CONSUMPTION HABITS OF PEOPLE IN TERMS OF LUXURY GOODS

QUESTION

Research associated with qualitative analysis

SOLUTION

The definition of the luxury is not fixed. It changes according to the behavior of the individual. One time when a thing is luxury, at the another time it is not luxury. When there is sufficient income or more income than expected, a luxury is affordable. But in the reverse case it is not affordable. For most of the persons, luxury goods usually seem to be more psychological distance than necessity goods. Some luxury goods are exclusive and expansive. People can easily experience with necessity goods but they face problem to get experience with luxury goods. The distance of necessity goods is less than that of luxury goods.Consumption habit of a children depend not only the behavioral aspect the parents but also different stages childhood. It is very difficult to define the habit of children about the consumption of the normal goods and luxury goods. In the case of parents mother provide conceptual thing while father provides external skills so the children behaves differently with the mother and father. Children watch most of the decision of the parents and he knows how to responsible to the consumption of the goods with is own rights. Family communication can moderate the effect of adolescent media exposures, knowledge of product prices and motive of advertisement behind the goods.

There are various question related to research-

1. Expenditure of consumer- people is spending their major portion of income on food, clothing, education and other necessary things. If there is surplus they spend on luxury things in the research field it is very difficult to decide percentage of expenditure out of their income.
2. Psychological distance of the consumer with necessary goods and luxury good- it is a compulsion of a person to arrange all the necessary goods whether he has income or not so psychological distance with the necessary goods is small. But people are losing their surplus on luxury goods and also they enjoy luxury goods occasionally so the psychological distance of the consumer with luxury goods is more that of necessary goods.
3. Psychology of a consumer is different for goods for the goods to be consumed. Psychology of a consumer is qualitative factor and it is very difficult to quantify it exactly. So the research is done on the approximate values not on the exact values.
4. Behavior of the children- children learn the consumption patterns from their household mainly with the their parents what parents consume children follow it actually children are mainly on their parents for the consumption of the goods but after sometime consumer behavior start changing when children get connected outer environment now the children start learning which are their liking and which are not.
5. Family communication- it is very difficult to decide the family communication. When parents interact with the children they want to help and guide the children how to do the things and how to encounter with outside family. The communication of the family is the major part in deciding the attitude of the children because there is a positive relationship with behavior of the children and that of their parents.

First Article

Qualitative Analysis of “The abstractness of luxury”

The quantitative analysis depends on the following assumption.

a-               Income of the consumer should be constant.

b-               Consumption pattern should not be changed.

c-               Budgets constraints must be fixed on the proportional basis.

d-               Children behaviors depend on two things first on their parents and outside environment.

e-               Custom of the area where research is going to be done must not be changed.

This research model is related to the abstractness of the luxury of the consumer with the ordinary goods and luxury goods.Abstractness of the luxury of the consumer is directly related to necessary goods and inversely related to luxury goods. But the abstractness of the luxury depends on two things psychological and abstract mental factor.

Formula used

Abstractness of luxury = x * Psychological factor + (1-x)*Abstract Mental factor

Goods                                               Factor                                  Intangible Range

Ordinary   ——————— Psychological ——————–    70 % to 80 %

——————— Abstract Mental——————     30% to 20%

Luxury     ——————— Psychological ———————  Less than 40 %

———————- Abstract Mental——————    More than 60%

Psychological factor includes habit, tradition and environment. If we set 100% point for each of factor habit, tradition and environment. When average comes to 70% to 80 % along with unique factor 30% to 20%, product chosen will be ordinary. But when these factor percents are less than 40% and more than 60 %, goods will be Luxury.

Second Article

Qualitative Analysis of Luxury consumption

This depends on the following assumption.

1 There should be luxury goods in the market with product differentiation

2 Population of the area should be constant.

3 Wages or salaries of the people must be constant.

4 Consumption pattern should be variable.

Two factors decide to the luxury consumption

1 Internal (100%) —- Self esteem

————  Quality of the product

————  Internal motivation

————  Internal satisfaction

Internal factor depends on these four sub-factors

2 External (100%) – Social status

———–   Fashion

———–   External Motivation

———–   Product differentiation

External factor depends on these four factors.

Now,

Luxury consumption = Internal factor + External Factor- Internal factor * internal factor

GH49

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