Proposed research direction - Essay Example

1. Ergin Uzgoren, Taner Guney, , The snob effect in the consumption of luxury goods. Procedia - Social and Behavioral Sciences 62 628 – 637This article addresses an interesting effect observed in the luxury goods market called the snob effect. This effect is directly connected to the psychological behavior and luxury market perception of snob consumers. The article describes in detail who are the snob consumers and how their shopping behavior can be modelled. The interesting part is that this research is applicable in virtually any luxury market regardless of the location and demographics.

This effect also stays immune to financial crisis and is still pronounced in an economic downturn. A marketing strategy that is aware of this effect can greatly benefit from the precise targeting of the described consumer type. The consumer demand in the luxury market exhibits inelastic behavior and classical marketing approaches are inefficient towards these consumers.The article also makes great references to other effects observed only in the luxury markets that can be exploited in parallel with the snob effect.

Depending on the product and its target audience one can select the strongest marketing effect out of five presented components: Veblen effect, bandwagon effect, hedonic effect, perfectionist effect and snob effect. A combination of all the effects might be an overkill for our research, but presents a good overview of how deep one can go in order to properly design a marketing strategy in the luxury segment. Even if sale volumes are miniscule compared to large retail discounters the profit margins are much larger, which presents a unique business opportunity.

However, large profit margins require a carefully selected and thought-out marketing strategy, which should take into account the psychological profile of the future consumer.2. Taskın Dirsehana, Meltem Celikb, (2011), Profiling online consumers according to their experiences with a special focus on social dimension. Procedia Social and Behavioral Sciences 24 (2011) 401–412Authors present a new marketing tool that helps to identify your target customer audience with the help of modern technologies.

It studies the behavior of online consumers and classifies them in seven categories: “individual hedonists, highly socials, holistic consumers, action-oriented consumers, knowledge seekers, sense-directed consumers and social utilitarian consumers”. Once a marketing department has an exact profile of consumers to target it becomes easier and more cost effective to come up, for example, with an advertising campaign. In the present days online shopping and online presence is a must for any retail business including luxury brands.

This article provides necessary tools that help to design a unique online shopping experience that would appeal to target audience and produce a high retention rate.This work is a logical continuation of the previous one and deals with same customer psychological portraits, but in a different domain – online shopping experience. The sales in luxury segment generally require much more attention to marketing strategies than, for instance, in retail business. That is why the knowledge of your customer is a good first step to identify and properly position marketing efforts.

In addition, these two articles provide sufficient reference to relevant studies that can help to elaborate on some of the marketing aspects in the luxury segment if required.