Does Perception of Luxury Differ in Eastern (Collectivism) Verse Western (Individualism) Cultural Orientation: Evidence from Pakistan

Abstract

Social, functional, and personal value perceptions are the basic dimensions of “luxury.” However, the subjective character and the relativity of luxury create difficulties in defining and measuring it. One category of relativity is cultural relativity, where divergent cultural framings and continual philosophical debates regarding luxury drive complexes and ambivalent consumer attitudes. This study examines differences in luxury value perceptions and their influence on luxury purchase intentions among collectivists and individualists. For this, we applied the Aliyev & Wagner (2018) model to the Pakistani environment. Attributes of Value perception included 1. Uniqueness, 2. Conspicuousness, 3. Quality, 4. Price, 5. Hedonic Value, 6. Subjective Norms (acceptability in a social circle), and 7. Satisfying Extended-Self. Empirical validity was established by conducting a survey using a close-ended questionnaire. Data was collected from 416 respondents which were consumers of luxury brands in Karachi and analyzed using confirmatory factor analysis and structured equation modeling multigraph analysis. The results showed that quality and price seems to have a positive and significant impact on Luxury Purchase Intention (LPI) in both cultures, with price having a more pronounced effect in individualistic culture as compared to collectivism, whereas extended-self remained insignificant for both. Conspicuousness and Subjective Norms seems to have a positive impact on LPI, whereas the same seems to have a negative effect on LPI. Meaning these have a perception of luxury in collectivist culture but not individualist culture. Similarly, Hedonic and Uniqueness seem to be driving the concept of luxury in individualistic cultures, as it has a significant positive impact on LPI, on the contrary, these two have a negative effect on the perception of culture in collectivism. Hence, the findings suggested that cultural relativity is a crucial factor in luxury perception, and luxury brands should consider cultural sensitivities when designing their products and communications.