The Objective of Luxury Research Luxury research is carried out for a reason, just as any other form of consumer research must have an objective. The development of many luxury goods and services has come about as a result of the affluent consumers offering honest answers to marketing questions, rather than by chance or a gamble on behalf of the businesses that anticipated their need. Any form of market research or survey has a purpose: an end use to which the results will be put. It makes little difference whether the target subjects of that research are affluent, average or even poor, as far as these terms can be defined, because what matters is the type of information being gathered and their intended application. Why is this type of market research carried out? The objectives of luxury market research are to: • Identify gaps in the market as perceived by the affluent, • Identify services that the affluent would be willing to pay for, • Identify any prospective changes in the way the affluent spend their money, • Identify a future need that can be anticipated in advance, • Obtain a better understanding of the way in which the affluent expect their future consumer spending to be directed • Offer a better understanding of future market trends for any product category or type of service You can likely think of several others, but luxury research is not significantly different to any other form of market research in terms of the objectives. The difference is one of supply and demand. There is as much money to be made from selling five standard cars as from one luxury car. There is a market for each, and while the luxury market has fewer buyers, the price is higher. Each market must be supplied, and each has its own criteria that are important to its customers. Luxury Cannot be Defined One of the problems with the term 'luxury' is that it cannot be defined. Luxury to one is standard to another and inferior to a third. Market research focusing on perceived luxury goods is partially directed to defining what the term means by identifying what the wealthy spend their money on now, and what they will be spending it on in the future. The identification of future consumer trends is a major part of any form of research into the retail and service industries. Keep in mind that not all wealthy people purchase premium goods. Many would like to see less ostentation and more practicality in their goods, while others are diametrically opposite: they want the bling and the more highly priced the better. That is frequently the difference between old and new money - the lottery winner spends the fastest and their wealth lasts the shortest. However, keeping in mind that the principal objective of luxury research is to determine what the wealthy will be spending their money on and the products and services they would like to buy now, but just aren't available, then there is a significant difference between the wealthy and those less so. The Problems of Incentivized Market Research Most market research carried out on the general population are by means of online or offline surveys that have an incentive for participating. That incentive might be cash rewards, goods or free entry into a sweepstakes for cash or goods such as TV sets and iPods. Those participating are fundamentally being paid to do so, and it could therefore be suggested that their responses might be fundamentally flawed. This may be particularly true of those using surveys as a means of making money - there are many sites online that offer cash rewards for surveys. In order to earn significant money, large number of surveys must be completed, and so the incentive for the consumer is not so much to offer information that could result in an improved service or better product, but to complete the survey as fast as possible so they can get onto the next one. Accuracy of Luxury Research The wealthy, however, have no need to make a few dollars by completing several surveys, and have no interest in winning a short package holiday. When they respond to a luxury research program they are doing so because they want to influence the goods offered to them. They want their say in future product developments, and feel a genuine need to point out a gap in the luxury market. Luxury research would be expected to be accurate, although the wealthy will respond only to specialist marketing businesses that offer complete confidentiality in return for candid answers to their questions. There are such firms online that maintain databases of wealthy clients who are prepared to participate in luxury market research in the hope that their comments will be listened to, and that improvements in products and services will result from their participation.
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