kest (Standard & Poor's, 1990, pp. H37 H43). The outlook for a product such as "Madonna" brand perfume, thus, is not a bright as it might otherwise be.
The prestige segment of the fragrance market, where "Madonna" brand perfume and all other celebrity fragrances are positioned, has been hurt by inexpensive imitation fragrances called knockoffs (Standard & Poor's, 1990, pp. H37 H43). "Madonna" brand perfume imitations entered the knockoff market in early 1992.
Prestige goods are typically of a higher quality level than are other products in the same genre. This characteristic is applicable to celebrity fragrances. Even when the actual quality level of prestige goods is not higher, there exists a perception of higher quality among those individuals included in the appropriate target market.
Higher quality, or the perception thereof, is accompanied by a significantly higher price. In most cases of prestige goods, price differences are greater than quality differences. The automobile industry offers and example of this situation. Few automotive experts challenge the contentions that a Cadillac "Seville" is a higher quality automobile than is the Honda "Civic," or that the Mercedes "300" is a higher quality automobile than is the Cadillac "Seville." Most automotive experts, however, will not agree that either the approximately $20,000 retail list price differentials between the Honda "Civic" and the Cadillac "Seville," or between the Cadillac "Seville" and the Mercedes "300" are accurate reflections of quality differences between the automobiles. Further, if one were to compare the approximately $40,000 retail list price difference between the Honda "Civic" and the Mercedes "300" to the quality differences between the two automobiles, the divergence in the measurement of the two variables would be revealed as truly absurd.
It is not the assessments of automotive experts, however, which make it possible for automobile m...