How to handle pester power

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Are you yet another parent who is being held to ransom by your tiny tots? Many children, especially in cities today, want the moon for their birthday. And they are even getting it. Recently, an article in one of the national dailies talked about the harrowing experience one mother had whilst celebrating her little girl's birthday. According to the story, it was very stressful for the parent to measure up to the kid's demands and also prove that she could outdo what the best friend's mom did for her birthday! All this hullabaloo for the birthday of a 5-year old! How do you handle this pester power ?