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Signaling Status with Luxury Goods
The Role of Brand Prominence

Authors:
Young Jee Han
Joseph C. Nunes
Xavier Drèze

Publisher:
Journal of Marketing
2010, 74 (July), 14-30

Abstract:
This research introduces brand prominence, a construct reflecting the conspicuousness of a brandís mark or logo on a product. We propose a taxonomy that assigns consumers to one of four groups based on wealth and need for status, and demonstrate how each groupís preference for conspicuously or inconspicuously branded luxury goods corresponds predictably with their desire to associate or dissociate with members of their own and other groups. Wealthy consumers low in need for status wish to associate with their own kind and pay a premium for quiet goods only they can recognize. Wealthy consumers high in need for status use loud luxury goods to signal to the less affluent that they are not one of them. Those who are high in need for status but cannot afford true luxury use loud counterfeits to emulate those they recognize to be wealthy. Field experiments along with analysis of market data (including counterfeits) support our proposed model of status signaling using brand prominence.
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