Final answer:
The claim that luxury market segmentation is by ethnicity is false. Segmentation for luxury goods is based on factors like income, quality, and status-seeking behavior, not ethnicity. Historically, luxury consumption was exclusive to the upper classes, but it has democratized over time, leading to greater product differentiation.
Step-by-step explanation:
The statement regarding luxury market segmentation by ethnicity is false. Market segmentation for luxury products typically involves criteria such as craftsmanship, design, prestige, and exclusivity, but not specifically ethnicity. While there may be nuances based on cultural preferences, luxury marketing strategies generally target consumers based on their income level, willingness to spend on luxury items, and the value they place on perceived status and quality rather than their ethnic background.
Socioeconomic class can inform market segmentation and consumer behavior. For example, the upper class often enjoys expensive, refined tastes, while the middle and lower classes have different consumption patterns. However, these are stereotypes, and individual choices may vary widely within any class. The blurring of class distinctions over the past decades also means that traditional class traits have become less predictive of consumer behavior.
Luxury goods were once almost exclusively the province of the nobility and the upper bourgeoisie. However, with societal wealth increases, a broader range of people now has access to luxury items, and there is more variety in what is consumed. This variety leads to product differentiation and monopolistic competition, as there is no longer a homogeneous market for many items.