The which concludes the contract. In the long

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 1.

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According to Veblen, consumers who display their
wealth are often rewarded with preferential treatments by social contracts 1. Even
though these contacts are mostly informal, the conspicuous consumers believe
that by displaying their wealth, 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 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 3.

          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 2.

              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 2. 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.

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.

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.

 

Consumer Behaviour and Luxury products

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 4.

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.

             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.

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.

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”.

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 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.

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.

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.

 

 

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 some 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.