Understanding consumer behavior in purchasing luxury brand cosmetics

Abstract

With its massive entry of new customers, the luxury market has become a fast-growing segment in recent years. The top 100 luxury goods companies generated 281bil USD in 2019 (Deloitte consulting report, 2020), and its cosmetics segment represents approximately 21% of the total market (Bain & Company, 2020). Luxury cosmetics are recognized as one of the crucial market segments in terms of widely consumed products that quickly penetrate new customers as must-have, daily routine products. As a result, the cosmetics market is becoming increasingly attractive for luxury goods companies because it carries enormous growth potential and its entry barrier is relatively low. Consequently, many major luxury companies use the cosmetics market to horizontally extend their reach and generate additional revenue while keeping brand identity without compromising exclusivity. Women are the majority of cosmetics consumers and comprise an emerging essential player in the luxury market. Given their improved consumption power and high earning capabilities, women as consumers have become the driving force for solid sales growth (Fionda and Moore, 2009). Cosmetics have become a vital part of daily routine. Many women can quickly chase trends and prefer to buy luxury cosmetic brands over similar but typical mass products (Mobil et al., 2019). In the luxury cosmetic market in Korea, majority of sales are generated by women while the men’s skincare segment only represents less than 4% (Beaute Research, 2021). Learning about luxury cosmetic brands can help understand one of the most crucial consumption behaviors of women related to the luxury brand perception. Purchasing of luxury cosmetic brands is influenced by cognitive and affective processes, as well as intuitive product responses. In providing a deeper understanding of individual decision making, the Model of Goal-Directed Behavior (MGB) has recently attracted attention, followed by Theory of Reasoned Action (TRA) and Theory of Planned Behavior (TPB). MGB is the enhanced model for predicting human decision making by adding variables such as desire, anticipated emotion, and past behavior to the existing TRA and TPB. In this regard, MGB is a valuable model for understanding the consumer purchasing behavior of luxury cosmetic brands, which have essential cognitive, habitual, and emotional characteristics. This study develops an extended MGB following decision making by investigating the perceived luxury consumption values. This investigation on how such values affect attitude, a significant factor in social psychology and the most influential variable on behavior, is critical (Han et al., 2014). Perceived luxury consumption value reflects the subjective consumer views, including both personal and social consequences of luxury products. Therefore, this perception is vital to identify the actual consumption value formed from the consumer-oriented view for purchasing and consuming luxury cosmetic brands rather than the company-oriented perspective to deliver luxury goods. This study applies three essential dimensions of perceived luxury consumption values (functional, symbolic, and experiential) to research the relationship to attitude, which affects the degree of behavior associated with the targeted actions. This study adds brand authenticity and emotional attachment to investigate the decision making of luxury cosmetic brands based on extended MGB. Brand authenticity refers to the consumer perception of a brand as trustworthy and reliable. The demand for authenticity plays an increasingly critical role, especially in the cosmetics industry, where trust in products and companies and brand symbolism are paramount. Furthermore, emotional attachment to a brand due to brand authenticity is examined. At the core of consumers’ behavioral intention and attitude formation, variations in consumer personality traits are also crucial. Therefore, this study selects four consumer traits (self-efficacy, novelty-seeking, need for interaction with a service employee, and self-consciousness) that moderate effects on desire and purchasing intentions, desire and reduction of brand switching intention in MGB of luxury cosmetic brands. Furthermore, luxury cosmetics have attributes such as new products applying patented new advanced formula technology, precious natural ingredients, new usage routine, consultation by new technology devices, and expensive products. Thus, the study of moderating effects in MGB through four consumer traits can provide much insight. In this study, the sample includes 550 Korean women who purchased luxury cosmetic brands within six months. Data analysis was carried out by using SPSS 27and AMOS 26. Results are as follows. First, the relationship with psychological factors that influence the purchase of luxury cosmetic brands by the extended MGB is examined. The additional variables are attitude, emotional attachment to brand, subjective norms, and perceived behavioral control that positively influence desire. Attitude shows a more substantial effect on desire than on other dependent variables. Desire clearly shows the role of mediator and has a positive influence on both reduction of brand switching intention and purchase intention. Second, this study investigates whether perceived luxury consumption values affect consumers’ attitudes toward luxury cosmetic brands. Results show that perceived luxury consumption value and its three sub-variables have a positive effect on attitude. Third, this study examines which luxury cosmetic brand authenticity influences the consumer emotional attachment. Brand authenticity has a substantial effect on emotional attachment to the brand. In addition, its three sub-variables of product, cooperate, and seller dimensions show a positive effect on emotional attachment to the cosmetic brand. Lastly, the moderating effects of four consumer traits between desire and purchase intention and between desire and reduction of brand switching intention of luxury brand cosmetics are examined. All four traits show a positive moderating effect between desire and reduction of brand switching intention, but only the need for interaction with a service employee has a pure moderating effect between desire and purchase intention.