Market Research on Luxury Watches Essay

Market Trend There was a slow-down in the maturement in sales of tribute and lavishness mark offes in India in 2008-09. It prompted the market leader Titan industries to enter the economy market. succeeding(a) the footsteps, sumptuousness watch over disgraces go for Tag Heuer and Rolex introduced low-price mock ups. But in new years, meandering(a) phones may besides progress to dampened growth in the penetration of watches in India, as they provide a time read-out as well up as alarm and other time-related functions.Watch industry experts believe that their crossways original function is increasingly losing importance, and that wristwatches atomic number 18 now organism bought as fashion accessories. Owning to a greater extent than one watch is like owning diametrical pieces of jewellery. Competitive landscape The economy watch invite is being met for the well-nigh part by the unorganised sector and by direct imports. The agiotage segment is increasingly being p eppered by fashion specks much(prenominal) as Esprit, Swatch, Fossil and Tommy Hilfiger. There has to a fault been strong hold dear growth for these brands, with increment fill from middle- and upper-in mystify roots in urban India.Titan, HMT and Maxima argon the leading Indian players and Timex, Casio and Swatch ar now the strong multinational players in the market. More multinationals ar introduction the retail market, but no new domestic companies have through and through with(p) so, and the multinationals share of value sales has increased over the review period. exchange bounteousness Brand & Product Perception With the watches market in India now become fashion and style exactn, peculiarly at the premium end, companies now ground models and designs e really six months. International brands much(prenominal) as Fossil dismiss spring/summer and winter ranges.Titan, on the other hand, times its launches to plump in with the Indian festive season Deepavali and we ddings. Companies like Casio and Swatch and prodigality brands like Rolex are exploring a niche market for chronographs, but this is currently negligible. Companies also need to respond to ware innovations. The Citizen eco-friendly watch has been well received in India and is reportedly selling well in its price bracket, eliminating the trouble of alternate batteries and encouraging the use of multiple watches.Apparel brands such as Esprit, Tommy Hilfiger, Benetton and Levis have all gained familiarity among Indias urban youth, who may become more than leading to try these brands premium watches. besotted, urban Indians may timbre more comfortable about buying premium watches, duration continuing to move spiritedlife watches as examples of overindulgent or insensitive spending. new Rich India The New rich India is now indulging into the experience of owning highlife Brands. Indias rapidly growing high-end retail market is expected to increase from the around $3.5 bill ion in 2008 to $30 billion by 2015. prodigality clothing, fragrances, premium wine, high-end watches have achieved good penetration among manful Indian consumers. Among women, jewellery and cosmetics end already boast high levels of awareness, followed by categories such as handbags and mobile phones. These items, while not necessarily being better (in caliber, military operation, or appearance) than their slight expensive substitutes, are bargain ford with the briny purpose of displaying wealth or income or military position emblem of their owners. There is a distinct shift from over-the-hill highlife to New luxuriousness.Old high life is defined by the attributes, qualities and features of the product, whilst New extravagance is defined by the consumers point of heighten on the experience that their get stimulates and not in ownership or possession of the product itself. The customers Redefined extravagance as they believe it to be a sign of self worth They are worth it it authenticates the buyers success and status it is a signal to others that the owner is a section of an exclusive group They require flawless performance in this application, the bell of product malfunction is too high to buy anything but the best.indigence of Study The matter of wearing and enjoying fine timepieces is a passion that these days must be justified. We like nice expensive watches even though cheap watches exist to do the same thing. Hence like any other extravagance good , today modern shoppers buy luxuriousness goods to reward themselves, to satisfy psychological needs or to make themselves feel good to show off their mortalality or to boost their self-esteem. plowshare of the inquiry This look at aims to understand the above said consumer buying behavior which will help the present marketing Managers to better reposition their branding and advertising st prescribegy to capture the correct target market for luxury products to boost the sales in t imes where economy are at a challenge. Literature Review Research Objective This study intends to come out if consumer buying demeanor of young grease ones palmsrs are regulated by factor outs such as premium price of luxury watches, perceived prime(prenominal) of luxury watches, societal status and brand loyalty joind with theconsumption of luxury brand. This study also intends to evaluate whether perceived qualities of the luxury brand watch have influence on the buying decision of consumer. It is also intended to tempt whether the high quality standards of luxury watches are the reasoning consumers opt for the luxury watches. Affiliations of social status of acquiring plastered luxury branded goods will also be studied to understand whether consumer buying luxury branded goods just for the matter of being affiliate with certain quarters of citizenry having the same luxury brand of goods.This study also will also evaluate whether brand loyalty of luxury brand will influe nce the buying decision of consumer. This study also aims to uncover whether a person who has been afield is a reason for the consumer buy a luxury watch Research Question The purpose of this study is to evaluate what motivational factors advertize consumers into purchasing luxury brand watches . In evaluating this statement , this study aims to resolvent the followers questions Is it the price or the type of users of the brand that drives the buying behaviour of the consumer for luxury branded goods?Is it the strong emotion of groovy themselves with the lower course of action consumers that drives higher social class consumers to turn to luxury brands? Is it the tag name of a mega brand that drives the farsighted term demand for that luxury brand? Is grammatical sexual practice a deterministic factor in deciding the secure of a luxury brand? If yes then what factors are important gender saucy ? Is it the product utility or the brand perception that is key for lu xury watch brands? Will a persons visit abroad influence his decision to bribe a luxury watch? old Research contribution Findings of overall previous research indicate that one-on-ones perceptivenesss plays a key spot in purchasing luxury goods. Individuals preferences may be based on desire and non-desires, which are based on experience in purchasing luxury items from their expiation, or nondesire such as bias towards brand products. Leibenstein (1950, p. 188) classified demand of goods and services consumption in relevant to motivation into two main aspects functional and non-functional. Functional demand is demand for a commodity which is labelable to the qualities inherent in the commodity itself.On the contrary, demand of goods consumption that comes from other factors, which is not the product quality, is defined non-functional demand. The outcome from Leibensteins (1950) study especially stresses the role of inter ain in the flesh(predicate) forces towards luxury br ands consumption, and derived three main exercises Veblen, Snob, and Bandwagon INTERPERSONAL EFFECTS perceived tangible Value Perceived uncomparable Value Perceived Social Value Ostentation Non-Conformity Conformity VEBLENIAN beak BANDWAGON Interpersonal doings (Vigenron & Johnson) (1999 p.7) Veblen Effect The Veblen effect brush aside be explained through conspicuous consumption in which people feel that it is necessary to purchase luxury products because they have a high price tag (Leibenstein, 1950). Conspicuous consumption is use by people to show wealth, power and status (Veblen, 1899). Prices of product have a significant aspect in consumers persuasion of quality (Vigneron & Johnson, 1999). Studies by Erickson & Johansson (1995) have shown that price is used to judge quality of luxury products in the midst of a range of brands.Usually people would associate high prices with better quality. Additionally, those who do associate high prices with better quality would also s uggest that high prices show a considerable gist of prestige (Lichtenstein et al. , 1993). Snob Effect The schnozzle effect takes into account personal and emotional desires (personal effects), and the influence of other peoples behaviour (interpersonal effects) towards the purchasing of luxury brand products (see Figure 1). The snob effect can be further explained through two circumstances.Firstly, the launch on new products which creates exclusivity in which the snob would purchase the product immediately because a minor beat of consumers at that grouchy time would have acquired it. Snob consumers only purchase limited items that have a high value, whereas those readily available are less desirable. Rare items demand respect and prestige (Solomon, 1994,p. 570). Products that are viewed as unique, popular, and expensive causes a higher demand for consumers (Verhallen & Robben, 1994), especially snob consumers.Snyder and Fromkin (1977) financial support the statement by Verhalle n and Robben (1994) suggesting that people have the desire to be unique. IndiaThe Affluent Masses Luxury volumes have been spurred by a significant growth in the rich in recent past. The new rich come in varied shapes, sizes and style quotients. Exporters, multinational bankers, college kids earning plum salaries at call centers or BPO operations, well-heeled corporate wives, and successful entrepreneurs.What they have in plebeian is that they have very high purchasing power Bandwagon Effect The bandwagon effect represents consumers who purchase luxury products because they wish to depart in with a particular group. For example, people would consume products that are fashionable and stylish to associate themselves to resembling people (Berry, 1994). Dubois & Duquesne (1993) explains that the snob and bandwagon effect are not alike. Although the similarity between the bandwagon and the snob effect is that people wish to enhance their self-concepts, the differentiation is that the y purchase luxury items for different reasons.Bandwagon consumers purchase items to be fit in with others, whereas snob consumers purchase items to be unique and stand out. Individuals who fit in with groups that purchase luxury brand products and/ or wish to differentiate themselves from people who do not purchase luxury brands are influenced by the bandwagon effect (Vigneron & Johnson,1999) Luxury is reward First time/New Purchasers They use luxury goods as a status symbol to say Ive made it . They are motivated by their desire to be successful and demonstrate this to others.Luxury brands that have widespread recognition are popular however they wear outt wish to appear lavish or hedonistic in their appearance. They want to purchase smart luxury that exhibit importance while not leaving them open to criticism. private Effects Consuming luxury products can also be from personal desires and taste. PERSONAL EFFECTS Perceived Emotional Value Perceived Quality Value Self-Actualizati on Reassurance HEDONIST PERFECTIONIST Personal effects (Vigenron & Johnson) (1999 p. 8) Hedonic Effect The hedonic effect occurs when consumers purchase luxury products and value the item.People who purchase items for self-fulfillment (e. g.inner direct consumers, Riesman, et al. , 1950, or role relaxed consumers, Kahle, 1995), and those who are not affected by interpersonal influences (e. g. conforming to group norms,Bearden, et al. , 1989) represent the hedonic effect. Dichter (1960) explains that motivation of noncognitive and unconscious is able to persuade consumer preference of products. Products that are consumed are known to have an emotional value that is added to their section (Vigneron & Johnson, 1999). When consumers purchase luxury products they expect that the item will offer benefits such as exclusiveness.Dubois & Laurent, (1994) stated that if products create an emotional value for consumers, it represents that the product is dependable and holds an important chara cteristic. Perfectionist Effect The perfectionist effect exists when consumers purchase luxury items and expects superior products and performance as well as quality (Vigneron & Johnson,1999). People who represent the perfectionist effect are those who are associated to personal values and judge a product according to their value of a luxury band product. An example of the perfectionist effect is when consumers are purchasing a luxury watch they expect it to be accurate.According to Groth and McDaniel, (1993, p. 10) stated that high prices may even make certain products or service more desirable, because people view products with high prices with great quality (Rao & Monroe, 1989). Additionally, consumers may assess the level of how luxury a product is by its quality (Vigneron and Johnson, 1999). Methodology Research Method valued data consists of closed end information that includes numerical figures. The study has self-collected quantitative data by applying closed-end questions towards a questionnaire.Focus Group news to understand attributes both physical and emotional that influence the purchase of a luxury watch. The group comprised of 7 individuals , 3 female and 4 male participants who have been users of luxury watches. info Collection Primary Data battle array Gathering information from consumers of luxury watches through online questionnaire survey Secondary Data Collection Research insights and hypothesis design with the help of previously published research work on luxury goods buying behaviour. Sampling Non-probability try method is adopted.Since the target audience or respondents of interest are consumers of premium or luxury watches, the sampling method adopted here is widget sampling and snow-ball sampling. Measurement & Scaling Measurement Techniques used ? Perception typify ? Utility of features in the watch Chronograph, Double dial, Indicator light etc. ? Stylish Designs that make the watch a fashion statement Respondents were as ked to rate the 10 different brands in order to obtain their perception of these brands on the above defined dimensions Based on two predefined dimensions i. e ? ? ? wildcat Factor Analysis To understand the underlying factors influencing the purchase behaviour of luxury watch for men & women and overall Regression To understand which interpersonal & personal effect is critical when consumers make a luxury watch purchase decision Discriminant Analysis To understand the group behaviours based on the following discriminating variable ? Gender ? Trip abroad ? Work deliverPurchasing power ? AMOS Confirmatory Factor compend to ascertain the wildcat Factor Analysis RESULT AND ANALYSIS 1.Discriminant Analysis Work-Ex & Fresher proof Wilks lambda (0.627) is more than 0. 4 which is not significant Box M test is also insignificant However based on analysis excrete 5 attributes discriminating work ex & fresher are Attributes Q5_7_attribute_analog Q5_2_attribute_alarm Q5_12_attribute_tor ch Q5_9__attribute_calculator Q4_8_attribute_celebrity_endorsement Variable burthen of discriminating function -. 366 . 361 . 331 . 271 . 262 2. Discriminant Analysis Gender inference Wilks lambda (0. 578) is more than 0. 4 which is not significant based on analysis top 5 attributes discriminating males & females Attributes Variable weight of discriminating function.Q4_3_attrifashion_statement Q5_3_attribute_dualclock Q5_13_attribute_barometer Q5_8_attribute_motionsensor Q9_2_buy_in_store .329 -. 285 -. 269 -. 259 -. 255 3. Discriminant Analysis Abroad Visit Inference Wilks lambda (0. 573) is more than 0. 4 which is not significant however based on analysis top 5 attributes discriminating foreign visited and not visited people Attributes Q5_9__attribute_calculator Q5_6_attribute_color Q5_16_attribute_warranty Q5_11_attribute_straptype Q4_9_attribute_brand_ date Variable weight of discriminating function . 228 . 225 .221 -. 207 -. 205 3) Exploratory Factor Analysis-(Male & Female) R esearch Question- Is gender a deterministic factor in deciding the purchase of the luxury watch. If yes what factors are important gender wise? Hypothesis- Women while making luxury goods purchase give more importance to emotional factors whereas hands go for Physical Utility features Factor analysis for male respndents(58 males) Results? ? ? ? ? ? ? ? Fac1(Ostentation) o o o o o o o o ? ? ? ? ? ? Sth to remmeber, hand gesture, to be unique Fac2(value added feature) Calculator,digital,compass.Fac3(Generic requirements) Shape, water resistance Fac4( sparing requirements) Discounts Fac 5(Tech savvy) Compass, transaction sensor Fac 6(basic) Analog,water resistance Fac 7(Wrist suitability) Strap type Fac 8(extra feautres)Date and day display, brand image Exploratory factor analysis female Respondents (23 females)Fac1(Economical) o o o o o o Warranty, after sales, analog, emotional satisfaction Fac2(Style) Social status, to be unique, fashion statement Fac3(Special requirements) Alarm, altimeter, digital,dual clock Fac4(value added feature)Calculator,compass,barometer, torch Fac 5(Tech savvy) have gesture,discount Fac 6(Exclusivity) Motion sensor,alarm,brand image Result Analysis? Meno link up importance to Ostentaion, value added feaures and style(veblenian effect and perfectionist effect are dominating) ? Womeno Style, Economic attributes an generic requirements ( Hedonist and snob effects dominate 4. Checking the Interpersonal and personal effects shown by males and female while purchase of luxury watch in Store Research Questiono Is it the price or the type of users of the brand that drives the buying behaviour of the consumer for luxury branded goods?o Is it the strong emotion of discriminating themselves with the lower class consumers that drives higher class consumers to turn to luxury brands? o Is it the product utility or the brand perception that is key for luxury watch brands? Hypothesis-Luxury watch purchase is primarily to show off and as an indicat or of status symbol veneblian effect. Users also buy luxury watches due to perceived emotional value or for hedonist reasons Veneblian Effect- Snob Effect Bandwagon Effect voluptuous effect Type of effect Veneblian snob Bandwagon Hedonistic Coefficient 0. 517 0. 499 0. 274 0. 305.Inference- As we can clearly observe from the above table that the veneblian effect is very prominent in all cases of interpersonal or personal effects. That kernel People tend to buy Luxury watches to show off of their macrocosm and Social Status. Snob and Bandwagon effect follows Veneblian effect. 5. Regression Analysis to check whether pertinacious term demand for luxury watches is driven by brand image Research Question Is it the brand image that drives the long term demand for that luxury brand? Hypothesis Brand Image for lucury brands is responsible for the long term demand of these watches.Inference Regression is insignificant with respect to the variables that drive brand image. Even the Rsqua re value is 0. 071. Hence we can infer that brand image is not a good factor to explain the long term demand for luxury watches. 6. AMOS The default model is created based on exploratory factor analysis and taking research literature into account. Model Fit Summary Check Cmin/DF 2-5 OK GFI 0. 9 Not OK PGFI0. 5 OK NFI,TLI,CFI0. 9 Not OK RMSEA max 0. 1 Not OK Model is comparatively fit as such But Goodness of fit index is not holding well. Validity & Construct dependability S No.1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Attributes Q4_1_attribute_social_status Q4_3_attribute_fashion_statement Q4_2_attribute_to_be_unique Q4_6_attribute_emotional_satisfaction Q4_9_attribute_brand_image Q5_9__attribute_calculator Q5_10_attribute_compass Q5_12_attribute_torch Q5_13_attribute_barometer Q5_3_attribute_dualclock Q5_4_attribute_altimeter Q5_2_attribute_alarm Q5_5_attribute_digital Q5_7_attribute_analog Q5_8_attribute_motionsensor Q5_16_attribute_warranty Q4_10_attribute_secon_time_bran dpurchase Q4_4_attribute_premiumwatch_collection Q4_8_attribute_celebrity_endorsements.Constructs Error e1 e2 Delta 1. 028 1. 079 0. 608 0. 635 1. 282 1. 323 1. 687 1. 473 1. 793 1. 816 1. 032 2. 133 1. 407 1. 074 2. 078 0. 179 1. 402 1. 367 2. 019 Lambda 1 0. 67 0. 922 0. 884 0. 997 1 0. 912 0. 971 0. 774 1 1. 135 1. 005 1. 258 1 0. 876 0. 84 0. 403 1. 231 1 AVE CR Exclusivity e3 e4 e5 e6 e7 0. 81 0. 81 Tech_Savvy e8 e9 e14 0. 84 0. 68 Value_Added _Feature e15 e16 e17 e21 1. 22 0. 75 Reliability e22 e23 e26 0. 82 0. 69 Brand_Perce ption.