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From: AMuzi <am@yellowjersey.org>
Newsgroups: rec.bicycles.tech
Subject: Re: Rene Herse "New type of tire"
Date: Thu, 9 Jan 2025 19:29:17 -0600
Organization: Yellow Jersey, Ltd.
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On 1/9/2025 7:11 PM, sms wrote:
> On 1/9/2025 11:07 AM, AMuzi wrote:
> 
> <snip>
> 
>> 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)
> 
> Pricing is indeed an art.
> 
> "Why Popcorn Costs So Much at the Movies: And Other Pricing 
> Puzzles"
> <https://www.amazon.com/dp/0387769994>
> 
> 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.
> 
> Outcomes:
> 
> 1. We would not introduce any product where the margin at 
> introduction was less than 60%. Margins could fall as the 
> product aged.
> 
> 2. We would not subsidize new low-margin products with 
> expected revenue from higher-margin products.
> 
> 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.

+1
The ancillary aspects (beyond design, tooling, production 
and delivery costs) are often, in fact usually, critical.

Price something too high and volume drops while competitors 
emerge. Price it too low and your business folds.

-- 
Andrew Muzi
am@yellowjersey.org
Open every day since 1 April, 1971