In conclusion, conspicuous consumption the acknowledgement of purchases with aim to display wealth and social status. Marketers, have noticed this behaviour among conspicuous consumers, so they develop and brand products to help consumers satisfy this need for social recognition. On the other hand, conspicuous consumption can have effect on the compounding issue of poverty. Because when poor person purchases a luxury products, he feels good and see it as an opportunity to display themselves as been rich. However, the problem arises when the feeling is short leaved, and they decide to spend money that they may not have on these products. A good question to ask is whether to tag conspicuous consumption as good or bad. This rather a hard question because while some consumers might actually be able to afford the conspicuous purchases, it might lead others to economic despair in the bid to seek or maintain social status. To sum up, the consumers are the sole decider of whether to a product is given a luxury acceptance, if the consumers can decide on what can be placed as luxury product or not, then consumers can use their income on the good rather than allowing marketers (through the use of luxury products) determine their spending habit by engaging in conspicuous purchases for social acceptance.
Luxury markets are already important, and with inequality poised to grow further, these markets will become ever more so. Those who fail to understand them cannot hope to understand what drives the world economy. That goal will remain elusive until we recognize that the wealthy are essentially similar to the rest of us. They just have a lot more money.
Each day, for instance, many of us consume espresso brews priced at what would be almost a week’s wages in other parts of the world. We’d be offended if someone described these purchases as attempts to display our wealth. And we’d be puzzled if someone said we’d buy even more lattes if our favorite cafe were to raise its prices. The coffee just tastes better, we’d say, and we’re willing to pay a premium for that.
The rich, of course, are willing to spend more, often a lot more, for products that deliver quality improvements they value. But few of them want to throw money away. In that respect, they’re like middle-income Americans, many of whom don’t feel especially prosperous these days. Yet relative both to current world standards and to living standards of the past, middle-income Americans are incredibly wealthy. And when viewed from the perspective of those standards, much of their current consumption is strikingly similar to that of today’s rich.
According to Veblen, showing of wealth is less important than he thought. In his articles, he says “the Rich buy luxury goods for several motives, even the ones showing up their wealth do find ways of doing that. Why buy an expensive good when you can show your riches just as effective with an equally expensive good that you actually like? To be sure, billionaires are often willing to spend enormous sums for beautiful things that can’t be duplicated at low cost. But almost none of them would want to buy more of something simply because its price had risen”. If they were merely chasing Veblen goods, the rich would be easily exploited by the purveyors of luxury items. Yet the markets for these goods are among the most bitterly contested, and not just because the stakes are so high. Thousands of wine producers spend small fortunes trying to achieve 96-point Robert Parker ratings, but very few get them.
The “Veblen goods” term was introduced by Thorstein Veblen, who interpreted what consumption by the rich is as an attempt to show up their wealth. “In his view, the lavish summer mansions of 19th-century industrialists in Newport, R.I., were valued less for their own sake than for the fact that they marked their owners as people of wealth and power”.
These has made our generation become what we aren’t, just because we want to make our peers see us in designer brands and all, the social norms of consumption are inclining every single time with the help of the media and advertisement we see, we tend to let them get to us and before we know what is going on we are already out with our credit card and within a click we have purchased the commodity. These are what the affluent ones usually violate, the law of demand. Which says as the price of goods geos up, the consumers buys less. however, these is opposite to the rich because they are someone who go after what it is called the “Veblen goods” which is as price of the goods go up, the sales also go up.
How the conspicuous consumption has taken over our society, imagine someone buying a Mercedes Benz on financing just to off his wealth status and all, even though he has what it takes to get a Honda and pays it in full, but because he wants to let his other peers see him has a big guy or to make the ladies think of him has a “big” boy, he allows peer pressure to take over him. Meanwhile both the Honda and the Benz goes on the same road, same gas and all, just the luxury taste that makes it different.
Recently, Conspicuous consumption has been on the increase because the consumers have enough of money, yet are they different from the other class like the middle class and all? The growth of income has deeply focused at the very top, and luxury goods have become the prime drivers of economic activity around the world. To understand these goods, we must understand the motives of the customers they serve, and it’s here that many analysts have stumbled.
There are a few factors responsible for consumer behaviour when it comes to the issue of conspicuous consumption, one of the factors is the role the media has played in passing on fascinating images of wealthy lifestyles to the targeted audience. There was a conspicuous change in the commercial media like television, social media platforms, magazines, etc. The media portray the expensive lifestyles as the social custom which people should aim. For example, advertising campaigns for luxury products often come without jingles, and as little information about the product as possible. These adverts portray the products with some sense of class, taste, and elegance to the conspicuous consumers. As a result, the consumer’s desire is aroused by the variety of products advised by the media .
Consumer Behaviour and Luxury products
Conspicuous consumption comes in various forms. In this write, I will be looking at the roles conspicuous consumption plays in consumer behaviour and product branding.
The concept of conspicuous consumption has eaten deep into our society, to extent it is being overlooked. Consumers desire products and services to show their social status; thus, this desire has given way for marketers create and promote certain products to satisfy this desire for status recognition. Although, some consumers have benefitted from the development and promotion of such products, conspicuous consumption has escalated the issue of poverty within the society.
Further, it is believed the shifting of income and wealth of consumers is one of the factors influencing new consumerism. As an example, the US and other advanced countries have experience change towards greater inequality in terms of the shared income and wealth going to the top 20 percent of the population . This outcome of upward redeployment has increasingly enabled those at the top of the socio-economic ladder to engage in all manner of luxury spending and conspicuous consumption. In return, the rising consumption norms of this wealthy minority have affected the ways in which the great majority of people who feel about their real self. Generally, if consumer feel their social status is not sufficient enough, they tend to look for ways to develop their own aspirations to compensate in those areas where they feel insufficient in hopes for social acceptance and recognition.
Juliet Schor, in her article “The New Politics of Consumption” in the summer of 1999, stated that the everyday life of consumers and the development of consumption give rise to the “New Consumerism”, which means the upscaling of the lifestyle norms, status goods and the competition for acquiring them; and the growing disconnect between consumer desires and incomes. The basic idea is that, the desire for social status and recognition in the present generation has compounded is issue of conspicuous consumption, as opposed to the old era where a comfortable and decent middle-class existence was the more common goal. This shows that the world is changing and the issue of conspicuous consumption is becoming a global reality .
The issue of conspicuous consumption was predominant in Europe and was dated back as far as 1700 AD. During these period, social stratification was the order of the day with a clear concentration of wealth at the top social pyramid. Conspicuous consumption was mostly enjoyed by those who either by inheritance or by office enjoyed social status and power. This social hierarchy maintained wealth in the hands of a few and was rarely passed downwards. However, this changed in the 18th century – a period referred to as the “era of the status revolution”. The dawn of the Industrial revolution provided more income, job and migration opportunities to people, and as a result, financially and politically powerful middle class emerged, adding to the number of players in the conspicuous ownership competition. While achieving new social status, the new players in the consumption game challenged the upper-class elites for social recognition, which resulted in extravagant spending clash between the two .
According to Veblen, consumers who display their wealth are often rewarded with preferential treatments by social contracts . Even though these contacts are mostly informal, the conspicuous consumers believe that by displaying affluence, the people who see will develop an opinion about it. Thus, this perceived belief of social status gives the conspicuous consumer a level of satisfaction which concludes the contract. In the long run, consumers want people to acknowledge and accept their conspicuous purchase. Immediately they get this approval, the return on investment of the purchase start of increase.
The concept of conspicuous consumption was first introduced by Thorstein Veblen in his 1899 book, “The Theory of the Leisure Class”. It’s a term used to refer to the practice of consumers buying goods and services to publicly display wealth and income, rather than to cover their basic needs. This particular type of consumption is not new and has been part of the society for a long time, and mostly associated with the rich and wealthy with the aim to gain or maintain higher social status or esteem .