Why companies are pushing premium products with higher prices

And attempts to maintain profit margins by giving products a superior shine are not guaranteed.

Six Flags, the theme park operator, recently moved to a more premium model by raising prices and limiting discounts, which Selim Bassoul, the chief executive, described as “bold changes to our business model in order to elevate the guest experience.” So far it has had mixed results. In the nine months to September, attendance at its parks fell 25 percent from a year earlier, spending per guest rose 22 percent and ultimately profits fell nearly 10 percent one hundred.

In January, the Walt Disney Company acknowledged that it may have pushed up the prices of its theme parks too much, angering loyal customers. It reviewed its policies on ticketing, hotel parking, travel photos and annual passes.

But the shift to premium products could signal the start of a longer-lasting shift as companies settle into a routine of selling lower volumes at higher prices in a split economy, a strategy that could leave poorer consumers worse off.

Take the US auto market. At the end of 2017, 36 models were priced under $25,000, and the share of cars costing that much or less was nearly 13 percent of all new car sales, according to a Cox Automotive analysis. By the end of last year, only 10 models had such low starting prices, and their share of sales fell to less than 4 percent. Subprime buyers are increasingly falling out of the market, a sign that poorer people, who tend to have lower credit scores, are struggling to hold on.

Automakers may be scaling back cheap models in part because it’s hard to justify the cost of making them in an era of expensive parts and persistent labor shortages, said Jonathan Smoke, chief economist at Cox. But the expectation is that they will continue to focus on bigger-ticket models, while resisting increasing overall vehicle production to levels that could lead to discounts even as supply bottlenecks ease.

“They’re better off selling less and keeping the pricing power,” Mr. Smoke. That could spur competitors to jump into the market to offer cheaper cars, but that adjustment is unlikely to happen quickly.