analog

Pricing is a business myth

September 29th, 2007 | posted in management, marketing |

Pricing your product expensive is the easiest way to enhance your product’s value, isn’t it?

I bought 50 grams of coffee for $10. I like it.
But there are many cheaper ones.
I’m not sure for the reason why I pay much for a commodity.

Is it expensive because of high value?
Or I feel high value for its price?

Am I satisfied with it’s taste? or ‘price?’

Do I like its taste?, flavor?, or ‘experience?’
I mean “paying much for an expensive product.”

I’m not sure as I said above, but I have an assumption.

Don’t you think that we have desire to spend money?

I’m sure we have it, even if you don’t have a shopping addiction.
It’s not instinctive actually, but I believe it is.

It can’t tell us the reason why I pay much for a commodity,
but I think it can describe some part of the reason.

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Recently, ‘polarization in consumption patterns’ is one of the most important issues in Japanese politics and economics.

For example, a young working lady, with average or lower income, carrying an expensive Louis Vuitton’s bag for everyday use, often takes a lunch at McDonald’s. She spend her money for what meets her criteria, otherwise she saves as much as possible.

It’s quite an extreme consumption pattern, isn’t it?

Day by day, ‘income class’ concept is getting fuzzy.

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Oops, I’ve written a lot of explaination of a relation between price and value. But I’ve just remembered a better example.

Can you distinguish prices of different kinds of wine?

See also: Noncontigous Supply and Demand Curves in Contents Market