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Originally Posted by 5digits6strings
I recall an article discussing how the one of the main Gibson guys (recently) increased sales by inflating their prices. Anyone that has taken a marketing class should understand this one. People often keep buying, despite artificially high costs...they want them more, because they cost more.
Bottom line: in mass quantities they don't cost that much more to make (with a set neck) to warrant the extra cost. C'mon, you can get an Epiphone with a carved top and a set neck for less than $400.
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I believe the short term increased sales claim, but as we were discussing above, by "increased sales" we would be talking dollars, not units.
The old all American honest dollar for an honest day's work still rules for long term health of a business, but in the past 10 years or so, it's been interesting to see how so many businesses are willing to gamble long term health for short term gains. You see a lot of them going lesser quality off shore "stack 'em deep and sell 'em cheap" and many going far the other direction with the jacked up pricing, elite marketing concept.
Straying too far in either direction can get very risky. Increasing prices to generate a short term increase in the bottom line isn't that simple and always comes at a cost. For instance, the further you raise the price, the further you open the door for competition.
Businesses that are willing to make these moves seem to be banking entirely on their trademarks. Of course, this is a lot of why we are seeing all the ridiculous trademark antics going on.