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Table 3.1 "Social Classes and Buying Patterns: An Example"shows seven classes ofAmerican consumers along with the types of car brands they might buy. Keep in mindthat the U.S. market is just a fraction of the world market. As we explained inChapter2 "Strategic Planning", to sustain their products, companies often launch theirproducts in other parts of the world. The rise of the middle class in India and China iscreating opportunities for many companies to successfully do this. For example, Chinahas begun to overtake the United States as the world’s largest auto market.“More CarsSold in China than in January,”France 24, February 10,2009,-market(accessed October 14, 2009).Table 3.1 Social Classes and Buying Patterns: An ExampleClassType ofCarDefinition of ClassUpper-Upper ClassRolls-RoycePeople with inherited wealth and aristocratic names (the Kennedys,Rothschilds, Windsors, etc.)Lower-Upper ClassMercedesProfessionals such as CEOs, doctors, and lawyersUpper-Middle ClassLexusCollege graduates and managersMiddle ClassToyotaBoth white-collar and blue-collar workersWorking ClassPontiacBlue-collar workersLower but Not theLowestUsedVehiclePeople who are working but not on welfareLowest ClassNo vehiclePeople on welfareThe makers of upscale brands in particular walk a fine line in terms of marketing tocustomers. On the one hand, they want their customer bases to be as large as possible.This is especially tempting in a recession when luxury buyers are harder to come by.On the other hand, if the companies create products the middle class can better afford,they risk “cheapening” their brands. That’s why, for example, Smart Cars, which aremade by BMW, don’t have the BMW label on them. For a time, Tiffany’s sold a cheaperline of silver jewelry to a lot of customers. However, the company later worried that itsPage58of66
reputation was being tarnished by the line. Keep in mind that a product’s price is tosome extent determined by supply and demand. Luxury brands therefore try to keepthe supply of their products in check so their prices remain high.Figure 3.11Page59of66
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The whiskey brand Johnnie Walker has managed to expand its market share without cheapeningthe brand by producing a few lower-priced versions of the whiskey and putting them in bottleswith different labels.© 2010 Jupiterimages CorporationSome companies have managed to capture market share by introducing “lowerechelon” brands without damaging their luxury brands. Johnnie Walker is an example.The company’s whiskeys come in bottles with red, green, blue, black, and gold labels.The blue label is the company’s best product. Every blue-label bottle has a serialnumber and is sold in a silk-lined box, accompanied by a certificate ofauthenticity.“Johnnie Walker,”(accessedOctober 14, 2009).

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Term
Fall
Professor
NoProfessor
Tags
The American, indian retail industry, Indian retail sector, Indian Retail, Changing Indian Retail Industry

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