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June 30, 2006

The middle market

One of the tasks of every business is to decide what level of market to sell in, from the high end or most expensive to the bargain level. Dr. Mike Walden, an economist at N.C. State University, says this decision is becoming more difficult.

"What we are seeing is the middle market actually shrinking," says Walden, a professor in the Department of Agricultural and Resource Economics.

"And what’s happening is that many folks -- and really this is irregardless of income -- have decided that for some products they want to buy the most expensive –- they want to buy the high end. It may be jewelry, it may be autos, it may be tech equipment.

"And in order to do that what they do is for other things that are not as important to them they really scrimp and they buy the low end," he adds. "So what you find is many consumers having a combination of some high-end products, some very low-end products but not much in the middle.

"And this is driving a lot of sellers wild. Because it used to be that the middle market was the largest, they could count on that for the majority of purchases, and now we are seeing a consumer who is changing that whole combination."

Posted by deeshore at June 30, 2006 09:24 AM