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Where Luxury Goes, Consumers Will Follow

new study by bc marketing prof. shows luxury brands can enter new product categories

Ed Hayward
Boston College Office of Public Affairs


Chestnut Hill, Mass. (August 2009) – Despite the beating they've taken from the recession, luxury brands can maintain their pricing and positioning strategies and leverage the emotional pay-off shoppers associate with their high-end goods to expand into new product categories, according to a study of consumer psychology.
Consumers sense the promise of pleasure inherent in luxury brands, and that emotional benefit is extendible to a range of products beyond a brand’s core business, according to findings forthcoming in the Journal of Consumer Psychology.
So rather than slashing prices, luxury brands can enter into new product lines considered by cost-conscious consumers and still charge premium prices, as long as the integrity of the brand isn't compromised, report co-authors Henrik Hagtvedt, a professor of marketing at Boston College, and Vanessa M. Patrick, a professor of marketing at the University of Houston.
When evaluating ordinary purchases, consumers often consider exactly what they get for their money,” said Hagtvedt. “But luxury is associated with pleasure and emotional gratification, attributes which consumers may enjoy in almost any product category.”
So a luxury brand could leverage this promise of pleasure to move into new product lines while maintaining premium pricing and luxury positioning against other established brands that consumers see as moderately or bargain priced.
In the midst of a global belt-tightening, the findings offer hope that luxury brands can still grow their business.
“Consumers want luxury even during a recession,” said Hagtvedt. “When consumers can’t afford a Jaguar convertible, perhaps they can afford a Jaguar pen or a pair of Jaguar sunglasses. As long as premium pricing and brand image are maintained, this may help luxury brands weather a recession and come out of it untarnished. On the other hand, slashing prices or abandoning a luxury positioning is likely to damage the brand in the long run.”
In four studies, Hagtvedt and Patrick contrasted a luxury brand with a value brand. Both brand concepts led to equally favorable brand evaluations, but consumers were willing to purchase luxury brands in various product categories because of the promise of emotional benefits and pleasure.
But lending the imprint of a luxury brand to new products does entail risks. Set the price too low or enter product categories indiscriminately and the luxury promise can erode, the researchers found.

For more information about Prof. Hagtvedt, please see the website:

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