Author(s): Neelam Raut, Archana Borde, Shailesh Tripathi, Nimita Srivastava Nimkar and Amar Prabhakar Narkhede
This study explores the pivotal role of brand equity in shaping consumer decisions within the luxury market and examines consumer perceptions regarding the premium pricing of luxury goods. Utilizing a quantitative research approach, data were collected through a structured questionnaire administered to 360 consumers who had purchased luxury items within the past year. The research focused on two primary objectives: understanding how brand equity influences consumer behavior and analyzing perceptions of premium pricing in the luxury sector. Hypothesis H1 posited that brand equity significantly affects consumer decisions, while Hypothesis H2 suggested that consumers hold positive perceptions of premium pricing for luxury goods. The findings from one-sample t-tests revealed that all aspects of brand equity—reputation, perceived value, brand image, and brand establishment—are significantly associated with consumer purchase decisions, thereby supporting H1. Additionally, the results confirmed H2, demonstrating that consumers generally perceive premium pricing as justified, enhancing the desirability, perceived quality, and satisfaction associated with luxury products. These outcomes underscore the importance of maintaining strong brand equity and strategic premium pricing to sustain competitiveness and consumer loyalty in the luxury market. The study provides actionable insights for luxury brand managers to enhance brand equity and effectively implement pricing strategies that resonate with consumer perceptions. Furthermore, it highlights the need for ongoing research to explore cultural and demographic variations in luxury consumption behaviors.