The effect of different distribution channels: From Luxury to Common Property: A study of why and how loyal customers’ perception and symbolic meaning of luxury brands change with different distribution channels and how these changes affect the luxury brands’ corporate brand

Astrid Lilleås & Stine Kofoed Lakoseljac

Student thesis: Master thesis


Executive Summary: Today, it is more common to find luxury brands in supermarkets, but how does this tendency affect the luxury brands sold? How do other distribution channels affect the luxury brands? This study researches why and how loyal customers’ perception and symbolic meaning of their favourite luxury brand change, when the brand appears in different distribution channels and brand-image-contrasts occur between the luxury brand and the channels. It is further researched how these changes affect the luxury brands’ corporate brand and customer-based brand equity. Six in-depth interviews and two focus groups are conducted in order to research the customers’ immediate perception and symbolic meaning of the luxury brands and how this perception and meaning change if the brands are sold in flagship stores, department stores, chain stores or supermarkets. Several observations in supermarkets are conducted to compare the respondents’ statements with the actual shopping experience and thereby strengthen the results. It is found that customers purchase luxury to realise their desires for achieving higher social status and belonging to a desirable group. They prefer to purchase luxury brands in flagship stores as they here get an enriched shopping experience, feel unique and a belonging to the higher social class, which in the end contribute to their self-image. With flagship stores the brands have full control, they achieve the most valuable customer-based brand equity and their corporate brand is characterised as successful. As the brand-image-contrast between luxury brand and distribution channel becomes larger, the channels become more unacceptable. Supermarkets are the most extreme contrast, of all the researched channels, and have a strong effect on the loyal customers. They stop purchasing their luxury brand if it is distributed here. The reason for this is that customers associate supermarkets with undesirable groups, a lost shopping experience and, most importantly, the luxury brand turns into common property. With this, several gaps in the luxury brand’s corporate brand exist and the customer-based brand equity decreases to such an extent that the brand must look for new potential loyal customers to build valuable brand equity with.

EducationsMSc in Brand and Communications Management, (Graduate Programme) Final Thesis
Publication date2014
Number of pages206