Consumer Culture and Purchase Intentions towards Fashion Apparel Rajagopal E-mail: [email protected] Home Page: http://prof-rajagopal.com Working Paper #MKT-01-2010 EGADE Business School Monterrey Institute of Technology and Higher Education 222, Calle del Puente, Col. Ejidos de Huipulco Tlalpan, DF 14380, Mexico March 2010 1 Abstract This study examines the effectiveness of different fashion marketing strategies and analyzes of the consumer behavior in a cross-section of demographic settings in reference to fashion apparel retailing. This paper also discusses the marketing competencies of fashion apparel brands and retailers in reference to brand image, promotions, and external- market knowledge. The study examines the determinants of consumer behavior and their impact on purchase intentions towards fashion apparel. The results reveal that socio- cultural and personality related factors induce the purchase intentions among consumers. One of the contributions that this research extends is the debate about the converging economic, cognitive and brand related factors to induce purchase intentions. Fashion loving consumers typically patronage multi-channel retail outlets, designer brands, and invest time and cost towards an advantageous product search. The results of the study show a positive effect of store and brand preferences on developing purchase intentions for fashion apparel among consumers. Keywords: Consumer behavior, purchase intention, socio-cultural values, designer brands, store brands, fashion apparel, brand promotion, personalization, fashion retailing, psychographic drivers 2 Consumer Culture and Purchase Intentions towards Fashion Apparel Introduction Globalization has catalyzed the growth of fashion industry and the marketplace attractions have driven the cultural attributes of consumers significantly across various consumer segments. Shifts in the cultural values, consumer preferences, and purchase intentions towards designer products is arguably the most critical issue faced by the marketing managers today. Many researchers argue that increasing globalization is reducing the homogeneity of consumer behaviors within countries, while increasing communalities across countries (Cleveland and Laroche, 2007). Most firms manufacturing designer apparel are trying to bridge intercultural differences and building cultural consonance across consumer segments on a variety of contexts that stimulates interest in fashion apparel. Customer centric market strategy developed on self-esteem attributes of consumer is used by the firms to enhance purchase intentions towards fashion apparel (Horowitz, 2009). Powerful market stimulants such as fashion shows on television, fashion advertisements, in-store displays, and fashion events in the urban shopping malls have influenced the transnational cosmopolitanism among consumers. Such interactive marketing strategies of fashion apparel have shown convergence of traditional and modern values and lifestyle to develop a homogeneous global consumer culture. The conventional method of using societal icons as the cultural drivers have now been replaced by global fashion players with flagship brands as a basis for product position and market segmentation. It is found that multi-channel systems of brand building and differentiation influence the consumers towards fashion apparel and need is created at local levels supportive of, and constituted by, cultural industries. The Italian city of Milan shows how the city has became a destination brand, where different various channels are being negotiated and integrate service fashion and design branding strategies (Jasson and Power, 2010). Globalization and increasing competition, and short product life cycles in fashion retailing cultivate asymmetric consumer behavior and pose a number of marketing challenges for retail firms in Mexico. In order to survive in this industry, it is vital for manufacturers and 3 retailers to develop and leverage core marketing capabilities. This study examines the effectiveness of different fashion marketing strategies and analysis of the consumer behavior in a cross-section of demographic settings in reference to fashion apparel retailing. This paper also discusses the marketing competencies of fashion apparel brands and retailers in reference to brand image, promotions, and external-market knowledge. The study examines the determinants of consumer behavior and their impact on purchase intentions towards fashion apparel. Consumer market for fashion apparel has become more diverse by designer brands, store brands, personalization, advertising, and ethnicity in the global marketplace. If manufacturers and retailers of fashion apparel can identify the target consumers' preferences, they may be better able to attract and maintain their target consumer group. However, little research has been conducted to investigate the factors influencing the apparel shopping behaviors among Hispanic consumers. Thus, the purpose of the present study is to investigate the attributes of shopping designer apparel among consumers in Mexico. Theoretical Motivation According to Optimal Distinctiveness Theory, individuals strive to maintain a balance between the need to be assimilated by the peers and family, and the need for autonomy and differentiation (Sorrentino et al, 2009). The purchase intention for fashion and designer apparel is stimulated among consumers in the social contexts. The distinctiveness of fashion features (e.g., designer brand, celebrity endorsement, media reviews) that are consistently associated with emotional expressions plays the strongest role in the buying behavior among consumers (Clavo and Marrero, 2009). Some studies suggest that the perception of a person on his personality is a distinctive and salient trait that differentiates behavior. Individuals who have high social standing and are adaptive to change in lifestyle are driven by the fashion demonstrations. (Arpan and Peterson, 2008) 4 The distinctiveness theory supports the notion that ethnicity can influence consumer responses to various marketing stimuli such as sales promotions and advertisements. One of the principal drivers of consumer behavior towards fashion apparel is the dominance of social interactions. The involvement of consumers in fashion products depends not only on their own perceptions but also on peers’ response to their personality and change proneness (Pinheiro, 2008). The relation between clothes and identity is perceived by the consumers from the perspective of their values generated in various social interactions. Consumers get involved in exhibiting fashion and lifestyle as an aesthetic way of presenting their personality. Hence, clothing is often considered as an opportunity for communicating a new order of identity of a person. In this process there are both cognitive and affective incentives that translate into potential welfare gains (or indifference) for the consumer in a given social and work related environment (Bianchi, 2002). It has been observed by some researchers that cultural values affect the purchase intentions of fashion apparel. In the societies that exhibit hedonic values, fashion apparel are promoted by manufacturers and retails to induce a sudden, compelling, socially complex buying behavior through the promotional programs to increase disposable income by facilitating credit to consumer (Venkatesh et al, 2010). Manufacturers and retailers apply both push and pull strategies to make the promotions of fashion apparel effective and advantageous to the consumers. Promotions targeted at final consumers, known as pull promotions, directly offer extra value to consumers, with the primary goals of attracting consumers to retail locations and stimulating immediate sales. Though both push and pull promotions are designed to speed up the selling process and increase sales, at least in the short term, their strategic implications as well as their impacts on fashion sales and profits are believed to be different. Such promotion led fashion retailing culture stimulates fashion oriented attitudes, debt and spending behavior on clothing among consumers (Martin-Herran et al, 2010). The designer brands and departmental stores have redefined the strategies of retailing fashion apparel in Mexico considering global-local buying preferences. The central and 5 northern regions of Mexico have witnessed increase in specialized apparel stores, which imposes new demands on manufacturers, wholesalers, and consumers (Chavez, 2002). It has been observed that the attributes determining overall acceptance of fashion apparel and accessories among Mexican consumers are significantly influenced by product attractiveness and price sensitivity. Purchase intent was influenced by overall appearance, brand appeal, and overall liking (Rajagopal, 2006a; Herrera-Corredor et al, 2007). Fashion apparel is largely penetrating in Mexico through cross border (American) consumer influence. Outshoppers literally go extra miles to outshop for better quality and assortment of merchandise, higher quality of personal service, more pleasant shopping atmospherics, and more competitive prices (Guo and Wang, 2009). Consumers in Mexico are largely influenced by the product attractiveness and show higher store-loyalty, irrespective of price and shopping ambience. When choosing apparel and store, consumers evaluate both the fixed and variable utilities of shopping; the fixed utility does not vary from trip to trip whereas the variable utility depends on the size and composition of the shopping list (Rajagopal, 2006b; Tang, 2001). Preferences and perceptions of Mexican consumers on fashion apparel also depend on the social and cultural values. Designer brands introduced in the Mexican market are generally expensive and price is considered as a major factor influencing consumption. Mexican consumers put more emphasis on the country of origin of products than on brand names. The product- country evaluations of Mexicans seemed to be affected by a strong home country bias (Ahmad and d’Astous, 2006). Fashion promotions in Mexico are derived considering socio- psychographic background of consumers such as age, gender, country of origin, social class, and income status, which are critical to the success of interethnic communications with the Hispanic population (Valdez, 2000). Hispanic consumers’ distinctive apparel shopping behaviors, along with a huge market potential, deserve attention from apparel retailers who plan on tapping into this market (Seock and Baily, 2008). Review of Literature and Hypotheses Framework Shifts in Consumer Fashion Culture 6 Traditional clothing practice is often assimilated to the generic preferences of ethnic dressing. Thus, modern fashion apparel market has emerged with the announcement that ethnic dressing comes from the core of the traditional culture whose gorgeous fabrics have been face lifted as convenience apparel within societal value and lifestyle (VALS) system. The fashion apparel has built the image in the market by characterizing as sexually ardent designs for passionate male and female shoppers (Narumi, 2000). It is argued that shifts in consumer culture provide a stimulus to dynamic innovation in the arena of personal taste and consumption. Such dynamism in consumer preferences is considered as part of an international cultural system and is driven by continuous change in VALS. The consumer values like functionality, fitness for purpose and efficiency significantly contribute in driving cultural change and recognizing suitable fashion to strategically fit with the lifestyles (Hartley and Montgomery, 2009). The growing technology led apparel selling is one of the major stimulants for inducing change in fashion and consumer culture. The three-dimensional Automatic Made-to-Measure scheme for apparel products, demonstrated through computer simulation in large departmental stores and lifestyle centers play major role in generation consumer arousal on the fashion apparel. Freeform design platform is adopted by the apparel designers, manufacturers, and retailers to represent the complex geometry models of apparel products. Apparel products are essentially designed with reference to human body features, and thus share a common set of features as the human model. Therefore, the parametric feature-based modeling enables the automatic generation of fitted garments on differing body shapes. Consumers lean towards buying such apparel that are largely sold as designer apparel (Wang et al, 2005). Hence, the following hypothesis can be laid: H : Consumer culture on fashion apparel is influenced by life style and value 1 simulations by gaining product experience Retailers have adopted personalization to successfully market a wide range of designer products, such as eyeglasses, bicycles, coffee, greeting cards, and apparel. The intention of purchasing of designer products differs across cultures. Customer preference and value 7 placed on designer apparel is largely influenced by the social differentiation of products and self-esteem of the consumer (Moon et al, 2008). These attributes are likely to vary depending on the customers' cultural orientation. The cultural dimensions of individualism, uncertainty avoidance, power distance, and masculinity should be a useful framework to explain cross-cultural differences in customer acceptance of designer products (Hofstede, 1980). Apparel is often used for its symbolic value reflecting the personality and status of the user. When the apparel holds a designer brand, it may be perceived as an ostentatious display of wealth. Thus consumers are motivated by a desire to impress others with their ability to pay particularity high prices for prestigious products (Solomon, 1983). Such personality dimensions often play critical role in shifting the consumer culture towards brand led buying behavior of utilitarian goods. The designer apparel brands are perceived by the consumers as prestigious brands encompassing several physical and psychological values such as perceived conspicuous value, perceived unique value, perceived social value, perceived hedonic value and perceived quality value (Prendergast and Wong, 2003). Consumption patterns are largely governed by social value of the product, which determines the purchasing intentions, consumer attitudes, or perceptions on brand or advertising slogan. Consumer experience with high socio-economic power perceptions creates qualitatively distinct psychological motives towards buying designer apparel that develop unique consumption patterns (Rucker and Galinsky, 2009). Therefore, the research proposition may be drawn as: H : Personalization of fashion apparel stimulates self-esteem among 2 consumers that enhances social values Apparel designers lay a significant impact on the success or failure of fashion apparel and accessories. It has been observed that the demographic (e.g. gender and generational cohort) and psychographic (e.g. fashion fans, attitudes and impulse buying) drivers influence frequency and levels of expenditure on buying fashion apparel. The consumer Attitudes towards fashion has higher bearing on female buying tendency than male that is more often and significantly different from males on yearly expenditure, fashion fanship, attitudes and impulsive buying. The younger generation in the present context has 8 higher purchase frequency, fashion fanship, and impulse buying as compared with other cohorts in the society (Pentecost and Andrews, 2010). Buying pleasure of consumers to stand unique with fellow consumers has also been a strong behavioral driver for designer apparel manufacturers. Fashion apparel consumers have shown favorable attitude towards exotic fashion apparel products and higher purchase intention. It has been observed that consumers leaning towards buying designer apparel show higher cognitive motivations, and a different shopping orientation from their followers. Lead buyers enjoy shopping more and are not as cost-conscious, traditional, or conservative as the followers (Belleau and Nowlin, 2001). Manufacturers and marketers of fashion apparel develop their strategies through four processes in order to induce change in the consumer culture. These include chartering, learning, mobilizing, and realigning that pave the way for successful institutionalization of a strategic change initiative. The elements rely much more on an understanding of the mix of task-related, emotional, and behavioral factors than is fashionable in today's metrics- driven environment. This also drives the shift in conventional wisdom about programmatic change, arguing that managers need to set in motion a series of processes right at the start if widespread changes are to stick (Roberto and Levesque, 2005). The cultural change in buying apparel from low price brands to designer brands in emerging markets has been institutionalized in a family environment. It has been observed that parental and sibling influences decreased with age, whereas peer and media influences expanded with increasing age. The television and celebrities also play a significant role in influencing adolescents' clothing choices irrespective of gender categories. Among the most common two forms of media that children largely use are magazines and television while, teens are primarily influenced by visual merchandising, hand on experience, and spotting the fashion apparel users (La Ferle et al., 2000; Seock and Bailey, 2009). Shopping behavior of consumers is also influenced by the attributes of Social Cognitive Theory that explains how variables such as self-regulation and self-efficacy direct the spending behavior and determine consumer lifestyles. Product attributes influence consumer perceptions of the personal relevance of a product or service to their 9 needs and consumer preferences for product attributes are significantly linked to their lifestyle. The lifestyle theory suggests that the consumers’ perceived hedonic attributes and social identity factors determine the shopping behavior of urban consumers (Zhu et al, 2009). The shopping behavior of consumers is driven by the social, economic and relations factors. The shopping ambiance, advertisements and retail promotions develop pro- shopping behavior. The social learning theory explains this phenomenon as positive reinforcement and it occurs when a behavior (response) is followed by a favorable stimulus (commonly seen as pleasant) that increases the frequency of that behavior. In the conceptual foundations of social learning theory, respondent conditioning and observational learning are empirically-supported approaches to understanding normative human development and the etiology of psychosocial problems (Thyer and Myers, 1998). Accordingly, the hypothesis may be constructed as: H : Family and external lifestyle and values impel consumer culture on 3 designer brands and fashion apparel Store Brands Response Departmental stores and Lifestyle Centers develop their apparel store brands to generate store loyalty among consumers. The store brands are displayed in these stores alongside the designer apparel brands. The changing dynamics of the fashion industry have forced retailers to aim at low cost marketing strategies and flexibility in design, and improving speed of penetration in market to gain competitive advantage. The concept of 'throwaway' or fast fashion had emerged since 1990 in the global marketplace, which describes that fast fashion drifts from a manufacturers to retailers and consumers. The store brands have emerged rapidly in the fashion market considering the fast growth of fashion (Bharadwaj and Fairhurst, 2010). 10