Can someone please explain? WHAT IF..?
In such a scenario their profits will rise and as a corporate they will be happy about it. BUT their existing clientele ( ie patrons as of today, current customers) will stop buying their stuff because the exclusivity does not exist any more, although he quality of the stuff is the same, same designers, same people etc.
What does the scenario explain?
Answer:
If firms like GUCCI marketing their products aggressively such that all potential custmers across income levels, they will leave the premier brans exclusivity market for the same products to others. So, new brands and existing top brands of the premium category will take over the customers of GUCCI or Verace, while GUCCI/ Verace will have to compete in the low margin high volume standard mass consumption brands and in this market competition will increase. Whether by doing this GUCCI will benefit or not GUCCI will have to find out because marketing and distribution of premier brands and competing in the regular retail standard brand markets is not the same thing.
The scenario therefore is nothing essentially will change: the names of brands that ell in different segments: exclusive, premium, regular/ standard will change, the distribution of industry sales world wide may marginally change, if at all, IF one is expecting that exclusivity/ snobish/ premium segments of consumers will disppear, one will be sadly disappointed. Human nature ios not socialistic or communistic so far consumption is concerned: each individual will assert his/ her special prefences based on his purchasing power ability and tates in the MARKET.
value of exclusivity
It's not that Gucci shoes look so much better than cheap ones, it's the exclusivity image that they convey.
I.e. gucci shoes cost $1000 b/c wearing them says "I can afford to spend $1000 on my shoes"
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