Introduction used to refer to the practice

Introduction        

The
concept of conspicuous consumption was first introduced by Thorstein Veblen in his 1899 book, “The Theory of the Leisure Class”.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

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 meet their fundamental
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.

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. For the rich seeking social recognition,
most of them end up purchasing Veblen goods.

The “Veblen goods” term was introduced by Thorstein
Veblen, to describe luxury goods mostly purchased by the rich with the
intention of showing up their wealth. Often times than not, these goods
(Veblen), function outside the range of income effects for the consumers and those
who purchase them most times don’t really need them. However, because they want
to maintain the social status and enjoy the attention they go ahead with such
purchases. Ordinarily, one would expect that the demand for a commodity falls
when there is a price increase, because consumers tend to seek for better
alternatives. On the other hand, Veblen goods seem not to obey this law. It is
observed that the demand for Veblen goods increases as the price increases,
contradicting the basic law of demand. Examples of Veblen goods include
expensive wines, jewelry, luxury cars, etc.

According to Veblen, public display of wealth is
somewhat unimportant. Why buy an expensive good when you can show your riches
just as effective with an equally expensive good that you actually like?  In his opinion people who engage in
conspicuous consumption do that foe several motives. The wealthy are often
willing to spend huge sums for beautiful things especially for goods that can’t
be replicated easily at low cost. However, almost not all of them would want to
spend more money purchasing more of something simply because its price had
risen”. On the contrary, the
markets for these goods are among the most bitterly contested, and not just
because the stakes are so high. There are many examples in the wine world
(where every wine producer tries to 96 –point Robert Parker rating) 5.

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.