Why addressing widening gap between rich and poor matters
The modern statistics are showing the increasingly growing gap between the rich and the poor, these days the difference between the incomes of these two categories of people is especially big. It turns out that only eighty five people on the planet own more money and have bigger income than the rest of the population. This leads to the concentrated ownership (Reber 2014, par. 2). Besides, income inequality also works as a serious socially destabilizing factor (Puzzanghera 2014, par. 9). If this process is not stopped, the world’s economy is going to head directly to its collapse because of loss of competition. And according to the analysis of the world’s experts a serious damage to the world’s economy can be done in the nearest decade (Gap between rich and poor the biggest threat to the word’s economy 2014, par. 2). This is why the issues of the gap matter today more than before.
Luxury brands that want to address the gap between the rich and the poor
There is a choice each luxury brand has to make under the current economic conditions of our world. The gap between rich and poor is growing, yet this does not affect people’s idea of a luxurious lifestyle and goods (Azerrad, Hederman 2014, par. 22). Nowadays consumers with lower income still purchase luxurious products. It is up to the companies to decide if they are willing to widen the circle of their potential buyers and make their goods accessible for a bigger amount of people or stay among the elite brands.
Companies that wish to stay luxury brands and be only available to the elite
In case if the company decides to go this way and stay unavailable for the majority of potential consumers, they have to take several facts into a consideration. The gap between rich and poor is growing, the number of rich people is getting smaller and the number of the ones that are less wealthy is growing. The luxurious products of the company that does not address the gap between rich and poor very quickly will become unaffordable for most people. As a result in the nearest future a company may face a serious deficit of customers, which will severely endanger its income.
The opportunities the increasing gap between rich a poor provides for the luxury brands
Every day more and more potential get hit by the growing income inequality, logically, major part of them falls into the category of poor or not wealthy consumers. This is why the brands that make their products accessible for this category of consumers are going to have a growing number of clients. This surely will help with the brand’s advertisement and popularity.
The threats that a luxury brand may face due to the increasing gap between rich and poor
The company that decides to address the growing income inequality has to be prepared to adjust the prices for the needs and possibilities of the customers with limited income. Besides, nowadays the issue of the gap between rich and poor is known to many company leaders, most luxurious brands are already making their products affordable for the wider circle of potential consumers. This is why the company that follows this tendency has to be prepared for the competition with other luxury brands working to increase their influence. Moreover, as it happened to most luxury brands – eventually the products that are available to everyone stop being a luxury and the company producing them loses the status of the luxury brand. The brand remains luxurious because it is of high quality and because it is expensive. For the brands with this reputation lowering the price for their goods may be the threat to the brand’s integrity to its status. This may result as a serious damage.
Ways to address potential risk for the luxury brands
In the modern world where economies hit crises one after another it is very important that the companies that want to stay popular and prosperous monitor the situation in the society, demand for the products and work out the most suitable prices to attract potential customers. The wages are the main measurement. Since many companies are keeping to the same strategy these days, it is crucial to be on the top in your marketing sphere, create advertising campaigns that emphasize the company’s attention towards the changing needs of the customers.
Luxury market and mass-market
This leads to the reducing quality of the brand, at they start putting more effort into pushing their mass-market products, when the luxury models end up neglected (Strach, Everett 2014, par. 2).
Most important and dangerous threat
The economy of nowadays cannot be characterized as strong, neither can it be called weak. This is why the potential luxury buyers remained non-affected. Their income did not become lower, their ability to buy, their demand and ability to afford luxury brands is the same. The one thing that changed is the uncertainty. The economy of the modern world keeps being unstable, this is why the rate of investments has lowered. The potential luxury buyers have become more careful about the products they consume and how much money they re ready to spend for luxury goods (Lamb 2011, par. 3).
Propositions to address counterfeiting
These days every luxury brand is facing the threat presented by counterfeiting. The companies that manage to remain successful are the ones that spend a lot of effort protecting own products. Potential consumers are aware that an original luxury product cannot be bought in the street, they also know that international online traders of unknown origin cannot be trusted, but not many buyers are aware that sometimes well known companies and brands may be involved in counterfeiting schemes, copying the goods or advertisements of luxurious brands to create a reputation for themselves.
Works cited
Affordable luxury? The war against cheap imitations. 2013, WIPR.
Azerrad, D., Hederman, R. S. 2014, Defending the Dream: Why Income Inequality Doesn’t Threaten Opportunity.
Bruinius, H. 2014, Income Inequality: Does Wider Gap between Rich and Poor Threaten Capitalism?
Gap between rich and poor the biggest threat to the word’s economy. 2014, RT.
Lamb, R. 2011. Are luxury brands impervious to threats of a recession?
Puzzanghera, J. 2014, Oxfam highlights widening income gap between rich, poor.
Reber, G. 2014, Economic Inequality: The Widening Gap between Rich and Poor.
Strach, P., Everett, A. M. 2014, Brand Corrosion: mass-marketing’s threat to luxury automobile brands after merger and acquisition.