SMS ???. ? wrote:
> Carl wrote:
>
>> Asking the OP a rhetorical question, how can any vendor's pricing
>> policy be "out of touch with reality" if they're selling their
>> product?
>
> Yes. Pricing needs to be set to maximize profit. You can be selling
> your product too cheaply and be leaving money on the table, or you
> can be charging too much and be losing customers that would raise
> profits by virtue of higher volume. You can damage the image of your
> product by getting into a price war with competitors that have a
> poorer product, but you have to be careful to not charge so much for
> your superior product that customers decide to put up with your
> competitors cheaper product.
>
> What most businesses do is figure out ways to appeal both to the
> price-sensitive customer and to the customer that doesn't care about
> paying more. I could pay much more for the Verizon service I have by
> foregoing a corporate discount or adding worthless services such as
> "Get It Now," or the g-d awful "Please Enjoy the Music While Your
> Party is Reached" service where the music is always the same
> static-filled classical piece. I could also probably pay less by
> switching to a Verizon MVNO that charges as little as 5.3¢/minute,
> rather than paying my current $32/month (which would buy me over 600
> minutes per month at 5.3¢ each).
>
> As to the iPhone, just think of how much better it would have sold
> were it on Verizon's network, with its more widely deployed, and
> faster, 3G service, not to mention its vastly superior voice network.
> Just look at the latest Consumer Reports, as well as _every_ other
> independent survey, then look at the bogus "fewest dropped calls"
> advertising campaign that was based on data that even the company
> that did the survey said did not support Cingular's conclusion.
>
You're right on every point, but I feel you're reading too much into the
OP's original question and into my response. Verizon appears to be, from my
point of view, doing well based on your criteria, so their pricing cannot be
out of touch with reality. They may be out of touch with HIS reality, which
is the way I chose to read it.

And I'll take issue with one thing: probably "most businesses" do "figure
out ways to appeal both to the
price-sensitive customer and to the customer that doesn't care about paying
more", but that is not always the best business model. There are businesses
which cater to the high end only (and there are, of course, the reverse
model businesses). The high-end guys, because they have a smaller customer
base, make a larger profit margin with fewer employees, smaller facilities,
less overhead . They also usually excel at customer service. because they
have to. The opposites have to work their asses off to do volume. Customer
service almost always suffers. The ones in the middle have a taste of both,
but generally appreciate their higher end clients more. Given the choices,
I'd rather be a business that caters to the high end. You?