The Snob Effect, or Why the Main Market Law Doesn't Always Work
Posted: Tue Dec 24, 2024 7:22 am
As the main law of sales says, when the price of goods/services falls, then demand increases, and vice versa, when the price rises, demand falls. But applying this rule is useless when it comes to premium goods: luxury real estate, unique exclusive cars, designer clothes, jewelry, antiques. In this case, the Veblen paradox, or the Snob Effect, comes into play, when an increase in price stimulates demand.
The snob effect: social and ethical benefits are more important than monetary gain
This economically unfounded phenomenon was described back in the 1920s by the American sociologist Thorstein Veblen. In his research, the publicist showed the paradox of people's behavior in sales, who are too susceptible to the influence of public opinion, connoisseurs of status goods.
The snob effect: social and ethical benefits are more important than monetary gain
In addition, people who have moved from one social antarctica email list 5644 contact leads category to another also have a tendency to the Veblen effect. The scientist found out that absolutely everyone is drawn to excessive consumption. As soon as a person has the opportunity to afford more prestigious things, he cannot refuse them.
Thus, the snob effect is consumer behavior that involves satisfying the need to belong to a certain social group - people with very high incomes. Any increase in the price of premium goods/services leads to an increase in demand. A drop in cost is perceived as a deterioration in the quality of goods.
The irrational behavior of people who are subject to the snob effect is connected with a psychological factor – in this way a person tries to demonstrate his exclusivity, uniqueness. Such a purchase, even if it does not bring any benefit, is very valuable for its owner.
Today, to satisfy the demands of this group of consumers, manufacturers of elite car brands specially release limited collections, the cost of which is unreasonably high. People with a penchant for the Veblen paradox are ready to spend more than one billion dollars, ordering an exclusive car at the stage of the existence of a drawing, 3-D presentation. Simply put, a person tries to buy what others cannot.
The effect of joining the majority, as a consequence of the Snob Effect
If in the last century the snob effect was inherent only to very rich people, today it has received a new interpretation. Due to the growth of consumption, the imposition of stereotypes, people with an average income demonstrate the Snob Effect, since in the modern world it is much more important what a person buys than how much he earns. A striking example is the purchase of modern gadgets on credit, in order not to be a black sheep. In order to buy the latest model of a smartphone, which is naturally more expensive than the previous one, people are ready to get into debt and loans. The most accessible and effective way to show your belonging to the majority is clothing. It is purchased solely to impress others. Although many are aware that there is a product that is not inferior in characteristics, but much cheaper.
The effect of joining the majority, as a consequence of the Snob Effect
At the same time, a real snob is ready to refuse to buy at any time if this product is in demand by the majority. Although many representatives of this social group fall for the same trick of marketers who, with the help of the right tools, convey to a person the uniqueness and exclusivity of the product, availability in a narrow circle. But in reality, after some time, the product can become mass, characteristic of the majority. For example, once only very rich people could afford to buy equipment from the American company Apple. Now, most people buy a smartphone with an apple logo, regardless of their financial capabilities, often solely to demonstrate that they can afford it.
Join us and choose thousands of products for wholesale and dropshipping from Ukrainian suppliers for your business, upload products to your online store!
Categories: Blog , Useful articles , Sales
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The snob effect: social and ethical benefits are more important than monetary gain
This economically unfounded phenomenon was described back in the 1920s by the American sociologist Thorstein Veblen. In his research, the publicist showed the paradox of people's behavior in sales, who are too susceptible to the influence of public opinion, connoisseurs of status goods.
The snob effect: social and ethical benefits are more important than monetary gain
In addition, people who have moved from one social antarctica email list 5644 contact leads category to another also have a tendency to the Veblen effect. The scientist found out that absolutely everyone is drawn to excessive consumption. As soon as a person has the opportunity to afford more prestigious things, he cannot refuse them.
Thus, the snob effect is consumer behavior that involves satisfying the need to belong to a certain social group - people with very high incomes. Any increase in the price of premium goods/services leads to an increase in demand. A drop in cost is perceived as a deterioration in the quality of goods.
The irrational behavior of people who are subject to the snob effect is connected with a psychological factor – in this way a person tries to demonstrate his exclusivity, uniqueness. Such a purchase, even if it does not bring any benefit, is very valuable for its owner.
Today, to satisfy the demands of this group of consumers, manufacturers of elite car brands specially release limited collections, the cost of which is unreasonably high. People with a penchant for the Veblen paradox are ready to spend more than one billion dollars, ordering an exclusive car at the stage of the existence of a drawing, 3-D presentation. Simply put, a person tries to buy what others cannot.
The effect of joining the majority, as a consequence of the Snob Effect
If in the last century the snob effect was inherent only to very rich people, today it has received a new interpretation. Due to the growth of consumption, the imposition of stereotypes, people with an average income demonstrate the Snob Effect, since in the modern world it is much more important what a person buys than how much he earns. A striking example is the purchase of modern gadgets on credit, in order not to be a black sheep. In order to buy the latest model of a smartphone, which is naturally more expensive than the previous one, people are ready to get into debt and loans. The most accessible and effective way to show your belonging to the majority is clothing. It is purchased solely to impress others. Although many are aware that there is a product that is not inferior in characteristics, but much cheaper.
The effect of joining the majority, as a consequence of the Snob Effect
At the same time, a real snob is ready to refuse to buy at any time if this product is in demand by the majority. Although many representatives of this social group fall for the same trick of marketers who, with the help of the right tools, convey to a person the uniqueness and exclusivity of the product, availability in a narrow circle. But in reality, after some time, the product can become mass, characteristic of the majority. For example, once only very rich people could afford to buy equipment from the American company Apple. Now, most people buy a smartphone with an apple logo, regardless of their financial capabilities, often solely to demonstrate that they can afford it.
Join us and choose thousands of products for wholesale and dropshipping from Ukrainian suppliers for your business, upload products to your online store!
Categories: Blog , Useful articles , Sales
share