Re: Rene Herse "New type of tire"

On 1/9/2025 8:03 PM, Frank Krygowski wrote:

On 1/9/2025 8:29 PM, AMuzi wrote:

On 1/9/2025 7:11 PM, sms wrote:

On 1/9/2025 11:07 AM, AMuzi wrote:
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<snip>
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A library full of economics theses have been written on the various theories, practices, successes, failures and (because they are economists) formulae of pricing (for products and for services)

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Pricing is indeed an art.
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"Why Popcorn Costs So Much at the Movies: And Other Pricing Puzzles"
<https://www.amazon.com/dp/0387769994>
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The semiconductor company I worked for sent a bunch of the engineers to a two week crash course in business at a university in Canada, a course which concentrated a lot on pricing.
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Outcomes:
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1. We would not introduce any product where the margin at introduction was less than 60%. Margins could fall as the product aged.
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2. We would not subsidize new low-margin products with expected revenue from higher-margin products.
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3. We would not let customers bully us on price. In the past, one customer wanted to pay a price based on the number of transistors on the die, and kept asking us "how many transistors are in the part. Another customer wanted a guarantee that we would not sell the same part to any other customer for a lower price. Nope and nope.

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+1
The ancillary aspects (beyond design, tooling, production and delivery costs) are often, in fact usually, critical.
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Price something too high and volume drops while competitors emerge. Price it too low and your business folds.

 And again, https://www.cbsnews.com/news/payless-sold- discount-shoes-at-luxury-prices-and-it-worked/
 

OK that's cool. I enjoy a good practical joke as much as the next guy.
But a stunt is not a business plan.
--
Andrew Muzi
am@yellowjersey.org
Open every day since 1 April, 1971