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Is everything an art or a science? Is there anything else… can something be both? Can something be neither?
What about pricing. It’s an art, right? I’ve been trying to figure out if there is anything unethical about charging two different people, two different prices for the same product. I’m pretty sure it’s okay if the price of a product is simply the value of its results. So, if someone values product X a lot more than another person, shouldn’t you be able to price it higher. You are not taking advantage of that person, you’re simply raising the price because the value of the product has raised.
For instance, if you bought a piece of land for $5K and you wanted to sell it for $7K but someone offered you $10K, would you take the $10K?
Of course you would! Their is no difference. And a good price is a price that both the buyer and seller are comfortable with. If you can achieve that, what’s the problem?
There are art and science aspects to pricing … me thinks …
The problem is if you are trying to take advantage of somebody. If you know person A had 2 million dollars, and you charge him more because he has the money, I think that is wrong.
If you know that person A will make $X off the product, while person B will only make $Y, then I think it may be ok to charge A more money as it is more valuable to him.
The problem I see is how to accurately determine how valuable a product is to a particular client, but maybe thats just me?
Wrong? It’s business, what does it have to do with right or wrong? Just make as much money as possible, utilize every resource possible, and take advantage of every situation possible. Just don’t knock your own feet out from under you by creating an air of distrust. At the end of it all, when you’re a multi-millionaire with money to spare, do something positive, change the world for the better. Poor people in our society have a hard time makind a difference.
also, they have a hard time “making” a difference… hahah
So … companies can do no wrong? I beg to differ …
If you charge some customers more for a product than others (without a legitimate reason … the wealth of the customer is not a legitimate reason), then you, as the company, open yourself up to a couple consequences:
1. Customers realize they are being taken advantage of … and take any appropriate action they can (i.e. litigation, which is a big issue for a small company even if they did no wrong).
2. You touched on … the fact that customers talk, and if they feel they have been taken advantage of … it will get around and hurt you in the long run.
I would call the business practice of overcharging certain customers for an unfounded business reason “wrong” even without addressing the moral/ethical issues.
That said, if it is clear the software is much more valuable to one client than another, I think it may be appropriate to charge more.
But isn’t the price supposed to accurately depict the value to the seller? Therefore, the same product should be have the same price regardless of who the buyer is or what the buyer would use the product for?
You don’t see Microsoft offering variable prices for their software because certain people use it for different reasons … or differing amounts of value.
Two things
1. Charging two people different prices is not take advantage of eather one.
2. Microsoft does have variable prices for their different customers.
any examples of variable prices, Billy? I would be interested in seeing that.
If you’re in the microsoft network you get better pricing - also, they charge computer manufacturers different prices than they charge you for retail software.
But yeah, of course companies can do wrong - they can make a move which seems like it’s going to be profitable, but in the end undercuts their revenues. You could walk into the home of every customer you have and force them to give you a hundred bucks, which on paper looks nice - (customers x 100)=profit - but you just lost all your customers, because they’re sure not going to come back to someone that robbed them - hahah - this is an extreme example of course, but you see what i mean