Professional Documents
Culture Documents
Conspicious Consumption
Conspicious Consumption
Introduction
Since the ages when kings ruled, people have had a desire to have
possessions that show the world that they have amassed a certain level
of wealth and prestige. Kings built statues, designed palaces, collected
valuables all in effort to display to their peers, subordinates, and
superiors how well off they were. This desire to use products and items
to display status has not changed over time and has been classified
under the marketing umbrella, as conspicuous consumption. The
research into this phenomenon has revealed a recognizable truth- that
consumers utilize products in an effort to display social status.
While there are different levels of consumer involvement, at
various points on the socioeconomic spectrum, consumers seek to
define public perception of themselves through the products they own.
Conspicuous consumption creates a tremendous opportunity and
market for companies to position their products in the consumer
consciousness as “luxury items.” Luxury, in this context, means that the
perceived value of the product in the eyes of consumers, elicits thoughts
of exclusivity. This suggests that only those individuals, who are
financially above average, consume the product. Marketers recognize
the opportunity that comes from positioning products with the luxury
or quality tag and aggressively price items in hopes that the price and
additional promotional activities will successfully communicate the
social and psychological benefits consumers will receive from using
the product.
27
There is value to both consumers and marketers with the
development of such products, however there is a negative consequence
to conspicuous consumption, and that is poverty. Consumers have long
desired objects and products to display their social standing; this desire
has paved the way for marketers to develop and promote products to
help satisfy this need to demonstrate prestige. While consumers have
benefited from branding and positioning of such products, conspicuous
consumption has compounded the social issue of poverty.
28
mind that in American society, people have a somewhat innate need for
social acceptance. If consumers feel their real self is not sufficient they
will look for product extensions to attach attributes to themselves to
compensate in those areas where they feel insufficient.
These insufficiencies have the propensity to fuel people to
build their self image through material possessions in hopes for social
acceptance and status recognition. Conspicuous consumption is a
process of gathering and utilizing goods to establish wealth and
prestige as attributes of individuals’ real self concept. While the
products displayed are a vital part of this self-concept, the feedback
buyers receive from acquiring and showing off these goods is needed
to validate the idea of wealth that the consumer wishes to convey.
29
functionally and convenience. However, when branding products with
the “luxury” moniker, different elements have more importance.
Characteristics that luxury brands must contain would include
aesthetics, quality, uniqueness, and sensuality (Emile and Craig-Lees,
2011). Since luxury brands are consumed with the primary objective to
achieve flash, products must have an aura of beauty which will lure the
buyer in, but also will be attractive to the viewing public.
Product quality is a term that has varying meanings for
consumers. Quality is a combination of functionality, durability, and
perceived value of the inputs used to make a product. The uniqueness
of a product is essential to the luxury branding process. Consumers
must feel the product they desire to purchase has a high level of
differentiation and individuality that only this particular brand offers.
At a minimum, one product characteristic must be unparalleled in the
eyes of consumers.
One of the key contributors to luxury branding is the sensuality
of the product, or its ability to appeal to the senses of the consumer and
the consumer’s audience. While the external senses are important, the
internal feeling the product gives the user, which can come from usage
or feedback from the user’s surroundings, is the most important factor.
If the consumer of a luxury item feels an unrivaled level of internal
satisfaction, it will drive that consumer to continue to indulge in the
brand. This internal satisfaction is derived from positive feedback from
spectators who experience a consumer using the product.
When branding a luxury product, marketers must find the right
mix between product attributes and marketing stratagem to lure
consumers to the product or there will be a high chance of failure. An
example of this potential failure can be seen in the case study done on
the strategies of Gucci and Guess in their attempts at luxury branding.
This study showed that, while Guess utilized a similar strategy to Gucci
in logo design, the company failed at matching up the price and
promotion of the product. This failure to fully brand the product left
Guess appearing to be an imitator of a luxury brand and created
negative consumer attitudes towards its brand (Majic and Majic, 2011).
30
Guess is a prime example of the difficulties of luxury branding for
marketers. In summing up, branding is a process in which difficulties
increase as the product is positioned towards higher social groups and
classes. For these target markets, the focus of marketers goes from
functionality to aesthetic and sensual features.
31
economic factors driving this trend are increasing disposable income … as
well as a growing wealthy class in emerging countries” (Truong, 2010).
These economic drivers have created opportunities for marketers to brand
products to satisfy the increasing need for luxury goods.
32
Luxury Partner Brands
Another affect that conspicuous consumption has on branding is the
increasing phenomenon of luxury partner brands. Luxury partner
brands can be defined as premium brands that use their perceived
product quality, unique value, hedonistic value, social value, and
conspicuous value to enter a partnership in a host brand’s market to
transfer these qualities to the host brands markets and consumers
(Uggla and Lashgari, 2012). These partnerships are successful due
the effectiveness of each brand to reach its market.
The luxury brand will attract those consumers who desire a
prestigious product while the host brand will attract consumers who
have significantly lower income than those who consume the luxury
brand. The attributes of the luxury partner add intangible value to what
is perceived as an inferior product, while still offering an acceptable
price. Two examples of these partnerships are the Eddie Bauer Ford
Explorer and the Ferrari-Acer computer co-branding.
The Eddie Bauer Ford Explorer was an attempt by Ford to
integrate features that the Eddie Bauer brand possesses in the world of
male fashion into a Ford vehicle targeted to men. This Explorer contains
a few insignificant physical changes but the perception that this car was
designed for a stylish, successful “Eddie Bauer” man attracted a target
market beyond Ford’s usual base. The Ferrari-Acer relationship
contained the same dynamic. What some view as an affordable, inferior
in quality, technology brand decided to partner with a prestigious,
quality automotive brand to offer more value to the host (technology)
brand’s consumer base.
Partnerships of this nature are made available because
conspicuous consumers increase the awareness of luxury brands in the
eyes of the public. When this public awareness happens, luxury brands
can attach their intangible value to less prestigious brands. Acer
leadership hoped the co-branding with Ferrari would create an
opportunity to develop and market a product with a higher perceived
quality. Conspicuous consumption affords marketers with opportunities
to create and adapt brands to satisfy the luxury consumer segment. This
33
behavioral phenomenon also offers a window for less prominent brands
to partner with luxury brands to appeal to average consumers as well as
those who are wealthier.
34
will give to owners when wearing the black watch.
How does conspicuous consumption play a role in the
advertisement? The answer is simple. Simply sell the product, free of
bells, whistles, and gimmicks (Han et al., 2010). Marketers gave as little
information about the product as possible, so consumers would only
know the elegant black watch was a Movado. No price was given
because the price does not matter when you can afford a Movado.
This simple advertisement is what appeals to conspicuous
consumers. These individuals may need a reminder periodically, but
the more subtle the advertisement is, the more it appeals to them. While
the impact that conspicuous consumption has on positioning strategies
may not be quantifiable or exact, it can be said the social status-driven
consumers want goods that they will use to show their wealth. And
these goods must be marketed in a unique way so that only a limited
number of people are made aware of the product and these few people
are in the appropriate social group.
35
economically disadvantaged individuals see conspicuous consumption
as a relief from their circumstance because of the internal and external
benefits. Externally, people who are not familiar with them will infer
their financial well being based on how they dress, accessorize, and
transport themselves. For those few moments, they do not feel as those
their economic status matters. When people acknowledge their
purchases, poor conspicuous consumers experience an external reward
system. This external reward drives them to continue these conspicuous
purchase patterns.
In addition to external compensation for status purchases, there
is an internal benefit that occurs inside these impoverished consumers.
Consumption leaves consumers with positive, negative, or unchanged
experiences based on the involvement consumers have with the
purchase. When poor individuals purchase luxury goods a positive
feeling arises within them because it is an opportunity to present
themselves as a person with wealth. This psychological state comes
from a desire for momentary happiness. For a limited window they will
know what it feels like to be seen as a person with expendable financial
resources and their social class will not have defined them.
The problem arises when this short term benefit, experienced
by underprivileged people who are escaping their current circumstance,
leads them to increase the economic hole that they are already in. These
purchases exacerbate their problem because these consumers decide to
spend money that they may not have on these products. For example,
when people below the poverty line decide to purchase a luxury vehicle,
it compounds the debt that they may already have incurred through
other purchases. Research shows that consumption of status products,
and the related enhancement of social standing that comes with
conspicuous habits, can cause consumers to sacrifice their financial
standing in order to achieve a certain level of social standing. These
purchases often increase the consumer’s debt load through use of credit
lines and loans (Thomas and Wilson, 2012).
Conspicuous consumption describes the thinking used by low
income individuals to connect a product or brand to social standing.
36
When products are branded as luxury items, after initial consumption
by the target market, awareness of the brand slowly moves down the
social ladder. This awareness is increased through media and
communication channels. Use of spokespeople enhances a luxury image
and consumers will perceive that the spokesman uses the products.
Attributes of the individual will transfer to the product.
This process of luxury brand marketing to less fortunate
individuals was not the initial target of marketers attempting to satisfy
the need for luxury goods. It seems likely, however, that as marketers
realize that poor people also wish to buy status endowing goods, ways
will be found to service that segment of consumers as well. Conspicuous
consumption has an undeniable impact on poverty. People who
experience hard economic times want to escape, they want to be
branded by something other than their current economic condition.
So they use luxury items to temporarily relieve the feelings created by
poverty. The rewards of conspicuous consumption outweigh the cost
of increased poverty to these individuals, at least momentarily.
37
Poverty does not begin with marketers; however, marketing can
compound the problem. It is difficult to suggest an alternative to luxury
branding of products that will not have an adverse affect on product
sales. Consumers do not always rely on rationality to make purchases.
Even if impoverished consumers were confronted by the potential
financial impact of their purchases, their behavior might not change.
It is difficult to change purchasing behavior that does give an individual
a momentary boost in self esteem. Consequently, there is no logical or
compelling reason to ask companies to stop marketing luxury goods to
all consumers. The intended market does purchase these goods, and
eventually so will secondary and tertiary markets. So it must remain the
responsibility of poverty stricken people themselves to ignore the
psychological benefits of conspicuous consumption.
Conclusion
In conclusion, conspicuous consumption is the recognition of purchases
for the purpose of displaying wealth and financial achievement. While
this form of consumption varies in price and frequency, consumers
engaging in it have the same goal in mind- to create a perception of how
much money they have and to receive acknowledgement of it. Marketers
have noticed this behavior and have developed and promoted products
that help consumers satisfy this need for social standing and acceptance.
In addition to developing products to meet luxury consumers’
needs, marketers have also used co-branding strategies to reap the
intangible benefits that luxury brands have in the eyes of consumers.
Consumers are the ultimate deciders of whether a brand receives the
luxury placement in society. Once consumers are receptive to a luxury
product, then the luxury connotation of the product begins to trickle
down the social ladder; at this point less financially well off individuals
begin to use their income on the good. These less well off people use
this item in the same fashion that the rich do. The only difference is that
the wealthy are trying to project their image through the product, while
others are trying to create this image through the same product.
38
Less fortunate individuals want to create this image in order to
escape the reality of their living standard. Since our society believes that
living standard is a function of social class, these individuals want to
escape it through conspicuous purchases. Even though they are poor
they do not have to feel it when they venture out into the world. “I may
be poor but this BMW isn’t.” The purpose of this research is to illustrate
that some of the behaviors of marketers and consumers that create
status symbols, can really skew the priorities of impoverished people.
Because of conspicuous consumption effects, people in need may lose
sight of fiscally responsible methods of trying to build wealth through
sustainable means such as education, and use their scarce resources to
buy material goods that only momentarily alleviate the pain of reality.
39
References
Dimotfe, C., Johannson, J., and Bagozzi, R. (2010). Global brands in the United
States: How consumer ethnicity mediates the global brand effect. Journal of
International Marketing, 18(3), 81-106. Doi: 10.1509/jimk.
Han, Y., Nunes, J., and Dreze, X. (2010). Signaling status with luxury goods:
The role of brand prominence. Journal of Marketing, 74(4), 15-30.
Lasaleta, J. D., Elbert, J., and Bennet, C. (2010). Do we really want to keep up
with the Joneses? A closer look at luxury, concealment, social interaction,
and justification. Advances in Consumer Research, 37, 804-841.
Majic, O., and Majic, H. (2011) “Case study of Gucci v. Guess – the failure of
brand strategies that rely on Veblen’s conspicuous consumption.
International Journal of Management, 13(4), 132-140.
Moav, O. and Neeman, Z. (2010). Status and poverty. Journal of the European
Economic Association, 8(2/3), 413-420.
Uggla, H., and Lashgari, M. (2012). Portfolio strategy for luxury partner brands:
Strategic guidelines. IUP Journal of Brand Management, 9(2), 18-28.
40