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Tiffany vs Burberry

Isaac Mostovicz writes that ...

The diamond industry is in love with Tiffany.

Witness this analysis from Diamonds.net of the way that Tiffany avoided ‘doing a Burberry’.

In 2002, with $120 silver bracelets rushing off the shelves, Tiffany’s CEO Kowalski raised the prices on all of its most accessible collections, including ‘Return to Tiffany.’ The increase was not a response to rising costs or a desire for higher margins. It was a marketing decision intended purely to reduce sales.

This sounds like madness if you are a salesperson, but if you understand brand, and the difference between marketing and sales, it makes perfect strategic sense.

Problematically, the price rises had no discernible impact on sales. So in 2003 and again in 2004, Tiffany drove prices even higher. Finally, with prices up by more than 30 percent, Kowalski achieved his goal: Sales of jewellery under $500 finally began to decline.

Kowalski had saved his brand, increased his margins and build a sustainable platform the future.

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