Stratospheric audio gear prices
"Premium Pricing
Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation or represent exceptional quality and distinction . A premium pricing strategy involves setting the price of a product higher than similar products . This strategy is sometimes also called skim pricing because it is an attempt to "skim the cream" off the top of the market. It is used to maximize profit in areas where customers are happy to pay more, where there are no substitutes for the product, where there are barriers to entering the market, or when the seller cannot save on costs by producing at a high volume. It is also called image pricing or prestige pricing.
Luxury has a psychological association with price premium pricing. The implication for marketing is that consumers are willing to pay more for certain goods and not for others. To the marketer, it means creating a brand equity or value for which the consumer is willing to pay extra. Marketers view luxury as the main factor differentiating a brand in a product category."
Source: Boundless. “Market Share.” Boundless Business Boundless, 26 May. 2016. Retrieved 07 Feb. 2017 from https://www.boundless.com/business/textbooks/boundless-business-textbook/product-and-pricing-strateg...
If there were no objects to impress us we would remain a little stagnant. Therefore there is some value to any art object although most end up in people who value them differently from the reason they were made. Of course there will always be this market and most of us will just dream, so let's put our minds to work on how to achieve the best price-performance ratio. |
I once heard Bill Dudleston (Legacy) say that there are only 30,000 audiophiles at a given time, who all the manufacturers of boutique gear are competing for. Not sure what the number is, but it's certainly pretty small, and boutique manufacturers can't be keeping the lights on by sales volume alone. So it seems like high markups and prices are inevitable in the audiophile market. (Not to say there aren't conspicuously better and worse values). I assume this is a common circumstance for artisanal goods of all kinds. I suspect the irony in this is not lost on the artisans themselves: to develop their art as far as they can, they have to price most people, including people like themselves, out of the market. Not quite the simple life of a craftsperson, somehow. |
ghdprentice said: What is stratospheric pricing to you? $150K? Most companies have flagship products that advance the art and have lots of top electrical designers time invested in it... few are sold. So costs are high when you load with the R&D. You price against the competition. Then the technology trickles down the substitute cheaper components and offer reduced price stuff.I agree and think about it as: the people who buy the high-end stuff are essentially funding R&D for the industry. Those of us who can't spend that much benefit from their willingness to shell out so much for the cutting edge. |
I thought the post by ericrt was worth reading and makes a few good points. Overpricing to convince buyers that an item is top quality has been a marketing technique for a very long time. I now make it a habit on all products to read customer reviews, particularly as so much crap is coming out of China. Of course, this may not pertain to stereo equipment. I would think stereo equipment will get better and cheaper like most electronic items. I paid $900.00 for my first VCR. |
