Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Path: utzoo!linus!genrad!decvax!cca!dee From: dee@cca.UUCP (Donald Eastlake) Newsgroups: net.misc Subject: Re: Artificially Different Products Message-ID: <5068@cca.UUCP> Date: Sun, 3-Jul-83 10:05:54 EDT Article-I.D.: cca.5068 Posted: Sun Jul 3 10:05:54 1983 Date-Received: Mon, 4-Jul-83 07:22:04 EDT References: utcsrgv.1663 Lines: 33 I have heard some faintly rational arguments for artificially different products. Assume you design and sell the Wizz-Bang Frammis which is the greatest thing since sliced bread for the high ticket end of the frammis market. It is also so cleverly designed that you have a very wide profit margin and still beat out all the competition (effectively these high profits are your reward for cleverness, investing in research, etc.). The only problem is that your Wizz-Bang Frammis is too expensive for the low ticket end of the frammis market. What do you do? If you ignore the problem, your competitors keep selling to the low end market and may be able to hold on to customers when they migrate to larger frammises. It would seem that the rational thing was to design and manufacture the Fizzle-Bang Frammis which uses your clever design principles and would also enable you to dominate the low-ticket end of the market; however, when you consider the high costs of designing, manufacturing, and maintaining a completely different design, the net profits become questionable. By simply installing a few jumpers so that the Wizz-Bang Frammis skips two out of three cycles, you have a product which seems just right for the low-ticket market. You retain the advantages of volume production, having to stock parts for only one product, etc. And, due to your high profit margins at the top of the market, you probably still make money at the low end. So you announce the Fizzle-Bang Frammis which is just a disabled Wizz-Bang Frammis. You might even figure it is better to loss a bit of money on each low end machine you sell to try to dominate the entire market. Of course, this whole thing falls apart if the market is competitive enough and large enough as a produce designed for the low end market is bound to make more money eventually. Donald Eastlake dee@cca, decvax!cca!dee PS: The above explanation does not decrease my general feeling of disgust at artifically disabled products.