Week 10 - Product Concepts. Part 1

Tiffany & Co. has long been known for its specialty products such as luxury jewelry, which it markets to wealthy people and delivers in its signature blue boxes. Tiffany products have the image of exclusivity along with a brand name and quality.
However, in the 1990s, the company expanded its product assortment to appeal more to the middle class, following the widespread trend of "affordable luxury." Tiffany introduced a silver charm bracelet, priced at $110, and a "Return to Tiffany" line that became very popular among teenagers and resulted in explosive sales growth for the company. Tiffany stores were bustling with people, but the lower-end silver jewelry was what attracted the crowds. The company hoped it would gain lifetime customers from this strategy- adults who had bought the jewelry when they were teenagers would continue to buy the brand throughout their lives. Instead, the short-term success of the less expensive silver jewelry alienated older, more affluent clientele who now viewed Tiffany as an inexpensive, common brand.
In response the company increased prices on its silver products by 30%, though the market took 2 years to respond to the price increase with a sales drop. Its continued attempts to revive its luxury image include store renovations with champagne available to shoppers and private rooms to create an intimate feel. By featuring high-end products like $2.5 million pink diamond rings, Tiffany reclaimed its luxury image.