They sell it for more because they have more value to the customer.

They sell for more because customers are willing to pay more, because omgmemoryfoam. Price can never be trusted to imply value, or even value from the point of reference of the customer because customers don't have perfect information. For example, my bed has slats and no box spring - if I got a 2500 dollar memory foam mattress it would be unusable in a week.

Case and point is liquor prices. There have been plenty of studies that if you price a $5 vodka at $15, sales will go up - because cheap vodka is for broke college kids so you have to get the good stuff.

This post was edited by dxlightning on Jul 25 2013 06:16am

That's the same for all cheap garbage. No one likes to buy cheap-low quality stuff. But since price is - to some degree - an indicator for quality, people fall for it... once. There's a reason why cheap booze is priced cheaply. They might be able to sell more if they raise the price, but not for long.

It's an indicator of manufacturing costs and demand, not quality. The only way that's true is SOMETIMES relative to other products in the same market. More often than not though it's steeped in pointless things that add no quality, like brand name or hype. Victoria Pasta sauce is 10 dollars a jar whereas Meijer brand marinara is literally the exact same recipe (their patent expired so meijer uses the EXACT recipe) and sells it for $5 per jar

I would never be caught dead saying price is a consistent indicator of either quality or value. You can slap the word "premium" on a package of pasta and price it 50 cents higher than "select" which is 25 cents above "natural" which is 25 cents above normal. People will buy it and continue to buy it because they perceive it to be better even though it isn't.

Humans are shitty at choosing "the best" and companies know this. That's why price is never a reliable quality indicator, because the people who set the prices know you think it is.

Well now we're arguing real value vs. perceived value. That's tough to do because you can't really measure either and in the end the only thing that counts is perceived value, since that's what leads to a buying decision or not. It's not like people are rational. We'd like to think we are...

From an economic perspective real value is all that matters. They're selling at equilibrium yes but equilibrium isn't optimal due to imperfect information. Perceived value is worthless if it isn't true value - I say again, you may think that 2500 dollar bed is the best for you, but if you wouldn't even try the "measly 800 dollar bed" which actually IS better, then you've just wasted 1700 bucks and sleep quality, not to mention you've reinforced that people will overpay more for memory foam just based on reputation. So from both a personal and overarching perspective, perceived value is harmful.

It's the opportunity cost argument. If you want to measure value as joy you get from consumption, wouldn't it be better to get more "joy" from a cheaper mattress and then use the extra 1700 for even more? Branding, hype, and buzz words prevent that from happening.

Tl;dr of my whole argument here - just because you think it's better doesn't mean it's better. And actually being better is what really matters.

This post was edited by dxlightning on Jul 25 2013 07:27am

You're talking to a marketing manager. If everyone would think like you I'd lose my job

Scourge of the earth but that means you know the buzz words and hype let you charge more for the same quality of product. You're basically ruining lives at your job

Well, luckily I'm working for a university. You could say that I am making lives better. And by "you could" I mean "you should"

Only if you're getting people to go to college when they otherwise wouldn't. Otherwise you're using marketing techniques to increase the perceived value of your college over other colleges

Plus if your college is like mine, only a small fraction of the tuition actually goes to investment in the students.

To be fair I'm not just digging at your job, all jobs everywhere kinda suck and are huge contributors to waste.

This post was edited by dxlightning on Jul 25 2013 07:44am