Introduction
Academic Relevance
The paper will study how consumer behaviour in the Republic of Korea and Japan has changed in relation to European Luxury brands, together with factors that have facilitated these changes. The study will also compare the differences and similarities between Japan and Korea as well as how they relate to the global luxury markets. Therefore, studying change in consumer behaviour is essential because Asia is the fastest-growing region for luxury goods, and the change is happening rapidly. Studying these alterations will help us understand the dynamics of the luxury market in the area (Behl et al., 2021). Additionally, it will aid in uncovering the challenges that the European luxury houses in the region are facing, which might help identify opportunities and possible ways of adapting and creating strategies that will aid the industry in meeting the preferences of Asian consumers (Kim et al., 2012). Therefore, the topic is worth researching because it will contribute to the existing literature on luxury consumer behaviour, especially in Asia, which has minimal research compared to other regions. It will also provide essential insights into the needs and preferences of Asian consumers that practitioners and policymakers will use in the luxury industry.
Chronological Framework
The chapter begins with a brief overview of the research topic while explaining why the study is worth conducting. The section will then introduce the study’s main research objectives as well as its significance in terms of social, political, cultural, and economic implications. The fourth part of the chapter will present the theories that will aid the research as well as the hypothesis and the thesis statement. Coming after the hypothesis/thesis section is the review of existing literature concerning the research topic. After the literature review is the theoretical framework section that will discuss the approach which will be used in the study. The last part will be the methodology section reviewing the techniques used in analysing collected data.
Research Objective
The goal of this research is to investigate the features of consumer behaviour in relation to European luxury fashion houses in Japan and Korea from 2010 to 2023.
Some of the research objectives of the paper are;
- To identify and compare factors that influence the consumer preferences and choices of European luxury brands over local and other alternatives in Japan and Korea.
- To examine how the consumption of European luxury fashion influences consumer’s identity, social status and lifestyle.
- To evaluate the challenges and opportunities for European luxury fashion houses in the context of changing consumer trends, global competition, and environmental issues.
- To analyse how consumer adaptation and marketing strategies of European luxury brands influence their popularity, market presence, and profitability in Japan and Korea.
Hypothesis/ Thesis statement
Some of the theories that will aid our research are the learning model and the sociological model. Learning theory proposes innate needs (food and shelter) and learned needs (social status and self-expression) that are adapted from previous experiences and environmental stimuli that influence consumer behaviour. This theory will help explore how consumers in the Republic of Korea and Japan have learned to associate specific benefits and values with European brands. It will also aid the investigation of how the learning process has changed over time and the influence of factors such as social influence, media exposure, and cultural adaptation. On the other hand, the sociological model proposes that the social and cultural contexts where they live, including family, friends, peers, and reference groups, influence consumers’ purchasing behaviour. This theory can be used to examine how consumers in Japan and Korea are influenced by the norms, opinions, and expectations of their social network and how they use European brands to express their identity, affiliation, and distinction.
Hypothesis:
H1: Korean and Japanese consumers have learned to prefer European luxury brands over local brands due to Western culture and media exposure.
H2: Consumers in Japan and Korea with higher income and education levels are highly likely to purchase European luxury brands.
H3: Consumers in Japan and Korea have different preferences and perspectives of European brands depending on their age, gender, and personality.
Thesis Statement
My analysis demonstrates that the consumer behaviour of the Japanese and the Koreans is influenced by their preferences and choices as well as cultural exposure, socio-economic status, and demographic characteristics.
Literature review
In the last two decades, consumption patterns have shifted from necessary products to flexible consumption due to increased economic growth and income per capita. These factors have compelled consumers to experiment with luxury goods, challenging luxury fashion houses to improve brand-specific features such as superior quality and prestige image to elevate brand status (Chitrakorn, 2023). According to the Global Luxury Goods Report (2016), demand for luxury goods has steadily increased in all parts of the globe due to high tourist spending, growing e-commerce, rising disposable income, the appearance of the digital age, purchasing power of the upper class, and increase in brand awareness amongst the youths. Additionally, these factors have caused remarkable transformations in the world’s luxury fashion industry.
In East Asia, especially Japan and the Republic of Korea, the industry is one of the most dynamic and lucrative areas for luxury consumption. For instance, Japan has always been the largest and most loyal customer of European Luxury fashion brands since 1980, Japan (Nachon, 2016). It is the third largest luxury market in the world, accounting for 10 per cent of global luxury sales, with a mature and sophisticated consumer base and high penetration of products across age groups (McKinsey, 2023). However, consumer preference in this nation has changed in the last fourteen years due to factors such as stagnant income growth and competition from online and domestic retailers, causing the population to be more value-conscious and selective when purchasing goods and services (McKinsey & Company, 2023). On the other hand, Korea opened up to foreign trade and culture during the 1990s, encouraging consumers to gain interest in Western fashions and lifestyles (Ścibiorska-Kowalczyk, I & Cichoń, 2021). Koreans are characterized by the ability to experiment with new and trendy products, high spending power, and fashion awareness (Park et al., 2008). However, the Korean market has recently become more complex as consumers seek to express their individuality and identity via their consumption choices. These dynamics and complexities make the study of consumer behaviour essential and, at the same time, attractive.
European fashion houses have already set a firm foot with loyal consumers as their primary customers in East Asia (Chevalier & Mazzalovo, 2012). Nevertheless, various economic, political, and cultural influences have changed consumer behaviour in these markets. These influences still need to be understood, and little empirical literature has investigated the determinants of consumer purchase choice and loyalty toward European luxury brands.
Various political, cultural, economic, and social implications are associated with the research on Japan, Korea, Europe, and the entire globe. For instance, how does the consumption of luxury goods affect the values, identity, and social status of some individuals in different contexts and their relationships with others. Nwankwo et al. (2014) studied psychological and social factors that motivate consumers’ purchase of luxury goods, and they found that their purchase behaviour is influenced by hedonism, status-seeking, quality, and uniqueness. Another potential implication is the influence of political and economic factors, such as inflation, income, inequality, trade policies, and currency fluctuations, on purchasing luxury items (Jaravel, 2021). Lastly, we may also study how each country’s cultural norms, trends, and traditions shape the consumption of luxury goods. However, Chadha& Husband (2010). have studied cultural factors that affect the consumption of goods, and they conclude that Japanese and Koreans have similar preferences regarding luxury goods and services, such as exclusivity, high quality, and brand reputation. Furthermore, they also found that the two nationals differ regarding the degree of conspicuousness, novelty, and emotional attachment. However, given these markets’ changing and dynamic nature, it is worth exploring whether the findings are still relevant.
Theoretical Framework
A multidisciplinary approach is taken to analyse the nature of consumer behaviour with respect to European luxury fashion houses in Japan. The study utilizes several theories and models of consumer behaviour to capture the complexity and diversity that is inherent in this phenomenon. The framework consists of five main factors that influence consumer behaviour: social influence, habit formation, personality development of the individual self and emotion-cognition together with tangibility The first one relates to the social influence factor, which means that factors relating to the various sociocultural norms, values and expectations affect consumer behaviour. Second, the habit formation factor is about how past practices and rituals influence consumer behaviour. Third, the self factor is related to individual values objectives and drives in determining consumer behaviour. Fourth, affective and cognitive processes factors stand for feelings and cognition. Finally, the tangibility factor reflects physical and sensory elements shaping consumer behaviour. Social influence will be studied in terms of how it differs among various groups comprising age, gender and socio-economic as well as… personality – interpersonal changes that take place over time due to factors such as globalization media exposure cultural adaptation. The study will look into the impact of these elements on consumer behaviour relating to European luxury brands and how it can be affected by innovation, variability or novelty factors. The research modifies the SHIFT framework to suit European luxury brand consumption and suggests that they influence how Japanese and Korean consumers judge, evaluate, or select between European brands over local or other substitutes.
Methodology
The research will use a mixed-methods approach, combining quantitative and qualitative data from surveys, interviews, and observations, to test the proposed framework and hypotheses, and to provide a rich and nuanced understanding of the features of consumer behaviour in relation to European luxury fashion houses in Japan and Korea from 2010 to 2023.
To carry out the study, we will select relevant and representative cases. One of the cases that will be used in researching consumer behaviour is Chanel’s Resort 2016 in Seoul. This case is essential for our research because the luxury brand was the first to recognize Korea’s luxury market’s potential after holding its Resort 2016 show in Seoul in May 2015. Korean culture’s traditional and modern components inspired the show, featuring local influencers and celebrities. Therefore, the case can explain how the brand adopted its strategy and aesthetics to the local preferences and contexts. The second case we will use to answer our research question is Dior’s flagship store in Ginza. In December 2020, Dior opened its largest flagship store to the Japanese market in Ginza, Tokyo. The store’s design was contracted to Peter Marino, who incorporated Japanese artwork and motifs into the building’s interior. The store was designed to appeal to the Japanese market by offering exclusive services such as Dior’s Café and the personalization workshop. Thus, the opening of a flagship store by Dior can help reveal how the company designed a unique and immersive experience for the Japanese market. Another critical case that can aid our research is Gucci’s Partnership with BTS. The company appointed J-Hope, a popular sensation BTS member, as their brand ambassador in February 2023. The member joined his bandmates Suga and Jimin, who previously had signed deals with Valentino and Christian Dior, respectively. The case will aid in understanding how the luxury brand tapped into Korean pop culture.
The data we will use will combine primary and secondary sources to answer the research question. We will conduct online surveys and interviews to collect the data used in the analysis. Additionally, we will use data already available in reports, textbooks, articles, and statistics. The data will provide relevant and reliable information, insights, and evidence on consumer behaviour in Korea and Japan about European luxury fashion brands. The data sources will help identify critical factors, such as trends and patterns, that influence consumer behaviour in these markets and their differences in other markets as well as each other. Strengths and weaknesses of the different strategies and practices used by the luxury fashion brands will be identified using the data so that recommendations can be made on how to improve or adapt from the industry.
Structure of the entire work
The following chapter is the literature review section which will provide a summary of existing literature on features of consumer behaviour in luxury fashion. The chapter will state the key concepts together with their respective definitions in the literature. It will also discuss fundamental theories, models, and methods that will aid the research. It will also present the results as well as conclusions based on the findings of the existing literature. The section will also discuss the key insights and arguments as well as the strengths and weaknesses of existing research which will aid in the identification of a research gap. The literature review section will also be followed by the methodology chapter which will the conceptualization and operationalization of key terms as well as a clear definition of all concepts. Most importantly the section will explain the methods of data collection and selection. It will also explain how the data was collected, the data that was dropped, and how it was analysed. The last chapter will conclude the research and state the paper’s main findings.
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