The Network Marketing Of Luxury Brand In The Chinese Market

In the modern world, luxury is unavoidable in every aspect of social life. Magnificent retail stores, prominent billboards and posters, dazzling fashion shows and campaigns and flourish advertisements in magazines, on TVs or movies and even on Internet constitute a living space where nobody could escape from luxury even if he or she never tends to be an owner of it. The luxury industry has expanded quickly during the past 15 years. Although the subprime mortgage crisis hit the industry a lot the business potential in this industry still high, especially in the emerging markets such as China.Luxury is of high quality, expensive and, in most cases, branded. It has evolved from an original value associated with projecting status to a modern value more and more related to supporting individual images. Luxury is always related with brands. A luxury brand is more than a label that persuades consumers to pay for the high margin of a product. It is the carrier of the emotion function of luxury and is responsible to deliver intangible value of the product to consumers. The intangible heritage in a luxury brand always reflects part of the spirit of the original country. Italian luxury brands are characterized by the blend of creativity and functionality. However, in the trend of marketing brands online, Italian luxury brands show slowness in establishing online presence, which is in contrast with its creative intrinsic. Even famous brands such as Versace and Prada did not have official website until 2005 and 2007.Interactivity is the key difference between the Internet and the traditional media. It offers opportunity for luxury brands to communicate the emotional value better with consumers. However, paradigm between the Internet media and luxury spirit still cannot be neglected. Luxury brands emphasize on exclusivity while the Internet is accessible to the mass. There is risk that the high-end brand image would be damaged by over-exposure on the Internet. Considering the long time and high costs it takes to establish a successful luxury brand, brand owners are reluctant to step into the Internet marketing. However, there is no choice about whether the luxury brands should enter the online marketing field or not. The only choice for all the global luxury brands is to decide when and how much to be involved in the Internet campaign. The key point in seeking a balanced solution is to make sure of the core brand value and the customers’attitudes towards luxury online in a specific social context. The main task of this study is to explore the Chinese consumers’attitudes towards Italian luxury brands online.Empirical studies based on 10 selected Italian luxury brands were conducted under three propositions:Purchase intent of Italian luxury brands has positive relation with the brand awareness level; Chinese luxury consumers expect more luxury information from the Internet; Chinese luxury consumers’preferences to the features of luxury brand official website display diversification. To explore the propositions, qualitative strategic analysis and quantitative questionnaire research were sequentially carried out. The qualitative analysis defined the scope and details of survey and explained the questionnaire in the Internet marketing mix model of 10 Cs. After data collection through online questionnaire, the results of the survey were coded and entered for statistical analysis. Explore factor analysis and Hierarchical Cluster Analysis were carried out to extract key features that consumers care about most and to classify different consumer group types. The critical 7Cs elements in current Chinese market were extracted out of the original Internet marketing mix model of 10 Cs. The new model was then utilized to compare the performance of the selected 10 Italian luxury brands’official websites and the result showed consistency with the consumers’feedbacks.Finally, conclusions can be made that it is beneficial for Italian luxury brands to invest more on Internet marketing for Chinese consumers. However, Chinese luxury market is still at the early age of industry evolvement and the consumption ideas of Chinese luxury consumers are still conservative. Chinese luxury consumers have not prepared well to accept the fashion of luxury online shopping and luxury online community as a way to contact with their favourite luxury brands. Some of them even strongly resist these kinds of communications. Internet marketing model for luxury brands in the context of China can be summarized as 7Cs (Customer Value, Cost, Content, Communication, Customer Care, Convenience and Customer Franchise) of luxury brand official website performance.However, further utilization of it are still to be studied.It was also found that the brand awareness of Italian luxury goods are still low in the Chinese market, and only several top luxury brands such as Gucci and PRADA, which entered China at an early age are widely well-known. The gaps between the other named brands are relatively small. Lack of familiarity means a tremendous opportunity for smaller and midsize brands to gain shares and also means a large amount of education efforts should be made by every brand.Chinese luxury market is predicted to be the largest luxury marketing in a decade. It will be important to obtain a leading competition advantage for those brands that haven’t entered this market for long. Italian luxury brands enjoy a good fame among Chinese consumers for their high quality and elegant design. But except several most famous brands, consumers still can tell few the other fabulous brands. Moreover, there are more shining spirits inside Italian luxury brands, such as harmony in personality and respect to the nature, which have to be broadcast to a wider range of Chinese consumers. Chinese traditional culture shares a similar value and so it would be accepted more easily.The limitation of the study is that the survey sample is not large enough. The age range of the respondents is 20-40 and a number of older and wealthiest consumers cannot be contacted easily through the Internet. Further study can also be conducted on the topics of the influence of the Internet in different phases of luxury consumer’s purchase decision making process and online brand consistency to modify the 7Cs model to be more delicate. Comparisons of online performance of luxury brands from different countries can also be made to summarize a more general e-marketing model for all the luxury brands in Chinese market.In summary, the exploratory study helps to bring an understanding of the Internet marketing environment for luxury brands in Chinese market. The findings encourage Italian luxury brands to communicate more with Chinese consumers through the Internet and summarize the marketing mix of 7 Cs that is most suitable for current Chinese luxury market. The study gives evidence that the interactive functions of the Internet are not valued too much by the majority of mass consumers while a small portion of pioneer consumers have already had requirements on high level of online services, being consistent with the original luxury brand images. It is argued that to utilize the interactive media is helpful and effective to collect consumer feedbacks and to control brand images in the mind of consumers. It still takes time for Chinese luxury market to be mature enough to get involved in all-round digital marketing.