Originally Posted by
The_Bouncer
In fact, sometimes you do. It's called "reverse price elasticity of demand".
Originally Posted by
Fitch
Indeed, many premium brands do just this.
You don't shop for diamond tiaras expecting a bargain: luxury jewellery prices are deliberately excessive so that customers' perceptions of value are nudged up...
Of course, the underlying product has to be good enough to sustain the illusion. Once people get the message that you're more Ratners then Boodles, you're into a world of pain
The term you guys are looking for is a Veblen good...which to keep this post in line with the topic, is certainly not what BA can achieve given its current status. Once the the brand equity is destroyed, it's very hard to build back up. Looking at the "premium" industry, take a look at Pierre Cardin as a classic example.
ETA: A brand needs to build up its image over time (read: decades) and maintain characteristics of a "luxury" [loosely defined as price, exclusivity, uniqueness, heritage, craftsmanship/service, know-how] good in order to cultivate its brand equity. Focusing on one (price in this instance) without simultaneously investing, developing, & exploring the others is not going to end well for its premium segment.
As for the Y cabin, the standard supply/demand model applies -- why choose them if others are better priced and (possibly) more convenient?