People buy based on recognizable brand names because it signals you're able to afford something in that price range and know "what's cool".
What's interesting is that some luxury brands's true high end lines are not really profitable (example: haute couture) and are actually supported by the brand's entry level "premium mediocre" products like canvas bags, perfumes, etc. In a way, the true luxury products acts as a marketing expense to bolster brand cachet, so their entry level products are coveted by the masses as status symbols.
What's interesting is that some luxury brands's true high end lines are not really profitable (example: haute couture) and are actually supported by the brand's entry level "premium mediocre" products like canvas bags, perfumes, etc. In a way, the true luxury products acts as a marketing expense to bolster brand cachet, so their entry level products are coveted by the masses as status symbols.