The article under analysis is called The price of social status desire and public self-consciousness in luxury consumption and is written by George Balabanis and Anastasia Stathopoulou. The authors delve into the mechanisms impacting the formation of a price for a luxury product and its acceptability for customers. The purpose of the research is to integrate the desire for social status and a specific concept of self-consciousness into a practical price model vital for the improved understanding of how the price for luxury products is formed (Balabanis & Stathopoulou, 2021). The authors do not formulate a distinct research question; however, the paper tends to answer to what extent various factors, such as a desire for status, can affect customers’ readiness to pay. The purpose of the research contributes to its increased relevance and practical utility as it helps to understand mechanisms of cost formulation and their acceptance.
The utility of the paper also comes from the theoretical and practical contributions associated with the research. The study employs data from U.S. consumers, meaning that results can be useful for companies and firms working in the luxury segment and determining the price for certain products. At the same time, the theoretical importance and contribution of the work are linked to the fact that it helps to critically evaluate the factors affecting clients in their desire to pay more for items that will guarantee unique status, satisfaction, and the feeling of belonging to a limited group (Balabanis & Stathopoulou, 2021). These aspects are vital for a better understanding of consumer behavior and their buying capacity.
There are also business and managerial outcomes that can be associated with the paper. First, the authors view the desire for social status as a powerful stimulus affecting individuals and preconditioning their readiness to spend money and buy things emphasizing their superior position (Balabanis & Stathopoulou, 2021). For business, it means that creating the specific image of an item and its positioning as a luxury object can form the basis for increased interest from clients and their readiness to buy more to acquire it. From a managerial perspective, the outcomes of the study will help to select strategies to affect mentioned aspects, such as the desire for status, price consciousness, and price-luxuriousness inferences, and attain the desired levels of price acceptability (Balabanis & Stathopoulou, 2021). For this reason, the article’s outcomes can be useful for business and managerial spheres.
The authors form the theoretical background of the study by reviewing the existing literature on social status and price consciousness. They assume that the need to acquire a social status is a meaningful aspect impacting their decision-making. For this reason, the creation of the luxury image and its employment to establish a price for a product can be an effective strategy. They also formulate the following hypothesis:
People high in desire for social status (a) are more anxious about their public behavior and the way they are perceived by others (public self-consciousness), (b) are less concerned about prices (less price conscious), (c) are more likely to use prices to infer luxuriousness (higher price-luxuriousness inference), and (d) are more willing to pay higher prices (high price acceptability level) (Balabanis & Stathopoulou, 2021).
It meets the existing theoretical background and the ideas about the correlation between the need for social status and the readiness to accept higher costs for products if they are associated with the desired position in the society or belonging to a specific group.
The authors also introduce specific variables to investigate the proposed issue. They are created using the relevant literature and following the goal of the research. The variables include the desire for social status, public self-consciousness, attachment to luxury products, and price-luxuriousness inferences (Balabanis & Stathopoulou, 2021). The correlation between these aspects and their influence on the establishment of a price for a certain product is the core of the research. For this reason, the investigators describe the nature of relations between these variables and how they impact clients by using data acquired in the course of the research.
The research model of the study presupposes the involvement of participants with the desired status and analysis of their attitudes and aspects affecting their decision-making related to luxury products. In general, the model is sufficient and applicable to the study. First, using data from customers and statistical methods, the researchers can discuss the offered variables and outline the nature of relations between them. Second, the employment of the given approach contributes to the increased credibility and relevance of findings as the data comes from the major stakeholders who play an active role in forming the price for a product.
The model mentioned above also presupposed the use of quantitative measures to process data acquired in the course of the research and incorporate it to provide understandable results. This approach is justified by the need to determine the nature of relations between variables and how they affect each other. For this reason, it can be viewed as an appropriate method meeting the demands of the research. At the same time, the authors employed a specific sampling method. Using the online panel from Qualtrics in the USA, they screened consumers regarding their income (Balabanis & Stathopoulou, 2021). It helped to include respondents with an annual income of about $20,000 (Balabanis & Stathopoulou, 2021). The given sampling method is explained by the fact that only clients interested in luxury products should be included in the research to guarantee the high credibility of findings and conclude about the relations between the outlined variables. This sampling and data collection method are sufficient in terms of the nature of the study and its major purpose.
The investigators also used structural equation modeling to test the hypothesis formulated by them. The use of this data analysis method contributes to the increased reliability of measurements and their validity. To avoid biased judgments and corrupted data, the authors also perform a latent moderated structural equation, which also provides additional support for their assumptions and offers credible numerical data (Balabanis & Stathopoulou, 2021). In such a way, the statistics and data analysis meet the goal of the paper and help the authors to attain more accuracy when speaking about specific variables and relations between them. Moreover, statistical methods of data processing help to support the assumptions and conclude about the existence of a correlation between investigated aspects.
The article concludes that attachment to luxury products plays a critical role in price consciousness, price-luxuriousness inferences, and luxury price acceptability (Balabanis & Stathopoulou, 2021). It means that the luxury products’ costs can be formed considering clients’ desire to acquire these goods and their readiness to pay. The feasibility and credibility of findings are justified by the statistical data and in-depth analysis of information attained from the clients. For this reason, the research offers an in-depth analysis of the outline issue and provides information that can be used in future projects.
Reference
Balabanis, G., & Stathopoulou, A. (2021). The price of social status desire and public self-consciousness in luxury consumption. Journal of Business Research, 123, 463-475.