The impact of attitude functions on luxury brand consumption: An age-based group comparison

JBR-08515; No of Pages 9 Journal of Business Research xxx (2015) xxx–xxx

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Journal of Business Research

The impact of attitude functions on luxury brand consumption: An age-based group comparison Michael Schade a,⁎, Sabrina Hegner b,1, Florian Horstmann a,2, Nora Brinkmann a,3 a b

Chair of innovative Brand Management, University of Bremen, Hochschulring 4, 28359 Bremen, Germany Faculty of Behavioural Sciences, Marketing Communication and Consumer Psychology, University of Twente, 7500 AE Enschede, the Netherlands

a r t i c l e

i n f o

Article history: Received 1 September 2014 Received in revised form 1 December 2014 Accepted 1 January 2015 Available online xxxx Keywords: Luxury brands Attitude functions Identity development process Purchase intention Age

a b s t r a c t The main purpose of this study is to understand the consumption of luxury brands in different age groups. Attitude functions (social-adjustive, value-expressive, hedonic, utilitarian) explain luxury brand consumption among three age groups. A total of 297 respondents between the age of 16 and 59 participated in a survey. Using structural equation modeling, this study shows that the hedonic and utilitarian attitude functions are relevant across all age groups, while the impact of the social functions greatly differs among the target groups. Whereas the social-adjustive function strongly enhances luxury brand purchase behavior of late adolescents (16–25 years), value-expressiveness only impacts the luxury consumption of young adults (26–39 years). The social functions do not determine the acquisition of luxury brands by middle-aged adults (40–59 years). © 2015 Elsevier Inc. All rights reserved.

1. Introduction Young consumers are the fastest-growing segment of luxury brand purchases. These consumers have increased their spending on luxury goods outpacing any other demographic group (Halpert, 2012). According to a study by Roland Berger Strategy Consultants (2012), young consumers are developing an increasingly positive attitude toward luxury consumption. Still, more mature consumers are currently of the greatest economic relevance in the luxury segment. According to Bain & Co, middle-aged luxury consumers are the highest spenders (each consumer spends an average of 1600 € a year on luxury items), while older luxury consumers make up more than 50% of luxury sales (Roberts, 2014). To sum up, not only the established target groups of middle-aged and older consumers but also young consumers have become a relevant target group for luxury brand managers. Consequently, understanding the motivations of consumers' engagement in luxury consumption in different age groups is crucial for both management and academic research. According to the “Identity Development Process,” age is an important factor that influences personal motivations (Diehl & Hay, 2011; ⁎ Corresponding author. Tel.: +49 421 218 66583; fax: +49 421 218 66573. E-mail addresses: [email protected] (M. Schade), [email protected] (S. Hegner), [email protected] (F. Horstmann), [email protected] (N. Brinkmann). 1 Tel.: +31 53 489 2730; fax: +31 53 489 4259. 2 Tel.: +49 421 218 66580; fax: +49 421 218 66573. 3 Tel.: +49 421 218 66572; fax: +49 421 218 66573.

Erikson, 1963). Following this theory, the increasing sense of one's identity from adolescence to adulthood leads to value changes during lifetime, and consequently, to a modification of the importance of individual needs and motivations (Gutman, 1982; Sheldon & Kasser, 2001). Hellevik (2002) states that “differences in value orientation between age groups are larger than the differences found for any other social background variable” (p. 286). Assuming that identity-based motives are particularly moderated by age (Erikson, 1963) and additionally assuming that those identity-based motives hold a strong reference with luxury consumption (Bian & Forsythe, 2012; Stockburger-Sauer & Teichmann, 2013), we expect that age influences the motivations of luxury brand purchasing in a very meaningful way. So far, research does not provide adequate knowledge about the influence of age on luxury brand consumption. In order to investigate the motivations for luxury consumption in different age groups, the authors apply the “Functional Theories of Attitudes” as a conceptual framework (Eagly & Chaiken, 1998; Grewal, Mehta, & Kardes, 2004; Katz, 1960; Shavitt, 1990; Smith, Bruner, & White, 1956; Snyder & DeBono, 1989). These theories suggest that individuals possess attitudes due to the psychological benefits they derive from them (Gregory, Much, & Peterson, 2002; Grewal et al., 2004) and that attitudes can serve different functions like expressing one's self (Katz, 1960). The functional view of attitudes suggests that in order for attitudes to change, brands need to appeal to the functions that a particular attitude serves for the individual. Thus, the features of the attitude object and their relationship to need satisfaction act as the motivational underpinnings of attitudes (Lutz, 1978). Therefore, a

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Please cite this article as: Schade, M., et al., The impact of attitude functions on luxury brand consumption: An age-based group comparison, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.08.003

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M. Schade et al. / Journal of Business Research xxx (2015) xxx–xxx

strong link between attitude functions and motivation exists (Sheth, Newman, & Gross, 1991). The “Functional Theories of Attitudes” are suitable for our study due to the established fact that attitudes are an underlying variable that influences behavior (e.g. consumer behavior) (Katz, 1960; Shavitt, 1989; Smith et al., 1956). Prior studies have shown the relevance of attitude functions (value-expressive, social-adjustive, hedonic, utilitarian) in explaining consumer behavior (Grewal et al., 2004; Shavitt, 1990; Wilcox, Kim, & Sen, 2009). In the context of luxury brand consumption, several authors have proven the applicability of the “Functional Theories of Attitudes” as a conceptual framework (e.g. Bian & Forsythe, 2012; Seung-A, 2012; Wilcox et al., 2009). In order to reflect the complexity of the attitude functions, we adopt the encompassing definition of luxury brands by Hudders (2012, p. 609): “Luxuries are brands with a premium quality and/or an esthetically appealing design. In addition, luxury brands are exclusive, which implies expensiveness and/or rarity.” The objective of the present study is to analyze luxury brand responses (attitude functions and purchase behavior) with a special focus on age groups. Thus, the following question arises: Which attitude functions are particularly relevant for determining luxury brand consumption in different age groups? This research regards both similarities and differences in the influence of attitude functions on luxury brand responses among different age groups. Consequently, this study will provide practical implications for the positioning of luxury brands adapted to specific target groups in order to increase the efficiency of marketing activities. The next section presents the “Identity Development Process” and the “Functional Theories of Attitudes.” Connecting the two conceptual frameworks, hypotheses are derived, followed by a presentation of the research method and the results of the empirical study. The paper concludes with a discussion of the key findings, management implications, as well as limitations and directions for further research. 2. Conceptual framework 2.1. Identity development process In order to investigate differences between age groups, most researchers draw on life span research (e.g. Lesser & Kunkel, 1991; Simpson & Licata, 2007; Waterman, 1982). The stage theory by Erikson (1963), focusing on the “Identity Development Process,” is one of the most accepted frameworks for life span research (Sheldon & Kasser, 2001; Simpson & Licata, 2007; Waterman, 1982). Consequently, the present study uses this theory as conceptual foundation. Personal identity is defined as “the totality of one's self-construal” (Weinreich, 1986, p. 317). The basic assumption of identity development (Erikson, 1963; Sheldon & Kasser, 2001; Waterman, 1982) is “that the transition from adolescence to adulthood involves a progressive strengthening in the sense of identity.” (Waterman, 1982, p. 342). This increasing sense of one's identity leads to value changes during lifetime and to a modification of the relevance of human needs (Gutman, 1982; Sheldon & Kasser, 2001). Based on the “Identity Development Process” (Erikson, 1963; Sheldon & Kasser, 2001), the following periods of identity development are present in Western societies: childhood (0–11 years), early and middle adolescence (12–15 years), late adolescence (16–25 years), young adulthood (26–39 years), middle-aged adulthood (40–59 years), and older adulthood (60 years and older). These age limits are in line with a study by Lesser and Kunkel (1991) investigating consumer behavior across the life span. According to Kapes and Strickler (1975) as well as Rokeach (1972), values and human needs tend to change considerably during adolescence and young adulthood; however, they are generally quite stable during middle and older adulthood due to the fact that in most cases, the sense of identity remains stable after the age of 40 (Erikson,

1963; Sheldon & Kasser, 2001). Kapes and Strickler (1975) as well as Rokeach (1972) come to the conclusion that only minor differences regarding the relevance of needs for middle-aged (40–59 years) and older adults (60 years and older) exist. As minor differences between these two age groups might appear, the authors exclude older adults from their sample and focus on the difference between late adolescents, young adults, and middle-aged adults. Consequently, the present study considers individuals with a minimum age of 16, as younger people mostly dispose a considerable low income, and therefore have limited possibilities to acquire luxury brands. Thus, this study investigates the following life span periods: late adolescence, young adulthood, and middle-aged adulthood. The focus is on the most relevant personal differences among the considered three age groups. In late adolescence (16–25 years), humans search for their identity and show mostly a weak sense of their own identity (Belk, 1988; Erikson, 1963). Thus, individuals in their late adolescence primarily strive for approval of their peer group. They feel pressured to conform to the opinion and behavior of their social group in order to avoid an outsider position (so-called “peer pressure”; Gil, Kwon, Good, & Johnson, 2012; Wooten, 2006). Because of their weak sense of own identity, late adolescents do not have the need to communicate their own identity to others, if this identity is not in line with the peer group. Contrary to late adolescents, young adults (26–39 years) show a stronger sense of their own identity and their behavior focuses less on peer group acceptance (Erikson, 1963; Waterman, 1982). Due to the increased sense of identity, individuals in the young adulthood feel the need to present their own identity to others and particularly to their reference or aspiration group (Erikson, 1963). Further, this age group shows a relatively high willingness to take risks (Lambert-Pandraud & Laurent, 2010; Lesser & Kunkel, 1991). Based on the “Identity Development Process,” young adults have especially the need to express their own identity (Erikson, 1963). This assumption is in line with other theorists who state that young adults have a strong desire to demonstrate personal achievement (Buhler, 1968; Kuhlen, 1964; Lesser & Kunkel, 1991). In this context, Stevenson (1977) uses the term “active mastery” to describe these individuals' motivations to demonstrate their identity and personal achievement. Contrary, middle-aged adults (40–59 years) are in most cases aware and consolidated in their own identity (Erikson, 1963; Sheldon & Kasser, 2001). Furthermore, Buhler (1968) argues that middle-aged adults begin to accept their self-limitations by adopting a more “passive” perspective about their environment (Lesser & Kunkel, 1991). As a consequence, these individuals are less concerned with identity and the need to present their identity to others is less pronounced (Erikson, 1963). Sheldon and Kasser (2001) empirically confirmed this assumption by showing that the need for presenting the own identity is on a lower level among middle-aged adults in comparison to younger age groups. Values and needs change during life span. Value orientations are conceptions of the desirable (Kluckhorn, 1951). Parks and Guay (2009) define values as “learned beliefs that serve as guiding principles about how individuals ought to behave” (p. 676). Following Gutman (1982), personal values determine the importance of human needs. For example, if “security” is a personal value, as a consequence the need for “group membership” is of high importance. In addition to values and needs, attitudes and motivations play an important role in determining consumer behavior. Attitudes and motivations distinguish from values and needs in the following way; while attitudes and motivations specifically relate to a given object, person, behavior, or situation, values and needs are more ingrained, more stable, and more general (England & Lee, 1974; Parks & Guay, 2009). Consequently, values and needs are influencing object-related attitudes and motivations. In line with previous research, this study analyzes motivations for luxury brand consumption based on the “Functional Theories of Attitudes” (e.g. Bian & Forsythe, 2012; Wilcox et al., 2009). The authors draw hypotheses based on the

Please cite this article as: Schade, M., et al., The impact of attitude functions on luxury brand consumption: An age-based group comparison, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.08.003

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changing value structures during lifetime by combining those general findings with research on attitude functions to the specific context of luxury consumption. 2.2. Functional theories of attitudes The proposition in the “Theory of Planned Behavior” (TPB) that attitudes guide or influence behavior applies to luxury brand consumption (Ajzen, 1991). Fishbein and Ajzen (1975, p. 6)) define attitude as “a learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object.” Similarly, the “Functional Theories of Attitudes” consider attitudes as an important variable in order to explain consumer behavior and classifies attitudes according to the psychological functions that they serve (Grewal et al., 2004; Katz, 1960; Shavitt, 1990; Smith et al., 1956; Wang, 2009; Wilcox et al., 2009). While the TPB provides a framework for the relationship between attitudes and behavior, the “Functional Theories of Attitudes” enrich the model by differentiating several facets of attitudes (Wang, 2009). Therefore, our study applies the “Functional Theories of Attitudes” as conceptual framework in order to analyze different facets of attitude as relevant underlying constructs that influence consumer behavior. Social attitude functions (Shavitt, 1990) differ from more personally orientated functions like hedonic and utilitarian (Shavitt, 1990). Social attitude functions are directly linked to personal identity and play an important role in social interaction and self-expression. Through those functions individuals express central values, establish their identity, and gain social approval (Katz, 1960; Shavitt, 1989; Smith et al., 1956). The social functions can be further distinguished in two dimensions: social-adjustive and value-expressive (Grewal et al., 2004; Katz, 1960; Shavitt, 1989; Wilcox et al., 2009). Literature links the social-adjustive function to the compliance with peer pressure, while the value-expressive function is closely related to the expression of one's own identity to a reference or aspiration group (Grewal et al., 2004; Katz, 1960; Shavitt, 1989; Wilcox et al., 2009). 2.2.1. Social-adjustive function The social-adjustive function is defined as a tendency to purchase and use brands to gain approval in social situations and to maintain relationships (Bian & Forsythe, 2012; Wilcox et al., 2009). This function is particularly relevant for consumers striving to meet the expectation of a peer group and gaining approval in social settings (Grewal et al., 2004; Wilcox et al., 2009). According to Bearden, Netemeyer, and Teel (1989,p. 474), the social-adjustive function is essential for individuals with a “tendency to conform to expectations of others.” Consumers with such a tendency are striving to purchase the “right brands” which are accepted by their peer group. In Western societies, luxury brands are often “the right brands” and are therefore used as a status symbol (Vigneron & Johnson, 2004; Wilcox et al., 2009). Following the “Identity Development Process” especially late adolescents (16–25 years) experience the need to align with their peer group (Belk, 1988; Erikson, 1963; Wooten, 2006), including purchasing “the right brands” their peers consume (Gil et al., 2012). Consequently, the social-adjustive function is of high predictive value for explaining luxury brand purchase behavior of late adolescents. In contrast to this presumption, young adults (26–39 years) as well as middle-aged adults (40–59 years) have a stronger sense of their own identity and therefore place less emphasis on the expectations of peer groups (2011; Erikson, 1963; Sheldon & Kasser, 2001). H1. The relation between the social-adjustive function and luxury brand purchase intention is stronger for late adolescents (16–25 years) than a) for young adults (26–39 years) and b) middle-aged adults (40–59 years).

3

2.2.2. Value-expressive function A value-expressive function is defined as a tendency to purchase and use brands to communicate one's self-identity (beliefs, attitudes, values) to others (Bian & Forsythe, 2012; Wilcox et al., 2009). Consumers holding a value-expressive attitude toward a brand are motivated to consume it as a form of self-expression (Wilcox et al., 2009). Hence, the value-expressive function is of high relevance for individuals striving for communicating their self-identity to others, even if this is not in line with the expectations of their peer group (Grewal et al., 2004; Shavitt, 1990; Wilcox et al., 2009). Those consumers intend to purchase brands that possess characteristics representing their identity (Bian & Forsythe, 2012). Due to their outstanding value-expressive function, luxury brands in particular enable consumers to communicate specific facets of their identity (e.g. success, sophistication) to others (Hudders, 2012; Vigneron & Johnson, 1999). According to the “Identity Development Process,” young adults (26–39 years) experience a strong motivation for expressing their own identity (Erikson, 1963). Therefore, the value-expressive function is of high importance for explaining luxury brand consumption of young adults. In contrast to this statement, late adolescents (16–25 years) show mostly a weak sense of their identity and hence do not have the need to communicate their (widely unclear) identity to others (Belk, 1988; Erikson, 1963). Middle-aged adults (40– 59 years) begin to accept their self-limitations by adopting a more “passive” perspective about their environment (Lesser & Kunkel, 1991). Therefore, the motivation for presenting their own identity is on a lower level in comparison to young adults. H2. The relation between the value-expressive function and luxury brand purchase intention is stronger for young adults (26–39 years) than for a) late adolescents (16–25 years) and b) middle-aged adults (40–59 years).

2.2.3. Hedonic function Consumers purchasing brands for hedonic reasons enjoy sensory pleasure, esthetic beauty, or excitement and consequently, arousing feelings and affective states receiving personal rewards and fulfillment (Dubois & Laurent, 1994; Sheth et al., 1991; Voss, Spangenberg, & Grohmann, 2003; Wiedmann, Hennigs, & Siebels, 2009). Dubois and Laurent (1994) have shown that the hedonic function is of crucial importance for luxury brand consumption as it reflects gratification and sensory pleasure based on experience with the product. According to the “Identity Development Process,” no indication exists that the need for arousing feelings and affective states is more or less relevant for different age groups. In contrast, Dubois and Laurent (1994) point out that “a vast majority subscribes to the hedonic motive” (p. 275). Therefore, the relevance of the hedonic function should not differ among the age groups. H3. No significant difference occurs between the age groups regarding the influence of the hedonic function on luxury brand purchase intention.

2.2.4. Utilitarian function Grewal et al. (2004) combine utilitarian and hedonic consequences of consumption, while Voss et al. (2003) as well as Batra and Ahtola (1990) call for a distinction of the utilitarian and hedonic function. This suggestion is in line with recent luxury brand research investigating hedonic and utilitarian dimensions discretely in order to explain luxury brand consumption (Shukla & Purani, 2012; Vigneron & Johnson, 2004; Wiedmann et al., 2009). The utilitarian dimension is derived from functions performed by products (Voss et al., 2003). While the hedonic function focuses on providing an emotional experience, the utilitarian function relates to the quality of goods and focuses on rational purposes (Batra & Ahtola, 1990; Tynan, McKechnie, & Chhuon, 2010; Voss et al., 2003). It is

Please cite this article as: Schade, M., et al., The impact of attitude functions on luxury brand consumption: An age-based group comparison, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.08.003

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mirrors the demographic composition of German adult population concerning education and income.

concerned with how a brand performs a desired product- or servicerelated function (e.g. durability) (Voss et al., 2003). In the field of luxury consumption, it is assumed that luxury brands offer greater quality and performance than non-luxury brands (Wiedmann et al., 2009). Shukla and Purani (2012) show in an empirical study that the utilitarian function strongly influences the purchase intention of luxury brands in Western societies. Following the “Identity Development Process,” no indication exists that the utilitarian function is more or less relevant for different age groups. Therefore, the authors propose:

3.2. Construct development and equivalence Development of the survey instrument began with a careful review of the extant literature to identify relevant measures for attitude functions of luxury brands. These measures divide the survey into two different sections: the first section contains attitude functions and luxury purchase intention, while the second section focuses on demographics. The study consists of items relating to the social-adjustive and valueexpressive functions of attitudes from Grewal et al. (2004). To measure the hedonic and utilitarian functions, the validated scale of Voss et al. (2003) applies. The authors do not draw on the measurement of the utilitarian function by Grewal et al. (2004) due to the fact that these researchers merge the utilitarian and the hedonic function. The purchase intention was measured within a time frame of 2 months using the scale from Bansal and Taylor (2004). The true predictive validity of intentions might get biased over time (Kalwani & Silk, 1982). In order to limit the consequences of such a bias, the authors decided to apply a time frame of 2 months. A complete list of items can be found in Table 1. For the measures, the authors implemented a five-point Likert-type response format, with 1 = “strongly disagree” and 5 = “strongly agree.” To provide content validity of the survey, the authors followed the recommendation of Zaichkowsky (1985) by presenting the questionnaire to 5 researchers. Initially, the original questionnaire was in English, then translated to German and modified as necessary to eliminate discrepancies between the two versions to verify the accuracy of the translation. Translation back-translation method applies to ensure semantic equivalence.

H4. No significant difference occurs among the age groups regarding the influence of the utilitarian function on luxury brand purchase intention. Fig. 1 summarizes the conceptual model of the present study.

3. Method 3.1. Sample and procedure To determine product categories capturing the luxury brand domain, the authors conducted exploratory interviews with marketing researchers (n = 3) and luxury brand managers (n = 5). We provided our definition of luxury brands (Hudders, 2012) to the experts. Based on this definition, the experts stated product categories for luxury consumption, which are frequently purchased and consumers are familiar with and have experience in. In addition, the experts mentioned prototypical luxury brands belonging to these categories (e.g. Hermes, Chanel, Fendi as typical luxury brands in the category clothes; Patek Philippe, Rolex, and Breitling as typical luxury brands in the category watches; Bugatti, Ferrari, Lamborghini as typical luxury brands in the category cars). This list was provided to the respondents of the main study for two reasons: (1) in order to communicate our understanding of luxury brands to the participants and (2) to exclude participants who have no luxury consumption experience in any of the categories. In August and September 2013, a total of 576 respondents (main study) participated in an online panel from a large pan-European market research agency. The sample of participants was actual luxury brand consumers. After deleting cases with more than 10% missing values, we had an effective sample size of 297 people. Of these, 20.3% were late adolescents (16–25 years, n = 90), 35.3% were young adults (26–39 years, n = 105), and 34.4% middle-aged adults (40–59 years, n = 102) with a mean age of 34.1. The sample is well balanced in terms of gender across the age groups and closely

Social-adjustive function of attitudes

4. Analyses and findings Partial least square (PLS) path modeling tests the hypothesized research model. PLS method is a non-traditional alternative to covariance-based structural equation modeling (Lohmöller, 1989; Ringle, Wende, & Will, 2005). In PLS, structural models use an iterative procedure which maximizes the strength of the relationship between independent and dependent variables. Unlike covariance-based approaches, PLS works well with small samples (Chin, 1998; Wold, 1982). SmartPLS 2.0 estimates the hypothesized model (Ringle et al., 2005). In addition, a bootstrap resampling procedure tests the model stability (297 cases, 5000 samples).

Age

Value-expressive function of attitudes Luxury brand purchase intention Hedonic function of attitudes

Utilitarian function of attitudes

Fig. 1. Conceptual model.

Please cite this article as: Schade, M., et al., The impact of attitude functions on luxury brand consumption: An age-based group comparison, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.08.003

M. Schade et al. / Journal of Business Research xxx (2015) xxx–xxx Table 1 Reliability and convergent validity. Variables

Item t-statistics CR loading

Social-adjustive function SA1: It is important for my friends to know the .62 11.71 luxury brands I possess. SA2: Luxury brands are a symbol of social status. .67 12.95 SA3: Luxury brands help me in fitting into .74 15.29 important social situations. SA4: I like to be seen with my luxury brands. .85 34.74 SA5: The luxury brand that a person owns, tells me .31 2.97 a lot about that person.a SA6: My luxury brand indicates to others the .73 14.70 kind of person I am. Value-expressive function VE1: Luxury brands reflect the kind of person I .83 27.20 see myself to be. VE2: Luxury brands ascertain my self-identity. .80 23.25 VE3: Luxury brands make me feel good about .80 28.07 myself. VE4: Luxury brands are an instrument of my .84 36.00 self-expression. VE5: Luxury brands play a critical role in defining .76 17.55 my self-concept VE6: Luxury brands help me to establish the kind .84 26.38 of person I see myself to be. Hedonic function Luxury brands offer the following characteristics to me HD1: not fun / fun .85 44.64 HD2: dull / exciting .86 45.30 HD3: not delightful / delightful .85 37.82 HD4: not thrilling / thrilling .86 44.29 HD5: enjoyable / unenjoyable .70 15.44 Utilitarian function Luxury brands offer the following characteristics to me UT1: effective / ineffective .74 17.84 UT2: helpful / unhelpful .76 18.86 UT3: functional / not functional .66 11.09 UT4: necessary / unnecessary .64 11.46 UT5: practical / impractical .72 15.73 Purchase intention How likely is it that you purchase a luxury brand within the next 2 months? PI1: unlikely / likely .94 66.44 PI2: no chance / certain .93 77.82 PI3: improbable / probable .95 109.84

AVE

.85 .53

.92 .66

.92 .68

5

in the measure range from .62–.95, and exceed the threshold. At the construct level, Hair et al. (2006) recommend to regard composite reliability instead of Cronbach's alpha. Additionally, average variance extracted measures the amount of variance captured by the construct in relation to the amount of variance attributable to measurement error (Fornell & Larcker, 1981). Together, these measures represent a good indication of the convergent validity of the constructs. The average variance extracted (AVE) is adequate for all the factors (N.50) (Fornell & Larcker, 1981). Additionally, composite reliabilities (CR) are all higher than .60 (Bagozzi & Yi, 1988) and therefore exceed the threshold. The measures fulfill the Fornell–Larcker criterion as all squares of parameter estimates between factors are less than their average variance extracted estimates. For adequate discriminant validity, the diagonal elements in Table 2 should be greater than the off-diagonal elements (Fornell & Larcker, 1981). Comparing all correlation coefficients with square roots of AVEs in Table 2, the results suggest evidence of discriminant validity. Additionally, all constructs positively relate to each other. Bivariate correlations between each of the variables are measured (see Table 3). The results show that all correlations are significant (p b .01). Bollen and Lennox (1991) recommend high or moderate correlations of effect indicators within a latent variable. In the presented study, most of the correlations of the effect indicators within a latent variable show a high correlation (exceeds .4). No correlation of these indicators within a latent variable is under the level of .2 (low correlation). 4.2. Structural model and multi-group analysis

.83 .50

.96 .88

CR = composite reliability; AVE = average variance extracted a Excluded from further analysis

4.1. Measurement model Prior to testing the structural relationships, exploratory and confirmatory factor analyses serve to pretest the measures and ensure the robustness of the selected scale structures. Confirmatory factor analysis establishes convergent and discriminant validity. Table 1 shows the descriptive statistics as well as reliability and validity measures of the constructs social-adjustive (SA), value-expressive (VE), hedonic (HD), utilitarian (UT), and purchase intention (PI). During this process, the authors eliminated one item (SA5) due to very low factor loading. Hair, Black, Babin, and Anderson (2006) propose that an item is significant if its factor loading is greater than .50. The factor loadings of the items

R2 estimates, standardized path coefficients (β), and significance level (t-statistic) evaluate the structural model. R2 values measure the structural model's predictive power, while path loadings indicate the strength between independent and dependent variables. R2 coefficients exceed the recommended .10 value (Falk & Miller, 1992) suggesting the structural model exhibits adequate explanatory power. Specifically, the explained percentage of purchase intention in the late adolescent segment is R2 = .31, in the young adults segment R2 = .26, and in the middle-aged adults segment R2 = .19. A PLS algorithm and bootstrapping procedure calculates path loadings and t-statistics for the hypothesized relationships. To compare the findings from three distinct samples, namely, late adolescents (16–25 years), young adults (26–39 years), and middleaged adults (40–59 years) of the influence of attitude functions on luxury brand purchase intention, the authors performed a multi-group analysis (see Table 3). In order to test the moderator hypotheses, the authors analyze whether the observed path coefficients of each function significantly differ from each other among the three age groups. The authors applied the PLS-MGA approach of Henseler (2007) to test for differences between the age groups. Table 4 provides the significance level of the group comparisons for each function. The results show that the path coefficient regarding the relationship between the social-adjustive function and purchase intention is significantly higher (p b .01) in the late adolescent (β = .26, p b .05) compared to the young adult sample (β = −.17, p N .05) confirming H1a. While the social-adjustive function shows the highest impact on purchase intention in the late adolescent group, a negative—though not statistically

Table 2 Discriminant validity: inter-construct correlations. Construct

Social-adjustive

Value-expressive

Hedonic

Utilitarian

Purchase intention

Social-adjustive Value-expressive Hedonic Utilitarian Purchase intention

.73 .69 .42 .42 .31

.81 .44 .42 .34

.82 .58 .39

.71 .38

.94

All correlations are significant at p b 0.01. Bold data indicates the square roots of AVE.

Please cite this article as: Schade, M., et al., The impact of attitude functions on luxury brand consumption: An age-based group comparison, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.08.003

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Table 3 Correlation matrix of all variables.

PI1 PI2 PI3 VE1 VE2 VE3 VE4 VE5 VE6 UT1 UT2 UT3 UT4 UT5 HED1 HED2 HED3 HED4 HED5 SA1 SA2 SA3 SA4 SA5

PI1

PI2

PI3

VE1

VE2

VE3

VE4

VE5

VE6

UT1

UT2

UT3

UT4

UT5

HED1

1

.79 1

.86 .80 1

.23 .24 .25 1

.18 .18 .21 .65 1

.34 .36 .37 .52 .51 1

.28 .25 .30 .68 .63 .57

.21 .16 .21 .58 .56 .51 .55

.22 .15 .23 .70 .65 .58 .62 .61

.25 .24 .24 .17 .24 .9 .17 .19 .24

.29 .30 .33 .13 .15 .33 .24 .19 .26 .39

.19 .18 .21 .29 .19 .30 .21 .20 .31 .42 .38

.29 .24 .24 .27 .19 .34 .27 .28 .30 .27 .44 .24

.22 .26 .23 .18 .24 .28 .20 .20 .20 .56 .33 .46 .25 1

.27 .39 .30 .23 .22 .38 .23 .21 .24 .36 .43 .27 .25 .40 1

1 1

1 1

1 1

1

HED2 .27 .38 .29 .26 .27 .40 .23 .19 .29 .30 .37 .25 .26 .30 .67 1

HED3

HED4

.30 .36 .30 .36 .36 .53 .34 .27 .35 .40 .37 .32 .34 .41 .62 .66 1

.28 .32 .29 .28 .28 .49 .26 .20 .33 .32 .49 .30 .30 .39 .66 .71 .70 1

significant—impact of social-adjustiveness occurs for the young adults. No significant difference (p N .05) on this parameter between the late adolescents and the middle-aged adults (β = .06, p N .05) exists (Table 5). Thus, H1b cannot be confirmed. In the consumer group of middle-aged adults, the social-adjustive function is not relevant for the purchase intention of luxury brands. Thus, a significant difference between the young adults and the middle-aged adults exists. Regarding the path coefficients between the value-expressive function and purchase intention, significant differences between the age segments are present. The young adults (β = .39, p b .05) group shows significantly stronger effects than the two other samples. Therefore, the results confirm H2a and b. The valueexpressive function even has the highest impact of all functions on purchase intention for the young adults. Both for late adolescents (β = − .03, p N .05) and middle-aged consumers (β = .08, p N .05), the impact of value-expressiveness on purchase intention is not significant. The influence of hedonism and utilitarianism on purchase intention is equally strong in all three groups, confirming H3 and H4. While the hedonic function shows a significant impact on purchase intention for the late adolescents (β = .21, p b .05) and the middle-aged adults (β = .21, p b .05), no significant effect exists for the young adults (β = .13, p N .05). The utilitarian function is highly significant for the purchase intention in all three segments. For the middle-aged adults (β = .19, p b .05), the utilitarian function is the most relevant of all functions for their purchase intention. But also in the late adolescent (β = .25, p b .05) and young adult (β = .24, p b .05) segment, the significance level is below .05 and therefore highly significant.

HED5

SA1

SA2

SA3

SA4

SA5

.21 .26 .26 .19 .12 .33 .18 .13 .16 .30 .36 .38 .12 .36 .54 .48 .50 .48 1

.18 .10 .22 .25 .37 .33 .32 .34 .28 .07 .18 .12 .17 .11 .08 .10 .18 .09 .05 1

.13 .18 .17 .31 .28 .35 .33 .37 .31 .19 .28 .29 .22 .16 .25 .26 .29 .30 .21 .25 1

.15 .14 .21 .40 .31 .42 .33 .38 .40 .21 .26 .14 .23 .09 .21 .16 .31 .26 .21 .42 .40 1

.30 .29 .33 .50 .50 .61 .46 .48 .49 .28 .30 .27 .31 .22 .34 .38 .49 .43 .25 .40 .45 .53 1

.21 .15 .22 .52 .46 .41 .53 .46 .49 .17 .23 .26 .22 .22 .20 .18 .27 .23 .15 .33 .47 .44 .47 1

5. Discussion According to life span research, individuals' motivations change through their lifetime. Previous research on luxury brand consumption neglected this phenomenon. Based on the findings of this study, the results confirm that the relevance of attitude functions for luxury brand purchase differs among age groups. This research is the first study empirically proving a moderation effect of age in the context of luxury brand consumption. Furthermore, the aim of this study is the identification of differences and commonalities of the relevance of attitude functions on luxury consumption in different age groups. While the utilitarian attitude function shows a high relevance for all age groups, the hedonic function seems to be particularly of influence on purchase intention for late adolescents (16–25 years) and middle-aged adults (40–59 years). In contrast to this finding, social-adjustive function is only significant for late adolescents and the value-expressive function only significant for young adults. The social-adjustive function seems to be exclusively relevant for late adolescents supporting the theoretical assumption that peer pressure is particularly shaping the behavior of this target group. Contrary, for young adults, a negative though not statistically significant effect of this function on purchase intention is evident. The strong focus on identity expression of young adults indicates a need for distinction from their peer group. For middle-aged adults, complying to peer pressure is of no influence on luxury consumption. No indication that socialadjustiveness has any relevance for middle-aged consumers occurs, while it seems of great importance for late adolescents. The small

Table 4 Summary of the standardized parameter estimates, t-statistics, and p-values of the structural model for the overall sample as well as the three age groups.

Social-Adjustive → Purchase Intention Value-Expressive → Purchase Intention Hedonic → Purchase Intention Utilitarian → Purchase Intention

Late adolescents

Young adults

Middle-aged adults

.26 (2.04; .04) −.03 (.39; .70) .23 (2.38; .02) .25 (2.54; .01)

−.17 (1.50; .10) .39 (2.71; .01) .13 (1.53; .10) .24 (2.46; .02)

.06 (1.15; .25) .08 (1.12; .27) .21 (2.91; .00) .19 (2.70, .01)

Note: Values in parentheses are t-values and p-values.

Please cite this article as: Schade, M., et al., The impact of attitude functions on luxury brand consumption: An age-based group comparison, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.08.003

M. Schade et al. / Journal of Business Research xxx (2015) xxx–xxx

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Table 5 Comparative results of the multi-group analysis represented by p-values.

Social-Adjustive → Purchase Intention Value-Expressive → Purchase Intention Hedonic → Purchase Intention Utilitarian → Purchase Intention

Late adolescents vs. young adults

Late adolescents vs. middle-aged adults

Young adults vs. middle-aged adults

.01 .02 .22 .49

.14 .09 .41 .24

.01 .01 .20 .29

Bold data indicates p b 0.05.

sample size might have an influence on the fact that this study shows no significant differences between late adolescents and middle-aged adults concerning the influence of social-adjustiveness. Future research needs to explore this effect in greater detail. The value-expressive function is only of influence for young adults. This finding confirms the underlying theory of the “Identity Development Process” showing that in a period of experiencing a stronger consciousness of one's own self-identity, individuals have especially the need to express themselves. Bian and Forsythe's (2012) study shows only a marginally significant effect for a combined social function in the late adolescent group. As the findings of this study demonstrate, a separation of the social-adjustive and value-expressive function is advisable. While the social-adjustive function influences luxury brand purchase intention in late adolescents, young adults reject peer pressure, and therefore the only social function that shows significance is value-expressiveness in this group. The study of Dubois and Laurent (1994) claims a strong influence of the hedonic function on luxury consumption across target groups. The findings only partially support this claim as the impact does not hold true in the young adult group. Given the fact that identity expression dominates the luxury consumption behavior in this target group, the hedonic function becomes less relevant. Grewal et al. (2004) stated that the utilitarian function plays a less prominent role for luxuries. In contrast to this, Tynan et al. (2010) come to the conclusion that a high standard of quality is essential for all luxury goods. Based on the results of our study the utilitarian function shows a high relevance across all three age groups. A possible explanation can be found drawing on Herzberg's (1959) motivation– hygiene theory. Adopting this theory, quality can be perceived as a hygiene factor for luxury brands (Brun & Castelli, 2013); therefore, consumers expect an outstanding quality. In case those high expectations stay unfulfilled, consumers might be dissatisfied and refrain from (re)purchasing the brand. Concluding, quality seems necessary but not sufficient. Thus, quality might not in itself drive luxury purchase behavior, brand positioning should always be complemented by social and hedonic aspects. To conclude, the personal attitude functions (hedonic and utilitarian) are in principle relevant across all age groups, while the impact of the social functions greatly differ among the target groups. Whereas the social-adjustive function strongly enhances luxury brand purchase behavior of late adolescents, value-expressiveness only impacts the luxury consumption of young adults. Social functions do not determine the acquisition of luxury brands for middle-aged adults. Based on the results, luxury brands are “identity supporting” brands for late adolescents and young adults; however, these social functions do not show any relevance for middle-aged adults. 6. Practical implications The findings suggest that managers need to develop an age group specific competitive marketing strategy concerning the positioning of luxury brands, particularly focusing on age group specific adjustments of the social functions. As the results show, brand positioning should always be a specific combination of utilitarian, social, and hedonic aspects to address the different age groups. As mentioned above, the utilitarian function (quality)

might act as a hygiene factor for luxury brands, thus in order to reach a competitive advantage, a brand should additionally be positioned on the hedonic and/or social functions. Especially to address late adolescents and young adults, the social function could provide a decisive competitive advantage. To position a luxury brand particularly the social functions offer versatile options for designing brand communication along the brand personality (e.g. elegant, sportive, or trendy). This study provides evidence that luxury shopping motives of late adolescents are highly influenced by the social-adjustive function. Luxury brand manufacturers can use this finding to leverage their brands by popularizing their trademark through the use of testimonials, idols, or role models to reach the opinion leaders of this target group. Carrying the well-known Monogram canvas bags by famous celebrities like Rihanna, Kim Kardashian, and Lady Gaga from the French manufacturer, Louis Vuitton has strengthened its positive image to attract late adolescents all over the world. Young adults communicate their self-identities to others by using brands serving the value-expressive function. For luxury companies, understanding the identity of this target group and communicating the corresponding characteristics are essential. Concerning the socialadjustive and the value-expressive function, highlighted signatures like logos, brand names, or predominant designs that identify luxury brands deliver consumers' desire to satisfy these social needs. For middle-aged adults, only hedonic and utilitarian aspects of the brand are important for purchasing luxury goods. The desire to express their self-identity or their expectations of how others will react to their purchase decisions does not direct their luxury brand consumption. Luxury brand managers face the challenge to address this target group with a hedonic and utilitarian function which is part of the product characteristics. Patek Philippe targets this age group by offering watches with outstanding longevity (utilitarian) and unique design (hedonic). Besides focusing on one age group in luxury brand positioning, managers face the opportunity to include sub-brands incorporating a specific target group in their brand portfolio. For example, the Polo Ralph Lauren Corporation has become one of the most famous luxury brands in the world by launching age group specific brands. By establishing the Polo Ralph Lauren line with the polo player as explicit logo, they were able to serve the social aspirations of their young consumers. Introducing the purple and black label for more mature consumers in 1996 with the focus on quality and hedonic aspects, Polo Ralph Lauren made a deliberate decision not to use a visible brand logo. 7. Limitations and further research The goal of our study was the identification of underlying motives for luxury brand consumption among age groups. Our findings show that the impact of the social functions greatly differs among the groups. It is conceivable that age not only moderates motives for luxury consumption but also the actual perception of what luxury constitutes. In literature various facets of the luxury concept are discussed, e.g. conspicuousness, uniqueness, craftsmanship, scarcity, ancestral heritage, long history (Dubois, Laurent, & Czellar, 2001; Kapferer, 1998; Vigneron & Johnson, 1999). For instance, the perception of conspicuousness as a constituting facet of the concept of luxury might change over the life span. As identity development research suggests, elderly individuals begin to accept their self-limitations by adopting a more

Please cite this article as: Schade, M., et al., The impact of attitude functions on luxury brand consumption: An age-based group comparison, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.08.003

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M. Schade et al. / Journal of Business Research xxx (2015) xxx–xxx

“passive” perspective about their environment including a strong focus on the private (Lesser & Kunkel, 1991). Following this argument, elderly consumers are likely to have more personal and private associations with luxury. Therefore, conspicuousness might not be a facet that elderly consumers automatically associate with luxury. Whether age actually influences the perception of the luxury concept would offer an interesting research question for future studies. Furthermore, not only does the interplay between motivations of luxury consumption and the perception of the concept of luxury represent an appealing field of research, but it would also be interesting to investigate the influence of values and needs on motivations and the perception of luxury among age groups. For instance, analyzing whether attitude functions and the perception of luxury mediate the relationship between values/needs and luxury purchase behavior seems to be an interesting venue. Additionally, the vast majority of prior research on luxury brand consumption takes a rather narrow focus regarding their age samples. The present study broadens this perspective by including participants from 16 to 59 years. Considering the great influence of age on the relation between attitude functions and luxury brand purchase intention, further research has to take age as a moderator into account. Especially middle-aged adults represent an under-researched age group and, therefore, might be of interest for further research. Based on theoretical considerations, the authors assume no difference in the influence of attitude functions on luxury brand purchase intention between middle-aged and older adults. Future research needs to confirm this assumption. Based on the results of the presented study, the relation between social functions and purchase intention is particularly moderated by age (Erikson, 1963; Sheldon & Kasser, 2001). Our research focuses on the luxury context only. Assuming that identity-based motives (social functions) might also hold a reference with non-luxury brand consumption, it can be expected that age influences the relevance of the social functions for non-luxury brand purchasing as well. In future research, investigating the influence of age on the behavioral relevance of attitude functions comparing luxury and non-luxury brands seems to be an interesting venue. Furthermore, the application of a wide range of product categories allows us to draw generalizable conclusions. However, for future research, an investigation of the interplay between age and luxury product categories offers exceeding, more specific insights. Similarly, different luxury product categories have different purchase cycles. In our study, purchase intention was measured within a time frame of 2 months. In future research, an adaptation of the purchase intention time frame to the specific purchase cycle of the product would be advisable. Thereby, distinguishing buying behavior based on impulse versus long-term planning could additionally be considered in future research. The present study includes the assumption that the buyer and consumer of the luxury brand is one and the same person. The relevance of the attitude functions might change if the buyer purchases luxury brands for another person of different age (e.g. a father purchases a luxury brand for his daughter's birthday). Comparing the relevance of attitude functions for the two conditions (buying for yourself and buying for another person) offers a possibility for future research. The present study demarcates the life spans according to age. To be even more precise in differentiating life spans, researchers might consider characteristics like family status and career status. Cultural setting is an additional factor for future research, as life span classifications might vary across different cultures. Further, the systematic exploration of the influence of culture on the relationship between attitude function and luxury brand consumption is advisable. References Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50, 179–211.

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