• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The prices for these luxury goods are getting more expensive rather than cheaper, so why are these sales escalating? Population growth is one possibility as the greater the population, the greater the demand

Extracts from this document...


Rahim Ladhani 3S1 Source: The Toronto Star Title of Article: Conspicuous Consumption Date of Article: Friday September 16th 2005 Submission Date: Thursday November 3rd 2005 Society today is based on the fundamental concept of supply and demand. If the demand increases the quantity supplied will rise. If the demand decreases the quantity supplied will diminish. However, the fluctuation in demand for all products is based on numerous factors such as price, population, income, advertising and more influential than price, taste. The Toronto Star printed an article on luxury items and how these extravagant goods are now in higher demand than ever before. Expensive brand names such as Lamborghini, Prada and Tiffany & Co as well as castles are having a vintage year. Lavish homes in the Toronto area that are worth $1.5 million were up 48 per cent in the first half of 2005. ...read more.


If one makes a large amount of money they are more likely to spend more compared to the person makes less. This cycle is referred to as the income effect. Individuals personal tastes have grown more expensive and companies have realised that there are those who wish for a taste of the 'good life' and as a result have created lower-end or diffusion brands to appeal to the cash-strapped consumer. President and CEO of the Retail Council of Canada, Diane Brisebois, commented on this marketing invention. "They have recognized that there is this huge middle market that wants to experience that kind of luxury and sophistication, and want access at a different price point." Demand Curve Luxury Goods A change in any factor affecting demand resulting in a change in quantity demanded (Q) ...read more.


This shows an excess of demand, and supply may not satisfy demand. This shortage could start an auction atmosphere, where the demand at this price is pushed up towards the equilibrium. Supply and Demand Luxury Goods At the equilibrium, the quantity supplied meets the quantity demanded. A surplus means that there is an excess of supply, that is, the supply goes beyond the demand expectations. This would result in the lowering of prices to effectively sell the supply. Although right now they are increasing at great rates, analysts agree that the very high end of the market will be the first to be hit if the economy suddenly takes a nosedive, since discretionary purchases are generally the first to go. This thought probably enters the mind of every company head each and every day, but until that day comes they will keep enjoying their continued success of the brilliant concept of supply and demand. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Marketing & Research section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Marketing & Research essays

  1. Factors affecting Supply and Demand.

    Disease The output of agricultural products can also be affected by disease affecting crops and disease and illness affecting livestock. Such as the foot-and-mouth epidemic in Britain 1997 has influenced the supply for the lamb a lot. Weather The supply of agricultural products is seriously affected by variation in weather conditions.

  2. Business Studies Company Profile

    Autocratic style is where the managers make all the important decisions, supervise and control workers closely and they expect to be obeyed. It's a very 'one-way' system the managers give the orders and the workers perform these tasks, there is no real feedback.

  1. I am going to be writing about the concepts of marketing distinctiveness of the ...

    They did this because a pressure group called CFC had pushed pressured on to them so they had no choice but also thinking differently about it why would McDonalds make such a big change in way of packaging not just because they were determined about the environment but also McDonalds

  2. Applied Business Studies

    Sometimes, the pressure groups can complain about certain things, and try to stop them, so if I am not carry out certain things, and they deem them wrong, then they will most probably complain. The importance of the pressure groups is that they try to influence 'Actors Vision' to do

  1. SunCity - developing marketing strategy for problem

    and to what extent, and which market segment do they primarily target as their customers. It is very important that Sun City carries out regular market research. Because Sun City is a relatively small company and will only generally attract customers from the local area it is very important to

  2. Business Enterprise unit 5

    logical and also practical, I see things realistically, I am self motivated and most of all I am an opportunist ambitious risk taker, therefore these skills will benefit me when I open my own business. My aims in setting up this business venture are to fill any gaps in the

  1. Investigating Marketing

    If you go to a phone shop today, there are many phones you can choose from, because many phone manufacturers see the different needs of customers. A same phone brand will have many different phones costing from a few hundred to few thousand dollars, besides income and gender group, they even make phones for the older and younger age groups.

  2. Rise and Fall In Oil Prices

    30 years is due to political unrest in the countries, which we obtain the oil. There is no pattern in the change of oil price during this time; the only difference is to what the current climate is in the particular countries.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work