Pricing trends.
In the last week I have come across multiple articles about what I call trends in upscale pricing. Lexus Automobiles (Toyota- to the rest of the world) realized that the upper tier of the economy is growing. They wanted to get their cars into the hands of that growing group of millionaires. Lexus held parties with magazines like Vogue all around the country. The found that the Bentley, Rolls Royce, Ferrari, Aston Martin crowd liked their brand but did not buy it. What I gathered from the article is 1) they (Lexus) was priced too low. 2) they did not give the service that this target market expected. Lexus learned that these clients owned more than one car. Cars that complemented one another. So to sell to the Market, Lexus needed to give the level of service demanded and make sure that the model offered (which will probably cost about 2 times what a Lexus costs now.) fits in with the complete lifestyle of the client.
Microsofts X box game system. The Xbox 360 came out priced at $399.00, about 2 times the price of the original x box. Now they come out with an “elite” version. Yes, it has more gizmos but will price out at $480. Do you see a trend yet?
Recently, resort/ hotels in places like Aruba, Bahamas and Miami have started “gold clubs” or “royal club” levels of service. Separate pools, air conditioned restaurants, faster check in/out are some of the services this status will run an extra $50-$500.00 a night depending on the resort. Keep in mind this rate is above the already $480-$800.00 guests might be paying, so we are not talking about mid-market level of service to begin with here.
Hotels are responding to the unprecedented number of US millionaires and the large number of retiring baby boomers, with luxury room rates up 9% over the last year. This is the beginning of the trend towards pricing aimed at the high end market, with a lot of growth in the next few years. People will pay for quality services and products. If you are in the position where you are not making all the money you deserve from your work. It might be time to rethink your brand position in the market. The top market is growing larger every day, how much of that business do you want?
