The Patriot-News
Sellers Of Luxury Goods In Harrisburg, Pa., Meet Hard Times With Innovation

By Bill Sulon

Even in a slow economy, consumers need to buy milk, fix the toilet and perhaps subscribe to basic cable TV service. But do we really need that baby-grand piano, diamond necklace or high-speed power boat?

Three years into a stock-market slump and rising unemployment, sellers of luxury items are well aware that people are asking themselves such questions, and have revamped their consumption strategies to keep from sinking into their own recessions.

All three of those local businesses "incorporate a lot of the logic that is required now," said Fred Hurvitz, instructor of marketing at the Smeal College of Business Administration at Penn State University.

"Most businesses will be careful with their inventory, trying to replenish more often rather than stock as much in the store itself. That applies to businesses in general, but especially businesses that deal in higher-end merchandise," he said. "The other way to move the higher-quality goods is to do survival pricing -- to not have the higher margins that they enjoyed several years ago."

But even if the economy worsens, "there's always a certain market out there that is semi-unaffected," Hurvitz said. "The wealthy are not going to curtail their spending. The majority of us do curtail our spending, but there is still a certain percentage of people who can still afford to buy that 5-carat ring."

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REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu .

Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

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