This research introduces “brand prominence,” a construct reflecting the conspicuousness of a brand's mark or logo on a product. The authors propose a taxonomy that assigns consumers to one of four groups according to their wealth and need for status, and they demonstrate how each group's preference for conspicuously or inconspicuously branded luxury goods corresponds predictably with their desire to associate or dissociate with members of their own and other groups. Wealthy consumers low in need for status want to associate with their own kind and pay a premium for quiet goods only they can recognize. Wealthy consumers high in need for status use loud luxury goods to signal to the less affluent that they are not one of them. Those who are high in need for status but cannot afford true luxury use loud counterfeits to emulate those they recognize to be wealthy. Field experiments along with analysis of market data (including counterfeits) support the proposed model of status signaling using brand prominence.

The authors examine the viability of an “everyday low price” (EDLP) strategy in the supermarket grocery industry. In two series of field experiments in 26 product categories conducted in an 86-store grocery chain, they find that a 10% EDLP category price decrease led to a 3% sales volume increase, whereas a 10% Hi-Lo price increase led to a 3% sales decrease. Because consumer demand did not respond much to changes in everyday price, they found large differences in profitability. An EDLP policy reduced profits by 18%, and Hi-Lo pricing increased profits by 15%. In a third study, the authors increase the frequency of shallow price deals in the context of higher everyday prices and find a 3% increase in unit volume and a 4% increase in profit. Finally, they draw a conceptual distinction between “value pricing” at the back door and EDLP pricing at the front door.