Theorizing Luxury:
Situation in which customers show a willingness to pay a higher price for an equal utility good
Author: Nicolò Favaro
Presentation held on 03/28/2019 at Parsons School of Design, New York, 5th Avenue ; in association with EMLyon Business School
Introduction:
This paper will analyze different aspects of Thorstein Veblen’s theories that take place in a system of conspicuous consumption, by taking in exam different sources, from primaries to successive studies.
First of all by studying some of Veblen’s passages, taken directly from one of his most celebrated works “The Theory of the Leisure Class” (1899), I will focus on few aspects that intrigued me such as the presence of this “new” social class, the leisure class, and its continuous search for social status. Veblen actually proposed several arguments that I will analyze through different points of view, some of which I have acquired throughout the lessons and readings we have done in class.
Second of all, the paper’s discussion will orbit around the “Veblen effect”, term generally used to express the situation in which customers show a willingness to pay a higher price for a equally functioning good. This would be discussed and approached in a more specific way thanks to the example that I would offer; a case-study taking as object Vertu, which is a luxury phone company, which initially was founded in UK as a division of Nokia.
As terms for comparison I will take the brands Apple, nowadays a very well known American company based in California, one of the leading firms in its industry for its technological devices.
Taking into consideration this situation we are going into a deeper investigation of the consumers’ mindset, emotions and social beliefs related to these kind of over-priced purchases. One more theme would be the chasing for status inside the society and the various manifestation this “hunting” may assumes; also by taking into consideration different authors’ reasoning about this argument; this point indeed, in my opinion, can be easily compared to the “Diderot effect”, in particular the second, the radical one, which pushes the customer to research for goods consistency.
The FULL essay is divided in:
– First Chapter
1.1 History of Ownership1.2 Veblen’s Theory of Leisure Class
– Second Chapter
2.1 Conspicuous Consumption 2.2 Analysis of Vertu Case
– Conclusion
– Bibliography
ENNE 