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From: wilde@tigger.Colorado.EDU (Nick Wilde)
Subject: Re: prices
Message-ID: <1991Apr25.174251.4967@colorado.edu>
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Organization: University of Colorado, Boulder
References: <1991Apr20.210745.4915@athena.mit.edu> <1991Apr22.055054.7976@hawk.cs.ukans.edu> <110@eclectic.COM>
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Date: Thu, 25 Apr 1991 17:42:51 GMT
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In article <110@eclectic.COM> kovar@eclectic.COM (David C. Kovar) writes:
>>
>>I second that! Yes, these prices sorely tempt me to piracy.
>
>  Pricing is a really difficult thing. I don't know much about pricing large
>products like Microsoft Word, but I've learned a bit about pricing 
>"utility" applications, and the smaller stuff.
>
>  If you set your price low, like more than 20% lower than your competition,
>many people will believe that your product is inferior simply due to the
>fact that it costs significantly less than other products. "If it's that
>cheap, there must be something wrong with it." So you'd pick up a few
>more sales from people who can't afford any product in the price range,
>but you'd lose a lot more sales from those people who can afford the
>going prices.
>
I'm really not picking on David here (I don't even know the man
so why should I pick on him ?)  But this is an oft-repeated piece of
wisdom for which I've seen suspiciousely little real data to back it
up. 

I'd be really curious, Dave, (or any one else) could give us hard
numbers/facts that show this to be true. I realize sales numbers are
something that companies are traditionally tight-lipped about (unless
you're NeXT - "we sold 8,000 machines, we sold 8,000 machines, Wuppie !"
But that's off the subject), but a good case-in-point "we sold
package XXX at yyy, then doubled the price (without fixing bugs, 
changing packaging, or anything else of course) and sold quadruple the
number".

Unless someone can actually point to  a product history like this,
I'm going to relegate this little tid-bit to the category of "oft
repeated pieces of folk wisdom with little basis in fact that take
on a life of their own simply by being repeated to many times on the
net (and anywhere else).

-Nick                       


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Nick Wilde                                           wilde@cs.colorado.edu