The Determinants of Repeat Purchase Intention for Luxury Brands Among Generation Y

Consumers in Malaysia

1.1 Background of Study

Luxury brands are often a symbol of global prestige and usually represent ‘unique’ quality,
design, fashion and status (Juggessur and Cohen, 2009; Phau and Prendergast, 2000a, cited in
Miller and Mills, 2012). The global luxury market has exceeded €1tn, and the value of personal
luxury market goods (like jewellery, watches, leather goods, fashion, perfumes, etc.) is now
worth €253bn (Kollewe, 2015). The online market share of top 10 luxury brands holds a
staggering 78.5%, Ralph Lauren being number 1 (19.2%) while Louboutin ranked at number 10
(1.8%) (Colson, 2016). Furthermore, Luxury brands like Louis Vuitton and Cartier have been
ranked at 19th and 62nd position by Interbrand (2016) as the best global brands of 2016. The
luxury brands industry ranges from fashion, jewellery, leather, cosmetics, wines, hospitality to
air and automobile brands (Okonkwo, 2009).

The consumption of luxury brands is no longer limited to the rich western and developed
countries. A market study done by D’Arpizio et al. (2015) found that Chinese consumers played
a key part in global luxury spending growth, which account for 31% worldwide spending,
followed by American and European consumers at 24% and 18% respectively. There are several
reasons why consumers from diversified cultures and of different income levels are increasingly
consuming luxury brands. The main reason is due to increasing per capita income. For 2015,
India and China were one of the fastest growing countries in terms of per capita GDP income,
while developed countries like USA ranked 19th, with Qatar being at rank 1 (CIA Factbook
2016; The World Bank, 2016).

The trillion-dollar global luxury market has attracted both marketers and researchers to identify
and analyse different factors that drive this consumption. Companies are now revamping their
marketing activities for their luxury brands to stand out against stiff competition to drive their
sales and retain a well-established customer base. Marketers are now much more interested in
knowing consumers’ repeat purchase behaviour and are vigorously attempting to retain high
spenders to make their luxury brand(s) more likely to be re-consumed again and again. Some of
these factors for consumption and repeat consumption identified by researchers include gaining
social status, higher self-esteem, materialism, inter-personal influence, hedonic value,
satisfaction, and product attributes (Bian and Forsythe, 2012; Bustamante, Carcelén and Puelles,
2016; Chiu et al., 2012; Chiu et al., 2014; Gil et al., 2012; Goh et al., 2016; Hsu, Chang and
Chuang, 2015; Hudders, Pandelaere and Vyncke, 2013; Kim and Johnson, 2015; Kuo, Hu and
Yang, 2013; Nelissen and Meijers, 2011; Shukla and Purani, 2012; Shukla, Banarjee and Singh,
2016; Shunmugam, 2015).

1.2 Problem Statement

Most of these studies have been in relation with purchase and repeat purchase intentions towards
consumer buying behaviour in various locations. However, very little research is done on the
repeat purchase intention, particularly on luxury brands in the Malaysia region. For example,
research by Bagheri (2014) has found that social factors, brand consciousness, and personality
factors play a key role in Malaysian consumers’ purchase intention. Similarly, another research
done by Goh et al. (2016) have studied on the impact of consumer inertia, product attribute,
satisfaction, and social influence on the repeat purchase intention among Malaysian consumers,
but it is focussed on the smartphone market. Furthermore, studies done in the topic of luxury
brands varied from studying counterfeits luxury brands (Juggessur and Cohen, 2009; Phau and
Teah, 2009; Poddar et al., 2012; Wilcox, Kim and Sen, 2009; Yoo and Lee, 2012), to cross-
cultural studies on luxury purchase intentions in developed and emerging markets (such as
Shukla and Paurani, 2012). Again, very few studies on the repeat purchase intention are
indicated towards luxury brands, particularly in Malaysia.

Therefore, this study attempts to find the relationship of hedonic value (HV), satisfaction (S),
consumer inertia (CI), and product attribute (PA) with the repeat purchase intention (RPI) of
luxury brands among generation Y consumers in Malaysia. Furthermore, these HV, S, CI and PA
independent variables have been mostly highlighted and studied against RPI for various topics in
past studies (Chiu et al., 2012; Chiu et al., 2014; Goh et al., 2016; Hsu, Chang and Chuang,
2015; Kuo, Hu and Yang, 2013) and will be used as variables to measure various responses in
this study.
 1.3 Research Objectives

The proposed research objectives for the research are as follows:

 To identify the level of Product Attribute, Consumer Inertia, Satisfaction, and Hedonic
Value
 To identify the level of Repeat Purchase Intention of luxury brands
 To identify the relationship between Product Attribute, Consumer Inertia, Satisfaction,
and Hedonic Value with Repeat Purchase Intention of luxury brands
 To examine the relationship between dimensions of Hedonic Value with Repeat Purchase
Intention of luxury brands

1.4 Significance of Study

As stated above, very few studies of repeat purchase intention on luxury brands have been done,
particularly in Malaysia. Therefore, the purpose of this research is to study the mind-set of
Malaysian consumers of generation Y, in relation to the intention on repeat purchase of luxury
brands. The study aims to bridge the above stated research gap, and the research findings will
further contribute to researchers, marketers and consumers in different ways, both theoretically
and practically.

In the perspective of researchers, they can use these research findings as reference to further
build upon the consumer behaviour field in future studies. They can do so by additionally
exploring other factors that can influence repeat purchase intention, and also comparing findings
against different study locations, population samples, etc. thus perfecting limitations of this
research.

For marketers, they can identify the relationship of each variable with their customers’ behaviour
and how it relates to repeat purchase intention. The findings can aid marketers in better decision
making regarding marketing campaigns and strategies to achieve an increase in their customer
base and profits, as well as intensify customer retention, as a result of repeat purchasing
behaviour.
Finally, for the consumers, they can use the findings to understand the significance of the four
variables with repeat purchase intention. In other words, it will help them save time and money
because they can now better understand what unique benefits can be for them by repeating the
consumption of luxury brands.

1.5 Limitations

Research limitations are inevitable, with resource constraints being number one limitation. Time
frame to undergo research is presumably four months or less and cost budgeting for various
research activities will be limited.

The respondents may also refuse to fill the questionnaires or may not participate completely.
Their responses may also be biased or inaccurate. As a result, the data obtained may not be 100%
reliable, or findings may not truly represent the population. Finally, this quantitative research is
limited to the scope of the generation Y consumers’ luxury repeat purchase intention in
Malaysia.

However, to overcome most of these restrictions, a flexible methodology is proposed to be

constructed in order to deal with limited time and costs. This will be summarised in the research
program section.

1.6 Scope of Study

The proposed study will be a quantitative research, which is focussed on generation Y consumers
in Malaysia region because of their higher purchasing power and overzealous shopping
behaviour. The study is focused on the factors that determine the Repeat Purchase Intention of
luxury brands.
Literature Review

2.1 Repeat Purchase Intention

A consumer typically decides to undergo a repeat purchase when he/she is normally satisfied
with the brand and is in the last stage of post purchase behaviour of the consumer buying process
(Kotler and Armstrong, 2016). The consumer reviews the brand’s experience he/she had during
the product’s or service’s use. Therefore, repeat purchase intention actually takes place in the
buyer’s ‘black box’ when the consumer has decided whether to purchase the same brand or not.
However, Jones and Sasser (1995) argue that consumers should possess both high satisfaction
and loyalty towards the brand, in order to become the brand’s loyalist or apostle. Therefore,
repeat purchase intention can serve as a predictor for the actual purchase behaviour. Companies
are now more interested in maintaining customer’ repeat purchase because it will not only lead to
sustained competitive advantage, but it will help increase profitability against fierce competition
whilst decreasing new costs in attracting new consumers as well. (Kuo, Hu and Yang, 2013;
Reichheld and Sasser, 1990). For example, according to Reichheld and Sasser (1990), a
company’s profits could increase by 25% to 85% with a mere 5% increase in consumer retention.
On the contrary, the same company can incur 5 times more cost in attracting new consumers.

In the span of four years from 2012 to 2016, researchers have studied many factors that affect
repeat purchase intention. As stated above, some of the variables include Convenience, Hedonic
Value, Perceived Risk, Customer Satisfaction, Consumer Inertia, Positive word-of-mouth, Value,
Trust, Habit, Familiarity, Product Attribute, Luxury Value, and Social Influence. These studies
were carried out on different samples, topics and locations, and the influences varied among
different papers. For example, research by Kuo, Hu and Yang (2013) reveals that consumer
inertia has more influence than satisfaction among female online shoppers for repeat purchase,
which is contrary to Jones and Sasser (1995)’s argument that consumers generally have high
satisfaction and loyalty when they intend to repeat purchase. Since this proposal focusses on the
determinants of hedonic value, satisfaction, consumer inertia and product attribute on the repeat
purchase intention of luxury brands, the following sections will provide a literature review of
Hedonic Value, Satisfaction, Consumer Inertia and Product Attributes.
 2.2 Product Attribute

Product Attribute(s) can be a set of characteristics that define one particular brand, and
consumers are able to recall the particular brand based on the product’s attribute(s), thereby
defining a consumer’s consumption experience (Costley and Bruks, 1992; Smith and Deppa,
2009). The attributes of any brand can also be seen as ‘dimensions of brand personalities’, for
example, Aaker (1997) defined the 5 brand personalities as Sincerity, Excitement, Competence,
Sophisticated and Ruggedness. Consumers also tend to evaluate their brand’s experience with
these brand personalities in order to adopt a repeat purchase intention. Aaker (1997) further
explained that each brand dimension has correlated with some brand personalities: Sincerity
dimension correlates with attributes of honesty, cheerfulness, wholesomeness and down-to-earth
personalities. Excitement dimension correlates with a brand’s attribute representing imagination,
spirited, daring, and up-to-date personalities. Similarly, Competence correlates with reliability,
success, and intelligence, while Ruggedness personality correlates with attributes like a brand
being outdoorsy and tough. Furthermore, Aaker’s brand testing samples included luxury hotels
and clothing. However, these dimensions are only used for literature review for better
understanding of past researches and its relation with repeat purchase intention.

According to Anderson and Mittal (2000), there is a dependent link between how well the
product attributes perform against customer satisfaction, thereby enhancing customer experience
and likely leading to a repeat purchase. Product attributes are one of the important element used
by consumers to evaluate their product of choice (Zhang et al., 2002). This evaluation is
supported by Tom et al. (1987)’s research in which product attributes are used as a basis of
evaluation regarding purchase intention. Product Attribute has mostly been an important
indicator for a consumer’s purchase intention. Studies like Wee, Ta and Cheok (1995) find that
Product Attributes affect consumer purchase intention, whereas Goh et al. (2016) find that
product attribute is among positive influencers of repeat purchase intention. Some other studies
done on product attributes in various contexts include research done by Huber, Herrmann and
Morgan (2001); Martin (1998); Min, Overby and Im (2012); Rahman, Zhu and Liu (2008).
Therefore, different product attribute impacts differently in the consumer’s mind, but it is overall
affecting the repeat purchase in different contexts.
 2.3 Consumer Inertia

In a nutshell, consumer’s inertia is an assumption that many consumers are inclined to stick to
the same brand’s consumption unless they are convinced there is a good reason to switch to other
brand, also known as energy threshold or called as ‘status quo bias’ by behavioural economists
(Castella, 2011). Prof Mazzucato (cited in Castella, 2011) believes that consumer experts have a
misconception that consumers behave rationally at all times and have the benefit of ‘perfect
information’, but in reality, consumers happily stick to their chosen products or services which
becomes their routine and inertia sets in due to both the costs of acquiring new information and
the costs of switching has become a psychological barrier for them.

Inertia-driven consumers make purchasing intentions without much contemplation (Solomon,

2013). Inertia-driven consumers. therefore, unconsciously support the repeat purchasing of the
same brands based on their past consumption experience (Gulati, 1995; Oliver, 1999; Solomon,
2013). Past studies test that consumer inertia could drive consumer to repeat purchase (Goh et
al., 2016; Huang and Yu, 1999; Kuo, Hu and Yang, 2013; Liu et al., 2007, cited in Goh et al.,
2016; White and Yanamandram, 2007). Therefore, consumer inertia has a positive effect on the
repeat purchase as consumers will be more likely not to switch to other brands.

Some reasons that consumers develop inertia can be linked to familiarity, saving time and cost,
and minimal difference between alternate brands (Anderson and Srinivasan, 2003; Liu et al.,
2007, cited in Goh et al., 2016; Oliver, 1999; Tsai and Huang, 2007). Familiarity occurs when
consumers get more and more familiar with the band by supporting it, in order to avoid
uncertainty in choosing alternate brands. Some consumers are also reluctant to spend time and
money to get accustomed to the new brands, thus developing inertia. The same reason goes for
minimal differences in brand, where consumers tend to repeat their purchase unless there are
noticeable differences in alternatives provided by competitors.
 2.4 Satisfaction

Previous studies have used satisfaction as one of the important independent variables for repeat
purchase intention (Chiu et al., 2012; Goh et al., 2016; Kuo, Hu and Yang, 2013). Satisfaction
occurs when the consumer is content with the brand’s consumption. A consumer is more likely
to return and repeat his/her purchase of the same brand if he/she is satisfied with its consumption
(Kuo, Hu and Yang, 2013; Lee, Choi and Kang, 2009). Similarly, satisfaction gained in the post-
purchase stage of consumer buying behaviour will positively enhance consumer’s attitude
towards the brand, thereby increasing odds of undergoing a repeat purchase (Engel, Fries and
Singer, 2001). For marketers, keeping their consumers satisfied is both challenging and
important. This is because satisfied consumers are less attracted by competitors, are more likely
to try additional product accessories (product depth) and other brands (product width) of the
same company, and are not likely affected by price changes (Hansemark and Albinsson, 2004;
Kotler and Armstrong, 2016; Zineldin, 2000). Furthermore, consumers from emerging markets
are now considered as ‘Global Citizens’, i.e., consumers seeing the global success of luxury
brands as a signal of quality, prestige, wealth, status, and uniqueness, and are willing to pay the
premium price charged by these luxury brands, once they are satisfied (both by physical and
psychographic pleasures) (Belk, 1988, cited in Goh et al., 2016; Bian and Forsythe, 2012; Li,
Robson and Coates, 2013; Solomon et al., 2016). Also, most emerging market consumers’
satisfaction is justified by the brand’s value as it displays a consumer’s high living standard and
status against their social classes (Tsai, 2005).

However, it should be noted that satisfaction and loyalty go hand in hand, meaning that even if
the consumer’s satisfaction level is high, the consumer may have low brand commitment
(mercenary) and he/she may switch back and forth from current brand to a competitor’s brand
(Jones and Sasser, 1995). It can be further elaborated that once a consumer is satisfied, he/she
will start to believe that the company surpasses its competition by understanding, listening and
addressing his/her needs, wants, values, etc. which will subsequently lead to the consumer being
highly loyal to the brand (Jones and Sasser, 1995).

Based on past and current studies, it can be concluded that, Satisfaction will positively influence
repeat purchase intention, especially for determining long-term repeat purchase (Brady,
Robertson and Cronin, 2001; Cronin, Brady and Hult, 2000; Johnson and Fornell, 1991;
Ranaweera and Prabhu, 2003; Zeithaml, Berry and Parasuraman, 1996).

2.5 Hedonic Value

Hedonic value can be defined as the pleasure consumers experience during a product’s or
service’s consumption that relates to aspects of fun, playfulness, multisensory, fantastic and
emotions (Babin, Darden and Griffin, 1994; Hirschman and Holbrook, 1982). For further
understanding hedonism, Arnold and Reynold (2003) proposed that there are 6 different
dimensions of hedonic drives regarding consumers’ shopping motives, they are hedonic Value
(feeling joyful after getting discounted value, bargain, etc. on price), Role (enjoyment gained by
shopping for others), Social (enjoyment in shopping with social groups, such as friends or
family), Adventure (décor and visuals, etc. of store giving stimulation of great shopping
experience), Idea (shopping to keep up with latest fashion trends, etc.), and Gratification
(shopping to relieve stress, for good mood, treating oneself, etc.). These dimensions have been
empirically confirmed under hedonism against repeat purchase intention in studies like Chiu et
al., 2014. Hedonic value has been used as one of the important independent variables in
numerous studies (for example: Chiu et al., 2012; Shukla and Purani, 2012; Shunmugam, 2015
for dependent variables repeat purchase intention, luxury purchase intention, and purchase
intention respectively).

Therefore, it can be argued that hedonic value is one of the main drivers of repeat purchase
intention (Kim and Gupta, 2009; Lin, Sher and Shih., 2005). Past studies also confirm that
importance of various hedonic values enable the drive to loyalty and repeat purchase (Chiu et al.,
2014; Jones, Reynolds and Arnold, 2006; Overby and Lee, 2006) thus hedonic value will
positively influence repeat purchase intention.
 2.6 Conclusion and Research Framework

This coursework proposes a quantitative study that attempts to study the positive relationship of
hedonic value (HV), satisfaction (S), consumer inertia (CI), and product attribute (PA) with the
repeat purchase intention (RPI) of luxury brands among generation Y consumers in Malaysia.
These variables have been studied and measured before against RPI (Chiu et al., 2012; Chiu et
al., 2014; Goh et al., 2016; Hsu, Chang and Chuang, 2015; Kuo, Hu and Yang, 2013), and the
summarised literature review identifies past and current work related to these variables. Figure 1
below is the conceptual research framework that relates four independent variables HV, S, CI
and PA with dependant variable RPI.
Figure 1: Conceptual Research Framework
 3.1 Research Design

This is a quantitative study that aims to use causal approach of hypotheses testing. 5 Research
objectives are proposed to design and implement study of IVs and DVs and their measurement
and relationships. Data is in form of numbers to from precise measurement, and analysis
proceeds by using statistics, tables, or charts and discussing how they relate to research
objectives (Harvard Research Methods, n.d.; Saunders, Lewis and Thornhill, 2012).

The research type is based on secondary data (variety of Journals used to formulate literature
review), whereas research method is primary, i.e., fresh and accurate quantifiable data is to be
collected related to this research topic.

The investigation type is correlation, has minimal research interference, whereas the study
setting is non-contrived (Zikmund et al., 2009). This is also a cross-sectional time based study as
it is carried on one go because of time limitation.

3.2 Sampling Methodology

The study population are individual generation Y consumers living in Malaysia and the sample
size is proposed to be a minimum 100 (Saunders, Lewis and Thornhill, 2012). The sampling
design is non-probability convenience sampling because it requires very low cost, is extensively
used, and there is no need of full population list (Harvard Research Methods, n.d.; Saunders,
Lewis and Thornhill, 2012; Zikmund et al., 2009).
 3.3 Instrumentation

Number of
Variable/Construct Author Source(s) Chronback Alpha*
questions

Repeat Purchase Tsai and Huang

4 0.96
Intention+ (2007)

Tsai and Huang

Satisfaction 4 0.93
(2007)
Value: 3 0.87
D1-Gratification: 3 0.77
Hedonic Value + 5 Arnold and Reynold
D2-Role:3 0.84
Dimensions (2003)
D3-Adventure:3 0.86
D4-Social:3 0.83
D5-Idea:3 0.87

Anderson and
Consumer Inertia 3 0.8
Srinivasan (2003)

Product Attribute Goh et al. (2016) 3 0.8

+
Dependent Variable Type
*
Chronbach Alpha should be more than 0.7, in order for the questionnaires to be valid and
reliable (Fornell and Larcker (1981).
 3.4 Data Collection

Firstly, to collect data, a 5-point likert scale will be used to measure data. Nominal scaling for
demographics measurement, and Interval scaling for variable items is to be used for data
measurement. These close-ended likert scale questionnaires are to be self-administered, and a
combination of drop-and-pick and online questionnaire filling methods will be used. This
questionnaire types are easily coded, have wide coverage, higher return response rate, and done
at the convenience of respondents (Saunders, Lewis and Thornhill, 2012; Zikmund et al., 2009).

3.5 Data Analysis

SPSS will be used as a tool to analyse the two data types of descriptive and inferential statistics.
Descriptive statistics will be used to analyse demographic data variables for ‘feel of data’, such
as mean, median, mode, percentage, variance, standard deviation, frequency distribution, and
graphs, pie charts, etc. Inferential statistics technique will be used to analyse the ‘goodness of
data’, as such, the variables of study will undergo validity and reliability tests such as Pearson
bivariate correlation tests between independent variables, dimensions and dependent variable.
These analyses will bring about the analysis of variables against the selected sample to fulfil the
research objectives.

3.6 Ethical Considerations

The Market Research Society’s (MRS, 2014) code of conduct will be strictly adhered right from
the beginning to the end of the whole research process. As such, the respondents right to privacy,
right of consent, right to refuse, transparency and unbiased data collection, and respecting all
rights and well-being of respondents will be professionally and sensibly carried out.
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Appendix A

Milestone timeline chart for the proposed research

Supervisor meeting
and plan(s) setting Chapter 2 Chapter 4 Chapter 6

27/2 - 1/3 1/3 - 14/3 15/3 - 31/3 1/4 - 14/4 15/4 - 30/4 1/5 - 14/5 15/5 - 31/5 1/6 - 11/6

Revision,
Chapter 1 Chapter 3 Chapter 5 presentation and
submission