The Psychographics of Luxury ShoppersQuestion 1)Everybody has different spending habits; some like to spend for luxury, while for some, it becomes part of their daily life. As shopping incorporates in somebody’s everyday life, it becomes a part of them – shopping becomes necessary to define them.
This does not refer to the act of shopping, but the products that are bought (Martinsen, 2005). According to the Simmon’s Market Research conducted, the market segment that is identified because of the products they shop for and use are, savvy career women and single working moms. The reason for this conclusion is that these are the women highest in number compared to the other segments who cannot resist expensive cologne, or the ones who prefer driving a luxury car. Again, single working moms and savvy career women are the ones who try to follow the latest trend in fashion the most compared to the other segments.
Following such trends is to work on their outward appearance which is part of their extended life.The market implication is that the demand of these products rises since purchasing habits of these women become a part of their extended life. As the demands rise, the price of these products shoots up. This results in a greater supply of these goods into the market, resulting with a help of a greater production. Greater production/output level requires a greater amount of labor force, and thus, a greater demand of laborers. While the savvy career women are rich enough to be able to pay for their expenses, the single working women are not. Some might be able to afford their luxurious spendings with the help of family and friends, but not all can. This results in the taking of loans from the banks.
This not only contributes to changes in interest rates, inflation, money value changes but also to the women and country’s debt burden.Question 2)Functionality refers to the practical concerns that a person has while spending money – shoppers keep in mind the worth of an object based on its price, their income, affordability, price value of money and many more factors (Vora, 2007). Those who do not keep these things in mind are just frivolous spenders; one of the reasons for spending frivolously is to keep up to date with the latest trends and fashion. These trends are not only regarding clothing, but also living patterns, home décor, eating and everything regarding one’s daily life.The market segments that pay close attention to the practicality and the functional concerns while spending are the active grandmas and the upscale mature women. Although, this does not mean that they do not like living a classy life and do not live a life of a good standard; this simply means that they take special care and think before spending. This can be judged by the statistics we have been given; upscale educated are the least number of women who spend without thinking along with planning far ahead when they spend on expensive items. Also, educated working women with no kids are also conscious about their spendings as they are the least in number who do not care about price of goods.
Upscale mature women and active grandmas are the least of the lot who try to keep up with the fashion trends compared to the other segments. Moreover, there is not even a single of these mature women from the survey sample who spends on clothing more than she can afford to. Surprising fact is that they do that despite having the second highest income of all. The market implication for this is that the if some of the customer base is lost on the basis of rational of high prices, the producers tend to reduce the prices of the goods to increase sales. Most importantly, they will try to sell the good at a price of its actual worth and not try to fool the customers by selling it at sky high prices.ReferencesMartinsen, Joel (2005). Business Briefs: Women’s spending and luxury goods.
Accessed on October 26, 2008 from http://www.danwei.org/business_and_finance/business_briefs_womens_spendin.phpVora, Shivani (2007). Spend/Thrift: For women buying luxury goods, cash is king.
Accessed on October 26, 2008 from http://www.iht.com/articles/2007/01/19/yourmoney/mspend20.php