Conditioning Market Demand through Status Consumption - Term Paper Example

Due Conditioning Market Demand through Status Consumption Introduction It is quite evident fromthe current literature that consumption patterns can be influenced or rather directed along certain paths by a stratified euphoria, otherwise known in the realms of academia as strategic marketing. By and large, consumption goes beyond the mere act of buying and the subsequent consumption. As Mcnall (1990) notes, the latent function of consumption engender some form of signaling effect of uniqueness and exclusivity: "consumers actively involve themselves in purchases not only to consume but also as a way of 'telling' others who they are, or who they wish to become" (49), thus the status consumption. It is thus a subjective psychological conditioning that ties goods and services as symbols of status. Status consumption, as originally defined by Thorstein Veblen in his “Theory of the Leisure Class,” refers to purchasing and the subsequent displays of unnecessary, expensive items in a manner that suggest or rather attract attention to an individual's wealth (39). Veblen though did use the term “conspicuous consumption,” and since then, the idea of inspirational consumption as a means of outward demonstration of wealth has been a hot topic examined not only in the field of Economics but also in a range of other discipline including marketing, psychology, sociology, to name but a few. Indeed, status consumption has permeated the modern setting, especially in the western world, where spending is not only away of determined by the amount of wealth owned but a unique way of trying to fit within a given social class. According to the theory of consumption, consumer buying behavior is conditioned partly by the intrinsic utility value placed on them, which in effect exceeds the attached price on a given product (Pepall, Richards and Norman 24-25). This description, however, was but a narrow perspective that fell short of accounting for the status that the product may hitherto confer to the bearer. Instinctively, behavioral consumption is a much more complex concept influenced by a myriad of factors far beyond utility maximization. This paper critically examines Status Consumption as an important factor in the theory of market demand. Background For a good or service to qualify as a status brand, two preconditions must hold: a sense of belonging [the “degree of commonality” concerning relative desirability of association with certain products or brands] and an open, social display of consumption of such products (Duensberry 11). Consumers have the incentives to amplify their consumption with the intention of gaining a position in social settings. For those that engage in some kind of self-reporting, a personal concern with status is but a factor that has been identified to motivate such actions. Indeed, the everyday observation of consumption patterns suggests a strong affinity to a direction of superior association with a given product; a fact that finds evidence in the concentration of households spending into furnishing living and dining rooms compared to private rooms such bedrooms. Such self-reporting intentions purposefully aimed at gaining social standing more often results from observed consumption patterns. Individuals often require alibis (reasons) that validate their purchases. Quite a huge chunk of college students’ product buying, for instance, is influenced by the advertising kind of contacts with colleagues. While needs play a fundamental role in the behavioral buying tendencies of consumers, the reality is that majority of products acquired are actually non-necessities in terms of survival. In the words of social anthropologist Edmund Leach, individual actions are shaped one way or another by learned behaviors from others within the immediate or observable surroundings (Jones 74). Clearly, if a person do not have adequate information, or simply does not value what being in possession of a Mercedes Benz signals to others in the immediate surroundings, then he/she would presumably not consider the car in the immediate budget. If anything Toyota is clearly a much cheaper option with almost even quality and rewards from a utility standpoint. The brand image seems to take center stage with public signaling effect ultimately influencing the decision to buy. To many consumers, success seems to more valuable if it can be demonstrated via expensive purchasing. With developments of the current economic meritocracy, individuals in possession of fewer resources previously labeled as “unfortunate” have found a new label of “failures.” It is the fear attached to the latter label that persistently drives consumers to work towards higher incomes to enable them prove to the public their success (De Botton 5-8). Insights from the Current Literature The notion of conspicuous consumption, pioneered by Veblen’s work, and herein referred to status consumption, has found literary support from a variety of scholars since inception. It is increasingly becoming a “form of consumer behavior” which can no longer be dismissed as trivial even in countries considered poor in the global wealth index; though economists have over the years felt instinctively uncomfortable with its inclusion in consumption economics (Wendner and Goulder 1968). As it, status consumption is but a powerful, respect attracting concept, at least with reference from those who regard it the soul of a culture. The current literature is replete with evidence confirming the existence of the same; the affluent nations topping the list with the largest number spenders on goods that are actually less important. The average size of homes in the United States, for example, has more than doubled in the past few decades (Deacon 34). Party holidays have become a favorite trend for status consumption with over $1,000 being spent on simple formal wear considered luxurious; more people are taking up wedding limousines coupled with expensive hotel suites among many more non-necessities as a newer form of showing might (Farrell 10). More in depth studies have gone to the extent of unraveling men’s habits of turning to status consumption as a show of masculinity in the wake of competitive gender equality, whereas adolescent girls are taking the contest much closer by rapidly turning to smoking (Wearing 48). From Corneo and Jeanne’s bandwagon conceptualization (334) to Robert Frank’s extreme “Luxury Fever” (174), modern theorists have more than demonstrated that status consumption can be utilized to condition market demand. Indeed, while the average values of new cars have increase more than three fold in the past decade, the expensive ones still attracts a comparably competitive demand, partly due to the social visibility and the near affinity to a reference group. Frank notes that despite the concerted efforts for a “downsizing” for more savings, status consumption remains very much alive, as evident in the 1999 Porsche’s one-year manufacturing waiting list in the United states. Another article co-authored by Angela Chao and Juliet Schor touching on “women’s cosmetics” serve to illuminate the effectiveness of status consumption with regard to advertisements appealing to particular targets (107). Influencing Product/Brand Demand through Status consumption Advertising, whether through the print or popular electronic social sites, possesses immense influencing power to condition consumer behavior. With fashion magazines, for instance, reaching the affluent more than any other group, it is quite obvious that targeted communication can have a tremendous effect in increasing sales, and to revenue, of Veblen goods upwards. Consumers’ obsessive nature with exclusive, elevated social status is highly encouraged by the vast amount of magazines and newspapers that tend to impose ideas of how important the noble class is almost on a daily basis (De Botton 4). The invention of television and radio in the twentieth century greatly added a unique impetus for more consumption patterns. The same methodology is still valid in the modern world, and thus can be utilized to attract traffic towards a particular brand, particularly the Veblen products. The presence of visible ads that has permeated right into the social media had made information spread even much easier, and in a sense increased consumption patterns (Pepall, Richards and Norman 16). As indicated earlier herein, most consumers do not buy simply because they want to out of necessity, but do so unconsciously with reference to the trending cultural norms (Clotaire 126). Branding being an important facet of social consumption (Shukla 109), brands falling into the conspicuously consumed products should be positioned as heavily status endowed (O’Cass and McEwen 27). In addition to aesthetic design with high levels of artisanship (Amatulli and Guido 124), a product must possess the element of exclusivity to gain admission into the status category; a sense created by premium pricing with some degree of scarcity via elite retail outlets (Dubois and Paternault 71). While the image of exclusivity is essential in signaling status, extreme care should be taken to avoid concealing brand awareness that is actually the facilitative agent of owners’ prestige and success (Vikander 2-3). Such brands require distinctive characteristics that embody the status reference supported by carefully crafted marketing appeal that drives home the marks of opulence, expense and exclusivity (O’Cass and McEwen 27-28). Given the gilded, glamorous lifestyles of celebrities, their endorsements are perfect symbolic gestures for brand consciousness in the status category (Schiffman et al. 43). Noteworthy, the involvement of prominent personalities only serve to construct an alibi where there is none to activate consumers’ purchasing decisions. Even though most companies supplying luxury products often employ social visibility through advertising, a brand must stand out as luxury endowed compared to the existing substitutes others coupled with effective targeting. It would be much easier, for example, to condition consumers’ buying behavior towards Mercedes Benz cars if it marketing goes beyond fashionability and status signaling; perhaps as a lifetime investment with guaranteed comfort and extensive lifesaving chances in case of accidents. Such igniting, tailored alibis repackage the consumers’ purchasing decision towards a particular brand without feeling the guilt of status consumption (Clotaire 126-127). Conceivably, such personalized ads dispel the obvious controversy as to whether a luxury product is “need” or “want.” An endearing advert with emotional attachment may be demand influencing than relaying factual reasons, which as much as being necessary, are often secondary in forming decisions to buy (Danziger 32). Conclusion Status consumption signifies popular but unique lifestyles. Available evidence supports the existence of the phenomena discussed herein, and that through well communicated and targeted displays has the possibility of influencing market demand of certain consumer products. From behavioral scientists to evidenced based research, all agree that it is human to aspire for acknowledgement and appraisal. It thus takes only a tactical approach that involves influential, visible displays to affect product demand positively. 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