CHAPTER INTRODUCTION For LVMH (Louis Vuitton Moet Hennessy), Hanoi and Guangzhou - not Lyons and Madrid – are the future. Levine 1997, p.81 This research investigates conspicuous consumption behavior in the context of Vietnam, a transitional economy. I argue that due to the impact of economic transition, consumers have a strong desire for luxury products, and show an apparent tendency to engage in luxury consumption for the sake of status. In other words, conspicuous consumption is considered an emergent phenomenon in transitional economies. This consumption phenomenon has attracted increasing attention from scholars (Belk 1999; Wang 1999). The current study addresses two fundamental research issues concerning the antecedents and consequences of conspicuous consumption in the context of Vietnam, a transitional economy. The first issue deals with several individual difference variables as potential antecedents of conspicuous consumption. The second issue deals with the possible consequences of conspicuous consumption and its effects on consumption satisfaction and life satisfaction. To address the first research issue pertaining to the antecedents of conspicuous consumption, this study focuses on the impact of several individual difference variables that are associated with changes in transitional economies. Specifically, I investigate and empirically evaluate whether modern status orientation, materialistic values, and the individualistic self have a positive impact on conspicuous consumption. I also examine whether traditional status orientation, the collectivistic self, and consumer ethnocentrism are negatively related to conspicuous consumption. In addition, I examine the outcomes of this consumption behavior at an individual level. Specifically, I investigate whether individual consumers in transitional economies are satisfied with their luxury consumption experiences for the purpose of status, and in turn, whether satisfaction with consuming luxury products has a significant contribution to satisfaction with life in general. 1.1 RESEARCH MOTIVATION Conspicuous consumption is an interesting facet of consumers’ desire for worldly goods (e.g., Belk 1988a; Veblen 1899; Wong 1997; Wong and Ahuvia 1998), and has both theoretical and managerial import for marketers and consumer researchers. Despite its importance, the concept of conspicuous consumption has attracted little serious attention from scholars (Wang 1999), and has mainly been described theoretically (Eastman et al. 1999). In addition, it has been noted that “despite the pervasiveness of the concept of conspicuous consumption, empirical research and theoretical models on the nature and influences of conspicuous consumption have been relatively scarce” (O’Cass and Frost 2002, p. 70). It seems that there is a limited understanding of the antecedents and consequences of conspicuous consumption, especially the outcomes from a consumer research perspective. Accordingly, there is a great need for an enhanced understanding of the phenomenon, and for an empirical investigation into its antecedents and consequences from a consumer research point of view. 1.1.1 WHY TRANSITIONAL ECONOMIES? The movement toward free markets in transitional economies such as China, Vietnam, and Eastern European countries has generated great theoretical and managerial interest in the marketing challenges and issues that are unique to these economies (Batra 1997). Accordingly, the study of marketing issues, and specifically consumer behaviors, in these markets has received increasing attention from both scholars and practitioners. It has been suggested that significant levels of conspicuous consumption are expected in transitional economies where the movement of the centrally planned economy toward a market system has provided consumers with the motivation and opportunity for engaging in conspicuous consumption (see Belk 1999; Lascu et al. 1994). While the previous society (before the economic transition) stressed equality among people, in the current society, the potential for social mobility – upward or downward – is much greater. Therefore, the desire to gain status has become an important concern for many consumers in the society where “as a result of transition, ownership of goods plays a significant role in status definition” (see Lascu et al. 1994, p. 89). The desire for respectability (i.e., “a show of luxury”), and “feelings of deservingness due to prior deprivations” have motivated many consumers in transitional economies to engage in luxury consumption (Belk 1999, p. 50). Due to the economic transition, retail availability, especially the availability of luxury items that “most quickly and prominently appeared in new retail kiosks, established state stores, and in the streets and markets” (Belk 1999, p. 40), and the rapid and significant increase in income levels have created the opportunity for motivated consumers to engage in conspicuous consumption. Vietnamese consumers (mainly from urban areas), similar to consumers in other transitional economies, now tend to engage in the consumption of luxury goods and services, and aspire to own foreign imported brands for an image of status (e.g., Fforde 1998; Toyama 2001). It is noted that “goods, brands, and symbols associated with popular culture and conspicuous consumption are very much a part of Vietnam now and their popularity is increasing exponentially” (Shultz, Pecotich, and Le 1994, p. 247). Previous research has mainly focused on the conspicuous consumption phenomenon in developed/Western societies where the patterns of conspicuous consumption may be different from other societies due to changes in primary motivations (Mason 1981). In transitional economies, as affluence is a new phenomenon, consumers (emerging middle and upper class consumers) might feel the need to display their newfound wealth. Economic achievement would be a cultural fixation, and therefore many consumers may place more emphasis on symbolic products to claim a desirable status (see Wong and Ahuvia 1998). On the other hand, in developed societies, many middle and upper class consumers “have come to take affluence for granted, and hence have shifted their focus to other forms of self-expression and self-actualization” (see Wong and Ahuvia 1998, p. 431). Consumers’ motivation could be to display not only financial rewards, but also their ‘taste’ in product choice, placing a greater importance on hedonic experiences. In addition, the opportunity for conspicuous consumption is open not only to the middle-class but to all status-minded consumers (Mason 1981). Accordingly, the existing findings from literature, focusing mainly on the issues in developed countries, may not be able to adequately explain conspicuous consumption in the context of transitional economies, and may be unable to capture all the unique factors influencing it in these economies. For instance, transitional economies are often associated with features such as a small percentage of wealthy consumers. These consumer groups are newly emerging, have growing incomes and newfound opportunities, and are not as numerous as in developed countries. According to Cui and Liu (2001) “consumers in transitional economies have unique concerns and consumption patterns and are still far from joining the global consumer segment” (p. 100). Prahalad and Lieberthal (1998) also suggest that in transitional economies, emerging middle class consumers are significantly different from those in the West. Unlike the middle-class consumers in the West, “little rich consumers (middle class consumers) are not as confident about their future and remain relatively conservative”, and spend less freely due to lower income levels (Cui and Liu 2001, p. 101). Moreover, the consumer market is in the early stage of development (Cui and Liu 2001) and everything is in the process of changing. In addition, in transitional economies, there is a coexistence of traditional and Western/modern societal and cultural values, attitudes and behaviors. Individual consumers are living within, and hence are influenced (though at different levels) by an increasingly global consumer culture. Therefore, although Western literature can be useful, it may only serve as a starting point due to the uniqueness of the consumption situation in transitional economies (Feick et al. 1995). As a transitional economy, Vietnam is opening up to many new marketing experiences. Although each transitional economy market is unique in its own aspects (Batra 1997), Vietnam is expected to share common characteristics with other transitional economies such as China and some of the Eastern European countries. Accordingly, Vietnam is considered a meaningful research site for investigating consumer behaviors, in particular the phenomenon of conspicuous consumption, in the context of transitional economies. 1.1.2 WHY EMERGING URBAN CONSUMERS? It has been noted that, in general, conspicuous consumption is more evident in urban areas compared to rural areas due to a higher level of sophistication in the city (Chao and Schor 1998; Veblen 1899). The extant literature on transitional economies also suggests that urban areas, especially big cities, are often influenced by globalization and consumer culture, and the impact of economic reform in them is more evident (e.g., Shultz and Pecotich 1994). In transitional economies such as China and Vietnam, emerging consumers, including middle and upper class consumers, have received attention from both scholars and practitioners due to their increasing growth and important role (e.g., Cui and Liu 2001; Speece 1998). In China, the rising middle-class is considered partly the product of Chinese modernization and global marketing. This segment, representing the future of China, includes young adults who mainly live in the cities (Zhang and Shavitt, forthcoming). For many countries, the major forces of cultural change (e.g., through trade and mass media) arrive mainly from the outside (Hofstede 2001; Zhang and Shavitt, forthcoming). In transitional economies such as China, the newly formed middle class is considered the key cultural recipient of these influences. Therefore, this segment of consumers is a force that determines the cultural orientation of China’s future. In addition, they are considered a profitable market (Zhang and Shavitt, forthcoming). In Vietnam, the situation is similar. The emerging consumer market, primarily located in urban areas, has been growing rapidly (Speece and Nair 2000). This group of consumers tends to show a strong desire for luxuries and to engage in conspicuous consumption. 1.2 THEORETICAL BACKGROUND The concept of conspicuous consumption was introduced more than one hundred years ago in Veblen’s well-known Theory of the Leisure Class (Veblen 1899). The theory of conspicuous consumption has been frequently mentioned in mainstream economics (Brown 1999; Peukert 2001; see Trigg 2001 as well). Recently it has also received more attention from consumer researchers (e.g., Eastman et al. 1999; Wong 1997; Wong and Ahuvia 1998). In this study, I use the literature and concepts from consumer research (e.g., status consumption, luxury consumption, status orientation, materialism, consumer ethnocentrism, and consumption satisfaction), social psychology (e.g., individualismcollectivism), economics (conspicuous consumption), and social research (e.g., status concern, life satisfaction) to develop the conceptual framework and formulate hypotheses. At the core of this study are the concepts of conspicuous consumption and the related concepts pertaining to antecedents and consequences of this consumption behavior from the perspective of consumer research. Conspicuous consumption has been referred to as the purchase, use, display, and consumption of goods and services as a means of gaining and displaying social status (e.g., Braun and Wicklund 1989; Mason 1981; Packard 1959; Veblen 1899). It has also been described as status consumption (Eastman et al. 1999) and “public” consumption of luxury products (Wong 1997; Wong and Ahuvia 1998). In this study, I employ the definition of conspicuous consumption as consumers’ tendency to purchase and consume luxury goods and services for the status or social prestige that they confer on their owners. Previous studies have attempted to examine several factors influencing conspicuous consumption, including psychological antecedents (Braun and Wicklund 1989), societal values (e.g., Dubois and Duquesne 1993; Wong 1997), cultural factors (e.g., Wong and Ahuvia 1998), and demographic characteristics (e.g., Chao and Schor 1998; Dubois and Duquesne 1993). However, it seems that modest research effort, especially with empirical evidence, has been given to understanding the possible antecedents of conspicuous consumption from a consumer research perspective. In this study, I examine the impact of several individual difference variables on conspicuous consumption in the context of Vietnam. These variables include status orientations (traditional status orientation and modern status orientation), materialism (success, centrality, and happiness) (Richins and Dawson 1992), selfperception (individualistic self and collectivistic self) (Singelis 1994; Singelis et al. 1995), and consumer ethnocentrism (Shimp and Sharma 1987). The status orientation construct is proposed for this specific research and the scales measuring it are developed and validated in this study. I argue that the concept of status orientation is a pervasive phenomenon in transitional economies. It is conceptualized as consumers’ orientation toward the value placed on symbols of status and on the attainment of higher status. Two sub-constructs, traditional status orientation and modern status orientation, respectively refer to consumers’ orientation toward the value placed on traditional status symbols (before the economic transition) and modern status symbols (at present). With regard to the consequences of conspicuous consumption, it seems that little research attention has been given to the outcomes of this consumption behavior, especially in transitional economies. The current study focuses on two possible outcomes of conspicuous consumption at the individual level: consumption satisfaction and life satisfaction. 1.3 CONTRIBUTIONS OF STUDY This study is expected to provide theoretical contributions, as well as implications for practicing managers and policy makers. First, by investigating conspicuous consumption, in the context of Vietnam, the current study is expected to enrich the theory of conspicuous consumption in general and in transitional economies specifically. It has been suggested that in many areas of consumer research, prior studies have mainly been conducted in the context of developed countries, primarily in the US. Furthermore, research interest investigating consumer behavior in the context of transitional economies to date has only attracted modest attention (Nguyen, Jung, Lantz, and Loeb 2003). Studies on the topic of conspicuous consumption seem to be no exception. This research topic has recently received more research interest and effort from scholars to examine it in the context of transitional economies, where it is considered an emergent consumption phenomenon. In this study, the proposed conceptual framework and hypotheses pertaining to the antecedents and consequences of conspicuous consumption in transitional economies are tested in the context of Vietnam. It is expected that Vietnam will present a meaningful research site in terms of providing a new perspective in understanding conspicuous consumption behavior in a transitional economy. Second, the extant literature has suggested that although conspicuous consumption is an important research topic, and has been investigated for a long time (since 1899 by Veblen), it seems that the phenomenon has not been completely explained in terms of its antecedents, and especially in terms of its outcomes. Although several past studies have attempted to examine the factors influencing conspicuous consumption, they did not pay significant attention to the impact of the individual difference variables. My study models a set of important antecedents of conspicuous consumption as individual difference variables, and also models the consequences of conspicuous consumption with regard to satisfaction with luxury consumption and satisfaction with life in general. In other words, a number of possible influencing factors of conspicuous consumption and its possible consequences are all examined together in the proposed model. The results of my study, while highlighting some consumption values and behaviors that are unique to a transitional economy, also suggest a global convergence of some consumers’ tendencies and behaviors in both transitional economies and advanced economies. Third, I developed and validated a new scale for status orientation including two subscales measuring modern status orientation and traditional status orientation respectively. The rigorous scale development paradigm recommended by Gerbing and Anderson (1988) was employed in developing the new scale, resulting in a reliable and valid measure of status orientation. Fourth, with regard to research methodology, a main survey was supplemented by a preliminary qualitative study. This was carried out to provide a more comprehensive understanding of the emerging phenomenon of conspicuous consumption. In addition, the current study uses LVSEM (latent variable structural equation modeling) to test the conceptual model. It is noted that this methodology has 10 the prevalence of conspicuous consumption were the accentuated levels of modern status orientation, materialism, and individualism existing among the consumers. This study suggests the co-existence of traditional status orientation and modern status orientation in individual consumers. It appears that traditional status orientation is declining and waning while modern status orientation is increasing in importance and influence. Similarly, with the transition of the economy, individualistic values seem to be readily promoted, leading to the co-existence of collectivism and individualism in individuals. The results showed quite a high level of individualism among the emerging urban consumers despite the collectivist nature of Vietnamese people. The results also indicated changes in the beliefs of Vietnamese consumers with regard to the importance and acquisition of material possessions. Many people tend to believe that material objects can help to showcase one’s success and achievement, and could help bring happiness and satisfaction in life. In addition, the results of this study also demonstrated a relatively low level of consumer ethnocentrism among the consumers who showed an evident trend of preferring foreign brands and products to the local ones. This may reflect the current fact that foreign products in Vietnam are perceived as better than many domestic counterparts (in terms of both quality and product image). With regard to the effects of conspicuous consumption on consumers’ satisfaction, the results of this study suggest that even though different opinions and judgments about conspicuous consumption behavior in TEs exist, engaging in this consumption behavior can make consumers satisfied with their luxury consumption experience, and eventually satisfied with life in general. With regard to the impact of demographic variables, the results of my study suggest that conspicuous consumption is salient for the group of emerging consumers 177 who are among the more affluent and educated in society. In TEs such as Vietnam, this group of consumers is believed to have benefited most from the economic renovation. However, for these emerging consumers, income and level of education seem to have no significant impact on conspicuous consumption behavior while several individual difference variables such as status orientation and materialism have a strong impact on this consumption behavior. The findings from my study also suggest that although previous research has presented regional differences in consumption behavior between the North and the South of Vietnam, the differences in both consumer values and consumption patterns seem to be diminishing. 7.2 DISCUSSION In this section, I first discuss the theoretical, managerial and policy implications drawn from the findings in this study. Next, the limitations of the current study and suggestions for future research are provided. 7.2.1 RESEARCH IMPLICATIONS 7.2.1.1 Theoretical Implications Conspicuous consumption is an important and interesting consumption behavior in consumer research. This study empirically examines this behavior and its antecedents and consequences in Vietnam. The findings are important from a theoretical perspective, since they contribute to a better understanding of conspicuous consumption behavior in the context of a transitional economy. The extant literature has suggested that although conspicuous consumption is an important research topic, there is still scope to explore various aspects of this phenomenon especially in terms of its antecedents and consequences. This study 178 modeled and tested a set of individual difference variables as antecedents of conspicuous consumption. These variables are considered emerging and/or evolving with the economic transition in Vietnam. This study also modeled and tested the consequences of conspicuous consumption with regard to satisfaction with the luxury consumption experience and with life in general. These outcomes have received scant empirical inquiry to date. The findings from this study supported suggestions from past research that there is a significant level of luxury consumption in TEs for the sake of status (e.g., Belk 1999; Lascu et al. 1994). In addition, my study also provided empirical evidence to confirm the coexistence of modern values, traditional values, Western values, and Asian values in the TE societies like Vietnam (e.g., Nguyen 1994; Shultz et al 1998; Zhang and Shavitt, forthcoming). Moreover, these values were distinct dimensions and could coexist in each individual. This study has focused on the impact of several individual difference variables on conspicuous consumption that were specifically associated with economic transition in TEs, and their influence could be different from those in the context of more advanced economies. For instance, the distinction and coexistence of traditional status orientation and modern status orientation emerged from economic renovation, and this is unique to TEs. Both these status orientations have a significant impact on conspicuous consumption. In my study, consumer ethnocentrism was found to be a significant predictor of conspicuous consumption. This may not be true in the context of more advanced economies where imported products may not convey a prestigious image, and foreign-made products may not be as readily associated with high status like in TEs at present. 179 Due to the economic transition in TEs, consumers’ values, attitudes and behaviors are continuing to evolve. The findings from my study demonstrated increasing levels of materialistic values, and individualistic values in Vietnam. These values may not have been socially accepted or desirable before the transition. Both materialism and individualism were found to have a significant impact on conspicuous consumption. My findings, therefore, suggested that together with globalizing consumer culture, when TEs achieved a certain level of development, consumers from TEs might exhibit tendencies and behaviors similar to consumers in more developed economies. In this study, to capture the impact of changes in consumers’ values placed on status symbols before and since the economic transition in Vietnam, a new scale of status orientations was developed and validated, following the rigorous scale development paradigm recommended by Gerbing and Anderson (1988). The new scale includes two subscales of modern and traditional status orientation. With this scale, my research findings indicated a significant impact of both traditional status orientation and modern status orientation on conspicuous consumption among Vietnamese consumers. It might be meaningful to make use of the status orientation scale to encourage more studies on consumer values and consumption in the context of TEs like Vietnam. I also suggest that with the new scale, more research related to the antecedents and consequences of status orientations will be spawned. This study used a combination of quantitative and qualitative approaches. The qualitative study was used primarily to supplement the main quantitative study. I found this combination useful and necessary to obtain a better understanding of the consumption behavior of interest. In addition, I used SEM to test all the proposed 180 relationships simultaneously in the proposed model. In this study, SEM was also used to assess the reliability and validity of all measures used in the study. 7.2.1.2 Managerial Implications In this study, several managerial implications are offered to managers of both international and local firms operating, or intending to operate in TEs like Vietnam. The findings from this study showed a significant level of conspicuous consumption in terms of both attitudes and actual behaviors among emerging urban Vietnamese consumers. This suggests great business opportunities for firms marketing luxury products. The changes in consumer values such as status orientations, materialism, and individualism foreshadow a rapid increase in conspicuous consumption in TEs in general, and Vietnam in particular. This implies a promising market for luxury products in TEs such as Vietnam for both international and local firms. The findings from my study, while suggesting the importance and attractiveness of emerging consumers in urban areas as target markets for luxury consumption, also provided useful information pertaining to the characteristics of these consumers. They hold high levels of individualism (even higher than the levels of collectivism across gender, age, income groups, and education levels), and have low levels of consumer ethnocentrism. These consumers also hold high levels of modern status orientation, while retaining high levels of traditional status orientation. These insights will help marketers better understand and target emerging consumers, and to develop appropriate marketing strategies. With regard to developing meaningful marketing strategies that are appropriate to the context of TEs, the findings from my study provide marketers with some insights and also specific suggestions. As conspicuous consumption is 181 considered an emergent phenomenon in TEs like Vietnam, the findings suggest that a number of different products are used to make a statement to others. There are some implications for developing marketing strategies in general and advertising strategies, in particular. A study by Taylor (1999) on ‘six-segment message strategy’ in advertising suggested that for the market segment in which economic consumption was motivated mainly by prestige-seeking, “the role of advertising is to create the appropriate social situation within the advertising that motivates the consumer and thus transforms the product into the appropriate emotion such as love, affection, affiliation, noticing, or admiration. This strategy calls for the communications to show the target audience member and socially important others” (p12). Many specific suggestions drawn from the findings of this study seem to relate to promoting and advertising luxury products in TEs like Vietnam. It is noted that marketers may need to think about an effective way to promote their luxury products based on the unique characteristics of the products and of the target customers as well. For instance, the findings from my qualitative study suggest that marketers may want to choose several types of magazines for advertising luxury products rather than using the daily newspapers and television. In addition, marketers also may need to be careful when making decisions on which celebrity (if they want to use one) is appropriate to the advertisement and endorsement of luxury products. For example, some of my participants suggest that Ms.Truong Ngoc Anh, a beautiful and famous local model who is considered to be a symbol of success and elegance, is suitable for promoting a luxury product, such as the Longines watch, in Vietnam. Another specific suggestion refers to issues such as selecting appropriate and attractive messages in building and promoting the luxury products’ image. In addition, marketers may need to think about promoting the image of the luxury products 182 through choosing appropriate locations for their shops, displaying the products well, and providing excellent after-sale services. Findings from my study also provide some implications for domestic companies. In my study, Vietnamese consumers showed a relatively low level of consumer ethnocentrism, and they showed a clear preference for purchasing foreign products. These findings reveal some big challenges for domestic companies that are often associated with low quality, poor services, and a less attractive image. Most of the local products have not established their position as luxury products in the minds of many Vietnamese consumers. Accordingly, local companies that want to compete with foreign companies, especially in providing luxury products to the market, may have to cope with many difficulties. To meet the needs of the customers, especially of the emerging consumers who are becoming more demanding, local companies may need to improve their products, not only in terms of quality, but also the design, package and the customer service to add value to the products and to enhance their good image in consumers’ perception. In addition, since Vietnamese consumers are proud of their national identity, “appeals to the sense of national identity may be an effective way to position a domestically manufactured product” (Lantz et al. 2003). It is suggested that in Vietnam, people generally show a great deal of pride and identification with the country, thus they may welcome the opportunity to support well-made domestic products (Lantz et al. 2003). This implies that local companies not only face challenges but also have chances to gain back the support from domestic consumers. For international firms, this study indicates promising opportunities for foreign companies offering luxury products to TE markets like Vietnam since a high level of conspicuous consumption is displayed. However, there are also some challenges for 183 the companies which often sell their products at high prices, because consumers in emerging economies like China and Vietnam are extremely price sensitive (Tse 2002). Consumers may revert to buying products provided by local businesses when the image and quality of these products are considerably improved. 7.2.1.3 Policy Implications This study is expected to provide implications for actions for policy makers in an attempt to make things better for both individuals and society, and for both consumers and businesses. Veblen (1899) referred to conspicuous expenditure as “waste” because it did not serve human life or well being. The word “waste” was used to imply extensive leisure activities (waste of time and effort), and lavish and extravagant spending (waste of goods) that the leisure class used to demonstrate their wealth (Trigg 2001). As conspicuous consumption is an emergent phenomenon in TEs like Vietnam, it has been judged differently. Some consider it as the inevitable consequence of rapid economic development when the new rich show off their recently gained wealth. Others judge it as a means of building up and maintaining personal networks for entrepreneurs, or as a tool that stimulates economic growth. It has also been judged as ‘stupid consumption’ and ‘anti-social consumption’ (Wang 1999). There has been an argument that the pursuit of luxuries in TEs could be good, humane, and desirable and it could provide hope and the motivation for achieving a better life. On the other hand, some concerns have been expressed pertaining to problems with the environment, consumers’ health, education, childcare (i.e., luxury consumption might be made at the expense of these), and the social and psychological effects as a result of pursuing luxuries (Belk 1999; Ger and Belk 1996b). In sum, both the positive and negative aspects of conspicuous consumption have been suggested. 184 Belk (1999, 2003) raised and discussed the very basic question of whether luxuries were good or bad for individuals and societies, and whether engagement in luxury consumption in TEs was “a basic and innocent human right” (Belk 1999, p.50). Although both positive and negative aspects are possibly associated with conspicuous consumption, this study provides evidence that engagement in conspicuous consumption may bring individual consumers satisfaction with consumption and with life in general. Accordingly, the desire for luxuries and conspicuous consumption may not be purely bad. Thus, policy makers may not need to hamper it although it may be necessary to implement certain controls and regulations. It has been suggested that “there will always be a socially constructed line between outrageous decadent luxury and morally justified decencies” (Belk 1999, p. 51). This provides some implications for the policy makers in judging this important consumption phenomenon, and then in guiding and educating consumers’ consumption behaviors. While pointing out conspicuous consumption as the way of displaying wealth and status of the rich/leisure class, Veblen (1899) has also noted that even the poorest people were subject to pressures to engage in conspicuous consumption because the member of each social class tried to emulate the consumption behavior of the class above it (Trigg 2001). Eastman et al. (1999) have argued that a consumer may seek to buy or consume products for the status they confer, regardless of that consumer’s objective income or social class level. Accordingly, it is expected that in TEs, not only the emerging consumers will tend to engage in conspicuous consumption, but also a number of consumers from the lower income groups may have a strong desire for luxuries. 185 As suggested by some respondents in my qualitative study, most people who buy and/or use luxury products have high incomes, or if they not, they will try to satisfy their own luxury consumption by studying or working harder to get higher positions in companies. However, some concerns have been expressed that some people in society may try to earn money by immoral, if not illegal, ways in order to afford luxuries. Several of my participants showed their concern that some authorities and government officials, who not have high salaries, can still engage in significant buying and consuming of luxuries. They raised questions as to how these people could afford to buy such expensive things as Longines watches, Pierre Cardin shirts, Guy Laroche wallets and belts, and Versace shoes. These questions imply possible immoral or illegal activities carried out by some authorities. This has implications for the government and its policy makers in issuing appropriate regulations that help to eliminate these undesirable activities in society. Another group of consumers also engages extensively in luxury consumption. They include the young children who by virtue of their rich parents, get to enjoy a luxurious life such as driving the latest model motorbikes, using the newest model cell phones, wearing brand clothes, and drinking imported wines. They want to prove that they are connoisseurs of fashion and that they are always on the forefront of new trends. This practice may provide some implications for public policy makers with regard to educating and guiding young people in the consumption of luxury products. Recently, in the US, luxury good companies have focused on younger, teenage consumers, that is, the “Generation Y” segment. The main reason is that many of these consumers have considerable disposable incomes. They target this group of consumers through various forms of products, promotions, and specially designed displays. The companies approach the teen market aiming to build loyalty now and 186 profiting later (Morris, forthcoming). The situation may not be the same in Vietnam where many in the younger group may not be able to earn their own income. As noted by Shultz et al. (1998), over half of Vietnam’s population is under the age of 20, and this young generation has a significant effect on Vietnamese society. Specifically, “an affluent population of teenagers in Ho Chi Minh City now has the capacity to obtain credit cards from foreign banks, and to purchase expensive imported consumer goods. In addition to being a growing market in their own right, the youth in Vietnam are becoming opinion leaders for others” (Shultz et al. 1998, p. 733). This fact suggests some implications for public policy makers in dealing with businesses’ marketing activities. For instance, some businesses may utilize unethical practices to promote their products and to attract these teenagers for a pure profit purpose (e.g., ads with too much emphasis on the youth’s enjoyment of luxuries). Policy makers may want to control and regulate businesses’ activities in order to keep the young generation both physically and mentally healthy. This could be considered important for the future development of the country. The findings from this study suggested a relatively low degree of consumer ethnocentrism, at least for the emerging urban Vietnamese consumes. This could have a negative effect on perceived domestic product quality, and purchase behavior. This has implications for public policy makers who may want to find out how to encourage Vietnamese consumers to support domestic products. A good way could be the continuation of the “buy-domestic” campaigns in more creative and effective ways that promote local-made products, especially high quality domestic products. In addition, more attention may need to be given to the policies of supporting and guiding domestic production so that the local products can achieve significant improvement, and thus, find more support from domestic consumers. 187 An area that policy makers also may need to deal with involves the prevalence of counterfeit luxury brands in TEs including Vietnam (Belk 1999). Several managers interviewed in my qualitative study expressed their concern about this practice in the Vietnamese market. They suggested that policy makers may need to improve the legal system to reduce the number of fake products in the market. At the same time, consumers may need to be educated and equipped with the necessary information so that they are able to recognize and buy the real products while engaging in luxury consumption. As noted earlier, in TEs like Vietnam, the cultural values have been changing, thus, both traditional values and modern ones co-exist in the society and in individuals. Accordingly, policy makers may attempt evaluating and building a reasonable balance between the traditional cultural values and modern values. To so, mass media and social marketing activities could be an effective means. The roles of the mass media and marketing activities such as advertising in promoting cultural values have been suggested in the literature (Zhang and Shavitt, forthcoming), and policy makers may consider using these methods of communication to help preserve traditional values while at the same time promoting new and modern values at appropriate levels. 7.2.2 LIMITATIONS AND FUTURE RESEARCH DIRECTIONS My study has achieved a certain success in examining an important consumption behavior, conspicuous consumption, and investigating its antecedents and consequences in the context of emerging urban Vietnamese consumers. The current research, however, presents some limitations that future studies could address, and also suggests several areas in which this research could be further extended. 188 First, with regard to research methodology, the current study while investigating conspicuous consumption among emerging urban consumers in Vietnam, used the data collected from only the two biggest cities, Hanoi and HCMC. A study using a larger and more representative sample including other cities such as Hai Phong (in the North), Da Nang and Hue (in the central region), and Vung Tau (in the South) would be useful to further verify the findings pertaining to conspicuous consumption behaviors of urban consumers in Vietnam. Although all measures in my survey were tested thoroughly before submitting to the structural model for analysis, some may need further testing for validity and relevance to the research context, such as the case of the items measuring the centrality component of the materialism construct. The new scale of status orientations developed and validated in this study showed good reliability and validity with all data collected in Vietnam. However, it may be useful to confirm the scale’s properties in the context of other TEs such as China (with some modifications if necessary). This would help to test my model in new research sites (i.e., another TE), and encourage more research using this scale to investigate issues related to status orientations in other TEs. Second, in my conceptual model, I examined the impact of several individual difference variables on conspicuous consumption. The results demonstrated evidence that my model provided considerable insights with regard to conspicuous consumption (R2 = .70). However, some other influencing factors may have been omitted in the current model. For example, the factors associated with the bandwagon effect (e.g., social conformity and the fear of losing competitive advantage) could be further explored. Marketing activities such as advertising may have a strong impact on conspicuous consumption. This could also be an avenue for future exploration. In 189 addition, although the impact of some demographic variables such as income and level of education were examined in some of my tests, they were not investigated in the current structural model. Future research may integrate these variables into the model for testing their effects on conspicuous consumption. Third, considering the widening gap between urban and rural areas in Vietnam nowadays (Nguyen, Jung, Lantz, and Loeb 2003), it would be meaningful for future studies to examine the possible differences in conspicuous consumption behavior between these markets, and to explore the reasons for the differences. A comparison could be made between the group of emerging consumers in urban areas and the group of emerging consumers in rural areas. Fourth, future research may also examine whether there is any difference in conspicuous consumption and related issues (e.g., the level of materialism, status orientation, and consumer ethnocentrism) between emerging consumers and the other groups of consumers in TEs. Although the group of emerging consumers has been growing fast and plays an increasingly important role, other groups of consumers still account for a large percentage of the population in these economies. With regard to conspicuous consumption, it has been suggested that even the poorest people are subject to pressures to engage in conspicuous consumption (Veblen 1899; Trigg 2001). Future research could also examine whether the lower-income consumers in TEs engage in conspicuous consumption differently as compared with those from the emerging consumers; whether they sacrifice “necessities” in order to acquire the “luxuries” (Belk 2003). Also, further research effort could be spent in investigating possible differences in the impact of the antecedents and the consequences of conspicuous consumption for these two groups of consumers. 190 In addition, future research may need to be conducted in other TEs for further verification of my results. China would be an interesting research site for fulfilling that objective as it has many similarities to Vietnam in terms of economic development characteristics, and the societal and cultural values associated with the past and the present. Furthermore, it may be desirable to conduct a future study in a cross-cultural context. Specifically, it would be interesting to compare consumer behavior among TEs, or between TEs and developed economies with regard to conspicuous consumption. It could be possible that the individual difference variables which were found to have a significant impact on conspicuous consumption in my study might demonstrate different effects on conspicuous consumption in the context of more advanced economies. For instance, the findings from this research showed that the individualistic self was significantly and positively related to conspicuous consumption. However, in developed societies, the relationship between the two might not be that strong. In these societies, to help one achieve the personal goals of displaying and enhancing status that are more likely to be associated with the individualistic self, other ways in addition to conspicuous consumption may be considered more attractive, such as being involved in charity activities (Mason 1981; Trigg 2001). In conclusion, this study has investigated an important and interesting research topic, conspicuous consumption, in a relatively new and attractive research context, a transitional economy. The findings from this study provide empirical evidence for the significant impact of several antecedents on conspicuous consumption, and the consequences of this behavior. The findings also suggest the influence of an increasingly global consumer culture. In addition to the unique features consumers 191 from transitional economies such as Vietnam exhibit, they might also show some similarities in consumption behaviors to those in more developed economies. I believe it is essential to both marketing theory and practice to more thoroughly investigate conspicuous consumption in the context of transitional economies to enhance my understanding of this important and interesting consumption behavior. 192 [...]... study in the area of sociology and was administered only to American undergraduates The shift from a centrally planned economy to a market economy in China, Vietnam and other Eastern European countries has had a significant impact on all aspects of society in these TEs Lascu et al.’s (1994) study on consumer purchase behavior in Romania, noted that “the transition taking place in Eastern European countries... concentrated in urban areas These consumers have consumption and entertainment habits such as wandering the streets and shopping, and playing sports (Lan Anh 2001) Along with their high incomes, the emerging consumers are more demanding shoppers and tend to spend more money when shopping These consumers also seem to show a strong desire for luxury products and services such as traveling abroad, having cars,... capita in TEs is still low compared to Western standards (Batra 1997), the living standards in TEs have been improving Most people have increasing purchasing power and opportunities to enhance their material lot (Williams 1992) It has also been noted that the living standards have improved significantly especially for people living in urban areas Statistical figures showed that in China, the average... generally poor and “unsophisticated”, this was changing fast A nascent phenomenon in these economies is the rapid growth and attractiveness of a middle class in urban areas, which will drive domestic consumption In contrast to more developed countries where a middle class has already been established, in TEs like China and Vietnam, “the middle class is barely emerging and even now apparent only in urban. .. context of a transitional economy; examining the differences in conspicuous consumption between urban and rural areas, between emerging and the other groups of consumers; and conducting cross-cultural studies (e.g., among transitional economies or between transitional economies and developed economies) 1.4 ORGANIZATION OF STUDY This dissertation comprises seven chapters After this introductory chapter,... Social class is often measured in terms of social status that is, “the relative rankings of members of each social class in terms of status factors” (p 298) Three status factors that have been frequently used in estimating social class are relative wealth, power, and prestige (Donnenwerth and Foal 1974; Schiffman and Kanuk 2000) Veblen’s theory of conspicuous consumption (1899), having some resonance... areas” (Chua 2000, p 23) Table 2.1 shows some figures regarding the proportions of the emerging consumers (i.e., middle class consumers and upper/“yuppies” consumers) and their income levels in two TEs in Asia, Vietnam and China (Cui and Liu 2001; Lan Anh 2001; www.nfovn.com 2001) TABLE 2.1 THE EMERGING CONSUMERS IN VIETNAM AND CHINA Vietnam China The emerging consumers account for 35% - The emerging. .. (Ahuvia and Wong 1998) In TEs like Vietnam, the movement toward a market driven economy has created many changes in social values The “collectivistic political values” that dominated in the past still exist along with other modern social values such as the acceptance of wealth and individualism (Hoang 1999) It has been suggested that at individual levels, individualism and collectivism coexist in Vietnamese. .. al 1999) In social research, the concept of status is often associated with the concept of social class According to Schiffman and Kanuk (2000), the concept of social class was defined as “the division of members of a society into a hierarchy of distinct status classes, so that 27 members of each class have relatively the same status and members of all other classes have either more or less status” (p... in which audience reaction is very significant and provides product satisfaction.” In a recent study by Eastman et al (1999), a scale measuring status consumption was developed and a significant correlation between this scale and the materialism scale developed by Richins and Dawson (1992) was found In this study, I expect a positive impact of materialism on conspicuous consumption in the context of . such as China, Vietnam, and Eastern European countries has generated great theoretical and managerial interest in the marketing challenges and issues that are unique to these economies (Batra. purchase, use, display, and consumption of goods and services as a means of gaining and displaying social status (e.g., Braun and Wicklund 1989; Mason 1981; Packard 1959; Veblen 1899). It has also. to managers of both international and local firms operating, or intending to operate in transitional economies such as Vietnam. The implications deal with understanding the market’s business