Digital Advertising Challenges for Global Luxury Brands' Appeal

This dissertation project, focusing on the e-business (e-marketing) program, investigates the challenges global luxury brands face in digital advertising while appealing to local expectations. The research explores the significance of digital advertising for the success of these brands, utilizing literature reviews, research methodologies, and data analysis through interviews and projective questions. It examines how cultural differences influence digital advertising strategies and the benefits brands gain by aligning with local expectations. The study utilizes Hofstede's cultural dimensions and Expectation Confirmation Theory to understand customer perceptions. The project aims to answer research questions about the influence of local expectations on digital advertising and the benefits derived from these strategies, providing insights into the evolving landscape of luxury brand marketing in a globalized world. The project is structured with an introduction, literature review, research methodology, data analysis, and conclusion, offering a comprehensive analysis of the topic.

RESEARCH METHODS - PROJECT TWO: OUTLINE (DISSERTATION)
RESEARCH PROPOSAL
Programme: E-business (E-marketing)
Broad subject area of interest: Luxury brand, Digital marketing, culture, and customer
behavior
Working Title: Digital advertising: Challenges for Global Luxury Brands appeal to local
expectations.
Acknowledgement
I would like to take this opportunity to thank you my dissertation supervisor Mr. Nick Howey
for advising and supporting every step of this study. Another crucial factor that proceed the
work are all participates who join the interview session without their co-operative and
willingness, this dissertation might not complete with good result and discussion. At last, I
would like to thank Newcastle university who gives a chance for me to do the research and
my colleges who encourage and help during unexpected situations.
Abstract
Global Luxury brands are regarded as images in the consumer's mind that comprise
associations regarding a high level of price, aesthetics, rarity, extraordinariness, quality and a
high grade of non-functional associations. Main purpose of conducting this dissertation is to
analysis importance of digital advertising on success of global luxury brand. In order to
complete this dissertation, different steps have been used by researcher. Literature review is
consider main steps which have been applied for identifying opinion of different authors
about the topic. Researcher methodology also used by researcher for collecting reliable and
valid data about the study. Data collection will be done with the help of interview questions
asked by an organization for its customers. Along with this, data analysis will be completed
with the support of projective questions. At last discussion and conclusion have been
completed for addressing each objective of research in systematic manner.
Introduction
Global Luxury Brands' mission is to work nearly with the best designers as well as
crafts people in all over the globe to provide bespoke or effective solutions in the decor sector
and tabletop. Main aim of this report is to identify local expectations influence digital
advertising regarding global luxury brands and the benefits gained by global luxury brands
that achieve local expectations by utilizing digital advertising. For this literature review will

be use by researcher for analysis gap in previous study. This gap mainly related with the
impact of digital advertising on luxury brands in all over the world. Along with this, different
methods will be apply by researcher such as quantitative research, primary and secondary
method of data collection, research philosophy, sampling etc. All these are useful methods
which will support an investigator to complete dissertation and achieve research aim and
objectives within given time duration. There are different chapters which will be require for
completing current dissertation systematically. Introduction, literature review, research
methodology, data analysis and interpretation, conclusion and recommendation are
considered main section for doing this investigation in systematic manner.
In recent years, digital advertising has become the most popular channel to reach
audiences in all sectors of business. Digital advertising is simply categorized as paid
communication through the internet (Ma and Du, 2018). Also, Shaikh et al. (2019) mentioned
that online-advertisement expenditures increased to $72 billion in 2016 while television
expenditure decreased to $67 billion. Digital advertising can be technically defined as social
media, mobile, video and E-mail communication as a persuasive influence on consumption
habits (Nisar and Yeung, 2018).
Beginning in 1980, globalisation has led to an increase in social movements,
investment expression, and product information sharing (Armando et al., 2016). As a result,
globalisation required global business management teams to deal with cross-country
performance, overseas strategy, cost reduction, and managerial process execution
(Kuzmanovic et al., 2019). Moguillansky (2006) states that international standard is created
to incorporate universal goals and how to effectively execute new product allocation and
spreading awareness at both domestic and worldwide. By 2017, international companies
created 9% of worldwide products and raise the GDP by 29% stemming from exports
(Ghemawat and Altman, 2019).
The distinctive luxury brand industry maintains a high global reputation for
distribution and awareness year after year. According to Salehzadeh and Pool (2017), the
definition of luxury brands originated from "Luxus" in Latin, which means exclusivity by
pricing. It can be further defined as “an elite art, irreplaceable, and precious”. However,
maintaining elite status as a super brand that transcends generations is no easy feat. Luxury
brands need to achieve complete worldwide macro distribution while simultaneously
succeeding in local acceptance and sensitive to cultural differences. Culture is defined as the
diversity of thoughts and practical patterns in that transfer from one group to another thus

forming the fabric of society. It has been continuously building from many years of personal
beliefs and roles of individuals since they were young (Hofstede and Bond, 1984). Then, the
significant differences between nations leads to their differences in local cultural
characteristics.
In general, digital advertising aims to embrace cultural boundaries and challenges global
business by way of achieving local expectations within cultural differences. Online
advertising of luxury brands shares a single strategy globally, while many local areas have
specific culture limitations with respect to awareness. So, this research will investigate what
actions need to adapt to the local markets. This study will determine the outcomes of local
expectations and how digital advertising is influenced by the people in each area. The result
is an opportunity for luxury brands to succeed.
This research provides a literature review of Hofstede's cultural differences dimension theory
to identify the difference in the culture of customer segmentation. In addition, the
Expectation Confirmation Theory (ECT) is used to forecast customer perception while
viewing online advertising that includes achieving customers' satisfaction. The next section
presents the research questions and literature review with an explanation of those theories.
Research Questions
1. To what extent do local expectations influence digital advertising regarding global
luxury brands?
2. What are the benefits gained by global luxury brands that achieve local expectations
by utilizing digital advertising?
The research questions’ purpose is to understand the effect of digital advertising through
local expectations in various cultural conditions, and the reasons why global luxury brands
use it as a strategy to connect with customers of different regions.

Literature review
Global Luxury brands
The luxury brand industry is recognized as a globalized market that provides high-
value products and exclusivity in brand awareness. It is a crucial market not only because of a
market value that was over $130 billion in 2007, but also because of its increasing
progression rate which surpassed other industries in the last decade (Fionda and Moore,
2009). Researchers stated that the growth rate was influenced by “High-net-worth
individuals” whose desire is to purchase luxury goods. The worldwide luxury brands can
support customer demand and attention requirements by establishing strategies that respond
to customer wants and expanding geographic availabilities. Since the luxury industry has
been enlarging offer classifications, the four main groups are luxury fashion goods, perfume
and make-up wine and spirits, and watches and jewellery (ibid.). Nevertheless, this research
will focus only on luxury fashion products as it presents the fast-changing and difference in
demand while offering high price and need strong marketing to support. Chan (2019) agreed
that fashion industry is the most affected industry by fast- changing market trend which
pushes customer buying decision and the brand need to understand customer demand before
launching new collection. Wisler (2018) highlights that luxury brands receive income from
their authentic goods and superior quality services to all willing participants. Although high-
end goods were sold at expensive price levels, they are justified by the established luxury
experience and legacy brand awareness.

Illustration 1: Brand value of the leading 10 most valuable luxury brands
worldwide in 2019 (in million U.S. dollars)*
Source: (Brand value of the leading 10 most valuable luxury brands worldwide, 2019)
This statistic explains the brand value of the leading ten most valuable luxury or
global brands worldwide in year 2019. In that year, Burberry was the 7th ranked most
valuable luxury brand in all over the world with a brand value of approximately 4.7 billion
U.S. dollars.
In regard to global brand management, Donze and Fujioka (2015) discuss their
research about the luxury brands business where companies changed marketing tactics to
expand business internationally by focusing on brand management, whereas the trend in the
1990s was mainly on globalization, focusing on customisation and modification to particular
regional markets. Luxury brands focused on globalisation and international sales extension
that is required for the large scaled business. Luxury brand management considers financial
systems, circulation systems, and company profile as centralised pillars, while decentralising
subsidiaries provide operational control. Researchers state the problem where the expansion
of global luxury brands meet cultural obstacles while developing sales in the new territories.
This difference can be seen when the company is the Asian and western territories (ibid.).
However, most luxury brands succeed in revenue growth this recent year by overcoming
cultural trends. According to Interbrand (2018), the value of luxury brands increased to 43%

in 2018 which larger than the others industry since they have accomplished by countering
with the cultural changing trends. Hennigs et al. (2012) supported that motivation of
consumers and perception in brand merit through luxury brands is key for managing outlook
and social viewpoints.
According to the Liam O'Connell, 2018, the global luxury brands, which covers
fashion, drinks, cosmetics, fragrances, luggage, jewellery, handbags and watches has been on
an upward climb for different years. The importance of the international personal luxury
brands market was around 212 billion euros in year 2013. Along with this, luxury brand is
independent of the product's quality, they are mainly considered to be products at the
advanced end of the market in forms of price and quality. Along with this, the concept of
phenomena of luxury brand is characterizes both luxury brands and products and also
differentiate similar phenomena such as masstige and premium. Along with this, it also
differentiates between main kinds of luxury brands and products such as a connoisseur vs.
star brands and accessible vs. exceptional luxury products.
In simple word, a a prestige brand or luxury brand introduces as a type of brand for
which a number of its products are quality and luxury products. It may also cover few brands
whose names are linked with luxury, high quality or high price. There are different examples
of popular luxury brands in the United Kingdom such as Rolex, Calvin Klein, Hugo Boss,
Harrods, Chanel, Yves Saint Laurent, Ted Baker, Ralph Lauren, Dior, Estee Lauder, Armani,
Pandora, Dolce & Gabbana, Cartier, Paco Rabanne, Gucci, Tiffany &Co, Barbour, Omerga,
Tommy Hilfiger, Givenchy, Burberry, Lancome, Versace, Tag Heuer, Dkny etc. Al these are
identified famous and most popular luxury brands in United Kingdom with its high quality
and high price.
Apart from this, local expectations influence digital advertising regarding global
luxury brands in direct manner. Digital advertising also called internet advertising or online
advertising, is fundamentally applying the online chances to communicate or convey
marketing information to customers. There are different kinds of emerging and new formats
for internet marketing, although its is mainly recognised that it would cover social media
marketing, search engine marketing, e-mail marketing, more common form of mobile
marketing and display marketing. All these are identify most essential and important types of
digital marketing which will help luxury brands to promote their products according to
customer's expectation.
Luxury Brands Are Spending More on Advertising which will help an organisation by
increasing its sales and market ratio. The accurate information is that maximum number of

luxury brands or organisation look to be optimistic on market situations and are maximising
their investment or sales in advertising and marketing of their products.
As per the opinion of Chase Buckle, 2019, Luxury users are changing now days.
Their expectations and needs are understand to be at odds with the formal knowingness of
what luxury products are. Along with this, expectation of luxury customers about the
advertising process is high which will help an enterprise to fulfil consumers expectation and
increase customer base within given time duration. There are different types of digital
marketing strategies for luxury brands such as 1). take advantage of visual social networks, 2)
Build a website that combines style, user experience, and functionality, Use brand heritage to
tell the stories behind products, Use Facebook Ads to reach luxury shoppers, Don’t
underestimate the value of good SEO, Create aspirational content to educate
customers,Supply content that appeals to people’s desire to display their status, Create a
sense of exclusivity online, Take the in-store experience online, and the online experience in-
store etc.
Expectation of local customers about the advertisement of luxury brands. Customer
expectation introduces to the perceived value or advantages that the purchasers seek when
buying a product or availing a facility. They are the output of learning procedure and can be
definite very speedily because first impressions is last impressions and it matter a lot. Along
with this, an individual established, such type of expectations can hold essential impact in
process of decision making and can be not easy to change. For instance, branded products
are often related with quality. Maximum number of the buyers expect that popular
organisation are higher quality and hence measure their performance.
According to the Scott Smith, 2018, customer satisfaction reflects the experience and
expectations that the buyer has with a big brand or service. In addition, expectation of
consumers reflect both current and past product evaluation as well as consumer experience.
Along with this, purchaser hold both implicit and explicit performance expectation for
features, advertisement, attributes and advantages of services and luxury brands. Customer
expectation is divided into different types such as explicit, implicit, static performance,
dynamic performance, technological, interpersonal and situational. All these are main
expectation which will be require to fulfil by all luxury brands. As it will help them in
enhancing its performance and goodwill in marketplace and in the customer's mind. Along
with this, it will further assist them by increasing number of loyal customers.
There are different forms of online advertising which is used by luxury brands are
determined as under:

Use Facebook Ads to reach luxury shoppers: Facebook Ads are identify one of the
most essential way of online advertising which will support luxury brands to advertise their
products or services in marketplace and to the customers. For example: target ads generally to
married 34 year old males from Paris who like the different brands such as Versace, Gucci
and Prada.
Don’t underestimate the value of good SEO: Google refers as one of the most
influential and effective channels when it comes to supporting luxury shoppers analyse
products, learn more regarding brands and create their purchase. Along with this, it is also
identify best and effective way for luxury brands to promote their products and services in
marketplace.
Create a sense of exclusivity online: Exclusivity introduces as fundamental to big or
luxury brands marketing or advertising as it keeps customer desire via rarity and scarcity. For
example: If an individual could travel into Louis Vuitton and purchase a handbag, Louis
Vuitton is a luxury retail company that would loss their appeal to those customers who
request to have something that other brands can't get access it.
Apart from this, there are different advantages gained by global luxury brands that
achieve local expectations by utilizing digital advertising. Along with this, there are different
reasons digital advertising works for global brand. As it helps global brand by driving its
sales & ROI, it enhance the effectiveness of non-digital media channels, it is more effective
across the entire customer journey, digital advertising drives word-of-mouth at scale, it will
also drives interaction & lifts brands, digital marketing is more efficient than traditional
media, it is more essential for global brand to reach an audience etc. All these are effective
and essential ways which will help an organisation by increasing its sales and profitability
within given time duration.
According to the Sherman Standberry, 2017, there are different advantages of digital
marketing for global brand. Some useful and essential ways are determined as under:
Digital marketing is the most powerful and effective type of marketing: Digital
marketing is important form of marketing which will helps global brand to reach and engage
large number of customers within given time period. Digital marketing also helps an
organisation to promote their products and services in marketplace and to the customers in
quick manner.
Digital marketing increase customer base: It is another main benefit of digital
marketing which assist global brand by increasing customer base and also improving their
goodwill in marketplace and in customer's mind. Large base of customer is moat essential

and significant part for success and growth of company within given time duration. It will
further help global brand to accomplish competitive benefits easily.
Improving brand image and goodwill: With the use of digital marketing, global
grand can easily improve their goodwill and image by introducing products and services at
international level. Along with this, digital marketing assist an organisation to easily promote
their products and fulfil basis requirements of their customers. As satisfied customer support
an organisation to capture large number of market share and increase their sales within given
time duration.
Thus, digital marketing has to provide large number of benefits or advantages to the
global brand including opens up growth options, conversion rate is Higher, customer support
has become a priority, get connected to the Mobile Customers, increase the trust for their
Brand, better ROI for your Investment, digital marketing is Cost Effective, potential to earn
higher revenues etc. All these are main advantages which will helps an organisation in its
development and success at international level.
Culture challenges and Hofsg to the tede’s cultural differences
Culture differences are an important focal point when expanding the brand into other
regions. To achieve the best result, business development should understand the local culture.
Personal preferences are defined by cultural foundations. From a review of Hofstede's
cultural differences dimension theory states human behaviour and values are consequences of
its culture in society. The theory structure is the diverse interaction in a culture that utilized
analysis from various social factors. Hofstede and Bond (1984) introduced "Collective
programming" which shows that individuals are not inherently pre-programmed in the same
way, instead, there are different individual components that form a collective society.
Hofstede's cultural theory are divided into six dimensions. There are power distance index,
individualism versus collectivism, masculinity versus femininity, uncertainty avoidance
index, long-term orientation versus short term normative orientation, and indulgent versus
restraint. According to the views expressed by Sunil Venaik and Paul Brewer, 2013, Culture
is consist to be the key aspect which is required to be considered by the businesses in respect
to developing their operations at global scale. For the purpose of betterment of business
operations through maintaining organisational culture Hofstede's cultural dimensional model
is applied by the businesses, therefore it is effective in maintaining the change within
organisational culture in effective manner. In organizational context, it is important to
analysis culture of customers before providing them services because it help in making
customers happy and satisfied towards company services. As a results, company easily

expand their business activities and attain success. In market place, customers are belongs to
different culture and also has different taste towards the services. This is the reason that
company is responsible for analysing their needs and wants so that they can easily satisfy
customers needs and attain their satisfaction level. For attaining the same, company use
Hofstede's Cultural Dimensions model that is more effective that includes cultural difference
can act as a barriers to communication and it also affect the business organisation ability to
build connection with large number of customers by motivating them towards company
products and services. In this, the main focus of organisation is to effectively understand the
cultural differences of customers with the aim of providing satisfied products and services.
Furthermore, it also define the cross culture communication that describes the effects of
society's culture on the basis of its customers and how these values are related to their
behaviour. This will help in increasing the chances of attaining success at global market. The
main reason behind this is that luxury brand can easily communicate with the customers
about their culture and behaviour as well. With the help of this, organization can easily
improve their brand image by capturing larger market share from its rivals. This type of
model also assist consumer in taking best decision, towards the making better choice. In
addition of this, understanding cross culture decision making style is also help in reducing the
gap between company and its customers as well. The main reason behind this is that,
company use digital advertising to invite and attract large number of consumers towards its
services with the aim of keeping them loyal.
Country differences are a crucial point for business development because of the
massive contrast between regions defined by people’s perceptions, values, and feelings.
McSweeney et al. (2016), states Hofstede’s theory experiment of human behaviour by
country was described as "national culture" and is proven that behaviour is separated by a
national area. By using this model, company easily analysis customer behaviour and culture
as well. The first claim demonstrates national culture can forecast social performance in
various habits. Predictive power is a significant dimension that affected people in over 50
countries in terms of performance, mind, and emotions (Hofstede 2001, cited in McSweeney
et al., 2016). For verification of the expectation of national culture, Hofstede’s model was
used by Swaidan (2012) to analyse consumer ethics in multi-culture situations and outputting
scores in each dimension for understanding diversification and further developing the
business strategy (Duncanson et al., 2016). Other research from Beugelsdijk et al. (2017)
noted in Kirkman, Lowe and Gibson’s 2006 (KLG), Hofstede's theory presented an effective
structure with their work collected from 180 papers, stating that culture is the main factor

which effect studies (148/180). The vast studies focus on country-level (78/148), 64 studies
focus on an individual level, and 58 studies pay attention only to Hofstede's dimensions:
Individualism-Collectivism. The research resulted in findings that country-level behaviour is
affected by cultural differences. Therefore, Hofstede’s theory was able to predict country
expectations and local behaviours. Dubois et al. (2005) supported by the result of their
surveys which determined national culture defined customer's attitude with luxury brands.
The outcomes are compatible with Hofstede’s four-dimensional theory (1980). This study
will focuses on the two relevant dimensions, Individualism versus Collectivism (IDV) and
Masculinity versus Femininity (MAS). The customer purchasing decision in luxury products
are mostly affected by IDV (Mosca and Gallo, 2016). For a masculine society, the one way to
demonstrate their achievement and social status is by purchasing product (Rogers, 1983).
Hence, the intention in luxury brand purchasing can be influenced by MAS.
Individualism versus Collectivism (IDV)
Tarmy (2019) brings a case study of Hermès in which global and local management at
Hermès differentiates themselves from other brands by allowing personal customisation of
the bag. The Birkin bags are one of their most popular collections representing individualistic
culture which is a common buyer habit situation in western countries. In contrary, the
customisation process is a challenge in Asian cultures, a collectivist market that creates bag
value with historic collectability (Roll, 2018). The Hermès financial report illustrates that
most of the sales revenue generated, sorted by geographic location, comes from individualism
counties. Europe and the USA represents over 50% of company income while Asian
countries represents only 36% (Hermès, 2018). According to the opinion stated through
Andre van Hoorn, 2014, Individualism and collectivism is refers as an effective multilevel
approach which is considerably applied by businesses to reducing the issue that is arises in
the culture through the issue of individualism and collectivism. This approach is majorly
helps in analysing the individual perception of people. Along with this, it is also explores
degree to which people within society are directly integrated into groups with the aid of
making them familiar towards the company and its services as well. It help in increasing
positive and healthy relation with large number of customers that may support in building
positive and competitive brand image at global market. Under this type of dimension,
individuals are concerned with their own opinion and also value their personal time to spend
on their activities. It may reflect on the entire activities and behaviour of consumers within
the organization. Whereas, customers from collective cultures feels that they are related to the
large group of people and well-being of other members.

Masculinity versus Femininity (MAS)
In luxury brands businesses, different demands and preferences are clearly separated
by country. The Hofstede study (2001) reveals the result of a country with high Masculinity
has a different value than Femininity countries when comparing male and females within the
same profession (Hofstede 2001, cited in Duncanson 2016). Masculine societies give value to
capability and accomplishment. While feminine societies more about concern for people and
well-being. De Mooij and Hofstede (2010) stated that in an example of masculinity society,
housework is independent between husband and wife. Additionally, more grocery shopping is
done by men, in contrast to grocery shopping by women in a feminine society. It has been
shown that the differences in responsibilities are the core characteristics of this dimension.
Moreover, luxury brands are utilized to showcase an individual’s success in a masculine
society (De Mooij and Hofstede, 2002). From the view analysis of Elizabeth A. Weing Lee,
2011, it is also an another key approach which is requires to be considered by the businesses
in betterment of organisational operations and function. AS per the previous survey it has
been analyse that, organsaitions are follow equality basis within their culture as they are
providing equal opportunity to their employees as per their gender, thus this create value in
development of organizational performance, so it is essential for each small as well as large
business organisation to follow equality within their culture and taking executive decisions
regrading the success of firm. Furthermore, it is also measures the extent in which a culture
has its social roles that clearly distributes between its members. It is also related with the
assertiveness, competitiveness, success and status as well. In this regards, Feminine societies
in which they share modest and caring views. This type of dimensions is often views as
forbidden in highly masculine societies. As number of customers like men buy grocery
products in which their responsibilities are totally change and different. Thus, it is crucial for
company to effectively analysis the factors through which they can easily provide better
services so that they satisfy their needs and wants.
The opposition believes that Hofstede Theory has some conflict with the Trait Theory
on the individual level by using different aspects to understand behaviour. Hofstede believes
individual behaviour is collected from society and family, while Trait Theory states that it is
from learning based personality (Noe, et al., 2017). Hofstede supports cultural difference as a
focus on the overall perspective of people in society. Trait theory structured on the individual
personalities, while Hofstede can reveal board characteristic that will benefit to the market
research.
Digital Advertising marketing