Heheheh

Blackberry is better than all of y’all!!! =P

@rosalinas aaaaand?

What else do you want me to explain? The producer knows the products aren't worth that much money but they do it anyways.
If you want further information, eh idk take economic classes

Early you tried to teach me. And i wait for new (idk, exclusive) info... But nothing happened. And again... Maybe outstanding thoughts? I really didn't get what you tried making a point to me.

Hmmm makes sense
But unfortunately I have to disappoint you as I don't have any outstanding opinion on this matter beside their marketing strategy is surprisingly effective which shows they got a lot of loyal customers with a thick pocket.
I will say high price and skimming price (many people mistake Apple's strategy as skimming price but it's actually high price) are great method to push up the sale but also very risky so before any producer comes to the decision to use this strategy, they have to go through many researches (about their customer).
I don't appreciate the customers who fall for these marketing scams (since the prices are no longer match the value) but I'm impressed by the one who manage to pull these tricks.

@wasserstern- when BMW started selling in America cars like the 2002 were their offering. Germany and Japan were both recent enemies of the US, and America was king of cars. Mazda and BMW both have very similar histories up into the 1960’s. The Mazda RX-2 and RX-3 were beating the 2002 in many (stock or near stock) racing classes and very similar quality and specs. Fast forward and Mazda went through decades of bankruptcy or near bankruptcy, countless rebranding, etc. BMW is one of the worlds largest and premiere auto makers. They are and have always been branded “the ultimate driving machine.” How? How did 2 car makers with equal chances and similar beginnings and products go so different?

One large factor- price. BMW has the balls to take cars they sold as taxis on Europe and charge what American luxury cars were going for. While through the 70’s and 80’s the Japanese kept trying to offer “more for less,” and the Americans tried to offer less for more- BMW just made cars that were decent and labeled and branded as luxury items and charged a premium. And it worked. Look at early BMW cars. Many are still running. They were quality machines yes- but buyers seldom keep cars 20-40+ years to find out. So that isn’t a huge buying factor for the mass market. The early BMW cars weren’t so different from their contemporaries but somehow were branded to a higher market.

It’s psychology. If I tell you my product is worth a lot of money, you’ll tend to think it is. That’s how most brands work. Wether it’s Nike or Gucci, or any number of things. Many things are made by the same companies in the same factories- high end sunglasses for instance are made alongside $10 glasses. In the auto industry, several large manufacturers make almost all the mechanical parts for automakers and after markets and just brand them differently. Subtle differences in specifications, materials, tolerances, etc. exist- and not all “premium products” are “complete rip offs” but most with brand recognition have a premium built on over a comparable profit to other products in the industry of the same quality simply for the brand.

The emerging luxury market in China? Budweiser beer- an American beer widely held as a cheap and not very “high brow” beer was revolted like fine Champaign and sold in China for hundreds a bottle as a premium alcohol. Simply put- unless we have great knowledge of an industry and all aspects of the product and production- we usually have no idea what something “should” cost. We either compare what similar items cost to decide if one seems reasonably in line to others, or we need to be told by marketing what things are worth. Who decides that Cartier jewelry is any better than stuff you buy at the mall? There are only a few diamond conglomerates and diamonds are rated. So everyone gets their stones from the same places, and a stone rated the same is not any better or worse based on who’s name is on the box...

... but that’s how marketing works. “Conspicuous consumption” is what it’s called when people want to show off their wealth through what they own. All the little $10,000 hatch back cars look similar. Even if you don’t know the price of cars you likely know that a little hatchback is a “cheap car” and a big huge Mercedes is an “expensive car.” When people see your purse cake from Gucci or your watch says “Rolex” they may know nothing of these things but they know the brand and it is associated with money. So people who want to “show off” like celebrities who are expected to look “glamorous” tend towards brand recognition- and the brands people like the rich and famous use tend to be recognized. Many people want those lifestyles or want to emulate them- so they then buy the same brands and products the “cool” and “rich” do so they too can try to look “cool” and “rich” that is called an “aspirational brand.”

Then we come full circle. The perception that if someone is charging all this money for a thing, if people who have money and can have whatever they want are choosing this one thing, if we see the people around us who are our peers lusting after this thing- we then assume that is the thing to have, or the “best” of a group of things. Plastic tumblers are in essence superior to crystal stem wear in every way no? Cheaper, more durable, harder to break- and yet- when the queen sets out a dinner for visiting diplomats she likely isn’t setting out plastic cups filled with $5 a bottle wine is she? Despite that many of these “cheap wines” have been rated in blind tests as superior to wines held as the “best” and certainly most expensive- by true wine experts. It’s the fallacy that the more expensive one is the better one. The better one for you is the one you like more isn’t it? So the illusion that so many people would choose a brand-

That they all chose it as the best, and not simply to show off or because they are part of the marketing. so many sportstars wear nike or Adidas and those guys want every advantage- so they must be the best right? I’m sure it has nothing to do with these brands giving free things to celebrities and pros, discounts, even paying them money to use and endorse their products- when two related companies like a fancy restaurant and a cookware company share investors, owners, or parent companies, they’ll use each brand to position the other as premium. And the other layer is the “aspiration.”

Things like sales and outlet malls and prefer owned car programs. The idea is to land customers who aren’t in the elites but want to seem “better off” or have the “best of life,” especially those in upwardly mobile and socially prominent classes. The bosses drive Mercedes. The new analyst wants to be in the club- so buys an older recent model they can afford. The mail room kid sees the analyst and wants to be him too, so he wants a Mercedes and a “piece” of that lifestyle and so on. It’s why luxury brands make these subtle changes mid model. Those who “know” and care and tell from a mile away you have the last model because this thing changed color or the emblems moved or the other minute changes- but it’s kept close enough that buyer of the used older model can still “pass” in less elite circles and those who don’t known or see the fine details will think they are on the newest model. When that new model comes out-

all the “trend setters” with big money MUST update do they aren’t outed as “behind.” All the “bottom feeders” “passing” gobble up the now liquidated older stuff which continues the advertising for the brand and the aspirational circle. Those outside this sphere buy the completely outdated version hoping someday to own the newest- and when a few product cycles have passed a new, new- “clean sheet” model comes out- that means those with the half changed model and the last new model can’t “pass” anymore and they must upgrade as soon as possible. Rinse and repeat.

@wasserstern- that is a simplified version with examples. But I hope you might see why Rosalinas was reluctant to go into detail. Simply put its as she said- methods such as demanding a higher price are valid marketing tactics driven by psychology and consumerism. A desire for exclusivity, to “have the best,” to “fit in” to certain social circles, etc. but it gets more complex in reality. You can’t just start charging $10 for a grape and make “luxury grapes,” you need more. For instance nonsense labels like “organic” or “locally sourced” can change the same produce you could have bought from a guy standing next to a field with a basket for $1 into a $20 shopping trip. Branding is a key and pricing is part of branding. Modern economics allows for charging as much- or even less than you pay for a product, and still being profitable if you line up all the “backend” factors and brand successfully.

Software is a perfect example with an average profit margin of 200% (where traditional physical goods are lucky to see 20-30% profit margin.) don’t know how old you are- but once upon a time you could make a couple thousand dollars for just hooking up a few computers to each other- not even the net. Anyone who knew simple HTML and could make a website could make thousands per job. Most people had no idea how much work was involved or what was involved and those who did could charge what they wanted. Most trades are like that- which is why we see many less skilled jobs offering less than ever. So that’s another aspect to pricing- who can do it, and if most people who can do a job are charging around the same... you have to pay what they say the price is.

There is of course a balance. For that to work- the service you offer has to have enough demand that the number of jobs you get at the prices you charge or the items you sell can pay you a salary that’s acceptable. The more critical or desirable a thing is and the harder it is to get somewhere else- the more control the seller has over a price. So things like bags or shoes that aren’t so hard to make aren’t sold as that- but by a brand. You can make a purse at home pretty easy but only Coach can legally sell you a bag with their name and image. Hence- branding allows companies offering something that is easy to offer to maintain a customer base because of their name and image.

In sales that is commonly referenced with an example. A steak is simply a hunk of dead meat. In most cases there is nothing that any two comparable cows meat better than the other. A steak is a simple thing to cook. There isn’t much to distinguish two steaks both made by competent chefs. Medium rare? 5 minutes give or take per side, flip once. Plate and let settle, serve. That slab of meat isn’t interesting to most. What do you say? “Our steak is more red?” No. So you have to “age the beef” and allude to secret seasonings (usually salt, pepper, and a few other things. Maybe garlic butter or herbs.. no huge secrets there.... so in sales they say: “don’t sell the steak. Sell the sizzle.” That’s the motto. Most products on their own are boring. Marketing creates the feeling of need, emotional connection, and plays on primitive responses in the human brain.

“One day only sale..” “while supplies last...” “limited edition...” “better pre order, it’s a long waiting list...” “not everyone can afford our quality...” these all build on ideas of scarcity. The thought “if o don’t get one... I will miss my chance!” “If I don’t buy it now- the sale will end!” Exclusivity is a form of scarcity. YOU were able to get something not everyone has. YOU are special, powerful. Others want what you have but can’t have it because they aren’t as “special” or “strong” etc. it’s a lot of psychology and other stuff. So this ends my “short” answer.