Tom Bolger died last week.

Bolger was the first CEO of Bell Atlantic, one of the companies formed by the breakup of the old AT&T. Reading his obituary, I was struck by something he said way back in 1983: “Right now we largely transfer only voices. But if the information age is as real as competent sociologists tell us, and you start imagining the transfers of data by all these people, the business could be immense.” That, as it turned out, may have been the understatement of the decade. It was all the more remarkable by the fact that Bolger made it a dozen or so years before most of us had ever even heard of the Internet.

Changing dynamics are a given in the modern economy. Not all of Bolger’s strategies at Bell Atlantic panned out, but he knew his charge wasn’t to preside over a telephone company—it was to keep Bell Atlantic (now Verizon) at the forefront of the communications business. That kind of thinking makes me pause and wonder what’s around the bend in my industry. That can only be a good thing.

Last night I attended a gathering of the Luxury Marketing Council, a membership organization representing nearly 900 high-end product and service companies. The presentation featured a panel with representatives from Bentley Motors, Moet Hennessey, Elite Travel Magazine and Blue Star Jets.

As you can imagine, none of the panelists were reveling in the current economic conditions, or the phenomenon they called “luxury shame” (the polar opposite of the conspicuous consumption from which luxury brands so often benefit). But neither were they sitting still, wringing their hands. As each panelist discussed their current strategies, it was clear not only that their companies were staying focused, in many cases they were increasing their focus.

Each company was facing the difficulty of losing (at least temporarily) its aspirational customer segment. As a result, each has chosen to concentrate on its core customer, being proactive in reaching them with fresh, creative approaches.

It’s tempting when growth stalls to start trying to be all things to all people in a desperate attempt to grow short-term revenue. But these luxury marketers understand that what they do with their brands today will have implications in the future. That’s true for all of us.

When 2008 came to a close, Nestle looked up and saw that revenues were up ten percent, fueled in part by higher prices. Procter & Gamble reports that its premium products are doing just fine, despite being priced 60 percent (Tide Total Care) or 70 percent (Clairol’s Perfect 10) higher than its base brands. Pepsi is stepping up support of its Rockstar energy drink, which sells for five or six times as much per ounce (according to Beverage Digest) as regular soda. Even Gucci Group reported healthy revenue gains in 2008.

What’s going on here? Aren’t we experiencing the worst economy in generations? Indeed we are, but the companies above (and others) understand that their customers are making a flight to value, not merely to cheap. Sometimes value means “less expensive” (GameStop is projecting double-digit sales growth this year based on its used offerings and perception of videogaming as affordable entertainment), but value can also mean “more for your money,” which, through a variety of approaches, Nestle, P&G, Pepsi and Gucci are managing to provide ($2.2 billion in R&D last year at Procter & Gamble, to cite one example.)

The easiest strategy to follow in tough times is discounting. But it can also be the most deadly (see Sprint Downhill below). Every company should be taking a hard look at its value equation in this environment. But no company should forget that equations always have more than one variable. Providing more value for the money is almost always a better strategy than asking less money for the value.

“Without a hit phone or strong brand to lure consumers, Sprint Nextel Corp. increasingly is pushing discounts in a bid to reverse two years of subscriber losses.” That’s the opening sentence from Friday’s Wall Street Journal article about the company.

Sprint lost over 1.5 billion dollars in the fourth quarter, along with over a million subscribers. The company lost nearly ten percent of its customers last year. By contrast, its two biggest competitors, Verizon and AT&T, added over three million accounts in the last quarter of ’08 alone.

The article goes on to say, “One of Sprint’s remaining weapons is to undercut rivals on pricing.” Really? If you’re wheezing, challenging your healthy competitors to a footrace is not a great idea. It’s like the dark knight in Monty Python and the Holy Grail, whose belligerent taunting of King Arthur grew more vigorous with each limb he lost. The end game of such a strategy is not good.

Innovation is the coin of the realm in the telecommunications industry, because it’s the only thing keeping companies from price wars borne of commoditization. That and effective branding, which will play an increasingly role as the industry continues to mature. Sprint isn’t carrying a sharp sword in either area.

Yesterday JetBlue launched a campaign headlined “Welcome Bigwigs” anchored by a special landing page on its website. The airline, like airplane manufacturer Cessna (see post below), is seizing an opportunity to make an attention-getting statement tied to the notoriety private jets (and their well-heeled passengers) have been getting of late in Congress and the press.

Air travel and a bold tone are about all the JetBlue and Cessna campaigns have in common, however. Both companies are taking risks with their campaigns, but whereas Cessna’s effort is bold, JetBlue’s can best be described as brash. The airline’s overtly tongue-in-cheek approach just doesn’t feel right.

Ostensibly addressing “Hedge Fund Managers…Captains of Industry…Former Treasuries Secretaries…Owners of $35,000 Antique Commodes…” (you get the idea), JetBlue is making a point by making fun of easy targets. Of course, these real-life “moguls” and “tycoons” won’t be flying JetBlue anytime soon, a point the approach obviously concedes. But my sense is that the real target of the campaign–road warriors for whom a few extra inches of legroom really does make a difference –won’t be charmed by its sarcastic tone.

JetBlue’s brand personality has always been friendly. But this campaign’s smarmy tone and intentionally insincere “Welcome Aboard!” slogan is out of character. It may provide a nice short publicity burst for the airline, but don’t expect it to fly for long.

In April, Bank of America will rebrand its Countrywide Financial unit. The new name will be Bank of America Home Loans.

Peanut butter and jelly. Oreos and milk. BMW and Starbucks. Some things just go together.

It’s true that Starbucks attracts a wide variety of customers, and you might find any number of different cars parked in front of the location near you. Still, both Starbucks and BMW have historically catered to what might be described as “an upscale clientele with taste.” There’s something about the two brands that just fits.

That’s why BMW’s strategy during the downturn is so interesting compared to Starbucks’ approach (see below). True, there are many differences between the two companies’ business models, but BMW is actually raising prices and lowering incentives in the face of an inevitable volume decline (while most of their competitors are begging for buyers and bailouts). BMW is choosing, in the face of a deep downturn, to protect profitability and bolster its brand.

No one can say which company’s strategy is right, or if both Starbucks and BMW will be effective in riding out the crisis. But while they’re both venerable brands, the latter has demonstrated a decades-long track record of making the right calls. Many companies could benefit from pondering their strategy over a cup of chai.

I’m worried about Starbucks.

Companies like Dunkin’ Donuts and McDonald’s have long gone after the upscale coffee purveyor, positioning themselves as offering similar quality products at more affordable prices. There was a time when Starbucks wouldn’t have given these competitors a second thought. They were merely fast food, while Starbucks was “the third place”–a 360-degree, five-senses experience that represented an entirely different category.

But with the economy now in the tank, Starbucks is in the tank right along with it. The company is suffering from the dual effects of losing its focus in recent years and consumers’ current reluctance to part with four bucks at a clip. McDonald’s, on the other hand, is doing just fine, leveraging the frugal economic environment as a way to introduce people to their new and improved coffee product.

With its launch of instant coffee, breakfast meal deals and loyalty cards, I’m concerned that Starbucks is allowing its competitors to reposition it, legitimizing their claims as acceptable alternatives and forever altering the playing field. Instead of holding on to its identity as “the third place,” Starbucks may become “just another place” to get coffee. The company’s short-term decisions to shore up sales could be doing long-term damage to the brand’s value proposition—damage from which Starbucks may never recover.

In my book, I speak of the dichotomy in which struggling companies often find themselves, being blind to the need to evolve on the one hand or changing strategies too frequently in search of a silver bullet on the other. The advice I give is to refrain from wholesale changes until you can carefully assess from where the problem is coming. If the troubles are borne of a temporary tectonic event–no matter how bad it is–it’s probably better to find a way ride things out.

The economy will one day recover, and many people will again seek out experiences that don’t involve tile floors and plastic chairs. While some will always zip through the drive through looking for a cheap caffeine fix on the way to work, others will once again relish the opportunity to linger someplace special. Whether Starbucks can continue to fulfill that need is largely up to the decisions the company makes in the weeks and months to come.

Private jets are an easy target. Angry shareholders and members of Congress have been self-righteously shaking their fingers at them as examples of corporate waste and greed. Taking a lesson from the auto chiefs (who were excoriated for daring to drop into Washington, looking for a handout, via their Gulfstreams and Learjets), big bank CEOs who testified before Congress last week wisely traveled by more humble means.

Three cheers for Cessna, which is taking out full-page ads in major newspapers headlined, “Timidity didn’t get you this far. Why put it in your business plan now?” Jack Pelton, Chairman and CEO of Cessna, is concerned about the future of his company and others like it that employ thousands of blue collar workers who wouldn’t relish being laid off at the moment. “We think it’s time the other side of the story be told,” he says.

Pelton and his company are demonstrating boldness borne of knowing whom they serve. Instead of being preoccupied with congressional blowhards or unfair public stereotypes, Cessna knows who its customers are and is boldly directing its message towards them. Is the company taking a risk? Sure, but that’s what’s to be admired. While the ads may be provocative to average people like you and me, Cessna isn’t aiming at us. The company needs to speak to its customers, and needs to do so boldly. Give them credit for having the nerve to do so.

Google recently announced it was abandoning its plans to sell radio and newspaper ads. The move by the Internet giant to become a broker of traditional media was troubling to many in the advertising and agency business when Google announced the initiative in 2006. But not even the all-powerful search engine could make an impact in an industry that is, it turns out, too far afield from its core business. Wisely, Google is refocusing on what it does best.