Upload & Sell: Off
| p.5 #18 · Saw this image and just had to order the DP2M, couldn't fight it |
Got to disagree with you on that one, sure in basic macro economics one learns about economies of scale and such, but it totally ignores the factor of consumer behavior to say the least.
Is the Hassy Lunar a $7000 NEX7 with some fancy wood because of small volume production ? Of course not, its priced that high because its what they think they can get for it.
Camera's are all simply priced at cost of production +15% markup across the board
If they could sell a hypothetical DP3 for $2500 (assuming it was a great camera all around) it would be silly to sell it for $800 just because increased volume could lower production cost.
Higher end photography gear, like most enthusiast hobby equipment, its usually not purchased just based upon price, but the total overall value the consumer places upon it.
There are limits of course, but as an extreme example, is the target buyer for a Leica 50 Nocti really going to buy or not buy if it was, say $1000 more or less expensive ? No
Its not like they are sitting in Solms thinking if they could find a way to up product 15% they could then price it cheaper and sell far more.
Just doesn't work like that in the real world on that type of product because the economy of scale can't factor in the strange and illogical human factor very well.
We simply don't often make rational buying decision and are driven by our wants more than our needs, especially in terms of hobby items.
Its basically "ooooo shiney, me want" rather than "hmmm, I wonder what the overhead on this item is because I would hate to pay an inflated margin"
Its largely irrational.
When setting a market price its first of course, how much does it cost us and how much profit do we need to make, but that is hardly where the pricing talk ends.
It then goes onto "hmmm, how much do we think people would be willing to pay for this"
Looks at some of Fuji's recent pricing strategies, they don't even announce the price, then toss out some numbers, judge response and then settle in on what its going to cost.
Its not about what it cost to me, its about what they think people will pay
Dude, no. it's about profit maximization within production and distribution constraints. $800 profit per camera on 10,000 cameras sucks compared to a $50 profit on 500,000 cameras. yes, obviously demand curves play a big role in this as well as supply curves. pricing gets tweaked a lot because cameras actually are pretty elastic goods and camera producers often misjudge their market. we're not talking about 15% increase in production here though, we're talking about an order of magnitude increase in production. finally leica is a terrible example, because unlike sigma, they can't drastically increase production without a huge expenditure of capital on sunk costs (which incidently they did recently anyway). also, this all falls under microeconomic theory (or business) not macroeconomic theory.