen & Tambyah, 2011) Especially, under the impact of economic integration between Vietnam and other parts of the world, many foreign luxury brands officially broaden their business to Vietnam As a result, people

can access branded products more easily than ever before Hence, luxury consumption is more and more popular particularly in big cities such as Ho Chi Minh City or Ha Noi Luxury product categories, including fashion goods, technology goods, and cars, are most loved items in Vietnam For instance, in recent years Vietnamese consumers show much concern to

a smartphone – iPhone, a product of luxury brand Apple There are many reasons for Vietnamese consumers to prefer iPhone to other kinds of smartphone According to Dam (2013), beside out-standing features of iPhone, Vietnamese people believe that using iPhone brings them the feeling of success and higher social status and being admired by others which they cannot feel when using other phones

1.2 Research gap

Purchasing luxury goods in Vietnam can be seen through some official statistic numbers of government According to a report of Ministry of Industry and Trade of The Socialist Republic of Vietnam (2013), in the first six months of 2013, the import turnover of luxury products is approximate 2.9 billion USD, increase 16.8% more than the same period, most of which are wine, tobacco, jewelry, and mobile phones Mr Matthaes – Managing director of Taylor Nelson Sofres states that the tendency towards consuming luxury items in population will be higher in next years (Matthaes, 2009) Especially, a recent survey of 29,000 people across 58 countries done by Nielsen shows that Vietnam is in top-three countries that most likely to use luxury goods with 56% of Vietnamese consumers answer that they are willing to pay more money for owning luxury products (Moodley, 2013) Moreover, Vietnam is expected to share common characteristics such as large population, rapid increase of wealthy people with higher discretionary income with China – the biggest luxury market in Asia Hence, Vietnam possesses many advantages to be an ideal destination

of international luxury brands in near future However, to be successful in Vietnamese

market, such advantages are only necessary but not sufficient conditions It requires luxury firms to do deliberately and deeply studies to find out what factors stimulate using luxury items of consumers In order to further understand the consumers‟ purchase intent of luxury products; it is helpful to know how they perceive or their attitude towards purchasing luxury products Stated differently, the key factors associated with consumers‟ attitude towards purchasing luxury goods need to be examined This way, international luxury brands can enhance their understanding and knowledge of consumer behavior towards luxury items which are critical for planning a long term strategy to win the Vietnam‟s luxury market

In the literature, a number of studies about luxury goods (Husic & Cicic, 2009; Amatulli & Guido, 2011; Kogler, 2006) have been conducted up to now However, most studies restricted themselves to identify the factors that directly affect luxury purchase intent

of consumers There is little research developed for examining the determinants of consumers‟ attitude towards purchasing luxury goods that exposes much effect on purchase behavior of consumers In addition, very few scholars do the research about this issue in Asia

- a non-traditional market of luxury products To the best of our knowledge, only the studies

of Zhang and Kim (2013), Jeon et al (2008), and Hung et al (2011) have ascertained which factors that the consumers‟ attitude towards purchasing luxury goods depends on in Asia‟s luxury market More specifically, the research‟s findings of Zhang and Kim (2013) show that brand consciousness and materialism impact significantly on consumers‟ attitude towards purchasing luxury goods in China On the other hand, the research‟s findings of Hung et al (2011) and Jeon et al (2008) have proved that social influence and the need of uniqueness respectively are also the determinants of consumers‟ attitude towards purchasing luxury goods in emerging markets and Korea‟s market Those are the markets that possess many similar traits to Vietnam‟s market Therefore, this study aims to test the influences of brand consciousness, materialism, social influence, and the need of uniqueness on consumers‟

attitude towards purchasing luxury goods in Vietnam Moreover, the motivation of this study also derives from the lack of studies in terms of luxury goods in Vietnam The reason for that scarcity is that luxury products just have got the concerns of Vietnamese people in recent years, since Vietnam moves from poor to developing country – a milestone that marks the improvement of disposal income among the population There are very few studies, for example, the research of Nguyen and Tambyah (2011) about antecedents and consequences

of status consumption in Vietnam; or Vietnamese consumers‟ perception of luxury scooter (Thuy, 2008) These studies, however, focus on other aspects of luxury goods Thus, in order

to fulfill such gap this study aims to investigate whether brand consciousness, materialism, social influence, and the need of uniqueness influence on consumers‟ attitude towards purchasing luxury goods in the context of Vietnam

1.4 Research methodology and research scope

This study uses questionnaire to collect data The survey questionnaire is originally developed in English and then translated into Vietnamese In-depth interviews are then conducted with eight people in order to modify the Vietnamese version of the questionnaire before the survey is implemented in mass The next step is analyzing the collected data The data of this research is processed using SPSS software with three main stages First, Cronbach‟s Alpha is used to test the reliability of the measurement scale Then, the validity

of the measurement scale will be checked by Exploratory Factor Analysis (EFA) Finally, simple regression and multiple regression are employed as the main method for investigating the relationships among factors in the research model

Ho Chi Minh City has been chosen to conduct the survey for this study since it is one

of the biggest cities in Vietnam and most of international brands centralize here Moreover,

Ho Chi Minh City is also one of the wealthiest cities in Vietnam, so people who live here will have higher chance to consume luxury goods, which are usually quite expensive Respondents of this study are people who live in Ho Chi Minh City and know about luxury goods

1.5 Research contribution

Based on findings in the end of this research, we hope to provide practical contributions to luxury industry, particularly to international luxury brand companies who have the intention to expand their business to Vietnam, especially enter Ho Chi Minh City market Obviously, expansion to a new market always accompanies with great opportunities

as well as considerable challenges Hence, it is essential for managers of luxury companies to find out effective strategies that can maximize opportunities and minimize obstacles This

study with deep understanding of consumers‟ intent to buy luxury goods can help the luxury firms‟ managers have a higher chance to be successful in Ho Chi Minh City market In summary, the findings of this study would be useful for luxury brand marketers who want to penetrate the business in Ho Chi Minh City and who have already developed in the market and want to maintain the loyalty of their customers

1.6 Research structure

This study is organized into five chapters It starts with the introduction chapter which presents an outline of this research This chapter includes background of the research, motivation for doing research, and research objectives Besides, the significance that this study contributes to management practice as well as scope of the research and methodology

of data analysis are also mentioned in the first chapter Chapter two reviews and synthesizes the theories in the literature of seven concepts, including luxury goods, brand consciousness, social influence, materialism, the need for uniqueness, attitude towards purchasing luxury goods, and purchase intent This chapter also describes research model and proposed hypotheses Chapter three introduces research methodology used to empirically test the research model Chapter four presents the results of data analysis The final chapter discusses summarily the study‟s core findings, suggests some recomendations for business strategy of international luxury companies based on findings and finally points out some limitations of the research

CHAPTER 2: LITERATURE REVIEW

This chapter mainly introduces the theories, which are proposed by many scholars in academic field, relate to each of factors in the model and research model of the study First, luxury goods concept is introduced to clarify specifically about luxury definition, its attributes and its symbolic values Second, the related theories of each construct, including brand consciousness, social influence, materialism, the need for uniqueness, and attitudes towards purchasing luxury goods are discussed respectively Finally, research model is proposed, simultaneously, its constructs and relationship hypothesized among these constructs are also discussed

2.1 Luxury goods

Todays, through media communications, luxury goods become more popular to consumers when there are many and many people can afford to buy a luxury product The difference between this kind of goods and other kinds of commodities is that luxury goods are often very expensive, perceived premium quality and produced with limited quantities, such as Rolex watches, Louis Vuitton handbags, Banana shirts, Gianni Versaci suits, and Lexus cars

According to Wiedmann et al (2007), the concept of luxury refers to the highest level

of prestigious brands including several physical and psychological values Luxury goods or status goods are considered as goods for which the mere use or display of a specific branded product brings prestige on the owner, separate from any functional utility (Grossman & Shapiro, as cited in Husic & Cicic, 2009) Beside, Dubois and Paternault define luxury goods are the goods that possess a list of following attributes including high quality, beauty, sensuality, exclusivity, expensive price, and uniqueness ( as cited in Berthon et al., 2009)

With the difference in definition between scholars, it proves that the concept of luxury is difficult to define The reason is that perception of luxury is much affected by social context which depends on cultural evolution (Nueno & Quelch, as cited in Amatulli & Guido, 2011) Thus, luxury concept is changeable, vary, and extremely subjective

In the world that rich people are growing rapidly and money no longer can make them different from the others, owning luxury goods will be an effective way to show one‟s wealth Luxury products possess a desirability that goes beyond their functional utility and bring to consumers a high status feeling through ownership One of the main reasons that motivates consumers to buy luxury brand items is that luxury goods help them to satisfy their material as well as socio-psychological needs better than regular goods (Vigneron & Johnson, 1999; Wiedmann et al., 2007) In addition, consumers are willing to pay lots of money for unique attributes which only can be found in luxury products including high quality, craftsmanship, recognisability, exclusivity and reputation (Zhang & Kim, 2013) Consumers‟ purchasing luxury goods also ties to a set of social aspects including displaying status, success, distinction Zhang and Kim (2013) point out that luxury has its essential role of reconstructing social stratification That is, people consider luxury goods as a key communication means to define themselves in society

2.2 Attitude towards purchasing luxury goods and purchase intent

In marketing area, attitude of customers is one of the most important indicators for marketers to achieve consumer insight The concept of attitude is understood as a general assessment of consumer about quality of a product or service after experiencing Consumers‟ attitude is the consumer„s feeling including good or bad, endorsement or preference towards product attributes, which is considered as the criteria that consumers refer to make purchasing decisions (Hanzaee & Jalalian, 2012) Stated differently, consumers‟ attitude explains how

people‟s feeling and evaluation lead to attitudes and how their attitudes form to actions and impact on their intentions to perform behaviors (Vallerand et al., 1992) According to Fishbein and Ajzen (as cited in Hanzaee & Jalalian, 2012) attitude possesses several attributes:

 Attitudes are not inbuilt; they are formed after real experiences

 Attitudes can be established through the observed stimulus factors and a sequence of repetitive behaviours

 Attitudes hold objective reference which relates to some object person, or issue In regard to this trait, they are different from motives or personality traits which reflect subjective reference

 Once established, attitudes are usually permanent and remain unchanged under regular conditions

 From operational point of view, attitudes reflects responses that relevant with a specific object situation

Attitude towards implementing a behavior is considered as an assessment of the level that a person likes or dislikes to perform the behavior (Finlay et al., 2002) The theory of reasoned action (TRA) that proposed by Fishbein and Ajzen explains the relation of intention and attitude of individual‟s behaviors (Fishbein & Ajzen, as cited in Sun et al., 2013) This theory mentions that intention of performing behavior would be affected by “Attitude” and

“Subjective Norm.” Thus, the more positive the attitude of an individual toward behavior is, the higher intention of behavior will be, vice versa (Sun et al., 2013) Hence, in the regard to consumer‟s decision-making process, it can conclude that attitude is a direct indicator that can predict the behavioral intention and actual buying behavior In many empirical studies, this positive relationship between attitude and purchase intention has been supported through

different kinds of product and service categories (Zhang & Kim, 2013) It can be inferred for the case of luxury goods When consumers‟ attitude towards purchasing luxury goods is positive, their buying intentions are also positive Thus, the following hypothesis is developed:

Hypothesis 1: Attitude towards purchasing luxury goods is positively related to

purchase intent of luxury goods

2.3 Brand consciousness

Consuming luxury brand products is considered as an effective way in enhancing identity, a sense of success and identification for consumers As Husic and Cicic (2009) argue luxury brand products are part of a new social protocol where one‟s identity and self-esteem are evaluated by the visible brands that person wears outside The importance of brand name

in consumer‟s decision making is always supported in practice Consumers often confuse price, quality and brand and use brand as a quality indicator (Husic & Cicic, 2009) When making buying decision in unclear situation, people believe that well-known brands are better than less well-known brands, thus brand name becomes one of the most exact signals that help consumers make the right purchasing decision In comparison with brand name, brand consciousness is not only an awareness or interest toward brand names According to Rausch (2002) “It is the understanding that brand names, in general, have personal relevance or value

in that they serve as a signal of functional or symbolic value” (p 55) In the literature, brand consciousness is defined as the psychological preference towards famous brand-name goods (Sproles & Kendall, as cited in Zhang & Kim, 2013) Brand-name products are endorsed to consumers by its prestige value Consumers who value prestige are willing to pay higher prices for products that they perceive as highly prestigious symbols (Deeter-Schmelz et al., 2000) A higher price can make a product seem more valuable to consumers because the price

can signalize prestige value of the product (Zhang & Kim, 2013) Consumers with high level

of brand consciousness will expect that brands symbolize their status and wealth and therefore are hunting for luxurious and famous brand-name products (Liao & Wang, 2009)

In practice, Zhang and Kim (2013) point out that brand consciousness is the most crucial variable in relation to prestige shopping With the significance of brand consciousness in consumer‟s perception, luxury producers nowadays pay more attention to enhancing the value of their brand They add a completely new dimension to their product; it is not only the unique design or high quality material that was crucial, it was the image, lifestyle and symbolic value that the brand brings to their customers

Although the product category plays a considerable role that affects purchase intention, whatever their origin and price, brand name always has a certain strength When products assocciate with a brand name they will share a symbolic meaning and a core of values expressing the feature of that brand (Nia & Zaichkowsky, 2000) Therefore, consumer‟s purchase behavior is sometimes determined by intangible values that the product brings to the owner For instance, the product of Rolex, people choose to buy a Rolex watch not only because outstanding quality but also the Rolex brand name and symbolic values it stands for: charming look, sophisticated design, and professional style Luxury items, therefore, are bought for what they symbol for, beyond what they are When consumers purchase or expose the desire to own a specific brand, it means they are showing a wish to be joined in the group of people perceived to consume that brand (Husic & Cicic, 2009) Consumers with preferences for high prestige should prefer brands that improve their own actual or desired prestigious self-image, and communicate this self-image to other individuals seen as sharing this image (Husic & Cicic, 2009) Based on above arguments, we propose the following hypothesis:

Hypothesis 2: Brand consciousness is positively related to attitude towards

purchasing luxury goods

2.4 Social influence

Social influence is not a new concept in the literature It is popular especially in psychology scientific field Social influence is understood as the way that other people influence one‟s beliefs, feelings and behaviour (Mason et al., as cited in Suki, 2013) In other words, social influence explains how actions and thoughts of a person are impacted by others

It is the result of the interacting process between people in social life More generally, other aspects of social psychology including social learning, relationship building and maintaining, attitude and imitation, group decision making, intergroup interaction, and bargaining and negotiation are considered as other forms of social influence (Mason et al., 2007) In addition, according to Chow et al (2012) social influence includes the influence of media, parents, and peers Social influence, in some researches, is assumed as a cause that leads to the individual‟s responses and attitudes toward brands selection Consumers have the tendency of purchasing products based on the values that goods bring to them and to other people in their social reference groups (Leigh & Gabel, as cited in Shukla, 2010) It is because people usually tend to make themselves associate with the current social group that they belong to Moreover, consumers‟ behaviour also depends on the pressures of social norms and the requirements of socialization process which come from family and other reference groups (Shukla, 2010) That great impact of social influence on consumers‟ purchase decision also has been proved by many researchers in academic field (Chow et al., 2012) For instance, Jamil and Wong (2010) argue that the intention to buy a brand is affected not only by consumer‟s attitude towards that brand but also by the influence of social norms and other people‟s expectations Moreover, Schiffman et al (as cited in Suki, 2013) emphasize that

although the influences of social groups, culture and subculture are not clear, they are considered as the most important determinants that are internalized and impact the way consumers value and accept the products

The level in which consumers are impacted by social influence in their attitude is determined by their susceptibility to such influence From this point of view, social influence affects the demand to identify or improve personal image in the others‟ opinion through the possession and use of products and brands, the willingness to conform to the expectations of others regarding purchase decisions, and the tendency to learn about products by observing others or seeking information from others (Bearden et al., 1989) Conceptually, this means certain products and brands are used to provide entry into certain groups It would appear that the need to identify with, or enhance one‟s image in the opinion of significant others operates closely with both status consumption and conspicuous consumption Consumers may be susceptible to social influence through observation, awareness or anticipation of decisions made by others in terms of buying luxury products Especially, when a luxury item helps it possessor be admired by other people, it will raise the motivation of luxury goods purchasing

in consumers The relationship between social influence and luxury goods purchasing has been already proved in marketing literature Many scholars such as Vigneron and Johnson (1999), Wiedmann et al (2007) mention and empirically test the effect of social influence on consumers‟ luxury brand purchase intention in their studies According to Tsai, the motivation of owning luxury brands of socially oriented consumers is aim to display their status and success to their targeted social groups (as cited in Hung et al., 2011) With above arguments, the following hypothesis is proposed:

Hypothesis 3: Social influence is positively related to attitude towards purchasing

luxury goods

2.5 Materialism

Belk defines materialism as „„the importance a consumer attaches to worldly possessions‟‟ (1985, p 265) and considers it as a group of related traits, attitudes, and values that focus on possessions as well as a guide that affects one‟s choice of goods and events (Zhang & Kim, 2013) Richins and Dawson (1992, p 307) define materialism as „„the importance a person places on possessions and their acquisition as a necessary or desirable form of conduct to reach desired end states, including happiness.‟‟ Materialism is also considered as „„a set of attitudes which regard possessions as symbols of success, where possessions occupy a central part of life, which include holding the belief that more possessions lead to more happiness‟‟ (Chan & Prendergast, 2007, p 214) In his study, Belk (1985) also argues such possessions are placed in the central of a person‟s life and are assumed as the source that causes satisfaction and dissatisfaction

Goldsmith et al (2012) argue that the rapid development of media and by other socialization process on buying, owning, and possessing materials goods, is the main motivation lead to materialism Moreover, due to the effect of a globalized consumption trend that is the result of international companies‟ global marketing efforts, people all over the world are increasingly showing their concern to material lifestyle and valuing luxury brands that best symbolize their wealth (Solomon, as cited in Jeon et al., 2008) Self-identity theory shows that the possession of material goods as a practical way to build and present one‟s identities (Goldsmith et al., 2012) Previous scholars emphasize that materialists are self-centered, self-indulgent, and considered possessions of luxury products and money as indicators of happiness and success (Zhang & Kim, 2013; Richins & Dawson, 1992) Beside, Fournier and Richins report that status display and self-identity are two important motivations for material-oriented people in order to show their desire towards status-oriented possessions

(as cited in Jeon et al., 2008) Materialists are believed that they put more concerns to their possession and acquisition than most other things in life (Richins & Dawson, 1992) They also express a strong tendency to judge people by the number and value of their material goods It is proved that highly materialistic individuals concern more to external cues, preferring those possessions that are shown in public places (Zhang & Kim, 2013) Furthermore, materialistic consumers believe that material possession is an effective way of communication to show others the type of people they think they are (Belk, 1985) Researchers recognize that materialism is quite popular personality among consumers all over the world (Belk et al., as cited in Shukla, 2012) Wong and Ahuvia (as cited in Jeon et al., 2008) in their study, they realize that consumers in Asian express more concerns to the meaning of luxury consumption than consumers in Western Especially, in some emerging markets as China, Thailand, where people are affected strongly by collectivism style, materialism has a big impact on brand choice of consumers More specifically, Sharma assumes that materialistic consumers in emerging markets place more emphasis on luxury goods because they believe using luxury brands may help them achieve a greater social status (as cited in Shukla, 2012) The fast growing need for possessions leads to highly appreciating the role of materialism in consumers; as a result, consumption of luxury goods rises relevantly (Liao & Wang, 2009) Based on discussion about materialism of previous researches, this study explores whether materialism positively influences attitude towards buying luxury items:

Hypothesis 4: Materialism is positively related to attitude towards purchasing luxury

goods

2.6 The need for uniqueness

According to Shukla (2012) consumer consumption is much influenced by the need for uniqueness The impact of need for uniqueness on consumer behavior is supported in many academic studies Ruvio (2008) states that people react emotionally and behaviorally in order to increase a certain level of uniqueness when they want to be different Using material possessions is a mean for individuals to avoid similarity and to express their uniqueness without encountering extreme social reactions for being different from social norms (Snyder,

as cited in Ruvio, 2008) Such desire can be achieved through possession of distinguishing or personalized labels, special items, or unique products With regard to consumer buying behavior, Tian et al (2001, p 52) define the need for uniqueness as “the trait of pursuing differentness relative to others through the acquisition, utilization, and disposition of consumer goods for the purpose of developing and enhancing one‟s self-image and social image” They emphasize that the higher level of uniqueness a product possesses, the more valuable such product is perceived (Shukla, 2012) Hence, such product can much improve

an individual‟s position in the social hierarchy Consumers seek to differentiate themselves from others and perfect their social image through utilizing the symbolic meanings of the products they buy, hence they concern much about product categories, brands, designs, and styles aim to satisfy the needs for uniqueness (Jeon et al., 2008) There are some reasons that explain why using luxury products can help consumers fulfill their needs of uniqueness For one thing, uniqueness is an attribute of luxury products Thus, acquisition of luxury goods can express the purpose of the owners is differentiating themselves from others and enhancing their personal identity Stated differently, consumers who want to emphasize their personal identity love to purchase luxury items That is also the motivation for most of luxury brands in the world trying to enhance the brands by promising customers the scarcity value of their products because many people perceive that luxury products are not easily possessed by

many people (Dubois and Paternaut, as cited in Tovikkai, 2010) Luxury brands‟ scarcity value helps possessors to make themselves different from others due to individuals who embrace high level of uniqueness are more likely to possess something which is perceived to

be quite rare (Jeon et al., 2008) As a result, luxury brands attempt to preserve their relative scarcity value through preventing inter-diffusion, which makes them different from non-luxury brands For example, Christian Louboutin is highly associated with unique shoe designs (red sole) and Levis with unique design of pants pocket This uniqueness aspect is an important criterion in the luxury goods market that create strong attraction of luxury products

to consumers Dubois and Paternault through their study, conclude that consumers‟ desires towards luxury products are positively influenced by awareness and negatively influenced by diffusion (as cited in Jeon et al., 2008) It is obviously that luxury brands in the global marketplace are managed in the way that their prestige values are authorized but just be possessed by few people (Jeon et al., 2008) This way, consumers‟ needs for uniqueness can

be fulfilled by purchasing luxury products, which present scarcity value Based on previous research, the following hypothesis is given:

Hypothesis 5: The need for uniqueness is positively related to attitude towards

purchasing luxury goods

Based on the review of some related literature and hypotheses developed, the following model is proposed (see Figure 2.1)

2.7 The conceptual model and hypotheses of the research

The conceptual framework is presented in Figure 2.1 and consisting of five hypotheses from H1 to H5, in there, the group factors correspond with H2 to H5 are independent and quantitative variables, they affect directly on attitude towards purchasing

luxury goods, a dependent variable Its turn, attitude towards purchasing luxury goods will be considered as the influent factor of purchase intent of luxury goods This relationship is mentioned in the first hypothesis (H1)

Figure 2.1: A theoretical model

There are total five hypotheses developed for this research:

H1: Attitude towards purchasing luxury goods is positively related to purchase intent of luxury goods

H2: Brand consciousness is positively related to attitude towards purchasing luxury goods H3: Social influence is positively related to attitude towards purchasing luxury goods

H4: Materialism is positively related to attitude towards purchasing luxury goods

H5: The need for uniqueness is positively related to attitude towards purchasing luxury

Purchase intent

of luxury goods

H2H3H4H5

H1

In summary, this chapter presents theoretical background of each concept in the model Based on discussion of literature review, attitude towards purchasing luxury goods is affected by four factors, these are: brand consciousness, social influence, materialism, and the need for uniqueness Then, the influence of attitude towards purchasing luxury goods on purchase intent of consumers is also considered Such factors are selected to build the model because their relationship has already tested by many previous scholars through their studies Hence, there are five hypotheses proposed for this research The next chapter will discuss about methodology that used to analyze the data and test hypotheses of the research model

CHAPTER 3: RESEARCH METHODOLOGY

This chapter presents a detailed account of a research methodology of this study First, it starts with sample description, followed by data collection method and research process Then, measurement scales are presented to develop questionnaire After that, in-depth interview is conducted to help measurement scales clearer and understandable Beside, this chapter also aims at explicating the research approach choice and presenting the purposes

of using that method

3.1 Sample

The survey was conducted in Ho Chi Minh city The sample was selected using a nonprobability sampling technique – convenience sample Target respondents of this survey were people who live in Ho Chi Minh City, especially young people with high income Moreover, it was necessary for respondents to know about luxury products to join the survey

About sample size, the size of the sample was necessarily big enough to guarantee statistical significance Hair et al (2009) stated that the minimum sample for appropriate use for statistical analysis is equal to or greater than five times of number of variables, but not less than 100

n >= 100 and n >= 5k ( k: number of variables)

The model in this study consisted six factors with twenty – three variables so that the necessary sample size should be: 23*5=115 observations

For Exploratory Factor Analysis, a general rule is that the minimum sample size is to have at least five times as many observations as the number of variables to be analyzed and

larger than 100 (Hair et al., 2009) Thus, the minimum sample size required by EFA in this research is: n=5*23= 115 observations

For standard multiple regression analysis, Nunnally & Burnstein (as cited in Nguyen, 2011) emphasized that the sample size must satisfy:

n > 50 + 8m ( m: number of independent variables)

There were four independent variables in this research Therefore, the minimum sample required to run multiple regression in this study should be: n > 50 + 8 * 4= 82 observations

Summarily, with 23 variables and 4 independent variables, this research needed 115 observations at least for running EFA and regression

3.2 Data collection and procedure

Collecting data process of this study was conducted in Ho Chi Minh City The current study consisted mainly of two stages, a qualitative phase followed by a quantitative phase The survey questionnaire was originally designed in English and then translated into Vietnamese by the researcher with the support of some English experts Concerning to the qualitative phase, the Vietnamese version of the survey questionnaire was pre-tested using in-depth interviews during two weeks with eight people who were colleagues of the researcher

to check whether they understood clearly about the scale or not The in-depth interview helped ensure that the final questions would be well understood by respondents and valuable

in measuring observed variables before launching the main survey The procedure of conducting in-depth interviews started with specifying the objectives of the research in terms

of what information was needed to be collected Then the detailed questionnaire was shown

to the interviewees for checking their understanding During the interview, the author also wanted to find out if the chosen measurement scale was suitable for conducting the research

in Viet Nam All the comments from the interviewees was gathered with the aim to modify the measurement scale

Based on the feedback of respondents, the survey questionnaire was slightly modified

to make it clearer and more understandable (see Appendix A)

After the questionnaire was modified, the survey was conducted in mass The processes of the quantitative research were taken as following: (see Figure 3.1)

Survey was utilized to collect data for testing the research‟s hypotheses Participants self-completed a survey with most of items were measured by five-point Likert scale, anchor points including “strongly disagree” ( = 1), “disagree” ( = 2), “neutral” ( = 3), “agree” ( = 4), and “strongly agree” ( =5) The questionnaire was mainly delivered to respondents in online version via the internet using Google Survey However in some convenient cases, paper version was used to collect data by directly disseminating to informants Respondents received questionnaire‟s link through email and they had two weeks to complete the questionnaire One week after the initial invitation a reminder email was sent to encourage respondents to participate as well as thank them if they did already Data collection was conducted both on week and weekend days during one month

Figure 3.1: Research Process

As mentioned above, the minimum sample size needed for data analysis was 115, hence, for the survey, 400 questionnaires were distributed directly by paper and indirectly via Google survey to respondents Specifically, 250 questionnaires were sent via email to the students of International School of Business and the rest of 150 paper questionnaires were delivered to the employees of Newviet Dairy Company, Novartis Company and some friends

(Examine reliability and validity of measurement

scale)

Multiple & Simple Regression Analysis

of the researcher After the data collection, total 323 responses were collected, the response rate was approximate 81 percent

Table 3.1 Source of data collection

3.3 Questionnaire design

The questionnaire was divided into three sections The first section explored respondents‟ knowledge regard to luxury products This section included a consent form and screening questions to identify exactly the target audience of this survey The consent form clarified in detail the participants‟ privacy protection commitment, estimated duration of response, significance of the participation, and the intention and importance of the survey Screening question was the following question: “Do you know luxury products?” The respondents would answer the screening question before started doing the survey If anyone answered “No” it meant that they were not the target respondents of this survey and they would stop their job Beside, because “luxury” was an abstract concept and may be different

people had different awareness about it Hence, to make sure all respondents had the same understanding of luxury goods, a definition of luxury was provided at the first part of the questionnaire Beside, some products of the most popular luxury brand-names in Vietnam were also mentioned as examples to help interviewees easily imagined what luxury products were Mercedes Benz car, Louis Vuitton bag, iPhone, and MacBook laptop of Apple, Channel perfume, Rolex watch, and Adidas sport-shoes were specific products that used for illustration

The second section explored informants‟ attitude regarding to luxury goods purchasing

All the variables in the model were measured with multiple items, which were developed by other researchers, to adequately capture the domain of the constructs Specifically, brand consciousness was measured by four items of Zhang and Kim (2013); materialism was measured by five items of Shukla (2012); four items that developed by Hung et al., (2011) were used to measure social influence; the need for uniqueness was measured by four items

of Shukla (2012); attitude towards purchasing luxury goods was measured by three items of Dubois and Laurent (1994); and finally, purchase intent of luxury goods was measured by three items that was developed by Hung et al., (2011) To avoid response bias, all concepts‟ names were eliminated from the questionnaire; total 23 questions were presented continuously in one table

The third section included demographics information such as gender, age, and annual total income of the respondents Such information was used to classify and compare groups

of respondents Table 3.2 summarized the reference sources of measurement scale used for each factors:

Table 3.2 Source of measurement scale

1 Brand consciousness

Zhang & Kim, (2013)

The more expensive brands are usually my choice

The higher the price of a product, the better its

quality

I am willing to pay higher prices for famous brands

I prefer to buy foreign brands than local brands

2 Social influence

Hung et al., (2011)

Before purchasing a luxury branded products, it is

important to know what brands will make good

impression on others

Before purchasing a luxury branded products, it is

important to know what others think of people who

use certain brands

I would buy luxury products if they can help me fit

in with my social group better

I actively avoid using luxury branded products that

are not in style

3 Materialism

Shukla, (2012)

I admire people who own expensive homes, cars,

and clothes

I like to own things that impress people

Purchasing luxury goods increases my happiness

It is important to me to own really nice luxury

I often buy luxury goods in such a way that I create

a personal image that cannot be duplicated

I like to own new luxury goods before others do

When a luxury product becomes popular among

others, I avoid buying or using it

I collect unusual products as a way of telling people

I‟m different

5 Attitude towards purchasing luxury goods

Dubois & Laurent, (1994)

One buys luxury goods primarily for one‟s pleasure

The luxury products we buy reveal a little bit of

who we are

People who buy those products try to differentiate

themselves from others

6 Purchase intent of luxury goods

Hung et al., (2011)

I have high intention to purchase luxury products

I have strong possibility to purchase luxury

products

I‟m likely to purchase luxury products

Finally, the completed questionnaire in English version and Vietnamese version were presented in Appendices B and C

3.4 Data analysis method

The collected data was processed by SPSS software version 18 using enter method Various statistical tests were extracted using SPSS First, the validity and reliability of the scale instrument were checked in the current study using Cronbach‟s Alpha analysis and Exploratory Factor Analysis (EFA) The items which were not satisfied the conditions of reliability and validity would be deleted before running regression After that, the influence

of attitude towards purchasing luxury goods on purchase intent of consumers would be evaluated by simple regression Finally, multiple regression was used to identify the correlation and measure the impact level of each independent variable to attitude towards purchasing luxury goods

In summary, this chapter described the choice of sample size, measurement scale construction, and research method employed to process the collected data A paper-based questionnaire was developed for data collection; it was distributed directly and email to respondents.This study was designed into two phases: first was qualitative phase (in-depth interview), second was quantitative phase (main survey) The in-depth interview was conducted to modify the measurement scale After the qualitative phase, the questionnaire was adjusted slightly before the official survey Main survey had sample size which included total 204 valid questionnaires that were used for data analysis with regression method The next chapter will present data analysis results of main survey

CHAPTER 4: DATA ANALYSIS AND RESULTS

Chapter 3 presented research methodology to examine scale validation and analyze the collected data In chapter 4, results of study would be shown and analyzed with sample n=204 First, respondents‟ demographics were analyzed by using the SPSS – Statistical software package Secondly, results of scale validation were presented In this section, the data of this research was evaluated through two steps Step 1 used Cronbach‟s Alpha and Exploratory Factor Analysis (EFA) to examine reliability and validity of the scale measurement In step 2, researcher employed simple regression to test the first proposed hypothesis and multiple regression to test the remain four hypotheses Finally, results of hypotheses testing were discussed

4.1 Respondents’ demographics

The collected data were analyzed using the SPSS – Statistical software package This part aimed to provide the general information of respondents The results of the demographics analysis were summarized in table 4.1 Initial analysis of data indicated that gender was not equally between female and male Female was dominant with 61.76% of respondents and male only seized 38.24% of respondents More than half of the respondents who took part in this study were young people from 24 to 30 years old with 54.9% of total sample Age ranged from 19 to 50 years old, with 9.8% respondents were between 19 and 23 years old, 31.86% people were from 31 to 40 years old, 3.43% of the respondents from 41 to

50 years old, and no one was older than 50 years old Income per month representation was divided into four groups Income per month of most of respondents was rather high, fluctuated between 8 million VND and more than 11 million VND Specifically, 38.73% respondents revealed that their income ranged from 8 to 11 million VND, 32.35% people earned more than 11 million VND every month There were about 26.96% respondents‟