Trading Up

Posted in Finance, Accounting and Economics Terms, Total Reads: 176

Definition: Trading Up

Trading Up refers to buying something superior than what one already has. It also means improving the quality, increasing the number of features or providing superior level of service which could justify higher price. It also means increasing the features of a product, enhancing its quality or supporting it with better quality of service to support its increased price


The opposite of trading up is trading down which means buying something of lower value or lowering the quality standards of a product or service.


A report named “Trading up and down around the world” published by Boston Consulting Group in September 2008 talks about tading up and trading down. Some of the key insights in developed and devlveloping economies are :

1. Trading up and down remains a powerful global trend spread across all income brackets, product categories and life’s stage

2. Both of them are driven by shift in economic and socio demographic forces across the globe like rise in education and wealth level and increase in discount retailing

3. Overall consumers spend wisely when they trade down hence the companies that can continue to generate meanignful innovation could afford to maintain price premiums with the consumers

4. There exist a difference in consumer attitudes across various regions like consumers from the U.S. , Europe, India enjoy the thrill of getting a good deal. And it is more compelling for trading up consumers in China and Russia than in mature market



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