Re: Why don\'t more companies do this when they launch a new console?
yes, console makers drop prices on consoles not based on cost, but based on consumer behavior; when the wii stops selling at a certain pace, nintendo will drop the price, but as long as it sells above a certain threshold, they will keep it the same
but i'm not talking about changing the entire console's price...i'm talking about creating a 'limited edition' product in order to segment the market and price discriminate, getting more money from those willing to pay more
people who care about having the 'ultimate ps3' or the 'gold wii' more than $$ will give more revenue to the company while the segment of consumers who just care about playing the games on the console and are sensitive to price will buy the standard console; everyone wins and the console company makes more money
it's used in pretty much every industry these days
golf ball makers sell the premium balls for $x to people who want the best and don't care about the price; they then sell 'x out' ones that have a black X on them in magic marker for having 'small defects that won't effect the performance'...all they did was put an X on those; there is no other change; but they sell those for less to those who are unwilling to pay the top dollar for 'a non-defect top rated golf ball'...that's how they segment the market
u'll never make as much money as u can if u charge all customers the same amount for your products or services, as different customer segments are willing to pay different prices...so u must find ways to legally charge one segment more than the other for the same basic product/service...
a gold wii is just one example i've come up with, but there are many other ways they could do it; the key is to do it, tho
they already have done it somewhat with having 2 models: 20gb and 60gb, but they could optimize it even further
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