These products are normally supported by high and extensive market promotion and advertising by manufactures of the products, creating a "status symbol" for wealthy individuals.
This research paper examines why consumers buy some goods for conspicuous consumption at prices which are normally higher. The papers will examine the concepts that try to explain this behaviour, and examine other factors. The paper will also explain the goods which qualify to be termed as conspicuous consumption. Market implication of in accordance to the 7Ps in relation to this phenomenon will also be analysed and a conclusion drawn after the analysis.
Veblen (1899) provided an explanation of conspicuous consumption behaviour in his prominent concept of "the leisure class". He notes that in order for people to show their wealth or power their have to put it into evidence, since self esteem can only be rewarded through evidence. Thus, one way of an individual showing off his wealth is through conspicuous consumption. Using Veblen, conspicuous good can be defined as a product whose consumption can be viewed by all in the market economy. In this context "Veblen effect" will refer to conspicuous consumption, which is seen as an action of consciously displaying and consuming a product that is bought at a higher price that its marginal cost. ...Show more