High-End Marketing, an Adequate Strategy in a Recession?

As the housing market collapses, as banks acknowledge bankruptcies, as the stock exchange breathes again with the governmental bailout, everybody has in mind the 1929 American financial crash featuring the great depression. As its precursory signs announce flagrantly the gradual fall of the economy, one niche paradoxically still thrives : the High end.

According to Motorola who just adapted a design responding to the “classy users”, the issue was never addressed meaning (?) that before the company was targeting the mass consumption with in the back of their mind the optimization of their sales volume.? As they monitor the fluctuations of the economic indicators, I guess, the tendency of the market seems to shift to quality rather than quantity. Or is it only where the money is?

Its new phones line, the Razr 2 with its crystal talk technology, symbolizes the state-of-the art in matter of communication. The Q line offers a range of diverse services accentuated on e-mailing whereas the Rokr Z6 celebrates the world of music, as for the Z8 innovates in the upper end of the distribution multimedia gadgets.

LVMH, the French world largest luxury goods holding has just invested in Morpheus Media to develop its domestic online marketing in order to build a stronger relationship with its target. It is a consequent move from LVMH given that 64% of affluent ($150,000 of annual income) Americans will purchase luxury goods on the web! As its 2007 financial report capitalizes 16 481 million euros, as its healthy pulse displays a turnover of 15,3 billion euros, LVMH definitely doesn’t show any signs of eminent heart failure… On October 1st, Its price share gained 1,21% closing the value at 62,50 euros.

Nestle, the Swiss multinational packaged food company in its new “premiumization” strategy of its chocolate is installing its first R&D unit luxury chocolate. Based upon calculation, the investment will ensure the company an “above-average and profit potential”. The dark and the premium lines are their key products.

Why do companies are resisting to recession? Firstly most of them are based in Europe, they will only feel the aftermath within months. Secondly during a recessive economical slope, middle and low-end consumers are the ones who are the first and most affected, and translate their anxiety by stopping their expenditures, they thereby anticipate a lack of incoming money. With a high-end market companies insulate their companies from the fluctuations of the market. What appears as a huge change in a low market is relativised by the high-end market. The high-end consumer will still spend on the essential high-end products. Furthermore, the high-end market companies manage higher prices and more consistency in their marketing policies.

Money rules our world!

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