I am in the process of fleshing out a post examining of whether professional service firms (PSF) are conspicuously consumed by businesses, much like luxury goods are by consumers. I’ve been wondering to what extent PSF’s can set higher prices based on their brand and any “Veblen Effects” that follow. Are high-end PSF’s subject to the same effects when they either lower prices or diversify their offerings into an area that appears more ‘pedestrian’? In other words, will lowering their prices and the complexity of their offerings dilute their brand?
Would be interested to hear folks’ thoughts as I begin working on the post.