Steady demand is one of the main components of successful trading. No wonder everyday objects, food products are sold best. Such goods are classified as normal, that is, the demand for them is growing with increasing consumer income. But the market does not consist only of everyday goods. Luxury goods, expensive cars, exclusive jewelry, designer items, like all other goods in the classical sense, are also normal. But in fact, the choice of the buyer depends on many components.
American economist Harvey Leibenstein identified three types of human behavior when shopping for goods.
- The effect of joining the majority is that a person buys the most popular and fashionable product. Such an individual wants to always be aware of trends, stylish, to be “on the wave”. The greater the demand for this product, the more likely it is this purchase. And, conversely, with a decrease in demand, the goods are not bought.
- The snob effect is the exact opposite of the first case. A person seeks to buy what others do not buy. His task stands out from the crowd, to emphasize his own creativity. The greater the demand for a product category, the less likely it is that a similar buyer will acquire it.
- The Veblen effect occurs when it comes to prestigious consumption. In this case, a person buys a product not in order to use it for its intended purpose, but to highlight it among others. If we take the previous effect - the snob effect, then there is also the task to stand out among all. But with Veblen, purchases should show the high status of the buyer, and not his personal personality. In one product line, such an individual will choose the most expensive.
These three effects are crucial to the luxury market, where marketing promotion techniques that are common for mass consumption do not work. If you are guided only by classical concepts, such as speculative demand, elasticity of demand, consumer expectations, when conducting an advertising campaign on a delusional product, then you can come to disastrous results. The classic marketing model is designed to expand the target audience, which reduces the need to purchase a product as a dream item.
Therefore, people who buy luxury goods by their nature, the desire to be the first in everything, cease to notice such a product. Even if its consumer properties, exclusivity and chic is visible immediately. Thus, all promotion efforts are nullified. This is because among potential buyers there are no those for whom the main thing when choosing a product is the effect of snob or Veblen.
Consumer demand for luxury goods should be tinged with a certain elusiveness and difference from others. One of the options for promoting high-class goods is the principle of evangelism. It is based on the creation of special groups of people for whom the ownership of the brands of a particular company is vital. A brand has its own history, philosophy and principles. And here we are talking about luxury goods. As a result, those who are exposed to the Veblen effect and those who always put their own personality at the forefront (the snob effect) begin to acquire goods.
The concept of a prestigious price also plays an important role, that is, the price at which a product stands out from the benefits of the same category. What matters here is the fact that, according to other people, the buyer pays for the product much more than he actually costs. The question of prestige, unusualness and significance immediately raises in the eyes of those who are trying to stand out. Therefore, when creating branded luxury products, all requirements must be taken into account. Indeed, the success of an organization depends entirely on loyalty to each client.