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Making products intentionally expensive for a touch of class

  • Corzhens Level 1
    • 21

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    Making products intentionally expensive for a touch of class

    It was a long time ago when I read an article in TimeMagazine about the Polo products. In the interview, Polo owner Ralph Lauren
    said that he cannot lower the price tag of his products because making them
    cheaper will lose the touch of class. That got me thinking that maybe the cost
    of the product is not just about vis-a-vis the cost of production but more of a
    marketing strategy. It means that a product can be sold at an exorbitant price
    and reap prestige along the way. But it’s not that simple because well-known
    products that are expensive have spent a lot in advertising to build up their
    brand name. Take the case of Apple products particularly the iPhone? Do I need
    to say more? 

    #Price #Cost #Productcost Marketing & Monetization
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    Henrywrites

    Henrywrites

    I first heard about making products expensive so as to attract the big earners from purchasing it. He gave the analysis using the Apple iPhones by saying that these phones are so as to attract the big spenders and give them that mindset that they are using a product that is not at the level of others.

    He further explained to me that this is a trick someone that wants to make it big and sells at a place that the wealthy are living by making the prices of their products quite expensive so as to attract these rich people which will, in turn, make him, the seller, maximize his profits. So, I think that it is something that is possible and has been paying off for most companies.
    9 years ago

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    DarthHazard

    DarthHazard

    It's a good strategy but you need to have a strong brand image. And you will also need to have a lot of experience as a business because people tend to not pay massive prices for a product from a startup company especially in terms of clothing. I don't mind paying a bit more if the product is a certain brand. I think a lot of brands tend to do this like Ralph Lauren or even Gucci. They intentionally price their products extremely high so that it is perceived as a high quality and luxury product.
    9 years ago

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    wiseagent

    wiseagent

    A branded product will never lower its prices because the customers pay to have the exclusivity of the products, leaving the quality of them in the background.

    I'm not saying they don't want quality products (because it's obvious they want it Making products intentionally expensive for a touch of class), but the value they pay is to have the right to be able to use a product that is not within everyone's financial reality.

    If the price is reduced, it's as if the product lost its origins. I don't agree with that, but this is how things - unfortunately - work.
    9 years ago

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    JoeMilford

    JoeMilford

    I think that you should charge as much as the customer is willing to pay for a product, but you still have to be realistic. Not everyone can get away with this, especially before one's brand is widely developed and marketed to the hilt. People do pay, for some reason, for the brand name itself, and if the quality matches the economic statement they are trying to achieve, then they will be even more enticed into buying the product and even more products offered by the same name brand as well. I never believed in buying something just for the fashion statement of it, but I guess I wouldn't mind selling things to people willing to pay for their supposed idea of status.
    9 years ago

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    PinkTurtle

    PinkTurtle

    I had never heard of this in the past but now that you bring it up I see the point, I have been a victim of this strategy myself, sometimes I rather buy something that's a bit more expensive just because I think it's going to be better... The classy touch given by the price is real, recognizes brands tend to be way more expensive than unknown ones!
    9 years ago

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    DarthHazard

    DarthHazard

    I'm surprised that you haven't heard of it before because it is definitely a strategy that is used by a lot of companies. Certain brands will always have more expensive prices. Legitimate brands will tend to have expensive products that are also extremely good. I understand though that sometimes expensive things may not be the best quality either.
    9 years ago

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    SimplyD

    SimplyD

    I have the notion that when a product is branded, it is expensive. But as to why it is expensive is because they are of quality, of which other cheaper products also have.
    With your discussion, it made me think that indeed pricing the product expensively, will make people that it is classy. Thus, only the rich people can afford them.
    So that if one would want to be tagged as rich, they have to have some expensive products they can display as theirs.
    I think that is true on how one can make their products classy.
    9 years ago

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    overcast

    overcast

    I am thinking that the Apple and the Xiaomi falls into this category. And the thing about the xiaomi is that they have class and the looks. And the best thing is that they have low price. And they seem to be making some serous money in due process. They have not much showrooms and the marketing. So they may have to work on this. In case of apple they are boasting the class and the price is high all the time.

    So some of the products are made intentionally to keep the prices high and that has to be changed for some brands. Because you can get the same price and the quality in due time with low price. So it all depends on your patience.
    9 years ago

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    augusta

    augusta

    It has always been so for some products and sellers.Rich people term inexpensive products inferior,so sellers have come to realize this and because they need the rich to patronize now they increase their prices.

    Again,the rich don't like wearing or having the same things with the poor,so to differentiate the upper and lower class.Some things must be sold expensively so that the poor can't afford and it would only be seen with rich.
    9 years ago

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    Baburra

    Baburra

    This is true, and I think there is more to it than just being a status symbol. There is also the idea of perception and the thought of getting as much as you could for a product that you are making. There are probably a lot of other shirt brands that make just as much as Ralph Lauren by selling a lot more at a cheaper price, and both business models are equally good as long as they turn a profit at the end of the year. I believe there is also skill and intelligence in walking the fine line of increasing your price to the fullest extent while still not alienating or turning off your audience.
    9 years ago

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    Joteque

    Joteque

    Yes, unfortunately some signature brands do mark their prowess by exhibiting a rather pricey gesture. In fact the faithful connoisseurs are so much sold by this that they would probably not buy the item if the price tag suspiciously dropped. I guess this is the psychology of marketing and some could get away with it because they are very much rooted in the minds of their faithful followers.
    9 years ago

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    JoeMilford

    JoeMilford

    This is a really interesting post here. I wonder, as well, if certain customers would be turned off by a brand name dropping its price. You mentioned the "psychology of marketing", and sometimes I think this stuff is a bit nuts. I guess the automatic assumption is that the quality has dropped? Or, are they still possibly just worried about the status symbol brands provide? I think I would like to look more into this marketing psychology...or psychosis...lol...
    9 years ago

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    randomzzguy

    randomzzguy

    everyone nowadays wants to show off what they have and if it means they'll have to spend more money on something you can get fpr cheap then they will just to feel superior to others
    9 years ago

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    Authord

    Authord

    Yeah, that's how we humans are wired, we don't allows value things that are cheap. According to a research I carried in 2015, i discovered that people will actually opt for a priced product other than a free way. Even when that product is repackaged and sold at a lower price, they will still opt for a pricey one.
    Take a look at apple, I have seen some phones that have the same or even better spec than apple, but people prefer to buy the Iphone because it's more expensive so "it's better", that's the mentality of most people.
    So he was right you know.
    9 years ago

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    anwebservices

    anwebservices

    It's true that some customers want to stand out and keep in "high class" by any means, even buying expensive things, expensive brands etc. so it is not something new in business or marketing world that someone selling something at triple price and still making great business and income. It only up to finding way to reach such classy people then you can earn good bucks
    9 years ago

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    vhinz

    vhinz

    I once read a story about a jewelry shop (not sure if this is the exact story) that has one item in their display that wasn't been sold for many years. The said item very cheap but customers did not but it. One day as the owner of the shop is about to leave, he told to something about the item that his assistant mistakenly heard. The assistant thought that the owner told her to increase the price of that unsold item. So she increased the price of the said item (it had been doubled I think). What happened next was really astonishing. The item was been sold.

    According to some authors, the high price of product really attracts customers to buy because it make them think that the product is really valuable and high quality.

    And I had actually personal experience about wanting to buy the product because the price increases. Here's what happened: There is a popular financial and business guru that I am following because he was able to earn millions of pesos by selling his digital products. He created an online coaching program which he offers first at Php7,000, and it increases every year. And now its price is almost Php 25,000. When I saw that the price is increased, there's something inside of me that says I have to sign up for that online coaching. I have a thought that what the author offers is really valuable because people are buying it and the price keeps on increasing every year.

    So I think the expensive price really matters.
    9 years ago

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    Pixie06

    Pixie06

    There are many people who buy branded products only. For some we can say that it is due to a habit and for others it is a matter of pride or to show off. Moreover those companies have spent years and such a great deal of money to build that brand image. They have to recoup whatever they have spent. People will never stop buying branded products and we can say that those products have an inelastic demand. Even if the price increase people will continue to buy them.
    9 years ago

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    jpyy

    jpyy

    This would be a con if the quality of the product doesn't match the price. Well, sometimes I do sort of suspect this thing with the forum software.

    For instance, XenForo and IPB seem to be good software - but I think MyBB and other free types can work just as well. In fact, the DIY (do it yourself) nature of the free stuff often is in the premium stuff too. For instance, there is no major difference in theme and mod uploading features of MyBB and XenForo. In fact, the only real advantage to premium stuff seems to involve the belief that free stuff can be hacked easier.

    Anyway, you could apply this idea to other products like the one the original poster mentioned.
    9 years ago

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    vinaya

    vinaya

    I once read an article by a marketing guru. The article explained the manufacturing cost, including the hardware acquirement, software development, and marketing cost, for iPhone and concluded that the product was overpriced. The marketing expert wrote they make making iPhone expensive in order to designate it a class.
    8 years ago

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    Corzhens

    Corzhens

    You are right about the iPhone that it is exorbitant. The iPhone is one good example of a product that is expensive not because of the production costs but just for the reason of being classy. If the iPhone is cheap then everyone can have an iPhone and the prestige of owning one will be gone. That happened to Converse shoes which was a revered brand when I was young. When that brand got cheaper, it lost its prestige of being an elegant brand of rubber shoes.
    8 years ago

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    Judas2018

    Judas2018

    I don't have a problem paying top dollar for a product if it serves me well or is very necessary to me. What hurts that relationship is when the physical quality of it drops (cheap materials that easily break) - or when the very things that made the product so terrific are slowly stripped away with each new release. Behind the excuse of 'more data' or 'making it appear sleeker.'
    8 years ago

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    		/opt/clerks-staging/docroot/libraries/adodb5/adodb.inc.php 1899 CacheExecute() getUserProfileImage()

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    		/opt/clerks-staging/docroot/libraries/adodb5/adodb.inc.php 1899 CacheExecute() getUserProfileImage()

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    		/opt/clerks-staging/docroot/libraries/adodb5/adodb.inc.php 1899 CacheExecute() getUserProfileImage()

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    		/opt/clerks-staging/docroot/libraries/adodb5/adodb.inc.php 1899 CacheExecute() getUserProfileImage()

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    Expensive SQL

    Tuning the following SQL could reduce the server load substantially
    LoadCountSQLMaxMin

    Suspicious SQL

    The following SQL have high average execution times
    Avg TimeCountSQLMaxMin