You are here

Yu'e Liu

DBA Graduate - 2019

Thesis title

The mediating role of Chinese luxury consumer motivations in the influence of country-of origin and price sensitivity on brand loyalty

Supervisor(s)

Yu Xiubao
Purpose: Benefiting from China’s fast economic growth and improved environment, most of the famous luxury brands have opened branches or stores in mainland China. Although many business professors and scholars have examined Chinese luxury consumers’ motivations and brand loyalty, most of their findings based on Western luxury samples may not be applicable to China’s markets due to cultural differences. For example, Chinese luxury consumption is focused on personal items, while Western luxury consumers focus more on experience or service consumption (Wang et al., 2011). Considerable research has been conducted to identify and conceptualize the dimensions of brand loyalty, and its influencing factors, yet the relations among price sensitivity, Country-of-Origin, consumers’ motivation and brand loyalty have received comparatively limited empirical attention. The final purpose of this paper is to identify the relations between Country-of-origin and brand loyalty, between price sensitivity and brand loyalty, and between Chinese luxury consumers’ motivations and brand loyalty, this study also aims to investigate the mediating role of Chinese luxury consumers’ motivation in the influence of the Country-of-Origin and price theory.Design/Methodology/Approach: This research adopted a quantitative approach. A hypothesis model was developed to explore the relations between Country-of-Origin and brand loyalty, and between consumers’ price sensitivity and brand loyalty, Chinese consumers’ motivations and brand loyalty, and the mediating role of consumers’ motivations between Country-of-Origin and brand loyalty, price sensitivity and brand loyalty. The measurement scales were developed on the base on well-known scales published in the literature. Survey data were collected from a sample of 420 luxury consumers and potential luxury consumers in China.Findings: Through quantitative analysis, we find that Country-of-Origin has a positive influence on brand loyalty while price sensitivity has a negative influence on brand loyalty for Chinese luxury consumers and potential luxury consumers. Luxury consumers’ motivation partially mediates the price sensitivity -brand loyalty relationship and the COO-brand loyalty relationship. The proved mediation effects show that consumers’ social and personal motivations can weaken the relationship between price sensitivity and brand loyalty and between Country-of-Origin and brand loyalty. Research limitations: There are a few possible limitations related to the empirical study: 1. Many variables can impact brand loyalty for luxury products consumption in China, and we only considered three variables, Country-of-Origin, price sensitivity and consumers’ motivations since they are the most widely studied based on the literature review. Other factors beyond our study may also play a role in the mechanism. There are some deficiencies in the measurement and evaluation of some variables 2. The convenience sample may introduce bias to the findings.Practical implications: The findings of this dissertation reveal that top management in luxury products in China should focus on consumer motivations besides brand loyalty. The results of this study will be useful not only for managers who work in the luxury brand market in China, but also for the researchers in the consumer research filed. From a brand perspective, to promote brand loyalty among Chinese consumers, efforts should be made simultaneously on three fronts: a brand’s Country-of-Origin, consumers’ price sensitivity and Chinese consumers’ motivations since consumers’ motivations play a mediating role between brand Country-of-Origin and brand loyalty, and between brand price sensitivity and brand loyalty. Luxury firms must act to exploit the benefit of strong brand loyalty by improving the effect of Country-of-Origin and analyze consumers’ motivations through which brand loyalty can be improved.Originality/value: With SPSS, we find that