I.Introduction

The Grand Metropolitan paid almost $6 billion for the acquisition of Pillsbury in 1989 (Marcom, 1989). Reflected in this price were not only the value of the factories and the value of the physical products Pillsbury owned and made, but also the acquisition of intangible assets-namely, the brand names (Cobb-Walgren, Ruble, & Donthu, 1995). The reason that businesses and consumers are willing to pay premium prices for some brand names is that brand names can signify value.

Well-established brands add value to products and allow consumers to differentiate between brands (Aaker, 1991, Jung & Shen, 2011). Thus, it is critical to manage customers’ valuation of a brand. The term used to describe consumer's valuation of a brand is brand equity. In consumer marketing, brand equity is critical to differentiating between competitive offerings (Aaker, 1991) as well as financial success (Frank & Watchravesringkan, 2016). It is well known that brand equity leads to profits through brand loyalty, premium pricing, lower price elasticity, lower advertising/ sales ratios, and trade leverage (Keller, 1998; Keller, 2009; Jung & Sung, 2008). Brand equity also increases resilience against competitors’ promotional pressure and the opportunity for successful extensions (Farquhar, 1989). Brand equity creates barriers to competitive entry and makes the brand less vulnerable to environmental and competitive threats because it is difficult for competitors to copy a brand name (Crimmins, 2000). Therefore, several top apparel brands spend considerable amount of resource on maintaining and promoting their brand association (Dawes, 2009). In addition, brand equity provides value not only to the firm but also to the customer via enhanced information processing, purchase decision confidence, and increased satisfaction (Aaker, 1991; Cobb-Walgren et al., 1995; Keller, 1993). Therefore, brand equity is regarded as a very important concept in business as well as in academic research (Cobb-Walgren et al., 1995; Wong & Merrilees, 2007).

One concept that can be managed and may impact valuation of a prestige brand is “luxuriousness.” The concept of “luxuriousness” is defined as characteristics of product features that could constitute luxury. Researchers interested in luxury have focused their attention on differentiating luxury goods from non-luxury ones as well as identifying what makes luxury (De Barnier, Rodina, & Valette-Florence, 2006). In order to identify what constitutes luxury goods, previous researchers have attempted to discover consumer motivations or the consumption value of luxury goods (Dubois & Duquesne, 1993; Vickers & Renand, 2003; Vigneron & Johnson, 2004). In fact, the concept of luxuriousness was developed based on the conceptual framework, named “prestige-seeking consumer behavior (PSCB)” (Vigneron & Johnson, 1999), which is resulted from multiple motivations but was particularly driven by sociability and self-expression. Thus, luxuriousness of a brand entails symbolic benefits such as enhancing self-image and providing a sense of prestige and those benefits contribute to satisfying the desires that underlie the purchase of prestige brands (Bian & Forsythe, 2012; Liu, Li, Mizerski, & Soh, 2012; Roux, 1991).

Based on the argument in above, the concept of luxuriousness can be described as consumption values of a prestige brand. A brand high in luxuriousness offers better consumption values than a brand low in luxuriousness. Also, a brand high in luxuriousness may add more value to products and has better function to differentiate from others than a brand low in luxuriousness. Considering that consumer’s valuation of a brand is brand equity, consumption value of a prestige brand could be considered as a factor influencing brand equity of a prestige brand. As the concept of luxuriousness appears to be a key factor contributing to the equity of a prestige brand, the purpose of this study was to examine how luxuriousness is related to the brand equity utilizing a model developed by Yoo, Donthu, and Lee (2000). This study contributes to brand equity theory as it tests the applicability of the Yoo et al. (2000) brand equity model to a prestige brand context and investigates luxuriousness as a potential contributor to brand equity.

Ⅱ.Background

1.Brand equity

In this study, we employed definition of brand equity offered by Yoo et al. (2000), that is, “the difference in consumer choice between the focal branded product and an unbranded product given the same level of product features” (p. 196). However, there are various definitions of the term “brand equity.” For example, the added value endowed by the brand name (Farquhar, Han,& Ijiri, 1991); incremental utility (Kamakura & Russell, 1993); the difference between overall brand preference and multi-attributed preference based on objectively measured attribute levels (Park & Srinivasan, 1994); and overall quality and choice intention (Agarwal & Rao, 1996) are just some of the ways that brand equity has been defined.

Although previous researchers have presented various definitions of brand equity, two well-established theories of brand equity―Aaker’s (1991) brand equity and Keller’s (1993) customer-based brand equity―have been the most widely accepted. Aaker (1991) approached brand equity from a managerial and corporate strategy perspective. He defined brand equity as a set of several categories of brand assets and liabilities linked to a brand that add value for a firm and the firm’s customers. He grouped the set of assets and liabilities into the following five categories: brand awareness, perceived quality, brand associations, brand loyalty, and other proprietary assets. Keller (1993, 1998) approached brand equity from a consumer behavior perspective. As stated earlier, he presented the concept of “customer-based brand equity” and defined it as the differential effect that brand knowledge has on the customer’s response to the marketing of that brand.

These two scholars’ conceptualizations of brand equity share common aspects. For example, both agreed with the notion that brand equity involved added value given to a product and that this value was a result of marketing efforts for the brand. In addition, they identified several dimensions of brand equity and these dimensions allow researchers to operationalize and measure the concept of brand equity. Thus, those concepts of brand equity were used in empirical studies of marketing. For example, Siu, Kwan, and Zeng (2016) studied whether brand equity of a luxury brand influenced Chinese consumers’ affective attitudes toward luxury brands, focusing on customer-based brand equity. Pham, Wu, Do, and Phung (2015) also examined how brand equity influenced quick-service restaurant revisit-intention, employing the concept of customerbased brand equity. Frank and Watchravesringkan (2016) investigated how consumer culture influenced perceived brand equity, attitude toward brand resonance. Wu and Kim (2014) also examined the role of store attributes influencing brand equity of Korean SPA brands.

As it is critical to protect and manage a brand’s equity, previous researchers have put forth effort to measure brand equity to be able to monitor and improve it. Aaker’s (1997) conceptual scheme identifying brand equity dimensions has been regarded as a keystone for the measurement of the concept of brand equity. The stronger these dimensions, the higher the brand equity. Awareness was defined as “the ability for a buyer to recognize or recall that a brand is a member of a certain product category” (Aaker, 1991, p. 61). Associations were defined as “anything linked in memory to a brand” (Aaker, 1991, p. 109). Perceived quality was defined as “the consumer’s judgment about a product’s overall excellence or superiority” (Zeithamal, 1988, p. 3). Loyalty was defined as “the tendency to be loyal to a focal brand, which is demonstrated by the intention to buy the brand as a primary choice” (Aaker, 1991, p.39).

Several researchers have attempted to empirically measure brand equity on the basis of these conceptualizations. For example, Yoo and Donthu (1997) developed a scale to measure customer-based brand equity. They initially adopted four dimensions derived from Aaker’s (1991) identification; however, they found that only three dimensions were useful: brand awareness, brand image/association, and brand loyalty. In 2000, while Yoo and his colleagues developed a scale to measure overall brand equity, they found that three other dimensions (i.e., association with awareness, perceived quality, and loyalty) positively affected overall brand equity.

Yoo et al. (2000) found that those three other dimensions affected overall brand equity; however, some researchers (Erdem & Swait, 1998) argued that brand loyalty results from brand equity, and is not a component contributing to brand equity. Besides, even Yoo et al. (2000) suggested (but did not test) that brand loyalty mediated the relationship between perceived quality, brand association, and overall brand equity. Based on the argument above, we hypothesized the following:

2.The luxuriousness of a prestige brand

The concept of luxuriousness refers to the degree to which consumers perceive luxuriousness regarding a prestige brand. The Brand Luxuriousness Index (BLI) (Vigneron & Johnson, 2004), which measures perceived luxuriousness, is composed of five dimensions: conspicuousness, uniqueness, quality, hedonism, and extended self. The BLI scale is believed to reflect the characteristics of luxury identified by several researchers (e.g., Dubois, Laurent, & Czella, 2001; Vickers & Renand, 2003). Since other researchers have identified validity concerns with the original BLI (Christodoulides, Michaelidou, & Li, 2009), Kim and Johnson (2015) modified the BLI scale and its components, changing them to quality, extended self, hedonism, accessibility, and tradition.

To explain each dimension of perceived luxuriousness, first, the quality dimension assesses the quality aspects of a brand, focusing on the attributes of a product that encompass materials and construction. Prestige brands are expected to be superior in terms of their quality compared to non-prestige brands (Garfein, 1989; Quelch, 1987; Roux, 1995; Vigneron & Johnson, 2004). Second, the dimension of perceived extended self was designed to measure the extent to which a brand expressed one’s identity and personal success. This dimension was developed based on Belk’s (1988) ideas concerning the “extended self.” Belk suggested that people use possessions to enhance their selfidentity by integrating the symbolic meaning of the products into their own identity. Hedonic consumption is defined by Hirschman and Holbrook (1982) as consumer behavior that is associated with the multisensory, fantasy, and emotive aspects derived from the consumption experience. Dhar and Wertenbroch (2000) noted that the affective and sensory experience of aesthetic or sensual pleasure, fantasy, and fun are the primary facets of luxury consumption. Thus, the hedonism dimension measures how well a prestige brand provides a sensory experience of the aesthetic components or sensual pleasures. The accessibility dimension measures how accessible the brand is to consumers. This dimension includes two characteristics of luxury products: expensiveness and exclusiveness. In other words, high price and rarity are believed to be essential attributes of a prestige brand (Dubois et al., 2001). Finally, the tradition dimension is associated with the heritage of a prestige brand (Kim & Johnson, 2015). This dimension measures whether a prestige brand has an original and unique history and recognizable style.

We speculated that the five dimensions of luxuriousness would influence the two dimensions of brand equity – perceived quality and brand association with awareness. Specifically, the following dimensions of luxuriousness, quality, accessibility, and hedonism, would be related to perceived quality. The quality dimension of luxuriousness focuses on the quality of a brand; thus it would be highly related to the perceived quality of a brand’s equity dimension. Accessibility measures how expensive the brand is, and price is often used as a barometer that indicates the quality of a brand to consumers. Thus, people may think that the quality will be good if the price of a brand is high and the brand is not easy to access. Hedonism is related to visual and physical appearance, and such aesthetic aspects can be important factors that influence consumers’ perceptions regarding the quality of a brand. Therefore, we hypothesized the following:

Next, since brand association is defined as “anything linked in memory to a brand” (Aaker, 1991, p. 109) and the three dimensions of luxuriousness (i.e., hedonism, extended self, and tradition) seem to affect one’s process of building memories about a brand. The hedonism dimension is related to how much prestige brand is visually appealing. Extended self is associated with the symbolic function of a prestige brand and tradition accesses the heritage that a brand owns, which is a good source for creating stories and images attached to the brand. Therefore, these three dimensions of luxuriousness are related to association with awareness and we hypothesized the following:

Ⅲ.Method

1.Data collection procedures

An online survey was employed to collect data for this research. The participants were recruited by a marketing research firm, E-Rewards. The participants were all female and recruited in the U.S. The questionnaire included the following sections: (1) perceived luxuriousness, (2) brand equity construct, and (3) consumer characteristics.

To collect data about the participants’ perceptions regarding a prestige brand, the participants were asked to name one prestige apparel brand they were familiar with (we call this X-brand), and they were then asked to answer all the survey questions regarding the X-brand. For example, they were asked to answer the following question, “I can recognize the brand (X-brand) among other competing brands.”

2.Measurement

The measurement scales were selected from the existing literature. Five components of perceived luxuriousness (i.e., quality, hedonism, extended self, accessibility, and tradition) were measured by the BLI scale modified by Kim and Johnson (2015). The dimensions of brand equity, such as perceived quality, association with awareness, loyalty, and overall brand equity, were measured by the scale developed by Yoo et al. (2000).

The BLI scale includes five components and 13 items. To respond to the measures, the participants were asked to indicate the point, among seven points, between a pair of bipolar adjectives that corresponded to their perceptions regarding a given brand (X-brand). For example, to measure perceived hedonism, the participants were asked to respond to the following word pairs: “Very influential vs. Fairly influential”; “Very powerful vs. Fairly powerful”; and “Highly regarded vs. Well-regarded.” If the participants believed a brand to be “Very influential,” they were expected to indicate the far left point of the scale denoted as “1”; in contrast, if the brand is believed to be “Fairly influential” rather than “Very influential,” the participants were to indicate the far right point denoted as “7.” The entire measure is presented in <Table 1> along with an indication of which items in the scale were intended to measure which components of luxuriousness (Table 1).

In the next section of the questionnaire, the participants were asked to answer survey questions about the brand equity of the X-brand. Four variables (i.e., brand association with awareness, perceived quality, brand loyalty, and overall brand equity) were measured by the scale developed by Yoo el al. (2000). Each variable was measured by 2 to 6 items. The reliabilities were reported as follows: the reliability of brand association with awareness was .94, perceived quality was .93, brand loyalty was .90, and overall brand equity was .93. An example question for brand association was “I know what X-brand looks like.”

Ⅳ.Results

1.Sample characteristics

The participants (n = 502) were women with a variety of backgrounds and ages ranging from 18 to 74 (m = 43). Income levels ranged from $20,000 to over $150,000 and were evenly distributed. The majority of the participants (67.1%) had graduated from twoyear colleges and higher, and the largest group of participants (26%), marked “professionals,” had occupations such as academic professors, lawyers, and CEO of their own businesses. Additionally, most of them were Euro American (76.3%).

2.Results of path analysis: Model and hypothesis tests

The theoretical model consists of five exogenous variables (i.e. quality, hedonism, extended self, accessibility, and tradition) and four endogenous constructs (i.e. perceived quality, brand association with awareness, loyalty, and overall brand equity) (Table 2).

At first, we used a confirmatory factor analysis to investigate the convergent and discriminant validity of the set of measures. All the factor loadings on the constructs within the measurement model were significant (p < .001) and all R² exceeded .50, supporting convergent validity (Table 3).

Using AMOS 18, the path analysis was conducted with the maximum-likelihood estimation procedure. The χ² test assessed the adequacy of the hypothesized model to reflect the variance and covariance of the data.

<Fig. 1> shows the visual description of the hypothesized structural model. Goodness-of-fit for the hypothesized research model was checked, however, the model fit to the data was not acceptable: the goodnessof- fit index (GFI) was .912, the normed fit index (NFI) was .819, the Tucker-Lewis Index (TLI) was .63, the comparative fit index (CFI) was .827, and the root mean square error of approximation (RMSEA) was .163 (χ² = 242.242, df = 17, χ²/degrees of freedom ratio = 14.25).

To improve the model fit, we checked modification indices to find any theoretically meaningful paths that could have been in the model. We found that association with awareness influenced perceived quality (p < .001) and perceived quality also influenced overall brand equity (p < .001) directly. Therefore, paths indicating these relationships were added to the model. This revised model was investigated and was resulted to fit the data significantly better than the original one: GFI was .98, NFI was .97, TLI was .95, CFI was .98, and RMSEA was .063 (χ² = 44.64, df = 15, χ²/degrees of freedom ratio = 2.97). <Fig. 2> displays the results of the revised causal model analysis including significant standardized path coefficients for each relationship.

The significance of the regression weights was examined for all constructs, and all relationships except one were significant at p < .05. Regarding H1, loyalty (β = .60, p < .001) had a significant effect on overall brand equity. For H2(a) and H2(b), perceived quality (β = .42, p < .001) and brand association with awareness (β = .22, p < .001) influenced loyalty. In support of H3(a) to H3(f), all relationships between the five dimensions of perceived luxuriousness and the two dimensions of brand equity were significant except for the relationship between tradition and association with awareness (H3f). Quality (β = .27, p < .001), accessibility (β = .07, p < .05), and hedonism (β = .12, p < .01) influenced perceived quality, and hedonism (β = .42, p < .001) and extended self (β = .13, p < .05) influenced association with awareness (Fig. 2).

Ⅴ.Conclusion

The results showed that four dimensions of perceived luxuriousness (i.e., quality, accessibility, hedonism, and extended self) contributed to the two dimensions of the brand equity of a prestige brand. As hypothesized, the quality, accessibility, and hedonism dimensions of perceived luxuriousness influenced the perceived quality dimension of brand equity. First, the quality dimension of luxuriousness measured the same aspect of a brand as the perceived quality dimension of brand equity, even though the measurement tools were different from each other. Thus, the relationship between those two variables turned out as expected. Second, previous studies have documented that price is often used as a barometer to estimate the quality of a product (Blattberg & Wisniewski, 1989; Dodds, Monroe, & Grewal, 1991; Rao & Monroe, 1989). Since the accessibility dimension is highly related to price perception, the relationship between accessibility and perceived quality was consistent with previous research. Next, the hedonism dimension is related to the aesthetic aspects of a brand. The participants may have presumed that a product that has a good physical appearance would be high quality.

In addition, the high level of hedonism and extended self created a significant positive impact on the ratings of brand association with awareness. These relationships can be explained, even though no previous research supports these relationships. The dimension of extended self measures the degree to which a prestige brand expresses the social status of the owners of the brand. Since the extended self dimension is concerned with the symbolic function of a prestige brand, a brand that has a high score in the extended self dimension would be good at creating brand awareness as well as brand associations. Besides, as the hedonism dimension focuses on the visual and physical aspects of a brand, a brand that gains a high score in the hedonism dimension would also have advantages in creating visual associations linked to the brand.

However, the tradition dimension turned out to not have an effect on creating brand association with awareness. This result may be explained by the following. The choices on the questionnaire that measured the tradition dimension were (1) “timeless vs. high fashion” and (2) “heritage vs. emerging.” Brand association with awareness is not high only when the brand is classic or has a long history. Many times, a longtime luxury apparel brand loses its strong brand image or other associations related to the brand; on the other hand, a new brand has often been successful in gaining attention and creating a strong brand image and awareness. Brand association with awareness can be created when a brand is managed strategically, and it is built through various ways. Thus, it may not be essential for a prestige brand to have the characteristics of tradition in building brand equity.

As hypothesized, the results revealed that brand loyalty was affected by perceived quality and brand association with awareness and that overall brand equity was affected by loyalty. Yoo et al. (2000) demonstrated brand loyalty as a component contributing to brand equity just like perceived quality and brand association with awareness. However, they also suggested that loyalty may mediate the relationship between the two dimensions - perceived quality and brand association with awareness - and overall brand equity because brand loyalty can be created after consumers perceive a brand positively in terms of quality as well as associations linked to the brand. And the results are similar to what Yoo et el. (2000) suggested.

With regard to additional findings, having positive associations linked to a brand helped to create positive perceptions regarding quality. In other words, when people can link something positive to a particular prestige brand, they are more likely to perceive the quality of the brand as better than when they do not have the positive association. Additionally, we found that consumers’ perceptions about the quality of a brand influenced overall brand equity directly as well as indirectly, thus brand loyalty functioned as a partial mediator between overall brand equity and perceived quality.

By investigating how each component of perceived luxuriousness influences the dimensions of brand equity, we were able to provide specific information for practitioners. Considering that allocating limited resources in managing a business is always a concern, these findings will be helpful for marketers to develop a specific goal in order to build successful brand equity.

For example, when marketers want to improve consumers’ perceived quality of their brand, they may want to improve consumers’ perceptions regarding not only quality itself, but also aspects related to accessibility and the hedonism dimensions of perceived luxuriousness. Besides, brand association with awareness is an important component that influences brand equity indirectly and perceived quality directly. To increase the strength of brand association with awareness, marketers of a prestige brand may want to selectively concentrate on improving the extended self and hedonism dimensions. If a product of a prestige brand has strong symbolism and unique physical appearance, the brand will probably be easier to gain brand association with awareness. Finally, having a high score on the hedonism dimension helps to create both brand association with awareness and perceived quality. Therefore, marketers of a prestige brand should not ignore these aspects and may want to put the most effort into improving this dimension.

Yoo et al. (2000) suggested that loyalty may mediate the relationship between the two dimensions -perceived quality and brand association with awarenessand overall brand equity. This study is meaningful in terms of demonstrating this claim and suggests to marketers that overall brand equity is created through loyalty. Brand association, brand awareness, and quality are important factors influencing overall brand equity; however, having only those cannot directly help to create brand equity. Therefore, prestige brand marketers should monitor whether their marketing efforts and various operational systems for managing their shops help to increase brand loyalty or have any way to actually harm brand loyalty.

Overall, this research expands the understanding of brand equity because it documents the contributions of luxuriousness, a component that can be controlled by brand managers.

Similar to any other study, this study has limitations. First, the participants of this study were all female, thus there are limitations in generalizing the results. However, women play a major role in decisions about buying apparel, thus this study is still beneficial for a prestige apparel brand. Further research employing male participants would be needed to confirm these findings. Second, this study investigated brand equity constructs that targeted only prestige apparel brands. This also limits the generalization of the findings beyond the prestige apparel industry. Future researchers may want to examine other types of product industries, such as electronics or stationary.