It’s been about 15 years now, since sociologists and marketers were amazed to discover a new phenomenon. BMW is parked in front of our discount stores. Why would somebody who pays fifty or sixty thousand pounds for a car want to save 50 cents on a liter of milk? The answer was, of course, that they were ‘trading up.’ An explanation of this can be found in this excellent book. Trading up is what consumers are prepared to pay a premium price for certain products that they think bring more luxury. It can be in many different areas, from Belvedere vodka or Boston Beer which costs 50% more than standard beers. It can be in things like pub food or in the doll industry, with American Girl.
Tag Archives: Boston University
BOOK REVIEW: “Trading Up: Why Consumers Want New Luxury Goods–and How Companies Create Them” by Michael Silverstein & Neil Fiske (2008)
At the AACSB Associate Deans conference, Karyl Leggio, Dean and Professor of Finance at the Sellinger School of Business at Loyola University Maryland, led a fascinating discussion on the issues in setting up new programs. The topic of the presentation was centered around generating revenues and “managing costs by benefitting from revenue sharing initiatives.” Given that we are now into the fifth year of the financial crisis with no easy end in sight, this is an important subject to address.