I really don't think any company "owes" us an answer as to what their pricing policies are, they set the price we decide whether or not to buy the product. It's a simple formula, if you don't like the price don't purchase.
I couldn't agree more. As outlined in another thread, Festool's pricing strategy is not our business and they have no obligation or reason to explain their decisions to us. Buy or don't buy is our decision.
Inner10 said:
Steve that is the most inaccurate explanation of the free market economy I have ever heard. No company "sets" a price....that would be illegal. Competition causes prices to be driven to a market equilibrium.
Actually, that is a perfectly accurate description. You are just interpreting "set" to mean a monopolistic approach to designating a price for a given item rather than the competitive process at a company level.
Festool sets their price for
their branded item. BMI sets their price for
theirs. Stanley sets their price... and so on. Consumers choose which to buy based on price and the substitutability of another same/similar item. If one maker wanted to be more competitive and/or to sell more, they would have to "set" their price lower. Competition spurs the process of price changes in order for a maker to sell more items.
So, some users will buy the BMI branded tape because it is very substitutable for the Festool tape. Some will pay the premium for the Festool branded tape because of personal reasons (e.g. aesthetics). If Festool wanted to sell more, and woo buyers from the BMI brand tape they could lower their price. But, perhaps selling 40% fewer, but at 45% higher is the equilibrium they want to be at. *shrug*
As a point of fact, Festool has established monopolistic (regional) pricing, by requiring dealers to all charge the same amount for a given tool with their brand name on it. But it is perfectly legal because it is within their own
product brand as opposed to a monopolistic price for, say, jigsaws (as a
product).