Comment by JKCalhoun | Hacker News Reader

Comment by JKCalhoun | Hacker News Reader

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> You knew the gear wasn't imagined and designed by a bunch of bean counters.

Hmmm.... Only later when they were marketing TV's?

Hated Sony for selling essentially the same TV with the same guts but leaving out one chip (for example) so that "Picture in Picture" required you spend an extra $500 on the high end model.

I always suspected it went something like this:

• Engineers describe the feature set they can deliver for a new TV.

• Bean counters determine it can be manufactured for $500.

• Marketing decide there will be three models: the F, the FX, and the FX+. Determine pricing will be: $800, $1200, $1800.

• Marketing aligns the FX+ model with the engineers feature set — cross off features to arrive at the FX — cross off even more to arrive at the F.

• Profit.

I shouldn't beat up on Sony though — all consumer electronics have been doing something like this since ... when ... the 1950's or so?

https://en.wikipedia.org/wiki/Price_discrimination

Thanks, yeah, that's been our Brave New World. :(

The bean counters don’t set the price.. the market does. The bean counters are there to predict how the market will respond and plan accordingly.

If they weren’t selling an adequate number of FX TVs at the higher price... they would lower it. I guess they didn’t have to.

This has nothing to do with price discrimination either, which is when the same good or service is offered at different prices in different markets.

What does this have to do with anything? Product differentiation is not price discrimination.

If they were selling the same exact product with same features at different prices, then maybe. But this is not the case.

This is just you being unhappy with the market clearing price for those features.

It is a form of price discrimination called tiered pricing:

https://www.priceintelligently.com/tiered-pricing

For a mass market good it’s not tactful to openly ask each customer how much they’re willing to pay and sell at that maximum price, so another way to get closer to achieving that is to differentiate products with features that have very low marginal costs.

Psychologically, it’s also part of “anchoring” where you establish the lowest value of the product with the lowest price version, so the middle and high prices don’t seem so bad.

And of course, who wants to buy the cheapest version of something? People generally feel better buying a better product, so the cheapest one might only exist to do that. Also a good strategy for wine in restaurants, sell the wine with the lowest supply cost at the middle price, because people will opt for the middle priced item over the lowest price.

If you think this is crazy you should have a look into CPU manufacturing.

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