Free Enterprise (was: Big money...)

[Brian Whatcott <betwys@DIRECTVINTERNET.COM>]

At 10:08 PM 7/31/02, Bill wrote:
> ... I originally complained about his $AU22 price for the product
...
> his product sold
> for around $13... USD


> why have I complained about Zapno(tm)?  I think I've explained this in
> great detail.  What Mr. Thorp was doing was wrong. ...


If I understand this thread, there is great consternation because some
enterpreneur wanted to charge $10 or $20 for a product whose material
cost may be 70 cents.

So a refresher on the free enterprise system may be helpful to prisoners
of the class room.

1) Anyone can decide to charge any amount whatsoever for a product
whose material cost is any amount whatsoever.
This is the intrinsic sense of the 'free' adjective.

2) Customers who are faced with offers to sell such a product are free to
buy or not buy in any numbers, depending in general upon the perceived
value of such a product to them. They may be expected to evaluate the
 face publicity, but more critically, they will often act on information
on the
'back-channel', which you may know as 'word-of-mouth'.

3) It has been a long standing facet of the US free enterprise system to
exact a stiff price for the early product. This is a recognition of the value
 of newness to the consumer. This acts to some extent as a virtual monopoly
advantage - but if the product is in fact successful, the vendor will sooner or
 later meet with competition from look alike products.

An easy example of a vanity product which had great 'newness' cachet was
 a hair growth drug taken orally.
This was a 1 mg dose of a product, which when prescribed in 5 mg tablets
as a male prostate medecine was observed  to regrow hair on bald heads.

Naturally, the smaller dose vanity version was offered at a handsome
premium over the 5 mg therapeutic version by the maker.

It will not be hard for you to visualise the competitive progress of this hair
restorative on the market. As a hint, I can mention that the therapeutic drug
 in Spanish wrappers, can be purchased advantageously via internet, with
tablet splitting accessory now.

This marketing illustration is exactly analogous to the cause of the
numerous emails of righteous indignation which I am currently discarding
on sight.
 Or perhaps not.
   If a consumer finds he can easily procure a workable substitute for
the premium item, but at low cost; he may well suppose the product in
 question is not in fact new, and does not warrant the newness premium.

Either way, I have difficulty with the righteousness aspect of this matter:
if you don't want it, don't buy it!   If you want to discourage others on the
back-channel, by all means do so. And if the vendor can dissuade you
from doing so (because it injures his business), then you can expect him
 to give it a try for the Gipper.   But why Phys-l is presently serving as a
product back-channel is not quite clear to me.


Brian Whatcott
  Altus OK                      Eureka!