Chapter 2: Literature Review

Chapter 2: Literature Review
2.0 Introduction
In the following chapter, a review of various literatures has been conducted that were
selected by focusing on the topic of the research. The fundamental aim of the research is to
understand the extent of effect of social influences on the purchase behaviour of the
consumers, with respect to the luxury brands. Through the following literature review, a
discussion has been conducted on the general definition and factors surrounding the
concept of luxury brands and brand awareness. Additionally, the fundamentals associated
with the concept of purchase intention and the various aspects that influence the buying
behaviour of the consumers have been explored.
In the following literature review, a detailed overview has been provided regarding the
opinions of other researchers and authors, associated with the current field of study.
Additionally, the significance of copyright on the luxury and first-class products have also
been discussed in the following literature review. Moreover, the development of the social
media technologies and its integration with the process of brand awareness and customer’s
purchases have been elaborated in the literature review. A critical analysis of the effect of
social influences on the purchase intention of the society, towards the luxury brands, have
been conducted through the review of various literatures that have provided information on
the same.
2.1 Social Influencer
According to Forbes, influencer marketing can be defined as a form of marketing in which
focus is placed on specific key individuals rather than the target market as a whole
(forbes.com) By all means, a social influencer has a credible character that was built base
on their own uniqueness in style and characteristics. Therefore, this specific individual
owns the influence to gain interest from others to mimic their style and to own the same
experience that is encountered by the influencer. Social influencers are perceived as a form
of opinion leader as they possess influence in other’s decision making process. It was

proposed that individual sources may be more powerful than broad communications in
those purchasing circumstances where instability exists. (Fisk, 1959) Also a concept that
was introduced by King and Summers (1970), that Opinion leadership's significance to
shopper's attitude, using the advancement of a self-assigning technique to quota the idea.
Through the Word-of-mouth diffusion that is implemented by social influencers, has long
been regarded as an important mechanism by which information can reach large
populations, possibly influencing public opinion, adoption of innovations, new product
market share, or brand awareness. (Zahn-Waxler, 2010) defines influencers as third party
individuals who significantly shape the customer’s purchasing decision, but may never be
accountable for it. Although some marketing experts consider SMIs as competing, possibly
hostile voices (Sara Dolnicar, 2011), others recognize the possibilities of forging alliances
with SMIs to promote a brand or organization.
2.1.1 Social influencers as a segment for marketing communications
There is no doubt in any way, no matter in forms of informational or normative influence,
the social influencers have always been a huge contribution to the process of marketing
communication. With their very special way of innovative behaviour, these group of
people has the power to raise adoption rate. (Broekhuizen, 2009) argues that their
normative influence makes it more likely that followers adopt the product as well. If
innovative behaviour of a customer is affected by the normative influence of the opinion
leader, we expect this effect to be stronger when the normative influence is of a higher
importance to followers.
Meanwhile, opinion leader spread information by giving out advices and directions to
other consumers. This active, informational influence may increase the effectiveness of
marketing communications. Furthermore, assuming the opinion leaders has more
experience and expertise with the product, a follower is likely to follow an opinion leader’s
advice in his or her purchase decision (Kaur A. , 2011). Therefore, the informational
influence of the opinion leader enhances the speed of knowledge and merchandise
diffusion, as well as the level of product penetration.

Both normative and informational influence should be critical in the adoption process,
though we recognized a potential difference between opinion leaders and followers with
respect to which type of influence is more important. An opinion leader should both
maintain his or her status by finding an appropriate level of innovativeness and establish
the norm in the network (Chang, 2012). This explains a critical role of opinion leaders in
marketing communications, as they are more likely to adopt a precept not already
supported by a positive norm. Hence, opinion leaders may be less sensitive to normative
influences than followers. In contrast, followers sense social pressure to adopt the product
after the opinion leader has done so. The effect becomes stronger if the importance of
normative influence is very low for the opinion leader, because this situation decreases the
social pressure on the opinion leader.
Besides, opinion leaders can evaluate products effectively through their experience,
expertise, and involvement with the product category. By sharing their expert evaluations,
opinion leaders “trans- late” marketing messages into WoM, which recipients perceive as
more reliable than an advertisement (McCartney, 2014). Without the better product
judgement of the opinion leader, the marketing message might remain unclear to most
consumers, who are unsure if the message is reliable, in which case they are unlikely to
share the information with others.
2.2 Social Media
According to (Mechant, 2017), Social media (SM) provides a cost-efficient means for a
brand to reach out to a large Internet audience and diffuse product and brand information
online. Because SM users are often willing to engage in information sharing, and the
networks to which they belong often have a high degree of richness and reach international
brands have increasingly adopted SM as a branding or advertising tool (Stragier, 2015).
(Schivinski, 2014) states that social media by itself does not influence decision makers but
rather it is the content and more specifically the content creators that carry the influence.

Since the ascent of the Internet and consequent development of the new media
environment, differentiating expectations have been advanced with respect to people's
media determination, which thusly could identify with the general's assessment
arrangement and this has established states that some argue that people will be all the more
specifically presented to likeminded data, which is good with their current conviction
framework, because of uplifted accessibility and selectivity of data. Still others fight that
people will have more opportunities to run over various data and perspectives in the new
data framework (Angella J. Kim, 2012).
(Leung, 2013) stated that the revolutionary of social media has adjusted the
communication landscape and has essentially affected marketing communication while the
developing significances of uses like Facebook, Youtube and others in consumers’ lives
has an expanding impact on their communication propensities. With shoppers investing
more energy in the online networking domain, an increasing share of communication
happens within these new social network environments meanwhile in respect to marketing
communication, this implies that brand related connections and presentation to showcasing
crusades progressively occur inside of Social Media (SM).
The rising correspondence setup has subsequently changed customers from being latent
members in promoting to being dynamic makers and influencers, has moved some control
over brands specifically to the buyer. (Nakara, 2012) refers to this expanding impact of the
client as "the developing groundswell of client force" and "social move in a client driven
course". Customary restricted communication in marketing has been changed into a multi-
dimension- al two-path shared communication reality.
This new marketing communication reality introduces new obstacles and open doors for
organizations as buying choices are progressively impacted by social media interactions.
Individuals depend like never before on their social networks when settling on those
choices. (Karen Blakeman, 2010) states that Since an expanding part of this system is
arranged inside of the social media space and a vast piece of the communication inside of

the system is going on in this space, SM stages display an essential part in buyer choice
making. Facebook and Co. turned out to be new key players for branding activities.
The impacts of online networking campaigns on shoppers' impression of items and brands
and also the effect on buying choices have yet to be better known. The potential
disadvantages of SM activities like the spread of negative verbal and data over-burden
bringing on aggravation and irritation, also, the troubles in measuring an included
estimation of such efforts have kept numerous marketing officials suspicious. In any case,
since brands can't take the danger of being truant in such a compelling communication
channel, in spite of the dangers and questions, organizations are spending progressively
into their social media activities (Sonja Gensler, 2012).
2.2.1 Uses of Social Media
According to (Melanthiou, 2012), the utilization of social media (SM) has significantly
expanded with a large number of clients making huge measures of information
consistently over the previous years meanwhile as of September 2012, Facebook came to
one billion month to month dynamic clients, while Twitter reported more than 140 million
active users. SM information are ordinarily as literary substance (e.g. in blogs, reviews and
status updates), rating scores in Likert scales or stars (e.g. audit evaluations), like or dislike
evidences (e.g. reviews helpful votes and Facebook’s like or Google’s “þ 1” buttons), web
seek inquiries (e.g. Google trends), labels and profile data (e.g. social network charts)
SM data incorporates personal opinions, thoughts and behaviors making it a vital
component of the web and a fertile ground for a variety of business and research
endeavours. In this context, the predictive power of SM has been recently explored.
2.3 Purchase Intention
One of the major yet fundamental concepts prevailing in the marketing literatures is the
purchase intention, which has been used by researchers in varied applications associated
with products and services. (Arenna, 2018) has mentioned the definition of purchase

intention to be the tendency of customers, who have identified aim, and the same is
measured in the terms of real purchases. Additionally, (Ming-Yi Chen, 2013) has also
described that the purchase intention can be referred to prospect of purchasing any
particular brand belonging to a special product category, during the purchase. On the other
hand, American Marketing Association (2017) has defined purchase intention as “the
decision plan to buy a particular product or brand created through a choice/decision
process”. The customers are mostly likely to purchase those brands that they believe to
have the potential to offer and provide the features that are preferred by them, along with
the appropriate or required product quality. Additionally, purchase intention is also
considered to be the combination of interest of customers, along with their buying
possibilities. (Paul C.S. Wu, 2011) has also mentioned that the perception of the customers
has the ability of influencing their own intentions, especially with respect to the purchase
of luxury brands, which are also either directly or indirectly affected by other socialization
agents.
Shah et at. (2012) has opined that purchase intention is the kind of decision making process
of the customers that studies the reasons associated with the purchase of any particular
brand. Additionally, it can also be said that purchase intention is the situation whereby the
customers tend to purchase a particular product under certain circumstances. (Janda, 2014)
has mentioned that consumer purchase decision is a complex process and the associated
purchase intention is usually associated with the attitudes, perceptions and behaviour of the
customers. (Wang, 2015) has also mentioned that purchase behaviour is a vital factor for
customers to access and assess any particular product. Purchase intention is considered to
be an efficient tool for predicting the buying processes. In addition, purchase intention can
be changed under the impact of perceived value and quality or price. (Verbeke, 2016) has
proposed that customers are influenced by the external as well as internal motivations
especially during the purchase process. It has been proposed by researchers that there exist
six stages prior to deciding the purchase of any product that comprises of awareness,
knowledge, interest, persuasion and purchase. It is also mentioned that consumers always