Luxury Brands in the Digital Era: A Cross-Cultural Comparison of the Effectiveness and Underlying Mechanisms of Personalized Advertising

Publication Date: Monday 20 June 2016
Author(s): Yu, S.; Hudders, L. & Cauberghe, V.
Appeared in: Asian Luxury Branding Research Conference

Abstract

In this paper, we investigate whether, how and when luxury brands can benefit from using an online marketing strategy, personalization. Therefore, the effectiveness and underlying mechanism of a personalized email ad for a fictitious luxury watch brand are tested in China and the Netherlands. By using a moderated serial mediation analysis, we find that individualistic cultures significantly moderate the indirect effect of personalization on purchase intention. Specifically, in the Netherlands, personalization has a positive effect on purchase intention through higher self-referencing and lower psychological distance sequentially. However, this serial mediation model is not valid for the Chinese sample. The findings are in line with the position that personalization is generally more effective in individualistic cultures than in collectivistic cultures. In a highly individualistic culture, people tend to elaborate a personalized ad message more diligently (i.e., relating the message to themselves, self-referencing) because respondents value their individual preferences more. Self-referencing, a lower level of construals, leads to lower psychological distance and in turn brings higher purchase intention.

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