How Wealth and Need-for-Status Influence Consumer Behavior Toward Luxury Goods
The article authored by Young Jee Han, Joseph C. Nunes, and Xavier Drèze (“Signaling Status with Luxury Goods: The Role of Brand Prominence”) in the July 2010 issue of JM provides rich insights into consumers’ perceptions of and responses to luxury goods. The authors propose a simple, intuitive, and interesting taxonomy that assigns consumers to one of four groups in a 2 x 2 grid—namely, wealth (haves and have-nots) and need for status or NFS (high and low). Each of these groups differs in terms of their predispositions to associate or dissociate with members of their own and other groups. In turn, these differences produce testable hypotheses about the behavior of each group toward conspicuous (loud) or inconspicuous (quiet) luxury goods, a construct that the authors call “brand prominence.”
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