Psychology: Luxury Goods
Psychology: Luxury Goods
Executive Summary
Luxury products is a niche segment of marketing and is not focussed not pricing strategy alone. To effectively market these products, it is important to understand the psychology of today’s youth towards these products. The paper reviews the article “The behaviour of the young towards luxury products” written by Allérès in 1999, in the context of understanding consumer behaviour.
The review of the article establishes three points. First, the young people do aspire for luxury products. Second, the youth is familiar with luxury products and effortlessly recall names of the famous luxury brands. Third, the young are influenced by social factors in creating aspiration for luxury products.
The paper also attempts to understand buying pattern of the youth through consumer behaviour concepts. Four key findings emerge from this exercise. First, behaviour of youth is influenced by both, environmental factors as well as intrapersonal factors. Second, environmental factors like marketing activities, changing lifestyle, cultural shifts have an effect on behaviour of the young people. Third, personality, attitude and perception are intrapersonal factors that play an important role in shaping decisions of young people. Based on the study, it can be deliberated that young people are not superficial, but more responsible and positive about their future. They aspire for higher end products for its quality and social stature, not for its ostentatiousness. Fourth, reference group influence the ambitions of the young people and significantly affect the choice behaviour of this target segment.
Introduction
Unlike generic products where pricing strategies matter a lot, positioning and niche branding are two important elements luxury product marketing. The niche segment of luxury goods requires thorough understanding of the target audience, with special focus on consumer behaviour. Understanding consumer behaviour is imperative, as a product can be effectively branded and positioned in niche market only if the pulse of the consumer is known. One size fits all strategies do not work best in niche marketing.
The paper is a review of the article “The behaviour of the young towards luxury products” by Allérès (Allérès, 1999). The paper aims at understanding the basic concepts of consumer behaviour in young adults in the context of research findings given in this article. The paper is divided into three main sections. The first section provides a brief review of the article. The second section discusses the findings of the article in the context of consumer behaviour theories. The third section concludes the paper.
The article attempts to answer three basic questions regarding the way young people perceive luxury. This section of the paper discusses the three questions posed for the survey and the related research findings.
Aspiration of Luxury Goods
First question posed is, do young adults aspire to own luxury goods? The research finds that young people do aspire for luxury products. According to Allérès (1999), research finds that young people do aspire to own luxury items of materialistic world like a fine car, fashion jewellery and magnificent house in near future. But research suggests their aspirations are not based on snob and superficial value of the product. They aspire to own luxury products for its quality, elegance and appeal. They aspire for the grandeur of luxurious items, not their flashiness.
Familiarity with Luxury Products
Second question posed by the author is that do the young population have acquaintance with the luxury products and brands available in the market? Research suggests that young people are well aware of the gamut of luxury brands surrounding them. The study found out that students were instinctively aware of the most prestigious luxury brands like Dior and Chanel (Allérès, 1999). They were also well informed about new emerging luxury brands in the market. The study found that extent of awareness of luxury brands in a specific category differed between males and females. While women were more responsive about luxury apparels and perfume brands, men were more conversant about luxury automobiles.
Influence of Social Factors on Creating Aspirations
Third, does the target audience get influenced by social factors while driving their aspirations? The target audience does get influenced by social factors. Media plays an important role in creating awareness among young adults. The study found out that spontaneous and aided awareness were both high for young people. The students, however, did not tend to draw their aspirations from celebrities and were not keen on its snob value. Thus, snob appeal was found low. But, students felt that luxury items helps in creating a stylish image for people in a social set up.
Concepts of Consumer Behaviour in Context of Young Population
Consumer behaviour can be defined as the decision making behaviour of individuals and households that buy products for personal consumption (Jethani, 2013). It includes individual behaviour as well as group behaviour. Studying consumer behaviour helps marketers to understand the target audience better and what drives them to purchase a product. In case of luxury products, it is important to study the behaviour of individuals in the young adult segment because this segment of the population will evolve into financially independent adults of tomorrow who can buy these higher end products. This section of the paper covers the factors influencing buying behaviour of young people.
Choice behaviour of young adults can be explained using black box model. According to the black box model of consumer' buying behaviour, consumer’s buying decision is influenced by both external and internal factors. In a black box model, emphasis is not on the consumer alone but on consumer’s response when he/she interacts with external stimuli (Singh, 2013). So, it is important to understand both, the environmental factors and the intrinsic factors, to be better able to comprehend consumer behaviour. To be able to understand buying behaviour of young people, it is imperative to know the external and internal factors influencing the way young people behave.
External factors affecting Buying Behaviour of Young People
Marketing Factors
In this case, young people had a good knowledge of luxury products. They were able to recall names of expensive brands, in aided as well as spontaneous responses. Not only this, they also knew about the upcoming brands in the premium segment. This awareness can be contributed to marketing stimuli that this population is exposed to, in three ways. First, media plays an important role in shaping aspirations of young adults. Second, this segment of population values quality more than snob value of product, hence marketing should be more product-centric. Third, promotional activities may not be very effective in this segment of higher aspiration-driven population.
Environmental Factors
The three environmental factors that play a key role in influencing young adults are presented in this sub-section.
First, changing lifestyles has changed likeability and acceptance of products of young people. Furs, in olden times, were well-accepted by young women. But, in recent times, young people consider it as ostentatious. The young people do not accept furs also due to increasing focus on animal protection and environment restoration reasons. Items of personal beautification and make-ups also found less association with this segment of population.
Second, increasing consumerism has created a higher interest in young adults for products of consumption. In responses of young people, luxury was found to be closely related to well-being items and products of personal indulgence.
Third, cultural shifts have also been observed in the students’ responses. Knowledge and interest in tableware have been found quite low due to rising number of nuclear families and reducing interest in marriages.
Internal factors affecting Buying Behaviour of Young People
While marketing and environmental factors influence individual behaviour, it is also important to understand the intra-personal factors that encourage a young individual to buy.
Personality of the Young People
Personality of a person has significant impact on one’s purchase behaviour. There are various theories that describe how a person behaves in a specific situation. The humanistic personality theories deliberate that people constantly endeavour to achieve higher levels of accomplishments, and as such undergo continuous change (Ortega, 2013). Luxury items are the next level of accomplishment for young people. Thus, it forms a part of their default nature to strive hard to achieve these dream products. The responses of students that they desire for items of materialistic comforts like a house or a car is just an extension of desiring a better quality of life than today, which supports this theory. The desire emerges due to basic human behaviour to strive more and reach excellence.
Freudian’s psychoanalytical theory throws light on the three schemes of human personality: Id, Ego and Superego (Ortega, 2013). The Id comprises of elementary human needs that drive a person. Superego driver is about satisfying one’s desires within the boundaries of societal norms. While Id and superego are at the two ends of the continuum, ego acts as a balance between these two drivers. In this case as well, young people intend to accomplish their wants in a socially desirable method. Young people are conformist in the sense that they associate luxury with non-deviance. Luxury means a way of life to them.
There are a lot of elements that define one’s personality. Different psychologists have used different frameworks to analyse personality. However, psychologists agree that the Big Five Personality should be a common framework to understand people’s personality (Howell, 2014). The big five can be used in the context of this case. The young people can be marked high on the openness trait. They appeared to be open and preferred being original. The students can be rated high on conscientiousness as they had well thought of plans for their future and future wellbeing. The students will score high on extraversion as they like being in social surroundings. They were more agreeable as appeared easy-going and thoughtful. They did not appear superficial and flashy. The students score low on neuroticism as they did not seem to be apprehensive and restless.
Attitude of the Young People
Attitude of people towards products or situations largely depends upon people’s good and bad experiences. With reference to marketing, a person’s attitude works like a filter through which every product and service has to go through (Dean, 2010). It stimulates people to scrutinize the products and services before purchasing it. Daniel Katz propounded the functional theory of attitude that divides attitude into four functions (Dean, 2010).
In case of young adults, purchase attitude appears to be related to knowledge function and value-expressive functions. It is related to knowledge function of attitude because the young people wisely form their opinion about products after careful analysis of the products. In this case, young people had detailed knowledge of luxury brands and products. They also had well-organised view of what luxury meant to them.
It is related to value-expressive function as internal value system plays an important role for young people in deciding upon a product. For instance, young people rejected furs for environmental reasons. They gave less importance to clubbing. Their value system influenced their decision. Also, there were consistent responses that the young wanted to purchase luxury products as they symbolise men and women of substance, which means that concept of perceived self plays a role in decision making.
Perception of Young People
Perception varies from individuals to individuals. There is a need to know how different products are perceived by different people or group of people. In two competing products, marketers need to differentiate their message for consumers (Donner, 2014). In this case, luxury products are recognized as products of better quality. So, young people would be willing to pay a little extra for luxury products. According to Perner (2010), repetition of marketing exposure also plays an important role in forming perceptions and same will be applicable is case of luxury products as well.
Gender Differences
In the same external environment, men and women respond differently. The responses of students differed distinctly based on gender. While young men were better aware about luxury automobiles, young women had better knowledge of luxury clothing and perfumes. This is because instinctively cars and bikes do not attract women as much as it attracts men. According to Wolf (2007), men are less likely to be impulsive buyers and purchase a product to improve their social standing. This theory clearly emerged in this case as well.
Group Behaviour
Group influences matter a lot in shaping buying behaviour of individuals. Consumers get influenced by reference groups that they believe they are a part of or aspire to be (Fisher, 2014). Conversely, people tend to dissociate themselves from products that symbolise groups people do not like to be a part of. In the given case, the young students also displayed group behaviour and a tendency to cling to reference groups. The young did not want to get typecast as snobbish, which was one of the main reasons that they rejected fur. The young aspired to be a part of the class of elegant people. Their inclination for luxury products was significantly derived from this aspiration.
Perner (2010) defines aspirational reference group as the one which people compare themselves against and want to become a part of. In this case, the progressive higher class forms the aspirational reference group for young adult. Progressive higher class means people of higher economic status, but progressive enough to be subtle in their demeanour to show their wealth.
Conclusion
The psychology of youth towards luxury products is influenced by environmental as well as intrapersonal factors. Environmental factors like marketing activities, changing lifestyle, cultural shifts have an effect on behaviour of the young people. Personality, attitude and perception are intrapersonal factors that play an important role in shaping decisions of young people. Based on the study, it can be deliberated that young people are not superficial, but more responsible and positive about their future. They aspire for higher end products for its quality and social stature, not for its ostentatiousness. Reference group influence the ambitions of the young people and significantly affect the choice behaviour of this target segment.
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