60-Second Science

Fancy Brand Logos Send Mixed Messages

High-end goods with recognizable logos may signal to the less affluent that you have some money, but also to the wealthy that you're not one of them. Karen Hopkin reports

Some people pay big bucks for a designer handbag or a luxury car—and the distinctive logo that goes along with them. Now scientists have learned that other people pay even more to leave the logo behind. The findings appear in the Journal of Marketing. [Young Jee Han, Joseph Nunes and Xavier Drèze,]

High-end goods are often ostentatiously labeled. After all, if you spend all that money on a status symbol, you want to make sure that other folks recognize your good taste, even at a distance. But researchers surveying California consumers found that people who are seriously well-off are willing to pay a premium for items whose branding is more discreet.

These patricians don’t need gaudy symbols to advertise their wealth. Status seekers, on the other hand, are drawn to more obvious logos. These designer items let the less affluent know that they’ve been outclassed. The irony is that the logos mostly serve to alert the patricians that the owner is not one of them. And then there are the posers who buy flashy counterfeit items that for the most part don’t fool anyone.

The lesson for marketers: when it comes to branding, less may be more. And you can charge a higher price for it, too.

—Karen Hopkin

[The above text is an exact transcript of this podcast.]

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