Is Luxury Kids Market a Way of Diversification of Luxury Brands?

INTRODUCTION

Aims of the Thesis

The study will explore the luxury kids' brands and branding as associated with luxury products, then embark on identifying the dynamic cultural values as a coefficient of consumer behavior such as diversification and fully-fledged expansion. The data collection method used in this research is the questionnaire because it is less costly, suitable in special type of responses, puts less pressure on respondents, has greater validity, and saves time. It is also the best way to select suitable respondents.

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Luxury Brands and Social Identity

Luxury kids market constitute a full-fledged market in full expansion. "Luxury" signifies products or services of upscale standing. These brands are expensive purchases that provide consumers with a sense of indulgence (Drucker, 2017). They hold various features including identifiable style, superior quality, uniqueness, high price, and global reputation. Luxury kids' items target consumers who belong to the premium class. Most consumers purchase these items for symbolic reasons. Even though the laws of demand and supply bind the consumption of these products and services, the buying decision of consumers is independent of other factors in the market (Quart, 2008). People strive to acquire luxury products in order to express certain facets of their identities which in most cases are directed by consumption stereotypes and social expectations.

An individual may buy a luxury product to satisfy social needs; to impress peers and gain social status. "The dimensions of luxury value perceptions are critical in all cultures and these products have more pressure to justify their premium prices because consumers are obliged to identify enough value to balance between the product and price" (Drucker, 2017, pp. 29). Understanding how people interpret luxury kids' brands and how they make a judgment about the same brands is critical to the manufacturers and their advertising agencies because the entities will know what consumers exactly need. "Social needs influence luxury consumption of consumers in collectivist cultures while consumers in individualistic cultures are more motivated by self-expression needs" (Drucker, 2017, pp. 32).

Personality and social traits are linked to consumer behavior for luxury kids' brands. "People with high need for uniqueness place more emphasis on establishing an independent identity and using distinguishing products" (Gardetti & Giron, 2017, pp. 15). These people are likely to adopt new products because, to them, material possessions are regarded as an extension of the self. They use unique brands as a means of accomplishing the need for uniqueness. Given their exclusivity and premium price, luxury kids' brands are seen as unique and scarce. In this regard, they are hard to obtain, original, exclusive to a number of people, and potentially unpopular (Gardetti & Giron, 2017). The need to create a unique product has a positive impact on purchase intention of a consumer. When the brand name works as a guarantee for quality, a luxury item is considered to have premium quality, and in this case, it provides consumers with functional benefits that are critical for value-conscious customers.

People will always want something that others in a similar environment do not have. The fact that people are exposed to success and wealth actually influence how badly they need luxury items (Stone & Farnan, 2018). The portrayal of luxury kids' items on TV and social media has skewed the views of consumers towards the values, norms, and social perceptions represented by the same media. Social media has been key in peddling the contagious appeal of a stylish child. People buy certain items because they want to enhance their lives, to fit in, and to remind themselves that they are just a little better than peers or friends (Stone & Farnan, 2018). What one desires and what motivates him/her to buy luxury items can only be understood by considering the bigger picture which is the purchase of products to reinforce a person's connection to a certain culture.

Consumer preferences are rarely the outcome of individualistic choices of human intellect. Consumption does not occur in a vacuum and the many expensive things people own provide meaning for both their self-identity and their social identity (Mao, McAleer & Bai, 2017). Most of these luxury kids' items play multiple roles psychologically and functionally. Consumers are rational beings, and they can acquire items at mass market retailers which are exactly similar to the luxury brands. In this regard, the rational mind of a consumer is more likely to choose mass market while the emotional mind yearns for luxury (Mao et al. 2017). Emotion is a component of rationality in the sense that it reveals what is important to an individual.

Since luxury products have the power to change the perception of a consumer, they deliver emotional end-benefits such as self-esteem and satisfaction. Consumers who have a greater financial means and greater connection to luxury brands exhibit a different psychological motivation. To such consumers, luxury is an integral part of their lifestyle, and they experience emotions of security, trust, and confidence. At times, consumers find it prudent to identify some classic brands that have lost their veracity and have embraced a style aesthetic that contradicts their perceived truth (Stone & Farnan, 2018). In developed markets, buyers are motivated by emotions associated with an item's core reason for being authentic and original.

Brands are viewed as marketing tools developed to differentiate an entity from other competitors. They are valued because they reaffirm certain principles or beliefs that define an individual or a community as a whole. In most cases, brands are used to display buyer's knowledge of culture, taste, and style. Since most parents are likely to choose products that are appropriate images of their children, entities can use brands to convey unseen aspects of one's self-image. Luxury kids' products are emblems of identity. Normally, consumers prefer items that are more consistent with their self-identify (Stone & Farnan, 2018). Most top luxury brands concentrate on how to avoid bad real estate and bad distribution deals. They also ensure product quality and adopt a strategy that will ensure that it controls its supply chain distribution.

Sustaining a successful luxury brand in any nation is an art that requires a brand to have a sense of its own. Building a successful luxury kids market lies in the pillars of patience, great communication, and a great story. The most critical feature of third-generation luxury consumers is self-awareness (Atwal & Bryson, 2017). If these consumers decide to flaunt their wealth, young consumers with the attitude that it does not matter if other people do not recognize the brand have become the industry's mainstream. This explains the recent rise of select shops with collections of various kids' luxury items. In most nations around the world, there is an increasing number of consumers who visit not only select shops but also luxury brand outlets.

Emerging Luxury Kids Market

Luxury kids wear is not a new trend. A number of organizations such as Dior, Ralph Lauren, Burberry, Chloe, and Little Marc Jobs have tried to create brands specifically meant for a certain group of people in the society. The forces behind the explosive growth in this industry is pinned down to business savvy of designer brands aiming to deepen the relationship with their customers and to build their brand loyalty. Diversification of the luxury kids market came as the extreme upper class continued to differentiate themselves from the public. This class also looked for unfamiliar brands that most people in the society cannot afford. Although the high-end kids' market is still centered in Europe, it is no surprise that other continents are seen as a prime potential destination for top brands children's lines. Between 1990-2000, most parents in Europe became more aware of specific luxury kids items. As the luxury market continues to expand, there is the need to assess if the current strategies are delivering competitive advantage continually. Whether the luxury demographic in Asia proves a windfall for Western brands, most of the Asian brands are certain to make up a significant portion of high-end sales in the coming years.

"Given the population of Asia, it would not be surprising to see the region becomes the world's top single market for luxury kids wear within the next ten years" (Silhouette-Dercourt & De Lassus, 2016, pp. 1086). The millennial culture is also driving the luxury kidswear market. There is this incredible appetite as millennials are happy to spend more money on their kids. Children also grow out of clothes quickly, and in this case, there is a constant demand for new items (Schor, 2014). This results in high profitability and turnover.

In some nations such as China, the luxury kids wear genre was fueled by the new defunct one child policy which led to parents indulging in lavish gifts for their children as well as the issue of the second generation wealthy (Silhouette-Dercourt & De Lassus, 2016). Millennials used to grow in an opulent lifestyle that the kids they sire also lead a similar lifestyle. In Asia, luxury kids wear is expected to grow at 5.3% per annum (Silhouette et al. 2016.). Parents like to see their children in outfits that reflect their sense of self. Having an independent brand image is key to remaining competitive in the market.

Certain luxury kids wear the growing interest in the market inspired companies such as Burberry and this gave them great satisfaction especially in some regions such as the Middle East and Asia (Lindstrom, 2004). As long as the organizations are consistent and stay true to the overall brand image while avoiding over-exposure, they are likely to reach many consumers who are willing to buy their products.

Luxury products market for kids is broadly segmented on the basis of the distribution channel, product type, and geographies. In the Asia Pacific, the growth in luxury expenditure is expected to increase by 40% by 2020 (Akancha, 2016). Nations such as Thailand, Malaysia, and Singapore are expected to contribute a significant share to overall continent's luxury products market for children. In North America, Japan, Latin America, Eastern Europe, Middle East, and Western Europe, the high purchasing power of consumers is expected to boost the revenue of global luxury products of children.

The key factors driving this growth include continuous innovation in products sub-segment, changing consumer lifestyle, awareness of products through the internet, improving nations' economies, peer influence, and rising disposable income among other factors. In China and Western Europe, there are some restraining factors which affect the growth of the luxury product market for children. Some of these factors include the expensive price range for consumers and fewer products variants available across the distribution channel (Stiehler, 2016). Initially, the market was dominated by retailers such as Mothercare Plc, The Gymboree Company, and The Walt Disney Company.

With a shift in consumer buying behavior, various entities such as J Crew Group, Gucci Group, Jack and Jill Clothing Inc., VF Corporation, KMART, Polo Ralph Lauren, Burberry Group Plc, Converse, FENDI, DKNY, and GAPInc, and other companies have entered the market. These entities go to great lengths to add details that ensure their products stand out. Wh...