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BRITISH SCHOOL OF FASHION

To investigate the impact of digital marketing on luxury fashion consumer\'s purchase decision in the UK

MBA LUXURY BRAND MANAGEMENT

Module: Research Project - Design and Methods

Module Code: MMN223636

Module Leader: Professor Bipasha Ahmed

Academic Year: 2016-2017

Submitted by:

Mrudula Dubal

(Student ID: S1607441)

TABLE OF CONTENTS

SR. NO

TITLE

PAGE NUMBER

1

Introduction

4

2

Background and Rationale

5

2.1

Contributions to Theory and Practice

5

3

Research Aim and Objectives

6

4

Literature Review

6

4.1

Anti-Laws of Marketing

6

4.2

Luxury Brand Equity

7

4.3

Digital Marketing Communications

7

4.4

Related Studies

7

4.5

Theoretical Concepts and Framework

9

5

Research Methodology

9

5.1

Research Philosophy

9

5.2

Research Approach

10

5.3

Research Strategy

10

5.4

Research Methods

11

5.4.1

Sampling Strategy

11

5.4.2

Data Collection

11

5.4.3

Data Analysis

12

5.4.4

Validity and Reliability

12

5.5

Research Ethics

13

6

Research Plan, Limitations and Final Considerations

14

6.1

Gantt Chart

14

6.2

Potential Limitations and Challenges

14

7

Reference List

16

1.INTRODUCTION

As the number of consumers around the globe is increasing, digital and social media is becoming increasingly significant from the commercial context. Unlike others, the luxury industry has been one of the few groups that have been reluctant in embracing social media in their marketing strategy. (Laroche, Habibi and Richard, 2013). The reactions of luxury brands towards social media are surprising as the brands that are known for innovation and creativity are not adopting the up-to date digital technology and social media. This leads to an enquiry of whether the luxury brands operating within the UK have adapted the digital and social media as a tool for marketing.

2. BACKGROUND AND RATIONALE

The emerging markets in present world are experiencing new demands that call for pushing the luxury brands to fit in the market. There has been a shift in the buying powers as the consumers are purchasing products across the entire chain of distribution, be it outlet stores or flag-ship stores. Laroche, Habibi and Richard (2013) illustrate that the relationship between the customer and the brand is affected by social media however the example given above shows that it is among the customers themselves. The capability to change the relation among the market actors and the market structures at a large scale is preserved by the digital and social media and the real co-design processes are allowed by social networking to be peered into by the integration. It is to be noted that the he brands can even have a negative impact by digital and  social media as the technologies regarding these forms of media have different opportunities that can be exploited by the brands for their best interest.

There has been an increased competition and offers across all luxury categories one of the reasons being digital communications that has subsequently lowered the barriers of entry for the customers into the world of luxury brands thereby increasing the clientele for luxury (Okonkwo,2009). As a result, activities of marketing become more profitable along with distribution due to the ability of social media to reach clients across the globe at once. Thus social media serves as one of the most effective platforms of generating higher levels of client engagement and contribution. Particularly in the UK, clients especially the high net worth individuals who are impulse buyers and like to purchase their favourite brands anytime and anywhere as they are digitally active users, it puts a greater emphasis to have a strong digital media marketing to encourage and influence the client's decision to purchase a luxury item (Euromonitor International, 2016).  Also, European brands like Burberry and Hugo Boss are revolutionising the fashion world by introducing ‘see now-buy now' facilities going beyond the expectation of their clients and digital media plays an important part in the same (Arthur, 2016).

Currently, the biggest difficulty faced by the luxury industry is to be able to reach more consumers in new markets with the help of new channels (Kim and Ko,2012). However, prime values critical to the luxury industry remain exclusivity and uniqueness that have to be maintained and aligned within the media chosen for the luxury products. Luxury brands are based on the values of aspiration, inaccessibility and exclusivity whereas, digital and social media is known for availability, accessibility and mass appeal thus indicating that there is a clear conflict between the characteristics of the luxury brands and social media (Thiems, 2013). However, regardless of the contrast in the fundamental values, digital and social media offer huge potential for the luxury brands to develop consumer interaction and engagement and increase brand awareness and customer acquisition.

Considering the fact that digital and social media marketing is emerging as the strongest form of marketing (Trost, 2013) luxury brands need to implement online marketing strategies that ensure a positive online presence that is complimenting the luxury values and reputation of luxury brands. It thus appears necessary to push the luxury brands forward to the tech-savvy consumers through digital and social media marketing.

2.1 CONTRIBUTIONS TO THEORY AND PRACTICE

The current academic literature on the marketing strategies of luxury brands has been well discussed and debated through an in-depth analysis.  The author identifies need of studying the proposed topic of the impact of digital marketing on luxury fashion consumer\'s purchase decision in the UK, due to the fact that no literature has discussed the topic in emphasis before. Most of the academic research has been conducted debating around the topic but nothing concrete has explained digital marketing and further moving to the luxury brands and thereby, understanding the impact of former one on the later one. Thus, the study can therefore contribute to the academic literature by developing a well-structured and concrete paper expected to fill in the gap in the available literature and add to the academic findings on the subject.

Selecting the topic on of the impact of digital marketing on luxury fashion consumer\'s purchase decision in the UK was not arbitrary, but it arose as the researcher identified the need to understand the current channels used by luxury brands to communicate to their clients in order to be able to serve their prospective clients and markets in an enhanced manner.

3.RESEARCH AIM AND OBJECTIVES

The art of shopping has changed. As the luxury consumers demand ease in shopping as well as demand for shopping in comfortable environments to be offered to them by the luxury brands.   It is suggested that to obtain the power of price, luxury brands should establish the characteristic meaning by the status, quality and creativeness (Rokka et. al, 2016).

Moreover, an excellent connection should be present between the luxury brand and individuality, human creativeness and tradition. The biggest question faced by the luxury industry at current point of time is to determine how to reach to the consumers in new markets and what are the new channels for the same purpose. However, prime values critical to the luxury industry remain exclusivity and uniqueness that have to be maintained and well-adjusted within the media chosen for these luxury products.

The aim of this study is “To investigate the impact of digital marketing on luxury fashion consumer\'s purchase decision in the UK”. In order to achieve the aim, research objectives are:

• To understand the luxury fashion industry in UK and characteristics of the consumers.

• To determine use of digital marketing by the luxury fashion industry in UK.

• To assess the influence of digital marketing on the purchase decisions by the consumers in luxury fashion industry in UK.

4. LITERATURE REVIEW

4.1ANTI-LAWS OF MARKETING

    According to Bastien and Kapferer (2013), only premium brands should apply regular standard rules. Whereas, the main target of luxury brand should be to plan their own tactics which include focus on public relations, limited number of distribution channels, knowledge about the ‘marketing anti-laws', and best product quality. Further,  consumers should be convinced by marketers of luxury brand to select an item of increased range in order to buy anything that will be better in quality and cost (Smith et. al , 2014). The consumers will not be satisfied with any other brand, as soon as they make good customer relations with their consumers. The brand will become expensive and can be vended at any cost once the consumers become loyal and devoted to the brand (Serhan, Mikhael and Warrak, 2016).

4.2 LUXURY BRAND EQUITY

Rokka et. al (2016) suggested that to obtain the power of price, luxury brands should establish the characteristic meaning by the status, quality and creativeness. Moreover, an excellent relationship between the luxury brand and individuality, human creativeness and tradition. The individuality is the fundamental element of luxury brand which is indicated from the background of brand. The tradition is acceptability from the creation, class and authority rather than the expertise. The personality of brand, its values, physique, relationship and self-concept of customer are included in the identity prism of brand.  

4.3 DIGITAL MARKETING COMMUNICATIONS

According to Tiago and Veríssimo (2014), mobile base, content that is user generated, internet, email, gaming, digital signs, web, viral marketing and Internet Protocol Television are the trends that are included in the digital media. Nowadays, social media is new methodology that depends on the storytelling, establishment of long duration relations and dialogues (Royle and Laing, 2014). Social media can be differentiated into three categories: i) shared discovery, ii) peer branding and iii) customer service that is crowd dependent. Each category gives opportunity to consumers to question, promote and analyze brand.   

4.4 RELATED STUDIES

It is reported that the method of buying is transformed (Angus et. al, 2012). Today, ease in shopping and ambiance that offers buying comfortably and easily is demanded by the luxury consumer. According to Hoffman and Austin (2016), the introductory products should be sold on the internet as it will appeal the novel customers rather than selling the products with prices higher than the entry level online as that will be detrimental the product as well as brand uniqueness. The selling of false goods should also be prevented. A term ‘cognitive surplus' was given by Sotiriadis (2013). Cognitive surplus signifies the people universally, who agree to take part, celebrate, and volunteer their free time on social media. It is reported that opportunity is offered to luxury brand by the social marketing to do online promotions, increase their public relations officially and create viral videos on any occasion until they are not able to attract online consumers like the premium brands. However, opportunities are not properly availed by the luxury brands to improve their communication and marketing tactics on social media.

Hence, it is suggested that rather than increasing the total focus on selling of introductory products, improvement should be done to marketing, relation with customer and communication. it was also indicated by study that best approach for sustaining the profile of brand, promote the awareness of brand and increase customers with brand loyalty, luxury brands should start the storytelling of their brand on the social media. However, there is a clear distinction between the characteristics of luxury brands and social media (Thiems, 2013).

However, regardless of the contrast in the fundamental values, digital and social media offers huge potential for the luxury brands to develop consumer interaction and engagement and increase brand awareness and customer acquisition. Considering the fact that digital and social media marketing is emerging as the strongest form of marketing, luxury brands need to implement online marketing strategies that ensures positive online presence that is complimenting the luxury values and reputation of luxury brands. It thus appears necessary to push the luxury brands forward to the tech-savvy consumers through digital and social media marketing.

From the spirit of above discussion, the consumer of social media has been empowered. The social media enables the consumers to have a greater access and participation during process of developing the value. Eventually the consumer's interaction through social networking might progress into a process of innovative networking and the social productions through binding the opportunities with the benefits of social production.

4.5 THEORETICAL CONCEPTS AND FRAMEWORK

The proposed study is based on the works of Habibi, Laroche and Richard (2015) who focused on the use of internet in the marketing strategy of a luxury brand. The core of the study by these researchers was examination of the business discipline specifically regarding branding within the digital context. The current proposed study puts greater focus on digital and social media and not all the internet services.

The proposed study will also use the theory of path classification that is suggested by Kim and Ko (2012). The theory states that there are three basic strategy paths that can be adopted by the brands when considering digital and social media marketing. Most important indicator in these three paths is the control level in the marketing strategy. The three path classifications include:

• Least resistance that means control is fully shifted from the brand to the consumer

• Playing their game that means there is reduction in control and brand fits seamlessly in the landscape of social media

• Leverage of social media that means that brand takes the full control and the consumers are given all the input from the brand itself

5. RESEARCH METHODOLOGY

5.1 RESEARCH PHILOSOPHY

An appropriate research philosophy is necessary to conduct the research while it reveals the imperatives of suppositions and assumptions. There are three major research philosophies as stated by Smith (2015) that include realism, positivism and interpretivism. The decision of adopting the right philosophy is made on the basis of subject and theme of the study. The positivism research philosophy is one that makes use of the universal values and truths. However, the interpretivism philosophy is one that aspects that are not part of the universal values and truths but can be used for resolution of the problems. The realism philosophy is one where situation is considered only in real context and thus the surroundings are used to determine the reality.

Based on above explanation of various research philosophies, it is decided that the proposed study will use the positivism one implying the properties and their relations will be understood in the light of positive knowledge that is based on natural phenomenon. Thus, the proposed study will derive information by interpreting the reason and logic that will serve to develop exclusive knowledge from authoritative sources.

5.2 RESEARCH APPROACH

A critical element of any research methodology is the research approach that can be either inductive or deductive. According to Fowler (2013), in the deductive research approach, study starts with a general idea that becomes specific as going forward. The approach is also termed as top-down approach where the theories are used to interpret observations of the researchers. On the other hand, in the inductive research approach, the study starts with the observations on the basis of which theories are proposed at the end of the research. Thus, inductive approach involves searching the observations for the patterns that can be used to develop theories as explanations.

The major difference between two research approaches is that deductive approach is used for aim and theory testing while the inductive approach is used to generate new theory based on the data. The proposed study will use the deductive research approach as various theories on consumer behavior, purchasing behavior, attitude towards luxury brands and digital marketing influence on the buying behavior will be assessed in order to generate the specific findings.

5.3 RESEARCH STRATEGY

Most commonly used research strategies are the quantitative and qualitative research strategies as stated by Neuman (2011). In case of quantitative research strategy, the researcher relies on the numerical data that, in deeper levels, is done through the development and testing and research hypothesis, assessment of cause and effect, reduced variables and testing of theories through measurements. On the other hand, the qualitative research strategy emphasizes on words rather than numbers. Thus, the qualitative strategy is subjective while the quantitative is objective.

The proposed study uses the quantitative research strategy in which different variables are used to determine the relationships between them. Choosing quantitative research strategy is feasible when the results with high reliability and validity are to be achieved.

5.4 RESEARCH METHODS

5.4.1 SAMPLING STRATEGY

The proposed study will use non-probability sampling technique that is defined by Hoy (2010) as the selection technique of units based on the researcher's judgment. Hence, the sampling is arbitrary rather than random and allows choosing the particular elements from the population. Choosing non-probability sampling for the proposed research enables the researcher to save time and cost. However, non-probability sampling overlooks flexibility of generalizing the findings as specific population is targeted in the sampling technique.

There are different types of non-probability sampling techniques that include purposive, snowball, quota and convenience sampling. Due to limited resources in terms of costs and time, the proposed study will use purposive sampling for selecting the units from target population. The proposed study will select the subjects for the study based on the annual income as usage of the luxury items can be strongly related to the income of the individual.

5.4.2 DATA COLLECTION

There are two major sources of collecting data for the research study that are primary and secondary sources. The primary sources are used to retrieve first-hand information that indicates that the data is specifically related to the particular study (Neuman, 2011). On the other hand, secondary sources allow collecting data from previous studies and publications so that findings from recent studies can be supported or rejected in the light of findings from other authors. Both sources of data are equally important for the purpose of research. However, secondary data saves a lot of time and can be used to understand the academic and theoretical grounds of the particular topic.

Primary data for the proposed research is collected through the survey questionnaire that is termed as the strong instrument for finding the relation between two variables (Leedy and Ormrod, 2012). The survey is also most popular research instrument for data collection that can be used to cover data from large population in a cost effective manner. On the other hand, secondary data for the proposed study will be collected from electronic libraries, online articles and publications.

5.4.3 DATA ANALYSIS

Data analysis is the most crucial part of the research as it leads to findings on the topic in concern. The statistics that will be collected through primary sources will be examined with the help of SPSS that facilitates the data entry, reporting and analysis. For this purpose, the answers from the respondents will be coded and then processed statistically to generate results in the form of frequency tables, bar charts and regression analysis.

5.4.4 VALIDITY AND RELIABILITY

The validity of any research study can be categorized as construct, content and criterion validity as suggested by Neuman (2011). The proposed study will consider all three categories of validity where the tools and sample will be checked for presenting sufficient observable facts with adequate details. Also, the proposed study will set the criterion validity for which the comparison between the techniques of research and findings of the research will be made with that of already established standard. Third category that is the construct validity for the proposed study will measure the instrument in terms of its effectiveness. As the proposed study will use the research instrument of survey questionnaire, the researcher will make use of the available secondary sources and the instrument will be checked for completeness, depth, clearness and relevancy.

Reliability of the proposed study is also to be attained that can be done by conducting a pilot study (Neuman, 2011). Twenty participants will be included in the pilot study to gauge the consistency of the construct. Also, the consistency of tool is checked by collecting feedback from the participants of the pilot study. Lastly, internal reliability will be established through Cronbach's Coefficient Alpha that reveals the consistency scores of the particular instrument that is the survey questionnaire in this case.

5.5 RESEARCH ETHICS

The researcher is well aware of the ethical considerations that arise in the course of the research. Firstly, the ethical requirement of the informed consent will be followed that means that the participants will be informed about the purpose and objectives of the study. They will also be communicated the rights of participation and thus in all manners the participants will be in full agreement with the researcher that their rights are protected. Another ethical consideration is about keeping the participants' information as confidential. The anonymity of these participants will be maintained by not mentioning any personal information about them in the study.

6. RESEARCH PLAN, LIMITATIONS AND FINAL CONSIDERATIONS

6.1 GANTT CHART

TASKS

WEEKS

1

2

3

4

5

6

7

8

9

10   11,12

Discussion of the proposal with mentor

Refining of research proposal

Developing survey questionnaire

Scheduling surveys

Distribution of survey for data collection

Analysing the data and redefining the problem

Generating results

Preparing a draft report

Conducting complete data analysis

Writing dissertation

6.2 POTENTIAL LIMITATIONS AND CHALLENGES

The proposed study faces a number of limitations and challenges in terms of the methodology as well as potential outcomes. It is possible that the respondents are not able to fill in the survey forms in the given time that will considerably increase the non-response rate. As the consumers can be active employees of different organizations, it can be difficult to find sufficient time to answer the survey questions. This limitation can result in more time for the research than expected. Also, the budget of the research imposes significant limitation. Sample size can affect the outcomes of the study as the issues arise in generalization of the results. The issues covered in the study are highly subjective and thus it is not possible to go in detail of every aspect.

The research design of the proposed study is a potential limitation as it includes only the quantitative data that fails in exploring the views, opinions and expressions of the participants as the selected research design takes only numerical values. Thus, the future studies in the same domain can incorporate qualitative data also to ensure better understanding from the perspectives of the consumers. The involvement of the researcher remains a challenge in the study. Role of researcher is described as data collector and analyzer. The researcher is supposed to put all the resources at work to reach the research objectives and answer the research questions. However, any degree of biasness can affect the potential outcomes. In case of quantitative research approach, the biasness of the researcher is reduced as the questions in the surveys are closed-ended and the responses are tabulated in numerical codes for analysis. However, it is possible that the researcher interprets the results with a different perspective as done by previous researchers. It is also possible that the survey questions do not include enough choices and the respondents find it difficult to select the answer. However, the researcher for the proposed study will review the survey questionnaire multiple times in order to ensure that all the options are fairly represented.

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