Luxury Cruise Travelers

Abstract

The purpose of this study was to understand the role of other customer perceptions (OCP) in the formation of luxury cruise travelers’ social value, brand attachment, and willingness to pay a price premium. Based on a literature review, theoretical causal relationships between study variables were proposed. During the theory-building process, it was hypothesized that travelers’ face-consciousness levels could play a moderating role in the relationship between OCP and social value. The proposed hypotheses were empirically tested using data collected from 342 U.S. travelers who had taken a luxury cruise. Based on the results of data analysis, it was found that all three dimensions of OCP are critical factors in the formation of social value. More importantly, it was revealed only face-conscious travelers feel social value when they identify with the other upper-class passengers on a luxury cruise. The managerial implications of these findings are discussed.

Keywords

luxury cruise other customer perceptions (OCP)social value brand attachment face-consciousness

Introduction

A luxury cruise refers to a cruise trip that starts at a rate of $350 per day and serves upper-class consumers (De La Vina and Ford 2001). As average income levels increase and the standard of living improves, the luxury cruise business has become one of the fastest growing segments in the world (Best Cruise Deal 2011). Over the last two decades, the luxury cruise industry has been growing steadily, accounting for US$29.4 billion in gross revenue, with more than 19 million passengers carried worldwide in 2011 (Cruise Market Watch 2011). Moreover, the number of passengers has risen by 5% annually since 2001 (The Cruise Review 2011).

One of the most important motivations for taking a luxury cruise is achieving social value, which is defined as “the utility derived from the product’s ability to enhance social self-concept” (Sweeney and Soutar 2001, p. 211). For example, people often take luxury cruise trips because they are eager to tell their friends about the experience (Hosany and Witham 2010), seek to create a distinctive and prestigious image via the luxury cruise trip, or want to enhance their self-image by telling others about their trip. In other words, through the luxury consumption experience, passengers feel that their social status is enhanced (Vigneron and Johnson 1999). For this reason, the reputation of a cruise company influences the perceived quality of the trip (Petrick 2004). Scholars (e.g., Belen del Río, Vázquez, and Iglesias 2001; Park et al. 2010) have argued that when luxury cruise passengers’ perceived social value is enhanced through a cruise trip, they feel a passionate bond toward the cruise trip (brand attachment), and such cruise passengers are willing to accept the high price of the trip (willingness to pay a price premium). In this regard, enhancing luxury cruise travelers’ social value is a critical factor for the success of a luxury cruise company.

More importantly, it should be noted that cruise passengers’ social value is largely determined by other unacquainted passengers also traveling on the cruise (Douglas and Douglas 1999; Huang and Hsu 2010). Scholars named the concept as “other customer perception” (OCP) and defined it as “a customer’s perception towards other unacquainted customers in the service facility simultaneously with” (Brocato, Voorhees, and Baker 2012, p. 2). In the luxury consumption experience, it is important with whom luxury cruise passengers travel because observable characteristics of other customers have a significant effect on the individual evaluation of a luxury cruise experience (Brocato, Voorhees, and Baker 2012).

Another important issue in the luxury consumption research is the fact that a large number of consumers purchase luxury products because they want to be respected by those around them (Okonkwo 2009). Defined as “a sense of favorable social self worth that a person wants others to have of him or her in a relational and network context” (Ting-Toomey and Kurogi 1998, p. 187), the concept of “face-consciousness” explains such desire. Theoretically, as compared to people with low face-consciousness, people with high face-consciousness are more likely to satisfy their social value by socializing with upper-class individuals who share a similar social status (Liao and Wang 2009). This theorizes the moderating role of face-consciousness in the relationship between OCPs and social value.

By combining the existing theoretical background presented above, three hypotheses can be formulated: (1) positive OCPs on a luxury cruise trip enhance individual passengers’ social value; (2) when social value is enhanced, luxury cruise travelers will feel a passionate bond toward the cruise trip and thus accept the high price; and (3) face-consciousness plays a moderating role in the relationship between OCPs and social value. This study aims to empirically test the proposed hypotheses and contribute to the existing luxury cruise literature. In the next section, theoretical backgrounds for the proposed research questions are provided, followed by a presentation of the methodology, the data analysis results, and the implications of the results.

Literature Review

Social Value

Social value refers to “the utility derived from the product’s ability to enhance social self-concept” (Sweeney and Soutar 2001, p. 211). Social value is related to social approval and the enhancement of self-image among other people (Bearden and Netemeyer 1999). According to consumer behavior research, a large number of customers place more emphasis on social value rather than on functional value when making purchasing decisions about products/services (Pitta and Katsanis 1995). In many cases, although customers are satisfied with functional value (e.g., reasonable price and prompt service), if a brand name is not prestigious enough to satisfy their social value, they do not purchase the brand’s products (Aaker 1996; Pitta and Katsanis 1995; Steenkamp, Batra, and Alden 2003).

According to the existing literature (e.g., Rintamäki et al. 2006), social value is composed of two subdimensions: (1) status enhancement and (2) self-esteem enhancement. The first subdimension, status enhancement, is “a benefit attained by using symbolic features in communicating signs of position or membership to others” (Rintamäki et al. 2006, p. 15). Pursuing status enhancement originates from materialism, in which people engage in conspicuous consumption to display social status (Richins and Dawson 1992). People who seek status enhancement worry about how they are perceived by others and tend to focus on conspicuous consumption when shopping (Page 1992). For instance, people often take luxury cruise trips because they are eager to tell their friends about the experience. Through such trips, they can express their social status (e.g., wealth, fame) to other people, create a distinctive image via luxury consumption, and enhance their self-image by telling others about the experiences.

The second subdimension of social value, self-esteem enhancement, is “a benefit experienced when symbolic features derived from the company, store, products, personnel and other customers are attached to self in order to define and maintain one’s concept of self” (Rintamäki et al. 2006, p. 15). Self-esteem enhancement is linked with self-contentment. Consumption experiences sometime carry unique personal meaning to individual consumers, which helps to develop and strengthen the consumers’ self-concept (Belk 1988; Csikszentmihalyi 2000; Holbrook 1999, 2001; Solomon 1983). For instance, when taking a luxury cruise trip, passengers can feel that the trip is consistent with their style and thus believe that the trip helps to define and maintain their self-concept. Moreover, through the luxury consumption experience, people are satisfied that they belong to a special group that can afford the expensive price (which is very different from the cost of a cruise taken by general consumers) and are thus more likely to behave in accordance with the expectations of such a special group. For instance, passengers on a luxury cruise ship feel that they belong to a prestigious group that is different from general travelers and are thus more likely to exhibit dignified etiquette and to follow the cruise ship’s policies.

Other Customer Perceptions

In consumer behavior research, “other customers” are defined as customers who are in a service facility simultaneously with and who are unacquainted with a focal customer (Brocato, Voorhees, and Baker 2012, p. 2). OCP indicates a customer’s perception toward other unacquainted customers in a service facility. OCPs are important in the business environment, because customer’s behaviors are influenced by other customers either directly through interpersonal encounters or indirectly by being part of the environment (Martin 1996; Baker 1987). Martin and Pranter (1989) discovered that positive interaction with other customers greatly enhances overall satisfaction with the service experience and future patronage intentions. Expanding their research, Martin (1996) examined the role of other consumers’ behavior in the service facility and found that other customers’ psychological moods (happy, pleasant, or aroused) positively influence other consumers’ satisfaction levels and buying decisions. Lovelock (1996) found that other customers’ physical appearance and behavior psychologically influence other present customers’ decision making. Based on the findings, Lovelock suggested that managers should create a customer database composed of high-prestige customers who can be utilized to maintain a positive mood in the store environment. More importantly, Moore, Moore, and Capella’s (2005) study found that interaction with other customers plays a critical role in the formation of loyalty to a firm and positive word of mouth. In addition, Huang and Hsu (2010) examined the role of customer-to-customer interaction in the cruise industry using data collected from 616 cruise customers in the United States. Their structural equation modeling analysis revealed that the quality of customer-to-customer interaction positively affects the cruise experience. The next section of this study further discusses the components of OCP.

The Components of OCP

Scholars (Churchill 1979; DeVellis 1991; Gerbing and Anderson 1988; Netemeyer, Bearden, and Sharma 2003) suggested three theoretical subdimensions of OCP: (1) similarity, (2) physical appearance, and (3) suitable behavior.

Similarity

Similarity is defined as “the extent to which an individual customer felt that he/she is similar to and could identify with other customers in the service environment” (Brocato, Voorhees, and Baker 2012, p. 3). Social identity theory explains the concept of similarity. According to this theory, people develop their self-concepts by observing similarities with other people in a reference group (Hogg 2006). Moreover, people seek to classify themselves into certain groups that have similar characteristics, such as organizational membership, religious affiliation, gender, and age cohort (Tajfel and Turner 1985). People then tend to develop emotional bonds with others who share similar characteristics and thus seek to help one other and share their common interests (Albert and Whetten 1985; Ashforth and Mael 1989; Mintzberg 1983). Social identity theory further explains that customers in a commercial context like to stay with other customers with whom they feel similarities because they are more likely to feel at ease in such a circumstance.

Following the above logic, it can be theorized that in a luxury market segment, luxury consumers feel more pleased and comfortable when they stay/consume with consumers with a similar background, since people feel relaxed and comfortable when spending time with others with whom they feel similarities, and feel uncomfortable when staying with others with whom they are incompatible (Brocato, Voorhees, and Baker 2012). For example, the upper classes feel more pleased and experience a higher level of social status when staying with other passengers who have a similar level of social status (e.g., respectable job, high income) on a luxury cruise. In contrast, the upper classes tend to feel psychological distance and a lower level of social value if they travel with passengers in lower classes. For this reason, Grove and Fisk (1997) postulated that social value in the service industry can be formed when upper-class consumers are together with other customers with whom they feel similarities. Based on the above theoretical background, the following hypothesis can be derived:

Hypothesis 1: Similarity has a positive influence on luxury cruise passengers’ social value.

Physical Appearance

Physical appearance is defined as “the physical characteristics and overall look of other customers in the service environment as perceived by individual customers” (Brocato, Voorhees, and Baker 2012, p. 3). The physical appearance of other people creates an overall image and mood in the service environment (Trampe et al. 2010). As such, in consumer behavior research, the physical appearance of other people can play an important role as a factor in the physical environment (Eicher 1995). The M–R environmental psychology model (Mehrabian and Russell 1974) further explains the role of other customers’ physical appearance in individual consumers’ behavioral intentions. According to the M–R model, physical appearance in a service environment induces various emotional responses such as pleasure, arousal, and dominance (Machleit and Mantel 2001; Jang and Namkung 2009).

In luxury marketing, other customers’ physical appearance is an issue of greater importance than in other marketing areas. Upper-class customers consider other customers’ physical appearance (e.g., clothing, handbags, accessories) as important factors (Johnson, Schofield, and Yurchism 2002). For example, luxury cruise passengers expect that they will meet prestigious people (who possess expensive and prestigious clothing, handbags, and accessories) on a luxury cruise trip. If luxury cruise passengers perceive that other passengers are poorly dressed, they will be displeased because dress indicates social status (Pratt and Rafaeli 1997). In other words, other passengers’ physical appearances can be an important factor affecting the evaluation of social status and social value on a luxury cruise ship. For this reason, many luxury cruise companies implement a dress code policy in order to maintain their desired environment (e.g., The Yachts of Seabourn and Windstar Cruises). Along these lines, Paulins (2005) postulated that physical appearance plays an important role in enhancing social value. Based on the above theoretical backgrounds, this study proposes the following hypothesis:

Hypothesis 2: Physical appearance has a positive influence on luxury cruise passengers’ social value.

Suitable Behavior

Suitable behavior refers to “the extent to which an individual customer felt that other customers in the service environment behaved appropriately given the consumption context” (Brocato, Voorhees, and Baker 2012, p. 4). Role theory explains the concept of suitable behavior. According to this theory, human beings behave in ways that are different and predictable depending on their respective social identities and the situation (Biddle 1986, p. 68). People holding a high position in society are more likely to be self-conscious, so they tend to behave in accordance with their social status (Goffman 1967). More importantly, such self-conscious behaviors have a positive impact on the service evaluations of other customers in the service environment (Brocato, Voorhees, and Baker 2012).

The upper classes typically place great importance on maintaining a sense of decorum and thus tend to not only act in a stately manner but also are conscious of the eyes of others around them. More importantly, in the service environment, they expect to meet other customers who display such suitable behavior (DiMaggio and Useem 1978). For example, luxury cruise passengers are more likely to be polite and well educated, and thus are discreet in their behavior and considerate of others. Around such considerate behaviors, other passengers feel respected and overall social value increases on the luxury cruise. Martin (1996) argued that other customers’ suitable behavior significantly influences individual customers’ social value. On the other hand, behaviors that lack consideration for others’ feelings, such as rudeness or disturbances, make other passengers feel unpleasant, resulting in a low level of social value. The following hypothesis can thus be derived regarding the relationship between suitable behavior and social value:

Hypothesis 3: Suitable behavior has a positive influence on luxury cruise passengers’ social value.

Brand Attachment

Brand attachment is defined as the strength of the bond connecting a brand with a customer (Park et al. 2010). Brand attachment originated from the concept of attachment in psychology literature and is defined as the affect-laden bond between a person and a particular target (Bowlby 1979). According to attachment theory, people have a psychological instinct to rely on particular persons or objects (Bartholomew and Horowitz 1991). Thus, they develop and feel psychological ties with the persons or objects.

Researchers in the marketing field (e.g., Hyun and Kim 2012; Vlachos et al. 2010) extended and adapted the concept of attachment to the customer-brand relationship. For instance, Hyun and Kim (2012) examined how luxury restaurant patrons’ brand attachment can be developed. They conceptualized that restaurant servers’ five attentive behaviors are critical in developing brand attachment and tested the relationships using empirical data collected from 379 luxury restaurant patrons. Their structural equation modeling analysis revealed that restaurant employees’ five attentive behaviors help to build and strengthen brand attachment toward a luxury restaurant company. Similarly, Vlachos et al. (2010) proposed theoretical antecedents and consequences of brand attachment toward a retail company. They tested the relationships using empirical data collected from 163 supermarket customers. Based on the data analysis, they found that, in the retail setting, customers feel brand attachment when they feel strong levels of trust in employees.

Many luxury cruise passengers seek to express their economic and social status through traveling on a luxury cruise (Douglas and Douglas 1999). Satisfying social value is one of the most important motivations in luxury consumption (Dubois and Duquesne 1993; Wiedmann, Hennigs, and Siebels 2009). Therefore, when luxury cruise passengers feel that their social value has increased as a result of a trip, they tend to feel a passionate bond toward the cruise brand. In this sense, Carroll and Ahuvia (2006) stated that when a brand enhances one’s social value, the consumer builds strong brand attachment toward the company. Therefore, it can be hypothesized that satisfying luxury cruise travelers’ social value could create attachment toward the brand. Empirical studies further support this theoretical argument. For instance, Vlachos et al. (2010) proposed nine theoretical antecedents of brand attachment in the retail industry. They created a structural model that suggested the causal relationships between the nine antecedents and brand attachment. The structural model was tested using empirical data collected from 163 shoppers in grocery stores. Their data analysis revealed that self-esteem (a key subdimension of social value) has a critical impact in the formation of brand attachment. Similarly, Park et al.’s (2010) empirical research also showed that satisfying customer’s self-esteem (a key subdimension of social value) greatly enhances brand attachment level. Analyzing the data collected from 108 customers, they found high correlations between self-esteem items and brand attachment development. In other words, enhancing social value is vital in building/maintaining strong brand attachment. Based on the theoretical and empirical backgrounds, the following hypothesis is therefore derived:

Hypothesis 4: Social value has a positive influence on brand attachment.

Willingness to Pay a Price Premium

Willingness to pay a price premium is defined as “the amount a customer is willing to pay for his/her preferred brand over comparable/lesser brands of the same package size/quantity” (Netemeyer et al. 2004, p. 211). When customers feel that a particular brand’s product is of relatively high quality compared with other brands’ products, they are willing to pay a higher price than for competitors’ products. In other words, a price premium is considered compensation to a reputable brand that gives the impression of high quality to buyers (Ba and Pavlou 2002).

Many luxury cruise passengers seek to enhance their social value by taking luxury cruises (Douglas and Douglas 1999). Therefore, when compared with other relevant cruise trips, if a particular luxury cruise trip can contribute to a high level of social value, the passengers are willing to pay a price premium to the cruise company. Belen del Río, Vázquez, and Iglesias (2001) stated that social value is a critical predictor of passengers’ willingness to pay a price premium. Based on the above discussion, it can be hypothesized that social value is an important factor that has a positive impact on willingness to pay a price premium:

Hypothesis 5: Social value has a positive influence on willingness to pay a price premium.

Consumers who have an emotional attachment toward a particular brand are willing to pay higher prices for the brand’s products than for other brands’ products. Therefore, it is logical to hypothesize that brand attachment has a positive impact on willingness to pay a price premium. This theoretical argument has been empirically tested in previous studies (e.g., Thomson, MacInnis, and Park 2005; Fedorikhin, Park, and Thomson 2008). For example, Thomson, MacInnis, and Park (2005) found the positive influence of brand attachment on willingness to pay a price premium. By analyzing empirical data collected from 179 customers, they found significant causal relationship between brand attachment and willingness to pay a price premium. Similarly, Fedorikhin, Park, and Thomson (2008) analyzed 155 customers’ responses, and found that customers’ brand attachment directly leads to willingness to pay a price premium for the brand. Based on this theoretical argument, this study proposes the following hypothesis:

Hypothesis 6: Brand attachment has a positive influence on willingness to pay a price premium.

Face-Consciousness

Face is defined as “a sense of favorable social self worth that a person wants others to have of him or her in a relational and network context” (Ting-Toomey and Kurogi 1998, p. 187). More practically, face indicates the desire to be respected in interpersonal relationships. People with high face-consciousness seek to improve their social status because they want to project a prestigious image or have high social/political leverage over other people (Bao, Zhou, and Su 2003; Ting-Toomey 1988). In order to improve his or her social status, a face-conscious person places more emphasis on the extrinsic cues of a product (e.g., luxury brand, expensive goods) than on the intrinsic cues (e.g., practicality, quality, durability of product) when he or she purchases a product (Belk 1988). It is widely accepted that consuming luxury brands creates a prestigious image for an individual, thus helping to satisfy face-consciousness needs (Hwang 1987; Tse 1996). In other words, face-conscious people purchase luxury brands in order to display their social status and wealth to others (Wong and Ahuvia 1998). Empirical studies (e.g., Bao, Zhou, and Su 2003) have found that people with high face-consciousness are more likely to prefer name-brand products or high-priced products over other products.

More importantly, people with high face-consciousness are more likely to socialize with upper-class persons whose social statuses are similar to or higher than their own (Belk and Pollay 1985; Liao and Wang 2009). As compared to people with low face-consciousness, people with high face-consciousness are more likely to satisfy their social value in this manner. In contrast, people with low face-consciousness are less likely to satisfy their social value in this way even when they socialize with upper-class persons who have a similar social status, because people with low face-consciousness do not believe that other people’s class (or social network) can enhance their social value (Hwang 1987). It can be hypothesized that for people with high face-consciousness, OCP has a stronger impact on enhancing social value.

Hypothesis: Face-consciousness plays a moderating role in the relationship between other customer perceptions and social value (for people with high face-consciousness, other customer perception has a stronger impact on enhancing social value).

Hypothesis 7a: Face-consciousness plays a moderating role in the relationship between similarity and social value (for people with high face-consciousness, similarity has a stronger impact on enhancing social value).

Hypothesis 7b: Face-consciousness plays a moderating role in the relationship between physical appearance and social value (for people with high face-consciousness, physical appearance has a stronger impact on enhancing social value).

Hypothesis 7c: Face-consciousness plays a moderating role in the relationship between suitable behavior and social value (for people with high face-consciousness, suitable behavior has a stronger impact on enhancing social value).

Methodology

Proposed Conceptual Model

In the literature review section, this study derived nine theoretical hypotheses. Figure 1 graphically presents the nine hypotheses.

Figure 1.

Proposed conceptual model.

Measurement

To empirically measure the theoretical constructs in the proposed model, this study adapted multi-item scales that were validated by previous studies. OCP was measured with 13 items under three subdimensions employed by Brocato, Voorhees, and Baker (2012). Social value was measured using six items under two subdimensions adapted from Rintamäki et al. (2006). Brand attachment was measured with eight items cited from Carroll and Ahuvia (2006). Willingness to pay a price premium was measured using four items adapted from Netemeyer et al. (2004). Lastly, face-consciousness was measured using four items cited from Goffman (1955). Using the measurement items presented above, a questionnaire was developed. All of the questions were designed based on a five-point Likert-type scale, anchored from strongly disagree (1) to strongly agree (5).

Data Collection

To collect empirical data for this research, a U.S. cruise passenger panel data provided by an online survey company was used. On November 2012, an e-mail invitation was sent to the 15,243 cruise travelers. Of the 15,243 invitations sent, 3,776 cruise travelers participated in the survey. At the very beginning of the questionnaire, respondents were given a clear definition of the term luxury cruise as follows:

A luxury cruise refers to a cruise trip that starts at a rate of $350 per day and serves upper-class consumers. (De La Vina and Ford 2001)

A screening question was then given to the respondents: “Have you taken a luxury cruise trip in the past three months?” If a respondent answered no, he/she was terminated from the survey. In this manner, the study collected a qualified sample of individuals who had taken a luxury cruise (that started at a rate of $350 per day) in the past three months. Out of the 3,776 cruise travelers who responded, only 350 had taken a luxury cruise that started at a rate of $350 per day. Via visual inspection and a Mahalanobis distance check, eight outliers were detected from the 350 responses and were thus removed from further data analysis. Consequently, 342 usable responses remained for further analysis.

Data Analysis

Profile of the sample

Of the sample of 342 respondents, 190 (55.6%) were male and 152 (44.4%) were female. The respondents’ age distribution showed fairly normal distribution from 20 to 80 years, with a mean value of 45.7 years of age. Regarding education, 73.1% of the respondents possessed bachelor’s or graduate degrees (43.0% for the former and 30.1% for the latter). With regard to income, it was found that the luxury cruise passengers possessed relatively high levels of annual income: 45.4% of passengers reported an annual income of higher than $100,000; 73.5% of passengers reported an annual income of higher than $70,000. Only 5.5% of the passengers reported that their income was lower than $40,000. In summary, overall, the luxury cruise travelers were well-educated people who possessed relatively high levels of income.

Confirmatory factor analysis

The confirmatory factor analysis (CFA) results showed that the overall fit of the measurement model was acceptable (incremental fit index [IFI] = .915, comparative fit index [CFI] = .914, Tucker–Lewis index [TLI] = .904, root mean square error of approximation [RMSEA] = .07) (Byrne 2001). Table 1 shows the specific variables used in this study, with their standardized factor loadings. All of the factor loadings were equal to or higher than .710 and were significant at the .001 level, with t-values ranging from 12.90 to 23.83.

Table 1.

Confirmatory Factor Analysis: Items and Loadings.

Construct and Scale Items	Standardized Loading^a
Other customer perceptions
Similarity
I could identify with the other passengers on the luxury cruise.	.799
I felt similar to the other passengers on the luxury cruise.	.849
The other passengers on the luxury cruise were like me.	.912
The other passengers on the cruise came from a similar background as mine.	.776
I fit right in with the other passengers on the cruise.	.828
Physical appearance
I liked the appearance of the other passengers on the cruise.	.827
The other passengers on the cruise were dressed appropriately.	.816
The other passengers on the cruise looked nice.	.886
The other passengers on the cruise looked like they were my type of people.	.880
Appropriate behavior
The behavior of the other passengers on the luxury cruise was appropriate for the setting.	.828
The other passengers on the cruise were friendly toward me.	.853
I found that the other passengers behaved well on the cruise.	.882
On the cruise, the other passengers’ behavior was pleasant.	.853
Social value
Status
Traveling by luxury cruise trip fits the impression that I want to give to others.	.867
I am eager to tell my friends/acquaintances about the luxury cruise trip I took.	.852
I can express my social status to other people through traveling on a luxury cruise.	.859
Self-esteem
I found a luxury cruise trip that is consistent with my style.	.819
I felt like a smart traveler because I had a successful cruise trip.	.860
The luxury cruise trip gave me something that is personally important or pleasing to me.	.830
Brand attachment
I love traveling with this luxury cruise brand.	.715
I am passionate about this luxury cruise brand.	.861
This luxury cruise brand reminds me of people that I love and beautiful experiences.	.875
If I were describing myself, this luxury cruise brand would likely be something that I would mention.	.862
If someone ridiculed this luxury cruise brand, I would feel irritated.	.729
If someone praised this luxury cruise brand, I would feel somewhat praised myself.	.787
People who know me might sometimes think about me traveling with this luxury cruise brand when they think of me.	.791
I would feel sorry if this luxury cruise brand ceased its operations.	.710
Willingness to pay price premium
The price of this luxury cruise would have to go up quite a bit before I would switch to another brand of cruise.	.820
I am willing to pay a higher price for this luxury cruise brand than for other cruise brands.	.935
I am willing to pay ___% more for this luxury cruise brand over other cruise brands.	.907
I am willing to pay a lot more for this luxury cruise brand than for other cruise brands.	.846

All factors loadings are significant at p <.001.

As shown in Table 2, the average variance extracted (AVE) for all constructs was greater than .50, which supported acceptable convergent validity of the scales. The composite reliabilities of all of the constructs were higher than the .70 threshold value (ranging from .914 to .939), showing that all of the constructs in the proposed model had adequate internal consistency (Hair et al. 1998).

Table 2.

Descriptive Statistics and Associated Measures.

	No. of Items	Mean (SD)	AVE	Similarity	Physical Appearance	Appropriate Behavior	Social Value	Brand Attachment	Willingness to Pay Price Premium
Similarity	5	3.89 (0.76)	.696	.919^a	.867^b	.732	.834	.740	.631
Physical appearance	4	3.94 (0.76)	.727	.752^c	.914	.821	.831	.710	.598
Appropriate behavior	4	4.07 (0.73)	.730	.536	.674	.915	.781	.630	.458
Social value	6	3.94 (0.74)	.719	.696	.691	.610	.939	.931	.708
Brand attachment	8	3.82 (0.81)	.630	.548	.504	.397	.867	.931	.777
Willingness to pay price premium	4	3.52 (0.99)	.771	.398	.358	.210	.501	.604	.931

Note: Goodness-of-fit statistics: χ ²(416) = 1289.069, p < .001, χ²/df = 3.099. Incremental fit index = .915; comparative fit index = .914; Tucker–Lewis index = .904; root mean square error of approximation = .07.

composite reliabilities are along the diagonal.

correlations are above the diagonal.

squared correlations are below the diagonal.

Lastly, discriminant validity was checked by comparing the AVE values with squared correlations between the two constructs of interest (Fornell and Larcker 1981). As presented in Table 3, the AVE for each construct was greater than all of the squared correlations (R²) between pairs of constructs with the exception of one pair: social value and brand attachment. In a case such as this, discriminant validity should be further investigated by combining two constructs into a single construct and then conducting a χ² difference test on the values given by the combined constructs (in this case, combining social value and brand attachment) and uncombined models (in this case, separating social value and brand attachment) (Bagozzi and Yi 1988). According to the data analysis results, the χ² difference was 99.827, which was higher than 11.07 (df = 5, p < .001). Therefore, discriminant validity was confirmed. In summary, the CFA results supported the convergent validity, discriminant validity, and internal consistency of scales.

Table 3.

Standardized Parameter Estimates for Structural Model.

Paths	Standardized Estimate	t Value	Hypothesis
Hypothesis 1: Similarity→Social value	.468	5.350	Not rejected
Hypothesis 2: Physical appearance→Social value	.226	2.115	Not rejected
Hypothesis 3: Suitable behavior→Social value	.218	3.068	Not rejected
Hypothesis 4: Social value→Brand attachment	.913	16.668	Not rejected
Hypothesis 5: Social value→Willingness to pay a price premium	−.018	−.134	Rejected
Hypothesis 6: Brand attachment Willingness to pay a price premium	.794	5.695	Not rejected
Hypothesis 7a: Face-consciousness’s moderating function between similarity and social value			Not rejected
Hypothesis 7b: Face-consciousness’s moderating function between physical appearance and social value			Rejected
Hypothesis 7c: Face-consciousness’s moderating function between suitable behavior and social value			Rejected

Note: Goodness-of-fit statistics: χ² = 1317.841, df = 422, χ²/df = 3.123. p < .001, incremental fit index = .912; comparative fit index = .912; Tucker–Lewis index = .904; root mean square error of approximation = .07.

Structural model

Fit indices obtained from AMOS indicated that the proposed model had an adequate fit (IFI = .912, CFI = .912, TLI = .904, RMSEA = .07; Byrne, 2001). Figure 2 provides the SEM results with standardized path coefficients. Based on data analysis, hypothesis 1, which suggested a significant relationship between similarity and social value, was not rejected (standardized coefficient = .468, t = 5.350, p < .05). Hypothesis 2 proposed a positive relationship between physical appearance and social value, and was not rejected (standardized coefficient = .226, t = 2.115, p < .05). Hypothesis 3, which predicted a positive relationship between suitable behavior and social value, was not rejected (standardized coefficient = .218, t = 3.068, p < .05). Hypothesis 4, which proposed a positive relationship between social value and brand attachment, was not rejected (standardized coefficient = .913, t = 16.668, p < .05). However, hypothesis 5, which proposed that social value positively influences willingness to pay a price premium, was rejected (t = .018, p = .134). Lastly, hypothesis 6 suggested a direct path linking brand attachment and willingness to pay a price premium, and was not rejected (standardized coefficient = .794, t = 5.695, p < .05). Table 3 summarizes the results of testing the hypotheses.

Figure 2.

Standardized theoretical path coefficients.

Testing the moderating effect of face-consciousness

In the literature review section, this study hypothesized the moderating function of face-consciousness (hypotheses 7a, 7b, and 7c). To statistically evaluate the moderating effects of face-consciousness, this study adapted a multiple-group analysis (Byrne, 2001). The sample (n = 342) was divided into two subgroups (a low face-consciousness group and a high face-consciousness group) based on a moderator score. The moderator score (face-consciousness score) was calculated by adding the four face-consciousness scale items. Then, the study employed multiple-group analyses following a hierarchical approach that compared two subgroups selected based on the median split of the moderating score (Chandrashekaran and Grewal 2003). To empirically examine the differential effects of face-consciousness between high and low face-consciousness groups, the chi-square difference between constrained and unconstrained models was checked in terms of the difference in degrees of freedom (Anderson and Gerbing 1988).

First, the moderating function of face-consciousness in the relationship between similarity and social value was assessed (hypothesis 7a). The standardized path (between similarity and social value) was compared between the low and high face-consciousness groups. The difference of chi-square value between the unconstrained model and the constrained model was significant at the .05 level, χ² = 4.20 > χ²_0.05(1) = 3.84, df = 1. This result indicates that the effect of similarity on social value is significantly different across face-consciousness levels. Thus, hypothesis 7a was not rejected. With regard to the high face-consciousness group, the path coefficient was .724 (p < .001). In contrast, for the low face-consciousness group, the path coefficient was not significant (path coefficient = .259, p = .591). In summary, similarity was found to be effective in enhancing social value only in the high face-consciousness group. In the low face-consciousness group, the impact of similarity on social value was not statistically effective.

Second, the moderating function of face-consciousness in the relationship between physical appearance and social value was assessed (hypothesis 7b). The difference of chi-square value between the unconstrained model and the constrained model was not significant at the .05 level, χ² = 2.936 < χ²_0.05(1) = 3.84, df = 1. This finding indicates that the effect of physical appearance on social value is not significantly different across face-consciousness levels. Thus, hypothesis 7b was rejected.

Lastly, the moderating function of face-consciousness in the relationship between suitable behavior and social value was assessed (hypothesis 7c). The difference of chi-square value between the unconstrained model and the constrained model was not significant at the .05 level, χ² = .627 < χ²_0.05(1) = 3.84, df = 1. This finding indicates that the effect of suitable behavior on social value is not significantly different across face-consciousness levels. Thus, hypothesis 7c was rejected.

The next section of this research discusses each statistical hypothesis testing result, the possible elucidation/interpretation for these results, and the theoretical/managerial implications of the findings.

Discussions and Implications

The data analysis results revealed that all of the three subdimensions of OCP bear a significant impact on social value. Among them, similarity had the strongest impact on social value (.468, p < .05). In the history of OCP research, scholars have postulated that when customers feel similarity (e.g., similar education level, similar income level) with other customers in a service environment, they tend to evaluate the overall service quality favorably (e.g., Brocato, Voorhees, and Baker 2012; Grove and Fisk 1997; Martin 1996). This study extends the existing literature by identifying the effect of similarity on social value in the luxury cruise industry. That is, luxury cruise passengers perceive higher levels of social value when staying with others who come from a similar background (e.g., upper class, high income holder, specialized job holder). Therefore, for the successful marketing of a luxury cruise company, it is necessary to give an impression that passengers on the cruise ship belong to the upper class. For example, it may be effective to emphasize through advertisements that a specific luxury cruise ship serves only upper-class customers who have an ability to pay $350 per day. In addition, 45.4% of the passengers in the study possessed an annual income of over $100,000. Therefore, it may be a beneficial strategy to show a brief customer profile (e.g., passengers’ average income levels, occupations) in promotional materials (Meredith 1985). This strategy can emphasize to luxury cruise passengers that other passengers are also upper-class travelers, which greatly enhances social value perception. In addition, extending invitations to famous people (e.g., men of wealth in the world, sports stars, television stars, and movie stars) can make luxury cruise passengers feel that they are traveling with the upper class (Kurzman et al. 2007), making them more likely to feel similarity to other passengers and maximizing their social value.

If a luxury cruise provides relaxed and comfortable meeting points where passengers can socialize together, they are more likely to perceive high social value on the luxury cruise. For instance, luxury cruise managers can develop programs such as a wine tasting and a formal evening party to encourage likeminded passengers to meet for personal exchanges with similar groups belonging to the upper social class (Hyun and Kim 2011). Therefore, luxury cruise managers should create customer databases with individual profile information such as occupation and income level in order to segment luxury cruise passengers into similar groups (Kara and Kayn 1997).

The results of the study also indicated that physical appearance has a positive influence on social value (.226, p < .05). It has long been discussed that in a service environment, other customers’ physical appearance helps to induce positive emotional responses, which lead to positive behavioral intentions (e.g., Brocato, Voorhees, and Baker 2012; Johnson, Schofield, and Yurchism 2002; Paulins 2005). For example, Brocato, Voorhees, and Baker’s (2012) study found that customers consider other customers’ physical appearance as a critical factor in evaluating a service environment. When customers perceive the attractive physical appearance of other customers in a service environment, they feel positive emotions and are more likely to enjoy staying in such an environment. This study replicated and further extended the existing literature by finding a significant relationship between physical appearance and social value in the luxury cruise industry. In other words, luxury cruise passengers perceive higher levels of social value when (1) other passengers are well dressed, (2) other passengers on the cruise look nice, (3) other passengers’ appearances are attractive.

This finding provides important practical implications for luxury cruise managers. First and foremost, luxury cruise personnel need to enforce the application of the dress code policy (Cruise Critic 2012a). For example, even though passengers are a cruise company’s valued customers, those who are poorly dressed should be resolutely refused entrance to public facilities on the ship (e.g., restaurant, shopping mall, convention center, etc). If poorly dressed passengers are granted admission into such facilities, other cruise passengers will experience negative emotional responses and a corresponding low level of social value. Therefore, it is a useful strategy to post a statement about the dress code policy at the cruise ship entrance. Second, the dress code policy must be clearly defined. In particular, there are many onboard facilities that are conceptually distinct from one another; therefore, the dress code should be developed according to the characteristics of each facility. For instance, at a dinner party, male passengers are typically required to wear tuxedos or suits and ties while female passengers are required to wear cocktail dresses or pants suits. It is also important to provide more detailed information about a facility, event, or party in advance so that passengers are prepared to dress appropriately for each setting. Furthermore, since passengers may not wish to bring excessive amounts of luggage on board with many multiples of items such as clothes, shoes, accessories, and handbags, it can be beneficial to provide apparel rental to promote convenience and adherence to the dress codes. Finally, managing cruise ship employees’ appearance and dress is critical because these factors have an important impact on customers’ service experiences (Bitner, Booms, and Mohr 1994; Qu and Ping 1999). Since employee uniforms can help to lend a prestigious image to passengers (Pettinger 2004), employees should be expected to consistently maintain a high level of tidiness in their dress and appearance.

In addition, based on the data analysis results, it was revealed that suitable behavior also has a positive influence on social value (.218, p < .05). Scholars and practitioners strongly believe that other customers’ behavior in a service environment plays an important role in overall service evaluation (Brocato, Voorhees, and Baker 2012; DiMaggio and Useem 1978; Martin 1996). When other customers smoke in a service environment, spit in the service facility, or create mayhem due to misbehaving children, customers evaluate the service environment negatively. In contrast, other passengers’ polite/appropriate behavior can lead to positive service experiences. This study replicated this theoretical argument and further extended it by empirically testing the relationship between suitable behavior and social value in the luxury cruise industry: luxury cruise passengers feel high social value when other passengers on the cruise ship behave appropriately. Since behavior is easily influenced by the surrounding environment (Altman 1975), it is imperative to provide a luxurious atmosphere where people are more likely to behave with dignity and grace. For instance, paintings and sculptures by well-known artists can lend a luxury image that encourages passengers to act in a stately manner. The light level is also important, and the use of subdued, comfortable, and warm lighting creates a luxurious image (Ryu and Jang 2007). Playing classical and slow-tempo music is recommended for creating an elegant ambience that encourages passengers to use good etiquette (Areni 2003). In addition, slow-tempo music is relaxing (Oakes 2003), promoting courteous behaviors.

To provide a luxurious atmosphere, minimizing noise and activity from children is also important. Since nearly 70 percent of cruise passengers travel with children (Cruise Critic 2012b), it is imperative to develop a variety of child-friendly programs and places in order to promote a peaceful environment in other areas. Finally, the importance of appropriate behavior is no exception to employees. In fact, the attitude of employee service toward passengers is a key factor affecting the evaluation of the overall cruise experience (Chen and Quester 2006; Henthorne 2000; Petrick, Tonner, and Quinn 2006). Luxury cruise passengers anticipate an exceptional experience and are particularly sensitive to courteous service. It is therefore imperative to develop systematic training programs for employees so that they can provide consistently outstanding service to passengers.

The data analysis results showed that social value plays a critical role in the formation of cruise travelers’ brand attachment formation (.913, p < .05). In the history of consumer behavior research, scholars argued that social value promotes customers’ positive interpersonal communication and information dissemination (Rogers 1962; Robertson 1967; Sheth, Newman, and Gross 1991), thus inducing positive behavioral intentions (Aaker 1996; Pitta and Katsanis 1995; Steenkamp, Batra, and Alden 2003). This study replicated the existing argument and further extended it by identifying the positive relationship between social value and brand attachment in the luxury cruise setting. That is, passengers who perceive social value during a cruise are more likely to feel a passionate bond toward the cruise brand. As discussed earlier, enhancing social value is one of the key motivations of luxury cruise travel. It should be noted that the prestigious image of a cruise brand is critical in the formation of social value. In fact, when customers enjoy shopping for luxury goods, they feel that they belong to high society because of the prestigious image of the products/services that they purchase (Steenkamp, Batra, and Alden 2003). Therefore, it is critical to provide high-quality products/services in order to promote a prestigious image. For example, if a luxury cruise company hires a professional food stylist with superior food decoration skills that create a prestigious image, the passengers are more likely to experience a high level of social value (Hwang and Hyun 2012). In addition, it is beneficial to provide impressive entertainment programs that create a prestigious image of the cruise (Coggins 2004).

Another key contribution of this research is identifying the important role of brand attachment in the luxury cruise industry. While the causal relationship between social value and willingness to pay a price premium is not significant (.018, p = .893), it was revealed that brand attachment is an important factor affecting willingness to pay a price premium (.794, p < .05). Although several consumer behavior studies have shown a positive relationship between brand attachment and willingness to pay a price premium in the retail industry (e.g., Fedorikhin, Park, and Thomson 2008; Thomson, MacInnis, and Park 2005), no previous study has investigated this relationship in the cruise industry. This study replicated the results of the existing theory and further extended it by empirically testing the relationships between brand attachment and willingness to pay price premium in the luxury cruise industry. It can be interpreted that if cruise passengers have an emotional attachment toward a luxury cruise brand, they are willing to pay higher prices. From a managerial perspective, it is important to make customers feel psychological ties with a luxury cruise brand in order to enhance their willingness to pay a price premium. It can therefore be useful to send customers e-mails on special occasions such as anniversaries and birthdays, and on holidays (e.g., Christmas and New Year) to remind customers that the luxury cruise brand is always present to offer psychological connection (Hwang and Hyun 2013).

Finally, this study found the moderating role of face-consciousness in the relationship between similarity and social value. Similarity was found to be effective in enhancing value only in the high face-consciousness group. In the low face-consciousness group, the impact of similarity on social value was not statistically significant. In other words, only face-conscious passengers feel social value when they identify with the other passengers on a luxury cruise. Non-face-conscious travelers, even if they cruise with members of the upper class, do not feel social value from the experience. This finding provides key practical implications for luxury cruise managers. First, it is imperative to develop a customer database segmented by customers’ levels of face-consciousness. For example, luxury cruise managers can gather personal information about patrons at the point of departure or by placing questionnaires in cabins (Hyun 2010; Kotler, Bowen, and Makens 1998). Cruise managers should then target high face-consciousness travelers when advertising their cruise packages by employing famous people such as sports stars, television stars, and movie stars for spokespersons for promotional materials (Magnini, Garcia, and Honeycutt 2010). When a luxury cruise company periodically sends out such promotional materials, their customers with high face-consciousness are more likely to feel similarities when perceiving these celebrities in advertisements. In addition, it is a good strategy to enhance social value by introducing luxury cruise passengers’ backgrounds (e.g., social and economic forces) in order to make them feel that the other passengers have a similar background. Via such practical strategies, luxury cruise companies can maximize their marketing effectiveness. A relatively large number of studies have examined the role of face-consciousness in Asian market segments (e.g., Liao and Wang 2009). However, the existing literature provides clear evidence that face-consciousness also plays an important role in Western consumers’ decision making (e.g., Bao, Zhou, and Su 2003). For this reason, this research applied the concept of face-consciousness to a Western cruise tourist market. This study’s data analysis results also showed that face-consciousness clearly plays an important moderating role in Western cruise travelers’ decision making. Given that no previous tourism research has examined the role of face-consciousness previously, the findings of this study provide guidelines for future tourism studies.

Limitations and Future Research

The two limitations of this study should be noted. First, the data utilized in this study was collected from luxury cruise passengers in the United States. Therefore, the extent to which the conclusions are cross-culturally generalizable is somewhat limited. Future research is necessary to test the proposed model using cruise panel data collected from non-U.S. citizens. Second, the sample may not exactly represent typical luxury cruise passengers because the data analysis showed that about half of the respondents earned less than $100,000 per year. Although 73.5% of the sample reported an annual income of higher than $70,000, it is necessary to reexamine the proposed hypotheses using a sample with higher levels of annual income. For a more valid and reliable conclusion, further research is needed to collect data from such passengers.

Given that a proper understanding of OCP is critical to a luxury cruise company’s achieving marketing competency and that social value is directly related to willingness to pay a price premium for a cruise trip, the model developed in this study may help cruise companies to maximize marketing effectiveness and profits.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Author Biographies

Sunghyup Sean Hyun is an associate professor in the Department of Tourism and Convention at Pusan National University. He received his MA in hospitality and tourism management in 2005 from the University of Massachusetts-Amherst and earned his Ph.D. in hospitality and tourism in 2009 from Virginia Polytechnic Institute and State University. He has published many papers in the area of hospitality and tourism marketing, focusing on brand equity, customer equity, advertising, emotions, and communication. He received the Best Researcher Award from Pusan National University in 2012 in recognition of his work and has been the chair of Pusan National University’s Department of Tourism and Convention since 2011.

Heesup Han is an Associate Professor in the College of Hospitality and Tourism Management at Sejong University, Korea. His research interests include airline, medical tourism, green hotels, and hospitality and tourism marketing. His papers have been selected as the most downloaded and read articles in many top-tier hospitality and tourism journals. Heesup Han was selected by the International Biographical Center (IBC) to be the Top 100 Educators - 2011 in the arena of hospitality and tourism, and recognized by the American Biographical Institute (ABI) to be the Man of the Year – 2011 in hospitality and tourism.

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