Effects of Social Media Marketing and E-Store on Luxury Brand Exclusivity and Brand Dilution

Introduction

Most luxury brands are only using the internet or communication and not for online distribution like other brands. Very few luxury brands sell online. The luxury fear online marketing since they fear they will lose the prestige of the brands (Keller et al. 2017, p.70). The topic is intriguing since today; most customers want to shop online since they are constantly on the internet through their phones, laptops or iPods. Despite the popularity of online shopping, luxury brands still stick to physical stores that raise concern (Kohli et al. 2015, p.40).

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Aims, objectives of the study include:

The first objective is to identify the advantages and disadvantages of luxury brands using e-stores. Based on the analysis, the study will assess whether luxury brands should exploit social media marketing as much as other brands. The study will light on the past, present and the future of luxury brands in the digital world.

The research will light on the consumer behavior of modern luxury customers and what they want in order to assess whether luxury brands can satisfy their market through online stores. It will assess people's perception of, modern luxury brands and the use of online marketing in luxury brands.

Research Questions

The research questions focus on the effects of social media marketing and e-store on luxury brand exclusivity and brand dilution. The questions are related to luxury brands and how they use online marketing techniques such as e-store and e-retailing. The research questions examine the relationships between online marketing and luxury brands' image (Keller, 2017).

To examine how and why luxury brands use online marketing techniques.

Can e-retailing cause brand dilution of luxury brands?

What does the modern luxury consumer focus on?

How will online marketing affect exclusivity of the luxury brands?

Can luxury fashion products thrive in e-retail?

How does the modern luxury fashion brand meet the target consumer's needs?

Feasibility

The information required to answer these questions and conduct this research is available online, in some articles and books that are easily accessible. The topic is based on marketing, the field that I specialized in. Hence, I have the necessary background skills and knowledge to conduct the study.

Besides the online books and articles, there will also be customer survey, and an interview to analyze the customers' attitude on luxury fashion brands and they experience online and offline and get an idea of the purchase behavior.

Literature Review

Social Media Marketing and Brand Image

According to Bowen & Ozuem (2016, p. 205), many people spend most of their time on the internet than sleeping or working. Around three-quarters of all the purchases of luxury, commodities are influenced by customer's behavior on the digital media even if the sales occur in physical stores. It is noted that 99% of sales on luxury goods whether online or physically is influenced by technology in one way or another (Kim & Ko, 2010, p. 167). Despite various skeptics, that digital media will dilute the brand, most luxury brands have succeeded on social media marketing. The use of social media marketing has led to a decline in marketing budgets resulting in more savings. Marketing budgets of luxury watches in the past were concentrated on magazines where they could advertise the product as highlighted by Han et al. (2010, p. 19). The costs associated were very high unlike currently where the industry does not spend even half of what was spend before. Every brand of the luxury watches has databases where new customers can be recruited and the existing ones tailored hence easy marketing (Wang et al. 2015, p. 1428). Many watch sellers use Instagram to market their products since the platform attract more consumers with Instagram's budgets significantly lower than advertisements in magazines, billboard, and televisions (Goyal & Subramanian, 2017, p. 44).

Social media marketing provides the basis for brand improvement and getting to know consumer tastes and preferences. Through digital media, the seller of luxury watches is able to monitor and analyze consumer conversations thus gaining insights into consumer likes and dislikes (Kim & Ko, 2010, p. 168). It helps to identify buyer's interests, know the product weakness and improve on it leading to more sales. Social media provides information about the customer's age, interests, geographical location, profession and gender, which assists in the improvement of brand marketing techniques (Celik, 2016, p. 440). Revenue of Burberry's digital, for instance, has grown by 14 percent to $528m during Christmas quarter as a result of monitoring customer conversations and making changes (Goyal & Subramanian, 2017, p. 45).

Customers' willingness to buy the luxury watches online has increased due to the presence of various official online stores (Latter et al. 2010, p. 209). On the internet, various customers discuss the brand, its quality, and cost hence able to be convinced to purchase the product unlike buying physically in the shop where you can buy a fake product. Social marketing allows customers to converse and share all information regarding the product thus encouraging sales (Kim & Ko, 2010, p. 170). The conversations benefit the brand through improvement of product development and marketing approaches marketing on the social media has led to increased awareness globally on luxury watches brand hence more sales. The social media marketing has enabled sellers to target international consumers. Increased awareness leads to more sales hence high revenues (Ozuem & Azemi, 2018, p. 119). Instagram account holders also, earn a living from the posts of luxury watches on social media. Luxury watches industries like Rolex and Swiss watch Company approaches them to market their products. For example, Alexander Rosenbaek, the owner of @dailywatch charges $800 to $1500 per post (Bowen & Ozuem, 2016, p. 253).

Although social marketing and online stores contribute significantly to the promotion of brand images, inappropriate use of technology might substantially have a negative influence on brand images. When brand promoters customize technologies to promote their brands online, the clients should not in return feel as though the process is invasive or inappropriate (Alam & Khan, 2015, p. 8). When it appears as though the online adverts reveal or obtain too much personal knowledge from the clients, they tend to avoid association with such brands thereby diluting its image in the market. Through social marketing, all information about a brand is readily available to all customers whether luxurious or not with the undesired target market also influencing the success of a brand in the market (Phan et al. 2012, p. 217). A slight undesirable characteristic on brands as noted by a single consumer raises numerous discussions that in turn may present the brand as a failure thus diluting its image (Wang et al. 2015, p. 1431). In the case of online stores, the advertised characteristics should be the actual physical characteristics as would be received and noted by the client; any slight variations from the features provided online and as noted physically creates unhealthy discussions in social platforms that in return threaten the image of the brand (Kapferer et al. 2012, p. 61).

Reference List

Alam, M., & Khan, B. M. (2015). Impact of social media on brand equity: A literature analysis. AIMA Journal of Management & Research Volume 9 Issue 4/4, 1-12.

Bowen, G., & Ozuem, W. (2016). Competitive social media marketing strategies. Hershey: PA Business Science Reference.

Celik, M. (2016). The impact of social media on luxury consumption. The Turkish Online Journal of Design, Art and Communication, 6 (4), 437-444.

Chu, S.C., Kamal, S. and Kim, Y., 2013.Understanding consumers responses toward social media advertising and purchase intention toward luxury products. Journal of Global Fashion Marketing, 4(3), pp.158-174.Goyal, D., & Subramanian, M. (2017). Efficacy of Social Media in Luxury Goods. Journal of Commerce and Educational Thought, 41-47.

Han, Y. J., Nunes, J. C., & Dreze, X. (2010). Signaling Status with Luxury Goods: The Role of Brand Prominence. Journal of Marketing, 74 (4), 15-30.

Kamal, S., Chu, S.C. and Pedram, M., 2013. Materialism, attitudes, and social media usage and their impact on purchase intention of luxury fashion goods among American and Arab young generations. Journal of Interactive Advertising, 13(1), pp.27-40.Kapferer, J.-N., Bastien, V., & Dawsonera. (2012). The luxury strategy: break the rules of marketing to build luxury brands. London: Kogan Page.

Kapferer, J.-N., Bastien, V., & Dawsonera. (2012). The luxury strategy: break the rules of marketing to build luxury brands. London: Kogan Page.

Kapferer, J.N., 2015. Kapferer on luxury: How luxury brands can grow yet remain rare. Kogan Page Publishers.Keller, K.L., 2017. Managing the growth tradeoff: Challenges and opportunities in luxury branding. In Advances in Luxury Brand Management (pp. 179-198). Palgrave Macmillan, Cham.

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Kohli, C., Suri, R. and Kapoor, A., 2015. Will social media kill branding?. Business Horizons, 58(1), pp.35-44.Latter, C., Phau, I., & Marchegiani, C. (2010). The Roles of Consumers Need for Uniqueness and Status Consumption in Haute Couture Luxury Brands. Journal of Global Fashion Marketing, 1 (4), 206-212.

Ozuem, W., & Azemi, Y. (2018). Digital marketing strategies for fashion and luxury brands. Hershey: PA IGI Globa.

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Wang, H.-W., Wu, Y.-C. J., & Dong, T.-P. (2015). Exploring the Impacts of Social Networking on Brand Image and Purchase Intention in Cyberspace. Journal of Universal Computer Science, vol. 21, no. 11, 1425-1438.