It is pretty much the same here but I have tried beating them at their own game and am having some success with it.
I am offering a very very basic (and I do mean basic!!!) for those sort of figures, once I have had the initial enquiry I will arange a personal visit and this where I will sell up the service.
I also offer instalment plans to those that are booking way in advance as this tempts them into going for a better deal than the basic one. Its the old premise that you pay for what you get and many people don't realise that the day shooting is the easy bit its the work at the back end that they are really paying for.
Its the same with the albums, if they go for a cheap package they get a basic album but like you I offer the more expensive albums and coffee books/ magazine style albums too but they are far more expensive and this has to be factored in.
I agree totally with your last comment, I had a meeting with a couple the other day who have booked me for October this year, they have spent just under £20k on their wedding and hadn't even thought of a photographer. As it happens I have got a poster up in the florist they are getting their flowers from and due to the 'low price' the called me, once we sat down and went through everything they ended going for the top package with a few extra trimmings:-)
At the moment I am training up my son who wants to get involved ( I bought him a D70 with a good lens) and he is taking to it well and has produced some good basic photos, he will be joining me soon for a big wedding I have got coming up (200+ guests) so we shall see how he gets on

Gone but never forgotten .