Friday, November 17, 2017

The 4 Categories of People and Luxury Products

Luxury goods are bought more for what they represent then what they actually are (Wiedmann, et. al., 2013). While functionality may be of interest to some that is not their essential value for someone who pays the higher luxury price. It is their perceived social status as someone wealthy that matters.

People often signal their status through the products they purchase (Han, Nunes & Dreze, 2010). They can be separated into 4 major groups:

1. Wealthy consumers who do not need status but want to signal to their own social crowd with quiet goods only other wealthy people recognize.

2. Wealthy consumers high in need for status who use "loud" luxury goods to signal to less influence they are "higher" than them.

3. People who cannot afford true luxury goods but use "loud" counterfeits to show others they should be perceived as "wealthy".

4. Those who don't care about wealth status and could care less if they associate with the wealthy or poor.

There are different type of people with different kinds of personality. Some only want to be part of their own crowd and have no negative view of people with less influence. Still, there are others regardless of whether they have money or not, that must look like they have money. Personally, I always found the big "Gucci" letters sort of obnoxious. It sort of screams "look at me" which indicates a lower sense of self.

Wiedmann, K. et. al. (2013). Creating Multi-Sensory Experiences in Luxury Marketing. Marketing Review St. Gallen, 30, (6).
Han, Y., Nunes, J. & Dreze, X. (2010). Signaling Status with Luxury Goods: The Role of Brand Prominence. Journal of Marketing, 74 (4). 

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