Moving Down Price-Performance Grid
Shifting to move down the price-performance grid via lowering price is a partial Blue Ocean strategy. However, luxury-goods makers are not altering the performance, which is good news-bad news. The good news is that it does get more people to buy on a short-term basis, and really accomplishes the same thing as a sale. The bad news is that it’s not a complete or authentic Blue Ocean Strategy, because the competition can follow right along by lowering price too. These current luxury manufacturers are really slipping into a Red Ocean by lowering price and not changing the performance. It would seem to be a better value to consumers given a lower price even without changing the product – but as a luxury good, it’s also about perception and exclusivity. These two factors for luxury goods are usually more important than the actual product itself – especially for items such as clothes, bags, and perfumes.

The Lowing Price Red Ocean
These luxury-makers need to avoid Red Oceans at all costs, and maintain their product’s uniqueness – and in less crowded spaces. They should not pursue a mutually exclusive low-cost strategy without product changes – otherwise it’s not a strategy, but a sale! There is nothing wrong with lowering the product price, but these manufacturers should product features which have “stripped out” low utility features thereby reducing costs. Make the product different and less expensive!