Luxury good Essay Example for Free

Luxury good Essay ? Introduction 1. 1 Background of Study For luxury product and brand in the past three decades, Chinese market is unprecedented booming. From Pierre Cardin dominate early, later Louis Vuitton Illustrious, to each proliferation of luxury brands, the Chinese luxury high-end consumer tasted bud grow vitality and enjoyed the excitement noisy fanatical pursuit of luxury brands. While luxury product appears to be the public think that is only a small number of people can have the products, but according to the Chinas current level of economic development and consumer purchasing level has been able to provide basic guarantee for the development of the luxury industry. Actually in the Chinese dictionary, the meaning of luxury is synonymous with waste. And luxury goods in English is originated from Latin roots luxus, meaning is strong reproductive capacity, this kind of description also expresses the luxury of the characteristics of too much and waste. But in the modern society, the meaning itself has completed the transformation from negative to neutral. At the book luxury brand management, zhouyun, P. 2010 gives a board definition to luxury goods, which is luxury goods as a hope, a dream. Because it is the hopes and dreams, so it is demanding for the people, once people have can get intense pleasure and enjoyment, but also shows it is not the necessities of human life. At present, a very noteworthy trend is the concept of luxury of being extended outward. The concept of new luxury arises at the historic moment; the new luxury refers to are those goods and services that better than other similar products in the quality of goods, higher grade, better service, more fascinated customer. However, these products are not cheap, but that does not mean it too expensive to afford (Michael Silverstein, 2005). Such as Apples IPOD, cell phone with new features, Swarovski, etc. In recent years, Chinese consumers have become the largest consumer group of luxury brands in the world (Husband, 2010). According to a new report compiled by HSBC, about a quarter of the world’s luxury purchases are now made by Chinese citizens, which means 25% of luxury goods. Go through the HSBC report it shows that in 2007, china only purchasing5% of luxury goods in the world. It’s increasing by 5% each years and the expert think the number of increasing will be more and more. The purchasing of Luxury goods was increasing by huge number and very fast speed. The increasing speed was similar with the China GDP growing (Bouee, 2012). Since 2000, the China economic GDP was increased a lot. Chinas gross domestic product stood at US$3. 38 trillion while Germany’s GDP was USD $3. 32 trillion for 2007. This made China the world’s third largest economy by gross domestic product. Based on these figures, in 2007 China recorded its fastest growth since 1994 when the GDP grew by 13. 1 percent (Xin, 2009). The increasing economic was the most important reason to push Chinese buying Luxury goods. There are also many other factors that irritate people to buy luxury goods, owning luxury goods that means have a kind of culture. In China, there mainly are three luxury consumer groups in China: the rich flaunting fortune and manifesting identity, the young people gaining a sense of satisfaction and the bribers for mutual collusion and commercially hidden rules. (Wood, Zoe, 2011). For luxury brands, they want to take advantage in the Chinese market; they must know more about China market and understand the Chinese consumer consumption. Only based on the understanding of Chinese people buying behavior, the luxury goods companies can make accurate and effective marketing strategy. Therefore, this study is titled â€Å"Factors that motivate customers towards buying decision of luxury product (A survey of Chinese customer in China)†. 1. 2 Problem Identification This study is according to the situation of Chinese social luxury consumption, analysis the factors that affecting Chinese customer purchasing decision of luxury product in China. The study intends to evaluate whether the value of buying luxury products, the attitude towards people who own luxury goods, income level and purpose of buying luxury products that motivate customers towards buying decision of luxury product. Based on the statement above, the title of this study is â€Å"Factors that motivate customers towards buying decision of luxury product (A survey of Chinese customer in China)†. 1. 3 Statement of Problem This study aimed to determine the Factors that motivate customers towards buying decision of luxury product in China; specifically it shed answer to following: Does the value of buying luxury products have positive and significant relationship with the customers buying decision? Does the attitude toward people who own luxury goods have positive and significant relationship with the customers buying decision? Does the income level have positive and significant relationship with the customers buying decision? Does the purpose of buying luxury products have positive and significant relationship with the customers buying decision? 1. 4 Research Objectives Based on the preceding research questions, the research objective of study can be translated as follow: To find out if the value of buying luxury products have positive and significant relationship with the customers buying decision. To find out if the attitude toward people who own luxury goods have positive and significant relationship with the customers buying decision. To find out if income level have positive and significant relationship with the customers buying decision. To find out if purpose of buying luxury products have positive and significant relationship with the customers buying decision. 1. 5 Significance of the Study 1. 5. 1 For researcher Research is a way that through the observed, robust, measurement and calculation to get the information what you want to need. So I can use the information of research to known what kind of factors that influence people buying the luxury products. 1. 5. 2 For luxury goods companiesÃ'Ž Through the research the luxury goods companies will understanding the customer buying behavior and decisions, so the companies can make accurate and effective marketing strategy to attract more customers. 1. 5. 3 For customer Through the research can guide the customer who buying the luxury goods has a right consumption view and values, buy luxury goods is focus on the intrinsic value rather than just for showing off wealth. 1. 5. 4 For future researcher Through the research, we can get some important data and the future researcher can use these data to do some analysis and get knowledge. 1. 6 Definition of Terms Luxury goods: In economics, a luxury good is a good for which demand increases more than proportionally as income rises, and is a contrast to a necessity good, for which demand increases proportionally less than income. Luxury goods are often synonymous with superior goods. Customer Psychology: an academic and applied discipline that involves the scientific study of customer mental functions and behaviors. Buying decision: the buying decision is series of choices made by a consumer prior to making a purchase that begins once the consumer has established a willingness to buy. Customer motivation: Consumer motivation is an internal state that drives people to identify and buy products or services that fulfill conscious and unconscious needs or desires. The fulfillment of those needs can then motivate them to make a repeat purchase or to find different goods and services to better fulfill those needs. Research methodology: research methodology is a collective term for the structured process of conducting research. There are many different methodologies used in various types of research and the term is usually considered to include research design, data gathering and data analysis. 1. 7 Scope and Limitation 1. 7. 1 Scope This research paper is study Factors that motivate customers towards buying decision of luxury product of Chinese customer. 1. 7. 2 Limitation For this research, the limitation of the study is: a. Place of research is China or PU Chinese student b. Young people and adults c. Number of respondents limited to 80 peoples d. The time limited from January 2014 until March 2014 References 1. Zhouyun P. (2010). Luxury brand management, 45-87 2. Michael Silverstein, P. (2005). Trading Up: The New American Luxury 3. Chadha, R. , Husband, P. (2010). The cult of the luxury brand: Inside Asias love affair with luxury. London: Nicholas Brealey International. 4. Charles Edouard Bouee. (2012) A brand awareness upgrade â€Å"Welcoming a new era in the Chinese luxury market† 5. China revises 2007 GDP growth rate to 13%. Xinhuanet. 2009-01-15. Retrieved 2009-01-15. 6. Wood, Zoe. LVMHs remarkable Half-year Results Reveal Luxury Is Back in Fashion. The Guardian. Guardian News and Media, 26 July 2011. Web. 20 Feb. 2012.