Piaras Kelly PR - Public Relations in Ireland

For all the talk of the iPhone’s price proving to be prohibitive, shoppers are eagerly snapping them up. John Moore points to a survey of 200 iPhone owners, 90% of whom are either extremely or very satisfied with the phone and 85% of them will recommend the iPhone to a friend. Some of the other survey stats include:


>> 30% of iPhone buyers are first-time Apple customers
>> 50% of iPhone buyers switched cellphone carriers
>> 35% of these switchers paid, on average, $167 to make the switch
>> iPhone users are expected to pay $35 more in monthly service fees

The last three stats are particularly interesting because they show that consumers are happy to pay a premium for products or services that deliver higher levels of quality, taste, and aspiration than conventional items. In their book ‘Trading Up: The New American Luxury‘, Michael Silverstein and Neil Fiske point out that ‘96% of American consumers say they often pay a premium for New Luxury goods‘. It’s a trend that is reflected in other parts of the world. Certain retailers would make you believe that consumers are obsessed with discount prices, but the reality of the situation is that we’re obsessed with luxury at the same time. As a result retailers caught in the middle are losing out.

One factor about the iPod that helps it drive a premium is the imitation factor. Not only are you buying a cool gadget, but you’re almost buying it for a social status also. Pamela Danziger has an interesting note on this in her book ‘Why People Buy Things They Don’t Need.‘:

Schor explores the status components in cosmetics by looking at brand purchasing patterns for four different cosmetic products: lipstick, eye shadow, mascara, and facial cleaner. What distinguishes each product is its relative visibility to others. For example, facial cleaner is the least socially visible product because consumers use it in private, whereas lipstick is the most visible because it is acceptable to touch up one’s lipstick at the table and in public. Her research findings: Women are far more likely to buy expensive lipsticks than they are to buy expensive facial cleaners. Her research leads her to conclude that consumers buy top-end brands of visible products far more than high-quality invisible ones.

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