Skip to main content

Trading up: A strategic analysis of reference group effects

Publication ,  Journal Article
Amaldoss, W; Jain, S
Published in: Marketing Science
September 1, 2008

Reference groups influence product and brand evaluations, especially when the product is a publicly consumed luxury good. Marketers of such luxury goods need to carefully balance two important social forces: (1) the desire of leaders to distinguish themselves from followers and (2) the countervailing desire of followers to assimilate with leaders. In this paper, we examine the theoretical implications of these social forces for firm prices, product design, and target consumer selection. We show that the presence of reference group effects can motivate firms to add costly features, which provide limited or no functional benefit to consumers. Furthermore, reference group effects can induce product proliferation on one hand and motivate firms to offer limited editions on the other hand. We find that offering a limited edition can increase sales and profits. In some cases, reference group effects can even lead to a buying frenzy. © 2008 INFORMS.

Duke Scholars

Published In

Marketing Science

DOI

EISSN

1526-548X

ISSN

0732-2399

Publication Date

September 1, 2008

Volume

27

Issue

5

Start / End Page

932 / 942

Related Subject Headings

  • Marketing
  • 3506 Marketing
  • 1505 Marketing
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Amaldoss, W., & Jain, S. (2008). Trading up: A strategic analysis of reference group effects. Marketing Science, 27(5), 932–942. https://doi.org/10.1287/mksc.1070.0350
Amaldoss, W., and S. Jain. “Trading up: A strategic analysis of reference group effects.” Marketing Science 27, no. 5 (September 1, 2008): 932–42. https://doi.org/10.1287/mksc.1070.0350.
Amaldoss W, Jain S. Trading up: A strategic analysis of reference group effects. Marketing Science. 2008 Sep 1;27(5):932–42.
Amaldoss, W., and S. Jain. “Trading up: A strategic analysis of reference group effects.” Marketing Science, vol. 27, no. 5, Sept. 2008, pp. 932–42. Scopus, doi:10.1287/mksc.1070.0350.
Amaldoss W, Jain S. Trading up: A strategic analysis of reference group effects. Marketing Science. 2008 Sep 1;27(5):932–942.

Published In

Marketing Science

DOI

EISSN

1526-548X

ISSN

0732-2399

Publication Date

September 1, 2008

Volume

27

Issue

5

Start / End Page

932 / 942

Related Subject Headings

  • Marketing
  • 3506 Marketing
  • 1505 Marketing