Tiffany Decreases Price to Add Sales Volume
If that sounds like business-school-speak for selling cheaper thing to slightly poorer people, it is. Tiffany's newer stores in places might have giggled about, if not actually fled, including Orange County and New Jersey (albeit the richer parts of each).Tiffany jewelry improvement in America is partly the result of persuading people that its prices are lower than they think: alongside a $1.6m pearl necklace, they can find a $15 pack of playing cards.
The firm has doubled its sales of christmas necklaces since it cuts their price and sells them online. Tiffany backed the price cut with an information campaign called "How to buy a diamond". "We found there were misconceptions about the price of a Tiffany diamond ring. People were intimidated and afraid to walk through the door," says Michael Kowalski, Tiffany's marketing chief. In the autumn, the company is to launch a similar campaign for pearls.
This use of a powerful brand name to boost sales volume rather than to command a price premium marks a sharp shift from the swollen prices that characterized the 1980s boom in luxury goods. But it is fashionable; a similar price-cutting approach has turned Compaq into the world's biggest personal-computer maker. Tiffany remains far from a mass-market business. But, provided it does not squander its wholesale tiffany bracelets in the currency markets, the company may at last have found a formula for growth.
The firm has doubled its sales of christmas necklaces since it cuts their price and sells them online. Tiffany backed the price cut with an information campaign called "How to buy a diamond". "We found there were misconceptions about the price of a Tiffany diamond ring. People were intimidated and afraid to walk through the door," says Michael Kowalski, Tiffany's marketing chief. In the autumn, the company is to launch a similar campaign for pearls.
This use of a powerful brand name to boost sales volume rather than to command a price premium marks a sharp shift from the swollen prices that characterized the 1980s boom in luxury goods. But it is fashionable; a similar price-cutting approach has turned Compaq into the world's biggest personal-computer maker. Tiffany remains far from a mass-market business. But, provided it does not squander its wholesale tiffany bracelets in the currency markets, the company may at last have found a formula for growth.
