1 THE ROLE OF SOCIAL MEDIA FOR

LUXURY-BRANDS – MOTIVES FOR

CONSUMER ENGAGEMENT AND
OPPORTUNITIES FOR BUSINESSES
Dipl.-Kfm. Benedikt Jahn (Ludwig-Maximilians-Universität München), Prof. Dr. Werner
Kunz (University of Massachusetts Boston), Univ.-Prof. Dr. Anton Meyer (Ludwig-
Maximilians-Universität München)

1.1 SOCIAL MEDIA IN A WORLD OF LUXURY

BRANDS
Social Media today is omnipresent and Brand pages on online channels like Facebook, Google+,
Twitter, or YouTube are getting more and more popular around the world. The customer engagement
on these platforms has changed the idea of relationship marketing. Traditionally, companies have tried
to reach out and build up relationships with customers through marketing activities like reward
programs and direct marketing. In this old world, customers were passive “receivers” of relationship
activities as well as brand messages and the company had control over the brand development
process. Today, customers engage and act as co-creators and multipliers of brand messages
[19,25,30].
Almost every successful brand-oriented company operates at least one brand page on Facebook,
Twitter, or YouTube. Luxury brands like Armani, Burberry or Dolce&Gabbana have increasingly
invested in social media [38]. Nevertheless many marketing managers are still skeptical and
questioning whether it is worthwhile putting so much effort into the social media phenomenon, and if it
pays off. Especially in the luxury product industry, marketers doubt the value of the mass medium
Internet for the unique relationship between exclusive luxury brands and their customers [34,16]. This
shows the need to understand the effects of social media on the customer-relationship in general and
particularly for luxury brands.
Therefore, this article discusses the relevance of social media for luxury brands and studies how
social media brand pages affect the customer-brand relationship. We begin with a brief overview of
the literature regarding luxury brands and social media. We then discuss the value of social media for
luxury brands. Subsequently we present a general framework that describes how brand pages can
contribute to brand loyalty of the customer and how brand page participation is influenced by various
consumer values. Further, we describe a study that has tested this general framework and discuss
managerial implications for the management of luxury brands.
As a central result of our study we show that social media can be seen as a business opportunity.
Brand pages are an excellent tool for brand management, because they have measurable effects on
the customer brand relationship. Brand managers should embrace this new channel and understand
how to work with it in a contemporary fashion. Our study contributes to the ongoing discussion about
the value of social media and shows motives and effects of social media customer engagement.

1.2 A RESEARCH REVIEW FOR LUXURY BRANDING

AND SOCIAL MEDIA
1.2.1 Luxury Brands
In the past luxury brands were a privilege for a wealthy minority. But recently luxury companies have
launched new product lines and extensions to target a wider range of consumers. As a result, luxury
brands became affordable to many average consumers and the luxury market has been growing over
the last 20 years [44,50,46]. This democratization of luxury [44,50] shows the relevance of the

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phenomenon for mass marketing.
Despite the omnipresence of luxury brands in our everyday life, it is not easy to define the term “luxury
brand”, because luxury is very subjective and relative [5,13,39,49]. For example, a millionaire flying on
business class will treat it as normality, but for a normal employee it would be luxurious. While in some
regions of the world taking a shower in the morning is quite normal, in others it would be perceived as
a luxury. While forty years ago, having a refrigerator was something special, today almost every
household has one [26]. Sekora [41] defines luxury as “anything unneeded”. Following the Oxford
Latin Dictionary [36], luxury stands for an extravagant lifestyle. What extravagant means, depends on
a common sense about what is normal at a specific date, in a specific region for an average person.
Marketers in general see the label “luxury” as chance to differentiate a brand in a category and make it
more appealing for customers [20,12]. This usually goes hand in hand with a price premium [50].
Accordingly Nueno and Quelch [33] they define luxury brands as “those whose ratio of functionality to
price is low, while the ratio of intangible and situational utility to price is high”. Traditionally luxury
goods are described as goods, which bring prestige apart from any functional utility [17]. They are
characterized by adjectives as exclusive, extremely expensive, luxurious, exquisite, elitist, high quality,
excellent, hedonistic, rare, precious, crafted, glamorous, powerful and magic [21,14,49-50]. Luxury
brands satisfy not only functional but also psychological needs, and the psychological benefits seem
to be the main distinguishing factor [50].
In general, the perception of luxury can be separated in non-personal and personal perceptions. The
non-personal perceptions can also be described as interpersonal or socially oriented [44,50,43].
Socially oriented consumers’ are buying luxury brands to display their status, success and distinction
in peer groups. The brand works as a symbol of prominence and tastefulness and signals membership
in a certain social group [44]. Personal perceptions are in contrast functioning to impress other people.
They stand for personally affective benefits as hedonic pleasure, personally symbolic benefits as the
expression of the consumer’s internal self, and personally utilitarian benefits, when the brand matches
with individual attitudes of the consumer and his tastes for quality [44]. Vigneron and Johnson [49-50]
are proposing five main factors of luxury that differentiate between non-personal and personal
perceptions of luxury (see figure 1.1).

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Figure 1.1 Framework of luxury brands

Bildrechte: Vigneron & Johnson 2004
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The conspicuousness dimension is based on the assumption that luxury brands are representing
prestige or social status, apart from any functional utility [50]. This fits to the classic motive of luxury
usage as “buying to impress others” [43-44]. The premium price is supposed to be only affordable for
successful and elitist people [18]. This link is also proposed by the Veblen effect [48], which state a
higher demand of products with a rising price. Veblen’s argues, that members of a higher class
consume conspicuously to distinguish themselves from the lower class, while members of the lower
class buy conspicuous brands, because they want to be associated with the higher class [18]. But
price is not the only reason, why consumer desire status brand. Brands and their meaning can be
used as signal for one’s identity [51,18].
The uniqueness dimension is based on the assumption that perceived exclusivity and rarity makes
brands more interesting and desirable, and that this effect is even higher when the brand is also
perceived as expensive [50]. It is suggested that uniqueness enhance the self-image and social image
of the user by signaling one’s personal and special taste, or breaking the rules, or avoiding similar
consumption [50]. This dimension is underlined by the snob effect [28], which suggests a declining
consumer demand with a rising number of customers.
The quality dimension is based on the expectation that luxury brands offer superior product
qualities and performance in comparison to non-luxury brands. Consumers may perceive a luxury
brand as more valuable because they may assume greater quality and reassurance [50,1]. Superior
quality is almost always taken for granted for luxury-brand products. Consumers look for the prestige
and premium price of luxury products, expecting that they have a better quality than non-luxury brands
[44].
The hedonism dimension is based on the assumption that hedonism is an important factor of
luxury. Hedonic consumers are looking more for emotional benefits and intrinsic pleasure than for
functionality [50]. Vigneron and Johnson [49] state that consumers with a strong personal orientation
focus on self-directed pleasure from luxury-brand products. They don’t care so much about signaling
effects on peers or social groups by consuming a products or brand.
The extended self dimension is based on the assumption that consumers are integrating the
symbolic meaning into their own identity [50]. Levy [29] describes this dimension perfectly by the
quote: “People buy products not only for what they can do, but also for what they mean”. Consumers
use luxury brands to classify or distinguish themselves in relation to relevant others. This dimension
represents the desire to conform to affluent lifestyles and/or to be distinguished from non-affluent
lifestyles affects their luxury-seeking behavior, but for personal reasons, not for social reasons [50].

1.2.2 Central Concepts of Social Media

Social media and engagement of customers is getting increasingly more attention in theory and by
managers of luxury brands and non luxury brands as well [38,11].
Social media in general can be described as “a group of internet-based applications that build on the
ideological and technological foundations of web 2.0, and that allow the creation and exchange of
User Generated Content” [22]. Some of the most prominent forms of social media are social
networking sites like Facebook. Social networking sites are defined as “web-based services that allow
individuals to construct a public or semi-public profile within a bounded system, articulate a list of other
users with whom they share a connection, and view and traverse their list of connections and those
made by others within the system” [8]. Users with profiles interlinked in this manner are called
“friends.” Theses profiles can include anything from favorite food and movies to relationship statuses
and especially preferences for particular brands, organizations, or celebrities. For example, users can
post information about themselves, post links of websites they like, comment on postings of their
friends, post pictures, and accept invitations for events; they also can receive invitations to become
fans of particular brands, organizations, or celebrities [40]. Today, almost all major social media sites
offer luxury brands as well as normal brands specialized web pages (i.e., fan pages on Facebook;

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channels on YouTube; Google+ Pages on Google+) for their communication. These pages are profiles
of organizations, businesses, brands, products, public figures, or causes, and can be used by
companies to integrate and interact with their customer base [9]. Hereby, Social Media platforms like
Facebook offer companies several options for contacting and communicating with their customers. For
instance, fan pages on Facebook are an interesting tool for companies to use. But what does it mean
to become a “fan” of a brand-related page? In general, a fan can be anything from a devotee to an
enthusiast of a particular object. Typical characteristics of fans are self-identification as a fan,
emotional engagement, cultural competence, auxiliary consumption, and co-production [25]. The
Internet has made it possible to overcome geographical restrictions and to build fan communities
worldwide. In practice, users become fans of a Facebook fan page by pressing the "like-button," which
indicates to their social network that they like this brand; this preference is then added to their profiles.
The new content of this fan page is automatically posted to their personal Facebook news feed, and
they can post comments on the fan page, get in contact with the company, forward offers from this
page as well as interact with other fans.
Since brand pages are organized around a single (luxury) brand, product, or company, they can be
seen as a special kind of brand community. Over the last decade, brand communities became very
interested in branding research. Muniz and O’Guinn [32] define a brand community as a “specialized,
non-geographically bound community, based on a structured set of social relationships among
admires of a brand. It is specialized because at its center is a branded good or service. Like other
communities, it is marked by shared consciousness, rituals and traditions, and a sense of moral
responsibility.” [32]. McAlexander and Schouten [31] indicate four crucial relationships in a brand
community: the relationships between the customer and the brand, between the customer and the
firm, between the customer and the product in use, and among fellow customers. Algesheimer and
colleagues [4], using survey data from a European auto club, showed that community identification
leads to positive (i.e. community engagement and community loyalty) and negative (i.e. normative
community pressure and reactance) consequences. Further, they showed an effect of membership
continuance intentions to brand loyalty intentions. Woisetschläger et al. [52] support their results.
Additionally, they found two further reasons for consumer participation in brand communities:
community satisfaction and degree of consumer influence within the community. Moreover, they
showed an effect from community participation on word-of-mouth, brand image, and community
loyalty. An effect on brand loyalty was not shown. By means of data from an online community, Kim et
al. [24] showed that online community commitment is a driver on brand commitment. They also
showed that online community participants possess stronger brand commitment than consumers who
are not members of the community. Recently, Adjei [3] verified in a netnography and experimental
approach that online brand communities are successful tools for increasing sales and showed that the
sharing of information significantly moderates this effect.
Despite the similarities of brand pages with brand communities, they are still different. Brand pages
like fan pages on Facebook or Twitter differ from brand communities by the way they are embedded in
an organic grown and not brand related network of social ties. Thus, members of a brand page are
also connected within the social network site to so called “friends” who might not be “fans” of the brand
and are mostly real offline connections [8]. Given this brand page usage are based on motivations
different from participation in traditional brand communities. Therefore, we look into the literature about
social networking sites. A central topic in studies towards social networking sites is the motivation of
why people use these platforms. For instance, Raacke and Bonds-Raacke [40] found two main
reasons for this: social connections (i.e., keeping in touch with friends) and information sharing (e.g.,
events or gossip). In a similar fashion, Foster and colleagues [15] found one of the main motivations
for participating in social networking sites is the perceived information value from the community and
the connection to friends. Many studies also show that entertainment plays an important role as
shared and consumed content on social networking sites [42,27]. Additionally, Tufekci [45] found that
many activities on social networking sites can also be conceptualized as forms of self-presentation.
Users present themselves by adjusting their profiles, linking to particular friends, displaying their likes
and dislikes, and joining groups. This motivation for social networking usage is supported by several
other studies [9,6,2]. In particular, Peluchette [37] shows that Facebook users employ their postings

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consciously to portray images about themselves. Considering the existing research on social
networking sites, we believe there are three main motivation areas for consumers’ using social
networking sites. The first is a relationship area, where the focus of the individual is to stay connected
and interact with others and participate in a social (online) life. The second area is content acquisition
and distribution based on the individuals’ interests. This content can be functional as well as hedonic.
Finally, the third area is self-presentation, which is related to the social context but also serves more
the purpose of self-assurance and personal identity.
But brand pages don’t just differ from brand communities because they are embedded in an organic
grown network. Another important difference is the fact, that brand pages are mainly company driven
and used as an explicit brand communication and interaction channel. In a classical brand community
the brand is the center of the community and the community is “based on a structured set of social
relationships among admires of a brand” [32]. In contrast, a brand page is supposed to be first of all a
connection between the user and the brand.
Despite the popularity in the business practice, only very little empirical research studies consider
brand pages in a branding context. Borle and colleagues [7,10] examined the degree to which
participating on a Facebook fan page affects customer behaviors. In a longitudinal study, conducted in
cooperation with two restaurants, they showed an effect of membership on the fan page to behavioral
loyalty, spending in the restaurants, and the restaurant category over all. The findings support the idea
that Facebook fan pages are useful for deepening the relationship with customers. But it is still not
clear what is happening inside of the “black box” brand page and what the crucial constructs are for
managing brand pages. Empirical studies for brand pages of luxury brands do not exist so far.

1.3 LUXURY BRANDS AND SOCIAL MEDIA

The central question of this article is whether or not social media work for luxury brands. Therefore,
this article now derives various influence areas where social media can increase the luxury brand
perception (see figure 1.2).

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Figure 1.2 Influential areas of social media brand pages on luxury brands
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As discussed, one important motive of social media usage is self presentation [45]. This motive is
connected with the conspicuousness dimension of luxury. All friends of the fan can see the
membership in the brand page community. So he can show, which brand he identifies with or wants to
be associated with. Because of this overlap of motives, there should be a positive correlation between
brand page usage and conspicuousness as luxury motive.
In contrast to this, we don’t see a positive correlation between social media usage of a brand page
and the need for uniqueness. Brand pages generally have a huge number of fans, even more than the
brand real customers, the perception of being a fan or user of a unique, elitist brand, will suffer under
the enormous number of members, especially when members are behaving inadequately.
We also expect a correlation referring the quality perceptions of a luxury brand. Because members of
virtual brand channels can’t experience the real product on the platform, they may take the quality of
the content and the conversation and interaction on the brand page as a proxy for the quality of the
product. The brand can manage the perception of quality by providing interesting and functional
content and moderate the interaction between the members of a brand page. If a company maintains
its brand page as a communication and interaction channel, it should have a positive effect on the
perception of quality of the brand itself.
This brings us to the hedonic dimension. Usually brand pages are not just functional, but even
hedonic. Brands can provide hedonic, entertaining content, which makes the page more vivid and let
the user experience the brand. This can happen through pictures, videos or music. But even more
interesting is the possibility to interact with the brand as a person. Members can ask questions and get
answers. In other words: The brand is getting alive, which isn’t possible in classic media channels as
advertisement or even web pages.
Finally, we see a correlation with the extended self-perception of luxury. A membership in a brand
community related to a brand page is not just an option to signal the user’s identity, but also a way to
extend their own self by a relationship or “friendship” to a brand. The use and even more the
engagement, participation and interaction on a brand page with the brand and other brand page
members is a way to connect their own personality with a brand’s personality, which represents the
ideal self. Therefore we propose a positive correlation.
Overall, we can conclude that with exception of the uniqueness dimension, social media should have
a positive influence on luxury perception. This fits to Tynan, McKechnie and Chhuon [46], who
accentuate the relevance of co-creating value for luxury brands. That means, luxury brands become
much more than just products, they become are vivid partner for life.

1.4 A FRAMEWORK FOR BRAND PAGE

PARTICIPATION
Considering the relevance of social media brand pages for luxury brands we developed a general
framework (see figure 1.3), which should be valuable not only for luxury brands, but even for
celebrities, television shows, sport teams or music groups (see figure 1, Jahn & Kunz 2012). The
framework is based on classical concepts of uses and gratifications theory [23], customer engagement
[47,19], and involvement theory [53]. By this, we follow a basic approach, describing how brand page
participation might influence consumers’ brand loyalty and what might influence the brand page
behavior itself. For this, we divide the process into three zones: gratification, participation, and
customer-brand relationship. The basic idea of this framework is that, if the brand brand page satisfies
particular needs of a user, this satisfaction should lead to a higher approach to the brand page, which
should in turn lead to a higher brand loyalty.

The uses and gratification (U&G) theory, proposed by Katz [23] , has been found useful for application
to new media like the internet, online communities, social networking, and blogs. U&G theory tries to

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explain why individuals have different media-usage patterns. According to U&G theory, people use
media to satisfy various needs and to achieve their goals. The most prominent needs can be
subsumed into three areas: A content-oriented area based on the information delivered by the media,
a relationship-oriented area based on social interaction with others, and a self-oriented area based on
particular needs of individuals such as achieving status or need for diversion. We take these
categories, which perfectly fit with the luxury relevant dimensions, as central motives for brand page
participation. With the second concept, consumer engagement, we want to differentiate the media
consumption of a brand page. The customer relationship literature shows that customer behavior goes
“beyond transaction, and may be specifically defined as a customer’s behavioral manifestation that
has a brand or firm focus, beyond purchase, resulting from motivational drivers” [47].

Transferring the engagement construct to the context of a brand page, we define brand page
engagement as an interactive and integrative participation in the brand page community and would
differentiate this from the solely usage intensity of a member. We do not expect these constructs to be
independent from each other and would assume that brand page usage leads to brand page
engagement. For instance, it is possible that a person is using a brand page on a regular basis (e.g.,
receiving gratis coupons from the brand page) without becoming highly engaged with the brand page.

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Figure 1.3 Framework of brand page participation

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Datei: figure1_3.jpg
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To explain the brand page usage behavior, we use the three gratification areas of U&G theory
introduced above, and we apply them according to the context of the brand pages. In the content area,
we differentiate between the functional and hedonic values that are delivered. In the relationship area,
we see two main kinds of relationships where an interaction could be of value for a brand page user:

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The interaction with other users, and the interaction with the brand or company behind the brand.
Finally, consumers can decide to participate in a brand page because they expect an impact on their
image or status. In this case, consumers defer values for their own personal identities by being
members of a brand page.

After considering the value and brand page behavior, we wanted to give some reasons for the
expected relationship to branding. The central concept for brand relationship in our model is brand
loyalty. Oliver defines loyalty as “a deeply held commitment to rebuy or re-patronize a preferred
product/service consistently in the future, thereby causing repetitive same-brand or same brand-set
purchase, despite situational influences and marketing efforts having the potential to cause switching
behavior” [35]. This definition stresses the importance of two important components: an attitudinal (i.e.
commitment) and a behavioral (i.e. purchase, patronage) component of loyalty.

On the one hand, brand page users that show high usage intensity, get in regular contact with the
brand, which in turn should have an effect on their brand relationship and should increase their
likelihood for repurchase, word-of-mouth, or their general commitment to the brand. On the other side,
brands with high brand page engagement already have developed a strong relationship to the brand
page community. This emotional bond is also associated with the object of the brand page, the brand.
Thus, we assume that an increase in brand loyalty is based on brand page engagement. This
relationship is also supported by the involvement theory. Involvement can be defined as “a person’s
perceived relevance of the object based on inherent needs, values, and interests.” [53]. Brand page
usage and engagement are indicators for a high involvement with the brand.

1.5 EMPIRICAL RESULTS OF CONSUMER

PARTICIPATION ON BRAND PAGES
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Figure 1.4 : Framework of brand page participation

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To test our framework in a field environment, we executed a survey on Facebook. For the data
collection, we invited members of different luxury and non-luxury brand fan pages (e.g. Audi, BMW,
HTC, L’Oréal, Lufthansa) to participate in an online survey by posting the survey link on the fan page.
Through the survey, we obtained a sample of 523 fully completed questionnaires of brand page
members. Gender is distributed evenly in the sample (51.7 % female, 48.3% male). Average age of
the respondents was 28.6. All participants were frequent brand page users (more than 80% use their
brand pages at least once a week) and active Facebook members (76% use Facebook longer than 20
minutes a day). For the constructs of our framework, we generated multi-item scales on the basis of
previous measures, the qualitative pre-studies, and the theoretical foundation. The reliability results of
the constructs indicate acceptable psychometric properties for all constructs.
We tested the proposed hypotheses using a structural equation model. The fit statistics indicate an
adequate fit of the proposed model (i.e. χ2/df= 2.99; CFI= .92; RMSEA= .062). The results of the
model estimation are shown in figure 1.4.
The multiple squared correlations for brand loyalty are .28, which is reasonable considering that online
brand pages are not the online influence factor for the consumer-brand relationship. All coefficients of
our proposed processing model (except two) were highly significant (p< .001). We haven’t found a
significant effect from the social interaction value to brand page usage. This might be because social
interaction mainly focuses on elements related to membership exchange. By means of passive
consumption of a media, social interaction value can hardly be gained. The effect from brand
interaction value on brand page engagement is just significant on the 0.01 level.

1.6 SOME IMPLICATIONS FOR SOCIAL MEDIA OF

LUXURY BRANDS
In summary, we can infer multiple implications for the management of social media brand pages of
usual and luxury brands. First of all, we can conclude that brand pages are an excellent tool for brand
management today: They have measurable effects on the customer brand relationship. Brand
managers should embrace this new channel and understand how to work with it in a contemporary
fashion. Setting up a brand page and generating pure traffic data (e.g., visits) is not enough to improve
customer relationships. The goal of a brand page strategy is to completely engage, integrate, and
immerse users in a vivid and active community. Therefore, luxury brand companies need to give users
realistic reasons to engage in a brand page community. This can be done for example by customer
integration in the designing process of a new fashion collection, a model competition for a new media
campaign, exclusive and preview offers to the fan community, invitations to exclusive events or
consumer surveys about new trends.
A second value driver is based on interaction among brand page members and between customers
and the brand itself. Luxury brand companies should therefore create as much interactivity as
possible. The critical factor is not the amount of fans but the level of interaction. The luxury fashion
label Burberry for example has almost 11 million fans as members of their brand page, but the
dialogue between fans as well as the company seems not very intensive. But if the company is not
(inter)active, their brand pages will not be successful because brand pages are interactive channels.
Also luxury brands are co-creative and can provide more experience through an active integration of
and interaction with the consumers. Online events or exclusive videos for example can trigger
discussions about relevant topics. Beyond consumer interactivity, companies must scan brand pages
and be attentive to the happenings in their brand page communities. They must answer questions
immediately and communicate proactively, even more so when comments are negative (Kunz,
Munzel, & Jahn 2012). Beside the interaction between the brand and the consumer it’s very important
to moderate the ongoing fan interaction. When fans act inadequately they can ruin the special image
of a brand within seconds. This is especially important for luxury brands, because user perceive to be
elitist, exclusive and special. But in social media everybody can become fan of a luxury brand like

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Aston Martin. This may cause problems, because there will be a mixture of different social groups,
interacting together on one platform.
Finally, from our empirical results, we see that valuable content, both hedonic and functional, on the
brand page itself is one of the most important drivers for attracting users to brand pages. Brand pages
must deliver interesting, entertaining, and innovative content to its fans. Luxury brands have to be
aware that the content fits to the exclusive character of the brand and doesn’t destroy the elitist image
of the brand. It is especially important to avoid the image of a mass-market brand. Therefore, the
content should be unique to underline the experience of a luxury brand as something special such as
extensive HD-videos, special presentations of the product or brand, interviews with testimonials,
statements of the CEO or exclusive pictures of brand related or sponsored events. It must be noted
that sweepstakes should not be included in the valuable content as you can find sweepstakes on
every brand page and sweepstakes do not fit to an exclusive and elitist image of a brand.
The mixture of social and commercial aspects makes brand pages unique. Our study has shown there
is high potential of brand pages for the customer/brand relationship. Ideally, fans would see brands as
real “friends” in their social networks, which plays an important part in their everyday lives. In this
case, brand communication is no longer automatically perceived as disturbing advertising but as
interesting and reasonable. If luxury brand companies understand the reasons for brand page usage
and engagement, they can use this to interact with, integrate, and engage their customers as well as
transform them from ordinary users to real “fans” of their brands. Social Media is a huge chance for
luxury branding, but companies have to realize that brand pages are not just a further communication
channel; they are a real interaction channel. This fact provides various opportunities for brand
communication, but is still a challenge for companies that are not used to social media and the new
power of their consumers.

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