File Name: fashion branding and consumer behaviour scientific models .zip
Driven by the competitive environment in fashion business, marketers have realized that creating a favorable brand image is a key to win larger market share in its market niche. An understanding of brand image can provide better foundation for developing a more effective marketing program.
It is well known that purchase of luxury fashion brands is strongly influenced by social needs such as the need for uniqueness and the need of conformity. The existence of these two competing social needs separates customers into two groups who exhibit different buying behaviors. This paper concerns the impacts of such social influences between different consumer groups on pricing and advertising strategies of luxury fashion brands with penalty of insufficient advertising. Important insights on strategic advertising for luxury fashion brands are discussed.
It is well known that purchase of luxury fashion brands is strongly influenced by social needs such as the need for uniqueness and the need of conformity.
The existence of these two competing social needs separates customers into two groups who exhibit different buying behaviors. This paper concerns the impacts of such social influences between different consumer groups on pricing and advertising strategies of luxury fashion brands with penalty of insufficient advertising.
Important insights on strategic advertising for luxury fashion brands are discussed. With the spectacular growth of consumption in its market, luxury fashion has become an area of growing interest to practitioners as well as academicians. Due to its high-price positioning, luxury fashion was used to be out of reach of mass consumption; however, luxury fashion brands are now developing strategies to manage broader diversity of consumer preferences for increasing profits.
In addition to various branding strategies such as brand extensions [ 3 ] and strategic pricing [ 4 ], advertising is deemed an effective strategy for luxury fashion brands to develop and maintain huge demand and consumption.
Apart from the physical value quality their products provide, luxury fashion brands highly emphasize the symbolic value prestige their image project. As such, advertising is a common tool that luxury brands rely on in building brand salience. Advertising, along with personal experience, is an undeniable force in creating brand equity [ 5 ].
One mechanism of creating brand equity via advertising is by creating and enhancing brand image. Meanwhile, it is well known that consumption is strongly influenced by social needs such as prestige and self-image [ 6 , 7 ]. For luxury fashion brands, consumers are influenced by two competing social needs: the need for uniqueness and the countervailing need for conformity in purchase [ 8 , 9 ].
Accordingly, a luxury fashion brand needs to reconcile the potential tradeoffs between exclusivity and accessibility on target advertising groups. On the one hand, exclusivity makes a brand out of ordinary as well as projects a positive brand association of user profiles; on the other hand, accessibility provides sufficient sales and profits [ 10 , 11 ]. Recognition of the social need for uniqueness and that for conformity also implies the existence of two types of consumers, namely, the elites and the majority masses.
The elites are usually more fashion conscious and would like to distinguish themselves from the masses in consumption, whilst the masses seek to emulate the choices of the elites see [ 12 — 14 ] for the details. In this paper, following Zheng et al. The former group usually plays a leadership role in the fashion trend, whereas the latter one is usually following the purchase of LG.
In light of the different buying behaviors between the two groups of consumers, luxury fashion brands must target each of them effectively and efficiently with proper allocation the limited advertising budget in order to obtain its best payoff.
Take the classic high-end British fashion brand Burberry as an example. Burberry holds its own fashion shows in Milan every year to attract its elite customers. The brand also strengthens the social interaction with its mass customers; it is now the leading luxury fashion brand on Facebook with over one million fans. In short, Burberry utilizes the social influence for brand development, establishing a leading presence across social media platforms, and creating new communities of interest.
Zheng et al. In this paper, we extend Zheng et al. To be specific, we investigate how a luxury fashion brand allocates the limited advertising expense strategically to maximize its profit. Similar to Zheng et al. Grosset and Viscolani [ 16 ] propose a model of a firm that advertises a product in a homogeneous market, where a constant exogenous interference is present.
They reveal that the optimal policy takes one of two forms: either a positive and constant advertising effort or a decreasing effort starting from a positive level and eventually reaching the zero value at a finite exit time.
Conditions under which an increase in penetration counter intuitively leads firms to increase advertising levels and enjoy higher profits are identified. In Zheng et al. It is important to consider the loss from the insufficient advertising for the target group because in practices, low advertising effort on the market might have a negative impact on market demand. In practice, most of the time, advertising is targeted [ 18 , 19 ].
Anand and Shachar [ 18 ] study a model in which firms can target their advertisements to particular groups of consumers, and advertising is noisy. Raghavan and Iyer [ 19 ] examine advertising strategy when competing firms can target their advertising effort to different groups of consumers within a market. With targeted advertising, they find that firms advertise more to consumers who have a strong preference for their product than to comparison shoppers who can be attracted to the competition.
They argue that advertising less on comparison shoppers can be seen as a way for firms to endogenously increase differentiation in the market. Our study is related to the work in social factors and conspicuous consumption [ 15 , 20 , 21 ]. He argues that advertising informs the public of brand names and creates the possibility of conspicuous consumption. Moreover, he finds that an incumbent might strategically overinvest in advertising to deter entry, and competition might be socially undesirable.
In this paper, we study an optimal control problem in the fashion apparel industry. We establish the study which analytically shows how a firm allocates the target advertising strategically on the luxury fashion brands when facing the market demand is affected by consumer desire for exclusivity and conformity, respectively.
We consider the scenario that a company sells a fashion product to the market with two groups of customers, namely, the leader-group LG customers and the follower-group FG customers. The unit product cost is , and the unit retail price is , where. We consider the case that is exogenous, whilst is decided by the company. Both groups are price sensitive, and demands of both groups are strictly decreasing in Chiu et al. In order to increase the sales volume of the product, the company implements advertising campaigns on LG and FG, respectively, and the total advertising resource and effort of the company spent on the advertising campaigns are denoted by.
Let be the proportion of the effort to be spent on LG, where. Then is the proportion of the effort to be spent on FG. The advertising cost function is strictly increasing in , and the marginal cost of the total advertising effort is strictly increasing in ; that is, and. In order to have closed-form solutions to generate more analytical insights, we consider , where. We denote the strategy of company with advertising and pricing by. We only focus on the set of finite ; that is,.
Different from Zheng et al. Accordingly, the profit of the company is. In this section, our objective is to derive the optimal advertising and pricing strategy for the social influence model with linear loss function for insufficient advertising.
Mathematically, we consider the following optimization model: where. Denote the optimal solution of by. Because of the presence of the penalty functions of insufficient advertising, there exist some situations that ; that is, the company is not profitable. In this paper, we only consider the situations that the company is profitable; that is, there exist some feasible that. Assumption 1. We employ Assumption 1 to make sure that there are positive product demands in both market segments when the product is sold at production cost, and the social influences are not considered.
To deal with the fact that is non-differentiable at some points, we consider the following four exclusive strategies in determining the optimal advertising and pricing policy for the company. Strategy 1. Advertising effort assigned to both market segments are sufficient; that is, and. In this case, we have. Strategy 2. Advertising effort assigned to LG is sufficient but that to FG is insufficient; that is, and.
Strategy 3. Advertising effort assigned to LG is insufficient but that to FG is sufficient; that is, and. Strategy 4. Advertising effort assigned to both market segments are insufficient, that is, and. Here, we consider the marketing strategy that the company sells the product to both FG and LG; in other words, we assume and. To facilitate presentation, we use to represent strategy. All proofs of propositions are relegated to the Appendix.
In this paper, we focus on deriving the local optimal advertising and pricing policies, as well as the respective associated necessary conditions and sufficient conditions as well if it can be solved out analytically for local optimality for individual strategies. Due to the complexity of the problem, it is very difficult to obtain the necessary and sufficient conditions for optimality for every strategy. Therefore, we mainly focus on exploring the necessary conditions for optimality. For any given market parameters, the company can check the necessary conditions for each strategy.
If any one of the necessary conditions of a particular strategy does not hold, then the local optimal of that particular strategy does not exist. In other words, the necessary conditions can be used to screen out the strategies that never provide the global optimal solution. Proposition 2. Proposition 2 shows that the value of takes different forms under various situations. Specifically, if , then , and hence and. On the one hand, if the company wants to assign the minimum total advertising effort, the optimal advertising effort assigned to individual market segments is just the minimum effort in individual market segments.
On the other hand, if the company wants to assign a greater advertising effort i. If , then , in turn and. Equivalently, the advertising effort assigned to LG is higher than the minimum requirement, but the advertising effort assigned to FG is just sufficient for and.
If , then and. Noting that can take any value which satisfies and if. However, for simplicity, we only demonstrate here the two special cases: satisfies , and satisfies , for. Therefore, the advertising effort assigned to FG is higher than the minimum requirement, but the advertising effort assigned to LG is just sufficient.
As a remark, represents the sensitivity of to product demand. Notice that the above-mentioned conditions are specific for the associated substrategies. In particular, they satisfy the following three basic conditions of Strategy 1 : , , and. We now need to check whether they fulfill the remaining basic conditions of Strategy 1 , namely: and.
Denoted by the local optimal advertising and pricing policy for Strategy 1 , where. Next, we explore the local optimal advertising and pricing policies for each substrategy of Strategy 1.
Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. Corpus ID: Consumer behaviour towards the fashion industry. Title: Consumer behaviour towards the fashion industry: what provoke planned or impulsive purchases? The fast fashion era Background: Fashion industry can be defined as a complicated complex and continuously changing industry to the demands of the consumers, that are influenced by universal trends and clothing from all over the world. Due to the globalization of the markets, the range of products available for the population is bigger as well as the variety of purchasing decisions.
Metrics details. In this highly competitive market, fashion brands struggle to distinguish themselves to increasingly apathetic consumers. This study illustrates why emotional branding is essential, especially to fashion brands, when developing brand strategies in a volatile marketplace. We propose a model for emotional branding strategies that focuses on sensory branding, storytelling, cause branding, and empowerment. The case studies we provide for each strategy describe how fashion brands can engage customers through emotional branding. In an ever-changing and highly competitive market, fashion brands struggle to distinguish themselves to increasingly apathetic consumers Clark
Consumer behaviour is the study of individuals, groups, or organizations and all the activities associated with the purchase , use and disposal of goods and services , and how the consumer 's emotions, attitudes and preferences affect buying behaviour. Consumer behaviour emerged in the s as a distinct sub-discipline of marketing , but has become an interdisciplinary social science that blends elements from psychology , sociology , social anthropology , anthropology , ethnography , marketing and economics especially behavioural economics. The study of consumer behaviour formally investigates individual qualities such as demographics , personality lifestyles, and behavioural variables such as usage rates, usage occasion, loyalty , brand advocacy , and willingness to provide referrals , in an attempt to understand people's wants and consumption patterns.
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