Consumers experiencing changes in living conditions: What effects do changes in living conditions have on culture and cultural meaning? Do changes in living conditions influence decision-making?

Abstract

When a consumer experiences good living conditions, the consumption is likely to expand to some degree. The society he/she lives in is in financial bloom and the culture surrounding him/her is characterized by a high standard lifestyle. A culture of luxury lifestyle is created. The consumer is likely to be influenced by the environment surrounding him/her and most often is desired to take part in this high standard, luxury lifestyle. The consumer uses products and brands to signal the cultural category he/she wishes to be associated with. These products are filled with cultural meaning and the meaning is what represents the cultural principles of the consumer. If the consumer wishes to be associated with the culture of luxury lifestyle, he/she purchases products that carry the cultural meaning of luxury. This is often referred to as conspicuous consumption. But what happens when there is a change in living conditions? The living conditions in Iceland in the years 2005- early 2008 were extremely good. The culture was characterized by high expenditures and luxury lifestyle. In late 2008, three of the largest banks in the country collapsed. This resulted in a major financial recession in Iceland which still has a great influence on the society and citizens. Consumers in Iceland have experienced a tremendous decrease in purchase power. The financial recession has changed the living conditions in Iceland. The situation in Iceland gives a perfect opportunity to investigate what effects changes in living conditions have on culture and cultural meaning and if it influences the decision-making process of a purchase, which will be the focus of this thesis. For the purpose of the research, in-depth interviews were conducted with consumers of luxury car brands in Iceland in the years 2005 to early 2008. Six respondents were chosen that fulfilled the main requirement. They gave information needed to answer the research questions: What effects do changes in living conditions have on culture and cultural meaning? Do changes in living conditions influence decision-making? The research is of a qualitative nature and is not meant for general assumptions about consumers of cars in Iceland but to give an insight into how the meaning of luxury might change during a financial recession and how changes in living conditions influence decisionmaking. The results indicate that the culture of luxury lifestyle becomes unattractive when living conditions worsen and the public cultural meaning of luxury gets negative associations. These changes in living conditions and culture influence consumers to focus more on utility in the process of decision-making of a car purchase and less on the cultural meaning it signals, which is the case when consumers experience good living conditions and wish to be associated with the lifestyle of luxury.