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The Objective of Luxury Research

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									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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