Segment Luxury Products With Small and Large Brand Signals

What’s the best size for a luxury logo?

Most people want large logos to communicate their ownership (Han, Nunes, & Drèze, 2010).

But there’s one exception: Wealthy people who don’t care about signaling their status. This segment wants smaller logos so that peers will recognize the brand without a loud signal (Han, Nunes, & Drèze, 2010).

Ultimately, luxury brands should offer products with both versions (small and large) to target these different segments. Your most affluent customers can buy soft signals, while less affluent customers can buy loud signals.

This approach seems to exist in the marketplace. Large logos are correlated with cheaper prices: As the Mercedes star gets 1 centimeter larger on cars, the price of the car drops by $5,000 (Han, Nunes, & Drèze, 2010).

I noticed a similar trend with Gucci handbags:

• Han, Y. J., Nunes, J. C., & Drèze, X. (2010). Signaling status with luxury goods: The role of brand prominence. Journal of marketing, 74(4), 15-30.