The Relationships Among Materialism, Luxury Consumption and Social Value Essay

Custom Student Mr. Teacher ENG 1001-04 17 February 2017

The Relationships Among Materialism, Luxury Consumption and Social Value

But with the formation of emerging market, extension of luxury product market and the changes of consumer behaviors, luxury goods industry take a important role in global economics. Literature suggested an individual’s level of materialism influences the attributes they seek and consequently their consumption behaviors. This study decomposes the luxury consumption of status consumption and conspicuous consumption.

Little research, however, has taken into account the relationship between status consumption and conspicuous consumption and how such it affect the social value of consumer. It is the aim of this study to discuss the relationships among materialism, luxury consumption and social value. This study focuses on consumers had bought luxury goods, but what luxury goods point to 38 luxury brands collected. Interceptions at various mall locations in Taipei were used as the survey method for the main study. Keyword: Materialism, Luxury Consumption, Social Value INTRODUCTION.

As previously communist countries turn to capitalism and as former third world economies become more affluent, demand for luxury and conspicuously consumed products is increasing. With the formation of emerging market, extension of luxury product market and the change of consumer behavior, luxury goods industry take an important role in global economics. In the past, purchasing the luxury goods will be seen to a kind of extravagant wasted consumption behavior. However, along with the change of the social values and the consumption value, the psychological state of purchasing luxury goods also changes gradually.

Behavior of buying luxury goods calls it as “luxury consumption”. In addition, the luxury products not only can inspire consumer but also can be a kind of investment. Previous studies of luxury consumption show slightly shortage and existing studies mostly discuss status or conspicuous consumption. Little research, however, has taken into account the relationship between status consumption and conspicuous consumption. In addition, the reason and outcome that cause the consumption are worth to discuss.

In this study, we combine status consumption and conspicuous consumption into luxury consumption as well as consider social value is the outcome variable of luxury consumption. Hence, we discuss luxury consumption whether can raise the social value of consumer through the outcome variable. LITERATURE REVIEW Materialism The terms “materialism” and “materialistic” are used freely in ordinary conversation and by writers, frequently without definition. Materialism originally referred to the philosophical notion that nothing exists except matter and its movements (e. g., Labnge1865;1925).

The concept of materialism suggests the possessions and money are to personal happiness and social progress (Moshis and Churchill, 1978). Belk (1985) argues that materialism can be thought of as a cluster of related traits, attitudes, and values focusing on possessions and guiding the selection of events and things. In popular usage materialism more often refers to a “devotion to material needs and desires, to the neglect of spiritual matters; a way of life opinion, or tendency based entirely upon material interests,” as defined in the Oxford English Dictionary.

Originally developed by Richins and Dawson(1992), the Materialism Scale has three established dimensions: happiness, centrality, and success. Happiness concerns the notion the possessions and their acquisition are essential for well-being and satisfaction in life, centrality addresses the extent to which someone places possessions and their acquisition at the center of his or her life, and success measures whether or not someone judges his or her own and others’ success by the number and quality of accumulated possession. Luxury consumption.

Individuals often gain recognition and distinction by spending their income on products that display status and success to significant others. The consumption of those who set standards of taste and quality influences an individual’s demand for socially conspicuous products. In this paper, we considered luxury consumption decomposes of status consumption and conspicuous consumption. Status Consumption Status is the position or rank in a society of group awarded to an individual by others (Dawson and Cavell 1986; Packard 1959).

Status consumption is the process of gaining status or social prestige from the acquisition and consumption of goods that the individual and significant others perceive to be high in status. Packard(1959) defines “status seeker” as “people who are continually straining to surround themselves with visible evidence of the superior rank they are claiming”. Veblen(1934) was the first efforts to address the issues of status and conspicuous consumption.

Conspicuous consumption refers to expenditures not made for comfort or use but for purely honorific purposes to inflate the ego and is “concerned primarily with the ostentatious display of wealth”. Packard(1959) takes Veblen’s idea of conspicuous consumption and applies it to modern society, suggesting that people consume products to demonstrate a superior level of status both to themselves and to their friends.

We defined status consumption as: The behavioral tendency to value status and acquire and consume products that provide status to the individual, what the status consumer value is status quality that the things let them feel. Conspicuous consumption American rich were spending a significant portion of their time and money on unnecessary and unproductive leisure expenditures and coined the term conspicuous consumption to describe the behavior. (Veblen,1899) It is often said of conspicuous consumption that it is pursued in order to enhance one’s prestige in society, which can be achieved through public demonstration signaling wealth and communicating affluence to others.

Conspicuous consumption also includes expenditures made for the purpose of inflating the ego (Veblen,1934) coupled with the ostentatious display of wealth (Mason, 1981). In this paper, conspicuous consumption can be defined as: The tendency for individuals to enhance their image, through overt consumption of possessions, which communicates status to others. (O’cass & McEwen, 2004) According of the scale, conspicuous consumption includes five dimensions, materialistic hedonism, communication of belonging to, social status demonstration, interpersonal mediation, ostentation (Marcoux, 1997). Social value.

The economics literature places value within the context of exchange; a good’s value to a consumer is represented by the price he is willing to pay and stems from the utilities or satisfactions the good provides. Otherwise some scholar said that value is the key outcome variable in a consumption experiences. Based on the philosophical analysis of value, Holbrook claim that an object’s value pertains to the consumption experiences associated with that object. Sheth, Newman, and Gross (1991) describe five types of value that drive consumer choice-functional value, social value, emotional value, epistemic value, and conditional value.

Social value represents the perceived utility of an alternative resulting from its image and symbolism in association or disassociation with demographic, socioeconomic, and cultural-ethnic referent groups. This paper considers social value as the outcome of status consumption and conspicuous consumption. CONCEPTUAL DEVELOPMENT AND HYPOTHESES Conceptual framework Figure 1 presents our conceptual framework. As shown, we propose that the consumer’s level of materialism affects both of status consumption and conspicuous consumption. Next, we discuss the relationship between status consumption and conspicuous consumption.

Finally, the status consumption and conspicuous consumption is expected to influence social value. In the following sections, we define several key constructs and then present specific hypotheses regarding the relationships shown in Figure 1. Figure 1 Conceptual Model Hypotheses Materialism and Status consumption Materialistic people place more importance on possessions, recognizing that material objects play many roles while status consumers would place more importance only on those possessions they feel have status qualities. Thus, possessions may not play as central role in a status consumer’s life as in a materialistic consumer’s.

Status consumption can explain why a person consumes for status products, while materialism addresses why a consumer craves all possessions. Status consumption then is distinct from materialism. Belk(1985) did find though that more materialistic people would buy more luxury products. Materialistic people value possessions, both those that convey status and those that do not. Based on the preceding discussion, the following hypothesis is offered: H1: The level of materialism will have a positive relationship to status consumption.

Materialism and Conspicuous consumption Research in the UK anticipated important social changes around 2000 (Powderly and Macnulty1990). Their research identified that people’s needs for apperarances and materialism were increasing. That is, they recognized an increasing demand for conspicuous products. The present research chose to use three materialism scales developed by Belk(1984)to measure possessiveness, nongenerosity, and envy. When a person can’t easily have the product which compares with other people, the person will envy the product which other people have.

The envy of person will give these products very high value, so envy and conspicuous consumption have very explicit link. Based on the previous discussion, the following hypotheses are offered: H2: The level of materialism will have a positive relationship to conspicuos consumption. Status consumption and Conspicuous consumption The argument presented by Eastman implies conspicuousness when they say that heightened status-seeking behaviour will lead to an increase in the consumption of status goods, thereby augmentiong one’s level of perceived status.

Status consumption tendencies will lead individuals to be more conscious of displaying their consumption of status and possessions. Status consumption tendencies emphasise the personal nature of owning status-laden possessions, which may or may not be publicly demonstrated, whereas conspicuous consumption focuses more towards putting wealth or position in evidence, whereby possessions are overtly displayed. Based on the preceding discussion, the following hypotheses are offered: H3: Status consumption will have a positive relationship to conspicuous consmption. Luxury consumption and Social value.

Conspicuous consumption is undertaken or pursued in order to enhance one’s position in society, which can be achieved through signaling wealth, public demonstration and communicating affluence to others. Displays of wealth essentially become important social symbols, whereby evidence of affluence provides greater likelihood of ascending the social status hierarchy. Therefore, there is the potential for consumers to prefer using luxury products that symbolically represent a prestigious position within the status stratum.

Hence, this paper think that status consumption and conspicuous consumption can strengthen personal social value, that is raise individual social class , personal symbol value and enhance other people to own affection, approval and respect. Based on the preceding discussion, the following hypotheses are offered: H4: Status consumption will have a positive relationship to social value. H5: Conspicuous consumption will have a positive relationship to social value. SAMPLE AND DATA COLLECTION Data was collected using face-to-face and internet questionnaire to the members of a consumers had bought the products of 38 luxurious brands(shown as table1) .

Interceptions at various mall locations in Taipei were used as the survey method for the main study. A total of 212 did not complete or answer the surveys and wer excluded from further analysis, resulting in 120 usable responses, for an effective response rate of 56. 6%. In terms of demographic characteristics of the sample, mostly purchase brand were Gucci, Coach and LV (43. 4%), mostly purchse product type were leather goods (46. 7%), and the price level expended mostly were NT$3,000-10,000 (57. 5%).

The majority of respondent is female (82. 5%), 21-25 years of age (45.8%), college/university education (81. 7%), less than NT$40,001 household income per month (75%), single (77. 5%). Most of their occupations are commerce, students and service industry (74. 2%). The information see table 2. Table1 The List of Luxurious Brands |Alphabetized |Brand Name | |A |Anya Hindmarch | |B |Bally? Bottega Veneta? Burberry? Bvlgari | |C |Cartier? Chanel? Chloe? Chopard? Christian Dior ? Coach | |D |D&G? DKNY? Dunhill | |F |Fendi | |G |Georg Jensen Blumarine? Giorgio Arman? Givenchy? Gucci? Guess | |K |Kent & Curwen? Kenzo? Kuan’s Living | |L |Lagerfeld?

Loewe? Louis Vuitton | |M |MARC JACOBS? MontBlanc | |P |Paul Smith? Polo Ralph Lauren? Prada | |S |Salvetore Ferragamo? S. T. Dupont | |T |Tiara Group? Tiffany? Tod’s | |V |Versace | |Y |Yves Saint Lauren | Table 2 Demographic Characteristics |Items |Classification |Times (%) | |Luxurious brand |Gucci |18 |(15%) | | |Coach |17 |(14. 2%) | | |Louis Vuitton |17 |( 14. 2%) | | |Burberry |13 |( 10. 8 %) | | |Tiffany |9 |( 7. 5 %) | | |Polo Ralph Lauren |8 |( 6. 7 %) | | |Other |38 |( 31. 7 %) | |Product type |Leather Goods |56 |(46. 7 %) | | |Clothes |21 |( 17.5 %) | | |

Jewelry and Accessories |13 |( 10. 8 %) | | |Other |30 |(25 %) | |Price level of luxurious brand products |NT $3,000-5000 |38 |( 31. 7 %) | | |NT $5,001-10,000 |31 |( 25. 8 %) | | |NT $10,001-15,000 |18 |(15 %) | | |Other | 33 |(27. 5%) | |Gender | Male |21 |(17. 5%) | | | Female |99 |(82. 5%) | |Age | Less than 20 years old | 3 |(2. 5) | | | 21-25 years old | 55 |(45. 8%) | |Table 2 Demographic Characteristics(cont. ) | |Items |Classification |Times (%) | |Age | 26-30 years old | 26 |( 21. 7%) | | | 31-35 years old |16 |( 13. 3 %) | | | 36-40 years old | 4 |( 3.3 %)

| | |41-45 years old |6 |(5 %) | | | 46-50 years old |6 |( 5 %) | | | More than 51 years old |4 |( 3. 3 %) | |Educational level | Below senior high school | 0 |( 0 %) | | | Senior high school | 4 |(3. 3%) | | | College/University | 98 |(81. 7%) | | | Master/Doctorate | 18 |(15%) | |Occupation |Commerce |34 |(28. 3%) | | |Service industry |20 |(16. 7%) | | |Students |35 |(29. 2%) | | |Military, Police, Officials and Teachers |12 |(10%) | | |Agriculture, Forestry, Fishery and |6 |( 5%) | | |Husbandry | | | | |Worker |4 |(3. 3%) | | |Housekeeper |4 |(3. 3%) | | |Self-employed |6 |(5%) | |Marital Status |Married |26 |(21.

7%) | | |Single |93 |(77. 5%) | | |One-parent family |1 |(0. 8%) | |Average available income per month | Less than NT $20,000 |45 |(37. 5%) | | | NT $20,001-30,000 |27 |(22. 5%) | | | NT $30,001-40,000 |18 |(15%) | | | NT $40,001-50,000 |13 |( 10. 8%) | | | NT $50,001-60,000 |2 |(1. 7%) | | |NT$60,001-70,000 |2 |(1. 7%) | | | NT $70,001-80,000 |2 |( 1. 7%) | | | More than NT $80,001 |11 |( 9. 2%) | SCALES AND MEASUREMENT Developed by Richins and Dawson(1992), the Materialism Scale has three established dimensions: happiness, centrality, and success.

Otherwise, we cite the scale of status consumption developed by Eastman Goldsmith & Flynn (1999) and the scale of conspicuous consumption developed by Marcoux, filiatrault & Cheron (1997) respectively to estimate luxury consumption, and the scale of social value (Chin Chia Chih, 2005) A six point Liker-type scale was used for recording the responses (1= strongly disagree; 6= strongly agree). The results of confirmatory factor analysis (CFA) shown as table 3 indicate that most construct of materialism, status consumption, and conspicuous consumption can explain more than 60% of the variance in the data except the success of materialism (59.71).

On the other hand, we modify the scale of social value presented by Chin Chia Chih (2005) to fit our research appropriately. The exploratory factor analysis (EFA) was used. Principal component analysis with varimax rotation extracted one factors, specified based on eigenvalues of one or more with the screed test. This factor explains 62. 98% of the variance in the data and factor loadings range from 0. 594 to 0. 885. Cronbach’s coefficient is used to verify internal validity. Nunnally (1978) indicates that the measurement will have high validity if the coefficient is greater than 0.7.

Wortzel (1979) also points out that the value of 0. 7-0. 98 indicates a high validity, 0. 35-0. 7 is acceptable, and lower than 0. 35 should be rejected. Most of the reliabilities of the materialism, status consumption, conspicuous consumption, and social status scales exceed 0. 7, except the centrality factor of materialism (0. 681), the happiness factor of materialism (0. 6993)(show as table3). Table3 the CFA of constructs |Constructs and factors |NO. of Items |Eigenvalue |Cumulative % |Cronbach’s ? | |Materialism | |Centrality |2 |1. 516 |75.816 |0. 6810 | |

Happiness |3 |1. 884 |62. 8 |0. 6993 | |Success |4 |2. 388 |59. 71 |0. 7718 | |Status Consumption |4 |2. 899 |72. 47 |0. 8732 | |Conspicuous Consumption | |Materialistic Hedonism |3 |2. 285 |76. 17 |0. 8433 | |Social Status Demonstration |2 |1. 817 |90. 86 |0. 8994 | |Interpersonal Mediation |4 |3. 003 |75. 06 |0. 8892 | ANALYSIS AND RESULT The research hypotheses were tested using the simple regression model. Table 4 shows the analytical results.

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