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Raising the Bar

The new affordable impulse buy is all about the Benjamins.

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This story appears in the April 2005 issue of Entrepreneur. Subscribe »

Browse through retailer sales ads or walk down the aisles of aTarget or a drugstore, and you may be surprised by how many itemsare being offered at or around the $100 mark. Suddenly, it seemslike a myriad of self-pampering products are popping up to sootheus, entertain us and/or simplify our lives--all with much higherprice tags than the previously accepted price of $19.99. Haveconsumers' attitudes shifted to make $100 the new affordableimpulse buy?

Daniel Howard, chair of the marketing department at SouthernMethodist University's Cox School of Business in Dallas andconsumer research and behavior expert, says inflation is one factorin the rising costs of products. But he adds that, psychologically,consumers are also allowing price points to move upward, especiallywhen it comes to gadgets. "Americans are fascinated andobsessed with technology-type goods and are willing to pay somewhatof a premium for technological ways of doing everyday tasks, eventhough many times the technological method of doing it is moredifficult and arguably less efficient," Howard explains.

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