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.”
More specifically, the four groups in the taxonomy include patricians (haves and low NFS), parvenus (haves and high NFS), poseurs (have-nots and high NFS) and proletarians (have-nots and low NFS). The patricians are motivated to associate with or signal to other members of their own group; the parvenus associate with patricians and with other members of their own group, but dissociate with poseurs and proletarians; the poseurs actively associate with patricians and parvenus; and the proletarians do not engage in any form of association or dissociation (i.e., no status signaling).
In a series of four studies, the authors empirically verify the following:
(1) Quiet luxury goods are priced higher than loud luxury goods produced by the same manufacturer, a finding compatible with the view that patricians are willing to pay a premium for the former;
(2) Lower-priced and loud luxury goods tend to be copied more by counterfeiters than other brands in the same product line, a result in line with the expectation that counterfeiters cater primarily to poseurs seeking to follow parvenus;
(3) Patricians are capable of deciphering subtle brand cues in luxury brands; and
(4) Preferences for loud and quite luxury goods differ across the four groups in line with each group’s distinctive pattern of associations and/or dissociations with other groups.
Overall, this research article marks a great beginning in a promising and new area. I found the discussion on griffe (“a set of special signatures” for the brand) especially illuminating. The authors are careful to recognize the limitations of their study and offer intriguing suggestions for future research. This study focuses attention on luxury goods, but it may be worthwhile to explore any limits to generalizing this framework to luxury services.
As always, I encourage JM readers to share your thoughts on this interesting article. Your contributions will help us advance the discussion.
Siva K. Balasubramanian, Web Editor, Journal of Marketing
