The Concept of Luxury Brands Essay
Paper about the Definition and Categorization of Luxury Products and Brands consisting of a Taxonomy of Luxury and a Handbook for the Creation of Luxury Products and Brands This paper defines both luxury products and brands and also distinguishes similar concepts such as premium and masstige and differentiates between major types of luxury products and brands such as accessible vs. exceptional luxury products and connoisseur vs.
Star brands. In that way, it should create a better understanding of what actually constitutes luxury products and brands, and thus should be useful for both researchers and managers within the field of luxury brand management.
As luxury is constantly on the move, this paper will be constantly up-dated. Therefore, please feel free to send me your feedback and ideas. The latest publication can be foundhere and previous publications below.
According to its objectives, the paper is split into the following two major components: Taxonomy of Luxury: The tasks of distinguishing between luxury and non-luxury and of categorizing luxury into different types reminds one of the work of taxonomists, who try to order organisms into groups based on their similarities and differences.
The classification of organisms is not that simple, not only because of their vast variety, but also because boundaries between species are diffuse.
However, similarly to the taxonomy of organisms, the taxonomy of luxury should provide a definition of “luxury products” and “luxury brands” that, for any products and brands, allows one to decide as best as possible if they are part of what is meant by these terms. In addition, the taxonomy should give an overview of the major types of luxury products and brands, as well as of similar concepts. Handbook for the Creation of Luxury Products and Brands: For mankind, classification had to be carried out from the very beginning, because the accurate identification of food, predators, mates, fuel, building materials etc.
was crucial to survival. This demonstrates that classification also leads to a better understanding about the objects of investigation. Besides their value in the classification of luxury, the characteristics of luxury products and brands thus also help to develop an understanding about how they are actually created. As this is a distinctive area of application, the explanations about their characteristics are consolidated in a separate part of the paper, which should serve as a handbook for the creation of luxury products and brands.
PART I – LUXONOMY The task of distinguishing between luxury and non-luxury and of categorizing luxury into different types is reminiscent of the job of taxonomists, who try to order organisms into groups based on their similarities and differences (Stace 1991, p. 5). “Taxonomy” is more generally used today for classifications of any types of objects of investigation, including, for instance, shopper motivations (Westbrook and Black 1985), vehicles (Pirotte and Massart 2004, p. 2) and luxury consumers (Han et al. 2010, p. 16).
This part of the paper presents a taxonomy of luxury particularly for use within the field of luxury brand management. Starting from a basic definition of luxury, it distinguishes between the major understandings of luxury put forth by different areas of research, defines luxury products and brands and gives an overview of the major types of luxury products and brands and also of similar concepts. The definitions of “luxury products” and “luxury brands” should allow one to decide as best as possible, for any products and brands, if they are part of what is meant by these terms. 1.
The Basic Definition of Luxury 1. 1. The Necessity-Luxury Continuum Despite confusions, researchers across all disciplines share a basic understanding of luxury. To begin with, luxury is defined as something that is more than necessary (e. g. by Bearden and Etzel 1982, p. 184; Muhlmann 1975, p. 69; Reith and Meyer 2003, p. 10; Sombart 1922, p. 85). In contrast to necessity, some authors also characterize luxury by non-necessity and superfluity (e. g. by De Barnier et al. 2006, p. 5; Dubois et al. 2001, p. 15; Csaba 2008, p. 3; Geerts and Veg 2010, p. 2; Jackel and Kochhan 2000, p. 75).
The distinction between necessity and luxury is based on the availability or exclusivity of resources. While necessities are possessed by virtually everyone, luxuries are available exclusively to only a few people or at least only on rare occasions (Bearden and Etzel 1982, p. 184). Bearden and Etzel (1982, p. 186) imagined the necessity-luxury dimension as a continuum ranging from absolute necessity to absolute luxury. Accordingly, they developed a six-point Likert scale ranging from “a necessity for everyone’” to “a luxury for everyone” in order to measure the luxuriousness of a number of product categories (see also Kemp 1998, p.594).
Today however, people spend the biggest portion of their income on goods that satisfy more than their necessary or basic human needs, but most of these goods might still not be considered a luxury. Therefore, Chaudhuri (1998, p. 158 et seqq. ) criticized the necessity-luxury continuum produced by Bearden and Etzel (1982) and measured necessity and luxury as two separate variables on a seven-point agree/disagree scale (“This product is a luxury [necessity] for me. “) No significant relationships were found among these variables (p.163), which supports the approach of these authors.
However, there were goods with low ratings on both variables such as cornflakes, frozen dinners, and potato chips, indicating the need for another category of ordinary goods. Bearden and Etzel (1982, p. 186) actually already considered this category, as they defined luxuries “as not needed for ordinary, day-to-day living. ’” Instead of subsuming ordinary goods into the necessity category, the scale can also be extended to the necessity-ordinary-luxury scale, which might be more intuitive for today’s consumers.
In very old lexica, luxury is defined as anything that is more than necessary (e. g. Brockhaus 1846, p. 179). After the increase in the standard of living over many social classes in the late 19th century, the definition was further narrowed by luxury being also that which is more than ordinary (e. g. Meyers 1890, p. 1035). Since then, most lexica share the notion of luxury as anything that is more than necessary and ordinary (e. g. Meyers 1995, p. 189). However, not everything that is neither necessary nor ordinary is a luxury.
For instance, most people rarely have moths in their wardrobe, but still do not consider this extraordinary occurrence a luxury. This demonstrates that the characterization of luxury as non-necessary and superfluous can be misleading because luxury is always meant to satisfy some human needs and desires (Berry 1994, p. 4 et seqq. ; Geerts and Veg 2010, p. 2; Giacalone 2006, p. 34; Goody 2006, p. 341). Accordingly, luxury is also associated with “dream” (e. g. by Seringhaus 2002, p. 5; Dubois and Paternault 1995, p. 69).
While necessary and ordinary goods are also desirable (or required), a study by Kemp (1998, p. 599; 603) points out an essential difference: “similar items [are] more likely to be perceived as a luxury if they [produce] a positive effect for the recipient than if they [relieve] a state of discomfort [… so that luxuries are…] positive instead of negative reinforcements. ” Therefore, Kemp (1998, p. 592) compares the necessity-luxury continuum with the hierarchy of needs produced by Maslow (1970), which ranges from basic physiological needs such as hunger (necessities) up to needs of self-actualization (luxuries).
These facts demonstrate that the luxuriousness of any resource is not only based on its availability, but also on peoples’ desire for it. Accordingly, the basic definition of luxury may be summarized as follows: Luxury is anything that is desirable and more than necessary and ordinary. | Luxury usually refers to single items, in which case it is described as qualitative luxury. In contrast, quantitative luxury refers to the profusion of an excessive amount of resources, which are not necessarily luxurious. For instance, this includes lighting a cigar with a handful of matches (Sombart 1922, p.86).
1. 2. The Relativity of Luxury The decision of what is desirable and more than necessary and ordinary is relative and depends on the perspective (Buttner et al. 2006, p. 9; Jackel and Kochhan 2000, p. 75; Kapferer 2008, p. 96; Nyeck 2004, p. 1; Sombart 1922, p. 85; Valtin 2004, p. 20 et seqq. ). The relativity of luxury splits into a regional, temporal, economic, cultural and situational relativity, which is illustrated in figure 1 and explained below. Regional relativity refers to the classification of resources on the necessity-luxury continuum depending on their local availability.
Some goods are widely available and worth very little in some regions, but acquire luxury status by virtue of their rarity in another environment (Merki 2002, p. 85; Reith and Meyer 2003, p. 10). For instance, in the 19th century, kola nuts could be freely collected in the forests of West Africa and became a luxury in Europe, where they were used for kola biscuits and kola wine (Goody 2006, p. 347). In addition, a sunny day at the beach might be considered a luxury in most parts of Europe, while it is almost an everyday experience for people living in Miami.
Temporal relativity refers to changes in the perception of the luxuriousness of resources over time, which are based on changes in their availability and desirability (Fuehrer 2008, p. 214; Kisabaka 2001, p. 119 et seqq. ; Matsuyama 2002, p. 1038). The major causes of these changes are technological progress and societal trends (see also Konig 2002, p. 118). Technological progress is also the main reason for the decreasing relevance of the regional relativity of luxury goods. For instance, modern production methods enabled the development from luxury kola to mass-marketed Coca-Cola (Goody 2006, p.348).
There are many other examples of the metamorphosis of luxury goods into mass market commodities such as butter, chocolate, coffee, spices, sugar, and tea (Reith and Meyer 2003, p. 10). This process runs especially fast for technical products, as exemplified by TV’s, PC’s, and mobile phones. However, this process can also run in the opposite direction, as seen with some historically ordinary resources, such as clean air, silence and space, which have become increasingly rare, at least in some regions (see also Koschel 2005, p. 41).
Temporal relativity represents the particular character of luxury as being not stable and constantly changing over time (Kapferer 2008, p. 96; see also Jackel and Kochhan 2000, p. 89; Mortelmans 2005, p. 504). Economic relativity refers to differences in peoples’ perceptions of luxuriousness depending on their access to resources (Kapferer 2008, p. 96; Kisabaka 2001, p. 121; Meffert and Lasslop 2003, p. 4; Vickers and Renand 2003, p. 461). While mostpeople consider a watch costing 50€ as an ordinary item, there are some who see it as a luxury, and still others who would not even regard a watch costing 5,000€ as a luxury.
Economic relativity also refers to differences among countries with varying states of economic development. For instance, cars are generally considered as ordinary goods in Western Europe, but remain a luxury in developing countries (Christodoulides et al. 2009, p. 397; Matsuyama 2002, p. 1038). Culutural relativity: In any cultural context, luxury refers to something that exceeds necessity and ordinariness. However, in contrast to the previous categories, cultural relativity does not refer to the availability, but to the desirability of resources to people depending on their culture.
The same resource might be considered luxurious in one culture, but just ordinary or even useless and undesirable in another culture (Kapferer and Bastien 2009b, p. 314; Kemp 1998, p. 604; Kisabaka 2001, p. 121 et seqq. ). For instance, champagne can be considered as a luxury in European countries, but generally is not desired in Islamic societies. The same is true for a Lamborghini from the perspective of someone from a secluded Amazon tribe (Berthon et al. 2009, p. 49). However, Mortelmans (2005, p. 497) argues that “every social group can be said to have its own luxury.
” There are culture-specific symbols of good taste and luxury, which are determined by the elite of any cultural group or subculture and are used for social distinction (Bourdieu 1994, p. 64 et seqq. ; Fuehrer 2008, p. 135 et seqq. ; Merki 2002, p. 90; Reith and Meyer 2003, p. 24). While gold teeth grills are considered a luxury in the hip-hop scene, the majority of people do not find them desirable.
The preferences of luxury are rooted to a great extent in cultural values (Kemp 1998, p. 596; Sombart 1922, p.87), which differ by demographic variables such as gender, age, and education (see studies by Hudders and Pandelaere 2009, p. 6 et seqq. ; Jackel and Kochhan 2000, p. 75). However, the members of a cultural group also differ in their knowledge of the symbols of luxury (Kisabaka 2001, p. 121).
These facts demonstrate that there are also differences in the perception of luxury among the members of a cultural group. Therefore, Berthon et al. (2009, p. 47) state that luxury “has an intensely individual component as well: what might be luxury to one person will be commonplace, or perhaps even irrelevant and valueless, to another.
” As the culture-specific symbols of luxury are a result of social learning, it must also be possible to influence peoples’ ideas of luxury using marketing measures (Jackel and Kochhan 2000, p. 81). For instance, De Beers managed to position diamonds as a symbol of love and luxury. Situational relativity implies that the same resource could be differently classified as necessary, ordinary or luxurious depending on the circumstances. For instance, ordinary food might become luxurious if a person has not eaten it for a long time, and any luxury food could be considered ordinary after eating it for several days (Kemp 1998, p.598).
1. 3. General Perspective for the Definition of Luxury These types of relativity can be used as follows to determine a general perspective from which luxury should be defined, particularly with regard to the requirements within the field of luxury brand management: Regional relativity: Due to the globalization of business, especially of the luxury industry, luxury should be defined from a global perspective, which leads to the omission of regional specialties from the definition of luxury for the sake of a broad international coverage. Temporal relativity: The definition of luxury should refer to the present.
Economic relativity: Luxury should not be defined from the perspective of the very poor or the very rich, but of the entire society of developed regions. Despite the differences in the notion of luxury between the poor and the rich, Kemp (1998, p. 596) found that to a large extent, a gross-societal consensus exists concerning the classification of goods as either luxury or non-luxury. Culutural relativity: The desirability of resources and the appearance of luxury are determined by the upper class, which also includes the relatively homogeneous segment of the global elite (Vickers and Renand 2003, p.461).
Consequently, hip hop-style gold teeth grills cannot be considered luxuries (as long as they are not adopted by the upper class). Basically, luxury appeals to everyone, if defined as something that is desirable and more than necessary and ordinary from his or her perspective. However, studies on the attitudes towards luxury usually refer to luxury as determined by the upper class. Consequently, the attitudes of respondents range from admiration to rejection (Reich 2005, p. 33), which often reflects their general opinion of the societal system.
Besides that, the upper class also consists of different segments, which means that a variety of luxury tastes and lifestyles exists. Situational relativity: Finally, the definition of luxury should generally not consider any temporary or individual circumstances, but should be restricted to normal conditions. Accordingly, the basic definition of luxury may be complemented as follows: Luxury is anything that is desirable and which exceeds necessity and ordinariness. As a general rule, this is defined from a global perspective, for the present and for normal conditions.
While the exclusivity of resources is evaluated by the entire society, the desirability of resources and the appearance of luxury are determined by the upper class. | Based on that, table 1 exemplifies some of the many resources that can be differentiated from luxury. Accordingly, theextended basic definition limits the scope of luxury from almost anything to a more reasonable level and therefore already helps to dissolve a large part of the controversies about its definition. Table 1: Examples of Non-Luxury Items| Example of Non-Luxury| Type of Relativity| Explanation|.
Clean air| Regional relativity| A luxury in Jakarta, but not from the perspective of most people| Color TV| Temporal relativity| A luxury in the 1950’s, but not from today’s perspective| VW Polo| Economic relativity| A luxury for a student, but not from a gross-societal perspective| Gold teeth grill| Cultural relativity| A luxury in the hip-hop scene, but not from the perspective of the upper class| McDonald’s Hamburger| Situational relativity| Might be a luxury after a strict diet, but not under normal circumstances|.
However, there are two limitations: First of all, the necessity-luxury continuum indicates that all luxuries are not equally luxurious, which means that there is also a hierarchical relativity. Consequently, it seems reasonable to distinguish different levels of luxury (see Kisabaka 2001, p. 120 et seq. ; and section 8. 4. 1). In addition, even though the extended basic definition limits the scope of luxury, it still covers a wide variety of resources such as musical talent, self-determination or Daikin air conditioning systems, which are not relevant within the field of luxury brand management research.
Therefore, the scope of luxury will be limited further in the following chapter by differentiating the understandings of luxury by area of research. 2. The Major Understandings of Luxury The literature analysis suggests differentiating luxury definitions by area of research into three main categories, which will be explained below.
3. 1. The Philosophical-sociological Understanding of Luxury The proponents of a philosophical-sociological understanding of luxury concentrate mainly on the evolution of attitudes towards luxury and its societal benefits (e. g. Berry 1994; Mandeville 1724; Sombart 1922, p. 86 et seqq.) and on the changes in the appearance of luxury and preferences for luxury (e. g. Dohrn-van Rossum 2002; Fuehrer 2008, p. 185 et seqq. ;
Koschel 2005 and Reitzle 2001, p. 26 et seqq. ). According to these research objectives, this understanding represents the broadest scope of luxury that can be referred to as luxuries or luxury resources. Examples include musical talent, time, and true love (see also Sombart 1922, p. 85). Luxuries are defined as follows: Luxuries correspond to the philosophical-sociological understanding and the broadest scope of luxury, comprising all resources which are desirable and exceed what is necessary and ordinary.
| 2. 2. The Micro-economic Understanding of Luxury The proponents of a micro-economic understanding of luxury investigate the relationships between price and the demand for luxury (e. g. Chaudhuri 1998; Kemp 1998; Lipsey 1975, p. 107 et seqq. ; Poll 1980, p. 38), as well as between income and the demand for luxury (e. g. Deaton and Muellbauer 1980; Lancaster 1971, p. 68; Poll 1980, p. 30). There are also some researchers who focus on the moderating sociological effects (e. g. Bearden and Etzel 1982, Leibenstein 1950, Veblen 1899) and on the benefits of the luxury goods industry for the economy (e.g. Thomas 2007, p. 53 et seqq. ).
In light of its research objectives, the micro-economic understanding of luxury represents a middle scope that is limited to goods that are suitable for exchange on the market. In microeconomics the term luxury goods was established for that and mainly refers to entire product categories (see Meffert and Lasslop 2003, p. 4; Reich 2005, p. 36). The marketability of micro-economic luxury represents its major difference from the philosophical-sociological understanding of luxury.
According to Chaudhuri (1998, p.162), product categories such as barbecue and golf equipment are (still) regarded as luxury goods. The definition of luxury goods can be summarized as follows: Luxury goods correspond to the micro-economic understanding and the middle scope of luxury, comprising all goods which exceed what is necessary and ordinary, and are suitable for exchange on the market. | Luxury goods are distinguished from necessary or ordinary goods by consequence-related measures; thus the luxuriousness of any good is not determined by its characteristics, but by peoples’ reaction (changes in demand) to exogenous stimuli.
These measures include price and income elasticity of demand (Poll 1980, p. 29). 2. 3. The Managerial Understanding of Luxury 2. 3. 1. Areas of Research The proponents of a managerial understanding of luxury focus on the development of business and in particular, on marketing strategy guidance for a relatively small group of luxury product manufacturers. The areas of research can be categorized into studies focusing on luxury brands (including products and industry segments) and on studies which rather focus on their consumers. The first group includes image analyses about luxury brands (e.
g. Matthiesen and Phau 2005, Wong and Zaichkowsky 1999) and studies about the luxury brand identity (e. g. Dubois and Czellar 2002, Heine 2009a, 2010a,b, Heine and Trommsdorff 2010a). The existing studies about luxury consumer behavior focus on the characteristics of luxury consumers, their consumption preferences and on environmental influences affecting luxury consumption. Studies about luxury consumer characteristics cover consumers’ purchasing motives (e. g. Tsai 2005), attitudes (e. g. Dubois et al. 2005), values (e. g. Dubois and Duquesne 1993, Heine 2010a, Sukhdial et al.1995) and demographics (e. g. Dubois and Duquesne 1993).
Results of these studies serve as a basis for the segmentation of luxury consumers (e. g. Dubois et al. 2005). Additionally, there are studies focusing on luxury consumer preferences (e. g. Nia and Zaichkowsky 2000, about country-of-origin preferences) and studies about environmental influences on luxury consumption incorporating the impact of reference groups (e. g. Bearden and Etzel 1982; Wiedmann et al. 2007), culture (e. g. Casaburi 2010), product types (e. g. social/private by Bearden and Etzel 1982) and situational factors (e. g.Dubois and Laurent 1996).
On top of that, there is a growing interest in the phenomenon of counterfeit luxury products (e. g. Perez et al. 2010, Phan et al. 2010, Phan and Lu 2008, Phau and Teah 2008, 2009, Phau et al. 2009, Wilcox et al. 2009). 2. 3. 2. Scope of Luxury The managerial understanding represents the smallest scope of luxury. The major difference separating it from the micro-economic perspective is that the managerial understanding of luxury does not usually refer to entire product categories, but only to the best products of a category, or to products with certain characteristics.
Accordingly, products that fall within the managerial scope of luxury should be referred to as luxury products. The broad definition of luxury products can be summarized as follows: Luxury products correspond to the managerial understanding and the smallest scope of luxury, comprising all products which exceed what is necessary and ordinary compared to the other products of their category. | The definition of luxury brands is closely linked to the definition of luxury products and usually refers to specific associations about their products’ characteristics.
Accordingly, the broad definition of luxury brands is summarized as follows: Luxury brands are associated with products which exceed what is necessary and ordinary compared to the other products of their category. | These definitions allow one to state some typical examples of luxury products and brands including Louis Vuitton bags and Rolls-Royce automobiles. For the sake of simplicity, the luxury product business will be referred to as the luxury industry. The managerial scope of luxury becomes even clearer in comparison with the other understandings of luxury.
This is not a horizontal differentiation (such as dog, cat and bird), but a vertical differentiation (such as dog, animal, living being), which refers to the relation between terms of different levels of abstraction (Eckes 1991, p. 120). As demonstrated in figure 1, luxury products constitute a subset of luxury goods, which, in turn, form a subset of luxuries. This means that the characteristics of luxuries also apply, to a large extent, to luxury products (see also Hoffmann 1986, p. 31 et seqq. ). 2. 3. 3. Limiting the Scope of Luxury.
Despite its small scope in comparison to luxuries, the definition of luxury products still covers a wide variety of different products. Therefore, and according to the basic idea of definition by reduction sentences, the scope of luxury products is further limited by differentiating the major luxury market segments as follows: Luxury Products, Services and Real Estate: The managerial luxury understanding usually refers to movable assets (“products” in the classical sense), as the luxury industry was and is characterized by craftsmanship and engineering (Belz 1994, p.648; Berthon et al. 2009, p. 50).
Beyond that, luxury services and luxury real estate form distinct luxury segments. Marketing knowledge about products offers a basis for other luxury segments, but still needs to be adapted to their specific characteristics. Branded vs. Unbranded Luxury Products: Unbranded luxury products are usually made on commission by craftsmen. Because of the high relevance of brands in the luxury segment, this paper considers only branded luxury products (see Kisabaka 2001, p.104; Vigneron and Johnson 2004, p. 486). Private vs.
Public Luxury Products: Instead of public luxuries such as altar pieces or national monuments, the term luxury products usually refers to private luxury, which is owned by a person or a private organization (Sombart 1922, p. 86; see also McKinsey 1990, p. 13). B2B vs. B2C Luxury Products: B2C luxury products, also referred to as personal luxury products, are marketed to end consumers and can be used by a person to enhance his or her personal life (Sombart 1922, p.86; Reith and Meyer 2003, p. 10; Valtin 2004, p. 186).
In contrast to that, there is a distinct B2B luxury segment, which includes luxury-specialized suppliers to luxury brands. One such supplier is Peter Bock, a manufacturer of nibs for luxury fountain pens. Founder-independent vs. Founder-dependent Luxury Products: This paper considers only founder-independent luxury products, which means that the existence of brands and the manufacturing of products should not depend on the life of their creators.
The manufacturers of luxury products should possess a distinct brand personality and at least the capacity for infinite business operation. Although an artist could become a brand, these requirements are not fulfilled as he or she may only create founder-dependent products. Compared to other products, the luxury art market follows very specific rules and therefore forms a distinct luxury segment. The same is true for other industry segments such as (star) architect offices and the relatively complex and fast-changing market of (fashion) designer products. Uni-regional vs.
Multi-regional Luxury Products: This paper disregards uni-regional luxury products, which are only available in specific regions. For instance, shopping in the KaDeWe is only possible in Berlin and spending the night in Le Bristol is only possible in Paris. However, many uni-regional luxury brands have the potential to become global. For instance, the luxury group Hilton developed the New York-based Waldorf Astoria into a global luxury hotel chain. Contemporary Luxury Products vs. Luxury Antiquities: With reference to temporal relativity (see above), only new products are considered.
Luxury antiquities (including antique cars) form a distinct luxury segment. Accordingly, the broad definition of luxury products may be complemented as follows: Luxury products correspond to the managerial understanding and the smallest scope of luxury not comprising services or real estate, but products which exceed what is necessary and ordinary compared to the other products of their category. These products are branded, founder-independent, multi-regional, contemporary and possessed or used by a person to enhance his or her personal life. |
Differentiating between the various understandings of luxury and major luxury market segments helps to further limit the scope of luxury in the area of management studies. Based on that, table 1 exemplifies some of the many luxuries that can be differentiated from luxury products. However, this is still not enough to distinguish clearly between ordinary and luxury products. Therefore, the broad definition of luxury products needs to be specified further, which will be addressed in the subsequent chapter. 3. Luxury Products 3. 1. The Definition of Luxury Products
Although the term “luxury products” is broadly defined and therefore basically comprehensible (see previous section), it still needs to be operationalized because it is not yet clear which products are actually “more than necessary and ordinary compared to the other products of their category. ” The broad definition of luxury products can be modified and further specified by an operational definition. For this purpose, adequate indicators for a term need to be determined. According to the dimensional analysis, it was decided to operationalize luxury products by their characteristics.
The operationalization relies on a literature analysis and an empirical study (as outlined in the paper). The results suggest that consumers perceive that luxury products have six major characteristics including price, quality, aesthetics, rarity, extraordinariness and symbolism. These constitutive characteristics and their typical sub-categories are explained in detail in one of the following chapters. In that way, the operationalization helps to decide for most products if they are part of what is meant by the term “luxury product” (see also Kromrey 2009, p. 110).
The definition of luxury products can be summarized as follows: Luxury products have more than necessary and ordinary characteristics compared to other products of their category, which include their relatively high level of price, quality, aesthetics, rarity, extraordinariness, and symbolic meaning. | Comparative terms such as luxury rely on continuous characteristics (as explained in the paper). Therefore, the major characteristics of luxury products can be considered as dimensions ranging from a minimum level that is also necessary for non-luxury products to a maximum level that corresponds to the highest form of luxury.
As these major characteristics must apply to virtually all luxury products at least to some degree, they are therefore referred to as constitutive characteristics. Although luxury products require a relatively high rating for all of the major characteristics, there still exists a wide range of possible ratings within the luxury segment. According to the principles of the prototype theory, luxury products therefore differ in the degree to which they are qualified as representatives of their category.
The luxuriousness of a product increases when the level of at least one of these characteristics increases. Not surprisingly, the luxury level therefore is one of the major means of differentiation for luxury products and brands (Esteve and Hieu-Dess 2005). The characteristics of luxury products are not independent of each other.