Status Inequalities in Business Exchange Relations in Luxury Markets

In this thesis we examine purchase exchanges between high status buyers and suppliers of lower status in luxury markets.

While extant literature has treated status inequalities as an objective distinction in status rank, Study 1 on boat builders presents a novel approach towards conceptualising emerging status inequalities on the basis of the buyer’s varying status salience at the impending exchange. Given contingent factors (purchase visibility; buyer status position; type of market uncertainty), we demonstrate this from the buyer’s willingness to trade-off incumbent supplier status for improved product attributes from a lower status supplier.

Studies 2 and 3 address end-consumer evaluations of  high status cars equipped with components of varying visibility from lower status suppliers. Results in general portray the end-consumers’ higher  preference towards  acquiring  improved components  regardless of supplier status. When comparing lower status suppliers of unknown and of known reputation, consumers manifested a more favourable attitude towards high status cars which include low visibility components from new entrant suppliers. We moreover demonstrate effects of potential status transfer in the affiliation. In spite of their newness, unknown suppliers of ingredients of high visibility, benefit from a higher perceived reputation than similar suppliers of low visibility ingredients.