Part 2 they will trade their Chevrolet for a smaller and more economic Ford, but it’s a different matter when it comes to luxury products. They will keep their Ferrari, even if it means leaving it in the garage and going by bicycle, on the pretext that it’s more ecological. On this point, we are reminded of an anecdote. Back in the 1980s, the People’s Republic of China was a major customer of Saint-Gobain Desjonquères, buying from them mainly small glass bottles, some for packaging antibiotics and others destined to be used for nail varnish. It was October, and the time had come to draw up the budget for the following year – an annual chore for the boss of any large group. The economic situation in China at that time was rapidly going from bad to worse, and a severe cutback in orders for the year to come was predicted. It seemed obvious to him that, in critical times, the health of the Chinese population was going to take precedence over the beauty of its womenfolk,especially in a Communist state. He therefore decided to leave the sales forecast for the bottles for antibiotics at the current year’s level while at the same time drastically reducing the sales forecast for the nail varnish bottles. This proved to be a major error of judgement because the very opposite occurred. The Communist leaders had understood perfectly that if they kept up supplies of nail varnish in their state-run stores, they would be passing along the message that everything was fine... and they could even add that they were reducing their orders for antibiotics because the health of the population had greatly improved. Besides, people would never know how much antibiotics were used in hospitals anyway. After decades of monochrome existence, Chinese women at last had the chance to wear bright colours (on their nails at least) without being immediately rebuked and condemned. To deprive them of nail varnish would be to deprive them of a symbol (at that time a luxury in China) of what was for them a quite new and very important freedom, and that would have been far more dangerous for the powers of the day than abandoning a number of sick people to their fate. Fortunately for the company’s budget, both products were manufactured on the same machines, and the total production volume was as forecast. 📖 The Luxury Strategy - Kapferer & Bastien