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Pricing Strategies for Products and Services

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40hz:
Totally off topic, but lemme just say laterally that Paul K. is in the top 25 list for consistently posts the longest replies I have ever seen on the web. That's one reason I hang here besides the software stuff.
-TaoPhoenix (December 22, 2012, 03:32 PM)
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Me too! I love his stuff. :Thmbsup:

Paul Keith:
Paul you lost me once again. What I meant was I've been involved in pricing decisions (both as a business buyer and a seller) for over 30 years. I've run a few businesses. Started a couple. And served as CFO for three more. So most of what I "know" (or more correctly believe to be currently valid assumptions) is based on my own real world use and refinement. And since the environment and contexts of business keep changing, they're all subject to ongoing refinement, modification, adoption and dismissal. And FWIW, pricing strategies aren't always based on logical considerations since buying patterns seldom are. Especially when it comes to consumer purchases.-40hz
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Way to make it tough for me to post a long reply guys.  :P

That's what I got from your post too except the CFO part.

It's why I used the white analogy. Logical and illogical the white clothes and white teeth was both.

On the logical side, the idea was that people wanted clean clothes to be so clean, they're white.

On the illogical side, modifications for these are through things like a famous celebrity telling a poor person to change brands instead.

Refinement side, certain things like talking toothbrushes were used to make a toothbrush look appealing.

Adoption side, you now have some mall doctor ad that scans the tooth, says it's dirty, hands the person a toothpaste and told them to wash their teeth and come back and the scan says clean.

Dismissal side, you have ads that sell the whiteness of the person but without stating it and instead using pretty people to kiss each other and so on and so forth.

The idea can be rotated all ways. It can be said to still be working. There's nothing finished about it as an art nor did business stop using it...the flaw was that no one had realized that it ended up creating a culture where every or almost every major visible ad still sell these whiteness that it literally blinds them to the fact that they're too focused on the white but each one of them is telling the customers the same forms of ad and it lead to many unintended consequences that are obvious such as stale ads and worse, there are many nuance of the same ad that keep repeating and the model lacked any foresight for the product.

For example, now I can't speak for what's really up with the ad producers here but anecdotally it's gotten so bad that a brand that sells dental floss doesn't have many TV ads for their new product but they waste everyone's time talking about talking toothbrushes with an old redesigned special toothbrush. Worse, the new ad with the talking toothbrush model is less interesting than when the years gone by earlier toothbrush was still showing. No competitor seems smart enough to realize that the doctor could be doing a PSA or that the product can be something other than generation and generation of stale. There's not even an attempt at an education ad. The same for detergents. It took ages before someone moved from the white clothes plus established character into a serial ad.

That's what 's happening here (in your statement) and that's what's so bad about articles like these. *You* think the article is saying something like snob pricing but it's not. *You* think my post is about snob pricing or local considerations when it's not.

The article is not even saying anything remotely close to these and if you drag a random passerby who doesn't know about snob prices and let them read the article then hand a definition of say...snob prices to them, they won't get the connection.

That's how bad it corrupts. You don't even feel fine defending or not defending it as if I was somehow attacking you and we aren't two users who have talked long enough that we don't need to defend our opinions to each other. You forget even that.  :P

If you don't believe me, here's my ultimate proof:

You say:

Many people gladly pay more for something just to feel an affiliation with the image the product presents.

Snob pricing in Google results to:

The snob effect is a phenomenon often observed in the field of microeconomics that refers to the situation where the demand for a certain good for individuals of a higher income level is inversely related to the demand for the good by individuals of a lower income level.[1] The "snob effect" contrasts most other microeconomic models, in that the demand curve can have a positive slope, rather than the typical negatively sloped demand curve of normal goods.
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...but where in the article did any research study say this? Remove the article from the research study part. Where did it imply anything like this?

Speaking of snob prices, for a long time...and it still holds somewhat of an effect here but Dunkin Donuts IS the Starbucks of Donuts in a poor country. I didn't bring any local consideration until this sentence.

That's how bad these things twist it. It rips the context out. It changes the food for thought. There's nothing wrong with snob prices if you are talking about coffee brands. There's something wrong IF what you get from a study is making apples and oranges comparison but replacing them with donuts and coffee. That's when you know it's already extremely sloppy. If what the article wrote was what you wrote, then there's less of an issue to be made about the actual article. If the article convinces you to write an entirely separate example but you feel it was saying the same thing then that's like the Apple effect of delusion only Apple actually provides a product. That effect is a problem especially the pay-off. The article is not only handing out advises but it's bringing down the research studies with it and it's making people who already know other things about pricing strategies to misread attributes of what it's really saying and replacing it what they think the article is saying. Guess who's the most punished? The reader who actually needs the advise, considers it but can't even google snob prices or other people effects unless they read some forum or comment thread. Then later on, it's the customers of that reader and the copycats of that reader that create another obfuscation level such as force everyone to traditionally accept that the words "small" must be added to any fee because that is what works.

40hz:
I think I'm still lost here. :)

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