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Comment by anal_reactor | Hacker News Reader

It's been true for almost every business. "Cheap and good enough" usually trumps "excellent but expensive". Ikea, McDonald's, Ryanair, AliExpress, Aldi - these brands prove that catering to poor people is more profitable than catering to rich people simply because there are so many poor people that their collective spending power outweights the one of rich people.

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>Aldi - these brands prove that catering to poor people is more profitable than catering to rich people

At least here in Germany Aldi isn't even really limited to the poor, it's famously a place where you can run into anyone. Where I used to live in Berlin close to the government district I literally on occasion ran into the chancellor (and her bodyguards). Aspirational shopping where you buy premium goods to pretend to have higher social status honestly seems a bit on its way out. Even middle class people seem to consciously shop more utilitarian now.

> RyanAir

https://en.wikipedia.org/wiki/Category:Defunct_low-cost_airl...

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

Seems more like a overall industry problem, not limited to low cost carriers

Well, not universally. It’s a tradeoff. If what you said was universally true Apple wouldn’t exist; Spirit Airlines wouldn’t be bankrupt, etc.

Apple sells to half the American population. And by definition many of them are poor.

Spirit was broken by oil prices which everyone pays the same for. (There is no cheaper jet fuel alternative).

Not a good comparison to the point of wrong conclusions.

Apple doesn’t target the low end (they are a luxury handset maker, their low end is the mid-end at best). The fact that people buy their products anyways shows that cost isn’t the only factor in business success.

Spirit was broken by oil prices because they target the low end customer with their ticket prices. Oil prices went up and they had no pricing headroom to charge more on tickets so they simply went kaput. Ryanair also suffered a fair bit. Other airlines did (comparatively) fine because they had the ability to increase prices since their customers are less price sensitive.

It’s a classical business lesson that being a “cost-sensitive” vs a “value-sensitive” business (what this tradeoff is called) is a tradeoff. It’s notably recommended that startups don’t target the lower end in prices since you can’t compete on cost with a business that has more economy of scale than you; you have to compete on features. And being a cost-sensitive business means that you are affected much more than other businesses by changes in material/component prices, because a 13-cent increase in the cost of a component matters more the more product you sell, and if you increase prices too much customers will start to wonder if the “budget” brand is really a good value proposition over the mid-end or high-end ones anymore.

Ah yes, Amazon, notable for targeting premium end to get started.

Literally everything you're saying doesn't line up with reality. Apple's most popular product today are two lower end (neo and mini).

You make the mistake of thinking your theory defines reality, when in fact reality says quite the opposite here.

I'm saying this because your logic is the classic logic that everyting thinks makes sense until you do it. Everyone can't target the high end, there are limited customers with many choices, making it far harder actually to win.

You target the demand/pain/need regardless of market.

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