Within a recent study “Signaling Status with Luxury Goods: The Role of Brand Prominence” by USC Marshall School of Business' Young Jee Han and Joseph Nunes, it was found that luxury brands charge more for “quieter” items with subtle logo placement and discreet appeal.
For the study, authors examined three categories of luxury goods -- designer handbags, high-end vehicles and men’s shoes -- with field experiments to survey consumers in a selection of Southern California shopping malls chosen for their demographics. These surveys were employed alongside an analysis of market data (including counterfeit goods) to reach the authors' conclusions on status signaling.
The study identified four luxury-good consumer species, according to their preference for “loud” goods with prominently placed brand logos versus “quiet” goods, perhaps the little black dress equivalent of subtle status:
Patricians: “Wealthy consumers low in need for status” who “pay a premium for quiet goods, products that only their fellow patricians can recognize”;
Parvenus: “Wealthy consumers high in need for status who use loud luxury goods to signal to the less affluent that they are not one of them”;
Poseurs, who lack the financial means to buy luxury goods, yet are highly motivated to buy counterfeit items to “emulate those who they recognize to be wealthy” (i.e., parvenus); and
Finally, those with no drive for status consumption? Proletarians.
The study’s key findings include:
Luxury brands charge more for “quieter” items with subtle logo placement and size that appeal to patricians. The authors find that a price disparity of several hundred dollars can be based solely on how prominently marketers display the brand on a purse.
Counterfeiters predominantly copy the lower-priced, louder luxury goods, which appeal to the non-patrician status-seekers and rarely copy the higher-priced, subtle items.
Patricians were more apt to accurately rank the value of a luxury handbag. In contrast, non-patricians consistently ranked flamboyant bags as having higher value than the discreet bags that lacked the brand name but were priced higher.
Patricians were the least likely of the four groups to buy a flashy item, such as a handbag, while the parvenus and the poseurs were more likely to prefer it. Meanwhile, poseurs expressed a significantly greater intent to purchase a counterfeit bag than parvenus.
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