The New Elite. Inside the Minds of the Truly Wealthy

Citation

Kwiatek, P. (2009), "The New Elite. Inside the Minds of the Truly Wealthy", Journal of Consumer Marketing, Vol. 26 No. 5, pp. 368-368. https://doi.org/10.1108/07363760910976628

In the management literature we often read about luxury brands, admiring the strategic achievements of Louis Vuitton, Hermes, or Porsche. We know perfectly well that the products behind the brands are only affordable to the rich. Passing by Bulgari, Prada or Zegna boutiques, we wonder who does their usual shopping there – well‐paid chairmen, lawyers, or maybe simply children of rich parents.

If you ever wondered who and buys and how they purchase the really expensive products, of whose existence we might not even know, this book will satisfy your curiosity and will let you get to know better the preferences, value systems and behaviour patterns of this relatively small but very important group of buyers.

The New Elite is a guide to the world of the wealthy, and specifically, the affluent. Let us make it clear immediately that the authors mean: The wealthy are those having US$5 million in liquid assets or at least $500.000 annual discretionary income, whereas in the case of affluent the figures are respectively: US$1 million and $125.000.

According to the authors, the wealthy is a dynamically developing segment of buyers. Over the last 21 years, the population of the US has increased by 33 per cent, and the population of millionaires has gone up by a few hundred per cent. At the same time, the gap in the asset distribution has widened – 5 per cent of the richest Americans possess over 60 per cent of all assets of US inhabitants. As a matter of fact, the rapid growth of this group, as indicated in reports (e.g. Merrill Lynch/Capgemini “World Wealth Report”), is a global trend.

This book takes readers on a fascinating journey through a market which certainly many crave, most likely many hate, but which no doubt everybody is curious about. It is a market having an air of mystery, but evidently also false myths. Thousands of interviews conducted with its representatives allowed for collecting material which should be compulsory reading not only for those who offer products or services for the richest but for everyone who is interested in customer behaviour.

The quoted research results show, for example, that most people believe that the rich mainly inherited their fortune (as many as 85 per cent Americans consider fortune inheritance to be the main source of wealth). The authors of The New Elite, however, claim that merely 10 per cent of the richest inherited a fortune. Most of them come from the middle class, and the highest annual income is generated by those who are their own bosses.

Another common myth is related to the conception of how the wealthy spend their money. In fact, only one in three is in the group of emotional buyers. The majority carefully plan their purchases and compare prices before making a decision.

The authors provide practical information presenting a well‐developed market segmentation scheme for the rich based on lifestyle and describing its five segments. They also point out differences depending on for how long the rich have been really rich.

A certain shortcoming of the book is the fact that sometimes the authors steer too much away from the nub of the matter, namely customers, towards brands. Defining, on the basis of the research results, six dimensions of the luxury brand would be more convincing if it appeared in the summary and not in the middle of the book like a kind of an interlude. Also the use of Coca‐Cola to illustrate the dimensions of the luxury brand is debatable. Nevertheless, all 12 chapters of the book are intriguing and thought‐provoking.

To sum up, The New Elite combines the results of extensive research with stories about the nature of wealth. It is a clear and compelling trip into the world of the wealthy and affluent, worth spending a few evenings reading. It will be beneficial to people dealing with luxury brands, academics studying consumer behaviour, as well as students of economics and social sciences.