It seems to me that they are.
You see attractive models wearing the clothes-and the advertising suggests that if you buy and wear them, you too will become happy, desirable, and oversexed.
Of course, you are bound for disappointment-life doesn’t work that way.
Is advertising mostly based upon magical beliefs?
Yep, magical thinking, got it in one. “Hello, here are wonderfully attractive people, and if you but our product you will be one too.”
Yep, and they’ve been doing it for decades.
Of course it’s not just advertizers. Remember in the early days of Friends when every single woman in the world had a Rachael cut?
It’s not just clothes designers. Practically every form of advertising is about image building. Smoke Marlboros if you want to be a cowboy. Drink Coors if you want to be a fun 20-something. Using products with a strong image is an easy way of projecting the image of how you want other people to see you.
Longer than that. They have found evidence that gladiators in Rome used to sponsor products. Be strong like a gladiator! Buy our product!
They were going to include a scene to reflect this in the Russell Crowe movie a few years back, but the producers ended up cutting it because thy didn’t think a modern audience would find it believable.
He could have pushed “New Spice” deodorant. What’s not believable about that? 
I wonder what sort of sexy image Old Navy is trying to project.
“Wear our clothes and you can hang out with washed up actors!”
I wouldn’t go so far as to use the word “magical”, because that implies something that is not real, not achievable.
I prefer to think of advertising as attempting to key into “aspirational” thinking. I “aspire” to look better, be richer, be more interesting, have more excitement in life, etc. These are, at some level, actually achievable.
Yes, this is the basic principle in marketing, buy our particular product and your life gets better. People readily convince themselves this is true to avoid the disappointment of reality. See Ralphie and the decoder ring for an example of how this can go wrong.
Mostly, but not entirely. There are exceptions and not just a few.
Since this is IMHO and since subjective opinions are de rigueur here…:
Put on a classic mens suit from Men’s Warehouse and put on a classic suit from Ralph Lauren. Look in the mirror. Now tell me which is the superior looking and fitting suit. And no, no amount of tailoring of the MW suit will get you to the fit and finish of the RL suit.
Additionally, you will feel better about yourself in the RL suit. Consciously or sub-consciously you will exhude that added level of self-confidence. Whether in a social setting or business setting, people will pick up on that confidence and it may translate to greater chance of success (all other things being equal).
Was the 5X the price for the RL suit worth the result? That’s entirely subjective and may only be due to a psychological advantage based on the label. Unless it got you noticed in the way you intended, right? Because that’s a result, not magic.
All advertising works this way. And I confess I am a sucker for it…
Basically any advertisement that doesn’t tell you HOW their product is better (and actually even many that do)? Especially beer, fragrances and soft drinks since they aren’t that different.
Hey some products can and have improved my life!
The answer ralph and people that keep pondering this issue like myself are missing is that some people do judge you by your clothing, you can also change the image you are projecting to these people by wearing certain brands. Also some people are just really rich and don’t mind dropping coin on overpriced luxury goods.
Also see Veblen goods.
I think that’s closer. Also, humans do discriminate socially based on clothing. Keying in on what the group you want to be part of is wearing has got to be part of our basic wiring.
No, cigarettes and beer are sold by magic beliefs.
Fashion is a status symbol. You’re showing other people that you have the resources to own valuable luxuries.
The commercials I think are really guilty of this are makeup ads. I’ve seen several for mascara that spend more time focusing on the models legs than on their eyes, as if they want the viewer to think that a better looking body can be achieved through longer lashes.