Why do consumers like to engage in conspicuous consumption What are Essay - 1

Why do consumers like to engage in conspicuous consumption What are the marketing implications - Essay Example 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 â€Å"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 â€Å"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. Some literature has tried to give answers to the first question. It is assumed that a person’s value is directly enhanced by purchasing higher priced products. (Nagel, 2002) unfortunately, this approach does not explain why individuals will prefer premium pricing. To (Trigg, 2001) explains that people prefer conspicuous goods because of monopolistic goods. However, other scholars are in view that individuals use conspicuous consumption as means of evaluating their social status in the society. (Nagel, 2002) This agrees fully with Veblen’s concept. Yet again, it is not easy to generalize the â€Å"Veblen effect† in this competitive market. The second question that regards what product can be termed as conspicuous can only be answered by trying to examine the characteristics