The logo on your designer handbag or sports car may say far more about your social status and social aspirations than the brand name itself, according to a new study from the USC Marshall School of Business, which finds that luxury brands charge more for “quieter” items with subtle logo placement and discreet appeal.
“Signaling Status with Luxury Goods: The Role of Brand Prominence,” was published in the July issue of the Journal of Marketing. It was co-authored by USC Marshall School of Business doctoral student Young Jee Han and Joseph Nunes, associate professor of marketing at USC Marshall; with Xavier Dreze, associate professor of marketing at UCLA’s Anderson School of Management.
The study points to consumers who may not realize that shrieking designer logos actually reflect a lower price point than more subtle counterparts. Were our mothers right? Is less actually more?
According to Nunes, “A significant segment of the population does not want to be branded, preferring to be understated … and is willing to pay a premium to have ‘quiet’ goods without a brand mark.”
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:
For consumers, the study’s authors note the following irony: “While many parvenus believe they are saying to the world that they are not have-nots, in reality, they may also be signaling to the patricians, the group they want to associate with, that they are not one of them.”
Implications for marketers:
Based on their research, the authors recommend the following to managers in the luxury-good category: