"We [also] live in a scary world where bad things can happen [at] any moment (we can lose our jobs, a bomb can go off on a city bus, an airplane can fly into a building) that we search for little symbols of stability and permanency," she continues. "I think that is what is so appealing about the names like Hermès, or Mercedes. They've stuck around."

But it would be naïve to think that consumers alone have driven this trend. Luxury goods manufacturers have helped to fuel our luxury lifestyles. They have brought down price points to expand their customer base and tap the pockets of the middle classes.

"Companies can only grow by developing new products, opening new shops, developing new markets and finding new customers," says Margolis. "Developing mid-range products is one way to grow revenues and get people to associate with luxury goods. Appeal to the mass market is a great hook. Get them to buy one product, 50 percent will want to buy another. It is a big opportunity to make them loyal, repeat customers."

But luxury brands go down market at their peril. "You can trinket-ize and make money," says Twitchell, "but do it too much, you'd better watch out. Money is to be made in the generation of mass luxury, but you run the risk of rattling the narrative. Once you see English professors driving 'round in a Mercedes it is goodbye to the brand."

Margolis also chooses Mercedes too illustrate the dangers of brand erosion. "Mercedes owners used to have respect for the brand. They were careful, courteous. But now you get a different type of driver. People are driving these cars who don't respect the brand and don't have to live up to it."

Moreover, the new luxury brands no longer have the same cachet. We all know that the A Class and newly released B Class Mercedes are "mass lux" models. If we see someone in a Ralph Lauren shirt, we presume they bought it in a discount warehouse for $15, not at full price from a fashion boutique.

Edwin Colyer is a science and technology writer based in Manchester, UK.