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Old 24th Apr 2019, 4:17 pm   #771
stevehertz
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Join Date: Sep 2011
Location: Rugeley, Staffordshire, UK.
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Default Re: The Audiophoolery Thread.

Quote:
Originally Posted by GrimJosef View Post
Quote:
Originally Posted by ajgriff View Post
... Personally I dislike the idea of paying a large premium for something of much smaller intrinsic worth ...
I'm currently reading Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations (publ 1776). In Book 1, chapter 7, entitled Of the Natural and Market Price of Commodities he defines these two terms - the natural price being what it actually costs a seller to bring a product to market (he includes a reasonable profit in that), and the market price being that set by the balance between supply and demand. He then explains in some detail how a free market will generally bring these two prices together, and in doing so he tells you how to resolve an excess of market price over natural price. As a seller you have to set up in competition with the man who is overcharging and undercut him, thereby raising the supply and bringing the market price down. And as a buyer, which is where you and I come in, if you think something is overpriced then you have to not buy it. This reduction in demand will also bring the market price down. If the market price stays stubbornly where it is then I'm afraid that that means that not enough people agree with you about the worth of the goods .

Cheers,

GJ
It's not that simple as you have to take into account perception of quality as an intrinsic part of the buying process, not just finite quality. Some people 'buy into' that, and others don't. When I was working at Crabtree as publicity officer I provided said services for Crabtree, Marbo, Britmac, Appleby, Volex and Wylex and one other that I can't recall. Some products, eg Crabtree and Wylex were sold as 'premium products' and received all the bells and whistles that went with it including expensive advertising, PR, glossy catalogues and brochures, product launches with entertainment for customers, invites to customers for football matches, brand marked novelty 'desk gifts' and so on. On the other hand, Volex was seen pretty much as a commodity product that was sold cheaply with lower margins through the 'sheds' and received no promotion, it sold on its low price. So demonstrably, prices do not always migrate or unite via a supply and demand process, there's other factors in place that oppose that. A high price will often entice people to buy something, never mind put them off. There are countless examples of this, as is evident on this audiophoolery thread. I've not read his book but from what you say I suspect there's probably a tad of 'politics' in what Adam Smith is saying, and a bit less marketing knowledge. Just like the subject of chance and odds, people often think that marketing is a relatively simple subject and will often wax freely and seemingly knowledgeably about it, applying 'logic' when in truth it is far more complex than mere logic.
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