The value of value

king_of_inismac

I've been thinking about this a lot lately (based on an interesting Podcast from the guys at Freakanomics).

They were discussing organic food and the increased cost associated with it.

At the start, people accepted that organic food had to be more expensive because of the increased production costs.

However, would people still value organic food if it as much if it cost the same as ordinary vegetables?

i.e. People seems to value a product because its valuable/costly.

As another example, would people like their iPhones as much if they were €100? Or are people paying for the exclusivity of the brand?

Would people like Mercedes as much if they cost as much as a skoda?

I'm not saying high cost is the ONLY reason people buy luxury brands/food, but is it A reason?

longhalloween

king_of_inismac wrote: »

As another example, would people like their iPhones as much if they were €100?

Would people like Mercedes as much if they cost as much as a skoda?

Yes, because they're amazing.

Pushtrak

Woah, the value of value... This thread is like inception.

tbh

king_of_inismac wrote: »

I've been thinking about this a lot lately (based on an interesting Podcast from the guys at Freakanomics).

They were discussing organic food and the increased cost associated with it.

At the start, people accepted that organic food had to be more expensive because of the increased production costs.

However, would people still value organic food if it as much if it cost the same as ordinary vegetables?

i.e. People seems to value a product because its valuable/costly.

As another example, would people like their iPhones as much if they were €100? Or are people paying for the exclusivity of the brand?

Would people like Mercedes as much if they cost as much as a skoda?

I'm not saying high cost is the ONLY reason people buy luxury brands/food, but is it A reason?

definitely. Look what happened to Burberry when all the chavs started wearing it, it still hasn't recovered. People are conditioned to believe that something that is expensive is better than something that isn't. Look at all the word lidl are doing to counteract that.

king_of_inismac

I'm guessing that if Apple reduced the cost of an Iphone in Ireland to €100, their sales wouldn't increase much (if at all). People like paying for the exclusivity, even if they're not that aware of it.

Fromthetrees

This is fun...
http://funstufftosee.com/kailidoscopedrawing.html

Zab

Organic food is not a good example of what you're describing.

The Big Red Button

Google "premium pricing" - it's a common marketing strategy.

biko

That's why people buy stuff in the middle of the price range. They don't want to pay full price but think that bottom range stuff has to be crap. Even when it's eggs, milk and other things that don't really change quality-wise.

Logical Fallacy

king_of_inismac wrote: »

I've been thinking about this a lot lately (based on an interesting Podcast from the guys at Freakanomics).

They were discussing organic food and the increased cost associated with it.

At the start, people accepted that organic food had to be more expensive because of the increased production costs.

However, would people still value organic food if it as much if it cost the same as ordinary vegetables?

i.e. People seems to value a product because its valuable/costly.

As another example, would people like their iPhones as much if they were €100? Or are people paying for the exclusivity of the brand?

Would people like Mercedes as much if they cost as much as a skoda?

I'm not saying high cost is the ONLY reason people buy luxury brands/food, but is it A reason?

I don't think those examples really work, due to the inherent flaw of the implication that you could produce quality goods at budget prices.

Be better to ponder if someone would pay Merc prices for a Skoda, despite the difference in quality and engineering, simply because it cost as much as a Merc.

Giselle

tbh wrote: »

definitely. Look what happened to Burberry when all the chavs started wearing it, it still hasn't recovered. People are conditioned to believe that something that is expensive is better than something that isn't. Look at all the word lidl are doing to counteract that.

Not so much because its costly, but because its exclusive (because its costly or rare).

When everyone can afford something, or its abundant enough, it loses that exclusivity and becomes commonplace.

People often use material things to define themselves as part of a group, tribe or class and nobody wants to think of themselves as commonplace.

RATM

An Apple iPhone costs €172 to manufacture but costs €600 to the end user.

Somewhere along the line the marketers have added value in the order of €428 for which the market is willing to pay judging by their huge sales.

AnonoBoy

In restaurants people often won't order the most inexpensive bottle of wine because they don't want to appear cheap so they go for the 2nd cheapest bottle.

Restaurants know this so they stick rubbish bottles in 2nd cheapest and jack up the price. But people think it's better because it costs more.

FizzleSticks

This post has been deleted.

28064212

RATM wrote: »

An Apple iPhone costs €172 to manufacture but costs €600 to the end user.

Somewhere along the line the marketers have added value in the order of €428 for which the market is willing to pay judging by their huge sales.

Cost of a product does not equal "manufacturing costs + marketing costs"

Trollsbury Trollington

Are you talking about inferred quality pricing?
I.e it costs a lot so it must be good.

Theres also an image factor, such as 'oh Oisinn and I oonly would eat a tiramasou with organic ingredients, good foor the envirooment and besides Sorcha is alergic to them'

www.acrwebsite.org/volumes/display.asp?id=6830

wendell borton

Something is only worth what someone is willing to pay for it.

seamus

Sure look at diamonds. DeBeers got there years before Apple on the brilliance of marketing to convince people to pay way over the odds.

OK, diamonds look good. But they're also common as dirt and can now be created 100% synthentically, more perfect than anything you'll find in the ground.

Yet people will still part with thousands of euros for a piece of crystallised carbon from the ground because DeBeers have convinced them to.

Sky King

biko wrote: »

That's why people buy stuff in the middle of the price range. They don't want to pay full price but think that bottom range stuff has to be crap. Even when it's eggs, milk and other things that don't really change quality-wise.

Milk does change though. We have far tighter regs here than up north. You'll find that milk produced in Ireland (by Glanbia etc) lasts longer than the milk you buy in Applegreen / Aldi, regardless of the date stamped on it.

Battered Mars Bar

king_of_inismac wrote: »

As another example, would people like their iPhones as much if they were €100? Or are people paying for the exclusivity of the brand?

Apple addicts don't belong in a value of value thread. More like, are people really this stupid? thread :P

ScumLord

I was talking to a watch fixer at the weekend that said he works for two watch shops in Dublin. One is in the city centre and one is ion the suburbs. The cost of repairs in the suburb shop is half the price of the one in the city and he says everyone thinks the city one is the better repair service simply down to the price as it's the same person doing the work in both shops.

You have the likes of Sony that charge a premium across their range even though it's only their high end stuff that deserves the premium.

It may be down to too much choice because people are just as guilty of making the opposite mistake when buying cheap goods. In the short run the cheap product may seem like better value but over the lifespan of the more expensive product you may need to buy 3 or 4 replacements for the cheap product negating any savings and making them more expensive in the long run.

Chuck Stone

The triumph of marketing over reason.

Advertising has us chasing cars and clothes, working jobs we hate so we can buy **** we don't need.

Tyler Durden

Fight Club.

Jester252

king_of_inismac wrote: »

I've been thinking about this a lot lately (based on an interesting Podcast from the guys at Freakanomics).

They were discussing organic food and the increased cost associated with it.

At the start, people accepted that organic food had to be more expensive because of the increased production costs.

However, would people still value organic food if it as much if it cost the same as ordinary vegetables?

i.e. People seems to value a product because its valuable/costly.

As another example, would people like their iPhones as much if they were €100? Or are people paying for the exclusivity of the brand?

Would people like Mercedes as much if they cost as much as a skoda?

I'm not saying high cost is the ONLY reason people buy luxury brands/food, but is it A reason?

I heard some thing like this on an RT podcast
As the cost of something increases the better you think it is but if it free it must do everything

Trollsbury Trollington

Wasn't it tulips that were all the rage back in days of old, they were rare and had to be imported by olde sailboat.

The lack of one indicated you weren't part of the upper social echelon/mileau or didn't have the cash.
So they became an essential to the aristocratic levels, while also being rare.

Yet effectively it's just a flower and doesn't really do anything that a rose doesn't.

So theres the influence of fear of being seen without something.

e.g if you don't eat cheezy-poofs you are lame.

Earthhorse

The truth is there are many one off, or few off, purchases we make where we don't actually know enough about what we're buying to make an informed choice. Watch repair is a good example. I wouldn't have a clue what's involved or what's a fair price. So you do tend to feel safer paying a little more because you assume there's a reason for that; that's not entirely irrational as many products we do know about we find there is a relationship between the two.

Capt'n Midnight

nothing is more valuable than a finite resource that can't ever be replicated.


The most valuable art is just a pyramid scheme where you hope some other mug will pay even more later on

google for the most expensive paintings or statues,

very few are what you could call 'fine art'

tmc86

AnonoBoy wrote: »

In restaurants people often won't order the most inexpensive bottle of wine because they don't want to appear cheap so they go for the 2nd cheapest bottle.

Restaurants know this so they stick rubbish bottles in 2nd cheapest and jack up the price. But people think it's better because it costs more.

You're right here, I fail to see the problem in ordering the cheapest bottle of wine - I wouldn't consider myself a wine expert by any means, I buy what I like and know regardless of price.

It's another Boom related behaviour, buying something that costs a bit more just so other people think you're not cheap. This is the recession, I'll happily order the cheapest bottle, the opinon of one person (waiter/waitress) does not matter to me.

Another thing is tipping, Irish people think that this is America and we should tip like they do but at the end of the day minimum wage here is nothing compared to the US.

Irish Guitarist

Some people will pay a couple of hundred euro for a pair of jeans covered in holes because they're made by Diesel when they could get a similar pair made by Smith and Jones for €20. Both jeans will last about the same length before they fall apart.

Organic fruit is different though. People buy them in the hope that they're not loaded with chemicals. They're not a status symbol like iPods and the other things you mentioned. I'm pretty sure that Tesco own brand organic bananas cost less than Fyffes bananas. A better example might be bottled water. Anyone that buys a bottle of Evian water is a moron in my opinion.

ScumLord

Irish Guitarist wrote: »

I'm pretty sure that Tesco own brand organic bananas cost less than Fyffes bananas. A better example might be bottled water.

Most bananas are clones of the same plant that they've been reusing for decades.

"Organic" is a very lose term in some places too. In Ireland Organic goes beyond chemicals too, you have to have consideration for the wildlife that might be on your farm which means a reduction in usable land. I'd wonder what constitutes organic in the country tescos buys there bananas from? Fair trade would be a much more useful logo to see on their products.

Jester252

I am always taken back by the agreed value of stuff like money

MadYaker

I bought a pair of Oakley sunglasses in the USA 5 years ago for $200. I bought them because they are the best not because I want to look cool (but they do look very nice ) No other brand I have tried are as comfortable or as well made. With some of the high end clothes brands there is a major factor of people paying over the odds just for the brand name. If you want to you can spend €600 on a pair of jeans but in reality what is so different between that pair and a pair you get in dunnes for a tenner?

SafeSurfer

Take the example of perfume and aftershave for example. Something like 98% of the unit cost of perfume and aftershave is due to marketing, convincing us of the intangible benefits of the product. The other 2% is the cost of the actual tangible product.

biko

I think what really takes the cake is diamonds.
Worthless as anything but a sanding agent but extremely pricey.

Standard Toaster

chatterpillar wrote: »

Google "premium pricing" - it's a common marketing strategy.

Can I wolframalpha "premium pricing" instead?

Doyler92

RATM wrote: »

An Apple iPhone costs €172 to manufacture but costs €600 to the end user.

Somewhere along the line the marketers have added value in the order of €428 for which the market is willing to pay judging by their huge sales.

Where have you found this out?

Chuck Stone

Domo230 wrote: »

Blame our stupid monkey brains.

Stupid monkey brain like sparkly stuff.

Ellis Dee

biko wrote: »

I think what really takes the cake is diamonds.
Worthless as anything but a sanding agent but extremely pricey.

I believe, but sadly have never been able to afford to find out, that they are a great leg-opener as well.:):)

Seriously, though, I was working in the spirits trade in the early 1960s and in those days a good deal more Scotch than Irish whiskey was sold in Ireland. That was because it was more expensive (in the days before the Anglo-Irish Free Trade Agreement). Then some of the Irish distillers grasped the importance of snob value and introduced a few more expensive Irish brands, such as Redbreast. They had soon eclipsed Scotch as the growing middle class did their best to impress each other.:D

As Oscar Wilde famously said: "What is a cynic? A man who knows the price of everything and the value of nothing.”;)

grindle

Battered Mars Bar wrote: »

Apple addicts don't belong in a value of value thread. More like, are people really this stupid? /thread :P

Apple does very well, without a doubt, but they have the most apps (useful) and a better-coded, more thoughtful OS than the others.
Music-making/MIDI apps on anything but iOS?
No point, latency's too high.

ScumLord

Domo230 wrote: »

Blame our stupid monkey brains.

Speak for yourself. I, like most people have an ape brain, maybe you didn't get the upgrade?

Chuck Stone

Domo230 wrote: »

Doesn't advertising essentially boil down to someone going

"LOOK AT THE SHINY SHINY!!!!!!!!!!!"

Shiny shiny.

Sex.

Fear*

Lifestyle.


*the amount of ads trying to frighten mothers into buying shit is absolutely astonishing. Most of those cleaning product ads have an underlying message that Mum is putting her children in harms way unless she buys <insert cleaning product here>.

grindle

Chuck Stone wrote: »

Most of those cleaning product ads have an underlying message that Mum is putting her children in harms way unless she buys <insert cleaning product here>.

The start of that ad was like a 'Brass Eye' excerpt.

ScumLord

grindle wrote: »

Apple does very well, without a doubt,

but they have the most apps (useful) and a better-coded, more thoughtful OS than the others.[/QUOTE] That's debatable, a long running and never ending debate. I find apple software intrusive and annoying I won't go near it. Windows phone OS is much better than apples IMO.

Music-making/MIDI apps on anything but iOS?

Yes, people can make music and midi on a hell of a lot of other devices other than an iPhone. It's a myth that Apple is the only computer that can be used in music and video production, a silly marketing myth.

srsly78

Most music guys use laptops. What kind of moron tries to mix on an iphone!?

grindle

ScumLord wrote: »

Yes, people can make music and midi on a hell of a lot of other devices other than an iPhone. It's a myth that Apple is the only computer that can be used in music and video production, a silly marketing myth.

I understand that it's a myth in the desktop/laptop world, and don't buy into it, but with the handheld devices (phones/tablets), iOS is the only one capable of latencies lower than 25ms.
This is according to app developers who are desperate to provide the apps to Android users, but don't want their app's image tarnished by Java's shiitty latency-causing architecture (or, badly implemented drivers).

Maybe Windows 8 for phones will tackle this, and provide another option, but they're still ironing latency issues out on the desktop variant at the moment, so that'll take priority.

srsly78

Errr android exposes a c++ native sdk for just that kind of thing. Try talking to better developers. Windows 8 on mobiles is even worse coz it's .net only.

Still doing it wrong tho, use a laptop.

grindle

srsly78 wrote: »

Most music guys use laptops. What kind of moron tries to mix on an iphone!?

Gorillaz made most of an entire album on one (on an iPad, mastered out-of-box), but that's beside the point.

iPhones and iPads can be used as multi-page control surfaces, or synths, or drum-pads, or samplers.

So, the people who want those things, those are the morons who would want to use such things.

srsly78

Using it as a control device connected to a laptop is completely different, the laptop is doing all the work.

grindle

srsly78 wrote: »

Errr android exposes a c++ native sdk for just that kind of thing. Try talking to better developers. Windows 8 on mobiles is even worse coz it's .net only.

Still doing it wrong tho, use a laptop.

Errr, they're the best in their field and you think they're wrong?
Korg, hexler and some others have put their apps out for Android
It's Android's problem, not their problem.
Oh wait, here's the Android-developer Dave Sparks, as in, develops Android as a Google engineer:

Latency is a big problem. We’re working at, hopefully we hope to be able to do something about it with ICS. As we investigated it it’s actually a pretty complex problem. There are a number of different places where latency gets introduced. Most of the latency is introduced below Android. Basically it’s happening in the drivers or in the chipsets or somewhere in there, and some of these are really obscene amounts like hundreds of milliseconds of latency in the audio path. So, that’s something we’re going to push on. We started/ I think we introduced something in CDD Gingerbread which was a “should” hit certain latencies.

And a link from... YESTERDAY??? Can this be real?
The good news is, this workaround (which has to be implemented by the developer, because Google can't be bothered yet) lowers the latency to around 20ms.
The bad news is, that's still pretty bad.

Also, how is using the most expressive, customisable controller available "doing it wrong"?

Do you think people should stick to the mouse and keyboard for MIDI tasks?

srsly78 wrote: »

Using it as a control device connected to a laptop is completely different, the laptop is doing all the work.

Not with Lemur, it uses the iPad hardware for the physics, and the many amazing synths and samplers on the iPad are using it's hardware too, not the laptop's.

Difference Engine

The concept of Veblen goods explains a lot of this:

Some types of high-status goods, such as high-end wines, designer handbags, and luxury cars are Veblen goods, in that decreasing their prices decreases people's preference for buying them because they are no longer perceived as exclusive or high status products. [2] Similarly, a price increase may increase that high status and perception of exclusivity, thereby making the good even more preferable. Often such goods are no better or are even worse than their lower priced counterparts.

The Veblen effect is one of a family of theoretically possible anomalies in the general theory of demand in microeconomics. Other related effects include:

the snob effect: preference for goods because they are different from those commonly preferred; in other words, for consumers who want to use exclusive products, price is quality;[3]
the bandwagon effect: preference for a good increases as the number of people buying them increases.

Sounds like iPhone users to me.











Sent from my iPhone

Battered Mars Bar

grindle wrote: »

Apple does very well, without a doubt, but they have the most apps (useful) and a better-coded, more thoughtful OS than the others.
Music-making/MIDI apps on anything but iOS?
No point, latency's too high.

I've grand apps too on android never had any problems. Sure apps are a load of overhyped crap anyway. I don't care about codes though doesn't affect me as the consumer as long as it works. Not interested in "music making" either sure I haven't a tune in my head I doubt these are the reasons why apple do well. Unless everyone's suddenly a computer coding music making genius. iPhones are much sought after by the lower classes aswell, becoming the burberry of technology imo. *snootyface*

grindle

Battered Mars Bar wrote: »

I doubt these are the reasons why apple do well. Unless everyone's suddenly a computer coding music making genius. iPhones are much sought after by the lower classes aswell, becoming the burberry of technology imo. *snootyface*

I agree.
Apple are doing well because of great aesthetics; creating the first properly smart smartphone, which led to the majority of developers developing for iPhone first; an overtly aggressive stance and dominance over their suppliers regards pricing.
Android phones would suit most people down to the ground, and would doubtless work just as well for the average consumer's needs, more-so if the OS was uniform and unimpeded by carriers installing their own software or sponsored software.