Coke is just soda, Levi’s is just jeans and Nike is just shoes. Yet consumers go out of their way to choose them over other brands. What’s behind these choices? Why we as consumers are so addicted to choosing them?
Actually, the question behind this is how a rational consumer chooses to pay more for the exact same thing. This explains the true power of brands, they have the ability to influence our behavior in ways that extends beyond the point of selling. When we’re obsessed with a brand, it’s usually because it speaks to us in a way no other brand does. Sometimes, we’re the early adopters or the exact fanatics and ambassadors they’re looking for. When we act as promoters or advocates, the part of a brand’s message that we amplify is the one that speaks to us most.
Although brands do not rule our lives, subconsciously they influence us a lot that our purchase choices do depend on the advertisements we see in our daily lives. Some people do recognize it and try to buy brands that are worth the price and some others fall into the trap of branded goods and buy expensive stuff.
Brand builders think of it as a living, breathing part of their company that needs to be monitored and nurtured to grow and evolve. It is intentional and strategic. A brand mindset is a growth mindset. Through that human-like raising process, a brand will need an identity. It will need to go out for people and talk about its beliefs, goals in life, the future, and why it is created in the first place. However, one of the most upraising branding trends nowadays is “looking rich”.
The relationship between the consumer and the brands begins when the consumer decides to build an identity for themselves. That’s when they start to purchase products that will help them along the way. For instance, if you want to look rich, go ahead and buy designer brands, you want to show affiliation to sport, then go ahead and buy a Nike. It’s not about the product anymore, it’s more about the brand and how it helps you to identify yourself in society. People buy luxury brands not because they just care about raw materials, craftsmanship, and high quality, but because they want to communicate something about themselves. They want to communicate their economic status, their social status, and consumption does this rather well
*It was a private launch party of a new luxury brand of shoes called Palessi, designed by Italian designer Bruno Palessi. 2018, USA
“I would pay $400, $500. People are going to be like, ‘Where did you get those? Those are amazing,’ ” a woman said as she tried on a pair of bright-gold sneakers with leopard prints. The woman was not actually buying a Palessi because there’s no such brand, and there’s no Bruno Palessi. There is, however, Payless ShoeSource, a discount shoe retailer hoping to shake things up through an elaborate — and expensive — advertising prank to attract new customers and change the perception that the company sells cheap unfashionable shoes.
“We felt like this campaign would be a great way to get a lot of people to consider Payless again, and to realize it’s more than just a shoe store in the mall,” said Sarah Couch, Payless’s chief marketing officer.
But the prank also points to a reality about the human mind: Consumers are not capable of discerning the quality and value of the things they buy, said Philip Graves, a consumer behavior consultant from Britain. Slap a fancy-sounding European label on $30 shoes, and you have an illusion of status that people will pay an exorbitant amount of money for.
“The way that we evaluate things is through associations. If you put wine in a nice bottle, people like it more. If you package things up to look more premium, people will like it more,” Graves said. “If advertising has high production qualities, people will think it’s better.”
The campaign is the brainchild of a 10-person advertising company in Brooklyn. DCX Growth Accelerator specializes in big media pranks, or what the company calls “culture hacking.” A few weeks ago, the company pitched its idea to Payless, which had been looking into an out-of-the-box advertising campaign ahead of the holiday season. DCX examined Payless’s early successes, why its momentum had stalled, and what it can do to help turn the brand around, said Doug Cameron, who founded DCX in 2015. Payless shuttered hundreds of stores and laid off thousands of employees last year.
Digging deeper into our topic, brand competitors deliver different identities for society. some deliver winning performances and others are just there in the market trying their best. For instance, Apple and Samsung. A study was made for Apple users vs Samsung users to find out that Apple users are emotionally attracted to the brand and treat it as a “family”. While on the other side, Samsung users only purchase Samsung because they hate Apple. The consumer will have to choose which of these paths they will pick.
Emotions are ruling here and not the rational side. Consumers want comfort, happiness, and satisfaction in their lives, and they get it in part through the products they buy. If the brands they use consistently deliver a positive experience, consumers form an opinion that the brand is trustworthy, which gives them peace of mind when buying According to Forbes; luxury brands are benefiting the most from income inequality.
The most interested people in luxury brands are the ones that can’t afford them. The psychology behind it is that people living in low-income neighborhoods–the ones who are relatively well-off compared to their neighbors–are nevertheless worried that they’ll be misperceived as resource-poor. So, they purchase expensive and conspicuous goods, to make sure their resources are visible to outsiders.
In places with great income inequality, those people with lower incomes live under great social stress. Their low position in the social hierarchy is more obvious and more consequential. In response, some poor people purchase the kinds of goods that create the impression that they have social resources to spare, even when they are cash-strapped. And people living in low-income neighborhoods–the ones who are relatively well-off compared to their neighbors–are nevertheless worried that they’ll be misperceived as resource-poor. So they purchase expensive and conspicuous goods, to make sure their resources are visible to outsiders.
As an example of this behavior, researchers recently discovered that people in the United States with high-income inequality are more likely to google luxury brands than others with a more stable financial state. For instance, the famous clothing brand Ralph Lauren (which is considered one of the most expensive clothing brands worldwide) is googled with a higher rate in Mississippi than Iowa and in New York than Nebraska. To elaborate more, these states have more percentage of income inequality than other states.
The map of the United States shows the income inequality in which redder states have more income inequality.
Below is the map of the United States showing the frequency of google searching on the name Ralph Lauren in which the redder states have more google searches.
Seeking luxury is not only represented in clothes and devices, but also in food and beverages. Such as Starbucks, almost everyone’s first stop station when going to work or school. Why are so obsessed with Starbucks? Is it really all about the coffee? do we enjoy its store vibe? Is it about the packaging? Or is it something else?
As mentioned before, looking rich is one of the greatest drives that affect buying behavior. The consumer can find the same exact coffee at a much lower price but they would still choose Starbucks. And that’s because Starbucks seems to present itself as a sort of luxury that “almost everyone can afford.” With its Italianized names, its inviting interior designs, and even its high prices, Starbucks feels like an indulgence or a reward. It’s easier to drag yourself to work on a Monday morning when you treat yourself to your favorite latte on the way. Many studies have shown that our enjoyment of foods and drinks, even our perception of how they taste, is enhanced by branding and clever packaging.
Also, Starbucks acts as a “third place,” which is neither home nor work, but a neutral community space. A cup of coffee may cost more at Starbucks than at McDonald’s, but you’re also paying rent in a pleasant, inviting living room where you can stay for a while and meet with friends or work colleagues. Shops also offer free Wi-Fi, making Starbucks an optimal location to work outside the office.
Consumer consumption behaviors toward luxury brands are not a recent trend. It has been there for a very long time. People have always wanted to stand out, and show their financial and social state to their society and even the world. Starting with Pharaohs and using gold in creating almost everything to the gilded age to finally where we are now.
According to Thorstein Veblen, the American economist and sociologist, back in the 1890s. He noticed that wealthy people tended to buy many things that they could consume in public, things at very high prices. This was rather odd, given that functionally equivalent products were available at much lower prices. He suggested that these wealthy people engaged in this wasteful, showy consumption or “conspicuous consumption” to signal their wealth status. Essentially, these wealthy people were putting their wealth on display to convince others that they belonged to a different and much more desirable class. Therefore, conspicuous consumption is a way to signal social status. In his famous book, The Theory of the Leisure Class, Veblen was studying the Gilded Age, and he argued that consumption was a signifier of wealth, and it became honorific to consume. It was almost as if you were failing to consume, it was a mark of demerit. He dubbed consumption as an end to demonstrate one’s economic position in society, and therefore signaling your wealth was a conspicuous behavior. Veblen had the insight that consumption and display of items that you owned was communicating information about yourself. That could be your economic status, it could be your social status, it could be the qualities that you have, for instance, coming from a famous or royal family.
Just like in those days, an expensive watch, an expensive car, and an expensive handbag today can tell others that we have wealth. There is a large body of academic research, as well as anecdotal evidence, that suggests that individuals spend a lot of their wealth in order to display these expensive items and to communicate these characteristics of themselves. This is very much the grounds on which the luxury industry operates. People buy luxury brands not because they just care about raw materials, craftsmanship, and high quality, but because they want to communicate something about themselves. They want to communicate their economic status, and their social status and consumption does this rather well.
According to Pinar Yildirim, consumer behavior is a very interesting area, it says so much about human nature. It tells us something about our desires for being in this world, how we want to live, whether we want to look like others or different from others, and how consumption serves the purpose of trying to differentiate ourselves from others. Consumers over the centuries have relied on different tactics for this. They were spending their wealth in order to say things about themselves. Now they are reversing these tactics to some degree, and in the near future, they might be relying on other tactics. They might be using alternate ways, alternate methods, alternate channels, or dimensions of signaling, and we are on the lookout for this. We are actively observing and looking at how consumers are trying to communicate characteristics about themselves through consumption.
Your luxury mindset is your decision to make luxury a standard in your life. To justify its importance and impact on your life. Once you make this decision, then you can shift into being your most luxurious self. The curating, the attention to the details that matter and the slowing down to enjoy your life.
Consumer buying behavior has great psychology behind it. Did you made your research about your consumers? Are you at a point where you can easily predict your customers’ next moves and act upon them?
When it comes to studying consumer behavior and having a selling plan based on it, Pinnacle will always be a perfect choice. Pinnacle programs and training will help you find the best way to get your customers and gain their trust and loyalty.
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The article is written by:
Marketing Business Analyst
Pinnacle Ltd. | Develor Egypt