How Firms’ Reference Price Strategies Shape Consumer Brand Loyalty in Luxury Markets
DOI:
https://doi.org/10.54097/209w6w56Keywords:
Luxury goods, Brand loyalty, Reference price, Pricing strategy, Consumer perceptionAbstract
In the luxury goods market, reference prices, both external and internal, serve as key pricing signals that shape consumers’ perceptions of product value, brand hierarchy, and exclusivity, thereby influencing brand loyalty. External reference prices, including discount-oriented and premium-oriented displays, can adjust consumers’ short-term purchase behavior and gradually redefine their internal price benchmarks. Managing internal reference prices strategically across product lines, brand lifecycle stages, and market positioning enables luxury brands to cultivate long-term emotional commitment, attitudinal loyalty, and sustained market advantage.
Downloads
References
[1] Kapferer, J.-N., & Valette-Florence, P. (2021). Which consumers believe luxury must be expensive and why? A cross-cultural comparison of motivations. Journal of Business Research, 132, 301–313. https://doi.org/10.1016/j.jbusres.2021.04.039
[2] Oliver, R. L. (1999). Whence Consumer Loyalty? Journal of Marketing, 63(Special Issue), 33–44. https://doi.org/10.2307/1251991
[3] Chaudhuri, A., & Holbrook, M. B. (2001). The chain of effects from brand trust and brand affect to brand performance: The role of brand loyalty. Journal of Marketing, 65(2), 81–93. https://doi.org/10.1509/jmkg.65.2.81.18254
[4] Kienzler, M., & Kowalkowski, C. (2017). Pricing strategy: A review of 22 years of marketing research. Journal of Business Research, 78, 101–110. https://doi.org/10.1016/j.jbusres.2017.05.005
[5] Mayhew, G., & Winer, R. S. (1992). An empirical analysis of internal and external reference prices using scanner data. Journal of Consumer Research, 19(1), 62–70. https://doi.org/10.1093/jcr/19.1.62
[6] Yao, A. (2023). Uncovering Heterogeneous Prestige Effect in Luxury Consumption: Insights from the Chinese Luxury Market. Journal of Business Research, 168, 114235. https://doi.org/10.1016/j.jbusres.2023.114235
[7] Dahlhoff, D., & Zhang, J. (2020). Reference price effects in the luxury goods market: Evidence from Chinese consumers. Journal of Business Research, 112, 245–257. https://doi.org/10.1016/j.jbusres.2020.03.031
[8] Nueno, J. L., & Quelch, J. A. (1998). The mass marketing of luxury. Business Horizons, 41(6), 61–68. https://doi.org/10.1016/S0007-6813(98)90023-4
[9] Arifoğlu, K., Deo, S., & Iravani, S. M. R. (2020). Markdowns in seasonal conspicuous goods. Marketing Science. https://doi.org/10.1287/mksc.2019.1228
[10] Albert, N., & Merunka, D. (2013). The role of brand love in consumer-brand relationships. Journal of Consumer Marketing, 30(3), 258–266. https://doi.org/10.1108/07363761311328928
[11] Kim, M., Kim, S., & Lee, Y. (2010). The effect of distribution channel diversification of foreign luxury fashion brands on consumers’ brand value and loyalty in the Korean market. Journal of Retailing and Consumer Services, 17(4), 286–293. https://doi.org/10.1016/j.jretconser.2010.02.006
[12] Romaniuk, J., & Nenycz-Thiel, M. (2013). Behavioral brand loyalty and consumer brand associations. Journal of Business Research, 66(1), 67–72. https://doi.org/10.1016/j.jbusres.2011.07.025
[13] Akarsu, T., Shaikh, S., & Maity, M. (2025). Luxury value perceptions and consumer outcomes: A meta-analysis. Psychology & Marketing, 42(1), 193–213. https://doi.org/10.1002/mar.22120
[14] Wiedmann, K.-P., Hennigs, N., & Siebels, A. (2007). Measuring consumers’ luxury value perception: A cross-cultural framework. Academy of Marketing Science Review, 2007, 1–21.
[15] LVMH. (2025). Universal Registration Document 2025. https://www.lvmh.com/investors/investors-and-analysts
[16] Lattin, J. M., & Bucklin, R. E. (1989). Reference effects of price and promotion on brand choice behavior. Journal of Marketing Research, 26(3), 299–310. https://doi.org/10.1177/002224378902600305
[17] Mazumdar, T., Raj, S. P., & Sinha, I. (2005). Reference price research: Review and propositions. Journal of Marketing, 69(4), 84–102. https://doi.org/10.1509/jmkg.69.4.84.18694
[18] Dhaliwal, A., Singh, D. P., & Paul, J. (2025). The consumer behavior of luxury goods: A review and research agenda. Journal of Strategic Marketing, 33(1), 66–92. https://doi.org/10.1080/0965254X.2024.2398699
[19] Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291. https://doi.org/10.2307/1914185
[20] Thaler, R. (1985). Mental accounting and consumer choice. Marketing Science, 4(3), 199–214. https://doi.org/10.1287/mksc.4.3.199
[21] Baillon, A., Bleichrodt, H., & Spinu, V. (2019). Searching for the reference point. Management Science. https://doi.org/10.1287/mnsc.2018.3232
[22] Kapferer, J.-N., & Laurent, G. (2016). Where do consumers think luxury begins? A study of perceived minimum price for 21 luxury goods in 7 countries. Journal of Business Research, 69(1), 332–340. https://doi.org/10.1016/j.jbusres.2015.08.006
[23] Kapferer, J.-N., Klippert, C., & Leproux, L. (2014). Does luxury have a minimum price? An exploratory study into consumers’ psychology of luxury prices. Journal of Revenue and Pricing Management, 13(1), 2–11. https://doi.org/10.1057/rpm.2013.27
[24] Ali, F., Suveatwatanakul, C., Nanu, L., Murad, A., & Terrah, A. (2025). Social media marketing and brand loyalty: Exploring interrelationships through symmetrical and asymmetrical modeling. Spanish Journal of Marketing – ESIC, 29(1), 114–135. https://doi.org/10.1108/SJME-01-2024-0004
[25] Vaidyanathan, R. (2000). The role of brand familiarity in internal reference price formation: An accessibility-diagnosticity perspective. Journal of Business and Psychology, 14(4), 605–624. https://doi.org/10.1023/A:1022958107151
[26] Hamilton, R. (2024). Consumer price evaluation strategies: Internal references, external references, and price images in consumer price perception. Consumer Psychology Review, 7(1), 58–74. https://doi.org/10.1111/cpre.12223
[27] Xu, Q. (2020). A study of the marketing strategies of high-end luxury brands: The case of Hermès. In Proceedings of the 2020 2nd International Conference on Economic Management and Cultural Industry (Vol. 155, pp. 462–467). Atlantis Press. https://doi.org/10.2991/assehr.k.201215.094
[28] Bennett, R., & Rundle-Thiele, S. (2005). The brand loyalty life cycle: Implications for marketers. Journal of Brand Management, 12(4), 250–263. https://doi.org/10.1057/palgrave.bm.2540022
[29] Lau, G. T., & Lee, S. H. (1999). Consumers’ trust in a brand and the link to brand loyalty. Journal of Market-Focused Management, 4(4), 341–370. https://doi.org/10.1023/A:1009886514295
[30] Benhardy, K. A., Hardiyansyah, H., Putranto, A., & Ronadi, M. (2020). Brand image and price perceptions impact on purchase intentions: Mediating brand trust. Management Science Letters, 10(14), 3425–3432. https://doi.org/10.5267/j.msl.2020.6.025
[31] Huang, A., Dawes, J., Lockshin, L., & Greenacre, L. (2017). Consumer response to price changes in higher-priced brands. Journal of Retailing and Consumer Services, 39, 1–10. https://doi.org/10.1016/j.jretconser.2017.07.008
[32] MacInnis, D. J., Moorman, C., & Jaworski, B. J. (1991). Enhancing and measuring consumers’ motivation, opportunity, and ability to process brand information from ads. Journal of Marketing, 55(4), 32–53. https://doi.org/10.1177/002224299105500403
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
