Why Apple sells the iPhone for 17 Different Prices
Love the iPhone pricing data - such a wide range for 'essentially the same device.' This strategy is so critical (and effective) in the B2B sales process too -> providing multiple different price points overcomes the classic "too expensive" objection and also avoids devaluing your product with massive discounts. When you only have one, or a limited number, of price points in the B2B process you end up selling the 512GB device for the price of the 128GB device too often just to 'close the deal.'
Nick, this is a great essay and should be required reading in Econ 101!
Then, in Marketing 501 - this part should be required discussion: "At 512GB, you’re not getting storage as much as you are getting the peace of mind that you won’t run out. How much is that peace of mind worth?"
As an Econ major, I haven't heard "consumer surplus" in a long time and smiled when I read it.
Thanks for this excellent post.