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New Luxury

Presentation on 2010-04-14

Oskar Kohonen

on 7 November 2013

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Transcript of New Luxury

What is luxury?
Oxford English Dictionary
The state of great comfort and extravagant living

An inessential, desirable item that is expensive or difficult to obtain
Rolls Royce SUV
Socrates describes the city of only necessities and is interrupted by Glaucon who calls it a "city of pigs"

Glaucon: You should give them the ordinary conveniences of life. People who are to be comfortable are accustomed to lie on sofas, and dine off tables, and they should have sauces and sweets in the modern style.
Plato: The Republic, Book II
Economic Definition
High income elasticity of demand: Demand increases more than proportionally as income rises, in contrast to a "necessity good"
Consumer rapport to luxury : Analyzing complex and ambivalent attitudes (2001)
DUBOIS, Bernard, LAURENT, Gilles, CZELLAR, Sandor
Interviewees perceptions of luxury
Excellent quality
Very high price
Aesthetics and
Ancestral heritage and
personal history
Scarcity and uniqueness
Factors affecting luxury
Innovation: "Something new that is presented in such a way that the value will be determined by selectors"
Adding Values (2007)
Luxury: "Something that is determined by selectors as luxurious"
Dany Jacobs:
We can use this idea too!
There is a person called A. He lives in a middle class economy of a developing country. What I mean by saying middle class of the developing ountry is that he has access to the electricity, basic transportation, drinking water supply, concrete house and other facilities like nearby kiosk, entertainment etc. His parents come from the hilly region where there was no electricity and houses are not concrete made. The nearest road is 3 to 4 hours walk from the house and life is traditional. Though his parents are migrated to this sub urban area from the hilly region his grandparents are still living there since they have some business there.

Lets say A goes to visit his grandparents in his vacation. This life there is a hardship for him compared to the modern life in sub urban area where he is living. Some example of the contrast life between open toilet verses modern hygienic toilet, collecting water from the river and pumped water from the ground, electric lights vs. kerosene lamp, postal letter vs. land line phone and many more. The big question here how A perceives this life. We presume that most of the audience will assume that A gets frustrated with this life, but its not true. A finds happiness being close to nature. A becomes content by eating fresh fruits and A enjoys swimming in the open streams of water. He perceives this as a luxury in life. Fresh vegetables, running streams of water, and closeness to nature is a luxury for him.
health and well-being
the New Luxury
Better approach:
Ethical Stance
Success criteria and Beliefs
Change in Consumer Mindsets
Local mindset


Dependency of authorities, organizations

Egoistic ethics
Global mindset


Agency, co-creation

Social and Sustainable ethics
changes in the mindset is a critical factor towards ”new” or ”sustainable” luxury
People and
ecological system together
are equally important.
Ref: Laszlo & al. 2009
Reference Point
If all the people and the globe sustain!
Human and ecological systems view.
Respecting and sustaining the intangible and tangible resources.
Win /evolve as a systemic whole.
If I get rich, all is fine!
Competition as recources are limited.
Win/Loose game.
If me and and you get rich!
Win/Win game. Exploiting the resources.
BUT: What is really necessary?
Opposite: Necessity
Primary energy consumption, CO2 emissions and world population.
Historical relationship between
CO2 emission and economic output
Behavior Change
Energy Awareness
Concern about consumption
Developing energy self efficiency
Beleiveing you can make a difference
Sustainability and luxury
Greedy consumerism is not something we can afford
to live with

Time of marketing brand is over


Deeper luxury , economic and ethics,
Higher level of consumption and wealth doesnot necessarliy co-relate with well-being
Life satisfaction, Life expectancy, and Ecological footprints
Energy demanding
Determined by the markets

Global markets
Can be determined
Very restricted
Light cultural dependencies
Products; items, services,
Necessarily no need of energy
Determined by the people themselves
Local markets
Can’t be determined
Everyone can have it “luxury for all”
Much cultural dependencies
State of the mind ?
The Old Luxury (Commercial luxury)
The New Luxury (a mindset)

Attitudes to luxury brands and
Attitudes to luxury owners
Judge luxury quality

Main channel to get luxury
Luxury consumer
Table 1 China luxury consumption culture changes
Social aspects like social circle influences
Negative. Luxury is extravagance

By its name and origin

Gift exchange

Traditional social elites like stars, government senior officers
Individual aspects like personal taste, reward etc.
Positive, demonstrates my success and taste

By quality, brand
loyalty declines.

Rising middle class, empowered woman, and the young generation
Source: Ronald Inglehart and Christian Welzel, Modernization, Cultural Change and Democracy. New York, Cambridge University Press, 2005: p. 64 based on the World Values Surveys, see www.worldvaluessurvey.org.
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