Abstract

Chinese market’s prosperity have received a huge amount of attention from marketing
researchers. Entered into China in 1980s, coffee—this totally Western beverage has achieved a huge success in China with the expansion of Starbuck in 168 Chinese cities and is still continuing its business glory in China today (Biederman 2005). Previous studies about Chinese coffee consumption have discussed its development. However, few of them studied the motivation and drivers for Chinese people to consume coffee, especially consuming coffee in the coffee shop. Thus, our study uses the coffee shop as a useful example to illustrate that the function of luxuriousness together within Western products would be an important determinant influencing Chinese consumers’ purchase intention and willingness to pay more for a Western product with luxuriousness value. Likewise, our study fills the theoretical gap to understand the real motivation for Chinese consumers’ coffee consumption. Our findings suggest that the Perceived luxuriousness of the physical environment of the coffee shop in China induce both higher perceived quality of coffee and consistent self- congruency, which lead to positive store attitudes, thus increasing willingness to pay a premium price for the coffee. In addition, we find that perceived luxuriousness of the physical environment of the coffee shop would induce a high level of self-congruence for high cosmopolitan consumers, compared with those who are low cosmopolitan. The managerial implication of this study suggests that the establishment of luxuriousness in the physical setting of a coffee shop would be crucial to attract consumers’ attention and that managers should use premium pricing strategy to ensure the superior value of coffee that fit with coffee consumers’ identity in China.