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Chapter 1

INTRODUCTION

The purpose of this chapter is to introduce the theme of this dissertation. Starting from the
background of the research area and why this study is important, this chapter of the study will
continue to present purpose, problem and objective. Finally outline of the dissertation is shown.

1.1 Background

The Irrational Purchaser

Taxonomy is always a contentious issue because the world does not come to us in neat little
packages (S. J. Gould, 1981, p. 158).What better way to start then from NTU Principal Lecturer
and author of the book “Visual Contrast” Tim Rundle. During his recent visit to Pearl in one of
the discussions with the Luxury team he mentioned “quality” may not always be the criteria for

the choice of buying Luxury. It could well be the story behind the brand.

Daniel McFadden, economist in his paper, "The New Science of Pleasure," writes the numerous
ways economics fails to explain how we make choices and also what economics can learn from
psychology, anthropology, biology, and neurology.People don’t behave rationally, when it

comes to making choices and clearly don’t always act in their best financial interests. A decent
and sturdy handbag can be purchased for a nominal amount, yet people will still spend thousands
to buy a brand name.

We will find that higher priced goods are mostly of better quality and we also spend irrationally,
believing we get what we pay for regardless of whether the goods are proven better than their
affordable counterparts. The purpose is not to change the world but to explore and understand the

way it is.

Self-Esteem and Branded Goods

Research says, low self-esteem is a big factor in whether a person will buy branded goods that he
may not be able to afford. A branded item can go a long way in increasing self-esteem or
providing a sense of belonging. Both men and women use branded goods to show off their

success and flaunt wealth.