Abstract

This paper investigates the impact of price-related factors on consumer choices within the Chinese luxury watch market. It explores how the positive prestige effect and negative substitution effect contribute to consumer preferences for luxury watches. Notably, heterogeneity in the prestige effect is observed at both the consumer and brand levels. Consumer-level analysis reveals a U-shaped relationship between family income and prestige sensitivity, emphasizing heightened sensitivity among lower and higher-end middle-income consumers. Top-tier luxury watch brands demonstrate a more pronounced prestige effect compared to lower-tier counterparts at the brand level. What-if simulations underscore the advantages of brand promotion and enhanced prestige, especially for top-tier brands. Income escalation benefits top-tier luxury watch brands, while its impact on lower-tier brands is intricate. These findings offer strategic insights for marketers to refine their approaches and harness the power of the prestige effect.

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.