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What is the Snob Effect?

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The snob effect is the tendency for a brand to lose its identity and status as it expands its market share. The term is most often associated with wealthy individuals dropping a brand when aggressive discounting occurs. The snob effect can also apply to subcultures who drop a brand when it becomes mainstream culture.
Luxury brands that endure for decades or centuries carefully manage their brand to avoid promotional discounting or low-end products that may trigger the snob effect. The temptation is great to discount as a high status brand can often boost sales dramatically by decreasing their price. This sales boost is typically short-lived as the status of the brand may quickly go into decline.
The snob effect isn't always driven by actual snobbery. Luxury goods are sold on the premise that they are rare, unique and special. When they are clearly mass produced at scale, customers may feel that they are no longer a good value at full price. For example, a customer who pays a high price for shoes and later sees them discounted by a large factor may feel cheated.
Overview: Snob Effect
Type
Pricing
Branding
Marketing
Marketing Economics
Definition (1)
The tendency for a product or brand to lose its status as it expands its market share.
Related Concepts
Scarcity Marketing
Price Discrimination
Price Strategy
Product Strategy
Brand Theory

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Pricing Strategy

An overview of common pricing strategies.

Price Discrimination

A list of price discrimination strategies.

Price War

An overview of price wars.

Price Economics

A list of price economics principles and theories.

Premium Pricing

A definition of premium pricing with examples.

Penetration Pricing

A definition of penetration pricing with examples.

Variable Pricing

The definition of variable pricing with examples.

Channel Pricing

A definition of channel pricing with examples.

Supply And Demand

An overview of supply and demand with examples.

Value Pricing

The definition of value pricing with examples.

Willingness To Pay

A list of factors that influence willingness to pay.

Sticky Prices

Prices that stick to an established range and resist changing economic forces such as inflation.

Commoditization

A definition of commoditization with examples.

Too Cheap To Meter

A definition of too cheap to meter with examples.

Relative Price

The definition of relative price with examples.

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An overview of dumping with an example.

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