Quote:
Originally Posted by dotcomakazee
But that is just you. There is a concept known as "prestige pricing" that is the exact opposite of the basic supply and demand curve that everyone learns in economics 101. With prestige pricing, demand actually increases as price increases.
Also, it isn't just Rolex. 2 years ago you could get a basic PAM 24 for $3000. Now they are like $6000.
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I don't believe it is "prestige pricing" that you are looking for. Rather, a VEBLEN good. This is not learned in Econ 101 (was an Econ major, among other things), but that is inconsequential. In fact, even for the super wealthy, price DOES matter. Consider my post a short while ago on an article in the New York Times. I doubt many people read it.
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Quote:
Originally Posted by subdownunder
Probably not, at the price point of a Rolex serious buyers will still buy the watch increase or not.
Anyway, as far as Rolex is concerned the rise of China and Asia is where its future sales lie as the Rolex brand is so recocognisable in those cuntries...
This isn't entirely true. Even the extremely wealthy are subject to supply and demand. Given recent US economic turmoil, many people are now cutting back, even going so far as to SELL their Rolexes..something that would drive the price back down. There is a recent article on this in the New York Times. See below.
“Even if they’re not in danger of not paying their mortgage, there’s still a psychological change,” said Chris Del Gatto, chief executive of Circa, which has watched its business jump by 50 percent in the last year as wealthy clients sell their spare diamonds and Rolexes. “The economy is an issue even for people who don’t need the money.”
http://www.nytimes.com/2008/06/01/fa...621&ei=5087%0A
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Consider those you refer to in your argument. For example, the heads of BEAR STERNS, who at one point owned millions of shares valued at $170 a piece. The CEO, in fact, was worth 1 BILLION USD in stock alone, shortly thereafter valued at $12,000,000. Of course, that is a large sum of money, except for when you consider that he is tied to expenses like the upkeep of a $100MM estate, private jet, fleet of cars, yacht etc... You see where I am going with this. People with this much money often have very extravagant belongings to match, and with an economic downturn, cutbacks must be made EVERYWHERE.
What's more, the extremely wealthy tend to be that way because of extreme thriftiness. They aren't likely to cough up any price Rolex demands simply because they understand the value of money, and how to make it grow. Being reckless with it is not one of those ways. The people that have the most money tend to be the ones who show it the least, and they aren't concerned with showing off their status as much as the next guy. Warren Buffett still drives a BUICK. Think about it.