The Impact of Perceived Brand Prestige on Brand Loyalty in Luxury Brand Purchase Contexts: The Mediating Role of Brand Trust and The Moderating Effect of Self-esteem

Purpose: The purpose of this study is to verify the causal relationship between perceived brand prestige, brand trust, brand identification, and brand loyalty in the context of luxury brand purchase, and to identify the mediating role of brand trust in the relationship between these constructs. In addition, this study intends to examine the mode rating effect of self-esteem on the relationship between perceived brand prestige, brand trust, brand identification, and brand loyalty. Research design, data, and methodology: Data for this study were collected through face-to-face interviews with 281 customers who purchased or shopped for luxury products at various luxury stores. Reliability was confirmed by Cronbach’s α coefficient through internal consistency analysis for constructs identified in EFA. Convergence validity was confirmed by performing confirmatory factor analysis to derive measurement models for each research unit for the measured items. Discriminant validity was checked by comparing whether AVE was greater than the correlation squared value. Structural Equation Modeling Analysis was used to verify model fit and hypotheses. Results: As a result of analyzing the direct influence relationship between each component, perceived brand prestige had a positive effect on brand trust and brand loyalty, but did not affect brand identification. In addition, it was found that both brand trust and brand identification had a positive effect on brand loyalty, and the mediating effect of brand trust was confirmed in the relationship between perceived brand prestige and brand identification. As a result of analyzing the moderating effect of self-esteem, it was confirmed that there is a moderating effect of self-esteem in the relationship between perceived brand prestige and brand trust. However, it was confirmed that there was no moderating effect of self-esteem in the relationship between perceived brand prestige, brand loyalty, and brand identification. Implications: Luxury store managers must present brands that fit their identities in order to build a database of profitable customers and increase brand trust and brand loyalty. Additionally, since people with high self-esteem evaluate themselves positively and motivate them to engage with others socially, frontline workers must strengthen brand trust by providing superior service to highly profitable and high-esteem customers. Based on such high brand trust, companies or managers need to increase brand loyalty