Good Example Of Case Study On The End Of Middle

EXECUTIVE SUMMARY

Against a background of unprecedented market recession, new marketing strategies are increasingly accounting for extreme market ends as opposed to conventional middle-class segmentations. The United States Consumer Confidence Index has shown declining slips since late 2007. Losing net worth and assets, middle class families are edged out of marketing efforts. Unlike upper class, wage dependent workers will not enjoy market recovery, a slippage which will further increase income inequality.
Retail and Consumer Packaged Goods (CPGs) best show how businesses are responding to new market realities. Procter & Gamble Co. (P & G), for example, has scaled down product portfolios in order to address upper and lower ends of consumer spectrum. Downsizing Tide and introducing higher markups for Olay and Gillette shows how P & G has re-geared her marketing strategy towards upper and lower consumer ends. "Brands for less" is consumer's most pronounced new value. Upscale brands like Tiffany and Saks are still performing well at upper end of consumer spectrum. However, pre- and post-recession luxury consumers are distinguished by caution. Meanwhile, middle retailers such as Gap, J. C. Penny and Sears have shown declining market performance. The market is further polarized between upper and lower consumer ends, redefining luxury and eroding middle incomes. Price becomes a crucial defining standard. The product, based on price, should either be of value or luxurious.

All industries are re-engineering adopted marketing strategies in order to cater for needs of lower and upper consumer ends.

ANALYSIS
The End of Middle marketing concept is notable not only in developed economies but also in emerging ones. Indeed, U.S. middle class consumers have long defined marketing strategies in U.S. and global markets. This has, in fact, locked up consumer habits within a limited scope of marketing efforts, leaving out extreme upper and lower market ends each in an isolated niche. The recession, however, has shown a silver lining for marketing efforts not only in OECD countries but, more interestingly, in emerging markets of BRIC (Brazil, Russia, India and China).
Indeed, new middle classes in BRIC countries are showing End of Middle at play. Considering for differential economic and social contexts of each BRIC country, emerging BRIC middle classes are radically different from U.S. middle class. If anything, marketing 4 P's – product, price, place and promotion – are redefined in BRIC contexts. For example, IT product design is longer as what U.S. middle class consumers used to see. Thanks to China's economies of scale, PCs and laptops are no longer defined by U.S. middle class consumer habits. The same applies to many iconic U.S. and European products and services which are now being strategized for a new, emerging BRIC middle class: Cheap flights, international education, online shopping and much more show how upper and lower end consumer habits are redefined by BRIC emerging middle class.
Hailing from lower classes, BRIC emerging middle class is a breed of Western-styled consumers whose older brand affiliations – and hence loyalties – are grounded in price but whose sensibilities are geared toward luxurious brands encountered and experienced in OECD economies by virtue of education, work or anomalistic market conditions.
Thus, a hybrid of market strategies considering for both luxury and price is quickly spreading in emerging economies and further emphasizing strategizing for extreme market ends as new marketing faith.