The impact of brand penetration and awareness on luxury brand desirability:: A cross country analysis of the relevance of the rarity principle

Abstract

The global market for luxury brands has witnessed sustained growth in the last two decades, driven by purchases from emerging economies such as China and rising upper middle classes. Because luxury is associated with rarity and exclusivity, fears arise about whether continued growth might dilute the leading luxury brands' desirability. Prior studies offer conflicting results about the effect of greater market penetration on luxury brands' desirability; it appeared negative in the USA but not in Asia, today's highest growth luxury markets. The present research analyzes 3200 luxury consumers' perceptions of 60 major brands across six Eastern and Western countries, both emerging and mature. The overall effect of increased market penetration on luxury desirability remains negative, while the impact of awareness remains always positive. This confirmation of the rarity principle has notable implications for marketing luxury brands that seek to sustain their dream value.