As the middle class shrinks, companies move on.

[Live and Learn]

Luxury tampons? Companies spurn middle class - to everyone's loss
http://www.nbcnews.com/business/luxury-tampons-companies-spurn-middle-class-4B11212163
Ben Popken NBC News
Sep. 20, 2013 at 3:25 PM ET

Paper towels embossed to look like cloth. Tampon packages with a glossy metallic sheen. Designer ice cubes for $75 a bag. Marketers are going glam with everyday products, taking them upscale as they give up on selling to the middle class.

Companies have reacted for years to the shrinking middle class by developing both top shelf and bargain versions of their product lines. Toyota has been successful with the Lexus. Frito-Lay has introduced Olive Coast, kettle-cooked chips with a Mediterranean flavor, as well as “Taqueros,” a discount tortilla chip. Apple's new iPhone comes in both a $199 version and a $99 one with cheaper components.

<snip>

The U.S. Census Bureau recently reported that national real median household income was $51,017 in 2012, 8.3 percent lower than in 2007 and 9.0 percent below the income peak in 1999. As the middle class feels like it's scraping by, it has less buying power to target with average products at average prices. By 2011, the top 5 percent of Americans by income accounted for 37 percent of all consumer spending, according to a Moody's Analytics survey. By contrast, the bottom 80 percent accounted for 39.5 percent.

See you at the Dollar Store!

[gopiscrap]

1. that's fucked up

[daleo]

2. It's hard to believe this is sustainable in the long run

I wonder how the income breakdown compares to the Middle Ages or the pre civil war American south?

[NYC_SKP]

3. iPhone is a bad example. Apple actually embraced lower income people with their lower cost model.

In the past iPhones were for the elite, costly, fancy.

So Apple makes a less expensive one so that more people can have it?

I call that good marketing and think it is not "spurning the middle class" but rather embracing it.

The rest of it makes sense.

The rich getting richer and the rest of us sliding back.

[Live and Learn]

4. I think the article was attempting to portray

that there will be 2 tiers of products, luxury items for the rich and lesser quality for the remaining middle class and the poor.

[NYC_SKP]

7. To some degree we've had that for a while: Cadillac and Chevy, with Olds, Buick, and Pontiac too.

Which is not to say that I disagree with the article at all.

I don't mind not being targeted to become a consumer, we get too much of that already.

I'm OK with the rich throwing their money away, I just wish more of the purchases would accrue to US jobs and not imported products.

[Exilednight]

6. That's not exactly what happened. Originally you had to

buy the iphone outright, with a price tag of $600. You then had a no contract cell plan with AT&T that was relatively cheap, around $40 a month.

The problem was, people couldn't, or wouldn't, fork up the upfront cash. Instead, Apple finally went to a contract plan like the rest of the market, thus lowering the original upfront to about $200, but the cell plans went to about $70 a month on a two year contract.

Now the phone cost $920 instead of $600 ( the original $199 upfront then the additional $30/month x 24 months)

[NYC_SKP]

9. Original purchaser, now on my 4th phone. Apples and oranges. Then you HAD to use AT&T.

And you didn't have the same data needs and you didn't get them at that low price. Texts cost extra, call minutes were limited IIRC (work always paid for unlimited).

Now you can buy the $99 phone and shop for cheaper plans, some as low as $25/month, not sure if there's a one or two year contract on them.

http://www.imore.com/strapped-cash-here-are-best-prepaid-iphone-plans-us

[Exilednight]

12. True, but now most plans are $100/month plus. The oroginal iphone came out while

Olbermann was still on MSNBC and Bush was still in office and Obama had not even announced his candidacy yet.

So here is the bigger point I am trying to make. Apple didn't do anything good, bad or otherwise. They did what every other company did and raised the cost of the phone and covered it by binding it to a long term contract that makes up more than the difference of manufacturing the phone. It's a shell game, plain and simple.

The sad part, it costs just under $170 to manufacture an iphone 5.

[BlueJazz]

5. More sir ? please

[SMC22307]

8. Thank you, Reagan, and ConservativeDemocrats. (n/t)

[leftstreet]

10. The Middle Class Myth was a massive scam

Politicians STILL invoke its 'exclusive' nature and people just lap it up

Such sleight of hand! Getting people to agree only 'hard-working Americans' who produce profits for the ruling class have a right to shelter, food, healthcare, security! And fuck everyone else who can't work or can't find work.

Chickens. Coming. Home. Roost.

[dixiegrrrrl]

11. Dollar store is selling phones now.

jus saying...

[brush]

13. And don't forget the middle classes in China and India

There's huge potential to sell in those country's rising middle class, which will dwarf out already shrinking one. The multi-national corps are well aware of that. They'll sell premium products to the one-percenters here, and regular products to the overseas middle classes.

The 99-percenters here, they could care less.

[mathematic]

14. I want to live in a world with exactly one product of every kind.

What are things coming to when you're complaining about consumer choice? And it's not like there are fewer "middle class" options on the market today. Indeed, the article does not make that claim and does not provide any evidence for that conclusion. The store brand at grocery stores are at the highest quality they've ever been and they cover more products than they ever have.

I'm inclined to believe that this product strategy has more to do with people realizing there is rarely a meaningful difference in quality between the store brand and the market leading name brand. So the name brand company jazzes up their main product to justify the price and introduces a new lower price product to compete with the store brand.

From the article: "The trend driving the strategy is that consumers are scrimping on the products they don't care about to make room in their budget for those they do. "

Imagine that! Companies responding to people that want to spend less on junk they don't like so they can spend more on junk they do like. It's a conspiracy!

[Live and Learn]

15. I think you missed the point of the article.

The point is that companies have quit marketing to the middle class. So, unless you are in the 1% your choices will be fewer not more.

The reason people are scrimping is because the middle class income is shrinking. If it continues the way it is, the middle class may well fall to what is now considered poverty levels.

[Arugula Latte]

16. This statistic is just so alarming:

By 2011, the top 5 percent of Americans by income accounted for 37 percent of all consumer spending, according to a Moody's Analytics survey. By contrast, the bottom 80 percent accounted for 39.5 percent.