07.07.2020

Showing Some Class

KIM, Christine | PARK, Brian | DUBOIS, David

Often associated with the wealthy, luxury goods are highly desirable non-essential products that are bought either to support self-worth and status, or for their quality and craftsmanship. As a primary human goal, and one that drives the desire for luxury goods, status refers to the level of respect and admiration one is given. Since the idea of supporting or maintaining status exists throughout luxury brand communication, an important question is when will consumers be more sensitive to messages emphasising maintaining status and subsequently desire luxury goods more? To answer this, a recent paper by Kim, Park, and Dubois, began with the notion that people’s views on status often come from their political ideology.

Crucially, their research distinguishes between two goals related to status: the desire to maintain status, and the desire to advance status. Building on previous studies that find conservative ideology emphasises the need to sustain the current social order, the authors propose having such an ideology “increases the importance of status maintenance but not status advancement or a general sensitivity to status (i.e., the value put on status in general)”. As such, they predict that conservatives exhibit a greater desire for luxury goods when the status-maintenance goal is activated. Furthermore, they posit that activating this goal amongst conservatives heightens their preference for social stability, thereby increasing their desire for luxury goods as a means of helping to maintain the social order.

To test their hypotheses, the authors ran six studies which used different measures of political conservatism and desire for luxury. Three studies assessed status maintenance by looking at sociodemographic characteristics, while the other three used controlled external manipulations including advertisement framing and semantic priming. To increase the generalisability of their findings, four different product categories (cars, fashion clothes, eyewear, and headphones) were used. Multiple measures of conservatism were also employed to provide convergence on the effects.

These findings reveal that distinct status goals (i.e., maintenance vs advancement) differently affect luxury consumption. They highlight the importance of this conceptual distinction by showing that conservatism increases sensitivity to the status-maintenance goal but not to the advancement goal, subsequently creating a greater desire for luxury goods only when the status-maintenance goal is activated. [CK1] 

The research also makes several key managerial contributions by presenting a more sophisticated but practical approach to luxury market segmentation than the traditional method of vertical segmentation (e.g., by income). The findings support an approach that takes into account two factors that combine to predict consumer appetite for luxury goods, namely political ideology and status maintenance. Crucially, the data on both factors are accessible and identifiable even at the granular level, thus making it easier for managers to leverage the findings when designing their strategies. Through this research, the authors also provide detailed guidelines on how managers of luxury brands can motivate luxury consumption and tailor their communications to audiences with a conservative ideology. As the authors explain, “rather than targeting a segment on the basis of mere wealth, a luxury brand that emphasises status maintenance may be more successful when targeting a wealthy conservative segment”.

The research is also featured in Harvard Business Review and INSEAD Knowledge:
HBR: https://hbr.org/2018/08/the-marketing-message-that-works-with-republicans-but-not-democrats
INSEAD Knowledge: https://knowledge.insead.edu/marketing/how-political-ideology-shapes-luxury-spending-9906

 

KIM, Christine

Assistant Professor
Marketing