I read an interesting article last week in my company’s newsletter. Forbes.com published a Business Wire press release about how consumers are looking at luxury and designer brands in a different light these days. The concept that Sporting “Loud” Designer Logos Can Communicate Unintended Messages may be new to some when they decide to make that purchase on their new luxury handbag.
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", a study published in the July issue of the Journal of Marketing and 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, 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."
Get this, 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:
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.
As I find these results to be pretty interesting, I'd like to use the example of handbags as well, by presenting these categories through women we may all know. The categories are as follows:
- 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"
Kim Kardashian, need I say more?
- 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)
I have to say, I hate it when I see people on the street wearing fakes! In my opinion it's so trashy. This article is dead on because, when you see a person walking down the street with jeans from Conway, a shirt from Rainbow and a pair of Old Navy flip flops with a G-oach-i (that's coach and gucci put together) bag. You know for sure that they're bag is fake. Even if it was a good knock-off, the rest of the outfit speaks for itself. If you can't afford the bag, then you can't afford it. Save up, decide if its really worth the money, or find another brand that suits your income and rock that, but please don't try to pretend! Or you'll just be classified as a POSEUR. Photo pulled from MailOnline.com
- Proletarians, those with no drive for consumption
Now a photo of a Proletarian with a handbag was really hard to find, especially since handbags are a materialistic items in the first place. So I grabbed this one of Reese Witherspoon with the Whole Foods Feed Bag, where the profits from each bag are supposed to feed one impoverished child for a whole year. I find it ironic though, how Whole Foods managed to turn something so useful and eco-friendly, like a reusable grocery bag into an object that is highly emotional necessity. What I'm referring to is the "I'm not a Plastic Bag" designed by Anya Hindmarch. The bags were sold out in 29 mins (!) in Columbus Circle the day that they were released and later were selling for hundreds of dollars on Ebay. The worst part is that there were even knock offs of those bags!
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.
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:
1. Develop a set of special signatures, or subtle cues, to distinguish the brand. For example, the authors cite Gucci's use of bamboo on its products that says "Gucci" without employing a logo. Patricians recognize the signal, while non-patricians do not.
2. Don't make a brand ubiquitous. A luxury-goods manufacturer should resist the urge to popularize its trademark. If too many people sport the brand's logo, the mark loses its value. Bottega Veneta is an example at one extreme, the authors say, with the logo appearing only on the inside of its products.
3. Consider advertising to all consumers, not just the target market. For brands that appeal to everybody, the message must be aspirational not functional.
4. Reassess the "pyramid" approach to luxury. Appealing to the creme de la creme to also lure less-sophisticated consumers doesn't always work.
For a copy of the study, please contact media relations at Marshall School of Business at firstname.lastname@example.org.
SOURCE: USC Marshall School of Business
Now the question I find myself asking is, what if you're non of these? I know I'm not a Patrician, and I'm not running out to buy bags with exceptionally large logos to show off, nor am I buying knock-offs; but I'm definitely not a Proletarian, because I love shopping. Is there a word for people who have taste and live on a lower budget? I know a lot of those!