21–30 of 144 posts
Most "premium" products costs are mostly Advertising, R&D, paying employees/shareholders, etc. They're valid things to spend money on, but don't reflect the "top quality ingredients" that consumers expect the money to be spent on. I suspect many consumers wouldn't like to know that the $1500 iPhone they just bought only has $400 worth of actual parts in.
Heh. Yeah 400 ;)
Most "premium" products costs are mostly Advertising, R&D, paying employees/shareholders, etc. They're valid things to spend money on, but don't reflect the "top quality ingredients" that consumers expect the money to be spent on. I suspect many consumers wouldn't like to know that the $1500 iPhone they just bought only has $400 worth of actual parts in.
I agree with the gist of this comment, but not the numbers. I don’t have sources to hand at the moment, but while Apple’s margins are notoriously high, they’re not that high. OLED screens are quite expensive.
https://www.counterpointresearch.com/bom-analysis-iphone-12-...
Most "premium" products costs are mostly Advertising, R&D, paying employees/shareholders, etc. They're valid things to spend money on, but don't reflect the "top quality ingredients" that consumers expect the money to be spent on. I suspect many consumers wouldn't like to know that the $1500 iPhone they just bought only has $400 worth of actual parts in.
I agree with the gist of this comment, but not the numbers. I don’t have sources to hand at the moment, but while Apple’s margins are notoriously high, they’re not that high. OLED screens are quite expensive.
[1]: https://www.counterpointresearch.com/bom-analysis-iphone-12-...
Most "premium" products costs are mostly Advertising, R&D, paying employees/shareholders, etc. They're valid things to spend money on, but don't reflect the "top quality ingredients" that consumers expect the money to be spent on. I suspect many consumers wouldn't like to know that the $1500 iPhone they just bought only has $400 worth of actual parts in.
Most "premium" products costs are mostly Advertising, R&D, paying employees/shareholders, etc. They're valid things to spend money on, but don't reflect the "top quality ingredients" that consumers expect the money to be spent on. I suspect many consumers wouldn't like to know that the $1500 iPhone they just bought only has $400 worth of actual parts in.
Most "premium" products costs are mostly Advertising, R&D, paying employees/shareholders, etc. They're valid things to spend money on, but don't reflect the "top quality ingredients" that consumers expect the money to be spent on. I suspect many consumers wouldn't like to know that the $1500 iPhone they just bought only has $400 worth of actual parts in.
I'm willing to buy a $1500 phone w/ $400 in parts because it has a better user experience than $150 phone with $50 worth of parts.
"People said they were 14.2% more likely to buy this chocolate bar when they were shown the version with a cost breakdown." What people say they would do and what they actually do are 2 very different things. The conversion rate of actual behavior needs to be tested for this to mean something useful.
It’s been a while since I worked retail but unless something has drastically changed most people don’t read product packaging very closely. I would constantly have people walk up to me with an item and ask a question that was not only clearly answered on the package, but the information was _highlighted_ for them. I just don’t think most people would even notice the cost breakdown let alone read it and think about wh…
Most "premium" products costs are mostly Advertising, R&D, paying employees/shareholders, etc. They're valid things to spend money on, but don't reflect the "top quality ingredients" that consumers expect the money to be spent on. I suspect many consumers wouldn't like to know that the $1500 iPhone they just bought only has $400 worth of actual parts in.
A better example might be a luxury brand wallet where they sell the illusion of better quality, but that may or may not be true.
"People said they were 14.2% more likely to buy this chocolate bar when they were shown the version with a cost breakdown." What people say they would do and what they actually do are 2 very different things. The conversion rate of actual behavior needs to be tested for this to mean something useful.
It’s been a while since I worked retail but unless something has drastically changed most people don’t read product packaging very closely. I would constantly have people walk up to me with an item and ask a question that was not only clearly answered on the package, but the information was _highlighted_ for them. I just don’t think most people would even notice the cost breakdown let alone read it and think about wh…
Most "premium" products costs are mostly Advertising, R&D, paying employees/shareholders, etc. They're valid things to spend money on, but don't reflect the "top quality ingredients" that consumers expect the money to be spent on. I suspect many consumers wouldn't like to know that the $1500 iPhone they just bought only has $400 worth of actual parts in.
But that reflects an ignorance of how cost accounting works. Sure, it might include $400 of parts, but a hell of a lot of R&D, equipment, labor, and overhead are amortized into that phone. A very cursory look at Apple's latest income statements shows that the net profit margin on their revenue is about 20%, meaning that the phone's actual cost to produce is somewhere around $1200 (assuming a $1500 retail cost).
"Yes Maaam, we'll spend $200 of the money you're about to give us on a fancy campus with hammocks to try to attract good engineers. Oh, and the massive billboard outside that made you walk into the shop in the first place."