Conspicuous Consumption the Relationship Between Luxury Purchase Term Paper
- Length: 29 pages
- Subject: Business - Advertising
- Type: Term Paper
- Paper: #81374108
Excerpt from Term Paper :
The Relationship between Luxury Purchase as Conspicuous Consumption and Y Generation -Take Designer Brands for Example
Conspicuous consumption is a complex concept that requires a great deal of quandary. Conspicuous consumption is often thought of as unnecessary spending or the purchasing of products that are not necessities. Increases in upward mobility have increased conspicuous consumption patterns in nations around the world.
Marketing professionals are eager to find the target markets that engage in conspicuous consumption. The purpose of this thesis was to examine the conspicuous consumption of the Y Generation in Taiwan.
Our research found that there are clear differences between luxuries and necessities and that the characteristics that distinguish each can differ from country to country. The discussion also discovered that conspicuous consumption is defined as "the consumption of goods and services on a grand scale for the purpose of demonstrating pecuniary power rather than that of providing utility through use." (Bell et al.) The thesis demonstrated that Generation Y is likely to engage in conspicuous consumption and should be targeted as a potential market. We also found that the conspicuous spending of the Y generation has been greatly influenced by Baby boomers and Generation Xers that preceded them. We also discussed the results of a survey, which measured the conspicuous spending of Generation Y
The survey, consisting of 112 participants, focused on the frequency with which they purchased brand named products. The study suggests that many in this generation desire to purchase brand name products even if they can't afford them. The survey also suggest that generation Yers decision to purchase name brand clothing is based on the quality of the product, peer pressure and, psychological factors. The study also found that females in this generation are more likely to make conspicuous fashion purchases than their male counterparts were.
The implications of the study suggest that marketing professionals should attempt to market products to this segment of the population. The findings of the literature review and the subsequent survey illustrate that individuals in this generation have money and are willing to make conspicuous purchases. Marketers must grab hold of the potential that exist with this generation and attempt to get and keep their business.
Organizations trading merchandise in the marketplace realize that it is impossible to appeal to all consumers from different generations in the same manner. Therefore, market segmentation has always been considered one of the most important practices in marketing for the two following reasons. On the one hand, market segmentation is crucial because it directly affects how a market is understood and defined in the minds of consumers. On the other hand, market segmentation has strategic function in the process of target market selection and the subsequent development of successful and effective marketing programmes accordingly.
Due to the important role market segmentation plays in strategic marketing implementation, generation Y is a distinguishable target market segment that business operators must play close attention to. These operators must gain insight into behavioural purchase patterns as well as the underlying psychological motivation for the consumption of luxury products. With emerging massive purchasing power in years to come this generation will be a force to be reckoned with. Generation Y differs greatly from its preceding generations. Therefore, understanding what consumers are looking for from luxury products is increasingly important for marketers from luxury industries.
Luxury goods are expensive and sometimes considered as "trivial" products without any clear functional advantage over their "non-luxury" counterparts (Dubois and Duquesne, 2001). Therefore, it is generally believed that there should be some additional emotional appeal attached to the purchase of luxury goods that force people to spend a greater sum of money on luxury goods anything else. In her book The Consumer Society, Baudrillard (1983) proposed the following: only when physical objects become a chain of signifiers can they provide significant meanings of consumption, and upon which consumers are enabled to differentiate themselves from others by this ownership. (Baudrillard 1983) In other words, sometimes when people conduct a series of consumption, it is no longer a particular object in its specific utility that matters; but the underlying meaning of that object in representing personal identity, status or other symbolic values. (Baudrillard 1983)
Buadrillard's (1983) attitude toward consumption is quite similar, to a certain extent, to the previous theory known as conspicuous consumption from the initial U.S. publication of The Theory of the Leisure Class. According to the author, Veblen (1912) conspicuous consumption was defined as the purchase of more improved and elaborate goods as an indication of wealth, thus followed by a sense of personal comfort and well-being. Therefore, under the influence of conspicuous consumption, the value of physical goods is transformed into a kind of cultural signifier that is used by people as medium to communication with the outside world by offering the messages of abundance and affordability of high-priced items among certain individuals (Campbell, 1987).
Traditionally, luxury goods have long been treated as something one's mother / father used, or it was the preserve of rich and older people as only they could afford it. However, people's attitude toward luxury consumption nowadays is quite different, especially among those who are categorized as generation Yers (born between 1977 and 1994) mainly because of the following two reasons. On one hand, they have not experienced major risks as baby boomers and generation Xers have. Generally, generation Yers would describe themselves as "happy," "upbeat" and "confident" and enjoy the pleasure of purchasing material goods. (Dias, 2003)
On the other hand, due to the rise of technology, Internet companies and global economic warm up, there has been a so-called "nouveau-riche" young group of wealthy consumers created. In addition, there is also an increase of more than 50% in average household income. As a result, middle-class Generation Yers get more money to spend than any other group over the past 30 years. Because of the changes of generation Yers' behavioural attitude toward the outside world and the economic advantages they can both exploit and contribute to the growth of world luxury goods market to the tune of 9%. This is up in real terms from 1996-2000 as shown in Figure 1. From Figure 2, it is clear that watches and jewellery made up the fastest growing sector within in the five years, mainly because of the expansion of designer fashion brands into this category (Anon, 2001).
1.1 Focuses of This Dissertation
Although the changes of behavioural attitude and a better economic situation explain why consumers from generation Y are trading up from mass commodity goods to luxury products, it is still not comprehensive enough. A mentioned previously luxury goods, do not provide consumers with any obvious functional advantage over its counterpart. Therefore, luxury goods should be attractive to consumers only if there are other psychological benefits that they can acquire throughout the process of the consumption. In Tu-Chia Ling's (2001) dissertation, she has already identified that more and more generation Yers tend to buy luxury goods because of conspicuous reasons. Therefore, designer fashion will be selected out of other luxury categories, such as cars, cosmetics and jewellery, to focus upon because they are more concerned with everyday life.
There are three objectives to be met by this dissertation:
a. How do generation Y view designer goods? Do they view designer brand goods and mass merchandise differently?
b. Do generation Yers from different age ranges differ from one another in the way they view designer brand purchases as conspicuous consumption? Does the age difference have any influence on generation Yers' brand loyalty, product category preference/selection and price sensitivity?
c. How could designer brand fashion marketers adjust the marketing programme to the finding accordingly?
2.0 Literature Review
2.1.1 Luxury VS. Necessity
Distinguishing luxury from necessity can be a bit of a challenge in the 21st century. According to a book entitled Living It Up: Our Love Affair with Luxury, the word luxury is defined as "those things that you have that I think you shouldn't have." (Twitchell 2002) The book goes on to explain that those things that are defined as necessities today were once considered luxuries. The book explains that,
Almost without fail, one generation's indulgence becomes the next generation's necessity. Think buttons, window glass, rugs, fermented juice, the color purple, door handles, lace, enamel, candles, pillows, mirrors, combs, umbrellas.... As the nineteenth century gave way to the twentieth, indoor plumbing was thought a horrible waste of living space and an environmental hazard. Our government now considers its lack to be one of the markers of poverty. If you don't have it, you're considered destitute." (Twitchell 2002)
Although this explanation of luxury and necessity is accurate and relevant, there are concrete definitions of both words. Over the next few paragraphs, we will discuss these definitions and the ways in which luxury and necessity differ from one another. Let us begin our discussion with a more technical definition of luxury.
According to Webster's dictionary luxury is "A free indulgence in costly food, dress, furniture, or…