Ha Bich Dong^[1] and Jayoung Koo,^[2] Department of Business Administration, Augsburg University, USA

Abstract

The purpose of this study was to examine whether the prestige-seeking consumer behaviour framework (Vigneron and Johnson, 1999) was applicable to a current luxury car brand, twenty years after the framework was formed. To test the idea, we collected BMW’s online advertisements and conducted a content analysis. As a result, ten themes were identified: Conspicuousness, Experience, High Tech, Heritage, Likability, Luxury/ Craftsmanship, Personalisation, Performance, Self-actualisation and Superiority. According to the framework, most of the themes were predictable except for three: Performance, Personalisation and Self-actualisation. These new themes focus on the value of individualism and reflect the rising trend of inconspicuous consumption of luxury goods. The findings would allow both luxury-brand marketers and researchers to better understand the recent trends of consumer behaviour.

Keywords: Conspicuous consumption, inconspicuous luxury consumption, luxury cars, value of luxury brands, BMW advertisements, prestige-seeking consumer behaviour

Introduction

Conspicuous consumption has long been studied in the field of consumer behaviour, dating back to The Theory of the Leisure Class: An Economic Study of Institutions, by Thorstein Veblen (1899), in which Veblen defined conspicuous consumption as how consumers use material objects to indicate social position, wealth and status. In 1999, Vigeneron and Johnson developed a conceptual framework of prestige-seeking consumer behaviour to examine the characteristics of luxury brands. The study found that consumption of luxury goods can bring in interpersonal effects (conspicuous, unique and social) and personal effects (emotional and quality). Each of the five values (conspicuous, unique, social, emotional and quality) is combined with a relevant motivation, categorised as Veblenian, Snob, Bandwagon, Hedonist and Perfectionist (Vigeneron and Johnson, 1999: 3–4).

Besides the work of Vigneron and Johnson, there are other studies that provide different perspectives on why consumers buy luxury goods (Table 1). In the book Spent: Sex, Evolution, and Consumer Behavior, Geoffrey F. Miller (2010) applies evolutionary psychological theory to examine how American consumers use conspicuous consumption of luxury goods not only to signal status and wealth but also to communicate biological values, impress potential mates and deter rivals. Using evolutionary psychology, studies carried out by Saad and Vongas (2009) and Hennighausen et al. (2016) examined the use of conspicuous consumption of luxury goods to display self-confidence, dominance and attractiveness. On the other hand, Berger and Ward (2010) and Wilson, Eckhardt and Belk (2015) discussed the inconspicuous consumption of luxury goods with low brand prominence as a way for wealthy consumers with low need for status to signal within-group identity and non-conformity and experience personal satisfaction.

In this study, we used Vigneron and Johnson’s prestige-seeking consumer behaviour framework as our guiding framework for our content analysis to discuss whether this framework (which was developed in 1999) can be applied to a current luxury-brand car. We recognised that there have been a large number of studies on the overall luxury goods market (Holt, 1995; Bian and Forsythe, 2012) or on the luxury-fashion industry (Workman and Caldwell, 2007; Zhang and Kim, 2013), but there are fewer studies that focus solely on luxury cars, particularly the marketing communication aspects of this industry. Not only are there significant differences between consumption of luxury fashion products and luxury cars – which we will explore further in the literature review section of this article – but the luxury-car market is also sizeable and accounted for over $100 billion and 18 per cent of all car sales revenues in 2015 (Taylor, 2015).

Research objectives

While there have been various studies on the luxury-goods industry, particularly luxury fashion, there have not been as many studies that focus on luxury cars and luxury car brands. Since luxury cars are always visible to others (publicly consumed) and usually much more expensive than other luxury products (e.g. apparel and footwear that are studied far more often than cars), this research aims to investigate unique marketing communications regarding luxury cars instead of other luxury products.

Using the conceptual framework of prestige-seeking consumer behaviour (Vigneron and Johnson, 1999) as the guiding framework, we explored the interpersonal effects (communication between the owners of luxury cars and the public) and personal effects (communication between the luxury car brands and the potential or actual car owners) of luxury-car consumption. With a content analysis of BMW USA’s online advertisement messages, we discussed whether the existing framework (Vigneron and Johnson, 1999) can be applied to a current car brand, and how BMW’s online advertisements reflect findings from other previous studies and theories of both conspicuous and inconspicuous consumption of luxury goods.

Literature review

Characteristics of luxury goods

Luxury goods are products at the highest end of the market in terms of quality and price. According to a cross-cultural study by Bian and Forsythe (2011: 1443–44), six main characteristics of luxury brands are ‘premium quality, heritage of craftsmanship, recognisable style, premium price, uniqueness, and global reputation’. With information on the prestige-seeking consumer behaviour framework, developed by Vigeneron and Johnson (1999), and a wide range of previous studies, we created Table 1 to show how different researchers studied characteristics of luxury goods and the consumer behaviour behind conspicuous and inconspicuous consumption of luxury goods.

Table 1: Examples of research studying characteristics of luxury goods

Luxury-goods industry and luxury-car industry

Luxury goods account for substantial consumer product sales worldwide. According to Statista, the value of the personal luxury-goods markets worldwide in 2016 was over $306 billion. Although experiencing a drop in sales during economic downturns, the luxury-goods industry has been growing for years (Figure 1). Deloitte divided the luxury-goods market into two categories: mature markets and emerging markets (Deloitte, 2017: 4–12). Mature markets, such as the United States, Japan and France, have 53 per cent of consumers who increase spending on luxury goods; this rose to 70 per cent in emerging markets, notably China, Russia and the United Arab Emirates. As luxury brands expand to more industries, the overall industry is expected to become more mature and segmented.

Sales of luxury passenger vehicles are driven by emerging markets, particularly China where the growth rate varies between 21 and 35 per cent (Statista.com, 2017). The United States remains an important market for luxury cars despite being a mature market. According to IBISWorld, in the United States, luxury cars accounted for 2.1 per cent of the products and services segmentation in the automobile wholesaling industry, a $94.8 billion market (IBISWorld, 2017). The same report also stated that, out of all product segments in the automobile industry, the luxury cars segment is the most diverse, ranging in size from subcompacts to full-size cars and ‘has increased as a percentage of revenue over the past five years, as income levels has increased’. IBISWorld also recognises BMW and Mercedes-Benz as the two most notable automakers of luxury cars in the United States. An early 2018 IBIS World report predicts the automobile wholesaling industry imports to rise at an annualised rate of 1.2 per cent over five years to reach $178.1 billion by the end of 2018 (IBISWorld, 2018).

Figure 1: Value of the personal luxury-goods market worldwide from 1995 to 2017 (in billion euros).

Privately consumed and publicly consumed products

Based on the influence of reference group on product or brand selection, luxury goods are divided into two categories: publicly consumed and privately consumed products. A study by Bearden and Etzel (1982) shows that group membership, or the need for belonging, is a determinant of behaviour; reference group plays important role in some types of consumer decision-making. The concept of group membership states that people will act in accordance to their recognised group; examples are joining social clubs (social class), fraternities/sororities (demographic), or professional associations (education level). There are occasions when people’s behaviours are considered uncharacteristic to their group membership because they are acting in accordance to their non-membership reference group. For example, some people with less cultural capital purchase publicly consumed luxury products because they wish to experience a state of higher social status (Berger and Ward, 2010: 559).

Publicly consumed luxury products are visible to observers, exclusive, and have strong brand influence. Decisions to purchase the product and/or product brand are often influenced by a reference group. These products are not commonly owned or used by the public but are consumed in public view.

Privately consumed luxury products are consumed without advertising or displaying to the public. While the ownership of these products implies a message about the owner, the message is usually not obvious. Reference group plays important role in product influence but not brand influence because of low brand prominence, which is the level of conspicuousness of a brand logo or mark on a product (Bellezza, Gino and Keinan, 2014).

Quiet-luxury and loud-luxury products

Publicly consumed luxury products can be divided into two categories according to the level of brand prominence: quiet luxury and loud luxury. O’Cass and McEwen (2004) stated that conspicuous consumption emphasises the visibility of products when consumed in public view.

Quiet-luxury products contain small or no logo and imply subtle signals. Wealthy consumers who have low need for status purchase quiet-luxury goods for self-satisfaction or to facilitate communication with people from within the same social class (Berger and Ward, 2010: 559–66). The same research also shows that people may prefer quiet-luxury goods if mainstream individuals prefer products with explicit brand prominence because products may no longer be a good indicator of social status if they are used by multiple social groups. In China, where counterfeit luxury products are abundant and the growth of the middle class allows more people to consume luxury goods, the top highest-income individuals prefer luxury goods with ‘exclusiveness and more self-indulgence’ (Lopez, 2012).

Loud-luxury products contain a visible trademark that is easily recognisable by casual observers. Loud-luxury products help owners to easily facilitate their desired identification. Wealthy consumers in high need of status purchase luxury goods with a high level of brand prominence to signal wealth, status and competence to the public (Truong et al., 2008; Han, Nunes and Drèze, 2010).

Differences between luxury-car consumption and luxury-fashion consumption

Bearden and Etzel (1982: 190) demonstrated that ‘automobile’ is the highest value-expressive product. Sukhdial, Chakraborty and Steger (1995: 36) found that when it comes to a final purchasing decision in an overcrowded market with competing brands offering similar options, consumers are more likely to purchase brands based on the value-expressive considerations. While both luxury cars and luxury fashion products are considered public necessities, luxury cars are generally more conspicuous than luxury fashion products (Riley, Pina and Bravo, 2013: 199–201). This means that driving a cheaper model of BMW is more obvious to the reference group than wearing a cheaper pair of shoes from Gucci. While the public can recognise the brand Gucci and associates the prestigious brand value to the value of the shoes without being able to identify whether or not it is a cheaper model, it is not the same with a cheaper model of BMW. There is a noticeable higher social risk from driving an ‘obviously cheaper’ model of BMW than wearing a cheaper pair of Gucci shoes.

Another difference with regard to the visibility of luxury cars versus luxury fashion products is that there are more fashion products that are quiet-luxury. Products from brands such as Hermès, Bottega Veneta and Christian Louboutin often contain subtle or no trademark. Wilson, Eckhardt and Belk (2015) found that, with the middle class being able to access more luxury goods due to ‘fast-fashion copycats and high-quality counterfeits’, logos of luxury fashion brands no longer carry the clear signal of wealth as they did in the past.

In contrast, all car models from every brand still contain a visible logo on several points of the car. Wilson, Eckhardt and Belk (2015) stated that the conspicuously branded Mercedes cars were still successful in the Chinese market although the luxury-fashion industry in China was moving towards quiet luxury. They also noted that Daimler has created a more quiet-luxury car brand named Denza in China. However, despite claiming to have quieter designs, Denza cars carry a recognisable logo on the front, back and on all four wheels. Another example is the 2018 Navigator model from Lincoln, which the Ford-owned brand called ‘quiet luxury’ (Korosec, 2017). The Navigator contains a huge logo on the front and smaller trademark on its side and back and in the middle of all four wheels (Figure 2). Lincoln explained this ‘quiet luxury’ attempt as a shift in focus to the interior of the car, emphasising the brand’s advanced technology that will bring a premium experience to the car’s owner. How Denza and Lincoln define ‘quiet luxury’ suggests that the quiet-luxury trend in the luxury-car industry has less influence on brand prominence but rather affects how brands put a stronger emphasis on the development of automobile technology to provide a luxurious experience for the car’s owners.

Figure 2: Online Advertisement for 2018 Lincoln Navigator.

Counterfeit products have long been a concern for many luxury fashion brands because they erode the impact of brand prominence on the signaling of wealth and status (Wilson, Eckhardt and Belk, 2015). Counterfeit products carry the same recognisable logos or signature patterns as well-known brands. Many people without the financial capability to purchase high-end luxury goods, but who have a high need for status, will purchase counterfeit products instead (Bian, Haque and Smith, 2015). Today, people with a high income and low need for status buy quiet-luxury goods in order to differentiate themselves from the rising middle class who can afford lower-end luxury goods and to avoid the social risk of being mistaken as using counterfeit products.

On the contrary, counterfeit products are usually not a concern for luxury car brands. One explanation is that it is significantly costlier to design and manufacture a car in comparison to designing and manufacturing a fashion product. Often, using counterfeit fashion products only costs a social risk of being exposed for using fake luxury items. If there is a counterfeit car, there will be serious safety concerns. In addition, it can be a challenge to find a distribution channel to sell a large product such as a car. The distribution and selling of automobiles is usually more complicated and selective than that of fashion goods. Fashion goods can be sold to end consumers using multiple channels, including – but not limited to – department stores, retail stores, online, and even street markets.

On the other hand, luxury car brands can be affected by copycat cars (Holding, 2017). There are Chinese brands that mimic designs of luxury cars to manufacture and sell copycat cars under different brand names. At a quick glance, it is hard to distinguish a BMW X1 from a Brilliance V5 (Figure 3). Luxury car brands can differentiate themselves from mass car brands by offering more advanced technology, better customer services, etc. Still, given that copycat brands cannot create an exact counterfeit car, one strategy for luxury car brands is to create conspicuous car designs, such as having a bigger logo, having the logo on more spots on the exterior of the car, or having a more distinctive design. The more conspicuous a car is, the more difficult and costlier for it to be copycatted.

Figure 3: BMW X1 versus Brilliance V5.

Comparing the value of a luxury car and a luxury fashion product is not straightforward. For example, the least expensive Hermès handbag costs approximately $9,000 (Lopez, 2012), but the least expensive BMW car has a starting manufacturer suggested retail price of $34,900 (‘BMW 3 Series’, 2017). Thus, purchasing a lower-end Hermès handbag costs significantly less than purchasing a lower-end BMW car. Nonetheless, the cost of a more exclusive Hermès handbag or a BMW car can be much more expensive. In June 2017, the most expensive Hermès handbag was sold at an auction for $379,261 (Ginsberg, 2017). In Forbes’s list of the ten most expensive cars for 2018, the price range was between $1 million and $4.5 million (Gorzelany, 2017). In this case, purchasing a top-end luxury fashion product is still significantly less expensive than purchasing the top-end luxury car.

Furthermore, car is one of the most depreciated and quickest-to-depreciate customer products; on average, a new car loses 11 per cent of its value the moment its owner leaves the dealership (Dempsey, 2011). Owning any car also requires additional maintenance costs such as insurance, fuel cost, repair, etc. Even if one purchases a luxury fashion product and a luxury car at similar price, owning a luxury car will cost more in the long term. In terms of length of ownership, Experian Automotive found that a majority of both BMW and Mercedes-Benz owners drive their cars for just over six years (LeBeau, 2014). Many luxury-car owners lease their car for three to four years, so the actual length of ownership is even shorter. In comparison, the Wall Street Journal (Suzanne, 2015) states that an average American woman (age 18 and older) owns around 11 handbags and buys two new handbags each year. The article did not provide details on the length of ownership of premium handbags but noted that sales of premium handbags have been in decline in general since 2013 as many women start to prefer buying fewer but higher-quality handbags that would last longer.

Communication between owners and the public

According to Winkelmann (2012), consumption externalities include owners (those who generate them) and observers (whose are affected). By owning and using a luxury car, the car owner will consciously and/or unconsciously send out certain messages to the observers. These observers may have lower, similar or higher social status and wealth compared to the owner. The observers may also have a different gender or sexual orientation compared to the owner.

With luxury fashion products, the ranking of the observers, along with the level of need for status of the owner, often influence the owner’s decision to choose between a loud-luxury or quiet-luxury product. It is not the same with luxury cars. Luxury cars are publicly consumed products with high visibility. All luxury cars, including those that are called ‘quiet-luxury’, display a high brand prominence regardless of the owners’ level of need for status.

Throughout the years, many people have considered a car as a symbol of status and wealth (Gebru et al., 2017). A study done by the National Academy of Sciences found that cars can signal income (Gebru et al., 2017). The study used an algorithm that analysed 50 million Google Street View images from 200 US cities. The study found that there is a positive correlation between the number of foreign cars in a neighbourhood and the neighbourhood’s average income level. High-median household income areas tend to have more German cars and Japanese cars (especially Lexus). Lower-median household income areas are more associated with American, domestically produced cars (Buicks, Oldsmobiles and Dodges in particular). A plausible explanation for this is that higher-income people have the financial capability to afford luxury cars, and the top three selling luxury car brands in the United States are BMW (German), Mercedes-Benz (German), and Lexus (Japanese) (Taylor, 2015). In other words, owning and using a luxury-brand car helps the car owner to signal wealth and status to the public.

Evolutionary psychologists have different explanations as to why people participate in conspicuous consumption, emphasising the signal of traits. Previous research by Miller (2010) suggests that people may use conspicuous products to impress potential mates; in this case, luxury cars give out a signal of mate value. Dunn and Searle (2010) found that women perceive men who drive a luxury car to be more attractive compared to men who drive a non-luxury car. Their research concludes that men purchase luxury cars to enhance their attractiveness. Hennighausen et al. (2016) suggest that luxury-car consumption can also be used to impress others and deter rivals. Their research focuses on the relationship of intra-sexual challenges and luxury-car consumption in the United States. Not only do they confirm that using luxury cars helps men to display mate values (wealth and status) to attract mates but also to impress and deter potential rivals in any same-sex competition. They found that men are more likely to perceive men who display consumption of luxury cars as rivals compared to other men who do not. Saad and Vongas (2009) showed similar results. By measuring men’s testosterone levels in different intra-sexual contexts, they pointed out that, in the presence of a female, men are more likely to feel threatened by the wealth display of other men.

Methods

We conducted content analysis to examine the marketing communications of luxury car brands. We chose content analysis because it is useful to justify whether research findings support or fail to support existing theories and formulate new theories (Carlson, Grove and Kangun, 1993; Stern, 1994).

Stimulus materials

We analysed commercial messages found on the BMW USA website (https://www.bmwusa.com). We selected BMW as our focus brand because of its success on the United States market. Out of all the luxury car brands in the United States, BMW was the only one that was named in top best luxury cars/ car brands on IBISWorld (2017), US News and World Report (2017) and Consumer Reports (2018).

The advertising messages of BMW 2 Series, 3 Series, 4 Series, 5 Series, 6 Series, 7 Series, X Series, Z4 and M were collected from the BMW USA website. We did not include the BMW X1, X2 or BMWi because these models were not consistently featured on the BMW website’s front page. We examined messages in February 2018 (118 texts) and March 2018 (161 texts).

Typology development

We examined a wide range of previous research on characteristics of luxury goods and conspicuous consumption of luxury products (Table 1) and used the conceptual framework of prestige-seeking consumer behaviour (Vigneron and Johnson, 1999) as our guiding framework for our analysis and to predict the result of our analysis. As a result, we developed two typologies to analyse the interpersonal effects (communication between owners and observers) and personal effects (communication between car brands and actual or potential owners) in the marketing communication of a luxury car brand, BMW. Interpersonal effects included the values of ‘conspicuous’, ‘unique’, ‘social’ and personal effects included the values of ‘emotional’ and ‘quality’. In addition, new themes were created based on other previous works (e.g., Saad and Vongas, 2009; Miller, 2010; Hennighausen et al., 2016) to identify potential aspects of the ad messages that may not fit with the guiding framework of Vigneron and Johnson (1999). As a result, we identified ten themes of Conspicuousness, Experience, High Tech, Heritage, Likability, Luxury/Craftmanship, Personalisation, Performance, Self-actualisation and Superiority.

Two researchers independently analysed the texts. The first researcher examined and categorised the texts from the BMW website under the ten themes that were identified by the literature review. The second researcher used comparative methods to generate themes and interpret the themes from the texts. She coded the frequency of key texts and constructed a bigger category from the related key texts. In that way, she established the repeated themes. The two sets of themes from the two researchers were compared to ensure trustworthiness and rigour of the research (Lincoln, 1995).

Research findings

We identified ten themes: Conspicuousness, Experience, High Tech, Heritage, Likability, Luxury/Craftmanship, Personalisation, Performance, Self-actualisation and Superiority (Table 2). Although the naming of the themes was varied, both researchers independently identified the same ten themes from the advertisement text analysis.

Table 2: Ten themes coded from BMW USA online advertising messages

As of February 2018, we found that the top five themes that appeared most frequently were Conspicuousness, Superiority, Heritage, Luxury/Craftsmanship and Performance, respectively. The theme of Conspicuousness appeared the most frequently, significantly more often than the last five themes. As of March 2018, the top five themes that appeared most frequently were Conspicuousness, Superiority, Performance, Luxury/Craftsmanship and Heritage. Again, Conspicuousness appeared most frequently. There were some small changes in the order of the top five themes, but the major themes stayed the same. However, the theme Performance became significantly more dominant in advertisement messages in March 2018, while the themes Personalisation and Experience also appeared more often this time.

Furthermore, we confirmed that the conceptual framework of prestige-seeking consumer behaviour (Vigneron and Johnson,1999) can be applied to examine characteristics of a specific luxury-brand car. However, we also found that not all ten themes could be justified using the five values identified in the conceptual framework. Table 3 shows that we were able to categorise seven themes into five values; the three themes of Personalisation, Performance and Self-actualisation did not fit well into any of the five values or reflect one type of communication, as the other seven themes did.

Table 3: Categorisation of ten themes found in BMW's online advertisement messages using the Vigeneron and Johnson (1999) prestige-seeking consumer behaviour framework

Discussion

Conspicuousness and Superiority

The two themes that appeared most frequently in BMW advertisements in both months were Conspicuousness and Superiority. The theme Conspicuousness communicates that BMW cars are ‘designed to be noticed’ (Table 2) but bring in a sense of non-conformity due to their uniqueness (Figure 4). The theme Superiority states that BMW cars are symbols of high social ranking and power, and the uniqueness of BMW cars allow car owners/drivers to have ‘incomparable luxury and power’ (Table 2) in front of observers. This finding aligns with various previous studies on the purchase intention of conspicuous consumption, which is to signal wealth, social status and social prestige (Veblen, 1899; O’Cass and McEwen, 2004; Berger and Ward, 2010; Bellezza, Gino and Keinan, 2013). The theme reflects BMW’s conspicuous brand image. BMW has spent efforts to ‘build long-term brand image to fight the idea that luxury cars are a commodity’ since the 1990s, based on the concept that people are more likely to choose conspicuous design when luxury car brands have similar level of technology (Sukhdial, Chakraborty and Steger, 1995).

Figure 4: Online Advertisement for BMW Series 6.

Heritage and Luxury/Craftsmanship

The theme Heritage and Luxury/Craftsmanship communicate the premium values of the BMW brand as a whole and BMW cars in particular. Bian and Forsythe (2011) identified ‘heritage of craftsmanship’ and ‘premium quality’ as two of the six main characteristics of any luxury brand. Truong et al. (2008), Berger and Ward (2010) and Wilson, Eckhardt and Belk (2015) also recognised premium quality and craftsmanship as characteristics of a luxury product, regardless of its visibility. BMW’s previous and current advertising campaigns often focus on promoting BMW’s heritage and luxurious qualities. The 1980s campaign for BMW AG focused on the brand’s ‘grand touring tradition’ (Berthon et al., 2007). In 1973, BMW built the BMW Welt museum in Munich to reserve BMW’s long history and recognise the brand’s appreciation for the art. A 2016 article in The Economist recognised that BMW has been successful in confounding its rivals by ‘maintaining an image of luxury and exclusivity’ throughout the years, even when it has introduced a broader range of entry-level, more-affordable cars (‘Bavarian rhapsody’, 2016). In a 2001 article Chris Bangle, the global chief of design for BMW in Munich, shared how he worked to make sure that BMW designs will be ‘works of art that express the driver’s love of quality’ (Bangle, 2001: 6).

Experience

Experience is one of top ten themes in BMW online ad messages. Our finding reflects results from many previous works that showed how people consume luxury goods in order to experience personal satisfaction, pleasure or leisure (Veblen, 1899; Berger and Ward, 2010; Wilson, Eckhardt, and Belk, 2015). A large part of BMW’s past strategy to differentiate itself from mass brands has been to provide exceptional customer services and options for customisation. BMW reached out to the Ritz-Carlton hotel chain and Lufthansa for advice on developing and maintaining a gold-standard luxury customer service, which resulted in an increase in customer satisfaction levels ever since the launch of the programme (Armitage, 2007). Indeed, BMW’s strategy is to focus not only on selling luxury cars but also selling customer services and ‘luxurious experience for both drivers and passengers’ (Table 2).

Performance

Among the top five themes that appeared the most frequently in BMW’s online advertisements is Performance. Using Vigeneron and Johnson (1999)’s framework, we found that the theme Performance is difficult to combine with one of five identified values of luxury brands and one communication effect of luxury-goods consumption. This theme reflects a common characteristic among many BMW customers: passion for aggressive speed and self-confidence in driving skills. Advertisement messages from this theme show both interpersonal effects (communication between the owner and the public) and personal effects (communication between BMW brand and its actual or potential customers) of luxury-car consumption.

Some existing studies discuss how consumers purchase luxury goods to display self-confidence or impress others (Saad and Vongas, 2009; Miller, 2010; Hennighausen et al., 2016) and inflate the ego (O’Cass and McEwen, 2004: 35). Research done by BMW found that BMW car owners ‘take pride’ in their driving skills (Lojacono and Zaccai, 2004). Perhaps this is one reason why BMW advertises that BMW cars offer ‘a wealth of athleticism’ (Table 2). In a 2018 survey of 2,000 British drivers, BMW M3 car owners were voted to be the most aggressive among luxury-car drivers (Petter, 2018). An advertisement message found on the BMW USA website stated: ‘Every BMW shares racing DNA.’ While this is not the absolute truth, it influences people who consider buying a luxury car and love high speed, making them more likely to purchase a BMW car, thinking that they can be associated with other skilled BMW car drivers.

Personalisation and Self-actualisation

Personalisation and Self-actualisation are two themes that we did not categorise into a personal effect (communication between the owner of luxury goods and the public) or interpersonal effect (communication between the luxury car brands and the actual or potential owner). Our reason is that, although Personalisation reflects BMW’s high level of customer services, the nature of the texts emphasises the individualism of the car owners, which was also the focus of the theme Self-actualisation. Individualism was not mentioned as a value gained from consumption of luxury goods in the Vigeneron and Johnson (1999)’s framework; however, it was discussed in a study on inconspicuous consumption of luxury goods by Bellezza, Gino and Keinan (2013). Given the rising trend in inconspicuous consumption of luxury goods within the last few years, it was understandable that the Vigeneron and Johnson (1999) framework did not capture the new value.

Driverless vehicles versus emotional value of luxury-goods consumption

Driverless vehicles represent a rising trend within the last decade. Many mass car brands are investing in self-driving technology, including Honda, Chevrolet, Nissan, Ford, Hyundai, etc. Luxury car brands working on driverless vehicles are BMW, Mercedes-Benz, Audi, Lexus, Volvo, Tesla, etc. There are various common issues about self-driving technology that all companies have to deal with, such as cost, safety, and technological and legal concerns. However, luxury car brands face a more complicated challenge: they have to innovate the ways in which they establish their brand images, given that brands like Mercedes-Benz and BMW ‘sell cars on the basis that people will love the experience of driving them’ (Adams, 2015). In the early 2000s, research by BMW stated that ‘a completely automatic system would have been an affront to the pride its customers take in their driving skills’ (Lojacono and Zaccai, 2004: 76). Yet the new trend in self-driving cars has forced BMW to rethink its strategies. Michael Aeberhard, a leading automatic driving researcher at BMW headquarters, shared that the brand is focusing its design effort into ‘making hands-free feel like a natural driving experience’, starting with a self-driving car resembling a regular 5 Series instead of having a new conspicuous design (Adams, 2015). Aeberhard shared that BMW recognises its customers’ strong emotional relationship with the car and high-speed driving; thus, BMW is working on a highly automated car that will not violate that connection.

Managerial implications

By looking at conspicuous luxury consumption and BMW’s marketing strategies, this research can provide information to help newer luxury car brands develop effective communication with customers. As shown in Vigeneron and Johnson (1999)’s framework, luxury car brands should provide all five values of consumption of luxury goods (conspicuous, unique, social, emotional and quality) through effective use of five relevant motivations (Veblenian, Snob, Bandwagon, Hedonist and Perfectionist). It is also important for these brands to be aware of rising trends in the car industry as well as new values/motivations of luxury-goods consumption coming from inconspicuous consumption.

Understanding the wants and needs of each specific target market would allow luxury car brands to use appropriate motivation in their marketing communications. For example, BMW highlights the powerful performances of BMW cars in its advertisements because the brand understands that many BMW drivers favour high-speed driving. BMW is aware that wealthy people who want to be seen as skilled drivers or lovers of powerful driving are its target markets. In contrast, an article from UC Berkeley stated that many Tesla car owners are wealthy drivers who want to show they are ‘socially responsible’ (Martin, 2017). Both BMW and Tesla car owners are wealthy individuals with a high need for status, but they have different purchase motivations and values.

Conclusion

In this study, we found ten common themes in BMW’s online ad messages, including Conspicuousness, Experience, High Tech, Heritage, Likability, Luxury/ Craftsmanship, Personalisation, Performance, Self-actualisation and Superiority. We used the prestige-seeking consumer behaviour framework (Vigeneron and Johnson, 1999) as the guiding framework for our content analysis. Seven themes (Conspicuousness, Experience, High Tech, Heritage, Likability, Luxury/Craftsmanship and Superiority) were categorised into five values with relevant effects (interpersonal or personal). However, there were three themes (Performance, Personalisation and Self-actualisation) that did not fit well with the existing five values from the framework. Both Personalisation and Self-actualisation focus on the value of individualism and reflect the rising trend of inconspicuous consumption of luxury goods, which brings in different values to the ones identified by Vigneron and Johnson (1999).

Limitations and future research

This is an exploratory research with content analysis as the main method. Our research focuses only on the United States market. In general, research findings can be applied to other markets, but perception of luxury brands and purchase intention differ by cultures and can be inconsistent across different market segments from the same culture (Bian and Forsythe, 2011; Zhan and He, 2012). Lastly, this research mentions the trend in driverless vehicles but does not mention other rising trends, such as sustainable technology and ridesharing.

For future research, it would be beneficial to conduct interviews with BMW owners as well as salespeople to gather primary data and develop themes based on the findings. Future work may consider investigating the impacts of cultural factors or differences in consumer's background (such as ethnicity or gender) on luxury-goods consumption.

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Notes

[1] Ha Dong recently graduated from Augsburg University with her BA in Marketing and International Business (Double Major). She is currently working as the Communications Coordinator at Riverside Innovation Hub, Augsburg University.

[2] Jayoung Koo is an Assistant Professor of Business Administration at Augsburg University. She teaches various marketing courses including Consumer Behavior, Marketing Communications, International Marketing, and Principles of Marketing. Her research interests include consumer happiness and social media, luxury brand consumption, and green marketing. Before obtaining her Ph.D. in Consumer Studies, she studied Psychology and worked as an Associate Consultant at The Boston Consulting Group Seoul office in South Korea.

List of figures

Figure 1: Value of the personal luxury-goods market worldwide from 1995 to 2017 (in billion euros). Image in the public domain, source: https://www.statista.com/statistics/266503/value-of-the-personal-luxury-goods-market-worldwide/

Figure 2: Online Advertisement for 2018 Lincoln Navigator. Image in the public domain, source: https://media.lincoln.com/content/lincolnmedia/lna/us/en/navigator-concept.html

Figure 3: BMW X1 versus Brilliance V5. Image in the public domain, source: http://www.motorpress.com.ar/autos/noticias/ultimas-noticias/copias-chinas-un-calco-por-donde-las-mires/?rlabs

Figure 4: Online Advertisement for BMW Series 6. Image in the public domain, source: https://www.bmwusa.com/vehicles/6-series.html

List of tables

Table 1: Examples of research studying characteristics of luxury goods.

Table 2: Ten themes coded from BMW USA online advertising messages.

Table 3: Categorisation of ten themes found in BMW's online advertisement messages using the Vigeneron and Johnson (1999) prestige-seeking consumer behaviour framework.

References

 

To cite this paper please use the following details: Dong H.B. and Koo J. (2018), 'Conspicuous and Inconspicuous Luxury Consumption: A Content Analysis of BMW Advertisements', Reinvention: an International Journal of Undergraduate Research, Volume 11, Issue 2, http://www.warwick.ac.uk/reinventionjournal/archive/volume11issue2/dong. Date accessed [insert date]. If you cite this article or use it in any teaching or other related activities please let us know by e-mailing us at Reinventionjournal at warwick dot ac dot uk.