How price discrim works in the IT industry.

> 10 years ago
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ThePhil
ThePhil
WA
1322 posts
WA, 1322 posts
30 Oct 2012 8:02pm
The elephant in the room that will never be discussed in any Parliamentary Enquiry, very simple concept.



You can take the boy out of Canberra but not the Canberra out of the boy!
GalahOnTheBay
GalahOnTheBay
NSW
4188 posts
NSW, 4188 posts
30 Oct 2012 11:31pm
Wow - he's not serious is he?

I understand his pricing gymnastics on the physical media (even though he forgot to add $37 shipping when you buy from the US for Australian consumption), but there should be no price difference for downloads.

Saying that the download must be priced the same as the physical distribution channel to support the reseller is a joke - something we would expect to hear from Harvey Norman.

I don't care about a box or a CD, so don't make me pay for them.

For anyone who cares about the box or CD, they can pay the extra $100 for the luxury.
ThePhil
ThePhil
WA
1322 posts
WA, 1322 posts
30 Oct 2012 11:29pm
I don't care about the box myself, but the problem they have is trashing (undercutting) all of their existing reselling/sales network, that's a very big decision. It may even cause Adobe problems in the long run as a newcomer would not have all of that 'baggage'. But in the meantime they do have shopkeepers actively selling their wares and are making super profits from those that buy direct online. What's not to like for them?
FormulaNova
FormulaNova
WA
15100 posts
WA, 15100 posts
31 Oct 2012 5:09am
GalahOnTheBay said...
Wow - he's not serious is he?

I understand his pricing gymnastics on the physical media (even though he forgot to add $37 shipping when you buy from the US for Australian consumption), but there should be no price difference for downloads.

Saying that the download must be priced the same as the physical distribution channel to support the reseller is a joke - something we would expect to hear from Harvey Norman.
<snip>


Sounds like a reasonable explanation of how it might work to me. Although the primary motivation would be extra profit for the supplier. I don't think the supplier would actually believe that the reason is to support the reseller, but that is probably what they would say.

If you were some faceless manager in a company, and you could get away with charging a premium for some customers, you probably would.

Phil is not telling you how he justifies it. He is telling you how he thinks these companies justify it.

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