ACU (Australian Catholic University)


Issue 9, Winter 2013

In the name of luxury

Name of luxury

Valued at $252.68 billion, the luxury goods industry is one of the fastest growing in the consumer market. But what makes a $5000 handbag better than a $50 one? Caitlin Ganter spoke to honours student Paris Touma about luxury consumer behaviour.

For some the label is everything. Designer brands often set the trend, but with easy access to counterfeit replicas, why do so many pay for the real thing? 

The high price of a designer label was once justified with the promise of quality and hand craftsmanship, however, nowdays it seems the reasons lie elsewhere.

ACU Bachelor of Marketing honours student Paris Touma has conducted a research project to understand Australian luxury consumption behaviour and the concept of symbolic meaning within the luxury market.

“I have always been interested in consumer behavior and how components of marketing influence consumer consumption in the marketplace, particularly the Australian marketplace,” she said.

“As a young girl I always admired luxury brands and the people who would wear them, but coming into age and realising how expensive some branded luxury goods are, I could never fathom why they would want to spend so much money on some of it. 

“So in essence, this is what my research considered: ‘why do consumers purchase luxury goods?’.”

Paris’s study focuses on one luxury segment in particularly, Louis Vuitton handbags, which can come with price tags over $4500. 

Louis Vuitton founded the prestigious French fashion house now known as Moët Hennessy- Louis Vuitton in 1854. One of the world’s leading international brands, the Louis Vuitton range of luxury products includes handbags, luggage, small leather goods, accessories, shoes, stationery, timepieces and jewellery.

Louis Vuitton was been named the world’s most valuable luxury brand for six consecutive years and its 2012 valuation was US$25.9 billion (A$26.5).

“In the attempt to deepen the understanding of Australian luxury consumption behaviour, my thesis was grounded in theories of consumer behaviour and luxury consumption,” Ms Touma said.

“Using an extended version of the Meaning Transfer Model, the thesis explored the types of symbolic meaning derived from luxury goods post-purchase, and consumer post-purchase justification in light of both high purchase price and the presence of counterfeit replicas in the marketplace.”

The Meaning Transfer Model maps the transfer of meaning from the culturally constituted world to goods and then to individuals. Essentially, it helps understand how meaning is created and mediated  through consumption for consumers.

“This study carried out in-depth interviews with Australian luxury goods consumers of only Louis Vuitton handbags. This was because the title ‘luxury’ lends itself to a broad range of goods and services which are dependent on individual interpretation.

“For some, the term luxury can relate to a Foxtel subscription, for others, a limited edition [item from] Hermès. In the attempt to focus my thesis, the study centred on Louis Vuitton handbags as an example of a luxury good, ensuring that all findings can be applied to the luxury industry as a whole.”

Despite a substantial amount of literature on luxury goods consumption in the American and Asian markets Ms Touma said there was little Australian research on the consumption behaviour of Australians in the purchase and display of luxury goods.

“I focused on the Australian luxury market as it is a key market within this global industry.

“Australian consumers spend a total of $9 billion per annum on the purchase of genuine luxury goods. This includes $2.61 billion on designer clothing, $2.34 billion on designer footwear and $1.44 billion on beauty products. More relevant to this study is $1.62 billion worth of consumer spending on designer luggage and handbags. 

“In 2011, Australian sales contributed a total of $2.79 billion to Moët Hennessy-Louis Vuitton’s global revenue and the largest contribution came from the fashion and leather goods sector.

“As Australians continue to demand and spend a considerable proportion of their disposable income on international luxury brands it is vital to deepen the understanding available on this marketplace.

“I believe that it is imperative for luxury researchers and marketers to recognise and understand why consumers purchase luxury goods, how consumer perceptions of luxury influence their luxury consumption behaviour, and how such consumption behaviour varies internationally. As a result, beneficiaries of this research include stakeholders such as consumers and retailers, both locally and internationally.”

Ms Touma conducted 16 in-depth interviews with people who had recently purchased a Louis Vuitton handbag. The results of her research indicated that symbolism was influencing people’s decisions to buy.

“The results of this study support the argument that symbolic meaning influences the purchasing patterns of consumers, identifiable through seven primary types of symbolic meaning derived post-purchase by Australian luxury goods consumers. The identifiable types of symbolic meaning derived by interview participants were brand heritage, confidence, fashion, memento, sense of achievement, status and wealth. 

“It is the types of symbolic meaning that consumers derive from their luxury purchase that make the good worth the additional money for the consumer.

“For most consumers what they possess aids as a method of communication. Such possessions assist in creating and managing outward impressions of who they are, and more than ever before, consumers today are attempting to assimilate such goods into their ideal state of being, transforming the conditions of their lives by transforming their consumption behaviour.

“This study recognises that consumers actively seek symbolism in their consumption of goods, helping to construct meaningfulness in everyday consumption. It is the symbolic meaning represented in a branded good that entices these consumers and satisfies their interpersonal goals.

“It was also clear from the in-depth interviews that when considering their genuine luxury purchase, consumers were able to justify both high purchase prices and the presence of counterfeit replicas in the marketplace.

“Participants believed that counterfeit replicas are a part of life, and the majority of participants understood the presence of counterfeit replicas was a direct result of the genuine luxury industry and its high purchase prices. Some participants even expressed praise for the existence of counterfeit replicas.

“Participants were also more inclined to choose their handbag’s design and style, bearing in mind the designs and styles they believed to be highly counterfeited. This was done to reduce any possible post-purchase dissonance relating to the presence of counterfeit replicas. And lastly, as careful decision-makers, participants also claimed that they could recognise a counterfeit replica when out and about, believing that counterfeits are always distinguishable from the genuine good."

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