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> No one cares what the product costs to make The production cost is one of the metrics customers use to decide if a price is fair or not, to them. There are o
by marklgr 8y ago
> No one cares what the product costs to make
The production cost is one of the metrics customers use to decide if a price is fair or not, to them. There are other metrics, like the time that can be saved by using the product (ie. some way to quantify the product "use value"), but the production cost is often quite useful to detect abuses--and boy, aren't there a lot of attempts of such abuses.
- chii 8y ago> production cost is one of the metrics customers use to decide if a price is fair or not only approximately, and only if the consumer really knows the cost. Think jewlery (like diamonds), or expensive brand name goods like designer clothing. The production cost for those goods is "low", but the charge is in marketing and status symbol representation (which is modified via marketing).
- marklgr 8y agoIt could be argued that those two examples are good cases where the customer could be concerned about the value they get, even including the status factor. Diamonds are notoriously high-priced because of a quasi-monopoly, and high-end clothing is pretty often of poor value, quality-wise. If you like designer clothes--and you're not on unlimited budget--you eventually learn what designers/brands to avoid, because the value is just not there, even for that industry. So this looks like a case in point, where having a rough ideas of the production cost (some parts hand-made, made in France/Italy/England, expansive material like quality cashmere etc.) is important.