Belive it or not, a Louis Vuitton bag Can increase social status. Your totally right that it is just a bag but many people see the bag as a status symbol because it costs alot of cash. For example, why do celebrities buy Louis Vuitton ?...they buy it because they can afford it, this shows their Status of how much they can spend on a bag. When Louis Vuitton started off...it was meant for rich people who were very high in society and now that normal people such as ourselves can afford it, Louis Vuitton is producing more of it.
Louis Vuitton is now aimed at people who like style and fashion, if a person from the street is willing to save...then they themselves can have a peice of Louis Vuitton. I know for a fact from personal experience that the LV logo makes people assume that you have money.