The Examination of Young Affluent Purchase Intention on Luxury Bags in Malaysia Essay

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Abstract Purpose This study aims to investigate the effect of perceived values & quality, status seeking, emotional attachment and visual merchandising on young affluent towards the purchase intention of luxury bags Design/methodology/approach Hypotheses were tested with a random sampling (students who use luxury bags) of 297 university students using distribution of survey forms. Structural equation modeling was used to test the hypotheses.

Findings The results revealed that young affluent purchase intention and consumption towards luxury bags could be influence by factors such as perceived values & quality, status seeking, emotional attachment and peer influences. Research limitations/implications This research is limited by several variables that might be important to the purchase intention of young affluent but were not taken into account. Originality/value Many luxury bags are available in Malaysia. However, only several paper are conducted on this field.

This paper contributes to the field by presenting several stimuli variables as the influence of purchase intention. Keywords Luxury bags, luxury products, perceived value, visual merchandising, Social status, social influences, purchase intention, young consumers Paper type Research paper ? 1. 0Introduction For centuries, human beings have been satisfied themselves with the possession of luxury goods (Husic and Cicic, 2009). According to Nueno and Quelch (1998), luxury was applied to products that were rare and scarce which were only presented to minor people.

However, follow by the time changed, luxury products have been more affordable for young affluent (Sriviroj, 2007). Young affluent can be describes as generation Y that are born in the year of 1977 to 1994 and generation Y consumers can be considered as the wealthiest group of people (Horovitz, 2002). Hence, Vatikiotis (1996) stated that generation Y consumer which is young affluent considered as wealthy and they are willing to spend more money on something that can differentiate themselves from other such as luxury products.

Therefore, young affluent will play an increasingly important role in the future target market for luxury marketers over the years (Danziger, 2004). The research of Nueno, et al (1998) highlighted that the global expansion of luxury products has been largely related to the rising wealth in the emerging market of Asia. Statistic shows that the demand for luxury goods and services in Asia could grow by 12% yearly to reach a total of USD258. 7 billion in 2016 reflecting the regions rising affluence (Euromonitor, 2007).

The objective of this research is to examine on the relationship between factors that influence young affluent purchase intention towards luxury bags. This research is structured around three main parts. First, main attributes that influence the purchase intention of young affluent on luxury products will be present. Then, second part will focus on results that obtained from qualitative survey undertaken within the university in Klang Valley region. Finally, we will conclude on the main contributions of this research and on the future research that could be undertaken.

2. 0Literature Review Relationship between perceived value and purchase intention on luxury bags. In context, the concept of perceived value gained its importance and wide popularity in the business environment because its result on consumer purchases intention and providing strategic implications for marketers (Al-Sabbahy, Ekinci and Riley, 2010). Thaler (1985) considered that perceived value is an important antecedent to influence consumer purchase intention because it is the composition of transaction utility and acquisition utility.

Perceived value includes quality, whereby quality value can be defined as the consumers judgment about a products overall excellence or superiority such as performance and durability (Zeithaml, 1988; Ergin and Akbay, 2010). Garfein (1993) mentioned that perceived quality of luxury products influences young consumers who see a higher value in the products such as guarantee in quality and reliability from the brand apart from the cost. Previous research revealed that reason on why consumer purchases luxury bags is for the superior quality that reflected in the luxury brand name (Gentry, Putrevu, Shultz, & Commuri, 2001).

Dodds and Monroe (1985) mentioned that perceived value is an important factor in consumers purchase intention, and consumers will buy a product with high-perceived value. According to Utility Theory, the probability of purchase intention will increase, when consumers acquire more benefits than they pay for a product (Dickson & Sawyer, 1990) According to Barnier, Rodina and Valette-Florence (2005), consumers regard perceiving value as one of the most crucial stimuli to purchase luxury bags because high value products had a significant relationship on luxury brand name and security the product will last for a long time.

For instance, according to Haataja (2011), young consumer supposed to be financially self-sufficient but most of them are students and do not have much money to waste; therefore, they will want to purchase luxury products because of quality. Therefore, it is essential for marketers to understand consumers perceived value because it is always affects consumers purchase intention (Hsu, 2008). As a result, the first hypothesis is: H1. The perceived value positively affect young affluent consumers purchase intention on luxury bags.

Relationship between visual merchandising and purchase intention on luxury bags. Visual merchandising is the design of a retail environment that related to the store atmosphere creation and it is an important issue for inducing the desired affective response and aims to enhance purchase probability (Law, Wong and Yip, 2012). According to McGoldrick (2002) and Varley and Raffiq (2004) agree that retail environment is a combination of physical and emotional attributes such as music, window display, signage and sensory perceptions.

These attributes contribute to the overall in-store communication of product with an aim to encourage consumers purchase intention (Kerfoot, Davies and Ward, 2003). Layout of a store is a way to influence consumers in the store to move by guiding them to more merchandise (Lusch, Dunne and Carver, 2011). Previous studies on customers behaviour in a store showed that particular layout design were especially attractive for customers (Botsali, 2007).

Stores that were kept in good condition could improve customers mood more frequently (Spies, Hesse and Loesch, 1997). Therefore, layout of store influence the positive mood changes of customer, hence results in influencing consumers purchase intention (Spies et al, 1997). Accoding to Tlapana (2009), a well-designed store is extremely important because they strongly influence in-store traffic patterns and shopping behaviour of customers, these attributes will affect the customers purchase intention.

Lea-Greenwood (1998) describes the window display, as being the initial way a store will attract the attention of the consumer. Window display produces immediate effect because the course of consumers contacting the window display to there at once decision to enter the store is very brief (Liu, Wang and Chen, 2009). A study found that new products placed in the window display helps increase consumers purchase intention, therefore sales increase and image of the retailer positively enhanced (Edwards and Shackley, 1992).

For example, consumers purchase decision may be based on information obtained from its windows; more specifically window displays can act as a more direct point of purchase by stimulating the purchase intention of consumers (Yildirim, Akalin-Baskaya and Hidayetoglu, 2007). Music can be a critical component of store atmosphere and it plays a role in consumer purchase decision-making process (Areni and Kim, 1993; Donavan and Rossiter, 1982). Millimans study (1982) reported increased purchase levels with slow tempo in-store music compared to fast tempo.

For example, playing classical music in a wine store leads to consumer purchasing more expensive wine (Wilson, 2003). Published research on music in retail settings results in fairly consistent in showing that sales may depend on the type of music being played (Yalch and Spangenberg, 1990). Besides that, intangible store elements such as sprayed fragrance can help boost mental imagination, then helps in associating a better cognitive experience and intensifying purchase intention between consumers and luxury products (Fiore, Yah and Yoh, 2000; Mandler, 1982; Meyers-Levy and Tybout, 1989).

Donovan, et. al (1982) stated that a particular scent in the store environment may result in certain approach or avoidance behaviors. Therefore, the price of product will be viewed as more acceptable in a store that has a high-ambience (Thaler, 1985). Thus, the following hypothesis is established: H2: The visual merchandising positively affects young affluent consumers purchase intention on luxury bags. Relationship between status seeking and luxury bags There are people whose life goals tend to be concerned about how they are perceived by others (Kitchen, McColl & Truong, 2010).

These life goals are called extrinsic goals, which are consistent with their most important psychological needs such as financial success, social recognition and appealing appearance (Kasser and Ryan, 1996). Based on the conspicuous consumption theory, these needs are therefore believed to have impact on motivation and eventually behavior of affluent people to consume highly conspicuous goods (Veblen, 1899). For individuals, this willingness to pay a higher price is not only due to utility of a product but also an approach to create a display of wealth and social status (Mason, 2001).

It was proven that extrinsic aspirations are related to status and have positive effect for luxury goods (Kitchen et al. , 2010). In psychological aspect, current consumers are willing to offer considerable amount of money for luxury goods in order to communicate meaning about themselves to their reference groups (Cicic and Husic, 2009). Therefore, main purpose of using status product is to impress others and positions the owners in one particular group to which he/she aspires to belong.

According to Cicic and Husic (2009), this is what gives consumers confidence as they aim to be accepted by the wealthier and mightier group. As a result, when external environment promotes or favors certain images, an individuals projected image often changes in order to cope with the new feature of external world (Hung, Chen, Peng, Hackley, Tiwsakul & Chou, 2011). Based on past research, status-seeking teenagers are greatly influenced by fashion industry (OCass and Frost, 2002). It is suggested that teenagers can spend a lot of money for branded and luxury products (Taylor and Cosenza, 2002).

According to Piacentini and Mailer (2004), young status seeking consumers are frequently in phases of role transition and uncertainty, thus they are more likely to be dependent on luxury goods to help them carry out their wanted role and show maturity. Hence, material possessions such as branded and expensive bag are perceived as a significant source of social status for young individuals (Belk, 1988). This leads to the hypothesis: H3. Consumers status seeking positively affects young affluent consumers purchase intention on luxury bags.

Relationship between emotional attachment and luxury bags In context, emotional brand attachment is defined as the closeness of the self to a brand in term of a strong cognitive and affective perception existing in consumers mindsets (Park, MacInnis and Priester, 2009). Emotional attachment is created and enhanced when individual discovers the connection between him/her self-concept and brand image (Hwang & Kandampully, 2012). When the level of emotional attachment is high enough to dominate the consumers cognition, it is called as brand romance (Patwardhan & Balasubramanian, 2011).

Patwardhan & Balasubramanian (2011) indicated that different consumers engage in different levels of romance to the same brand based on three aspects, namely pleasure, arousal and dominance. In a study on the relationship-based construct associated with young consumer, Park and Macinnis (2006) suggested that emotional attachment is formed mostly using aesthetics or hedonic domain which is sensory pleasure. That is, when luxury brand is perceived as an important part to express an individual self, an emotional relationship with that brand has been built (Hwang & Kandampully, 2012).

Thus, brand romance is considered a strong motivation for consumers to stay loyal to the brand and purchase that branded product (Cohen and Areni, 1991). In this research, emotion bond of an individual with a product is expressed not only through brand attachment but also through product attachment as it is argued that the two attachments are conceptually distinct from each other (Kleine and Baker, 2004). Product attachment implicates relationship between consumers and the specific object or product variant, rather than consumer-brand relationships (Wallendorf and Arnould, 1988).

Specifically, product attachment is developed through period of time when a person interacts with the object; as a consequence, the object becomes important to the owner (Baldwin, Keelan, Fehr, Enns & Koh-Rangarajoo, 1996). The outcome of this attachment is protective behaviors since people want to preserve their relationship with the object (Mugge, Schoormans and Schifferstein, 2010). Moreover, Davis (2002) suggested that the positive attachment to a product may be transferred to the brand and increase consumers loyalty to the brand.

Hence, in the future, consumers will have intention to purchase other products bearing the same brand (Mugge et al, 2010). H4. Consumers emotional attachment positively affects young affluent consumers purchase intention on luxury bags. ? 3. 0 Methodology The population that is chosen for the purpose of this research involves students between the ages 18-26. It is suggested that younger consumers are slightly easier to attach brands because they are more likely to be new to the variety of product and not yet established customers of other brands (Anderson & Sharp, 2010).

Thus they should be in the process of adapting one particular brand to develop a repertoire, which is appropriated as reliably collective information. A total of 296 online surveys were distributed and targeted students from universities and colleges in the Klang Valley areas. Apart from the general definition on luxury branded bags as disclosed above, luxury brand names that are more internationally recognized are mostly focused. This research focuses on international recognized luxury brands to confirm the participants are accustomed to the brand before doing their questionnaires.

By default, there are seven brands which are Gucci, Louis Vuiton, Prada, Dior, Loewe, Celine and Fendi. Participants could choose their own brands if they could not find suitable one on the list. This step was taken to ensure that the selected brand is widely popular. After the purpose of this research explained, participants could select the brand of their choice to answer questions on. The chosen product for this survey is luxury bag because the purpose of this survey is to understand the relationship between college students and luxury bags.

In addition, handbags are not necessarily gender-benefit and it has all of functional, experiential and symbolic values (Han, Nunes and Dreze, 2010). For this research, non-probability sampling method, which is snowball sampling, was implemented. Since the focus of this research is only on consumers with luxury bags, it is useful to use recommendation to find people with the specific range of product (luxury bags). Relevant items were adopted from a wide range of past literature (e. g. status seeking (Husic et al. , 2009; Leng and Ian, 2008); emotional attachment (Patwardhan et al., 2011; Mugge et al. , 2010).

All the questions were restructured to fit into the research context and measured on six point Likert scale, ranging from 1 (strongly disagree) to 6 (strongly agree) in order to study the attitude of college students toward luxury bags. Data analysis technique in SPSS will be used to run the data and test the reliability of all the proposed variables. Specifically, cronbach alpha is used to test the reliability and stepwise regression is formulated to evaluate the findings. 4. 0Data Analysis and Findings Results.

The sample of this study focused on university students on consumption of luxury bags. There are 296 respondents in total that participated in the survey. Among 296 respondents, there are 22% are male respondents and 78% of the respondents are female. Demographic profiles were collected from several universities throughout Klang Valley in Malaysia. Malaysia is a multicultural country with various ethnic groups, therefore based of the sample, the majority of the respondents are Chinese with 88. 9% followed by Malay 2. 4%, Indian 2% and others ethnic group of 6. 8%. In terms of age, there are 45.

6% of the respondents aged between 18 to 20 years old, followed by 46. 3% of respondents which are the majority of respondents aged between 21 to 23 years old and 8. 1% respondents in the range of age between 24 to 26 years old. Based on the sample, 64. 9% of the respondents are full-time students, whereby 22. 6% are full-time student with part-time job, followed by minority of 1. 7% of part-time student and 10. 8% of non-student. As for the income level, most of the respondents, 29. 4% that have a purchase intention on luxury bags are from the group with salary less than or equal RM5000, followed by 22.

3% of respondents with salary from RM5001 to RM10000. Whilst, 14. 9% and 11. 8% of respondents are from income group of RM 10001 to RM15000 and RM15001 to RM20000. Remaining respondents of 21. 6% are from the group income of RM20000 and above. Factor analysis and reliability test In order to ensure the reliability of all the variables, Cronbachs alpha was used to estimate internal consistency reliability (Helms, Henze, Sass & Mifsud, 2006; Bonett, 2003; Alsawalemh and Feldt, 1999). The test was run in SPSS and given the results of 0. 797, 0. 924, 0. 899 and 0.

825 for perceived value, emotional attachment, status seeking and visual mechanism, respectively (see table I). Since the Cronbachs alpha for each of these variables are above 0. 7, the measures in the set of item are considered reliable (Nunnally, 1978). Additionally, the Cronbachs alpha of the four measures of purchase intention is, which demonstrates a consistency of construct measure. Therefore, the averages of measures of each item are used as variables in regression analysis. Table 1 Stepwise regression is used as a method of regression to analyze relationships proposed in Figured 1.

Stepwise regression is an automatic procedure for statistical model selection that uses two main approaches, namely forward selection and backward elimination (Jennrich, 1995). It is a suitable analysis tool as it selects subsets of variables for researchers to study and have better understanding by watching the entry process (Jennrich, 1995). The independent variables are perceived value, status seeking, emotional attachment and visual mechanism, and the dependent variables is purchase intention of young affluent consumer toward luxury bags.

Figure 1: Framework Table II shows the stepwise regression results. The result indicated that perceived value, status seeking, emotional attachment, visual mechanism and purchase intention of young consumers are positively related at p < 0. 01 level. Perceived value had a significant impact on the purchase intention of young consumer (? = 0. 121, p < 0. 05). Therefore, H1 is supported. Furthermore, visual merchandising was found to be significantly related to purchase intention of young consumers (? = 0. 116, p < 0. 05) Hence, H2 is supported.

Likewise, status seeking was proven to be significantly related to purchase intention of young consumers (? = 0. 369, p < 0. 01). This supported H3. Lastly, emotional attachment was significantly related to purchase intention of young consumers (? = 0. 220, p < 0. 01). Thus H4 is supported. For the overall sample, four independent variables account for a R2 of 0. 419 of the purchase intention of luxury bags. This shows that roughly 41. 9 percent of variation in purchase intention of young consumers toward luxury bags is explained by perceived value, status seeking, emotional attachment, visual mechanism.

As a result, H1, H2, H3 and H4 are supported. Table 2: Coefficient Table Discussion and managerial implications This study has investigated and made clear the impact of perceived value, visual merchandising, status seeking and emotional attachment on university students and the purchase intention of luxury bags. A significant and positive relationship between perceived value and purchase intention of young affluent toward luxury bags (p < 0. 05). Thus, the first hypothesis (H1) is supported. Gentry et al.

(2001) found that consumers purchase luxury products because of the superior value suggested by the brand name, therefore, the value of luxury bags is a distinguishable feature. Hence, perceived value is an important issue in the development and implementation of marketing strategies, and marketers should take perceived value into consideration and every factor associated with the construct (Tsiotsou, 2005). Lastly, marketers should focus on the value of product such as quality and durability and also emphasize these attributes in their communications and promotional activities in order to increase consumers purchase intention.

Based on the findings, this study provided support for a positive relationship between visual merchandising and purchase intention of young affluent toward luxury bags (p < 0. 05). The findings thus supports hypothesis (H2). The finding is in line with those reported by Bastow-Shoop, Zetocha and Passewitz (1991), who stated that visual merchandising can help create that positive customer image that leads to successful influence on consumers purchase intention. Manager of store should enhance the in-store ambience to influence young consumers for prolonged stay in the store to increase the probability of purchase intention (Rajagopal, 2010).

The findings indicated that there was a significant and positive relationship between status seeking and purchase intention of young consumers toward luxury bags (p < 0. 01). Therefore, the third hypothesis (H3) is supported. Consumers will most likely to yearn luxury bags that represent status in the eyes of others whom they feel are significant (OCass & Frost, 2002). Thus, young consumers tend to buy luxury bags as a way to enhance their self-image and group affiliation (Cicic and Husic, 2009).

Additionally, it is believed that status consumers are more likely to purchase luxury bags than non-status seeking consumers, since luxury apparel satisfies their symbolic needs (Goldsmith and Stith, 1993). This behavior indicates the current trend of luxury market for young affluent consumers, which the major concern is that status seeking teenagers are now longing for more fashionable apparel (Phau & Leng, 2008). The luxury apparel industry should focus its marketing strategy on improving the attributes of fashionable and brand name of luxury bags so that young consumers would probably purchase.

This research also found that there was a significant and positive relationship between emotional attachment and purchase intention of young consumers toward luxury bags (p < 0. 01). Consequently, the fourth hypothesis (H4) is supported. When there is a strong bond between consumers and luxury bags, it often results in attachment to the brand. This progress has important impact on future purchase decision as well as consumers engaging in positive word-of-mouth recommendations of the product or brand (Mugge et al, 2010).

Marketers can increase brand attachment by enhancing the utility and appearance of the product. This can greatly prolong the product life cycle and therefore decrease the waste and resources. 5. 0Limitations and future research There are several limitations that might constrain the research findings of this research. In this study, the respondents profiles revealed that majority of the respondents were university students. The primary limitations in this research include the relatively small sample size, and the fact that only university students were sampled.

In addition, the sampled students were insufficiently diverse in terms of perceived values, peer influences, status seeking and emotional attachment. Future studies should increase the sample size and expand the demographic segment of research to include people outside the university environment and across university students from public or private universities in Malaysia instead of focusing on private universities alone. Comparison between different environment groupings would have given a different or similar result on how luxury bags are perceived and used in Malaysia.

It would be especially interesting to include respondents of disparate environment groups to determine a more accurate pattern of dependency behaviour towards luxury bags and how it influence the purchase intention and consumption. The findings might not be applicable to all luxury bags brand categories as different luxury bags brands have different functionalities and applications. There are many categories of luxury bags brands, which include Louis Vuitton, Gucci, Prada, Burberry, Fendi, Chanel, Hermes, Miu Miu and etc. Thus, the focus of the study was not specific in terms of luxury bags brands.

Different luxury bags brand categories may impact differently on university students evaluations and views on the stimulus that affect their purchase intention and consumption towards luxury bags. By specifying a specific category brand of luxury bags, the relationship between the perceived values, peer influences, status seeking and emotional attachment towards university students purchase intention and consumption on luxury bags can be analyzed more accurately and thus provide more beneficial information to marketers.

Therefore, more useful information research is obtained that would be advantageous for marketers in the formulating of marketing strategies. 6. 0Future Research Direction This research study raises various arguments on consumers purchase intention on luxury bags affected by perceived value, visual merchandising, status seeking and emotional attachment. It has been observed in the study that these attributes lay strong influence towards building consumers purchase intention on luxury bags. However, this sample survey was only conducted in the Klang Valley region to 297 respondents.

Although the chosen location is well-diverse but due to the urbanization of this region, the mentality of respondents would be almost homogeneous and hence may respond to similarity, poorly reflecting the general population as a whole. Therefore, future research should seek to improve upon this drawback by expanding the research into more reclusive part of the country to obtain better and accurate samples. However, future research can also be addressed to explore the different sex response for luxury products as a powerful antecedent to evaluations of purchase intention and attitudes.

Future research may also be directed towards measuring the impact of women consumers on luxury products that leads to impulsive buying of luxury brands product. Furthermore, some research can be also conducted to discover other significant factors that could influence consumers purchase intention on luxury bags since some of the factors in this study are found to be insignificant. Lastly, future research can also be directed based on what aspects that consumers are looking for when they evaluate the worthiness of luxury bags as reputation of luxury brands and price values.

7. 0Conclusion To conclude, this research is developed based on an in depth research on the factors that influence young affluent on their purchase intention towards luxury bags. This study suggests that consumers with sustainable purchase intention for luxury products are motivated by the factors such as, perceived value of luxury products, visual merchandising in the store, and influences of social status and emotional attachment on a particular luxury product. The results of this study show the existence of young affluent that purchase luxury bags.

Although we had foreseen the difficulty of convincing consumers that purchase luxury bags to be interviewed the reality proved to be complicated as most of those who agree to participate in this sample survey that we assume that they owned a luxury bags, but actually they do not own any of luxury bags. We concluded that these individuals were wary of losing self-confidence on telling us researchers that they do not actually own either one of luxury bags. ? 8.

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