Book Summary (Lite) of Trading Up

December 2009
Business
Summaries lite
About the Authors

Trading Up
The New American Luxury
By Michael J. Silverstein and Neil Fiske, Penguin Books, 2003
Mr. Silverstein joined
The Boston Consulting
Group in 1980. His second
book, Treasure Hunt, was
W hy do people happily pay $6
for a Panera Panini instead
of $3 for a sandwich at the deli?
NEW LUXURY IS MORE
THAN MARKETING
New Luxury good cannot
published in May 2006 be imagined, developed,
and has received critical Or $28 for a Victoria’s Secret manufactured, distributed, or
acclaim. With Kate Sayre, bra instead of $12 for a generic marketed following
he is coauthor of a third brand? conventional middle-
book, Women Want More, market business
which is being published in Or $30,000 for a BMW attitudes or practices –
September 2009. instead of $20,000 for although many business
a Chevy? assume they can be.
Trading up has become Companies assume
Neil Fiske was named Chief that the New Luxury
a fact of life.
Executive Officer in June consumer will be
2007. He was recognized Consumers today seduced by a high price
as “Marketer of the Year” are willing to pay a point, but New Luxury
and “Retailer of the Year” in significant premium for goods consumers do not automatically
2004 and 2005 by Women’s and services that are emotionally assume that if it costs more, it must
Wear Daily. important to them and that deliver be better. They are sophisticated
the perceived values of quality, enough to evaluate the technical
performance, and engagement. and functional benefits of a product
About the Book But in other categories that and to trust their own emotional
aren’t emotionally important, reactions to it. We heard over
they become bargain hunters: a and over again from consumers
Publisher: passionate Mercedes driver will that the most expensive entry in a
Penguin Books, 2003 shop at Target every weekend; a category is not always the best.
construction worker who splurges
ISBN: 59184 013 9 on a $3,000 set of Callaway golf
316 pages clubs will also buy store-brand New Luxury is much more than
groceries. a marketing exercise, although
Trading Up | Michael J. Silverstein and Neil Fiske

BusinessSummaries.com
The Nutshell
marketing is, of course, a key part of the process. TRENDS IN NEW LUXURY
But New Luxury goods are not created solely in Greater globalization and influence of overseas
the marketing. They are created through all the markets. As the European Union continues to
management disciplines – and often through expand and accept new member nations, and
unconventional marketing methods. as China and other Asian countries become
increasingly welcoming to both businesses and
THE PRACTICES OF NEW LUXURY travellers, the trading-up phenomenon will
become more globally influenced. Consumers
will discover new tastes and styles, ideas and
New Luxury leaders and their companies follow interests, and look for their Americanized versions
a set of management practices that are different back home. Businesses will have greater access, at
from those of conventional or Old Luxury goods lower cost, to ideas and supply chain services in
creators. Using them, New Luxury companies countries throughout the world.
have shattered conventional beliefs in nearly all Heightened role of the Web and
aspects of product creation and distribution, e-commerce. E-commerce is currently a minor
including ideas about price ceilings, price ranges, source of revenue for New Luxury creators, but
brand extendibility, consumer sophistication, it is growing fast and contributing to sales and
market stability, and the innovation cascade. brand growth in many ways beyond the direct
sales of brick and mortar stores.
1. Never underestimate the customer. Influence of solo females. Young singles
rocket in a relatively small number of categories,
2. Shatter the price-volume demand curve. but divorced women told us they rocket in as
3. Create a ladder of genuine benefits. many as thirty different categories.
4. Escalate innovation, elevate quality, and deliver a Seniors as heavy spenders. Seniors represent
flawless experience. an enormous potential market that New Luxury
5. Extend the price range and positioning of the goods creators have yet to fully tap. There is an
brand. opportunity to better serve the senior travel market
with clothing, luggage, health care products and
6. Customize your value chain to deliver on the services, food supplements, photo and electronic
benefit ladder. imaging systems, travel planning and support
7. Use influence marketing; seed your success through services, and more.
brand apostles. Next-generation consumers: smarter and
8. Continually attach the category like an outsider. more sophisticated than ever. It is the “juniors”
aged six to eighteen, however, who represent the
greatest potential for continuing and expanding
Just as New Luxury has arisen as the result of the trading-up phenomenon. They are interested
the confluence of social changes and business in learning, travel extensively, and are highly
capabilities, its spread will be further enabled by a attuned to brands and products.
number of factors:

***
2009 BusinessSummaries.com
What was luxurious and different

today becomes the standard
brand of tomorrow.


“If they are going to buy your product,

it has to be better, it has to be right.”

About Us
BusinessSummaries.com is a business book
summaries service. Every week, it sends out to
subscribers a summary of a best-selling business
book chosen from among the hundreds of new
business books released in the United States.
Summaries are available in PDF, PDA, HTML,
Powerpoint, audio, video and mindmap formats.
Do you like this summary but not a member yet?
Subscribe now and learn the latest business trends
in minutes from book summaries of today’s business
bestsellers. Simply go to www.BusinessSummaries.
com for more details.

Book Summary (Lite) of Trading Up

Uploaded by

Copyright:

Available Formats

Book Summary (Lite) of Trading Up

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Book Summary (Lite) of Trading Up

Uploaded by

Copyright:

Available Formats

What are some of the practices followed by New Luxury leaders according to the book?

What are some of the trends mentioned that can enable further spread of New Luxury?

December 2009

About the Authors

Trading Up | Michael J. Silverstein and Neil Fiske

Trading Up | Michael J. Silverstein and Neil Fiske

What was luxurious and different

Trading Up | Michael J. Silverstein and Neil Fiske

Trading Up | Michael J. Silverstein and Neil Fiske

“If they are going to buy your product,

Trading Up | Michael J. Silverstein and Neil Fiske

Trading Up | Michael J. Silverstein and Neil Fiske

You might also like