Concepts of Luxury and Masstige

The word ‘luxury’ derives from the Latin word ‘luxus’ , which according to the Latin Oxford dictionary signifies ‘soft or extravagant living, indulgence’ and ‘sumptuousness, luxuriousness, opulence’ .

There are two aspects to consider when defining luxury, the psychological value and the value of the product/service itself. The psychological value of luxury comes from its function as a status symbol and from a highly involved consumption experience that is strongly congruent to a person’s self-concept. From a product perspective, luxury brands are frequently defined in terms of their excellent quality, high transaction value, distinctiveness, exclusivity and craftsmanship.

In his paper on International Retail Marketing, T.B. Jackson proposes the following as the core characteristics of a luxury product: ‘… exclusivity, premium prices, image and status which combine to make them more desirable for reasons other than function’. Dimitri Mortelmans, in his paper ‘The concept of luxury’, says there are three main characteristics in [a narrow] definition of luxury: extra value, high quality and exclusivity. The fourth, derived, characteristic is high price.

  1. Extra value – Extra value here is loosely defined to include design, aesthetic value any innovation or attribute that makes the product unique.
  2. High quality – Superior quality is an essential component of luxury products. Luxury products have been typically been associated with fine craftsmanship, precision and skill.
  3. Exclusivity – Exclusivity in luxury products comes from two factors: (a) the goods are made in limited quantity and distribution is strictly controlled. Haute couture began when royal tailors custom made garments that were made only for one user. Till date, products belonging to the highest category of luxury are made in scant quantities. It is also crucial to decide where all these products will be available in order to make them rare. (b) Luxury goods are typically priced so high that they automatically exclude a majority of the population from their target group. In the world of luxury, rarity value sells, because it is the rarity that the customer wants to own. Owning such a product makes the consumer feel privileged to be part of a select group of people.
  4. High price – When a product or service is superior in quality has extra value and also has to be exclusive, then the price automatically becomes high.

Traditionally, there were four principal categories of luxury goods: fashion (couture, ready-to-wear, and accessories), perfumes and cosmetics, wines and spirits and watches and jewelry. Today, luxury has expanded to include many more categories such as luxury automobiles, hospitality (hotels, tourism, airlines) private banking and home furnishings among others. Among these, the luxury fashion goods category accounts for the largest proportion of luxury goods sales and also showed the strongest product category growth in recent years.


In their paper ‘The specificity of luxury management: Turning marketing upside down’ Kapferer and Bastien express that for the outward oriented motivations, “Luxury converts the raw material that is money into a culturally sophisticated product that is social stratification”. Where the inward directed motivations are concerned, “luxury should have a very strong personal and hedonistic component; otherwise it is no longer luxury but simple snobbery”.

Luxury and Masstige

According to Wiedmann, Hennigs and Siebels, “luxury is a subjective and multidimensional construct”. When studying consumer motivations for consumption of luxury, both outward (conspicuousness, snobbery, status) and inward (hedonism, perfectionist) directed motivations need to be taken into account. Additionally, these must be placed the situational and cultural context of consumption. They have proposed four dimensions that add value to luxury purchases in the consumers’ mind:

  • Financial Dimension of Luxury Value Perception – The financial dimension captures the monetary value that consumers are willing to put on the purchase. This will take into account aspects like price, return on investment, resale value and discount.
  • Functional Dimension of Luxury Value Perception – This is the core benefit or utility derived from the luxury product or service purchased. This will take into account the attributes of the product such as its quality, durability, reliability, usability etc.
  • Individual Dimension of Luxury Value Perception – The individual dimension addresses the inward oriented motivations or the personal value derived from luxury. This includes benefits like self – identity, materialism and hedonism.
  • Social Dimension of Luxury Value Perception – This dimension has been the most researched and appears to be the largest contributor to the value derived from luxury. The social dimensions of luxury value include recognition or being identified as a part of a particular social group, conspicuousness and prestige value within a social group and a sense of power in a social context.

In “A Review and a Conceptual Framework of Prestige-Seeking Consumer Behavior”, Vigneron and Johnson have suggested that the primary driver for the purchase of luxury is prestige-seeking behavior. The prestige benefits derived out of luxury purchases are of two types: inter-personal (outward oriented) and personal (inward oriented).

Interpersonal effects:

  • The Veblen effect – perceived conscious value: Veblenian consumers attach greater importance to price as an indicator of prestige. This comes from the fact that these consumers often use price as evidence to judge quality. They also tend to perceive higher quality products as granting higher prestige.
  • The Snob effect – perceived unique value: ‘Snobs’ have a need to be unique and seek prestige through differentiation. The snob effect manifests itself in two forms: (a) when a new product/collection is launched, these consumers will want to be the first to buy (innovators) (b) they will choose not to use a product once the general masses have adopted it. Snobs see higher price as an indicator of uniqueness and exclusivity.
  • The Bandwagon effect – perceived social value: This is the reverse of the snob effect. These consumers, the followers, seek prestige through group affiliation. In the words of Vigneron and Johnson, “bandwagon consumers attach less importance to price as an indicator of prestige, but will put a greater emphasis on the effect they make on others while consuming prestige brands”

Personal effects:

  • The hedonic effect – perceived emotional value: Luxury purchases have emotional value attached to them beyond their functional utility. These emotions could be aesthetic appeal, sensory pleasure, excitement etc. The consumer here is more concerned about her own feelings than those of others around her. The luxury product could be fantasy or self rewarding behavior.
  • The perfectionist effect – perceived quality value: These consumers seek superior quality as an indicator of prestige. They rely on their own judgements about the quality of products and services. They may see higher price as an evidence of better quality.


In her book ‘Let them eat Cake: Marketing to the masses – as well as the classes’, Pamela N. Danzinger explains that consumers link luxury to fantasy fulfilment. They fantasize about how their life will change once they own a luxury product; “Luxury takes on a transcendent quality linked to the person’s hopes, wishes and dreams”, she says. Once we have achieved this fantasy, bought that luxury product, after some time it becomes ordinary and then we wish for something else, something even more luxurious and unattainable which then becomes the new object of fantasy. As Danzinger puts it, “that which is unattainable is overwhelmingly attractive and desirable”; once we have attained something, it loses its mystique and charm and becomes ordinary. Thus, to consumers, luxury is ultimately the unattainable.


There was a time when “luxury” as a category was restricted in the hands of the affluent and was meant only for the crème de la crème of society. Today, however, the scenario has changed – more and more people can now afford a small piece of the pie with the democratization of luxury. According to a study done by IBM Business Consulting Services (2004), today’s consumers are demanding lower prices on basic goods but at the same time, they are willing to pay premiums for products that matter more to them.

Traditional luxury, now commonly known as ‘old’ luxury, was all about conspicuous consumption and its appeal was derived from the status and prestige that came with the ownership of these products. The attributes and quality of the offering itself were of supreme importance as it was a cultural symbol of high taste. In the years after the Second World War, material wealth was highly sought after. The generation that witnessed World War II and subsequently the great depression had seen immense scarcity; this generation basked in the joy of material things and sought luxury as a symbol of wealth.

While old luxury was about the thing itself, new luxury is about the experience. The economy, worldwide, improved continuously in the 80s and 90s leading to increasing disposable incomes, lower unemployment rates and a growing wealthy class in emerging countries. Simultaneously, the democratization of luxury meant that luxury has now become more accessible to a larger population.

Goods that fall under the ‘new’ luxury category are less expensive than traditional luxury goods yet, they have some confines in terms of their price as exclusivity. They are affordable, yet they enjoy a reasonable level of perceived prestige as compared to middle-range products. The prices of ‘new’ luxury items are kept only slightly above those of middle ranges. This helps in targeting a much larger segment than the traditional luxury niches.

The consumers for this new luxury come from middle and upper middle classes for whom luxury purchase is a form of self reward and indulgence. Their focus is a desire for living the good life and private pleasure. As Twitchell says in his book ‘Living It Up: Our Love Affair With Luxury’ – “These new customers for luxury are younger than clients of the old luxe used to be, they are far more numerous, they make their money far sooner, and they are far more flexible in financing and fickle in choice. They do not stay put. They now have money to burn. The competition for their attention is intense, and their consumption patterns – if you haven’t noticed – are changing life for the rest of us.”

The term masstige was introduced by Michael Silverstein and Neil Fiske to refer to a new category which aims at providing luxury to the masses. The term is derived from the words mass + prestige – goods and services that occupy the space between mass and class. These products are priced at a premium over the convention but are not always positioned at the top of their category in price. A recent survey by the Boston Consulting Group (2004) said that the top four categories for ‘trading up’ are homes, cars, appliances and dining out. Examples of new luxury goods are the urban BMW 1-series starting at $19000, Ralph Lauren Polo shirts sold in outlets for $9 and Swarovski crystals with prices as low as $ 20.


Critics argue that brands which enjoy the tag of ‘masstige’ today, could become the ‘mass’ brand tomorrow. By definition, it is contradictory to sell prestige and exclusivity in mass (because when something is owned in mass, it would no longer be prestigious). These products may be successful at first, but their enchantment for the consumer would be inversely proportional to their success.

The critical success factor, then, for masstige brands would lie in maintaining the equilibrium between prestige differentiation and a reasonable price premium. “In order for a masstige product to be successful in the long term, it must have a noticeable differentiation in design and/or technology compared to the regular products in the category. This differentiation must be real and marked. Promises of “improvements” are not enough if they don’t really exist or are imperceptible to the consumer”.


With the advent of masstige, top end luxury houses like Armani and LVMH are entering into the affordable luxury arena. Critics argue that as luxury becomes more and more affordable, the concept itself will die out. Here is where understanding the sign-value of luxury is important – the concept is not absolute but relative. Over the centuries, what constitutes luxury has changed, but the concept has endured. Brands that are at the top may not remain there, even objects that are considered to be part of luxury may change, but because of human social needs, the concept of luxury will persist.


  • Motivations for consumption – When defining masstige, price is not the only criteria to differentiate between the realm of luxury and that of accessible luxury. An extremely important difference lies in the motivations for consumption. While the reasons for consumption of luxury can be both internally as well as externally driven, consumption of masstige is in most cases externally driven. Conspicuous consumption, which formed the basis of luxury when the concept originated, now forms the basis for the masstige category. Hence, a Valentino gown does not have a logo printed on it but a Tommy Hilfiger product will always have a label, logo and some visible identification mark on it so that others can see it.
  • Global versus local – Luxury is global, it remains the same across the world – luxury brands target the elite who expect the same experience from their brands whether they are in the United States, Europe or in Asia. Although various brands have specific associations with the heritage of their countries of origin, a luxury brand is not modified to suit a particular geography. It is meant for people who are global, and hence the brand perception and delivery has to be ‘global’ in approach and consistent in delivery everywhere. Masstige on the other hand needs to be localized to an extent because the consumption of masstige is directed outwards. It has to adapt to the cultural ethos of the geography in order to remain relevant and in the process also gets absorbed into the culture of any society.

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