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This article contributes to the development of an understanding of managers’ decision-making processes when it comes to brand extension. This study examines the extent to which the model of extension decision-making proposed by earlier writers applies to the luxury sector. It concludes that the A & S model’s general framework and components apply to the luxury industry. Certain adjustments are necessary to account for the distinctions between luxury and regular hospitality service providers. In comparison to other service providers, growth, rather than defense, is the primary engine of premium hospitality brand expansion. In the luxury hospitality business, marketing, rather than Research and development (R&D), has the most effect on brand expansion choices. Luxury goods specialists see tradition and brand legacy as the primary motivation and a critical selection factor for brand expansions. Digital marketing efforts seem to become hindrances rather than supporting the business of luxury brands, owing to its focus on “generalized” content which is against the aspect of “exclusivity” which is a must for luxury customers. This article discusses this matter in detail to reveal the various ways in which digital marketing negatively impacts the brand integrity of luxury brands in the hospitality sector.
Brand Integrity, Luxury Customers, Digital Marketing, Luxury Brands, Hospitality
INTRODUCTION / RATIONALE
When individuals use the term “digital media,” they are referring to Internet-based platforms that enable users to produce and share information, as well as discuss ideas (Troise and Camilleri, 2021). The interactive character of digital marketing, which is based on the widespread usage of various digital media platforms, is a strong tool for brand managers. Brands use social media to interact with their consumers, replying to their postings and enticing them to join in the conversation (Aydin, 2020). The most successful companies on Twitter react to more than 60% of their customers’ tweets. With the growth of social media, luxury brands are increasingly utilizing it as a two-way communication route with their clients. Two high-end hospitality firms, Aman and Six Senses, encourage their customers to post photos of their products on social media with hashtags and to promote them on their websites (Leite and Azevedo, 2017) This suggests that they promote the use of digital media to popularise their brand. Additionally, “Rosewood Hotel Group” responds to client inquiries and engages in a conversation on its Facebook page. Numerous general brand studies have demonstrated the favorable effects of brand-consumer relationships on social media. Brand communications made by users on social media increased brand loyalty and had a favorable effect on how customers perceived the brand’s quality. Customer intent and readiness to provide information about a brand grew as a result of brand-user engagement.
The question remains, however, as to whether or not a high level of brand-consumer contact is always beneficial to luxury businesses, notwithstanding the advantages of social media brand-consumer connection. While social media is open, engaging, and accessible to all, luxury is exclusive, limited, and targeted at a select set of rich clientele. Unsurprisingly, these two notions are opposed (Troise and Camilleri, 2021). Thus, because digital media are distinguished by interaction and accessibility, they can undermine the underlying sense of exclusivity inherent in a premium brand (Moro and Rita, 2018). Previous studies including the one conducted by Arrigo (2018) have indicated concern about premium brand dilution on social media from this vantage point. Social media has been the subject of a lot of empirical studies, but there has been little focus on how social media could backfire for luxury enterprises. This fact would therefore make the literature review to be presented ahead quite complex. Since brand dilution has long-term effects, the negative influence of social media marketing on luxury products’ perceived worth must be examined (Gutsatz and Heine, 2018). Luxury businesses may better educate luxury brand managers on the necessity of developing standards for preserving their brands’ online reputations while simultaneously optimizing the effectiveness of social media marketing by better understanding how luxury firms use social media (Coyne, 2020).
The current study makes the case that active brand “consumer engagement” on digital media may harm organizations operating in the luxury hospitality sector’s core value perceptions (i.e., “social,” “uniqueness,” and “quality value”) by making brands appear too close and accessible to the public (Litvin, Goldsmith and Pan, 2018). The term “psychological distance” is used in this study to refer to customers’ subjective assessment of the distinction between a luxury brand and mass-market consumers (Garant, 2017). This research discusses why luxury companies in the hospitality sector must maintain psychological distance from their social media followers to safeguard their critical value judgments using the “construal level” notion of “psychological distance.” If they fail to do so, the “appeal” of the brand would get compromised. The central aim of this study is to critically analyze the different ways in which digital marketing efforts negatively impact the brand integrity of luxury hospitality organizations.
CRITICAL LITERATURE REVIEW AND ANALYSIS
2.1 Negative Impact of Digital Media in The Luxury Segment
Nowadays, most firms have a social media presence on Facebook, Instagram, or Twitter. Consumers prefer and indulge in social media activities because it enables them to connect with new people, share their experiences, and stay connected with old ones (Moro and Rita, 2018). Additionally, luxury hotel firms have recently recognized the value of digital media as a marketing tool (Cheung, Pires, and Rosenberger III, 2019). Slivar and Bayer (2017) believe that social media channels, particularly Instagram, can be incredible tools for telling a brand’s narrative in a unique and aesthetically attractive way. Additionally, utilizing digital media channels for commercial purposes has several significant advantages, including increased traffic, direct client connection, and greater sales. Luxury hospitality businesses are no exception to this norm since the majority of luxury brands now have social media profiles on the majority of the most prominent social networking sites. As per the opinion of Ozuem and Azemi, (2017), although luxury hospitality firms are rapidly adjusting to the social media environment, marketing gaffes and errors are an unavoidable part of the process. One may argue that digital media platforms such as social media are synonymous with mass media, whereas luxury brands cater to a limited segment of the population (Reilly and Larya, 2018).
This argument is undoubtedly valid, as social media provides access to the general consumer. Rather than that, only a select few can buy luxury products. As a result, luxury hospitality businesses do not rely on social media to promote their offerings (Moro and Rita, 2018). However, if a business chooses to open an account on a social networking site, it should surely invest financial and human resources in marketing to strengthen its social media presence, states Arrigo (2018). Luxury businesses must have a firm grasp of social media and its philosophy to maximize their exposure on the platform. It appears that simply posting photographs and videos to social networking sites is insufficient. As with any other kind of effective marketing, luxury businesses’ success on social media comes down to a knowledge of customer behavior and offering consumers what they want (Vinerean, 2019).
While mastering digital marketing might be challenging, the time spent researching what makes consumers tick, who they follow, and how they unwind online will help a business choose which social networking sites are best for it. While some errors may occur along the route, it is always preferable to learn from the experiences of other firms that have already traveled a similar path (Troise and Camilleri, 2021).
2.2 Construal Level Theory” of “Psychological Distance
As defined by the CLT of “psychological distance,” this theory seeks to explain how an individual’s subjective experience of distance is linked to how they approach their thoughts (Rinaldi, 2020). “High-level construals” are the outcome of “abstract” interpretations of objects that are far removed from the self, according to CLT (“versus low-level construals”), according to the findings of Muniesa and Giménez (2020). For example, CLT claims that when the “distance” between an object and the “self” (ie., increases) grows, persons experience the thing via “high-level construals” (“vs. low-level construals”) (Rinaldi, 2020). To describe “psychological distance,” CLT looks at the following aspects in detail: Psychologically distant events are those that occur in a distant future (i.e., in a location that is physically remote from a person) or in a distant location that is psychologically distant from a person (i.e., in the far future, in a place that is both physically and psychologically distant from the person) (Muniesa and Giménez, 2020). This “psychological distance” is a combination of the four characteristics of “psychological distance” that have been demonstrated to be linked. People can instantly access all levels of “psychological remoteness,” even though they are unconnected. One dimension of “distance” influences the other dimensions, state Bazi, Filieri, and Gorton (2020). As a luxury hospitality service provider’s “psychological distance” is affected by the provider’s physical location, trust, and purchase intentions are affected.
2.3 “Psychological Distance” of Luxury Hospitality Companies
A luxury hospitality brand, as described by widely accepted consumer research, has a variety of different features, such as “exclusivity”, “high price”, “quality”, and “symbolic attributes” (Schreurs et al., 2018). These are just a few examples. Luxury hotel brand management relies heavily on the concept of creating a “psychological barrier” between their high-end brands and the rest of the market. According to the research by Schreurs et al., (2018), the “psychological gap” between “luxury brand” and “mass market” customers is described as the consumers’ “subjective perception” of the distance between a “luxury brand” and “mass-market consumers”, as per the findings of Romo, Medina, and Romero (2017). The desire to improve one’s social status and to own a unique item that only a small number of people can afford drives the purchase of luxury goods. The perceived psychological barrier between luxury brands and regular consumers has been raised because of the difficulties in accessing premium hospitality brands due to the idea of rarity and exclusivity (Ozuem and Azemi, 2018). To maintain a sense of exclusivity among their customers, luxury hospitality organizations carefully manage numerous aspects of their business processes, such as “product price”, “distribution” techniques, and “aesthetic” qualities. Athwal, Istanbulluoglu, and McCormack (2019) believe that marketing luxury hotel brands also suggests social isolation and exclusion as a means of conveying a sense of superiority, exclusivity, and distance. As a result, luxury hospitality companies are viewed as having a greater psychological distance than informal hospitality companies.
2.4 “Brand-Consumer Engagement” on Digital Media
Digital media typically generates a place for sociability and the creation of prospective friendships through regular interactions and exchanges between users. In the same vein, businesses routinely interact with their customers on social media to build relationships. In this research, the term “brand-consumer engagement” refers to a luxury hotel brand’s desire to engage with and build relationships with every one of its customers. By responding to client feedback, putting up user-generated content on social media, and giving interactive features such as clickable symbols or a quiz, luxury hotel businesses connect with customers. Eastman, Shin, and Ruhland (2020) mention that there is a wide variety of engagement between a brand and its customers on digital media channels. To build a personal and deep relationship with all customers, a high degree of active brand-consumer contact is required. As luxury companies with limited levels of brand-consumer engagement, they may react to customer feedback cautiously and concentrate on delivering their brand message through social media (Dwivedi et al., 2020).
Alternatively, there is a strong correlation between brand-consumer interaction and psychological distance, particularly the social distance associated with high-end brands, according to this study (Wang, 2020). Socially closer people are more likely to interact, whereas those who are socially farther apart are less likely to do so, according to a model of social distance. Socially isolated people avoid social contact because of a metaphorical divide between different socioeconomic classes. Colella, Amatulli, and Martinez-Ruiz (2019) hold that this can lead to more intimacy and closeness between the brand and its customers and feelings of camaraderie among consumers as a result of expanded interaction between the brand and its customers. Brand-consumer interaction on social media is projected to help reduce the luxury industry’s perceived distance from its customers. In digital media, luxury brands with a “high” (as opposed to “low”) degree of brand-consumer connection are perceived as “near” to their customers (rather than “remote”) (Pentina, Guilloux, and Micu, 2018).
2.5 Psychological Distance and Value Perceptions of Luxury Brands
Several factors influence buyers’ perceptions of the value of luxury brands, according to studies. In other words, buyers who buy from a premium brand want to get several benefits from their money. Dubois (2017) suggests that there is general agreement that the perceived worth of luxury brands is influenced by three factors: social capital, uniqueness, and quality. A premium brand’s long-term viability depends on maintaining these key-value attributes. Perceptions of a luxury brand’s ability to elevate one’s social status are considered when determining its social worth. It is an outward-directed value that aims to increase clients’ social status or fit them into the groups they aspire to through the purchase of prominent items, Ramadan, Farah and Dukenjian (2018) believe. Symbolic meanings are incorporated into consumers’ identities and communicated to others via the use of products. Consumers utilize luxury hospitality brands to denote wealth, high social position, and membership in an exclusive social group because of this association. A luxury brand’s perceived “exclusivity” and uniqueness” lies at the heart of its distinctiveness perception. For luxury goods, scarcity is essential because it makes individuals feel unique and special and boosts the value and dreams of the company. To differentiate themselves from the competition, consumers valued a rare luxury hotel brand since it indicated that they were distinct and distinct from their competitors. In this way, the exclusivity of a luxury product or service diminishes as it becomes more readily available, according to the comments of Khan (2018).
“Quality value perception” is described as a consumer’s “subjective belief” in the superior quality and performance of a luxury hospitality brand’s products. The finest materials and hand-finishing are used by luxury hospitality firms to ensure the best quality. von Wachenfeldt (2021) ardently suggests that this superior quality is seen as an essential part of a premium hotel brand by consumers. A high perceived quality value is also expected of expensive luxury hospitality firms, as the high price is typically linked with excellent quality. It is claimed in this study that the psychological distance between brands is an important aspect in the brand integrity of premium hospitality brands (i.e., “social perception”, “uniqueness perception”, and “quality perception”). Due to the luxury hotel industry’s reliance on the concept of “remoteness,” not everyone will be able to afford or use its products. As a result of their association with undesired client groups (e.g., “mass-market customers”) and over-distribution into the “mass market”, “luxury” hospitality organizations’ basic ideas may be diluted, according to researchers. When luxury goods become more accessible to the mainstream market, they lose their high-status, symbolic nature, which diminishes the brand’s value to consumers. Recent studies by authors such as Magano and Cunha (2020) show that a decrease in psychological distance harms the impression of premium brands. Customers’ need for high-end, custom-designed services has dwindled in comparison to those provided by large corporations (Parvez et al., 2018). The brand’s perceived social worth was undermined when mass-market customers instead of the elite specialists of luxury companies provided its services.
More accessible high-end hotels were associated with a lower social value than more exclusive luxury hotels. For this reason, this research suggests that a reduced psychological gap between the brand and the consumer may give the impression that the premium hospitality brand is accessible to a wider audience. As a result, customers’ opinions of high-end hospitality companies will be tarnished.
Having a high level of “brand-consumer engagement” on digital media platforms would harm a luxury hotel brand’s brand integrity (i.e., “social perception”, “uniqueness perception”, “quality perception”) (Bazi, Filieri, and Gorton, 2020).
CONCLUSION AND IMPLICATIONS
Maintaining the luxury myth and ideal is a critical aim of running a premium hotel business. This study serves as a stark warning to the luxury hospitality business that their social media endeavors may detract from their objectives. To safeguard premium brand fundamentals such as “exclusivity”, “status signaling”, and “quality”, organizations in the luxury hotel sector must create an impenetrable psychological barrier on social media. Luxury companies’ consumer views may be tarnished if they are seen as being excessively friendly and accessible by the general public as a result of their excessively active and pleasant digital media involvement. Thus, it may be more advantageous for luxury hospitality organizations to connect selectively and follow a small number of customers on social media (e.g., “high-profile” personnel) to indicate that they are psychologically distinct from mass-market consumers. Positive customer sentiment about the extent of the “brand-consumer” connection on digital media does not always transfer into higher perceived values for luxury hotel firms. Thus, while brand-consumer engagement may appear to be beneficial for luxury hotel enterprises, it may weaken their core image. They must keep the brand’s image in mind when they construct brand-consumer communication across many digital media channels. This may result in additional benefits for luxury hospitality organizations (e.g., increased brand recognition) if a strong connection exists between the brand and the consumer. Therefore, luxury hospitality brands catering to rich clients must measure the benefits of client engagement against the risk of weakening their essential values.
The central aim of this study was to critically analyze the different ways in which digital marketing efforts negatively impact the brand integrity of luxury hospitality organizations.
This study has fulfilled its aim by examining the social distance experienced by luxury hotel firms as a result of social media marketing, one of the several components of psychological distance. Brand-consumer contact was revealed to be a significant predictor of social distance for luxury hotel operations, which can have a detrimental effect on critical brand views. Future research should study additional psychological distances associated with luxury products, such as temporal and geographical. In terms of sales and convenience, a lot of high-end luxury firms frequently provide direct links to their online storefronts on social media with product images. Another issue that may contribute to bad opinions of luxury hotel firms is the possibility for this digital marketing tactic to lessen the perceived geographic distance. As a consequence of the widespread use of Internet shopping, customers may see luxury hospitality firms as less exclusive as a result of their items and brands being more accessible. As a result, future research should examine factors that may act as moderators in the link between “psychological distance” and “brand impressions” of luxury hotel companies. In this situation, “customer-related variables” such as “power”, “societal objectives” (i.e., “competitiveness”, and “assimilation”), and the need for prestige may affect this connection as a result of the alignment of luxury hospitality firms’ symbols with consumer desires. Those with a high drive for status may be more inclined to see luxury hospitality businesses favorably than those with a lesser desire to consider them more noticeable.
Finally, the current study evaluated the psychological distance that exists between luxury hospitality firms and their guests from a social distance perspective. If social distance serves as an accurate proxy for “psychological distance”, “future research” may design and evaluate other measures of “psychological distance”. By considering the location of a luxury brand, for example, more precise assessments of the psychological distance associated with premium hospitality enterprises may be established.
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