Luxury consumer behavior and brand response: a cross-cultural comparative study based on Hofstede’s Individualism Versus Collectivism and Power Distance Indexes

Abstract

The goal of this thesis is to explore the ways consumers of luxury brands pertaining to different cultures inherently consider the concept of luxury itself, and how brands have adapted their strategies to meet their exigencies. By observing two of the cultural dimensions proposed by Hofstede – Individualism versus Collectivism and Power Distance Indexes – the paper outlines how the latter influence their decision-making and purchase intentions and patterns within luxury consumption. A particular emphasis has been devoted to the comparison of Eastern (mainly Confucian) and Western (mainly European and North American) cultures. Four chapters comprise this thesis, the first one being an overview of the luxury industry - with a focus on the way the concept has evolved throughout history -, the second involving a deeper layer of understanding, preliminarily identifying several declinations of luxury and buyer personas – laying the basis for considerations addressed in the following chapters. The third, core of the paper, exhaustively investigates how cultural characteristics derived from the indexes mentioned earlier can drive luxury consumption along the cultures considered, as well as observing the analysis on a country-specific level, highlighting differences between the two hemispheres. The fourth chapter identifies strategies utilized by luxury brands to target different consumers, with a focus on the cross-cultural role of social media. The findings of this literature review reveal a sharp distinction in the motivations behind luxury consumption between Eastern and Western consumers. It can be generalized that the most emphasized dimensions that drive purchases, such as a preference for loud instead of quiet luxury (or viceversa) can be, in part, attributed to individuals’ culture, but not entirely, as this kind of representation might limit diverse nuances present in a specific culture, and thus create a distorted view on the matter.