Marketing - Concept of Status Consumption - Essay Example

Discuss the concept of status consumption and how a marketer might be able to utilise status to market a specific brand or product type. Introduction The social trends are changing very rapidly and it is evident from the changing life styles of the customers. Today, the customers are more aware and knowledgeable therefore, marketers have gone beyond the price wars. Interestingly, marketers are getting more interested in understanding the psychology of consumers. The demand of high quality products, brand logos on the products and superior items, has insisted the marketers to believe that there is something which actually enhances the desire of high quality, superior and branded products. It is generally argued that increasing materialism in the society is the major factor contributing to this attitude of consumers. However, many of the researchers specifically name it as ‘status consumption’. In literature the concept of status consumption is defined as the consumption of anything with the intention of boasting of and showing off affluence to others and it ranges from an expensive lipstick to a pricey car (Scheetz, n.d.). Status consumption is the phenomenon through which consumers seek to increase their social standing by conspicuous consumption and possessions (Schiffman). Shukla defines status consumption as the behaviour of the consumer to buy the products and services to enhance their status, no matter what their income or social class is. Basically, status consumption refers to the purchases made by consumers to attain a social status. It also shows the increasing materialism among the people in the society. A lot of work has been done by various researchers on status consumption. Even the concept of status consumption is considered very effective from marketing point of view. In a survey of 239 Malaysian students, it was found that promotional appeals that underline social comparisons are more effective on status seeking customers (Heaney, Goldsmith & Jusoh, 2005). The researchers have been always curious to determine the reasons because of which the consumers go for status consumption. In a study of 598 consumers, it was found that status seeking consumers have a need for uniqueness and can be good opinion leaders (Clark, Zboja & Goldsmith, 2006). Therefore, the need to look superior and to maintain the social status results in status consumption. Ustuner and Holt (2009) studied the concept of status consumption among the middle class people from less industrialised countries. They limited their research to middle class group only because this class does have enough spending power to maintain their social class and they find that significant level of status consumption is shown by middle class people and above and they also argue global trickle down model explains the concept of status consumption. Actually there are various theories and models that explain the concept of status consumption. In this essay, we will evaluate how marketers use status consumption to market their brands and services. Theories and Models The theory of leisure class: In his book, The Theory of the Leisure Class, Norwegian American Thorstein Veblen has first defined the terms conspicuous consumption and conspicuous leisure. In the theory of Leisure class, Veblen highlights the reasons because of which customers go for luxury consumption. The term, conspicuous consumption is nowadays known as status consumption, and Veblen defined it as the spending of people in the form of resources or money to show off their higher status (Veblen, 2003). Bourdieu Theory of Consumer Taste Formation: Bourdieu does not agree with the general notion that consumers’ tastes are the result of human intellect, individual choices and inborn and he argues that ‘Kantian Aesthetic’ fails to understand that consumers’ tastes are socially conditioned and they are influenced by their intention to look different from other social classes of society and taste becomes a social weapon. Bourdieu has highlighted the consumer preferences for the products known for their aesthetic components and they have emerged class based hierarchy imposed through cultural dominance in the society (Allen & Anderson, 1994). A conceptual Model of Status Seeking Consumption Mason (1992) through the conceptual model of status seeking consumption explains the ability of consumers to buy for social recognition and the extent to which this tendency is translated into consumption. Mason also argues that status consumption is visible among all communities to a significant level and within the developed framework; there are three forms of status seeking consumption. The model (Figure I) highlight that need to achieve recognition generates conspicuous consumption; the need to secure social relationships results in bandwagon purchasing and the wish for distinction results in the consumption of products which have high aesthetic value (Masson, 1992). Therefore, all desires to obtain recognition and to show off wealth results in status consumption. Figure I: A conceptual Model of Status Seeking Consumption Source: By Mason in Modelling the Demand for Status Goods Status Consumption Scale: The researchers have also come up with status consumption scales in order to evaluate the relationship between status consumption and social class. Actually, developing such measures is also significant because the branded and luxury products are growing in demand and the marketer’s need to identify status conscious customers is also increasing. Status Consumption Model: The status consumption model given below identifies three major factors which result in status consumption behaviour of the consumers and they include Socio-psychological antecedents (social gains, esteem indication and osten, Brand antecedents and situational antecedents. The model (Figure II) shows that the factors like esteem indication, social gains etc contribute to status consumption. Nowadays, the marketers are promoting these factors in their ads and promotional material to attract customers. Figure II: Status Consumption Model Source: Paurav Shukla Website Implications of Status Consumption by Marketers The concept of status consumption as viewed by most of the researchers appears to be a process through which consumers seek to buy the products which may increase their social status. Before initiating the discussion on how marketers have been able to apply this concept to market their products and services, it is very important to analyse whether, status consumption has become more visible over time. Chao and Schor in their research find strong existence of status consumption in society however; they do agree that the degree of status consumption may vary based on the factors such as income, urban/suburban dwellings, education and race. Knol argues that the new wealth in the United States is bottled up in brand images, signs and symbols. In short, consumers are getting very status conscious which is directly leading to increased status consumption. For example, the fashion designers are highly focusing on branded clothes; jewellery etc to maintain exclusivity and it is interesting to note that the desire to look exclusive is not only limited to wealthy people but the same desire can be seen among the middle ones. Since consumers in every class have the desire to show off for status purpose as found by Basanko in 1995 (Cass & Frost, 2002), therefore, marketers have become very keen to obtain full benefit from status consumption of consumers. Since the factors like cultural differences cannot be ignored when it comes to develop marketing strategies, therefore, marketers do consider these differences. For example, Kim (2009) found that Chinese are relatively more brand conscious people as compared to Japanese which are more sophisticated consumers and more prices conscious. Therefore, as a result shopping patterns are changed because of nationality and the preferences of consumers to buy products are also changed. Now for a marketer, utilisation of status consumption as an important component of marketing strategy makes more sense in the Chinese market as compared to Japanese market. Whilst utilising the status consumption to promote their products and services, markets have to be aware of the other national differences as well. In a research it was found that the concept of status consumption is different in the case of British and Indian consumers. The British consumers go for status consumption with social benefits in their minds, whereas, the Indian consumers invest in luxury products to show off their wealth (Shukla, 2010). Therefore, in an individualistic culture like British, consumers consider their actually self-concept whilst making a purchase and in a collectivistic culture like India, the consumers consider the self concept of others with an aim to signal status through luxury consumption. Moreover, as the British consumers have been exposed to superior brands and products for a longer time as compared to Indians, therefore, British consumers show more awareness and symbolic associations than Indians which usually opt for luxury consumption more on social occasions. Therefore, the marketers targeting the Indian market, will find it relatively easier to promote the branded and luxury products by enhancing the social image linked with it. There are various products which are being promoted by linking the usage of the product with qualities such as superiority, adventure, sophistication, elegance etc. Smoking can be also linked with the concept of status consumption and it is evident from the fact that in most of the advertisements of cigarettes the celebrity tries to look different and superior after taking the cigarette. The more the customer is status conscious, the more superior brand he seeks to select. In a survey, it was found that the women which are fashion conscious are more likely to smoke than those which are not fashion conscious (Connor, Friel & Kelleher, 1997). Although it does not directly talk about status consumption however, it does promote the idea of fashion consumption, which is pretty linked with status consumption. Barnett (2005) in his research argue that along Manhattan’s Canal Street, a number of vendors have established temporary or permanent stalls to sell a number of imitations of superior handbags and other products. The products are being sold at very reasonable rates and the cost conscious consumers also shop their very frequently. By highlighting this, Barnett not only discusses the issue of copyright but he also highlight the status consumption of people. The vendors at Canal Street have been able to sell their low-prices and low quality products just through the brand name and the consumers are also willing to purchase the products to show off their status consciousness whilst bearing the costs easily. It means that status conscious consumers might not be very concerned about the price of product however; they are more interested in the perceptions of others regarding them. Marketers utilising the concept of status consumption to promote their products, find it more applicable for visible products. Chao and Schor found that visible status goods are characterised by lower price quality correlation which means that such goods usually have higher status premium and they favour higher prices. The marketers have the opportunities to promote the visible status brands to attract customers. Actually, most of the companies are already pursuing this strategy for their visible status products for example, luxury watches, luxury cars, high end handbags etc. Interestingly, perfumes are the exceptions in this case, as the perfume selling companies do promote their products as status symbols however, they are not visible but all that matters is their fragrance. The given ad of luxury watch booth at Basel reflects sophistication and elegance. Now the buyer of this watch will not be actually interested in the functionality of the product rather he will be more interested in the brand name and image associated with it. It is one of the major reasons because of which luxury watch companies have been able to earn millions of dollars by offering the same functionality. A luxury watch booth at Basel 20071 The given ad of Exotic Car Rentals is another example of how marketers utilise status consumption to promote their products and services. Although the ad has been published by a car rental company however, it makes itself distinguishable from other companies by creating the image of ‘status ride’. Source: Exotic Car Rentals 2 In short, the marketers can promote their products and services by associating the image of status with their products. In this ways the customers which are status conscious and which seek to maintain their social status are the main target markets. Bibliography Allen, E. D., & Anderson, P. F. (1994) Consumption And Social Stratification: Bourdieus Distinction. Journal of Retailing and Consumer Services. Advances in Consumer Research. Volume 21, pp. 70-74. Barnett, M. J. (2005) Shopping for Gucci on Canal Street: Reflections on Status Consumption, Intellectual Property, and the Incentive Thesis. Virginia Law Review . 91(6), pp. 1381-1423. Cass, O. A. & Frost, H. (2002) Status Consciousness and fashion consumption. [Online] Available on: http://smib.vuw.ac.nz:8081/WWW/ANZMAC2002/papers/pdfs/p406_ocass.pdf [Accessed on 11 July 2010] Chao, A. & Schor, J. B. (n.d.) Empirical tests of status consumption : evidence from womens cosmetics. [Online] Available on: http://ideas.repec.org/p/dgr/kubwor/19967.html [Accessed on 11 July 2010] Clark, A. R., Zboja, J. J., & Goldsmith, E. R. (2006) Status consumption and role-relaxed consumption: A tale of two retail consumers. Journal of Retailing and Consumer Services. 14(1), pp. 45-59. Connor, A. E., Friel, S. & Kelleher. C. C. (1997) Fashion consciousness as a social influence on lifestyle behaviour in young Irish adults. HEALTH PROMOTION INTERNATIONAL: Oxford Jounrals. 12(2), pp. 135-139. Heaney, G. J., Goldsmith, E. R., & Jusoh, W. J. W. (2010) Status Consumption among Malaysian Consumers. [Online] Available on: http://www.informaworld.com/smpp/content~db=all~content=a902296183 [Accessed on 11 July 2010] Kim, J. C. (2009) Chinese are brand-conscious, while Japanese price-focused. [Online] Available on: http://www.asianewsnet.net/news.php?id=8858&sec=2 [Accessed on 11 July 2010] Knol. (n.d.) The Genealogy of Our System. [Online] Available on: http://knol.google.com/k/the-consumption-of-status-and-signs# [Accessed on 11 July 2010] Mason, R. (2006) Modelling the Demand For Status Goods. Association for Consumer Research. 14(1), pp. 88-95. [Online] Available on: http://www.acrwebsite.org/volumes/display.asp?id=12198 [Accessed on 12 July 2010] Scheetz. K. T. (n.d.) A Modern Investigation of Status Consumption. [Online] Available on: http://www.case.edu/artsci/dean/elf/documents/scheetzreport.pdf [Accessed on 11 July 2010] Schiffman. (n.d.) Consumer Behaviour. Pearson Education India. pp. 378. Shukla, P. (2010) Status (luxury) consumption among British and Indian consumers. [Online] Available on: http://www.pauravshukla.com/status-luxury-consumption-among-british-and-indian-consumers [Accessed on 11 July 2010] Veblen, T. (2003). The Theory of Leisure Class. [Online] Available on: http://www2.hn.psu.edu/faculty/jmanis/veblen/theory-leisure-class.pdf [Accessed on 11 July 2010] Ustuner, T., & Holt, B. D. (2010). Toward a Theory of Status Consumption in Less Industrialized Countries. Journal of consumer research. 37(1), pp. 37-56 Read More