Level 5 Refs at USFA Qualifiers

[Mo]

"It's not just water, it's mountain spring water. And it's not just any mountain spring water, but water that's travelled millions of miles and years through the clear filtering process of the Italian Alps. And not just ANY italian alpine mountain, but the Dolomites blah blah blah."

And with that, Edew proves the crux of what Inquarta and I were trying to say. Price point matters, but it's not the end all. Some times the chutzpah factor comes in: if you're selling "arty" widgets on the street and charge $100...the consumer will think they must not be very special. Take the same art widget, go to a gallery and charge $3,500...they must be ART!

But: go to a fencing tournament, set up five tables with the same five brands of fencing widgets, and as a parent trying to keep three people fencing at each NAC, I will NOT (in the absence of any other enticements) go to the $40 per widget table when there is a $20 table ten feet away.

In Tim the armorer's case, there is a captive market, with little or no competition. If you have a monopoly, price is one of the least relevant factors in volume of business. In a case like this, to assert (like Edew & Tim) that doubling the price is the primary reason for increased business would assume idjitiocy for all of us.

If you're about to be scratched as a young fencer for having only one of the three epees you brought still working, you don't care what the price is. Add three more armoring tables to that same scenario, and you'll HAVE to do some fancy marketing to sustain a higher price, because at that point, price WILL matter. Virtually none of us will automatically assume that Fred's table is better than Bob's because Bob charges half as much.

But hey, that's the power of idjit economics.



The Other Mo

[sallearmourer]

Just to let you all I know that one I started the booth after the USFA ban the offical armoures from doing repair. I started it because I whated the fencers to have a place to have repairs done.

I use to work with Ted and Joe And Dan all the time.

I Have been a armourer for closed to 30 years now. Bill Murphy is a good friend of mine. I talk to Joe and Ted a least once a week about different products and what works good and any new problems. I was invited to go to the Altana games and to Sydney games as well. Since I don't fly and I would have to pay my way I chose not to go.


Now I can tell this for sure that the numbers as increased .

I started with a typical national armourer briefcase of tools and parts. We do a lot more then repair weapons at the booth now.


We take care of the offical weights and sims for the USFA. They are all with in the rules now.

If I need a new test box or tool I get it or built it. It does cost money to run the type of repair service we offer.

Oh by the way I didn't raise the price of rewire until after the last JOs. Where I did 45 in three days.

The USFA chagre all the vendors for the right have a booth at a NAC.

The cost of tools that walk when I being a good guy. If a fencer whats advice in repairing his or hers weapons I give it.

Tim

[Inquartata]

Originally posted by edew
And it's also differentiating your product from mine.

YES! It is! ( I am glad I don't have to entirely reevaluate my estimate of you as a rational person. )

You are talking about product differentiation now. You weren't before. Here's what you said initially":

Inq, you know what would happen if you double the entry fees at all local tournaments? You get more fencers to attend the tournament! And, you'll have fencers REQUESTING that rated referees be present because they're paying good money, and there's lots on the line.

No sign of any reference to making your product better ENABLING you to charge a higher price there.

If you enhance your product or service, so that it is now perceived as measurably better than competitors, you can attract more customers, and charge a higher price for it---within the bounds of the supply-demand constraints you face, of course. But the direction of causation is better product > higher price, and POSSIBLY more customers ( or less, or the same, depending on your costs, the size of the market, etc, etc, etc ). You had it higher price > more custom. This is backward.

Later, you went on to say
People appreciate value. Part of what determines value is the price. People see a Lexus as more valuable than a Toyota despite the fact that they have the same chassis and engine and lots of other items. Why? Because a Lexus costs more than a Toyota.

Which, again, is wrong. A higher price alone will not fool anyone into believing that the producyt is superior. Well, perhaps a few credulous fools, but not enough to alter market equilibrium noticeably. Higher quality justifies a higher price; higher price does not prove higher quality. Ultimately, it is the quality difference that makes the difference.

So if you convince fencers that a tournament is better than others---expert officials, smooth organization, free food, attractive young women in bikinis as score/timekeepers, whatever---they may be willing to pay a higher price, and quantity demanded may even increase. But it's DESPITE the price hike, not because of it. You are in fact now on an entirely different demand curve.

That's the whole point in marketing and selling: you differentiate your product from others so that you can claim a unique position and provide something that people think can only be gotten from you.

YES! Gloryosky, we actually agree on something! I await the arrival of the morning paper with the news of the hard frost in Hell...


But just so we're clear----it is not raising price which brings that cachet and thus more quantity demanded, but vice versa. Yes?

[edew]

Generally, you give $X worth of improvements, but charge $Y, where Y > X. That's how people would do it. But, there has been instances where nothing else was done other than just raising the price and voila, more business, and certainly more profit, since there's no increase in anything else.

These situations occur primarily in service industries, since there isn't a physical product to look at. Typical would be accountants, lawyers, hookers... (let me ask you, would you rather do the nasty with a $5/job streetwalker or a $200/hr call girl?).

So yes, companies try to provide differentiation to allow them to charge more.

As for the fencing entry fee case, there is differentiation. First, there is a new perception by the fencers that this event is a "serious" event. The fee is not trivial, so it's a "serious" event. You as organizer, will (if you had any brains) drum up the event with announcements of great prizes and top fencers attending (or whatever it takes). You know you can afford referees, so you hire good ones. All that MAKES the differentiation between a $25 event and a $5 "floor fee" competition.

That's why I distinguished between commodity items and non-commodity items. Commodity items are based (almost) strictly on cost. Non-commodity items are not.

Nice to see you finally understand basic marketing.

[oiuyt]

attractive young women in bikinis as score/timekeepers

I KNEW we were forgetting SOMETHING for our competitions....

-B :)

[Gav]

There is an additional point here. If you plan to raise the entry fees with the promise of nebulous improvements, you had better deliver. Remember that Fencing is an amateur sport and the vast majority have jobs, kids mortgages and the like. If you hike the price up people will probably pay - at first. If there is no appreciable benefit to the competitor then they will stop coming and you will be left with the hardcore, rich fencers and a stagnant fencing fraternity. There must be a definite and obvious reason for the price. The cost of competing isn't limited to the fees, there's also travelling, lodging, equipment and food (and alcohol - if you fancy a night out to put you to sleep ).

If I was paid to fence I wouldn't give a toss what people asked me to pay I'd let my sponsors pick up the bill however at the moment I have to justify competing to my girlfriend (and that's like going through a tax audit).

If bringing in good experienced ref's makes an obvious difference to a tournament then a moderate hike would be tolerated.

Also don't forget that there are other factors that make a succesful tourney, good organisation makes a big difference but then I shudder at the prospect of the professional fencing administrator.

[Inquartata]

Originally posted by edew
But, there has been instances where nothing else was done other than just raising the price and voila, more business, and certainly more profit, since there's no increase in anything else.

If the original price did not clear the market, or from the business' point of view it did not put them at the point where marginal revenue=marginal cost ( assuming a competitive industry ), raising the price would certainly increase profit. But it would NOT increase quantity demanded, ie "more business". Don't start backsliding on me, now. Raising price, all else being equal, will never of itself have that effect.

These situations occur primarily in service industries, since there isn't a physical product to look at. Typical would be accountants, lawyers, hookers... (let me ask you, would you rather do the nasty with a $5/job streetwalker or a $200/hr call girl?).

Once again, you are discussing product differentiation, not price. Given an identical product, the lower price will ALWAYS bring a greater quantity demanded. In this case the higher price is justified by the higher quality. The higher price does not MAKE the higher quality, it only reflects it.

As for the fencing entry fee case, there is differentiation. First, there is a new perception by the fencers that this event is a "serious" event. The fee is not trivial, so it's a "serious" event.

Seriously, Eric, people's minds just do not work this way as a matter of course. "Oh, Saturn just raised price to $100,000 per car, that means it's now WORTH that much! Sight unseen, I'm going to go buy one!" Please.

The fee does not improve anyone's perception of an event. What the fee is expected to buy may, but if the quality is not seen I guarantee that next year your entry numbers will be down. How much depends on elasticity of demand. Were it otherwise, as I said, you should just raise the fee to $1,000 and book the Staple Center for the thousands of fencers who will eagerly beat a path to your event from all over the world. Not likely.

You as organizer, will (if you had any brains) drum up the event with announcements of great prizes and top fencers attending (or whatever it takes). You know you can afford referees, so you hire good ones. All that MAKES the differentiation between a $25 event and a $5 "floor fee" competition.

Yes. THAT makes for product differentiation ( hopefully ). The higher price in itself does not.

That's why I distinguished between commodity items and non-commodity items. Commodity items are based (almost) strictly on cost. Non-commodity items are not.

There are no exceptions to the law of economics for "noncommodity items". Sorry, it there just aren't.

Nice to see you finally understand basic marketing.

NOW I'm insulted...

[Mo]

Nice to see you finally understand basic marketing.

Edew,
I think it is you who finally understands marketing or at least how to explain it.
Your premise has about faced over and over!
Sheesh:angry

[135711]

As for the fencing entry fee case, there is differentiation. First, there is a new perception by the fencers that this event is a "serious" event. The fee is not trivial, so it's a "serious" event. You as organizer, will (if you had any brains) drum up the event with announcements of great prizes and top fencers attending (or whatever it takes). You know you can afford referees, so you hire good ones. All that MAKES the differentiation between a $25 event and a $5 "floor fee" competition.

You're trying to be sophisticated because you feel upset that you accepted a prize after you fenced. Instead of criticizing the organizer for this, you should have donated the money to a worthy cause. However, it would be better if all organizers refrained from the cash prize thing. \
Now, before kodiak kid jumps in and says 'we should be able to accpet cash prizes......." etc, you should think 9 times in this instance: accepting cash prizes is somewhat humiliating for fencers, there is no glory. the ancient greeks only accepted a Laurel wreath as a reward for their valor. But if you really feel cheap and feel you need to drag a small oranization through the mud, then you should think 9 times again about coming back.

[edew]

I'd gladly accept cash prizes. There's plenty of glory in that. As for raising a Saturn's price to $100,000. Of course there is a limit. That's the art in pricing and marketing. Saturn's a plebian car. No one's going to buy a $100,000 Saturn. A no one is going to buy a $8,000 new Lamborghini either.

As another anecdote, the speaker at the small business seminar gave an example of a carpet cleaner who wasn't getting much business. So he (the speaker) suggested he position his business as an exotic oriental rug cleaner, and double his fees. And, in the ads in the papers, he'll also say, "by the way, we also clean regular carpets as well." By virtue of saying that he cleans expensive carpets (and not having any special tools or skills needed or available), and doubling his price, he had MORE business and higher profits.

It is possible to raise prices AND get more business. It does not break any rules, because there is no "absolute" value for prices. It all depends on what the customer wants to pay and whether the customer feels he or she is getting something of worth. The carpet cleaner was no con-artist, just making a smart business decision.

Falling prices is the first sign of a death-watch for the company or business. Rising prices is an indicator of a healthy company or business. I used to work at Handspring, the hand-held device maker. They sold their products at about $20 cheaper than a comparative Palm model. Didn't sell (because they're not the first into the market, and because price is usually not the most important factor). They're now selling their products cheaper than what we got them with employee discounts (30-50% was our discount). Their stock is $1.08, while IPO price was $20, and high was at $95. Low prices alone is never enough, and lowering prices is a bad omen.