Is Verizon's Pricing Out of Touch With Reality in the age of theiPhone?

Good article from Information Week

Verizon's $399 Price Tag Of The Palm 755p Is Out Of Touch With Reality
Posted by Eric Zeman, Dec 17, 2007 01:10 PM


Can they really get such money for crippled crap 'smartphone' phones
when a buyer could get a real iPhone instead for the same price?

http://www.informationweek.com/blog/...OSKHSCJUNN2JVN

On Dec 18, 10:47 pm, 4phun <vic.hea...@gmail.com> wrote:
> Good article from Information Week
>
> Verizon's $399 Price Tag Of The Palm 755p Is Out Of Touch With Reality
> Posted by Eric Zeman, Dec 17, 2007 01:10 PM
>
> Can they really get such money for crippled crap 'smartphone' phones
> when a buyer could get a real iPhone instead for the same price?
>
> http://www.informationweek.com/blog/...12/verizons_39...

If you really think an iPhone has a place in the business world, and
is really a replacement for a pocket pc, then you are out of touch
with reality. Send vcards, send emails with attachments, sync with
exchange over edge while driving down the highway, COPY AND PASTE
TEXT...

digi wrote:
> If you really think an iPhone has a place in the business world, and
> is really a replacement for a pocket pc

Correct, Jobs admitted it was not going to be a replacement for a pocket PC.

On Dec 19, 2:15 am, DTC <m...@nothingtoseehere.zzx> wrote:

> Correct, Jobs admitted it was not going to be a replacement for a pocket PC.


So why does he compare the price of the Treo, one of the most noted,
and highly praised pocket devices ever offered to the business world.
Then go so far as to call it "crap", and say "a buyer could get a real
iPhone(as if Treo is a wannabe iPhone) for the same price"???? The
two aren't in the same category really. Its time for fanboys to
understand, the iPhone is not a real PDA

Treo can nearly be considered a laptop replacement, it will do nearly
anything you need it to do when out away from the office, as I gave a
few minor examples in my last post. iPhone, while its very pretty,
and will probably be seen in the hands of desperate housewives and
their teenage daughters in high school all over the world, just
doesn't make the cut in the business world. Being able to poke at
your phone with two fingers is neat at best, but doesn't nearly make
up for any of iPhones serious, serious shortcomings.

digi wrote:
> On Dec 19, 2:15 am, DTC <m...@nothingtoseehere.zzx> wrote:
>
>> Correct, Jobs admitted it was not going to be a replacement for a pocket PC.
>
>
> So why does he compare the price of the Treo, one of the most noted,
> and highly praised pocket devices ever offered to the business world.

I have no idea what voice he hears in his head. He was only quoted
as saying that.

At 19 Dec 2007 05:48:53 -0800 digi wrote:

> Being able to poke at
> your phone with two fingers is neat at best, but doesn't nearly make
> up for any of iPhones serious, serious shortcomings.


True, but to be fair, they're intentional shortcomings. Apple isn't aiming
this thing at the business Treo/Blackberry market. Picking on the iPhone
for it's enterprise shortcomings is like picking on a Nintendo DS for
lacking Exchange support.

I like the iPhone from the few times I've played with it- I don't pick on
the device- just the fanboys who think it can do anything, rather than the
few things it does, but does very well.

At 18 Dec 2007 19:47:32 -0800 4phun wrote:
> Good article from Information Week
>
> Verizon's $399 Price Tag Of The Palm 755p Is Out Of Touch With Reality
> Posted by Eric Zeman, Dec 17, 2007 01:10 PM
>
>
> Can they really get such money for crippled crap 'smartphone' phones
> when a buyer could get a real iPhone instead for the same price?

>
http://www.informationweek.com/blog/...zons_399_pr.ht
ml;jsessionid=VYDVRU52AEIR4QSNDLOSKHSCJUNN2JVN


Funny spin you've added, since the article really has nothing to do with
the iPhone- it's more of an indictment on Verizon's pricing of the 755p
compared to the same phone on Sprint for $249, or other similarly-equipped
smartphones at Verizon and elsewhere for $200 or less.

The only reference to the iPhone was that it's a better multimedia phone at
the same price as the 755p. (No argument there!)

On Dec 19, 10:57 am, Todd Allcock <eleccon...@AmericaOnLine.com>
wrote:
> At 19 Dec 2007 05:48:53 -0800 digi wrote:
>
> > Being able to poke at
> > your phone with two fingers is neat at best, but doesn't nearly make
> > up for any of iPhones serious, serious shortcomings.
>
> True, but to be fair, they're intentional shortcomings. Apple isn't aiming
> this thing at the business Treo/Blackberry market. Picking on the iPhone
> for it's enterprise shortcomings is like picking on a Nintendo DS for
> lacking Exchange support.
>
> I like the iPhone from the few times I've played with it- I don't pick on
> the device- just the fanboys who think it can do anything, rather than the
> few things it does, but does very well.

Todd, were not talking about a DS, were talking about an iPhone, and a
Treo. The latter which does happen to be geared toward the enterprise
market. 4phun picked the devices, not me, so regardless of being
intentional or not, in this comparison, they are shortcomings, and
rather serious shortcomings at that.

At 19 Dec 2007 16:47:49 -0800 earthtodigi wrote:
> On Dec 19, 10:57 am, Todd Allcock <eleccon...@AmericaOnLine.com>
> wrote:

> > True, but to be fair, they're intentional shortcomings. Apple isn't
aiming
> > this thing at the business Treo/Blackberry market. Picking on the
iPhone
> > for it's enterprise shortcomings is like picking on a Nintendo DS for
> > lacking Exchange support.
> >
> > I like the iPhone from the few times I've played with it- I don't pick
on
> > the device- just the fanboys who think it can do anything, rather than
the
> > few things it does, but does very well.
>
> Todd, were not talking about a DS, were talking about an iPhone, and a
> Treo. The latter which does happen to be geared toward the enterprise
> market. 4phun picked the devices, not me,

Yeah, but he's a fanboy posting "news" that he doesn't understand (like the
Avaya "software.")

> so regardless of being
> intentional or not, in this comparison, they are shortcomings, and
> rather serious shortcomings at that.

Yes, because you're comparing them as enterprise devices. If you compare
them as multimedia devices, then the Treo comes up short.

Either way, of the two, I'd rather have the Treo, but the iPhone has it's
market. I'm just not part of it! ;-)

If your high school/college aged son or daughter asked for a combo
phone/media player with a large memory and e-mail, what would you suggest?
Probably an iPhone- I doubt you'd eliminate it from contention because it
can't connect to the corporate VPN or edit Excel spreadsheets.

I'll admit I agreed with the article 4phun posted on one count- $400 for
the 755p? Are they kidding? There must betwo dozen phones I'd rather have
than a 755p that cost $400 or less. And no, the iPhone isn't one of them-
but I'd take one for $200- my wife, (an even bigger cheapskate than I!)
might like it. She likes her (work) Blackberry and (personal) T-Mo Dash,
but isn't thrilled with the browser on either.

CozmicDebris wrote:

> But doesn't the Palm have a tone of features (even in the Verizon world)
> that the iPhone does not?
>
> GPS
> Voice Dialing
> 3g
> PUSH mail sync
>
> Just to name a few.

Yes, but the biggest reason Verizon can charge more, both for handsets
and for service, is because their network is so much better. Look at the
latest Consumer Reports, and look at _every_ other independent survey of
carriers, and look at the bogus "fewer dropped calls" advertising
campaign that Cingular got in trouble for.

Remember, Apple approached Verizon with the iPhone before they
approached Cingular, for a very good reason. Verizon wasn't willing to
do the revenue sharing arrangement that Apple wanted, but Cingular was
desperate enough to agree to it.

On Dec 19, 9:12 pm, Todd Allcock <eleccon...@AmericaOnLine.com> wrote:
> At 19 Dec 2007 16:47:49 -0800 earthtodigi wrote:

>
> Yeah, but he's a fanboy posting "news" that he doesn't understand (like the
> Avaya "software.")

I get that, I think for the most part we are agreeing that we
agree...


> > so regardless of being
> > intentional or not, in this comparison, they are shortcomings, and
> > rather serious shortcomings at that.
>
> Yes, because you're comparing them as enterprise devices. If you compare
> them as multimedia devices, then the Treo comes up short.

I'm doing that on purpose, the Treo has never been considered or
marketed as a multimedia device, always a business tool. And although
Apple hasn't really said iPhone was for the enterprise, every Apple
fanboy seems to think iPhone will destroy WinMo, RIM, and Palm in the
coming months/years, which is exactly what 4phun has said before, and
was subtly suggesting here.

But what the hell, lets throw Treo into the multimedia ring... video
recording, mobiTV, Sirius, XM, Orb, Slingbox Player, Full YouTube
support. Thats just a few things off the top of my head the Treo has
the iPhone simply cannot do.


> Either way, of the two, I'd rather have the Treo, but the iPhone has it's
> market. I'm just not part of it! ;-)

Yes, the pink razr had its market too...

> If your high school/college aged son or daughter asked for a combo
> phone/media player with a large memory and e-mail, what would you suggest?
> Probably an iPhone- I doubt you'd eliminate it from contention because it
> can't connect to the corporate VPN or edit Excel spreadsheets.

No, I would eliminate iPhone because its locked to ATT, which is a
terrible service provider in this area. Just last week, my brother
who is kinda middle of the road when it comes to technology, came to
me asking this same question. He was with Sprint so I suggested him
the PPC 6800. He got one and hes totally in love with it. He too had
bought into the hype-phone and was considering getting one, then he
found out on his own what all it didnt actually do, thats why he came
to me to see what I suggested. He uses this phone for work approx.
zero% of the time, the enterprise features of WM6 were not even in the
equation.



> I'll admit I agreed with the article 4phun posted on one count- $400 for
> the 755p? Are they kidding? There must betwo dozen phones I'd rather have
> than a 755p that cost $400 or less. And no, the iPhone isn't one of them-
> but I'd take one for $200- my wife, (an even bigger cheapskate than I!)
> might like it. She likes her (work) Blackberry and (personal) T-Mo Dash,
> but isn't thrilled with the browser on either.

I could not agree more with that price being outrageous.

At 19 Dec 2007 19:41:45 -0800 earthtodigi wrote:

> I get that, I think for the most part we are agreeing that we
> agree...


Agreed. ;-)


> I'm doing that on purpose, the Treo has never been considered or
> marketed as a multimedia device, always a business tool. And although
> Apple hasn't really said iPhone was for the enterprise, every Apple
> fanboy seems to think iPhone will destroy WinMo, RIM, and Palm in the
> coming months/years, which is exactly what 4phun has said before, and
> was subtly suggesting here.

Fair enough. 4phun is throwing me- he occasionally writes like Oxford, yet
posts using OE...

It's just important to remember the difference between hating the fanboyism
and hating the product. I think the iPhone is very slick, but there's
nothing really "new" other than multi-touch. As for it's shortcomings,
other that no 3G, they're all "fixable" if Apple is willing, or if they
allow true 3rd party development in a few months. (I feel that they won't
however- I suspect the SDK will likely be crippled- probably allowing
little more than local storage of the current "webapp"-type programs, or
run in some sort of Java-like "sandbox.")

> But what the hell, lets throw Treo into the multimedia ring... video
> recording, mobiTV, Sirius, XM, Orb, Slingbox Player, Full YouTube
> support. Thats just a few things off the top of my head the Treo has
> the iPhone simply cannot do.

Ah, but WHAT Treo- we're discussing the 755"P". Do PalmOS devices have
decent multimedia capabilities like those you mentioned these days? I'm a
WinMo guy, personally- I know MY device can do all those things, and I'll
even put my MS Voice Command-enabled WinMedia Player up against the
iPhone's "Cover Flow" for ease of use any day of the week- but I'm not at
all familiar with recent Palms. The last one I've even touched was a
Verizon-crippled Treo 650! I tried setting up e-mail for a friend of my
wife's at a dinner party only to find Verizon removed the e-mail client-
apparently you have to install it from the CD, which wasn't available at
the aforementioned party! ;-)

On Dec 20, 12:01 am, Todd Allcock <eleccon...@AmericaOnLine.com>
wrote:
> At 19 Dec 2007 19:41:45 -0800 earthtodigi wrote:

>
> Ah, but WHAT Treo- we're discussing the 755"P". Do PalmOS devices have
> decent multimedia capabilities like those you mentioned these days? I'm a
> WinMo guy, personally- I know MY device can do all those things, and I'll
> even put my MS Voice Command-enabled WinMedia Player up against the
> iPhone's "Cover Flow" for ease of use any day of the week- but I'm not at
> all familiar with recent Palms. The last one I've even touched was a
> Verizon-crippled Treo 650! I tried setting up e-mail for a friend of my
> wife's at a dinner party only to find Verizon removed the e-mail client-
> apparently you have to install it from the CD, which wasn't available at
> the aforementioned party! ;-)

Very true, that is my mistake. I was thinking of the 700WX, not
PalmOS. To be honest, I am not familiar enough with PalmOS to say
what it can and cannot do. with any real confidence. Even still, I
just did a quick Google search for the features I listed for PalmOS
and it looks like they are all available, except for maybe full
YouTube support. It looks like PalmOS is stuck with m.youtube.com
with the iPhone guys.


And again, I love the iPhone as well, I just hate the hype around it.
When its displayed as something that it is clearly not, people get
confused, and subsequently ripped off.

SMS ???. ? wrote:
> CozmicDebris wrote:
>
>> But doesn't the Palm have a tone of features (even in the Verizon
>> world) that the iPhone does not?
>>
>> GPS
>> Voice Dialing
>> 3g
>> PUSH mail sync
>>
>> Just to name a few.
>
> Yes, but the biggest reason Verizon can charge more, both for handsets
> and for service, is because their network is so much better. Look at
> the latest Consumer Reports, and look at _every_ other independent
> survey of carriers, and look at the bogus "fewer dropped calls"
> advertising campaign that Cingular got in trouble for.
>
> Remember, Apple approached Verizon with the iPhone before they
> approached Cingular, for a very good reason. Verizon wasn't willing to
> do the revenue sharing arrangement that Apple wanted, but Cingular was
> desperate enough to agree to it.
>
>
Very well put. Said another way, you get what you pay for.

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? Unfortunately,
what questions like these usually imply, imho, is that "I'd like to have
that more than the other but I'd rather pay less for it." In other words, I
want my cake and eat it too.

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.

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?

At 20 Dec 2007 10:25:31 -0500 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? Unfortunately, what questions like these usually imply,
> imho, is that "I'd like to have that more than the other but I'd rather
pay less for it."
> In other words, I want my cake and eat it too.


Perhaps, but in this case it's out of line with other products in their own
lineup- Verizon sells more featured phones for less. My guess is that
they're trying to milk the last of the PalmOS diehards who have resisted
switching to Blackberries or WinMo devices.

=?UTF-8?B?U01TIOaWr+iSguaWh+KAoiDlpI8=?= <scharf.steven@geemail.com> wrote
in news:476a9a01$0$84224$742ec2ed@news.sonic.net:

> 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.
>
>

If this thread continues, I think we all deserve some credit hours in
Economics on our student records......

Larry
--
QUOTE OF THE MONTH:
"I have been to several major Chinese cities and have seen first hand shops
crammed with obviously fake American products." - Jon Dudas, Undersecretary
of Commerce for Intellectual Property Rights.

How can they be fake? The Chinese make all "American Products" I use!

Carl wrote:

> 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).

Yes, I was referring to businesses that sell a product that is
essentially unlimited in supply. These businesses find many creative
ways to sell the same product to different market segments at vastly
different prices. They may sell the product under a different brand
name, they may have all sorts of complicated discount schemes including
rebates, coupons, corporate discounts, friends and family discounts,
discounts for certain clubs and organizations etc., or they may just
engage in plain haggling.

A prime example is how Verizon allows MVNO's to resell their service at
substantially lower cost than Verizon itself charges. Clearly Verizon
views most of the MVNO business as pure upside, or they wouldn't resell
to MVNOs.

Larry wrote:
> =?UTF-8?B?U01TIOaWr+iSguaWh+KAoiDlpI8=?= <scharf.steven@geemail.com> wrote
> in news:476a9a01$0$84224$742ec2ed@news.sonic.net:
>
>> 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.
>>
>>
>
> If this thread continues, I think we all deserve some credit hours in
> Economics on our student records......

There are some good case studies of pricing in the Harvard Business
Review. The Tagamet versus Zantac is a classic.

It's called entrepreneurial pricing. Apple tried that with the iPhone
and failed, being forced to lower their price. Verizon is able to engage
in entrepreneurial pricing to some extent because their network is so
much better than the AT&T, Sprint, or T-Mobile networks, and because the
consumers understand this and enough are willing to pay extra for far
superior coverage.

=?UTF-8?B?U01TIOaWr+iSguaWh+KAoiDlpI8=?= <scharf.steven@geemail.com> wrote
in news:476bf2a7$0$84188$742ec2ed@news.sonic.net:

> superior coverage.
>

You haven't been to Myrtle Beach, have you?.....(c;



Larry
--
QUOTE OF THE MONTH:
"I have been to several major Chinese cities and have seen first hand shops
crammed with obviously fake American products." - Jon Dudas, Undersecretary
of Commerce for Intellectual Property Rights.

How can they be fake? The Chinese make all "American Products" I use!

Larry wrote:
> =?UTF-8?B?U01TIOaWr+iSguaWh+KAoiDlpI8=?= <scharf.steven@geemail.com> wrote
> in news:476bf2a7$0$84188$742ec2ed@news.sonic.net:
>
>> superior coverage.
>>
>
> You haven't been to Myrtle Beach, have you?.....(c;

I'm sure that there are numerous small cities and towns where Verizon
isn't great, but for the metro areas where most of the customers are,
they are much better in almost every case. I guess I'm a little skewed
because in the San Francisco Bay Area, Verizon is so much better than
the other carriers in terms of coverage. The other carriers are simply
unusable in many of the less urban parts of the Bay Area.

SMS ???? ? wrote:
> There are some good case studies of pricing in the Harvard Business
> Review. The Tagamet versus Zantac is a classic.

Is that on line somewhere? I've always had a suspicion that Tagamet was
the start of the outrageous pricing of drugs we see today. I remember it
was $30 a month as opposed to a typically expensive prescription of $12
or thereabouts. I remember also that they promised the price would drop
like a rock when R&D was paid off, but the price did nothing but go up,
quintupling just before a generic became available.

--
Dec. 6 (Bloomberg) -- Government officials and activists flying to Bali,
Indonesia, for the United Nations meeting on climate change will cause
as much pollution as 20,000 cars in a year.

clifto <clifto@gmail.com> wrote in news:a9bt35-jjp.ln1
@remote.clifto.com:

> the outrageous pricing of drugs we see today.

http://www.drugstore.com/pharmacy/pr...price.asp?ndc=
55513019001&trx=1Z5006

This is the price of Neulasta, a 0.6ml plastic syringe to "help
REDUCE infections in chemo patients." It doesn't prevent them.

ONE syringe, .6ml costs $3,201.75 at drugstore.com DISCOUNTED!

I brought up some heavy computer hardware and did some arithmetic and
this crap is $US22,198,800 per gallon, making it FAR more valuable
than ANY OTHER LIQUID ON THE PLANET.

We should hang ALL the usurers, not just the lawyers and bankers.
Check out the webpage to get better discounts on Neulasta if you're a
multimillionaire and want more than one injection. It gives new
meaning to "one every four hours".

Larry
--
QUOTE OF THE MONTH:
"I have been to several major Chinese cities and have seen first hand
shops crammed with obviously fake American products." - Jon Dudas,
Undersecretary of Commerce for Intellectual Property Rights.

How can they be fake? The Chinese make all "American Products" I
use!

clifto wrote:
> SMS ???? ? wrote:
>> There are some good case studies of pricing in the Harvard Business
>> Review. The Tagamet versus Zantac is a classic.
>
> Is that on line somewhere? I've always had a suspicion that Tagamet was
> the start of the outrageous pricing of drugs we see today. I remember it
> was $30 a month as opposed to a typically expensive prescription of $12
> or thereabouts. I remember also that they promised the price would drop
> like a rock when R&D was paid off, but the price did nothing but go up,
> quintupling just before a generic became available.

It's the opposite of what you're thinking. The head of Glaxo was being
pressured to price Zantac at a lower price than Tagamet, and instead he
decided to charge a premium, because Zantac was a better drug for the
same condition.

clifto wrote:
> SMS ???? ? wrote:
>> There are some good case studies of pricing in the Harvard Business
>> Review. The Tagamet versus Zantac is a classic.
>
> Is that on line somewhere? I've always had a suspicion that Tagamet
> was the start of the outrageous pricing of drugs we see today. I
> remember it was $30 a month as opposed to a typically expensive
> prescription of $12 or thereabouts. I remember also that they
> promised the price would drop like a rock when R&D was paid off, but
> the price did nothing but go up, quintupling just before a generic
> became available.
>
Pharmaceuticals is not a good example to use in this debate. The market
forces of the drug industry are different than other consumer goods. Not to
say that he doesn't have an ax to grind or that a lot of what he has to say
is biased, but you should make a point of seeing Michael Moore's "Sicko".

At 21 Dec 2007 21:23:03 -0500 Carl wrote:

> There are the Sam Waltons with their Walmarts but there are also
> the Warren Buffets with their Berkshire Hathaways.

I fail to see the point of that comparison. Berk is a holding company that
controls a variety of companies that catervto the masses- insurance
companies, fast food, mall jewelry stores, etc. Rather than the antithesis
of Sam Walton, Buffet is many Sam Waltons in one convenient package!

> I suppose I prefer the latter for
> myself. Different strokes and all.

So, essentially you want to be one level removed from Walton and not get
your hands dirty? ;-)


> And along with your axioms you might also add, "and if you sell to the
> masses, to survive you must also employ the asses of those masses and
then
> treat them like shit."

Not necessarily- Walmart is the extreme example. Plenty of mass-market
companies are also good corporate citizens.
> Or how about, "So the common man can fly, you must crowd up the sky. So
> lower those fares and gain more near-miss scares." Or something like that.

> :-)


Now you're talking about an entire industry- who is the high-end "luxury"
carrier you'd rather be than, say, United?


> Just a little food-for-thought for those of you who think marginal
markup,
> cut-throat pricing, high volume selling is such a wonderful thing for
> people.


Not necessarily cut-throat- again, it's not all Wal-Mart- pick any
successful mass-mrket retailer, say Macy's, and they've got a more
successful operation than any high-end "boutique" does.

Most, if not all, independent business people that I know that cater to the
"high-end" customer is not as successful as his clients are- that's all
that I'm saying.

"Todd Allcock" <elecconnec@AmericaOnLine.com> wrote in message
news:fkilqb$v6o$1@aioe.org...
> At 21 Dec 2007 21:23:03 -0500 Carl wrote:
>
>> There are the Sam Waltons with their Walmarts but there are also
>> the Warren Buffets with their Berkshire Hathaways.
>
> I fail to see the point of that comparison. Berk is a holding company
> that
> controls a variety of companies that catervto the masses- insurance
> companies, fast food, mall jewelry stores, etc. Rather than the
> antithesis
> of Sam Walton, Buffet is many Sam Waltons in one convenient package!
>
>> I suppose I prefer the latter for
>> myself. Different strokes and all.
>
> So, essentially you want to be one level removed from Walton and not get
> your hands dirty? ;-)
>
>
>> And along with your axioms you might also add, "and if you sell to the
>> masses, to survive you must also employ the asses of those masses and
> then
>> treat them like shit."
>
> Not necessarily- Walmart is the extreme example. Plenty of mass-market
> companies are also good corporate citizens.
>> Or how about, "So the common man can fly, you must crowd up the sky. So
>> lower those fares and gain more near-miss scares." Or something like
>> that.
>
>> :-)
>
>
> Now you're talking about an entire industry- who is the high-end "luxury"
> carrier you'd rather be than, say, United?
>
>
>> Just a little food-for-thought for those of you who think marginal
> markup,
>> cut-throat pricing, high volume selling is such a wonderful thing for
>> people.
>
>
> Not necessarily cut-throat- again, it's not all Wal-Mart- pick any
> successful mass-mrket retailer, say Macy's, and they've got a more
> successful operation than any high-end "boutique" does.
>
> Most, if not all, independent business people that I know that cater to
> the
> "high-end" customer is not as successful as his clients are- that's all
> that I'm saying.
>
>
When was the last time you shopped in Macy's? Macy's, to me, is closer to a
high end boutique than a mass-market discounter. They carry mainly
designer-name lines and sell those things at huge prices. They do NOT cater
to the "masses" though they admittedly attract them: poor people spending
huge bucks to have clothing with someone else's name on them. This is NOT a
Walmart or Target, not a GAP or Old Navy, true "masses" stores by your
standard. Btw, I'm a Macy's shopper. I was going to use Macy's as my analogy
but thought it didn't quite make the point because their success at crossing
over a wide range of economic levels is so good. But a "masses" store? No
way.

My Berkshire Hathaway reference was meant to refer primarily to the stock,
which currently sells for something in the neighborhood of $134,000 a SHARE.
Do you think that company is concerned about volume trading? The secondary
point is that Berk doesn't do business at the grass-roots level, but at the
"holding company" level where he deals with few clients who are willing to
pay high prices. It's naive to assume that, at the end, every business
doesn't eventually filter its way down to the "masses" as you put them. If
you do a "family tree" lineage study of any business, it has to end up down
there somewhere. My analogy was a good one. That you "fail to see" it is on
you.

"Carl" <crothman@NOSPAMoptonline.net> wrote in
news:476d1de7$0$31146$607ed4bc@cv.net:

>
> "Todd Allcock" <elecconnec@AmericaOnLine.com> wrote in message
> news:fkilqb$v6o$1@aioe.org...
>> At 21 Dec 2007 21:23:03 -0500 Carl wrote:
>>
>>> There are the Sam Waltons with their Walmarts but there are also
>>> the Warren Buffets with their Berkshire Hathaways.
>>
>> I fail to see the point of that comparison. Berk is a holding
>> company that
>> controls a variety of companies that catervto the masses- insurance
>> companies, fast food, mall jewelry stores, etc. Rather than the
>> antithesis
>> of Sam Walton, Buffet is many Sam Waltons in one convenient package!
>>
>>> I suppose I prefer the latter for
>>> myself. Different strokes and all.
>>
>> So, essentially you want to be one level removed from Walton and not
>> get your hands dirty? ;-)
>>
>>
>>> And along with your axioms you might also add, "and if you sell to
>>> the masses, to survive you must also employ the asses of those
>>> masses and
>> then
>>> treat them like shit."
>>
>> Not necessarily- Walmart is the extreme example. Plenty of
>> mass-market companies are also good corporate citizens.
>>> Or how about, "So the common man can fly, you must crowd up the sky.
>>> So lower those fares and gain more near-miss scares." Or something
>>> like that.
>>
>>> :-)
>>
>>
>> Now you're talking about an entire industry- who is the high-end
>> "luxury" carrier you'd rather be than, say, United?
>>
>>
>>> Just a little food-for-thought for those of you who think marginal
>> markup,
>>> cut-throat pricing, high volume selling is such a wonderful thing
>>> for people.
>>
>>
>> Not necessarily cut-throat- again, it's not all Wal-Mart- pick any
>> successful mass-mrket retailer, say Macy's, and they've got a more
>> successful operation than any high-end "boutique" does.
>>
>> Most, if not all, independent business people that I know that cater
>> to the
>> "high-end" customer is not as successful as his clients are- that's
>> all that I'm saying.
>>
>>
> When was the last time you shopped in Macy's?


For me, it would have been about a week ago and I wasn't impressed.
Many identical items found elswhere for a fraction of the cost. What I
saw was a Target store trying to be classy.

At 22 Dec 2007 09:23:34 -0500 Carl wrote:

> When was the last time you shopped in Macy's?

The last time I was in the closest shopping mall.

> Macy's, to me, is
> closer to a high end boutique than a mass-market discounter. They
> carry mainly designer-name lines and sell those things at huge prices.


Frankly, despite your opinion of them, any retailer that anchors a mall in
Independence, Missouri, is a mass market retailer! ;-)

Again, I used Walton as an extreme example. I could've as easily used Ray
Croc vs. Wolfgang Puck.


> They do NOT cater
> to the "masses" though they admittedly attract them: poor people spending
> huge bucks to have clothing with someone else's name on them. This is NOT
a
> Walmart or Target, not a GAP or Old Navy, true "masses" stores by your
> standard.


"Standard?" I think you're confusing "mass market" with Dickens-era England.
Macy's is mass-market, but they're higher-end "snob appeal" mass market
like Apple Computers- sell a product for higher margin than your
competitors and use marketing and reputation to justify the markup- there's
nothing wrong with that.

If Macy's is what you mean by "high-end," then we're not having an
argument! ;-)

> Btw, I'm a Macy's shopper. I was going to use Macy's as my analogy
> but thought it didn't quite make the point because their success at
crossing
> over a wide range of economic levels is so good. But a "masses" store?
No
> way.

Historically, no, but in the last 10 or so years (since the Federated/May
mergers) they've become a suburban gilt-edged Sears.


> My Berkshire Hathaway reference was meant to refer primarily to the
stock,
> which currently sells for something in the neighborhood of $134,000 a
SHARE.

I'd never have thought of analogizing between a retailer and a stock price!
Market forces control the price of a stock, not a company's markup. B-H
is high because they've never split it, not because ir sells at a high
"profit margin."

> Do you think that company is concerned about volume trading?


No, it's concerned about ownership dilution! Look at the Baby Berk shares-
fractional shares of Berk with 1/5 the voting rights vs. dollar value.
Again, you don't buy stock at retail from the company itself, but at least
I kind of follow where you were going with it.


> The secondary
> point is that Berk doesn't do business at the grass-roots level, but at
the
> "holding company" level where he deals with few clients who are willing
to
> pay high prices.

It's not like Sam Walton was still working the register either after
WalMart opened their 1000th store, either.

>It's naive to assume that, at the end, every business
> doesn't eventually filter its way down to the "masses" as you put them.
If
> you do a "family tree" lineage study of any business, it has to end up
down
> there somewhere.

Butler? Yacht designer? ;-)

> My analogy was a good one. That you "fail to see" it is on you.

If you say so. I've just never pictured Walton and Buffet in the same
industry to draw an analogy between them... I guess I should've went with
Kroc and Puck...