TWO
The Deterioration Trap
How to Manage Market Power to Beat Low-End Competitors
Sometimes research has an accidental quality. I was reminded of this recently when I bought a Louis Vuitton handbag for my daughter. She was very pleased until she took it to school and her classmates made fun of her for buying a knockoff. I knew it was a genuine Louis Vuitton—and had the bill to prove it! But her peers could not tell, and that was actually more important.
The quality of imitators, private labels, and generic products has increased to the point where even discerning eyes—and, believe me, teenage girls are very discerning—have a hard time telling the difference. The handbag episode encouraged me to look further afield. I looked at the discount ...
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