Conspicuous Consumption Part 1

We tend to spend money to show how successful we are to the outside world.  Marketing professionals use this tendency to develop “images” for products they want to sell us.

As an example, a top of the line Mercedes Benz shows the world how successful and rich the owner of the car is (or must be) because in the advertizing the owner/driver of the car are usually well dressed and appear to carry themselves with authority furthermore we know how much such a car costs.  He/she must be doing well financially to be able to have such a car!

And so a wonderful cycle of product image development and “sell” is created:

1. A consumer with the (subconscious) desire to show everyone how “well” I am doing.
2. Marketing specialist has a Mercedes Benz to sell.
3. A long term campaign and pricing strategy is developed to show everyone who would drive/consume this product: “Successful, Good Looking and Rich”
4. Our consumer in step 1 buys the Mercedes Benz.

What’s funny is that the reality of this purchase on the consumer is that he or she just bought a quickly depreciating “asset” (using straight line depreciation, over 5 years @ about $20,000/year).  Furthermore, they impacted their financial condition for the worse because now he/she has that much less to spend on their daily needs or investment objectives.  Also, they are still the same person they were prior to owning the Mercedes Benz, realistically the car (no matter how wonderful the engineering) did not change the consumer into the “imaginary” hero seen in the advertizing campaign.

I would be curious to see examples of implied value you can identify by looking at what you consume every day.

Reading list:
Thorstein Veblen, Conspicuous Consumption, 1902  http://www.fordham.edu/halsall/mod/1902veblen00.asp