4 ms·
Attaching a specific price to a long term marketing campaign that becomes entrenched in the minds of consumers should be considered an antipattern. It locks ven
by asaph 7y ago
Attaching a specific price to a long term marketing campaign that becomes entrenched in the minds of consumers should be considered an antipattern. It locks vendors into a price point that ignores inflation. This can be tough to break free of when inflation (or tariffs or commodity prices, etc.) inevitably make legacy price points unprofitable. See 5 cent coke[0] and $5 footlong Subway sandwiches[1].
Tesla should be able to raise prices by ~2%/year (the rate of inflation) without it being a big deal to consumers. Hopefully consumers are getting their annual cost of living wage increases at their respective jobs.
[0] https://www.npr.org/sections/money/2012/11/15/165143816/why-coke-cost-a-nickel-for-70-years https://www.npr.org/sections/money/2012/11/15/165143816/why-...
[1] https://www.npr.org/2019/05/07/721193879/subways-five-dollar-footlong-fail https://www.npr.org/2019/05/07/721193879/subways-five-dollar...
- arkades 7y agoIn fairness, 5-cent coke came about because of an unwise contract in which Coke promised syrup to a bottling company for <5 cents, under the impression that bottled drinks would never take off. The ad campaign followed, from coke (not the bottler selling the cokes), as an attempt to keep the bottler from raising prices, because at that point Coke only profited from sales volume, not increases in retail price. This only hurt them after they managed to buy back bottling rights, but the 5 cent coke ads had become deeply entrenched.
- brianwawok 7y agoThat, and also vending machines. There was no way to do a slight increase in the price of coke. To go up to 10 cents would DOUBLE the price of Coke. Coke even asked for congress to issue a 7.5 cent coin, but was denied. More details: https://www.npr.org/2019/05/01/719213730/episode-416-why-the-price-of-coke-didnt-change-for-70-years https://www.npr.org/2019/05/01/719213730/episode-416-why-the...
- rchaud 7y agoNobody forced Tesla to push "$35,000 EV" as their rallying cry. They did it because, among other reasons, they saw how successful it was for brands like Apple, which they like to be compared to. The problem is, when Apple announces a new iPad model at $499 (2010-2015), they know they can manufacture and sell profitably at that price. Tesla on the other hand cannot meet its own production targets, so they shouldn't have tried to publicly anchor their own price at $35k.
- asaph 7y agoApple also increases their prices regularly. And Apple customers don't mind paying a little more because they believe they are getting a premium product. Tesla has built a similarly premium brand and could similarly increase prices without consumer backlash, if not for the famous $35k Model 3 pitch.
- dingaling 7y ago> Hopefully consumers are getting their annual cost of living wage increases at their respective jobs. There are very few jobs where that is even considered
- asaph 7y agoDo you have any data to back up this assertion?