Signaling Status with Luxury Goods: The Role of Brand Prominence

Citation: Han, Young Jee, Nunes, Joseph C, Drèze, Xavier (jul/2010) Signaling Status with Luxury Goods: The Role of Brand Prominence. Journal of Marketing (Volume 74) (RSS)
DOI (original publisher): 10.1509/jmkg.74.4.15
Semantic Scholar (metadata): 10.1509/jmkg.74.4.15
Sci-Hub (fulltext): 10.1509/jmkg.74.4.15
Internet Archive Scholar (search for fulltext): Signaling Status with Luxury Goods: The Role of Brand Prominence
Download: http://journals.ama.org/doi/abs/10.1509/jmkg.74.4.15
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Summary

This paper examines the influence of brand prominence on the brand value. Very little work has been done in this area of branding and the paper aims to provide some more insight into this. The paper classifies customers into two major segments: customers who prefer loud branding vs customers who prefer quiet branding. It also divides customers by net wealth and social status, which provides insights on who consumers seek to associate with. The four groups are: Patricians (possess immense wealth and are willing to pay a premium), Parvenus (possess immense wealth but low connoisseurship), Poseurs (lower wealth but ambitious), and Proletarians (less affluent customers). Patricians use quiet signals while Parvenus and Poseurs use loud signals. The authors have conducted four studies to understand brand prominence. Study 1 examines the relationship between prominence and price, which manifests in decisions of luxury companies to charge more for quieter brands and products. Study 2 considers effect of counterfeit goods on buying decisions among the four customer classes, which leads to counterfeiters copying loud brands that are visible to Poseurs (who can easily afford counterfeits). Study 3 aims to recognize subtle brand cues used by Patricians and finds that Patricians are able to identify quiet brand signaling easily while Parvenus use loud brands to associate with Patricians. Study 4 examines motives for associations and disassociations and its relationship with brand prominence, which explains the tendency of Patricians to gravitate towards quiet brands that cannot be copied and associated with Poseurs or Parvenus. The implications of this study are: mangers should develop a specific subtle signature for their brands, luxury goods manufacturers should be quiet on their trademarks to stem counterfeiting, luxury goods manufacturers must advertise to all segments to attract a bigger market, and finally, luxury brands need to appeal to Parvenus and Poseurs through making their brand identifiable but not loud.