In all fairness, seiko is not the firs or only company to try to move their brand upmarket. I have yet to see any company pull it off successfully though (though I'd be interested in hearing of any that have). The closest I've seen to success was in the car industry, when Volkswagen tried to move their brand upmarket. they did a wonderful job of improving the feel and quality of all their cars, and introduced some very impressive models in the process. however, they didn't do it gradually, and instead upped prices across the board and jumped feet first into the very high end section of the market, with no accounting for price. the result was disastrous for the high end models, and the company took a big hit, because the lower end models began to overlap with VW's other luxury offerings from audi. It seems like VW abandoned that notion, but the end effect is the VW as a brand is now generally perceived (at least in the US) as a slightly more upmarket brand, than comparable vehicles from other manufacturers. Mixed results, but not an entire failure, and that's the best example that I can think of.
I know in watches that Omega went from being a solid higher end brand, to a dying brand, to a volume manufacturer (not that different from seiko at the time), and then back to a high end brand. But in their case their brand retained the initial brand appeal, and they had a prior high end history, so they simply returned to what people already expected of the brand. I've seen many watch brands move down market, but not up (at least not as an entire brand name). It's definitely a steep uphill road seiko is trying to travel, and thus far, their approach doesn't seem entirely cohesive.
