Originally Posted by
Duragrouch
So... I am NOT an expert on the bike market, at any level.
However, I have seen auto companies chase only the segments where they make high profits, abandoning entry level, low cost cars. This is short-term thinking, with exec bonuses based on their stock price. And it's killed them in the long run. Not if every car company made junky cars in that segment, but when you have companies that produce cars of high quality and durability in the entry level segment, they build brand loyalty that way, and it shows, customers are more likely to buy another of their cars as they move up in affluence. It finally got to a point where the companies got leadership that said, "If we can't build and make a profit on small cars (entry level), we'd better learn how." And that's when the companies started to turn around, for the better.
Yet many companies depend crucially on marketing the exclusivity of their products. A New Yorker article on the creative marketing approaches used in the vodka industry (where, as the writer pointed out, the marketing had to be creative, because all vodkas taste pretty much the same) included this anecdote:
The writer was walking through an airport with the head of an advertising firm that had just landed the Absolut account when they happened on a very heavy guy wearing a too-small Absolut T-shirt. The advertising exec whipped out his wallet and bought the T-shirt on the spot for fifty bucks, explaining that he collects them.
He told the writer that the first thing he was going to do was eliminate sales of all such hoi polloi-level branding products.