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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 20:06:46 -0600
Organization: Yellow Jersey, Ltd.
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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:
>>>
>>> <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.
> 
> 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