After the deep discounts of 1992, the ability to sell premium customers on the added-value of the airline experience got much, much harder for the major carriers. Again from the practice of marketing we learn that at the moment a premium customer sees the product they are loyal to become deep-discounted, the esteem that was held for that product is lost. The unique brand becomes merely a commodity. Unfortunately, this is an all-too-common occurrence in business today. It is not unique to the airline industry. Selling through low-cost mega-retailers like Wal-Mart has turned long-standing brands like Levi’s, Rubbermaid, and Goodyear into shells of their former selves. And you can’t put the toothpaste back in the tube, as the cliché goes if you later decide you made a mistake.
Imagine if Tiffany’s set up a counter at Wal-Mart. How long would it take before the Tiffany’s brand, even with the blue box and white ribbon, became merely a commodity in the eyes of its best customers? Even the venerable Apple is playing a dangerous game right now by expanding its sales through Wal-Mart, Best Buy, and other huge chains. One wonders if they will be able to keep the barbarians at the gate and hold onto their image as a hip, cutting-edge, innovative company. Or, will they too fall victim to the trap of big volume and discounts? The fact is that once the perception of the product is diminished in the eyes of the customer, price becomes the primary factor that determines whether they buy it or not.