The Role of Conspicuous Consumption

in Branding and Positioning

Ryan Weatherford

Introduction
Since the ages when kings ruled, people have had a desire to have
possessions that show the world that they have amassed a certain level
of wealth and prestige. Kings built statues, designed palaces, collected
valuables all in effort to display to their peers, subordinates, and
superiors how well off they were. This desire to use products and items
to display status has not changed over time and has been classified
under the marketing umbrella, as conspicuous consumption. The
research into this phenomenon has revealed a recognizable truth- that
consumers utilize products in an effort to display social status.
While there are different levels of consumer involvement, at
various points on the socioeconomic spectrum, consumers seek to
define public perception of themselves through the products they own.
Conspicuous consumption creates a tremendous opportunity and
market for companies to position their products in the consumer
consciousness as luxury items. Luxury, in this context, means that the
perceived value of the product in the eyes of consumers, elicits thoughts
of exclusivity. This suggests that only those individuals, who are
financially above average, consume the product. Marketers recognize
the opportunity that comes from positioning products with the luxury
or quality tag and aggressively price items in hopes that the price and
additional promotional activities will successfully communicate the
social and psychological benefits consumers will receive from using
the product.

27

There is value to both consumers and marketers with the

development of such products, however there is a negative consequence
to conspicuous consumption, and that is poverty. Consumers have long
desired objects and products to display their social standing; this desire
has paved the way for marketers to develop and promote products to
help satisfy this need to demonstrate prestige. While consumers have
benefited from branding and positioning of such products, conspicuous
consumption has compounded the social issue of poverty.
History of the Concept of Conspicuous Consumption
The definition, and introduction, of the theory of conspicuous
consumption into the field of marketing, starts with the work of
Thorstein Veblen. Veblen, who was an economist and sociologist, sought
to study the social factors that influence economic behaviors. When
examining the social factors that have an influence on consumption
he realized that consumers make purchases based on their social
surroundings and thus the concept of conspicuous consumption began
to take form (Bagwell and Berheim, 1996).
Conspicuous consumption in its simplest form can be described
as individuals purchases of products in an attempt to display
accumulated wealth and social status. This desire for consumers to use
products to communicate wealth to their peers is not a recent
phenomenon and has been a behavior of consumers for a long time.
Veblen wrote that, those who put wealth in evidence are rewarded
with preferential treatment by social contracts (Bagwell and Berheim,
1996). These social contracts are informal in nature, but conspicuous
consumers have a belief that by displaying their wealth, people who
witness it will develop an opinion regarding it. This belief about
perceived status, gives the conspicuous consumer a level a satisfaction
which completes the contract.
In essence, consumers want others to recognize and give
approval for conspicuous purchases. Once the buyer receives this
praise, the return on investment of the purchase begins to increase.
While this process seems to be farfetched, it is important to keep in
28

mind that in American society, people have a somewhat innate need for
social acceptance. If consumers feel their real self is not sufficient they
will look for product extensions to attach attributes to themselves to
compensate in those areas where they feel insufficient.
These insufficiencies have the propensity to fuel people to
build their self image through material possessions in hopes for social
acceptance and status recognition. Conspicuous consumption is a
process of gathering and utilizing goods to establish wealth and
prestige as attributes of individuals real self concept. While the
products displayed are a vital part of this self-concept, the feedback
buyers receive from acquiring and showing off these goods is needed
to validate the idea of wealth that the consumer wishes to convey.
Consumer Behavior and Branding
The consumers desire for a variety of products that will endow him
with attributes implying status comes, in part, from the marketing
function of branding. Branding is the process by which marketers,
in addition to the tangible functionality of a product, attach human
attributes to products in an effort to differentiate and add value to a
product for consumers. The purpose behind branding is to lure
consumers to a product due to the intangible attributes that are
associated with the product. Examples of these attributes are quality,
uniqueness, luxury, prestige and convenience.
These characteristics, while nonphysical in nature, are affected
by decisions made in developing the marketing strategy. The
controllable factors that directly go into branding efforts are price,
promotion, place, and product. These four marketing elements are the
tools marketers have to brand a product, the rest is up to the attitudes
consumers develop about that product. Consumer attitudes determine
the success of branding efforts because they are the ones who will, or
will not, purchase a product based on how it is branded and presented.
Luxury branding becomes a little more difficult. When
branding products that will be frequently consumed and have low
consumer involvement, marketers find success in focusing more on the
29

functionally and convenience. However, when branding products with

the luxury moniker, different elements have more importance.
Characteristics that luxury brands must contain would include
aesthetics, quality, uniqueness, and sensuality (Emile and Craig-Lees,
2011). Since luxury brands are consumed with the primary objective to
achieve flash, products must have an aura of beauty which will lure the
buyer in, but also will be attractive to the viewing public.
Product quality is a term that has varying meanings for
consumers. Quality is a combination of functionality, durability, and
perceived value of the inputs used to make a product. The uniqueness
of a product is essential to the luxury branding process. Consumers
must feel the product they desire to purchase has a high level of
differentiation and individuality that only this particular brand offers.
At a minimum, one product characteristic must be unparalleled in the
eyes of consumers.
One of the key contributors to luxury branding is the sensuality
of the product, or its ability to appeal to the senses of the consumer and
the consumers audience. While the external senses are important, the
internal feeling the product gives the user, which can come from usage
or feedback from the users surroundings, is the most important factor.
If the consumer of a luxury item feels an unrivaled level of internal
satisfaction, it will drive that consumer to continue to indulge in the
brand. This internal satisfaction is derived from positive feedback from
spectators who experience a consumer using the product.
When branding a luxury product, marketers must find the right
mix between product attributes and marketing stratagem to lure
consumers to the product or there will be a high chance of failure. An
example of this potential failure can be seen in the case study done on
the strategies of Gucci and Guess in their attempts at luxury branding.
This study showed that, while Guess utilized a similar strategy to Gucci
in logo design, the company failed at matching up the price and
promotion of the product. This failure to fully brand the product left
Guess appearing to be an imitator of a luxury brand and created
negative consumer attitudes towards its brand (Majic and Majic, 2011).
30

Guess is a prime example of the difficulties of luxury branding for

marketers. In summing up, branding is a process in which difficulties
increase as the product is positioned towards higher social groups and
classes. For these target markets, the focus of marketers goes from
functionality to aesthetic and sensual features.
Product Position and Branding
Product position is a process that is derived from product branding.
Positioning is the strategic placement of a product and its attributes in
the minds of consumers. Positioning is an important marketing activity
because when consumers are able to retrieve a product, that is
perceived to have the attributes needed to meet their needs from their
conscious or subconscious minds, they will be more motivated to select
that product over alternatives. Luxury positioning, as luxury branding,
has an increased level of difficulty. The decision to position a brand as a
luxury brand is done by the brand manager, and once the decision is
made, proper actions are necessary to maintain this positioning (Emile
and Craig-Lees, 2011).
Consumers do not choose if a brand has luxury positioning- that
is the marketers choice. However, consumers do have an impact on the
longevity of a brands luxury positioning. Luxury position is strongly
linked with the promotion of a product or how marketers choose to sell
the benefits of their product to consumers (Uggla and Lashgari, 2012).
Promotion is the primary means of communication between marketers
and consumers. While price is a crucial element to the luxury positioning
of a product, advertising can take a product from being aggressively
priced to a luxury good that has the aesthetics, quality, and social impact
that other luxury goods possess. Luxury positioning requires proper
endorsement, subtle flare, and a reception from the upper tier social
classes acknowledging that this brand is indeed for them.
Conspicuous consumption and the use of products to signal status
creates opportunities in the retail market space for marketers to brand
products to meet these needs. The market for luxury goods and services
has been enlarging, steadily and strongly since the early 1990s. The
31

economic factors driving this trend are increasing disposable income as

well as a growing wealthy class in emerging countries (Truong, 2010).
These economic drivers have created opportunities for marketers to brand
products to satisfy the increasing need for luxury goods.
Personal and Social Orientation in the Luxury Market
The most obvious opportunity for marketers to maximize profits is
through the supply of goods for individuals in the luxury market.
Consumers that participate in economic activities in this luxury
marketplace have two needs that need to be fulfilled: personal
orientation and social orientation. The personal orientation for luxury
consumers is the desire for self fulfillment and actualization. When
consumers have attained a certain level of wealth, the next step is to
give themselves rewards that give them an internal feeling that they
are indeed the wealthy individuals.
An example of this can be seen with significant disposable
income increases that occur with a promotion. An individual who goes
from middle management to the executive level will want to use that
income to validate to himself that he indeed is an executive. This could
include a luxury car, or designer clothes. Any luxury good that validates
and actualizes the individuals self perception is an option. Socially, we
develop perceptions about what professionals and individuals at certain
levels should look, dress, and act like.
Social orientation is externally driven, meaning luxury
purchases are made to impress others with ones wealth. These two
needs provide the marketer with the opening to brand products to satisfy
these needs. As discussed, to do this, marketers must utilize price,
product, promotion, and place; however with an increasing market, new
consumers will want products to fit their personal conspicuous desires.
Some conspicuous consumers may just desire a high price tag; others
may want brand prestige or well known luxury brands to ensure that
others are impressed. A growing group of luxury consumers also desire
up and coming brands. These people want the get their hands on the
latest luxury brands and be the opinion leaders of their social group.
32

Luxury Partner Brands

Another affect that conspicuous consumption has on branding is the
increasing phenomenon of luxury partner brands. Luxury partner
brands can be defined as premium brands that use their perceived
product quality, unique value, hedonistic value, social value, and
conspicuous value to enter a partnership in a host brands market to
transfer these qualities to the host brands markets and consumers
(Uggla and Lashgari, 2012). These partnerships are successful due
the effectiveness of each brand to reach its market.
The luxury brand will attract those consumers who desire a
prestigious product while the host brand will attract consumers who
have significantly lower income than those who consume the luxury
brand. The attributes of the luxury partner add intangible value to what
is perceived as an inferior product, while still offering an acceptable
price. Two examples of these partnerships are the Eddie Bauer Ford
Explorer and the Ferrari-Acer computer co-branding.
The Eddie Bauer Ford Explorer was an attempt by Ford to
integrate features that the Eddie Bauer brand possesses in the world of
male fashion into a Ford vehicle targeted to men. This Explorer contains
a few insignificant physical changes but the perception that this car was
designed for a stylish, successful Eddie Bauer man attracted a target
market beyond Fords usual base. The Ferrari-Acer relationship
contained the same dynamic. What some view as an affordable, inferior
in quality, technology brand decided to partner with a prestigious,
quality automotive brand to offer more value to the host (technology)
brands consumer base.
Partnerships of this nature are made available because
conspicuous consumers increase the awareness of luxury brands in the
eyes of the public. When this public awareness happens, luxury brands
can attach their intangible value to less prestigious brands. Acer
leadership hoped the co-branding with Ferrari would create an
opportunity to develop and market a product with a higher perceived
quality. Conspicuous consumption affords marketers with opportunities
to create and adapt brands to satisfy the luxury consumer segment. This
33

behavioral phenomenon also offers a window for less prominent brands

to partner with luxury brands to appeal to average consumers as well as
those who are wealthier.
Conspicuous Consumption, Positioning, and
Advertising Methods
While conspicuous consumption has a more direct impact on branding
strategies, it also has influenced how marketers choose to position a
product. Positioning revolves heavily on what the promotion managers
do for a product. In order to place a product in the consciousness of
consumers, that product must have its attributes communicated in the
proper way so that when the need or want to purchase a product
becomes evident, the consumer will be drawn to
a particular brand.
This means that advertising campaigns have to do great job of
designing the creative message and tactics, as well as creating an appeal
for the sensual and hedonistic features that individuals look for in a
product. However, these advertising methods must be adapted when
marketing luxury products, especially to conspicuous consumers.
Advertising for a luxury item must portray the product with
some sense of exclusivity, elegance, and class. This means there cannot
be large discounts or a large amount of television advertisement
because consumers impression of the product will shift. Luxury brand
marketers do not want to deter individuals with the ability and desire to
frequently purchase their goods because they may shy away from
discounts and advertisements aimed at the mass market. Instead these
marketers allow their product to be the advertisement.
For example, Movado watches have been one of the more
prestigious watches an individual can buy. These watches are not in the
same class as Rolex but differentiated enough from lesser brands to
have the luxury stigma placed upon them. In recent advertisements
for watches designed to attract a younger generation to the brand, there
was no humor, no sex, not even a location where the watch could be
purchased. There was merely a song to simulate the rush the product
34

will give to owners when wearing the black watch.

How does conspicuous consumption play a role in the
advertisement? The answer is simple. Simply sell the product, free of
bells, whistles, and gimmicks (Han et al., 2010). Marketers gave as little
information about the product as possible, so consumers would only
know the elegant black watch was a Movado. No price was given
because the price does not matter when you can afford a Movado.
This simple advertisement is what appeals to conspicuous
consumers. These individuals may need a reminder periodically, but
the more subtle the advertisement is, the more it appeals to them. While
the impact that conspicuous consumption has on positioning strategies
may not be quantifiable or exact, it can be said the social status-driven
consumers want goods that they will use to show their wealth. And
these goods must be marketed in a unique way so that only a limited
number of people are made aware of the product and these few people
are in the appropriate social group.
Conspicuous Consumption and Poverty
While demand has created opportunities for marketers to develop,
communicate, and deliver luxury products to satisfy wealthier
consumers, conspicuous consumption can have the effect of
compounding poverty. An individuals status is defined by the social
inferences made about the individuals unobserved income. While
social inferences can be made by communications and interactions, they
primarily are derived from an individuals conspicuous consumption
(Moav and Neeman, 2010).
Due to the importance of first impressions in our society,
people are motivated to present themselves as though they are endowed
with a respectable amount of wealth. With social inferences based on
outward appearance, impoverished people may see their outward
appearance as an opportunity to escape their living conditions both
physically and psychologically.
People who have to live in poverty everyday will often find ways
to escape their reality and conspicuous consumption is as option. Very
35

economically disadvantaged individuals see conspicuous consumption

as a relief from their circumstance because of the internal and external
benefits. Externally, people who are not familiar with them will infer
their financial well being based on how they dress, accessorize, and
transport themselves. For those few moments, they do not feel as those
their economic status matters. When people acknowledge their
purchases, poor conspicuous consumers experience an external reward
system. This external reward drives them to continue these conspicuous
purchase patterns.
In addition to external compensation for status purchases, there
is an internal benefit that occurs inside these impoverished consumers.
Consumption leaves consumers with positive, negative, or unchanged
experiences based on the involvement consumers have with the
purchase. When poor individuals purchase luxury goods a positive
feeling arises within them because it is an opportunity to present
themselves as a person with wealth. This psychological state comes
from a desire for momentary happiness. For a limited window they will
know what it feels like to be seen as a person with expendable financial
resources and their social class will not have defined them.
The problem arises when this short term benefit, experienced
by underprivileged people who are escaping their current circumstance,
leads them to increase the economic hole that they are already in. These
purchases exacerbate their problem because these consumers decide to
spend money that they may not have on these products. For example,
when people below the poverty line decide to purchase a luxury vehicle,
it compounds the debt that they may already have incurred through
other purchases. Research shows that consumption of status products,
and the related enhancement of social standing that comes with
conspicuous habits, can cause consumers to sacrifice their financial
standing in order to achieve a certain level of social standing. These
purchases often increase the consumers debt load through use of credit
lines and loans (Thomas and Wilson, 2012).
Conspicuous consumption describes the thinking used by low
income individuals to connect a product or brand to social standing.
36

When products are branded as luxury items, after initial consumption

by the target market, awareness of the brand slowly moves down the
social ladder. This awareness is increased through media and
communication channels. Use of spokespeople enhances a luxury image
and consumers will perceive that the spokesman uses the products.
Attributes of the individual will transfer to the product.
This process of luxury brand marketing to less fortunate
individuals was not the initial target of marketers attempting to satisfy
the need for luxury goods. It seems likely, however, that as marketers
realize that poor people also wish to buy status endowing goods, ways
will be found to service that segment of consumers as well. Conspicuous
consumption has an undeniable impact on poverty. People who
experience hard economic times want to escape, they want to be
branded by something other than their current economic condition.
So they use luxury items to temporarily relieve the feelings created by
poverty. The rewards of conspicuous consumption outweigh the cost
of increased poverty to these individuals, at least momentarily.
Is Conspicuous Consumption Good or Bad?
It is difficult to apply the label of good or bad to the subject of
conspicuous consumption. Conspicuous consumption is not the primary
reason that poverty exists. Poverty exists not because of what marketers
do, but based a whole series of circumstances that can reduce
individuals to a state of economic despair. The aim of a marketer when
branding luxury items is to service a market that desires to display its
accumulated wealth. In a marketplace where goods are not
homogenous, the well off will purchase different products than those
who are in a less advantageous financial position.
Even if branding did not intentionally place these products as
luxury goods, society would still note the difference between brands that
the wealthy buy versus those that the rest of society buys. We are a
comparative society which strives to compete with one another in so many
different areas. As a society we like to differentiate levels of social standing
with descriptors that enhance and exaggerate even the slightest differences.
37

Poverty does not begin with marketers; however, marketing can

compound the problem. It is difficult to suggest an alternative to luxury
branding of products that will not have an adverse affect on product
sales. Consumers do not always rely on rationality to make purchases.
Even if impoverished consumers were confronted by the potential
financial impact of their purchases, their behavior might not change.
It is difficult to change purchasing behavior that does give an individual
a momentary boost in self esteem. Consequently, there is no logical or
compelling reason to ask companies to stop marketing luxury goods to
all consumers. The intended market does purchase these goods, and
eventually so will secondary and tertiary markets. So it must remain the
responsibility of poverty stricken people themselves to ignore the
psychological benefits of conspicuous consumption.
Conclusion
In conclusion, conspicuous consumption is the recognition of purchases
for the purpose of displaying wealth and financial achievement. While
this form of consumption varies in price and frequency, consumers
engaging in it have the same goal in mind- to create a perception of how
much money they have and to receive acknowledgement of it. Marketers
have noticed this behavior and have developed and promoted products
that help consumers satisfy this need for social standing and acceptance.
In addition to developing products to meet luxury consumers
needs, marketers have also used co-branding strategies to reap the
intangible benefits that luxury brands have in the eyes of consumers.
Consumers are the ultimate deciders of whether a brand receives the
luxury placement in society. Once consumers are receptive to a luxury
product, then the luxury connotation of the product begins to trickle
down the social ladder; at this point less financially well off individuals
begin to use their income on the good. These less well off people use
this item in the same fashion that the rich do. The only difference is that
the wealthy are trying to project their image through the product, while
others are trying to create this image through the same product.

38

Less fortunate individuals want to create this image in order to

escape the reality of their living standard. Since our society believes that
living standard is a function of social class, these individuals want to
escape it through conspicuous purchases. Even though they are poor
they do not have to feel it when they venture out into the world. I may
be poor but this BMW isnt. The purpose of this research is to illustrate
that some of the behaviors of marketers and consumers that create
status symbols, can really skew the priorities of impoverished people.
Because of conspicuous consumption effects, people in need may lose
sight of fiscally responsible methods of trying to build wealth through
sustainable means such as education, and use their scarce resources to
buy material goods that only momentarily alleviate the pain of reality.

39

References
Bagwell L. S. and Bernheim, B. D. (1996). Veblen effects in a theory of
conspicuous consumption. American Economic Review, 86(3), 349-373.
Dimotfe, C., Johannson, J., and Bagozzi, R. (2010). Global brands in the United
States: How consumer ethnicity mediates the global brand effect. Journal of
International Marketing, 18(3), 81-106. Doi: 10.1509/jimk.
Emile, R., and Craig-Lees M. (2011). A luxury perspective on brands
characteristics, value, and the eye of the beholder. Advances in Consumer
Research, 39, 307-310.
Hamilton, K. (2012). Low-income families and coping through brands: Inclusion
or stigma? Sociology 46(1), 74-90. Doi: 10.1177/0038038511416146.
Han, Y., Nunes, J., and Dreze, X. (2010). Signaling status with luxury goods:
The role of brand prominence. Journal of Marketing, 74(4), 15-30.
Lasaleta, J. D., Elbert, J., and Bennet, C. (2010). Do we really want to keep up
with the Joneses? A closer look at luxury, concealment, social interaction,
and justification. Advances in Consumer Research, 37, 804-841.
Majic, O., and Majic, H. (2011) Case study of Gucci v. Guess the failure of
brand strategies that rely on Veblens conspicuous consumption.
International Journal of Management, 13(4), 132-140.
Moav, O. and Neeman, Z. (2010). Status and poverty. Journal of the European
Economic Association, 8(2/3), 413-420.
Thomas, S. and Wilson, P. R. (2012). Youth consumerism and consumption of
status products: A study on the prevalence of social pressure among students
of professional courses. IUP Journal of Business Strategy, 9(2), 44-64.
Truong, Y. (2010). Personal aspirations and the consumption of luxury goods.
International Journal of Market Research, 52(5), 653-671.
Uggla, H., and Lashgari, M. (2012). Portfolio strategy for luxury partner brands:
Strategic guidelines. IUP Journal of Brand Management, 9(2), 18-28.

40