Is it possible for a high end manufacturer to overprice their goods?

@carlsbad2

In business they have a similar set of equations that we used to calculate the price point that maximized revenues. Of course we had to have a demand vs price curve.

There’s not a single major company on earth that doesn’t understand the demand and price relationship.

I think it’s fair to say that some of them will go to extraordinary lengths to ramp up demand. It is said that Big Pharma was making $1000 every second during the most recent p(l)andemic.

With that kind of money they could afford the greatest PR campaign in history, and they did.

Luckily we audiophiles are still seem as relatively small fish compared to what happens in the art world. The fairly recent sale price of Cy Twombly’s Untitled fetched $46, 437, 500 USD back in 2017.

Most of us would be reluctant to pay $50 for what appears to be slapdash broad red paint stripes on a canvas if we saw it in a thrift store.

Encouraging a few well placed friendly ’journalists’ to whip up demand for high priced audio is kids stuff in comparison.

Here are some more surprising examples of what demand can do to price.

https://www.artnews.com/list/art-news/artists/most-expensive-works-sold-at-auction-1234579250/cy-twombly-untitled-bolsena-1969/

In the U.S., the share of our population that fit the demographic for being in the middle class has been shrinking for decades and is now below 50%. Poor people do not buy expensive audio systems and America is a country loaded with poverty and near-poverty. Kids today are not doing as well as their parents, economically speaking. Not even close. So manufacturers have been more and more targeting the wealthy. When prices for components hit the mid 5 to 6 figure range, price has little to do with cost for most of those items-- like a $100,000 amp. They are accepting the sad reality that there will be fewer and fewer customers for the high end-- so they raise prices WAY UP to pad margins and live with fewer and fewer sales. A race to the bottom that feels like up!

@wesheadley 

but but!

job creation!

they deserve it!

...

:)

Pricing strategy is interesting for luxury products.

• Porsche's profits are driven by the Macon and Cayenne and they were ridiculed for creating 'me to products'
• Bentley had internal fights on going to market with the Continental GT and it's the most profitable car in the VW group

I recently saw a McIntosh clock on sale for$1800? This will be made for probably a $100. Is there overpricing, yes. Is it overpriced, well not for the person buying it.