Economic Psychology and Fashion Marketing Theory Appraising Veblen’s Theory of Conspicuous Consumption

Abstract

The study here serves to examine customer choice and firmprofitability outcomes from the conjoining of four perspectives:economics, fashion, marketing, and psychology. This article describescore tenets of fashion marketing theory (FMT) fromthe perspective of economic psychology. The study here isunique and valuable in proposing empirically testable hypothesesthat follow from FMT and in describing evidence fromavailable literature testing these hypotheses. The core tenets reflectthe view that impactful fashion marketing moderates therelationships among price and consumer demand for the firm’soffering (i.e., brand) by psychological customer segments, andsubsequently firm profitability. Relating to fashion marketing,“psychology” in “economic psychology” includes the influencesof chronic desire for conspicuous consumption (CC) and desirefor rarity as relative human conditions, that is, humans vary inthese desires; consumers relatively very high versus very lowin these desires are more prone to enact conspicuous choiceswhatever the price level of the object or service. Consequently, different pricing points (decisions) that maximizeprofitability vary considerably for product designs which arepositioned high in CC and rarity directed to customers veryhigh in chronic desire for CC and rarity versus product designswhich are positioned low in CC and rarity directed tocustomers very low in chronic desire for CC and rarity. The study offers an interesting application of interdisciplinaryresearch that combines economics, fashion, marketing, andpsychology. The theory and empirical findings support theview that the influence of fashion marketing designs and pricedepends substantially on the chronic desires of consumers andmarketers’ abilities to segment and target customers by thesedesires—a conclusion made explicit by Veblen (1899).