I’ve got a luxury brand. Do I go down market in the downturn?

Before you make this decision I think you need to think about:

• What your brand stands for?
• What its position is in the market vs your competitors.
• What is your consumer’s perception of the brand?
• If you go down market now, will you be able to crawl back up later? Or will it then be positioned as a cheaper product in the market?
• Do you really need to go down market or could you position it slightly differently to maybe appeal to a different target audience.
• Do you currently export?  Could you focus more on the export markets?  (With the dollar as it is, you probably make more money this way).
• Could you perhaps bring out a slightly cheaper product under a different brand name and therefore not damage your brand?

I think you can guess that I am not overly keen on a luxury brand going down market.  In the downturn I would say that if you start to compromise your brand now then you are starting on a downhill slippery slope.  

The million dollar question is: What will you do when the downturn ends if you have gone down market?  

Start with the end in mind; don’t just panic or you might regret it.

Lara Solomon is the founder of Mocks, mobile phone socks www.MyMocks.com and author of Brand New Day – the Highs & Lows of Starting a Small Business. Lara’s business LaRoo was the winner of the NSW Telstra Micro-Business Award in 2008.

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