People often say, “People buy products to solve a problem,” and that’s oversimplistic.

Product’s aren’t just for solving problems

Saying “a product is for solving a problem” is a neat, catch-all bucket that makes it easy to describe why a person buys something.

It allows us to say things like, “people buy water to solve the problem of hydration.” It works to (sort of) explain why people buy a category of product (like bottled water) but it’s bad at explaining more nuance:

• But why do people buy Fiji Water over Dasani?

• Why do lawyers carry Perrier into a client meeting but not a giant Gatorade?

The reason is status. I use the word status to mean: showing membership to a group (sometimes I call this a status group).

Every product has three elements

• Functional - the problem-solving part

  • The human tendency to avoid pain

• Fun - the fun part

  • Also known as hedonic goods in the language of Economics

  • The human tendency to seek pleasure

• Status - the part that signals or justifies the buyer’s identity

  • The human tendency to seek social connection, membership to a group, and achieve a high standing in that group.

Products don’t need to score highly on every element

Some examples

• Garbage bags

  • Highly functional

  • A better brand may signify a marginally higher status

  • Very low hedonism

• Vintage watches

  • Moderately functional (we have watches in our phone, computer, various cheaper watches)

  • Low hedonism

  • High status

    • Signified high-class appreciation, wealth, etc.