Post by hereticus on Dec 19, 2006 18:34:10 GMT 1
Notice that I've changed the name of the thread from 'Pricing Differential' to 'Differential Pricing' ? Thats because Differential Pricing is the correct economics term for the pricing strategies used by Hillarys.
In essence it is quite reasonable practice, and is certainly widespread in many industrial and retail environments. Another way of expressing it would be 'pricing at what the market will stand', and few would dispute that people in the affluent South Easy are accustomed to paying more for most things in life.
I guess that Red, whilst quite right about the cost of petrol, would throw a fit if he bought a pint in my local (£ 2.50 and upwards) or if he compared house prices, council tax, etc in different parts of the country. Even the major supermarket chains price identical products differently in stores around the country and, if memory serves me correctly, the North East is the cheapest place to live in nearly all respects.
Whilst I am in one of Hillarys higher price band areas (though not the highest), I do not encounter strong price resistance on a regular basis - people who live here are accustomed to what things cost here, and often lead such busy lives that they are prepared to pay a 'premium' for the fact that they can choose in their home, more or less at their convenience, and have the blinds fitted for them and done professionally.
I do think that some of the price comparisons posted over the last couple of days are interesting and, like others, whilst I knew we used Differential Pricing I didn't appreciate how big the variations can be. I guess that the main lesson to learn, bearing in mind Phugly's comment that the blind still costs the same to manufacture, is that we in the south probably have more flexibility to discount to win the order. Even then, though, the cost of manufacture is only part of the story - advertising costs more in southern papers, leaflet distribution is more expensive, distribution costs are higher, etc.
I am not seeking to justify the large inconsistencies in pricing, nor am I joining the view that differential pricing is unreasonable - just pointing out that it is a complex issue and a legitimate strategy .
In essence it is quite reasonable practice, and is certainly widespread in many industrial and retail environments. Another way of expressing it would be 'pricing at what the market will stand', and few would dispute that people in the affluent South Easy are accustomed to paying more for most things in life.
I guess that Red, whilst quite right about the cost of petrol, would throw a fit if he bought a pint in my local (£ 2.50 and upwards) or if he compared house prices, council tax, etc in different parts of the country. Even the major supermarket chains price identical products differently in stores around the country and, if memory serves me correctly, the North East is the cheapest place to live in nearly all respects.
Whilst I am in one of Hillarys higher price band areas (though not the highest), I do not encounter strong price resistance on a regular basis - people who live here are accustomed to what things cost here, and often lead such busy lives that they are prepared to pay a 'premium' for the fact that they can choose in their home, more or less at their convenience, and have the blinds fitted for them and done professionally.
I do think that some of the price comparisons posted over the last couple of days are interesting and, like others, whilst I knew we used Differential Pricing I didn't appreciate how big the variations can be. I guess that the main lesson to learn, bearing in mind Phugly's comment that the blind still costs the same to manufacture, is that we in the south probably have more flexibility to discount to win the order. Even then, though, the cost of manufacture is only part of the story - advertising costs more in southern papers, leaflet distribution is more expensive, distribution costs are higher, etc.
I am not seeking to justify the large inconsistencies in pricing, nor am I joining the view that differential pricing is unreasonable - just pointing out that it is a complex issue and a legitimate strategy .
