This study attempts to fill in the gaps in the international marketing literature about international marketing entry decisions for luxury products. With this in mind, a macromarketing approach is used to segment countries according to the basic luxury consumption criteria based on the literature review. These criteria include population, GDP, GINI coefficient, total female labor force, and cultural dimensions. These indicators are listed for a total of 60 countries and multidimensional scaling analysis (MDS) is conducted to see whether some countries form groups. Finally, five groups are determined and are discussed for their luxury potentials.
TopIntroduction
The possession of “beautiful goods” usually makes the owners of the goods happy. Nowadays, people are willing to spend higher amounts of money on luxury products (Husic & Cicic, 2009).In order to succeed in the luxury sector; brands need to build strong images. Thus, luxury brands are now some of the most remarkable and valued brands in the world (Kapferer & Bastien, 2009). As the luxury consumption trends change in today’s world, brands need to consider entering new markets. However, entering new markets raises questions that need to be analyzed. This is why luxury consumption has become an interesting area for marketers.
Researchers approach luxury consumption from two theoretical directions: the first is based on social psychology and aims to understand social motivations; and the second one is personally oriented (Godey et al., 2013). Hudders et al. (2013) propose two main categories for luxury brands based on their physical and psychosocial attributes: characteristics referring to exclusivity and characteristics referring to excellent quality and aesthetics. These characteristics are mostly individual.
On the other hand, when companies plan to enter a new market, they should first consider macro indicators to select a market and should then focus on individual characteristics after reducing the number of potential markets. Therefore, this study focuses on the macro characteristics of luxury consumption rather than the psychological ones.
Companies operating internationally should collect information about (1)economics and demographics, (2) the cultural, sociological, and political climate, (3) the overview of market conditions, and (4) a summary of the technological environment and the competitive situation (Cateora et al, 2009). This study tries to provide a tool for international market evaluation of the luxury sector including its dynamic structure.