4 ms·

> In the end, people with higher quality demands will pay a significant, dis-proportionate premium. Also known as "rip-off".

by kleiba 3y ago

lotsofpulp 3y ago
>In the end, people with higher quality demands will pay a significant, dis-proportionate premium. So, you can tap into that, which means the premium tier essentially cross-subsidizes the cheap tier. Everybody angry at this practice needs to understand that they couldn't just sell the premium tier for $150. They'd need to sell it for $250, or whatever the weighted mean is. Worse, they'd likely sell fewer items in total, so $280 or some such is more likely to reach the same total profit. See: https://www.investopedia.com/terms/m/marketsegmentation.asp https://www.investopedia.com/terms/m/marketsegmentation.asp Another example is selling books for cheaper in countries with lower incomes. Yet another example is countries charging more for access to national parks to people from richer countries than poorer countries. And another example is using coupons to get discounts, or student discounts, etc. It is not a perfect mechanism, and sometimes the subsidies are not from and to the populations that would make it "fair", but on a population wide level, it works pretty well.
mohaine 3y ago
The consumer is paying for slight sound improvement and the prestige of owning the nicer pair. You may not think it is worth the extra money but apparently it is for some. This is no different then offering coupons to more ‘cost sensitive’ buyers
- comprev 3y ago
  In the same way people prefer to drive an Audi instead of Skoda.
  - gmac 3y ago
    Yes, this particular example I always find really stark. Large numbers of people look at a VW and think to themselves: "this is a nice car, but what I really want is to pay a whole lot more for it". (I have a SEAT, which is for people who think the reverse. VAG, so same engine, transmission, gearbox, software, etc. as VW, Audi, Skoda).
    - Ccecil 3y ago
      A Audi/VW mechanic I know put it best "They all mostly use the same parts so maintenance and repairs cost the same...might as well buy the one that sells for more used" It depends on what you want. If you are planning to resell the car after a certain length of time the best bet is the Audi. If you are buying used and want "close" to the same performance buy VW (Audi has higher power, often different suspension, better sound deadening and way more options). In my case...I bought a used VW. So I didn't take the advice...but I don't ever plan on reselling. I repair cars myself and run them far longer than a typical person does. By the time I am done with my car it will probably be sold for scrap due to miles...even though everything will likely be replaced at least once.
      - gmac 3y ago
        > “might as well buy the one that sells for more used Not sure I follow this logic. Seems unlikely the higher resale value is going to fully cover the higher price you buy it for (whether you buy new or used)?
        Ccecil 3y ago
        I guess "hold their value longer" is a better wording...but that is the point. Easier to sell used? More desirable/rare? He bought/fixed and resold mostly Audi/VW but specialized in European cars. I have owned 2 VW and 1 Audi. They all had very similar intervals on things breaking. I will say though I much preferred to drive the Audi...but unfortunately a 2001 allroad only lasts so long :)
        deleted 3y ago
        [deleted]
    - newaccount74 3y ago
      If you follow that logic, then the Dacia Sandero is the only car you can buy. Every other car just comes with pointless overpriced extras that nobody needs. In reality, the brand of a car is extremely important to most people who buy cars. (But speaking of VW transmissions, I don't know why anyone would buy a VW. Their manuals always seem to be having issues with the clutch, and DSG is the worst driving experience I've ever had. Maybe their EVs work better)
coffeebeqn 3y ago
$350 is hardly the high end market for headphones. That’s the general consumer market top end, barely getting into real Hifi money spenders (who drop hundreds of dollars on extremely dubious products like “balanced” cables etc)
lost_tourist 3y ago
Exactly, some people will do anything to defend pure greed lol.

> In the end, people with higher quality demands will pay a significant, dis-proportionate premium. Also known as "rip-off".

by kleiba 3y ago

> In the end, people with higher quality demands will pay a significant, dis-proportionate premium. Also known as "rip-off".

lotsofpulp 3y ago

>In the end, people with higher quality demands will pay a significant, dis-proportionate premium. So, you can tap into that, which means the premium tier essentially cross-subsidizes the cheap tier. Everybody angry at this practice needs to understand that they couldn't just sell the premium tier for $150. They'd need to sell it for $250, or whatever the weighted mean is. Worse, they'd likely sell fewer items in total, so $280 or some such is more likely to reach the same total profit. See: https://www.investopedia.com/terms/m/marketsegmentation.asp https://www.investopedia.com/terms/m/marketsegmentation.asp Another example is selling books for cheaper in countries with lower incomes. Yet another example is countries charging more for access to national parks to people from richer countries than poorer countries. And another example is using coupons to get discounts, or student discounts, etc. It is not a perfect mechanism, and sometimes the subsidies are not from and to the populations that would make it "fair", but on a population wide level, it works pretty well.

mohaine 3y ago

The consumer is paying for slight sound improvement and the prestige of owning the nicer pair. You may not think it is worth the extra money but apparently it is for some. This is no different then offering coupons to more ‘cost sensitive’ buyers

comprev 3y ago
In the same way people prefer to drive an Audi instead of Skoda.
- gmac 3y ago
  Yes, this particular example I always find really stark. Large numbers of people look at a VW and think to themselves: "this is a nice car, but what I really want is to pay a whole lot more for it". (I have a SEAT, which is for people who think the reverse. VAG, so same engine, transmission, gearbox, software, etc. as VW, Audi, Skoda).
  - Ccecil 3y ago
    A Audi/VW mechanic I know put it best "They all mostly use the same parts so maintenance and repairs cost the same...might as well buy the one that sells for more used" It depends on what you want. If you are planning to resell the car after a certain length of time the best bet is the Audi. If you are buying used and want "close" to the same performance buy VW (Audi has higher power, often different suspension, better sound deadening and way more options). In my case...I bought a used VW. So I didn't take the advice...but I don't ever plan on reselling. I repair cars myself and run them far longer than a typical person does. By the time I am done with my car it will probably be sold for scrap due to miles...even though everything will likely be replaced at least once.
    - gmac 3y ago
      > “might as well buy the one that sells for more used Not sure I follow this logic. Seems unlikely the higher resale value is going to fully cover the higher price you buy it for (whether you buy new or used)?
      - Ccecil 3y ago
        I guess "hold their value longer" is a better wording...but that is the point. Easier to sell used? More desirable/rare? He bought/fixed and resold mostly Audi/VW but specialized in European cars. I have owned 2 VW and 1 Audi. They all had very similar intervals on things breaking. I will say though I much preferred to drive the Audi...but unfortunately a 2001 allroad only lasts so long :)
        deleted 3y ago
        [deleted]
  - newaccount74 3y ago
    If you follow that logic, then the Dacia Sandero is the only car you can buy. Every other car just comes with pointless overpriced extras that nobody needs. In reality, the brand of a car is extremely important to most people who buy cars. (But speaking of VW transmissions, I don't know why anyone would buy a VW. Their manuals always seem to be having issues with the clutch, and DSG is the worst driving experience I've ever had. Maybe their EVs work better)

coffeebeqn 3y ago

$350 is hardly the high end market for headphones. That’s the general consumer market top end, barely getting into real Hifi money spenders (who drop hundreds of dollars on extremely dubious products like “balanced” cables etc)

lost_tourist 3y ago

Exactly, some people will do anything to defend pure greed lol.