CUSTOMER ATTITUDE TOWARD GRAY MARKET ON LUXURY BRANDED BAG PURCHASE IN INDONESIA

• Main Author: Widjaja, Monica
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/72444
• Institution: Institut Teknologi Bandung

Introduction - Luxury fashion industry has grown phenomenally in the last few years. Despite the fast growth of luxury industries in both mature and emerging markets in the world, problems are also arising concurrently. The problem is the growth of gray market which utilize this opportunity to take over the luxury industries’ consumers into their hand and their activities have become global. Grey Market is one of the distribution channel where trades of a certain type of goods happen, which is actually legal, but not intended by the original manufacturer of the goods. This study aims to learn about consumer attitude toward gray market in big cities in Indonesia, where the result of this study can be used effectively by trademark holders or international brand managers in determining the right marketing strategy in facing the gray market from consumer point of view. The main focus in this research is about gray market in Indonesia both online and offline which sold genuine branded bags at lower prices. This study also investigates the relationships between consumer attitude toward gray market goods and the factors which influence purchase intention of gray market goods. Method – The variables which are used in this study are the result of the combination of some constructs from previous research about luxury brand perception and gray market goods purchase intention. Price consciousness, price quality, risk averseness, personal value, social value, attitude toward gray market, luxury brand perception, and purchase intention toward gray market are predicted variables that influence customer’s purchase intention toward gray market. Purposive sampling was performed to 400 respondents from Jakarta and Bandung, age 16-64 years old who potentially buy or owned luxury branded bag, and/or familiar with the luxury branded bag that penetrated Indonesian market. Both online and offline questionnaires were developed to gather data. Data processed by confirmatory analysis, threeways- ANOVA, linear regression, and path analysis. Findings – This research found that gray market is currently growing rapidly and more people perceived gray market as one of the trusted channel for luxury goods purchase. However, more respondents still prefer to buy luxury branded bags at authorized channel. This research also found that there are two variables which influence attitude toward gray market which are luxury brand perception which has the biggest influence and risk averseness. Price Quality, Price Consciousness, Attitude, and Personal Values are four variables which are found to be significantly influence purchase intention. From those four variables, only price quality which has inverse relationship with purchase intention. The most influencing factor which affects purchase intention at gray market is Attitude toward gray market. Author then recommend luxury brand companies to focus on building consumers’ attitude first. However attitude is a dependent variable, which is influenced by luxury brand perception. Also, luxury brand perception is influenced by social values and personal values which has stronger influence. So, companies should then focus on their consumers’ personal values in order to win over the competition with the gray market.