Consumer Purchase Intentions Towards Luxury Brands: Cases of Russia and Norway

Abstract

The study of consumers purchase intention is one of the key research topics in marketing over the past twenty years. The increased competition and low growth rates of different markets make it critical for the companies to better understand their clients in order to achieve long-term success. The huge amount of papers are dedicated to the investigation of different factors of the consumers purchase intention, however, a lot of markets (both product and geographical) are not studied well. At the same time the importance of analyzing the factors of consumer purchase intentions in a cross-cultural context is continuously increasing, based on the needs of multinational companies. The goal of the research is to develop a model of the consumer purchase intentions towards luxury brands on the basis of the international empirical research of young female consumers. On the basis of the research goal seven objectives are defined: 1) to define what luxury products are; 2) to identify the current trends of the luxury market development in the world; 3) to determine the current approaches to the definition of the consumers purchase intentions in different markets; 4) to define the factors of the consumers purchase intention towards luxury brands products; 5) to develop the model of the consumers purchase intention towards luxury brand products; 6) to verify the developed model on the basis of empirical research of Russian and Norwegian young female consumers’ purchase intentions towards luxury brand handbags; 7) to identify the common features and differences in purchase intention towards luxury brand handbags among young female Russian and Norwegian consumers. Comprehension of the factors that have the most significant influence on the consumer purchase intentions towards luxury products in Russia and Norway will allow companies to develop more targeted marketing strategies. Within the framework of the research, a conceptual model of consumer purchase intentions towards luxury brand products was developed. The model includes eight factors: Need for uniqueness, Materialism, Conspicuous Value, Status Value, Social Comparison, Normative Influence, Functional Value, and Experiential Value. The proposed model has been tested in the empirical study, a sample of which constituted young women (18-30 years old) from Russia, which is an example of a developing economy, and Norway, studied as an example of a developed economy.The results of the carried out research showed that the proposed model is significant for both Russian and Norwegian markets, and really consists of eight assumed factors. In the “Russian” model all eight examined factors have statistically significant influence on Russian young female consumers’ purchase intentions towards luxury brand handbags. The biggest influences are attributed to Conspicuous value, Status, Need for Uniqueness, Materialism, and Functional value. As for “Norwegian” model, Norwegian consumers are significantly influenced only by six factors out of the eight examined ones – Materialism and Normative influence do not have a statistically significant influence on young female consumers in Norway. Despite the relative similarity of the identified significant factors, it should be noted that the desire to demonstrate the well-being, status, and personality has a greater impact on Russian consumers’ desire to buy luxury brand handbags, while Norwegian consumers pay more attention to functionality and quality of the luxury brands handbags. Identified during the study differences in the factors' significance for the Russian and Norwegian consumers are explained by the cultural differences of Russian and Norway, including large "power distance" in Russia, and the differences in income between people of different social classes in these two countries.