When Social Media Backfires: The Impact of Psychological Distance on Perceived Values and Desirability of Luxury Brands

University of Minnesota Ph.D. dissertation. July 2018. Major: Design, Housing and Apparel. Advisors: Hyunjoo Im, Hye-Young Kim. 1 computer file (PDF); viii, 115 pages.This research focused on examining the impact of psychological distance of luxury brands prompted by various social media marketing tactics on perceived values and desirability of luxury brands within the context of social media marketing. The first research objective was to identify the determinants of psychological distance of luxury brands (i.e., consumer engagement strategy, formality of engagement, and message response time). The second research objective was to assess the impact of psychological distance on perceived values (i.e., social, exclusive, and quality values) and desirability of luxury brands. The last objective was to examine the interaction effect between psychological distance and consumers’ need for status to identify boundary conditions. To fulfill these research objectives, three pilot studies and three experimental studies were conducted. The result of Study 1 demonstrated that a luxury brand with a high level of consumer engagement is perceived to be psychologically close, and such a psychologically close brand was perceived to have lower social and exclusive values. The mediation analysis revealed that psychological distance was a full mediator for the relationships. Also, the results showed that there were interaction effects between psychological distance and need for status on perceived exclusive value and desirability. However, contrary to the prediction, the effect of psychological distance was pronounced for the low need for status group, not for the high need for status group. The results of Study 2 showed that a luxury brand displaying casual engagements with consumers was perceived as less psychologically distant, as it was predicted. However, there were no main effect of psychological distance and interaction effect between psychological distance and need for status. Study 3 demonstrated that when the luxury brand’s response time is shorter, it was perceived to be less psychologically distant. However, contrary to the prediction, the psychologically close luxury brand was perceived to have higher exclusive and quality values. Discussions of the findings, theoretical and practical implications, and limitations and suggestions for future research were provided