The price a consumer will pay for a product is often significantly less than the price they will accept to sell it. According to a new study in the Journal of Consumer Research, this occurs because ownership of a product enhances its value by creating an association between the product and consumer identity.

"Our studies support the idea that ownership enhances the attractiveness of a product because ownership creates an association between the item and the self," wrote study authors Sara Loughran Dommer from the Georgia Institute of Technology and Vanitha Swaminathan from the University of Pittsburgh.

In several studies, the authors found a link between possessions and consumer identity. They also discovered that men are more likely to consider a product's association with specific social groups when making a purchase. 

"Men strive to differentiate themselves, and group distinctions are more significant for them," the authors wrote. "In contrast, women are focused on forming connections and less likely to classify themselves as separate from others. They are less likely to purchase products because of an association with a particular social group."

Why is this important, and why should you care? Because businesses can benefit from creating feelings of ownership through promotional strategies such as free trials, samples and coupons. For example, a consumer may be more willing to purchase a couch if they are offered a free trial, clothing stores increase sales by having customers try on items, and sporting goods stores could allow consumers to try out equipment in the store to boost sales.

However, companies wanting women to identify with and purchase their brands need to work harder to emphasize the identity differences across brands. A good example would be Apple's recent Mac versus PC advertising campaign that depicted the distinct identities of the two brands.

"If ownership increases the value consumers place on products, then companies could benefit from any action that creates feelings of ownership before actual purchase," the authors wrote. "Our findings regarding gender differences also suggest that in certain situations companies may benefit from prompting female consumers to make intergroup comparisons."

(Story materials from the University of Chicago Press Journals.)