1. Working title Why Chinese prefer purchasing luxury goods, especially dresses, as compared to British people and what is the role of Chinese’s love for luxury in promoting the development of luxury goods industry? 2. Introduction The term “Luxury” is not easy to describe as it is the continuously growing, changing and prejudiced contemplation. The term luxury is usually used to express the most attractive and magnificence brands and things.
This word is employed to describe the unnecessary but the most desiring and comfortable items. The complete control or authority over best quality of products makes the luxury brand different from the other products. Although luxury brands have no functional benefit over the other products yet they are considered more advantageous (Okonkwo, 2007). Since the period of 1990s, China has vast understanding, proficiency and acquaintance in the persistent flow of the purchasing power of the consumers.
The consumers of the china have become more affluent and knowledgeable. Therefore they are more tolerant and cooperative to the foreign structure and arrangements of the trade. The wealthier consumers of China accepting the overseas sale system in the global markets, stores and the group of the traders provide the basis for the progress and growth of the sumptuousness sellers (Lu, 2011). The corporations trading in the luxury products have been investing in the markets of the China.
The first luxury brand outlets were opened in China almost ten years ago by Ferragamo, Bally, Louis Vuitton and Gucci, the luxury dress brands. Currently, due to the growing purchasing power of the consumers and relaxation in the trade restrictions by the authorities of the state, the western luxury products are now facing the problems and difficulties to reinforce their loyalty and assurance to the mainland (Chevalier & Lu, 2011). These products are facing the problems of losing their positions in the markets due to strategies of their competitors.
China has become the largest consumer of the luxury goods and luxury goods market is growing at the rate of 30% per annum while the growth of this industry has reduced in the developed world. It was reported by Chevalier & Lu (2011) that chinese luxury market will expand to $15billion in 2015 from $2 billion in 2011. Therefore, the current study is proposed to explore the factors that are driving the growth of luxury brands i. e. dresses in China and importance of sales of luxury brands in china for the overall luxury industry.
Aim and Objectives As the title suggests, the proposed study aims at finding the major factors that involve Chinese people in purchasing luxury goods, especially luxury dresses. It also aims at finding the impact of trend of luxury purchases among Chinese people on the development of the luxury goods industry. The main objectives of the study are: * To examine the relevance of the existing theory on consumer buyer behaviour to the practical situation of luxury goods sales i. e.fashionable dresses in China and the UK.
* To identify major factors that lead towards difference in consumer behaviour from China and UK towards purchasing luxurious dresses * To identify and explore factors that promotes the preference for luxury goods among Chinese people despite the global financial crisis * To find out the impact of Chinese luxury market on the sales of luxury goods 3. Research Questions The proposed research questions for the study are: 1. What are trends of luxury dress purchases in China and UK and how the trends relate to the consumer behaviour theory? 2.
What are the major factors responsible for stimulating the Chinese buyers to purchase luxury dresses despite the global financial crisis? 3. What is the impact of Chinese luxury market on the overall sales of luxury goods? 4. Literature Review The following readings are important for the literature review to meet the objectives of the current study. Chevalier and Lu (2011) provided a comprehensive overview of the china luxury market and its customer base. This reading also provides considerable knowledge about the opportunities and challenges present in the Chinese luxury market for international and Chinese luxury brands.
The luxury brands are facing problems and complexities in China due to implication of tax and other regulations of the state. Despite very high growth rate, the luxury brands are facing difficulties of evaluation and inappropriate organization in the supermarkets and department stores of China. Lu (2011) explored the consumption of luxury goosd by China’s elite and their behavior towards these goods. The luxury products are purchased for the personal pleasure and comforts. The luxury products that are used in China are largely imported to the countries of United Kingdom and Spain.
These countries trade in the various luxury brands such as accessories, perfumes, cosmetics, products, fashion clothes, footwear etc. Okonkwo (2007) defiend luxury as the necessity that commence when necessity ends. This reading emphasizes the fashions brands such as clothing and provides some factor that may stimulat the consumers to purchse luxury fashion brands like Gucci, Dior or Louis Vuitton. He stated that higher growth of the fashionable luxurious brands is further enhanced by technological advances that has made the fashion accessible to every marekt and consumer.
The white papter on chinese luxury consumer by industrial bank China (2012) also highlights the factors and forces that play important role in the expansion of luxury market in China. Degan (2009) explored the opportunity for different luxury brands in markets of china. This paper provided current trends and situation of luxury brands consumption by Chinese consumer and future trends in the market. Jun and Zishi (2007) explored the luxury consumer behavior in china.
The price discrimination is present in the case of luxury brands and consumers are ready to pay the considerable price difference for these products due to the desire to be in style and significant qualities of these brands. The luxury products have different characteristics such as top quality, best craftsmanship, uniqueness and name and standard of the brand. Luxury products are not only the sign of quality and superiority but considered as the code of the society expressing the access to the comfortable, unique and distinct brands. The luxury market is attractive and fascinating because it makes the expenditure self indulgent and apparently unreasonable. 5. Research Methodology.
The proposed research will follow the positivist research philosophy since the study aims at finding the relationship between different factors and luxury brand sales in China and compare the trends of these sales with developed countries like UK. As described by Saunders et al. (2009), the positivist philosophy is largely associated with quantitative research approach. Therefore, the quantitative research approach is chosen for the proposed study. The following research process will be followed for the proposed study. Aims and Objectives of research Review of pertinent literature.
Research Framework Development research questions Primary Research Designing the Questionnaire Circulating the Questionnaire Collection, Analysis of Data and Results Research Conclusion and discussion Selecting the topic Figure 1: Research process to be followed in the proposed research The data will be collected regarding the factors driving the Chinese luxury consumer to buy luxury fashion dresses through a closed ended questionnaire based survey. The survey will be conducted through e – mail. 100 luxury consumers will be sampled from China and the questionnaire will be mailed to the participants. 6. Sources of data/
Information The secondary research will be done from the published sources such as books, journal articles, reports, working papers and online sources regarding the luxury brands and their sales in China and UK. For primary data, the detail regarding the luxury customers can be obtained from different luxury dress brands like Gucci, CHANEL, Dolce and Gabbana etc operating in China as they have the contact details of their customers. After that data can be collected through questionnaire based survey from the sampled luxury consumers. 7. Data analysis Techniques.
Since the quantitative approach will be followed in the proposed research, the quantitative data analysis techniques will be utilized for answering the research questions. Data collected through survey will be analyzed through descriptive statistics using SPSS (Statistical Package for Social Sciences). The data will be analyzed through univariate as well as bivariate functions and correlation between different factors affecting the sales of luxury brands will also be determined. 8. Timetable Proposed time table for the research is shown in the form of Gantt chart. Task No.
Questionnaire based survey will be used for gathering primary data from the Chinese consumers of fashionable and luxury dresses, the consent will be obtained from the participants to take part in the research by providing detailed introduction to the purpose of this survey and use of data to find answers posed in the proposed study. The participants will be ensured that their demographics will remain confidential.
10. Reference list Chevalier, M. , & Lu, P. X. (2011). Luxury China: Market Opportunities and Potential. Singapore: John Wiley and Sons. Jun, G. and Zishi, X. (2007). Luxury consume Behavior in China. Market Modernization. (4):157-159 Lu, P. X. (2011). Elite China: Luxury Consumer Behavior in China.
Singapore: John Wiley & Sons. Okonkwo, U. (2007). Luxury Fashion Branding: Trends, Tactics, Techniques. Palgrave Macmillan. Degan, R. (2009). Opportunity for luxury brands in China. Working Paper, International School of Management Paris. Retrieved April 17, 2012, from: http://www. globadvantage. ipleiria. pt/wp-content/uploads/2009/06/working_paper-31_globadvantage. pdf Saunders, M. N. K. , Lewis, P. & Thornhill, A. (2009). Research methods for business students (5th Ed). Harlow: FT Prentice Hall. Industrial Bank, (2012). The Chinese luxury consumer. White Paper: Retrieved April, 16, 2012, from: http://img. hurun. net/hmec/2012-03-27/201203271608211665. pdf.