Real versus perceived value of high-end products

[yaesumofo]

Me either. You were the complaining about companies pricing policies and peoples willingness to purchase high priced products.
Why if this is really how you feel did you even ask the question?
Like I said Value is relative.
And IMHO that is the bottom line.
Yaesumofo

I agree.Sometimes I don't get why we can't love our own lights and respect what other people choose. :shrug:

 

[flashy bazook]

This topic has been discussed here at CPF before. Let me see if I can add anything new to all that has been said before.

First, there is a recent study that finds that people DO (as an empirical fact) associate higher price with higher quality, whether there is IN REALITY such an association OR NOT.

Now, this being the good-'ol-US-of-A, land of super-capitalism, companies and marketers know this, and exploit it to the hilt.

If you can sell something for $100, but also manage with good marketing to do it for $500, which would you sell it at? If it flies (ie, if you can get good marketing for less than $500-$100 per unit, which you generally can), you will do it over and over again.

On top of this, there is a group of so-called "positional" goods. These are goods that have value EXACTLY BECAUSE it is difficult for most people to have them. For expensive (even if mass-marketed) goods, this is true by definition.

Hence the "limited edition" coins or whatever, that can be pushed out by a mint or a factory to any number desired by the seller. This also explains why, over time, "limited" editions of anything tend to become unlimited.

Once the limited (ie, high priced) demand is satisfied, then ways are found to flood the market (using surrogate sellers, slightly different brand names or styling, licensing to other countries--which then mysteriously neglect to keep the goods within their borders but come back to the home country, etc.) at a cheaper price. Once this is exhausted, the cycle is repeated in a slightly different good ($2 dollar coins instead of $1).

There are two solutions to this problem: (a) savvy customers, who can tell the quality of the different goods, and who emphasize function instead of bling and resist marketing; and (b), independent organizations (like Consumer Reports) who help the consumer by rigorously testing products for quality and reliability.

As to a good historical counter-example of the "high price equals quality" fallacy, I offer you the British signature car of a couple of decades ago, the Jaguar. If you (or a friend or relative) has even owned one, you know how often it broke down and how costly it was to repair. Yet, it was bought, and at very high prices. QED.

 

[jtr1962]

Hence the "limited edition" coins or whatever, that can be pushed out by a mint or a factory to any number desired by the seller. This also explains why, over time, "limited" editions of anything tend to become unlimited.

And that exactly describes the real problem I have with this stuff. Invariably the first people to jump on the bandwagon pay the most, but when whatever they bought floods the market, they're left holding stuff which is practically worthless. And another problem I have with it is using resources to produce crap which in the long run neither adds infrastructure nor increases the net worth of the country. It never should have been made in the first place, much less sold at a premium. Point of fact a lot of this stuff ends up in landfills. That's probably what's ultimately going to happen to my late father's collections of baseball cards, figurines, Hallmark ornaments, and other assorted collectibles. The stuff is worth way less than he paid for it. In fact, it's mostly not worth enough to even waste time selling given that eBay fees will eat up much of the low sales price.

I guess the moral of the story here is don't run to be the first to have anything unless you can afford to lose the money you spent. There ought to be restrictions on deceptive or misleading advertising also but I wouldn't even know where to start. These limited editions and such are hardly harmless capitalism at work. The debt and clutter those who buy them pass on to family members is most decided quite harmful. I'll gladly support a law requiring the baseball card companies to buy back all the junk they sold my father at original retail price. Ditto for the other stuff as well. I'm saying this only half in jest.

There are two solutions to this problem: (a) savvy customers, who can tell the quality of the different goods, and who emphasize function instead of bling and resist marketing;

It's a shame teaching this isn't part of the material required to earn a HS diploma. Of course, a lot of big companies would have a fit if it were.

Funny at one time the economy functioned just fine without all the emphasis on consumerism for its own sake. I really feel we should try to return to that.

 

[paulr]

For stuff like flashlights I don't consider it to be entirely about the end product. As a flashaholic I appreciate the technical and artistic creativity that goes into making high end lights, I see the problems modders are trying to solve, and they can make these advances because other flashaholics are out there willing to buy the lights. The ones over here (USA) can't possibly sell a light at Chinese prices because they're not in China and they have much higher expenses, so it doesn't bother me that they charge more. I'm past the point of trying to acquire large numbers of lights instead of just the best ones. If higher prices means I buy one or two lights a year instead of dozens, that's fine, total expenditures work out about the same and I get nicer lights.

The ultimate goal of the traditional business person is to collect a high income without having to do any work (i.e. by owning the business and collecting the revenues while the hired help makes the flashlights). That affects the value proposition to me as a buyer as much as the flashlight itself does. I.e. if McGizmo or PhotonFanatic make a handful of $500 lights on a workbench and I buy one, the light carries in it a bunch of their personal creative effort and my expenditure goes straight to the source of the creativity and I'm happy. I have the sense (possibly a delusion of course) that they're making these lights because they want more than anything else to be making really cool lights. If it were strictly about business to them, they could find much more lucrative things to do. But if Rolex gets into the light business and makes 1000's of lights per month on an assembly line and sells them through a distributor-retail network and I buy one, my expenditure is mostly going to non-flashaholic middlemen and investment tycoons who see the business simply as a money engine to milk the silly flashaholics with. That attracts me a lot less than the flashaholic-made light, even if the end price is similar and the flashlights are equivalent in quality. I mostly lost interest in high-end watches when I figured this out.

I have nothing against tycoons and if I become one myself someday, I'll be happy to buy ultra-expensive stuff from my fellow tycoons when it happens. As it is, since I'm a flashaholic and not a tycoon, I have to spend more carefully, and the financial disparity between me and a tycoon is too much to my disadvantage. So in buying decisions I take into consideration not just what flashlight I'm getting, but also what kind of person's activities I'm financing (i.e. that to me is also part of the value proposition). A flashlight is more valuable to me and I'm willing to pay more for it if a flashaholic is at the other end of the transaction, than if a tycoon or other non-flashaholic is at the other end.

In the case of the MacBeth color chart, I don't know the situation, I'd consider it to be a professional tool. Those things have been around long enough that I'd expect the price to have reached some kind of equilibrium by now and the price really reflects the cost of making it, but who knows. It's possible that some kind of artificial monopolies are involved and of course that would mess up the picture.

 

[LightBen]

This is an interesting thread. One marketing concept that comes to mind here is validating the buying decision--in other words, make the purchaser feel good about (over)paying for something and he will be glad to buy it.

My personal philosophy: let someone else bear the depreciation burden and buy the big-ticket items used, unless you have a specific and identifiable reason for needing something new. Why anyone would purchase a new car is beyond me. Financing one is insane (instead of paying interest on a loan for a depreciating asset, just buy something used that you can afford). My television was purchased at a thrift store for 1/5 of what it cost new. It functions perfectly, and if it fails I'll repair it myself (I'm an electrical engineer).
It disgusts me that our society throws away so much good, functional equipment simply because folks want the latest, shiny (but less well-made) whatever.

Just my take on things; it's ok with me if you disagree...

-Ben

 

[Ecko]

You get what you pay for or you pay for the name?

I know that in most cases you get what you pay for but, how much are we paying for that name/logo printed on the side of the light.

I ask this because I was just looking at some Surefires. I like the looks of them but, most are over $100 and only put out around 80 lumens. The E1E Executive Elite puts out 15 lumens for 1.5hrs. and it's $80 :duh2:. I don't understand how that is worth it when you could get so much more for your money.

I know SF has a monster reputation but, isn't that just because they were the only kid on the block for a long time.

Mind you I'm still a newb to high end flashlights. I'm just trying to figure out what's worth it and what isn't when it comes to some of these brands.

 

[EV_007]

Re: You get what you pay for or you pay for the name?

I think it is a combination of both.

True, SureFires do seem a bit pricey, however you are getting a solid light that will outlast most others in the long run.

I too wish that they were priced a little lower. But the thing that makes it all worthwhile is their customer service. I had an LED bezel crack after a friend ran it over with a snowblower by accident. The light still worked, but cosmetically it looked like it has seen better days. Just the lens was cracked and a slight nick on the HA coating. I thought it would have been a lot worse.

I called SureFire and they had me send it in and got a replacement in less than 2 weeks. No questions asked.

That is why I don't mind paying for quality and a company that stands behind their products.

 

[generic808]

Re: You get what you pay for or you pay for the name?

When you buy a Surefire, you're buying a light for life! Their lifetime no-hassle warranty and the awesome customer service is what you're paying for. There is no better customer service out there!

 

[unique]

Re: You get what you pay for or you pay for the name?

So I can say I lost mine and they will just send another one? Or if I accidentally drop it, break it etc they will send another without questions asked?

 

[generic808]

Re: You get what you pay for or you pay for the name?

So I can say I lost mine and they will just send another one? Or if I accidentally drop it, break it etc they will send another without questions asked?

If you lose it, that's obviously your fault. But if it drops and happens to break--which I highly doubt it will--then yes, they will replace it.

 

[unique]

Re: You get what you pay for or you pay for the name?

Wow. Nice.

 

[adamlau]

Even if I ended up wealthy by some miracle, I'm 100% sure I would continue to think much like I do now.

I am 100% sure I would not continue to think as I do now regarding purchases. I would start buy everything that interested me! Probably start off with a Xenotech SkySweep and Britelight 10000, Spectrolab CHIS, a Maxa Beam and a SureFire Beast. I would be a hardcore member of the CPF Big Guns Club .

 

[LuxLuthor]

It is hard to make any general interpretations about why people buy what they buy, or value what they value. The motivations are as complex as each person's life. Some buy quality for reliability, some for status, some for aesthetic enjoyment, or some other personally verified functional value. Some buy for no real reason, others buy things to give them a moment's joy, others to distract from their misery. Some value perceived quality based upon advertised/marketing ploys....DeBeers duped hundreds of millions into believing that diamonds have value, are a girl's best friend, and a symbol of marriage. If they were to flood the market with all they have bought and stored in vaults, diamonds would be as worthless as quartz.

On this topic, the most fascinating thing is watching people gamble, especially in casinos. I will never forget watching the people who were watching a very wealthy Asian man play $250,000 per hand Baccarat at Trumps Castle in Atlantic City. He reportedly had a one day swing from being up $12M to leaving down $4.5M and that was over 15 years ago.

 

[rodfran]

Ditto to LightBen on the purchase of a new car.
The last car I bought cost me $85. A guy that I used to work with rode the bus all the time and did not own a car. He always said that there are more cars in the US than people. I think that now there are more cars than affordable fuel.

However, about that new Tesla......