To identify how significantly Consumer Expectations and Perceptions can Influence Consumer Spending

By

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION1

Background of the Study1

Problem Statement1

Rationale of the Study2

Objectives of Study3

CHAPTER 2: LITERATURE REVIEW4

Politics of Mass Consumption: Balancing Public and Private Consumption4

Consumer Behaviour6

Individual purchaser perception9

Personality and self concept9

Buying Process10

Public Spending as Percentage of GDP12

British Politics of Mass Consumption and the Purchasing Power Paradigm, 1990s-2000s13

The European Model of Consumer Spending14

Overspending Trends in British Consumers15

REFERENCES18

CHAPTER 1: INTRODUCTION

Background of the Study

The economic impact of the expenditure patterns on today's global consumers is documented frequently, however, little, if any research specifically evaluates consumers' attitudes toward luxury brands in developing countries, such as United Kingdom; this study reverses that trend, by gaining a comprehensive understanding of the consumer market in developed countries, like Britain, during the time of recession. Local and global firms are better equipped to effectively target this consumer sector. Consumers' consumption of luxury brands exists not only in affluent countries but also in less developed countries such as United Kingdom (Hawkins, 2008, 27) where the consumer population comprises roughly 10% of the whole country's population (IBGE Brazilian Census 2000), and represents an attractive market for many companies.

Recent market research predicts that spending trend among British consumers represents the most important segment that will influence the global luxury market over the next decade (Gersh, 2006, 12). For consumers, particularly in affluent countries, the ownership of luxury brands is important as a means of facilitating friendships with others and achieving popularity (Gerrish, Lacey, 2006,78), and given that consumers are becoming more globalised, this trend is expected to be observed in emerging markets as well, like United Kingdom.

Problem Statement

Not surprisingly, periods of transition are often accompanied by the need for a variety of products or services to ease the transition. Not much is known about the spending motivations of this young group of powerful consumers, who just a decade ago, were not perceived to be particularly economically important. While consumers do not earn large salaries themselves and consumers have little income compared with adults, they do receive money from allowances or from temporary jobs and they have more disposable income than adults because most adolescents do not have to pay health insurance, credit card bills, mortgages/rent, supermarket or even utility payments. Consequently, consumers' behaviour has gained importance as a research topic of study due to teenager's disposable income expenditure levels.

Marketers recognise that consumers represent a target audience in which consumption patterns are always changing and, for that reason, consumers are difficult to evaluate as a target market. Despite their changing consumption patterns, consumers continue to increase their buying power which places them among today's most desired consumers.

Rationale of the Study

The emphasis on lavish spending on luxury brands is increasing in emerging markets, whereas in the past, luxury companies would focus only on established markets (Foxall, 2009, 76). A luxury brand is defined as a high-quality, scarce, high-priced, or rare brand (Fowler, 2005, 58). A study of 20 countries, including United Kingdom, conducted by (Fischer, 2008, 286) found that consumers in 19 ...