Snob Goods Are Only for the Rich - Assignment Example

Are Snob Goods Only For The Rich? A Critical Evaluation Introduction There has been a tremendous growth, both in terms of consumption and in the production of goods during the past half-century. The economic growth has been rapidly emulated in one country after another – to provide for the millions that were continuously being added to the world population. The International trade has increased from $ 1.6 Trillion in 1985 to $ 5.4 Trillion in 1998, but most of the capital and benefits were gathered by the already rich Multi-National Organizations which were using their manufacturing and marketing power to sell their products even in far-off places. Also, in 2000, 85% of the world income was controlled by the just 20% of the world population dwelling in the rich countries. There has been a skewed development and growth in terms of income as well as purchasing power – the rich have got richer, and the poor, poorer. Increasingly, the pattern of consumption has moved out of the realm of consumption merely for basic sustenance. Initially, with the advent of industrial revolution and large-scale manufacturing, it was assumed that basic human needs will be adequately full-filled. Now there are products that are only acquired for their capacity to add an image boost to the owner – to impart a snob effect. A class of individuals that have access to more economic power, and also boasts of having a luxuriant lifestyle, eagerly consumes such products that are called as the snob goods. This paper tries to shed light on the nature of the snob goods, their utility to the consumers, and also tries to answer whether the snob goods are only for the rich. An endeavor is also made to find out why the snob goods hold value for consumers, and what are the reasons that people are ready to spend increasing amounts of their wealth on their acquisition. Snob Goods Snob goods are goods that are able to provide a snob value, and are high on economic value even though having low utility. Examples of snob goods include luxury automobiles, expensive watches, designer clothes, precious stones, jewelry, electronic gadgets, even bathroom fixtures. etc. (Wilkipedia, 2006). Snob Effect is another term related to the Snob goods. It is described as the desire to own exclusive or unique goods. The lesser the number of people who own the product, the greater the demand for it. (Reference.com). These goods display a positive price-demand curve, as opposed to the negative correlation for other ordinary goods – the costlier the product becomes, the more the demand. Ordinary goods’ show a decrease in demand with increase in their prices – which appears rational, and in sync with all the Economics theories. Snob products, on the other hand, seem to be belying the basic tenet of price-demand equation. At a glance, these products appear to be making the their consumers; behave in a contra normal manner – the higher the price the happier is the buyer of the Snob goods. The Snob products can be differentiated from the Giffin products (named after Robert Giffen, the originator of the idea). According to Alfred Marshell in his book, Principles of Economics, (Marshell, 1895), the Griffin goods too have a positive curve for price-demand equation. However, the reason behind the consumption widely differs from the reasons for purchasing the Snob goods. Griffin Goods are those that are so essential for the existence of the consumer (like bread), that he is forced to buy more of the same (even during a price hike) and forgo consumption of other goods. This way the consumer still finds it cheaper to sustain himself. This is in sharp contrast with the reasons for buying the Snob goods – precisely, to flaunt the acquisition. For example, “Rolex watches do not function noticeably better than the cheaper versions that are available through the department stores. The reason people buy them is because of the status that comes along with the name Rolex. Rolex watches make the buyer feel more important, and make the people who do not have a Rolex, but crave for it, jealous.” (Shopping the brands, Googolplex.com ) Though Griffin goods are rarely to be found in the real world, and their reference is used only for theoretical purposes, the Snob goods are very real and tangible – Ferari, Rolex Watch, diamond jewelry etc. Why People Buy Snob Goods The snob goods display the owner’s wealth, and also his tastes and preferences – hence reflect on his overall personality. People not only expend loads of money for the acquisition of these products, they also have to keep updating their collection with the latest in the market. People yearn for goods that are difficult to be owned by everybody - though, all crave for them, Snob goods are beyond the capacity of most individuals.Hence, the market for the snob goods is very lucrative for the producers – they are able to get exorbitant prices for their products simply by associating their offering with a snob affect..Thus Snob products are those that lead to what Veblen has called Conspicuous Consumption. (Veblen, Thornstein, 2006) According to Thornstein Veblen, Conspicuous Consumption is the consumption designed to show how wealthy a person is – and it reflected in the type of clothes he wears, the car he drives and various other Snob goods that he owns. Such goods serve a basic purpose in the owver’s life - even though this basic purpose is different from their survival needs – they enable him to exhibit his prestige and status among his society members, and thus give his ego a boosting. “People choose products that communicate their role and status in society. Thus company presidents often drive Mercedes, wear expensive suits, and drink Chivas Regal Scotch”(Kotler, Philip, 2000). Hence, what a person can afford, reflects upon his overall image. As the goods that display a person’s wealth are acquired through considerable economic expenditure, the Snob goods are thus used to differentiate the successful or the rich status class from the other classes. Individuals who own them, are better than the masses – and the snob products that they possess only make an exhibitionist statement of their superiority. Snob value was previously associated with the aristocracy or with one’s lineage – elite nobles were also possessors of enormous wealth and hence indulged in Ostentation Consumption. Even today, when globalization and economic revolutions around the globe have fostered a new breed of rich class who have earned their way rather than inherited their social status, people are still extremely sensitive to their social status or rank within a social group – the reason being that status is directly correlated with a person’s salary, perks or the type of romantic partner that he is able to get. (Baron A. Robert and Donn Byrne, 2002). Franck Vigneron and Lester W. Johnson describe the prestige brands (closely related to our current concern) as having multi-dimensional facets. Those brands or products that have a perceived conspicuous value, and signal the wealth or status of the user, are among the prestige brands. Also, other criteria such as uniqueness (the product is scarce or too difficult to acquire), social value (the product enhances the social status of the owner), hedonistic value (satisfy an inherent emotional desire – e.g. feeling of superiority over others) and perceived quality value (the product being technically superior – e.g. Rolex watches that can be used under deep sea conditions) also come into action. (Vigneron, Franck and Lester W. Johnson. 1999). According to Vigneron and Johnson, the goods that display a unique value are classified as Snob goods, while those that lead to conspicuous consumption, are the Veblen Goods. Are Snob Goods Only For The Rich? The authors of the current paper however feel that the Snob goods closely follow the Veblen description – they are price sensitive and the greater the price, the greater their demand. This happens as the criteria of a high price places the said goods out of reach of the majority of masses. This adds exclusivity, and the owner feels himself as a part of the chosen elite. The other factors, too, play an important role in the consumption of Snob goods, and also in attributing the snob tag to certain goods. Largely, what is considered as prestigious or status enhancing is dictated by the value assumptions of a given society. Hence, what goods will fall under Snob goods are not only culture bound but also time bound. For example, in Western society materialism forces people to flaunt their money on expensive restaurants eating exotic meats. In the East, especially in those nations where vegetarianism is the order of the day, meat becomes meaningless as a Snob good. Secondly, what is considered a Snob good at one point of time, might cease to be so later – for example, 20 years back, having a Color Television would have been the height of prestige for people in Asian countries. Today, the same commodity has become commonplace, and Plasma TVs (priced exorbitantly) lead the snob brigade. Another example of Snob Goods that are place-dependent is of Handcrafted products. If sold in the vicinity of the artists’ village, these goods might not fetch him enough to live comfortably. These do not present even the remotest semblance of being Snob goods locally. When exported abroad, or traded in far-off cities, these same products acquire a snob value – and are much in demand among the affluent individuals. Another important factor that imparts the snob value to the goods is that they are not only owned, but people like to aspire to own them too. For teenagers and students, owning the latest videogames, the xBoxs and the ipod nanos etc (even when beyond the capacity of their finances) is like a dream – they aspire to own them, and might save or earn extra money to acquire them. Similarly, even the upper middle class is able to enjoy holiday cruises (that previously were the realm of the aristocracy or the business class) to exotic locales. This has been made feasible due to the availability of credit, and a shift in the market towards tapping the burgeoning middle-income group of the Asian continent. John Kenneth Galbrait, in his book, The Affluent Society, has rightly postulated that people are lured into pursuing goods that go beyond their valid requirements by excessive bombardments of their senses through advertising and media. Though criticized for speaking against economic development of America, (brothersjudd.com, 2006) Galbrait has presented a revelatory aspect of the economic progress – that there has been a trend of mindless production and consumption brought forward by the markets enticing consumers to buy goods that have low basic utility. However, Galbrait fails to take into consideration that the social needs of human beings, that include a sense of status or superiority among fellow beings, too are very real. A person does not survive merely by satisfying his basic needs of food, cloth or shelter – as a social being, he nurtures other desires like conforming to a particular group, belonging to the society as a whole and identifying himself as a respectable member of the social structure. The producers of the Snob Goods, at times, manipulate an individual’s social needs. The more the production increases (with economic progress), the more the manufactures and advertisers attract consumers by portraying their goods as exclusive and having a snob value. This learned persuasion is based on the fact that people tend to select products that give them a sense of congruity with their ideal or aspirational personality. (Batra R., John J. Myers and David A. Aker, 2000.) Hence, when an individual possess a Ferrari, he associates the car’s characteristics with his personality – he feels he is a go-getter and among the best of his kind. The marketers ingenuously exploit this aspect of human nature to use positioning strategies for their goods that extol their uniqueness or novel features. Now even the not so rich, too are falling for the snob effect, especially with the availability of consumer finance. Thus Snob products are being promoted by their manufactures on one hand, and their availability is being provided by the financial institutions. Conclusion The authors will therefore like to conclude that the snob value is neither inherent in the goods (as it is culture-society-time bound), nor all snob goods can be beyond the reach of the ordinary people. But if you want to own a Yatch or private jet – you do need the underpinnings of solid cash. References 1. Snob effect, Wikipedia (The Free Encyclopedia), online at http://en.wikipedia.org/wiki/Snob_effect , accessed on 11March 2006 2. Snob effect, at Reference.com http://www.reference.com/browse/wiki/Snob_effect, accessed on 11 March 2006. 3. Marshall Alfred, 1895, Principles of Economics, online at Giffen Good, Wikipedia (the free encyclopedia) at http://en.wikipedia.org/wiki/Giffen_good, accessed on 13 March 2006. 4. Shopping the brands, Googolplex, http://googolplex.cuna.org/1/cnote/story.html?doc_id=857, accessed on 11 March 2006 5. Veblen, The Theory of the Leisure Class, online at http://xroads.virginia.edu/~hyper/VEBLEN/veb_toc.html, accessed on 14th March 2006. 6. Vigneron Franck and Lester W. Johnson, 1999, A Review and a Conceptual Frame-work of Prestige-seeking Consumer Behavior.," Academy of Marketing Science Review [Online] 1999 (1) Available: http://scholar.google.com/scholar?hl=en&lr=&client=firefox-a&q=cache:1IFqF46uRYoJ:www.vancouver.wsu.edu/amsrev/theory/vigneron01-99.html+author:%22Vigneron%22+intitle:%22A+Review+and+a+Conceptual+Framework+of+Prestige-Seeking+...%22, accessed on 13 March 2006. 7. The Affluent Society, brothersjudd.com online at http://www.brothersjudd.com/index.cfm/fuseaction/reviews.detail/book_id/432, accessed on 13 March 2006. 8. Kotler, Philip, 2000, Analyzing Consumer Markets and Buyer Behaviour, In Marketing Management, pp. 167, Prentice-Hall of India Pvt Ltd., India. 9. Baron A. Robert and Donn Byrne, 2002, Groups and Individuals: The Consequences of Belonging, In Social Psychology, pp. 483, Pearson Education (Singapore) Pvt Ltd., Indian Branch, India. 10. Batra Rajeev, John G. Myers and David A Aker, 2002, Brand Equity, Image and Personality, in Advertising Management, pp. 326-327, Prentice-Hall of India Pvt Ltd., India. Read More