Establishment of  a complete research model  to study the consumption motivation of Chinese Millennials   

       Establishment of  a complete research model  to study the consumption motivation of Chinese Millennials                                                                                                                                                   

Introduction

1.1 Brief introduction

Research background is introduced in this topic, the research purpose, different research gaps not forgetting the structure of the research.

1.2 Background of the Study

At present, China has done a replacement for Japan, despite China being the largest luxury market in the world (anon, 2013). It has been to be a viral market used in luxury branding. During 2010, China was seen to be the second-largest economy that existed in the world. Due to the rapid growth of the economy of China, the income of the people also started increasing. Due to the increase in income, people developed that desire for shopping. Chinese millionaires, in particular, started spending a massive sum of money on luxurious commodities. People felt the need for luxurious commodities in showing wealth and identification of rank. (Xiao and Lu, 2011) it is essential as it Follows China middle and upper class where consumers are seen to be an essential target in the luxury commodities. A part of the middle class is following and buying luxury goods that can satisfy their dream of becoming rich, which has already become very known in China.

The Chinese market is seen to be different from the other types of markets, and this is because of its cultural characteristics. When comparing the Chinese market to that of the US, market with the middle class as the leading consumer group, millennials become the primary customer group that is increasingly ageing. (Chen and Jia, 2013) millennials mainly are seen to be those people born between 1980 and 1994. For optimists, like Raines (2003), millennials are seen to be optimistic, talented, having a good education, very social, having an open mind, having a significant influence, and also very cooperative. Although, according to pessimistic research held out, the millennials are seen to be having stress, very lazy, having anxiety issues, lacking competition skills, and having an easy way of changing jobs

This phenomenon has two reasons which constitute China did relationship to individual policies of China.an implementation of the one-child policy during the time as this constituted of each family having one kid alone as this would help parents give their attentions to the kids especially on monetary terms.

According to McKinsey (2017), above 80% of the parents had the capability of giving out money to their kids so that they can get themselves any luxuries that they wanted. The parents of the time seemed to be a bit younger, as this showed that they were a bit energetic. When people reached, 30 years seemed to be more stable because they were working, and this could enable them to get any luxurious goods that they felt like (Liu and Y, 2013). luxury brands must pay some attention towards this generation because without the attention, and millennials will abandon the generation shortly.

On the other hand, millennials are also very different in their consumption behaviour. For example, they are very vulnerable to the influence of social media when they consume. Millennials have significant influence towards social media as this is seen in different ways (Martin & Turley, 2004), the ways have a high susceptibility towards online reviews compared to the different generations (Smith, 2012). different researches have shown how millennials have become the very first generation involved in attention payment towards the online word-of-mouth instead of participating in the sharing of the traditional types of recommendation tools and those used in advertising (Senecal & mantel, 2004; Smith, 2011). Therefore, as Pate and Adam (2013) discovered that the millennials have a possibility of finding products liked by their friends and those that the friends recommend SM, and they think that reviews are more “transparent”. Blogs are “more objective.”. SM participates in a crucial role in the consumption behaviour of Millennials.

China is seen to be one of the unique markets. Due to cultural differences, the results obtained from the research often rely on Western samples as the samples have no vital role in planning in the Chinese market. The specificity of China brings about a demand on representing different opportunities involved in product changing of the same company. For the successful adaptation of market development, then luxury brands need to have huge markets.

1.3 Research Aim and Objectives

An analysis of the willingness by consumers to pay a premium from the perspective of cognitive emotion model and attitude theory.

Specifically, there are two objectives of the study.

A complete research model is established to study the consumption motivation of Chinese Millennials.

Using a regression model to analyze and evaluate the effectiveness and determine the relationship between the factors of consumption motivation

 1.4 Structure

This paper intends to make some contributions to this document. Firstly, this paper summarizes the factors that play a crucial role in influencing the willingness of Chinese millennials in the buying of luxury goods and constructs a complete conceptual model. Therefore, in statistics, the analysis done on regression is used in the identification and testing of the relationship among the various factors. Secondly, in achieving the literature gap of relevant samples, we further test some hypotheses by using Chinese samples. The main structure is divided into different sections.

The first part is the introduction, and an introduction is done on the research background, not forgetting research progress that involves word-of-mouth communication and network word-of-mouth communication at home and abroad. This chapter also clarifies the research blank, puts forward the purpose and goal of the study, and highlights the necessity and importance of this study. Then the paper structure is shown.

Then literature review is discussed, and there is reviewing of the different factors that participate in influencing the process of the luxury intentions that consumers have. Secondly, this paper discusses the relevant literature on the factors influencing purchase from two aspects: cognitive emotion model and attitude theory. Then, there is the establishment of a conceptual research model that is explained by the use of different hypothesis as clarification is brought out. Then different research methods are looked upon as a methodology is given out from the scope of the study.

Discussion on how data is analyzed is ten looked into as the analysis is seen to be done with the help of the data collected to test the factor analysis to help in the determination of the role of data collected in the research. The collected data also plays a role in determining if the established conceptual model has a basis on the literature of the data. Discoveries involved at statistics identification is also looked here as the final results of the project are given out. The data findings are looked upon, and in this case, findings that have a relationship to the objectives are highlighted. There is a discussion about the development of the goof fit model, then the moderating factors that affect the consumers and the knowledge that consumers have regarding the luxury purchase intentions. A conclusion is drawn at the end where there is a suggestion about the practitioners and also the researches. Here, the provision of intellectual enlightenment is seen as the potential research gaps get to be highlighted and then putting forward the future research topics. This chapter also puts forward some suggestions for the managers of consumer forum, to better meet the needs determined by consumers. Finally, the conclusion is drawn.

 Literature Review

2.1 Introduction

the cognitive-affective model uses the cognitive and emotional aspects of consumers to predict the behaviour of consumers. （Oliver，1993）When consumers decide to buy luxury brands products, they will perceive cognitive cues from different brands, including the quality of the brand that is perceived, its image and prices on the brand. The evaluation of these cognitive cues is capable of leading towards the information about different emotional reactions that include what is felt emotionally as a prediction is made on the intentions of consumers’ purchase (Bian and Forsythe, 2012). The study usually has an argument cognitive-affective model. The literature related to the luxury brand and brand equity will be provided. The next one is about an analysis of the literature review. Thirdly, luxury brand purchased intention will be further discussed from the affective attitude, self-expression attitude and self-monitory with the help of conceptual research model.

2.2 Luxury brand 

As by the theory of attitude function (Katz, 1960), the behaviour of the consumers is determined by his attitude, and his attitude is an essential expression of his values. Consumer’s purchase behaviour expresses his attitude and the core value concept. The process involved in the consumption of luxury goods reflects a social function that is seen to be very strong (Bian and Forsythe, 2012), because goods and products are generally considered to meet the needs of non-necessities, and are often associated with wealth, exclusiveness and rights (Brun, 2018). Luxury products provide not only the practical value of products but also social reputation and status for the owners. （Vigeneron and Johson,2014）

The semiotics of the word “luxury” was put forward by Kapferer (1997), and its interpretation is artworks that can be applied to functional projects. However, luxury is a relative concept. For an instant, a Mercedes Benz and a Ferrari maybe both regarded as luxury cars, in contrast, one can be considered more extravagant than the other. In this case，Ferrari can be considered more luxurious than Mercedes Benz. Many products can be regarded as a luxury, but consumers have different opinions, the same product can be regarded as a necessity for different consumers. According to Kemp (1998) proposed the definition of luxury is whether it can be provided unnecessary consumer demand. Luxury products provide exceed the needs of the products themselves. This luxury dimension is closely related to cultural elements and socio-economic background. （Vickers and AmpAmp,2003）

Vigneron and Johson (2014) proposed the concept of the luxury brand, which distinguishes the luxury brand from a luxury brand. For many consumers, luxury products are associated with scarcity, high price and high quality. Besides the typical characteristics of luxury products, luxury brands have more specific meanings. They can be in showing the symbol status, as they have an attraction to the consumer that has high brand awareness. Therefore, the act of equity brand building is essential as it is used by the brands that have luxury firms. Brands with substantial assets can gain more customers that are loyal as the maintaining ability gets. In this paper, the leading research luxury fashion brand, with the high price, exclusive, distinctive image and status of the combination. At the same time, luxury fashion brands also have the following fashion brand characteristics: global popularity, high quality and innovation, core competitiveness, unique brand characteristics, perfect store display and excellent customer service (Potts, 2007)

2.3 Brand equity and Affective Attitude

Brand equity has an extensive definition. Aaker (1991) defined it as associated with the brand image or logo and can provide value-added utility for brand products or services. Brand equity is also a perception of belief (Ekinc and Massey, 2008), which is related to the consumer experience of using and consuming brand products or services (Vazquez, Del Rio and Iglesias, 2002). It is imperative to understand the response of customers to brand.

Brand equity can be measured from the perspective of companies, finance and consumers (Keller and Lehmann, 2006).

Some studies have given a vision on a good where CBBE has a positive relation towards brand development. It is positive to improve corporate profits (shocker, 1991). Besides, it can also improve communication efficiency with consumers (Keller and Lehmann, 2003), improve customer brand loyalty, maintain high prices, and reduce price sensitivity (Erdem, 2002). In the process of building brand equity, guiding target customers to produce a positive emotional response to the brand having a beneficial effect on the brand (Kumar, 2009). Emotional attitude emphasizes the emotional response and emotion that consumers can get from the brand products, such as feeling happy and full of satisfaction. (Bian and Forsythe, 2012) An excellent emotional attitude is seen to be having a positive effect on brand equity as well as that of consumers. Then there is a rise in emotional attitude that is addressed to the meaning of the brand.

Consumer-based brand equity is multidimensional, which includes the images of the brand, loyalty involved in the brand and quality of the brand that is perceived. Keller (1993) referred to the equity of the brand as different reactions of customers with various awareness on the brand levels toward brand marketing, and he believed about how brand knowledge needs to have different aspects that include the image and awareness. Yoo and Donthu (2001) show the model of CBBE, include the perceived quality gotten in awareness of the loyalty of the brand.

2.3.1 Brand Loyalty

Brand loyalty is among the equity brand foundations. (Kayaman and Arasli, 2007). In a case where the attitude of the consumers becomes positive concerning the brand, and repeatedly buy the brand, their brand loyalty is established (Oliver, 1999). Consumers will repeatedly buy brands that match their pursuit and provide the attributes they like (Lee, 2001). The brand loyalty of consumer is related to their emotional attitude, which is the emotional attachment of consumers toward the brand (Aaker, 1991). This emotional attachment is an individual’s perception of luxury brands. Consumers buy luxury brands in pursuit of emotional satisfaction and enjoyment (Vigneron and Johnson, 2004), and they can get emotional rewards (Pappu, 2005). Examples of emotional rewards are stability, happiness, positive feelings, satisfaction, trust, self-esteem and belonging (Choi and Kim，2003). At the same time, there is a recognition of the most loyal consumers towards the brand (Pappu, 2005). Consumers who are loyal to the brand have a possibility of getting favourable impact with the help of products compared to those unloyal (Chaudhuri and Holbrook, 2001):

H1: Brand loyalty has a positive effect on the productive attitude of luxury brands

2.3.2 Perceived Quality

Consumers’ subjective judgment on the overall superiority of a brand illustrates perceived quality well (Zeithaml, 1988). The quality is seen to be among the significant factors in the creation of brand equity (Kim and AmpAmp, 2005). Good quality perception has a great benefit to the brand equity (Yoo, 2000). The quality also creates value for consumers by providing consumers with purchasing reasons and differentiation from competitors (Loureiro, 2013). At the same time, perceived quality is also an essential factor in determining consumers’ attitudes and preferences. Recognition of the advantages by the consumers and differences the brand has from other brands, and they will have a high-quality perception. When making purchase decisions and choosing brands, consumers will buy brands that they think are of higher quality (Calvo and Montes, 2012).

According to self-verification theory, people will verify their existing self-concept and find and confirm self-consciousness (Swann, 1983). In the process of evaluating brand quality, consumers are capable of having some good impression that is geared good quality perception, and their self-awareness of high-quality luxury brands will also be enhanced (Fuchs, 2013). In the theory of relationship marketing, the quality can be seen to have a significant advantage to the relationship between consumers and brands, and it is also the reason for trust and brand commitment. (Johnson, 2006) it affects consumers’ perception of brand credibility, technology, and reliability. (Erdem and Swait, 2004) the improvement of consumers’ perception of brand quality will enhance their emotional attitude directed to the brand (Johnson, 2006) and can obtain a more positive response from the brand products.

H2: Perceived quality has a positive effect on productive attitude to that of luxury brands

2.3.3 Brand Knowledge

To combine awareness with the brand association, brand awareness is replaced by brand knowledge proposed by Keller (1993). Brand knowledge can be said to be the association generated by the nodes involved by consumers’ memory that are connected with various brands, Keller (1993). Knowledge is related to brand awareness and association. The brand association can be anything related to the brand in the memory of consumers. It may be the logo of the brand, the colour of the brand, and the product of the brand. Brand association is not a single group but is usually generated by some meaningful real estate. (Aaker, 1991) The brand association consists of many concepts, the events and facts which are related to the brand. It is a complex and interrelated concept. These concepts, events and facts constitute a firm brand knowledge network. They are interconnected and usually based on a lot of experience and communication. (alba and Hutchinson, 1987) The brand connection is positively correlated with brand equity because it is a signal of quality and commitment. The more consumers associate with a brand, they can provide them with more judgment information when they choose, thus resulting in behaviour favourable to the brand.

Brand awareness can be seen as the capability consumers use in identifying and recalling of the brand and its products, as it has a similarity towards the strengths that brand association has and memory trace. (Keller and Yoo, 2000).  When the possibility of the popularity of a brand is high, then the greater brand awareness possibility. When consumers are shopping, brand-related knowledge will be recalled, such as the characteristics of the brand, uniqueness and the happiness of consumption experience. In a case where consumers start getting familiar with the brand and retain positive and compelling brand knowledge, there is a possibility of having some emotional and robust reaction towards the brand. For instance, in luxury brands, when consumers are seen to be having an attitude that is positive to the brand, then there is a possibility of feeling happy.

H3:  Brand knowledge has a positive impact on productive attitude involved in luxury brands

2.4 Self-expressive Attitude

According to attitudinal function theory, consumers’ consumption behaviour is driven by the social attitude to some extent. Luxury goods can provide a social status and social needs for the owners, which is the most crucial social driving factor. (Mendel, 2006) The social function of attitude can promote self-presentation and expression (Mehta and Kades, 2004). According to Shavitt (1989), a decision was made about the expression of an individual towards luxury brands response. Consumers show their identity and potential value through luxury brands and also convey their beliefs. Consumers express their values through luxury goods and convey the image they want socially to convey (Wilcox, 2009).

However, for many Chinese consumers, these self-expressive attitude and self-presentation attitude is quite different from western consumers. According to Brewer and Chen (2007), these differences are influenced by culture, which has a significant influence on people’s thinking, feeling and behaviour. The different social, cultural and status pursuit of individuals will lead to different luxury consumption patterns. Some studies show that the influence of the social environment, historical factors, culture, eastern and western consumers’ consumption patterns of luxury goods are not consistent. For example, compared with American consumers, more attention is paid by Chinese consumers to face than to brand factors. (Li and Su, 2007)

On the other hand, China and the western world are in different social forms. Individualism and collectivism also affect people’s consumption behaviour (Hui & Yee, 1994). In China’s collectivist culture, it is essential to maintain the relationship during a group and the social respect of this group (Hofstede, 2001). Understanding these differences will help to understand Chinese consumers better.

Attitude is embodied in personal cognition, thoughts, beliefs and emotions, that is the reactions of personal experiences and feelings (Morris and Kim, 2002) Self -expressive -presentation has a reflection that is biased toward cognition of luxury brands. They convey their core has a believe based on social status using luxury brands. This kind of cognition is related to the cognitive emotion theory, which is the rational and perceptual understanding of consumers (Zajonc &Amp; Markus, 1982). The emotional attitude of consumers originates from their feelings towards luxury brands (Sweeney and Soutar, 2001). The previous cognitive emotion model has shown that emotion can affect consumers’ purchase intention, especially for some brands that consumers like very much; they will actively buy this brand. This part of the reason explains the willingness of the consumers in purchasing luxury goods with higher premium rather than products with lower price and same function. Self-expression and presentation attitude is discussed in the following sections.

2.4.1 Self-expressive Attitude, Self-presentation Attitude and Affective Attitude

The purpose of consumers to express and obtain material wealth is to feel different from others. They pursue their uniqueness. (Tian et al.) They want to express themselves as different from others by expressing their uniqueness. Especially when people are in a large group, they feel highly similar to others and express themselves by buying or displaying some distinctive goods (Snyder and Fromkin, 1977). This feature is widely used in marketing. To meet the individual’s desire to be different, marketers use the scarcity and uniqueness of products to attract customers who want to break the common similarity (Thompson and Haytko) In brand promotion customers buy advertising products to express their particularity. The success of the marketers of these advertisements will stimulate more of the same type of advertising. When consumers find that these products do not reach the scarcity reflected in the advertising effect, they will react to the advertisement weakly, and their expectation of specificity will also weaken. They choose other products that are truly unique. One of the characteristics of luxury goods is uniqueness, and they are usually expensive. For some consumers, they can’t afford the price of luxury goods although they like it.

As a result, luxury goods are limited in sales and have a relatively small amount of transmission, so they can be used as a tool to spread uniqueness (Vigneron & Johnson, 2004). Different luxury brands have their unique crafts and unique design styles. Their recognizable designs can convey the intrinsic value of consumers. (Park et al., 2008) for example, when people see the classic stripe pattern, they will easily associate themselves with the Burberry brand. Customers who choose this brand may want to convey the attitude of having taste and pursuing quality life. Snyder and Fromkin (1977) put forward the theory of uniqueness to explain the consumers’ demand for uniqueness. For consumers who want to pursue uniqueness, they want to use uniqueness to reflect individual differences, that is through the visual display of consumer goods such as clothing and use to distinguish their motivation.

This kind of motivation may come from people’s will or willful needs influenced by the social environment. Therefore, in essence, the essence of consumers’ demand is to pursue personalized will, and may also be to serve other motives. China’s millennials pursue more uniqueness than their parents. According to the KPMG (2013) luxury survey report in China, the new generation of Chinese consumers (China’s millennials) pays more attention to the design of luxury brands. When asked about the reasons for buying luxury goods, I hope to express my personality by wearing luxury clothes with a unique style and get the most recognition (Wilcox et al., 2009), which encourages buying of goods by the consumers to express their characteristics.

H4: When predicting millennial willingness of the consumers in paying premium prices for the luxury brands, self-monitory and affective attitude interact.

2.4.2 Self-expressive Attitude

According to the attitude determination theory, the attitude of consumers will determine the behaviour of consumers. Under certain circumstances, consumers will self-monitor what kind of feeling they present, which will also affect their behaviour (Snyder, 1974). Self-monitoring refers to the degree of adjustment of the response people have when addressing different situations socially, as well as the sensitivity to others (Snyder, Berscheid and Matwychuk, 1988). A significant degree involved in the process of self-monitoring will be susceptible to the image they display in the society in adjusting behaviours according to social norms (Lippa, 1976). Some studies have found that some young people in their 20s have strong self-monitoring. () social psychologists believe that with age, the importance of self-monitoring will gradually diminish (Sears, 1986). Compared with older people, young people tend to think that they play a more critical role (Gangestad & Snyder, 1985), and they will attach great importance to their appearance, And they will pay more attention to their clothes and their role, and they will have some attention towards fashion.

There is also a remarkable feature of Chinese consumers, whose face problem is compelling. In the west, where individualism prevails, consumers often want to express their self-esteem through unique and rare luxury goods. However, Chinese consumers living in collectivism will pay more attention to maintaining the relationship with the collective and maintaining the image of this group in society (Hofstede, 2001). They have a strong sense of face, are under pressure and not ready to catch the expectations of others (Wong and Ahuvia, 1998). They think about social status, more not forgetting on other people’s views on them (Monkhouse et al., 2012). They will sacrifice their preferences for the recognition and social status of others. It is more critical for them to save face (Liao and Wang, 2009).

When consumers choose luxury brands according to their characteristics, they may affect their attitude towards luxury brands’ self- presentation. It will also affect their purchase decisions. H5: When predicting millennial consumers’ willingness to pay premium prices for a luxury brand, self-expression and affective attitude interact

2.5 Self-presentation Attitude

In this research, using the ability to pay luxury premium goods willingly is an indicator of research. According to the traditional consistency theory of attitude and behaviour, people’s behaviour is influenced by his attitude, and his close attitude to products influences the consumer’s consumption behaviour. When consumers decide on the payment of a special price that has same functions, then the brand has a possibility of convincing the buyers to meet and respecting most of their needs both psychologically and functionally (Li et al., 2012. Emotional value can be seen as the feeling and attitude of consumers when using the brand. The cognitive emotion model has proved that emotion plays a more critical role in purchasing. Consumers tend to buy products with a positive attitude (Batra and Homer, 2004), and a positive attitude towards luxury brands will affect their willingness to buy these products.

H6: Favorable affective attitude has a positive relationship towards that of the millennial willingness of the consumers in payment of the premium price for the luxury brand.

2.6 Conclusion

Through the above analysis, the following model is established. In this model, there are seven variables involved, namely, the loyalty of the brand, the quality perceived, the knowledge that the brand has, self-expression and presentation attitudes and lastly capability of paying the premium price. According to cognitive emotion model, we can know that predicting the behaviour of consumers is related to their cognition and emotion. (Oliver, 1993) these cognitions come from brand-related images, prices, products, etc. (Kumar et al., 2009), which can lead to the formation of emotional reactions. This paper studies equity that is based on the customers, as brand loyalty is included and the brand knowledge quality. Let’s assume that they all have a positive impact on emotional attitudes. According to the attitude theory, the behaviour of consumers is determined by their attitudes (Katz, 1960). In this study, the attitude found on self -expression and presentation attitude is mainly studied. It is assumed that they all willingly have a positive impact on the payment of premium. Consumers don’t have any problem with the payment of high premium for the same function resources when buying luxury goods, because they will get more value than the use-value of the goods, such as emotional return, social status and reputation. The high price is also a feature of luxury goods, so the ability to pay the premium is taken as a variable. It is assumed that emotional attitude has a affects the payment of premium positively.

Chapter Three: Research Methodology

3.1 Introduction

In testing of the different factors that play a role in influencing the willingness involved in the paying of premium, the quantitative method is selected. Considering that the subjects of the study were Chinese millennials born in 1980-1994, the questionnaire was distributed through three Chinese social media platforms (Weibo, Wechat, Red). First, millennials are the primary users of social media. Second, they are very active on social media. They will learn about products through social media, express their purchase opinions online, and communicated purchase information with other users. Luxury goods also have the attributes of status and prestige (Wang et al., 2011). Consumers often publish their luxury goods on social media to get attention. It will get a discussion in the next section.

3.2 Research Method

Quantitative research can be regarded as the structural study, which objectively measures the current subject with the method of mathematical statistics. Qualitative research, in most cases, is seen to be expletory as well as untrusted. Despite the purpose of the study being different, the goal is to help in solving problems. The purpose of quantitative is to help in the identification of things while that of qualitative to help in behaviour reveal. His study has a primary focus on finding out the similarity of brand loyalty, perceived value and brand loyalty. Therefore, quantitative research is more appropriate. In consideration of the research period, which is seen to be short, the samples are also small. The luxury brand is seen to be one of the subjective concepts because of consumer cognition determination (Phau and Prendergast, 2000). Different motivations have involved that help in buying consumer goods (Apos and McEwen, 2004).

Obtaining more samples can be done by the help of sampling survey as this helps in meeting the needs of the researcher and that of consumers. Quantitative research has extensive usage of the problems involved. The consumer willingness towards the payment of premium can be seen as the reason for the buying behaviour of brands. (Li, et al., 2011) takes the purchase of luxury goods to be the leading indicator, and also limits the number of people born in 1983-1994. The questionnaire will pass. Three Chinese social media (Weibo, WeChat, red) were released. This channel has been proven to be usable. Yamawaki and Sarfati (2019) used the data that was available in social media to channel when studying millennials’ participation in luxury goods. There are two other reasons: first, playing of the central role by social media than that of millennial lives (Lenhard et al., 2010). They learn about products through social products, and the possibility of posting opinions or photos of products online is the escort of other generations.

Besides, they also seek information from different people, for example, social media platforms, their family members, on the products and services they have an interest in (marketing strategy, 2014). Second, millennials are the primary users of social media in China. As by 2020 microblog user data that got released by Xi’an data, people aged 25-40 account for 52.3% of microblog users, and users under 24 years old account for 35.7% (media research, 2019). 

3.3 Questionnaire Design

3.3.1 Questionnaire

Questionnaires are classified into different parts, where the first one discusses why the research was conducted as it can explain personal information. Then there is another part that has a basis on how those interviewed were feeling, and it is shown using the questions. The experience and loyalty in buying luxury goods are significant because of quality perception, brand knowledge, emotional attitude, and using Likert structure in solving problems problem involved in consumer participation of respondents. According to the literature, there are five kinds of questions in the questionnaire. According to these factors and literature, 19 schemes are selected. The other questionnaire section is that involved in telling respondents to fill in information that is required statically live gender and even the place they stay in

3.3.2 Questionnaire Versions and Pilot

Due to the fact of survey conduction in the Chinese market, then the questionnaire is in the Chinese language. Publishment of the questionnaire was done via social media. The respondents that are targeted are the ones who have already purchased the luxury goods.  The respondents need to participate in the filling of the online questionnaire as it will ask of questions. The specific content of the questionnaire is shown in the figure below.

3.4 Data Collection

3.4.1 Data Collection Methods

Snowball is the method used in the selection of the samples because of the comfortability it has in response collection from targeted groups. Questionnaires are sent by the use of a link that is unique then published on WeChat luxury communication group. Obtaining of the responses of the questionnaire can be done by different groups using the Internet.

3.4.2 Samples

Totally 218 respondents completed the survey, where some of the questionnaires were not taken into account because the students did not complete them. For proper analyzation of questionnaires, first of all, we did not consider other people in the year of birth; but the answers of the people were excluded. As by the statistics on the population that were done, the number of males was 124 and 79 respectively as this led to 61.1 % and 38.9% of the medium balanced sample, respectively.

3.5 Multiple Linear Regression Model

The selection of data analysis method is made as it plays a role in achieving the reason for the study as the purpose is also achieved. Multiple linear regression model helps in the analyzing of the final data collected by the use of variables. Y is seen to be the dependent Variable while x1,x2…, xk is k variables that explain y

Y=0+1×1+2×2+3×3+4×4+5×5+6×6+7×7+8x3x7+9x4x5+

This model showed how the multiple linear regression help in analyzing data as the relationship amongst them could also be seen directly (Dao De, 2000).

3.6 Conclusion

For proper selecting of appropriate methods used in the study, some factors are taken into consideration. Collection of first-hand information being the first one, making sure those studies are born between 1980 to 2000, using the MLR model as the number of questionnaires need to be above 200 (Barassi, 2005). Verification of hypothesis is done as the snowball method helped in the collection of samples from the Internet as they were distributed to the respondents

Chapter 4: Findings & Discussion

4.1 Introduction

Evaluation of hypothesis and understanding of the different factors that have an impact on the willingness of the consumers in payment of premium. There was conduction of questionnaire survey done in social media. Valid respondents were 218 as they were the ones interested in the luxury goods. The respondents were requested to help in filling the questionnaire regarding the motivation they had concerning the purchase of the luxury goods. Data that was collected was analyzed by a software called SPSS. The hypothesis had to follow. Verification was done on the influences of the factors (field, 2009).

4.2 Reliability Analysis

To be able to go through the establishment of the reliability of the questionnaire, an analysis of reliability must be conducted. The Cronbach’s Alpha helped in measuring the random errors involved in reliability. Then a test was done on the overall scale, and that of subscales as brand loyalty got included, the knowledge of the brand, the was quality is to be perceived, self-expression and presentation attitudes, and the willingness involved in the payment of premium prices. The coefficients involved in the reliability of the indicators of subscales was seen to be higher than 0.7.as this showed that the questionnaire data could be relied upon. Because there was acceptance on the 0.7 minimum standard, the results are in the below table. High reliability is seen as the coefficient scores of high Alpha get a combination because if items get to be removed from the scale, then the total score will reduce in the total score instead of getting an increase as this brings some confidence in scale reliability (Pallant, 2013). Concerning the validity of the scale, the actual item’s usage conducts a pilot test before releasing a questionnaire that helps establish the scale (Pallant, 2013). Therefore, all the scales involved in questionnaires can be beneficial and relied upon (Veal, 2011).

Results of reliability analysis

4.3 Factor Analysis

Before doing factor analysis, it is necessary to measure whether the items are related to each other. In this case, there is the usage of Bartlett’s test, which is about Sphericity not forgetting that of Kaiser-Meyer-Olkin measures that play a role in the sampling of the total adequacy used.

The eigenvalue is more exceptional than one comes up with a suggestion about the seven factors that help in the explanation of variations that are sizeably involved in the data. The following table can show the findings.  Since these seven factors have eigenvalues more significant as it gives an explanation on the variance of 86.138% making the factors valid

Factor loadings of the items on a factor are more significant than 0.50, which ensures that EFA has a practical significance to the analyzed data. Therefore, these seven dimensions initially determine the measurement scale of consumers’ willingness to pay the premium.

4.4 Correlation Analysis

In confirming the closeness between the variables, the analysis was done by the SPSS software. The analysis described how the variables were close. The analysis is shown in the table below. A positive correlation is shown as it highlights the different brands and affective attitude (p < 0.05). There is also a positive brand shown. Brand knowledge and willingness to pay premium prices (p < 0.05). There are some shreds of evidence to support that affective attitude is positivity relative’s willingness to pay premium prices (p < 0.05). It is preliminarily considered that H6 hypothesis is tenable, but further proof is needed. At the same time, there are some pieces of evidence show that in the significance (P < 0.05), the relationship between self-expression attitude, self-presentation and willingness to pay premium was not significant. Further investigation is needed.

4.5 The similarity of brand loyalty, quality perceived, knowledge on the brand, affective attitude and willingness to pay a premium price

cognitive emotion model, cognition can cause an emotional reaction and consumers’ attitude that shows how the luxury brands affect the willingness of the consumers in payment of premium brands. Three elements of cognition are addressed here, including loyalty, knowledge and equity of the brands.

4.5.1 The link between the loyalty of the brand, quality perceived, brand knowledge and readiness of paying a premium price

Taking brand loyalty, perceived quality and brand loyalty as independent variables, and readiness in paying the premium as variables that are dependent, results show hoe the brand loyalty changes using the help of purchase intention of the brand, indicating that the overall variation of the model has reached a significant level.

From the chart, the regression coefficient that shows brand loyalty is not significant, indicating that there is no importance shown by brand loyalty because it has affected the readiness of paying the premium. Some studies have shown that perceived quality affects the readiness that the consumers have in paying the premium. When the quality of the product gets high, then the consumers can willingly pay for the premium. The brand should focus on the quality of goods production. The more consumers know about the brand, they will also increase their willingness to pay a premium. When consumers choose brands, they tend to choose brands they are familiar with. When they see products related to brands, they will have brand associations. These associations may come from their shopping experience and the feeling of brand products. Therefore, the luxury brand that plays a role in producing consumers with a satisfactory consumption experience has a role in sales improvement.

4.5.2 The link between the loyalty of the brand, quality perceived, knowledge of the brand and affective attitude 

Secondly, it studies the relationship between the different brands seeing them as independent variables. In contrast, affective attitude got seen as the dependent one, and the results outline on the adjusted R-square regression model is 0.184, f = 16.165, P < 0.05, as an indication is done on the overall variation of the model can be explained to a significant level.

According to the chart, the regression coefficient that shows the brand involved in loyalty is significant (β = 0.247, P < 0.05), because an indication of how the brand loyalty has an effect that is on the useful trade. If we accept the original hypothesis H1, brand loyalty has a positive impact on productive attitude. The higher the loyalty of consumers to a brand, the more positive emotion they will have. The regression coefficient of perceptual quality was significant (β = 0.212, P < 0.05), indicating that perceptual quality has a significant positive effect on emotion. After accepting the original hypothesis H2, perceived quality has a positive impact on productive attitude. The higher the brand quality perceived by consumers, the more they like the brand. The regression coefficient of that brand knowledge is significant (β = 0.146, P < 0.05); this indicates how the knowledge of the brand has decisive importance on the influence of affective attitude. Accepting the original hypothesis H3, the more the brand is known by the consumers, the more association they can have with the brand, and the more positive emotion they will have with the brand.

4.5.3 The link between the loyalty of the brand, quality perceived, knowledge of the brand and affective attitude 

Finally, considering the affective attitude as a mediator and add it to the model. Taking brand knowledge, the quality perceived and quality and brand loyalty. The results showed that the R-square of the model after the correction was 0.167, f = 11.117, P < 0.05, indicating that the whole model reached a significant level. From the coefficient table, a positive, meaningful impact is seen on the affective attitude towards the readiness of paying the premium (β = 0.238, P < 0.05). After adding intermediary variables, the regression coefficients of brand knowledge, quality brand that is perceived as it is also loyal starts decreasing. Therefore, affective attitude plays a  role using brand knowledge, perceived quality, brand loyalty and the ability to pay a premium readily. Accept H6, and capabilities can be seen to have some positive effects that result in the readiness of the payment of the premium price.

Although H1 highlights on how brand loyalty acquires some positive effects on the affective attitude, the impact of brand loyalty about the readiness of payment of the premium cannot be relied on. Some research has shown how the millennials are considered to be less loyal towards luxury brands than their parents.

4.5.4 Discussion and Managerial Implications

Investigate whether brand equity which can also be seen as the one constituting the equity of the brand, the quality perceived and the knowledge of the brand can be seen to affect the readiness of the payment of premium as this is done through intermediary involved in affective attitude. Through the above analysis, we can know that there is a positive impact that is seen by brand loyalty on a productive attitude. Still, it has no disadvantage on the readiness of premium payment. Other factors, for example, those of the quality perceived, and the knowledge of the brand are seen to be having some positive effect on the readiness to the payment of premium.

Brand equity has a relative influence as it is based on the willingness to the payment of premium because of the influence seen using culture, and the differences involved in other countries. (Yoo &amp; Donthu, 2001) discovered about the quality perceived that is seen to be a very significant factor for America and also the loyalty of the brand seen to be a significant factor based on the talent of Korea. Consumers in China will increase their understanding of brand knowledge because of brand awareness, which will increase their willingness to pay. Chinese young people’s increased brand awareness makes them more insightful and will seek experiential luxury goods. For them, luxury goods not only give them legendary status and prestige but also give them more value, such as social needs (KPMG, 2013). Bian and Forsythe (2012) also confirmed how consumers sometimes buy luxurious brands for social functions. For Chinese, such a need is for social status or the desire for face-saving (Liao and Wang, 2012). Today’s young people’s social needs are not only reflected in offline communication, but also online social needs. Even because social media can spread more widely, their needs are better met online than offline. For luxury brands that focus on the Chinese market, we should pay more attention to China’s social media platform. You can communicate with the younger generation of Chinese consumers from here.

The findings also highlight brand knowledge, which needs special attention. This knowledge is related to the possibility of brand appearance and recall of brand-related information. In a case where a Western brand is capable of entering the Chinese market, it becomes explicitly necessary to establish awareness, because the consumers that are targeted are possible to not having any relevant information at first. Many of the consumers from China are capable of naming one or two brands using some of the specified categories (Han and he, 2012).

Therefore, the managers that have a target on the Chinese market are supposed to have an awareness established as this can be done by the advertising of different sponsorship ways and other publicity ways. Connection of the brands can be made with the help of a logo that is well known by the Chinese market as it strives to cultivate the personality of the brand to be unique. Frequent and significant promotional activities will improve consumers’ ability to identify and recall brands. For example, if a European brand is a traditional luxury market, it may emphasize its country of origin. Knowledge tends to build attachments that are stronger as they are supposed to be having a positive impact when it comes to the brand.

The results explain the importance of different roles of the face in Chinese consumers’ luxury consumption model. Gabrielli et al. (2012) have a thought on how luxury consumption has become a mirror that has a reflection of the public self. The findings suggest the consumers that are capable of attaching a great significance to the face have a possibility of consuming the luxury brands despite the attitude that they have towards the brand itself. It is mainly due to the social status found in Chinese society and prestige as they have a likeliness of relationship to luxury consumption (Wang et al., 2011). Therefore, different marketers need to focus on how they can develop attractiveness that can have a relation to success, not forgetting the status that most consumers tend to value. Most luxury brands tend the adoption of common strategies seen at a global level (Wiedmann et al., 2007). However, a suggestion on the findings is that the global brand manager has a role in making sure there are a better understanding and proper response towards different needs. The understanding also needs to have a focus on the unique characteristics the consumers may be having across different cultures, as this can be seen during the conduct of marketing activities. When addressing a large market like China, the demand of the consumers that is based on social recognition is supposed to have a reflection of its pricing, packaging and many more brand positionings. The younger generation of luxury consumers is a dynamic group. In their life cycle, their actual needs may change, but their need to keep face may be more stable.

4.6 The relationship between self-expression attitude, Self-presentation attitude and willingness to pay the premium price

4.6.1 Self-expression attitude

There was the use of regression analysis as this helped in testing effects of affective attitude

Firstly, the most used attitude and self-expression attitude get to be seen as the independent variables while readiness involved as the dependent ones. The product of the affective attitude and self-expression attitude is obtained, and the product (affective attitude x self-expression attitude) is added to the regression. From the coefficient table, the product of affective attitude and self-expression attitude is seen to be having some decisive importance on the readiness of the payment of premium (β = 0.199, P < 0.05.

4.6.2 Self-presentation attitude

Both attitudes get to be seen as independent variables. Willingness in premium payment is considered as the independent Variable under regression analysis. Obtaining of the attitude products and self-presentation is done, and the product (affective attitude x self-presentation attitude) is added to the regression. From the coefficient table, the product of affective attitude and self-presentation attitude has a significant positive impact on the willingness to pay a premium (β = 0.1103, P < 0.05). In other words, the self-presentation attitude plays a moderating role between affective attitude and willingness to pay the premium.

4.6.3 Discussion and Managerial Implications

In the past, some researches have suggested that because of different cultural differences (individualism in western countries and collectivism in China), Chinese consumers tend to follow social norms when buying luxury goods, and they will value the opinions of others, and sometimes even buy luxury goods they don’t like according to other people’s opinions. (brewer &amp; Chen, 2007) individualism emphasizes the pursuit of individual uniqueness and the display of one’s personality. Through the above analysis, the millennial luxury consumers born in 1980-1994 will have their views on luxury goods and pursue uniqueness. Even they buy some brands because they think that the uniqueness of these evil brands can show their characteristics and show themselves. They think that clothing is not just clothes, but their external expression reflects their personality and has its characteristics (Gabrielli, 2012)

According to Han and he (2011), China accounts for about 25% of global luxury consumption, making it the second-largest global luxury market after Japan. What’s important is that not only China’s upper class but also middle-class consumers have become important targets for luxury goods. (Hershman, 1995) With more and more luxury goods entering China and regarding China as an important market, the new generation of consumers can access more luxury brand information. Another reason is that the self-examination and self-concept of consumers in this age group will affect their fashion awareness (Aaker, 1999

Self-monitoring and self-concept will affect the fashion awareness of consumers aged 18-23. (Kim, 2014) also shows how exposure to social media has been impacted positively on fashion awareness of the 24-29 and 30-35 age groups. Therefore, luxury brands can appropriately increase advertising information to the act of bringing influence on self-monitoring, an influence on self-concept that is based on young consumers in 1920s. Choosing appropriate channels that help in the increasing luxury exposure is essential as it helps in getting fashion information that should be given to the consumers in the mid-20s to mid-1930s. For example, in social media, there will be online celebrities in China. They sell goods through social media platforms, and many luxury brands have begun to choose this way to expand their sales channels.

Besides, luxury companies can design some products according to the local characteristics when they enter the emerging market, and the marketing should also be combined with the actual situation.

These measures can help companies adjust their products to market characteristics and are critical for luxury companies because they can provide unique value propositions to all customers around the world. To cope with a dynamic and uncertain market like China, enterprises need to have some developments of new functions as the developments can help in the adaptation of various marketing variables, for example, different products as they push the products towards a local demand (Teece, 2007; Teece, Pisano and Shuen, 1997). Previous discussions have been mainly done, and the conclusion that has been brought up is, as the internal market design keeps getting more reliable, the capabilities of the market, on the other hand, ten the ability to adopt market needs gets more durable too. It leads to the adaptation of the needs involved in emerging markets. Besides, the design of luxury companies will highlight their uniqueness, satisfy consumers’ pursuit of uniqueness, and increase their willingness to pay. Their development in the Chinese market will have a positive impact.

4.7 Conclusion

In conclusion, the above analysis results are helpful to establish the model of consumers’ willingness in the payment of the premium for the luxury goods. Through the analysis, perceived quality, brand knowledge, affective attitude, self-presentation, self -an expression which tends to be having a definite advantage on the readiness of premium payment.

Table 4.4: Summary of Hypotheses Testing

Nature of Association Hypothesis

Testing

Tendency

 Conclusion

Chapter 5: Conclusions, Recommendations and Limitation

5.1 Introduction

Research findings are seen in this chapter as a conclusion gets to be obtained, and provision of recommendations from academic research is the research objectives are discussed with the help of a conclusion. The recommendation is shown and described afterwards, then lastly the limitations.

5.2 Conclusions

The objective of the research plays a crucial role in finding out factors of luxury brands purchase by Chinese millennials. Firstly, the cognitive-affective model shows that the consumers’ readiness to payment of premium for luxury brands. The cognition is analyzed from three aspects of brand equity, and affective attitude is the common factors among them. Secondly, according to the attitude theory, this paper analyzes the influence of self-presentation and self-presentation on willingness to pay the premium.

5.2.1 Affective Attitude

The research proves how the affective attitude got an effect on the consumers willing the payment of a premium price for luxury brands. Chinese millennial luxury consumers will buy luxury goods because they like brands. Affective attitude can enhance their preference for brands, and they will give priority to some brands they like. At the same time, the more emotional feedback they get from the brand, the more they like the brand.

5.2.2 Brand loyalty Perceived Quality and Brand Knowledge

Previous studies have shown that although there has been a positive impact on emotional attitude, it does not affect the willingness to pay a premium. For Chinese millennials, there are not just loyalty to some brands. They may like many brands at the same time. They are more interested in the design and popularity of brands than the popularity of brands. Another reason is that there is 22.7% of the people that gave out their response have a monthly income of 15000-50000 yuan, while only 2% of the others got that more than 50000 yuan. Most of the respondents are not the target customers of luxury brands. Although they also buy luxury goods, they mainly focus on some low price and frequently used luxury goods, such as shoes, backpacks, leather goods, scarves, etc. According to KPMG (2013) China luxury survey report, many millennials purchase luxury goods mainly through overseas purchase or Internet e-commerce like Taobao. One of the reasons is that the luxury tax in China is relatively high, and the price of purchasing through this way is relatively low. The number of new products launched by each brand in different seasons is limited. If the respondents have already purchased the famous products of one brand in this season, they will consider purchasing the famous products of other brands. Other types of products of this brand, such as clothes and tableware, may not be in their consideration. Therefore, their loyalty to luxury brands will be relatively low, and brand loyalty will not affect their willingness to pay.

Perceived quality can be looked at as the judgment of the consumers on a brand’s products and the difference between this brand and other brands. Luxury brands provide consumers with reasons to buy through perceived quality and create value for consumers. (Kim and Ling, 2013). According to the previous analysis, respondents’ perceived quality of brands will affect their willingness to pay for brands.

Millennial consumers are very different from previous generations. They attach great importance to the uniqueness of the brand. What they pay attention to is not the brand itself or the product. For them, innovation is critical. Social media greatly influence them. They like to express their opinions on the Internet. At the same time, they are also influenced by the network to pursue the trend. This phenomenon is also reflected in their purchase of luxury goods. They are very fond of luxury goods that keep up with the trend, especially the innovation of cross-border cooperation between high-end luxury brands and sportswear. According to Bain consulting (2018) China luxury report, millennials are the main consumption force of luxury brand sports category. For example, the Triples series, launched by a barricade in 2017, is still popular until 2020. The most surprising is a series of products launched by Louis Vuitton in conjunction with skateboard culture and fashion brand supreme. Not only has Louis Vuitton become the most popular luxury brand of China’s millennials, but also supreme has successfully expanded its influence. Louis Vuitton is famous for its exquisite leather goods. Their superior products are all leather goods with the Louis Vuitton logo. For some millennial consumers, this design is more like the products their parents will use. Through this collaboration, Louis Vuitton has become a synonym for fashion in the eyes of many Millennials.

By the help of brand knowledge where a proportion was done by Keller (1993), there was a combination of brand association and awareness. Consumers, in this case, are supposed to know the understanding of the brand association (Aaker, 1991). Different researchers have come up with reasons as to why brand knowledge is essential to the willingness of the consumers to payment of price premium. (lassar, 1995). According to Netemeyer (2004), brand knowledge tends to make those consuming it to be less sensitive as this can lead to an increase in the prices.  Brands are seen to have a willing in the payment of higher price because of the quality of the products (Chaudhuri, 1995; Seitz et al., 2010). Despise China becoming the leading consumer luxury worldwide, their global consumer market accounts to 33% global consumer market (Bain consulting, 2018), and it is still an emerging market. Different from the regions with a long history of luxury culture in Europe, many luxury brands are not familiar to consumers in China (Hoeffler and Keller, 2003). Some brands with low popularity can increase their investment in brand marketing and expand their popularity in China. Only when consumers know the brand will they be interested in it.

5.3 recommendations

5.3.1 Recommendations to Academic Research

This study refers to millennials who are born in 1980-1994, but there are many different opinions on the definition of Millennials. KPMG describes China’s millennials as those born in 1983-1999, and many works of literature in China describe them as people born in 1990-2000. The range of age can be expanded in the next phrase.

5.3.2 Recommendations to Luxury Brands

Luxury brands should keep up with the trend in design. They can also design products jointly with some luxury brands loved by Millennials. For example, the shoes recently launched by Dior and Nike are popular with Millennials. The original price of the shoes is 35000 yuan, and the price in the second-hand market even reaches 100000 yuan.

Online shopping and social media are very developed in China. Luxury brands can consider expanding their visibility and communication with millennials through digital marketing. Create Omnichannel marketing. Lannes (2018) studies the top 20 fashion luxury brands in China and finds that the proportion of brands with the growth of more than 25% and less than 10% is about 1:2. The successful brands used younger and more conventional marketing methods to attract Millennials. For example, they will penetrate consumers through social media celebrities who are favoured by millennials and use them to promote their products to young consumers. They have also joined popular Chinese social media, such as WeChat, and their marketing budget on WeChat is even as high as 40% – 70%. Although the cost continues to rise, its brand scale has been dramatically improved.

5.4 Limitations

Because this research collects data through social media, the data collected is uncontrollable and has some limitations. First of all, there are more male samples than female samples, and their ratio is about 6:3. According to previous researches, female consumers will spend more money than male. Especially cosmetics, which is a traditional female category for female. At the same time, male consumers will spend more money on watches. Second, we look In the survey here, and there is no restriction on the location of the respondents, which leads to a relatively small sample of high-income respondents. There are four primary sources of financing for Chinese millennials to buy luxury goods: 38% from personal income, 57% from parents’ funding, 2% from brand sponsorship, and 3% from other sources (KPMG, 2018). In the questionnaire, they were only asked about their monthly income, without considering whether they had other sources of funds. In the data collection, these are uncontrollable. In future research, we can consider collecting larger samples, but because of the control of time and cost, we did not collect larger samples this time.

5.5 Final Conclusion

China is considered to be the most significant luxury goods consumption in the world, leading to 33% in the global market. Chinese millennials are predicted as being the leading luxury consumption shortly. They will not lose interest in luxury goods or purchase them

There was a total of 218 questionnaires that were acquired using social media, and 203 of them were able to be valid. First of all, they pay more attention to the design of the brand and pursue the uniqueness rather than the popularity of the brand. It is essential, as studies in other age groups show that Chinese consumers value luxury brand awareness. Because luxury brand provides beyond its use-value, is a status symbol. So, they will buy some famous brands that they don’t like. Second, they will pay more attention to self-monitoring. They are very concerned about their appearance, self-monitoring will make them have a sense of fashion, they are very concerned about fashion brands, and fashion trends. Their behaviour is greatly influenced by the social platform, which also makes them very easy to access fashion information. Their consumption behaviour has formed a complete cycle. They get fashion information from social media and then share them with social media after buying luxury goods. This discovery is significant. Luxury brands can use social media to promote their brands, communicate with consumers, obtain their ideas, improve the design of brands and meet the needs of consumers.