Is Country of Origin (COO) a vital moderator for luxury consumption

Along with the rising global appetite for luxury brands, luxury brand managers have to balance the tremendous demand for their products in the global marketplace without threatening the key characteristics of exclusivity and uniqueness that are considered necessary aspects of luxury.  Many research in this area evidenced that the desire for and the consumption of luxury brands involves several dimensions of customer perceived value which has direct connection with their psychogenic needs and one of the needs are Country of Origin

Strategically managing the brand identity and its product lines in a global environment is among the most challenging activities for the marketers.  This job becomes even more tough when it comes to Luxury Brands, as in some cases, the macro and micro economic factors to be considered while aligning Premium Priced Luxury Brands with the respective Markets and Segments.

When it comes to Luxury Segment, with ever-increasing product diversity, the increased complexity of the Luxury buying process has been a significant challenge.  Brand names convey information about various aspects of a product that are difficult to quantify such as reputation, status, reliability, aesthetics and heritage.

Product categories are especially suitable for a luxury strategy in a context where consumers employ luxury products to manage their self-image (Vigneron and Johnson 1999, p. 4, 2004), and where they increasingly build up a personal connection with these products (Nueono and Quelch 1998, p. 62). In contrast to products such as hedge shears and kerbsides, “people related items” such as apparel, glasses, and wristwatches are therefore especially suitable as luxury products (McKinsey 1990, p. 19). Furthermore, within the luxury segment there is a continuum that ranges from these very personal to relatively impersonal products.

It has been evidenced from secondary data that all Luxury Brands have three components in common.

> Global

> Luxury

> Brand

And the consumers buying luxury products are broadly classified in to two categories.

Type 1 – Luxury Buying Behavior of Consumers: Consumers buying specific luxury products to flaunt their wealth (Indian luxury car buyers)

Type 2 – Buying Behavior of Luxury Consumers: Consumers buying behavior would largely portraying their life style.

Bearing the thoughts, some manufacturers and marketers have been trying to promote their products as Luxury.  However, these products could gain the status of a niche brand or premium brand or even a surrogate for luxury but not considered as luxury products by type 2 consumers.  The attempt of making a product or brand to achieve luxury status would not alone rest in the hands of promotions and advertisements, which may create a bigoted perception but does not really gain the Luxury status.

Country of Origin in Luxury Consumption

All luxury brands are global in nature and they have a strong representation of the Origin (Countries) like France, Italy, Germany, Scotland, US to name a few and these luxury markets have strong distribution system which is again countries like Dubai, Singapore, Amsterdam, etc.  Let us take Car Industry as example; the most luxury car manufacturers are Germans and Italians, they display the car quality and performance in Formula 1 tracks, they display the grace and appeal of the new launches, extensions, next generation, technology and innovation in the shows held in Geneva and they sell the product first in Europe, America and Dubai.

Luxury consumers travelling to these destinations as part of their vacation or on special occasions or as an invitee as part of their life style, gather more and more information about their Luxury Brands of Fascination which manifest into brand choice of enduring interest.  Marketers of Luxury Brands also use the occasion of launches or any form of displays / brand communication as a prestigious moment for the targeted audience.  The Luxury Consumers hence form array of habits and ideas which leads to attitudes and traits to constitute Luxury Brand Personality.  This is how Psychology of Ego Involvements (Sherif, Muzafer, & Hadley Cantril, 1947) handled and addressed by Luxury Brand Marketers.

Various sources of information on Luxury proves the phenomenon across all Global Luxury Brands, the target groups form the involvement inventory (Involvement Construct for Products and Services, Zaichkowsky, 1985, 1986, 1994, Laurent & Kapferer, 1985, Houston & Rothschild, 1977) towards purchase of Luxury Brands.  The other dimension to the phenomenon is that all luxury consumers gather in a place or access information in a particular style or purchase luxury brands in a particular format, hence these global conglomerates make sure that they are displaying the strength of their brands in all the Point of Sale (POS).

When Overseas travel opened big time across geographies, people from all over the world travelled to different countries to fulfill their luxury aspirations which has been a clear evidence of display of Egalitarian Economic Behavior (EEB).  For example, Indians travel to Dubai and Singapore to buy Armanis and Guccis of the world.

Moreover, a luxury attraction is not only at the functional, tangible level but also at the intangible, symbolic level.  The reassurance, distinctiveness and image of an established brand elevate the perceived value of Luxury Products and buyers are willing to accept a higher price.


Luxury manufacturers build strong brands not only at the marquee level but also at the model level.  In several respects, Luxury manufacturers manage their products as individual brands and allocate specific organisational and economic resources.  Therefore, highly valued models are significant marketing investments and brand assets.  Building Brand Strategy which articulates the power of brand right thru the brand attitude to fulfilment of real time product experience thru which customer delight with a wow factor achieved should be the Single Key Focal Point for all Luxury Manufacturers in the World and here Country of Origin also play an adequate role.