Abstract
Today, the term luxury has become ubiquitous. To attain aspirational attributes, products not traditionally perceived as luxurious are associating themselves with luxury, which confuses its meaning. The term is also lost when luxury brand managers are pressured between choosing to increase sales by reaching a wider range of customers where they lose sight of luxury’s unique values and opting to guard their brands by adhering to its exclusivity and selectivity. This article explores the pitfalls that luxury companies face in today’s competitive luxury market and how counteracting strategies may lead to the commoditisation of luxury brands. These may result in the loss of luxury brands’ positioning and differentiation in the market. Recommendations to luxury goods companies are offered, presenting different tactics to avoid negative consequences of luxury brand commoditisation and methods to manoeuvre well in business environments where industries are inevitably turning brands into commodities.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Ang, S. H. (2000). The influence of physical, beneficial and image properties on response to parallel imports. International Marketing Review, 17, 509–524.
Belk, R. W. (1988). Possessions and the extended self. Journal of Consumer Research, 15, 139–168.
Berger, J., & Ward, M. (2010). Subtle signals of inconspicuous consumption. Journal of Consumer Research, 37, 555–569.
Berthon, P., Pitt, L., Parent, M., & Berthon, J.-P. (2009). Aesthetics and ephemerality: Observing and preserving the luxury brand. California Management Review, 52, 45–66.
Bloch, P. H., Bush, R. F., & Campbell, L. (1993). Consumer “accomplices” in product counterfeiting: A demand side investigation. Journal of Consumer Marketing, 10, 27–36.
Bourdieu, P. (1986). The forms of capital. In J. G. Richardson (Ed.), Handbook of theory and research for the sociology of education (pp. 241–258). London: Greenwood.
Bruce, M., & Kratz, C. (2007). Competitive marketing strategies of luxury fashion companies. In Bruce T. H. a. M. (Ed.), Fashion marketing: Contemporary issues (2nd edn.). The Netherlands: Elsevier.
Catry, B. (2003). The great pretenders: The magic of luxury goods. Business Strategy Review, 14, 10–17.
Danzinger, P. (2005). Let them eat cake: Marketing luxury to the masses-as well as the classes. Chicago: Kaplan Publishing.
Dion, D., & Arnould, E. (2011). Retail luxury strategy: Assembling charisma through art and magic. Journal of Retailing, 87, 502–520.
Dubois, B., & Laurent, G. (1994). Attitudes toward the concept of luxury: An exploratory analysis. Asia Pacific Advances in Consumer Research, 1, 273–278.
Eagle, L., Kitchen, P. J., Rose, L., & Moyle, B. (2003). Brand equity and brand vulnerability: The impact of gray marketing/parallel importing on brand equity and values. European Journal of Marketing, 37, 1332–1349.
Eastman, J. K., Goldsmith, R. E., & Flynn, L. R. (1999). Status consumption in consumer behaviour: Scale development and validation. Journal of Marketing Theory and Practice 7, 41–52.
Fiske, N., & Silverstein, M. (2002). Trading up: The new luxury and why we need it. Boston Consulting Group. http://www.bcg.com/documents/file13925.pdf. Accessed 13 Sep 2013.
Granot, E., Russell, L. T. M., & Brashear-Alejandro T. G. (2013). Populence: Exploring luxury for the masses. Journal of Marketing Theory and Practive, 21, 31–44.
Han, J.-M., Suk, H.-J., & Chung, K.-W. (2008). The influence of logo exposure in purchasing counterfeit luxury goods: focusing on consumer values. DMI Conference, 14–15.
Han, Y. J., Nunes, J. C., & Dreze, X. (2010). Signaling status with luxury goods: The role of brand prominence. Journal of Marketing, 74, 15–30.
Hauck, W. E., & Stanforth, N. (2007). Cohort perception of luxury goods and services. Journal of Fashion Marketing and Management, 11, 175–188.
Hieke, S. (2010). Effects of counterfeits on the image of luxury brands: An empirical study from the customer perspective. Brand Management, 18, 159–173.
Hilton, B., Choi, C. J., & Chen, S. (2004). The ethics of counterfeiting in the fashion industry: Quality, credence and profit issues. Journal of Business Ethics, 55, 345–354.
Hines, T. (2007). Supply chain strategies, structures and relationships. In M. Bruce & C. Kratz (Eds.), Fashion marketing: Contemporary issues (2nd ed.). The Netherlands: Elsevier Ltd.
Hines, T., & Bruce, M. (2007). Competitve marketing strategies of luxury fashion companies. In M. Bruce & C. Kratz (Eds.), Fashion marketing: Contemporary issues (2nd ed.). The Netherlands: Elsevier Ltd.
Husic, M., & Cicic, M. (2009). Luxury consumption factors. Journal of Fashion Marketing and Management, 13, 231–245.
International Anti Counterfeiting Coalition. (2013). Facts on fakes. http://www.iacc.org/news-media-resources/media-kit.php. Accessed 5 April 2013.
Jackson, T. (2007). The process of trend development leading to a fashion season. In Bruce T. H. a. M. (Ed.), Fashion marketing: Contemporary issues (2nd edn.). The Netherlands: Elsevier.
Jiang, L., & Cova, V. (2012). Love for luxury, preference for counterfeits–A qualitative study in counterfeit luxury consumption in china. International Journal of Marketing Studies 4.
Kapferer, J.-N. (1997). Managing luxury brands. Journal of Brand Management, 4, 251–260.
Kapferer, J.-N., & Bastien, V. (2009). The specificity of luxury management: Turning marketing upside down. Brand Management, 16, 311–322.
Kim, J.-E., Jeong Cho, H., & Johnson, K. K. P. (2009). Influence of moral affect, judgment, and intensity on decision making concerning counterfeit, gray-market, and imitation products. Clothing and Textiles Research Journal, 27, 211–226.
Lai, K. K.-Y., & Zaichkowsky, J. L. (1999). Brand imitation: Do the chinese have different views? Asia Pacific Journal of Management, 16, 179–192.
Leibenstein, H. (1950). Bandwagon, snob, and veblen effects in the theory of consumers’ demand. The Quarterly Journal of Economics, 64, 183–207.
Lichtenstein, D. R., Ridgway, N. M., & Netemeyer, R. G. (1993). Price perceptions and consumer shopping behavior: A field study. Journal of Marketing Research, 30, 234–245.
Manlow, V., & Nobbs, K. (2013). Form and function of luxury flagships: An international exploratory study of the meaning of the flagship store for managers and customers. Journal of Fashion Marketing and Management, 17, 49–64.
Marketline Advantage. (2013). Europe-Apparel, accessories and luxury goods. http://advantage.marketline.com. Accessed 5 April 2013.
McAfee, A., Dessain, V., & Sjoeman, A. (2004). Zara: IT for fast fashion. Boston: Harvard Business School Publishing.
Morgan, L. R., & Birtwistle, G. (2009). An investigation of young fashion consumers’ disposal habits. International Journal of Consumer Studies, 33, 190–198.
Nia, A., & Zaichkowsky, J. L. (2000). Do counterfeits devalue the ownership of luxury brands? The Journal of Product and Brand Management, 9, 485–497.
Nill, A., & Shultz, C. J. (1996). The scourge of global counterfeiting. Business Horizons, 39, 37–42.
Nueno, J. L., & Quelch, J. A. (1998). The mass marketing of luxury. Business Horizons, 41, 61–68.
O’Cass, A., & McEwen, H. (2004). Exploring consumer status and conspicuous consumption. Journal of Consumer Behaviour, 4, 25–39.
Pelham, A. M. (1997). Market orientation and performance: The moderating effects of product and customer differentiation. Journal of Business and Industrial Marketing, 12, 276–296.
Penz, E., & Stottinger, B. (2008a). Corporate image and corporate similarity-assessing major demand drivers for counterfeits in a multi-country study. Psychology and Marketing, 25, 352–381.
Penz, E., & Stottinger, B. (2008b). Original brands and counterfeit brands-do they have anything in common? Journal of Consumer Behaviour, 7, 146–163.
Perez, M. E., Castano, R., & Quintanilla, C. (2010). Constructing identity through the consumption of counterfeit luxury goods. Qualitative Market Research: An International Journal, 13, 219–235.
Phau, I., & Cheong, E. (2009). How young adult consumers evaluate diffusion brands: Effects of brand loyalty and status consumption. Journal of International Consumer Marketing, 21, 109–123.
Phau, I., Sequeira, M., & Dix, S. (2009). To buy or not to buy a “counterfeit” Ralph Lauren polo shirt: The role of lawfulness and legality toward purchasing counterfeits. Asia Pacific Journal of Business Administration, 1, 68–80.
Prahalad, C. K., & Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of Interactive Marketing, 18, 5–14.
Radon, A. (2012). Luxury brand exclusivity strategies-An illustration of a cultural collaboration. Journal of Business Administration Research, 1, 106–110.
Reddy, M., Terblanche, N., Pitt, L., & Parent, M. (2008). How far can luxury brands travel? Avoiding the pitfalls of luxury brand extension. Business Horizons, 52, 187–197.
Reimann, M., Schilke, O., & Thomas, J. S. (2010). Toward an understanding of industry commoditization: Its nature and role in evolving marketing competition. International Journal of Research in Marketing, 27, 188–197.
Reyneke, M., Sorokacova, A., & Pitt, L. (2012). Managing brands in times of economic downturn: How do luxury brands fare? Journal of Brand Management, 19, 457–466.
Riot, E., Chamaret, C., & Riguad, E. (2013). Murakami on the bag: Lous Vuitton’s decommoditization strategy. International Journal of Retail and Distribution Management, 41, 8.
Shapiro, B. P. (1987). Specialties vs. commodities: The battle for profit margins. Working Paper No. 587–120. Harvard Business School.
Stewart, M. L. (2005). Copying and Copyrighting Haute Couture: Democratizing Fashion, 1900-1930s. French Historical Studies, 28, 103–130.
Trinh, V.-D., & Phau, I. (2012). The overlooked component in the consumption of counterfeit luxury brands studies: Materialism-a literature review. Contemporary Management Research, 8, 251–263.
Truong, Y., & McColl, R. (2011). Intrinsic motivations, self-esteem, and luxury goods consumption. Journal of Retailing and Consumer Services, 18, 555–561.
Truong, Y., McColl, R., & Kitchen, P. J. (2009). New luxury brands positioning and the emergence of masstige brands. Brand Management, 16, 373–382.
Turunem, L. L. M., & Laaksonen, P. (2011). Diffusing the boundaries between luxury and counterfeits. Journal of Product and Brand Management, 20, 468–474.
Twitchell, J. B. (2002). Living it up: Our love affair with luxury. New York: Columbia University Press.
Tynan, C., McKecknie, S., & Chhuon, C. (2010). Co-creating value for luxury brands. Journal of Business Research, 63, 1156–1163.
Veblen, T. (1899). The theory of the leisure class. New York: Penguin.
Vigneron, F., & Johnson, L. W. (1999). A review and a conceptual framework of prestige-seeking consumer behavior. Academy of Marketing Science Review, 1, 1–15.
Vigneron, F., & Johnson, L. W. (2004). Measuring perceptions of brand luxury. Journal of Brand Management, 11, 484–506.
Wilcox, K., Kim, H. M., & Sen, S. (2009). Why do consumers buy counterfeit luxury brands? Journal of Marketing Research, 46, 247–259.
Willems, K., Janssens, W., Winnen, G., Brengman, M., Streukens, S., & Vancauteren, M. (2012). From armani to zara: Impression formation based on fashion store patronage. Journal of Business Research, 65, 1487–1494.
Wilson, J. A. J., Eckhardt, G. M., & Belk, R. W. (2012). The rise of inconspicuous consumption. http://thinkethnic.com/wp-content/uploads/2012/02/the-rise-of-inconspicuous%20consumption-wilson-eckhardt-belk.pdf. Accessed 5 Oct 2013.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2014 Springer Fachmedien Wiesbaden
About this chapter
Cite this chapter
Makkar, M., Gaur, S., Yap, SF. (2014). The Commoditization of Luxury. In: Enke, M., Geigenmüller, A., Leischnig, A. (eds) Commodity Marketing. Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-02925-8_25
Download citation
DOI: https://doi.org/10.1007/978-3-658-02925-8_25
Published:
Publisher Name: Springer Gabler, Wiesbaden
Print ISBN: 978-3-658-02924-1
Online ISBN: 978-3-658-02925-8
eBook Packages: Business and Economics (German Language)