The reason we buy luxury goods may be different to everyone, but the psychology behind it is very similar. According to Investopedia, who have research data taken from Yale scholars, reveal why people feel the need to buy higher-end goods, and they reveal what is going on psychologically when consumers purchase these goods. I now understand the mentality behind why people have the incentive to spend an extreme amount of money on one luxury item. Consumers don’t consider the trade-offs they can get in exchange for brand name items because they only consider the immediate satisfaction they get when they splurge.
Even if a product isn’t better than the generic one, as consumers, we feel convinced that the higher end one is superior. Investopedia gives insight into this by stating, “Consumers wait overnight for new releases and have immense brand loyalty even though Macbooks and iPhones aren’t technologically unique or superior. In fact, Samsung makes phones with better features...at a much cheaper price point. Nevertheless, Apple seems to break sales records year after year.” It seems that at my school, I can count the number of non-iPhones on the one hand. Everywhere I turn I see bigger and newer phones, but they don't show much improvement from the previous model. However, they are way more expensive. This goes back to the psychological stand that we feel like we are getting a better product because we are paying more money, but that’s not the case all the time. As consumers, we see brand names as superior, and we are quick to point out the negatives of inferior non-luxury products. This mentality we have is why are so ready to splurge, and when things go wrong with luxury items, we make excuses for it. We never look at the fact that maybe they cheated us.
Personally, I feel proud when I can buy a brand name item because it shows that my hard work paid off. It is immediate gratification, which is better to me than saving it. This is not necessarily the smarter option, but it happens to a lot of consumers. I don’t consider the trade-offs for not splurging on an item and maybe saving it for something more significant in the future. Going back to the psychology of it, the researcher at Yale did a study on children and if they can differentiate luxury brands compared to knock off brands. As buyers, do we care about the logo and reputation, or the actual quality of a high-end product? He concluded that “this quest for authenticity develops early in childhood.” The study attempted to convince the children that a machine had cloned their favorite item. However, “most children refused to accept the duplicate as identical. It turns out that the sentimentality of the item – the memory or pride or feeling that comes from having purchased a genuine luxury good – is part of the reason that we seek authenticity.” That goes back to the mindset I have when buying something new. The pride I get when purchasing authentic stuff is half the reason I do it.
Future Question: How do brand name sellers convince a consumer to splurge?
Future Question: How do brand name sellers convince a consumer to splurge?
