High-End Markets

Question 1

High-end mkt definition

Answer 1

Market that is usually associated with high-quality, expensive products/services. All else being equal, mkts typically have high-end, mainstream/mass and low-end segments

Question 2

High end mkts general examples

Answer 2

High-end fashion (apparel), luxury cars, yachts, premium chocolate, first class airline tickets, artisanal ice cream, upscale restaurants

Question 3

High-end mkt characteristics

Answer 3

• likely high profitability
• customer segments likely not price sensitive and are usually ready to pay price premiums, typically valuing brand names and high-quality product
• key success factors typically include high quality offerings, established brands and large investments in marketing
• competitive landscape is likely fragmented with several differentiated players
• mkt size is likely significantly smaller than the correspondent mass market/low-end market (eg, high-end apparel vs low-end apparel)

Question 4

High-end mkt example: client is boxed wine producer that has decided they want to acquire premium wine producer, should they?

Answer 4

Premium wine market:
- price-inelastic demand as only customers with specific income range can afford premium wines
- high margins as customers are likely ready to pay price premiums
- a few high-end wine producers (highly differentiated)
- mkt size is fairly large but might be far smaller than regular wine market