by bleach168 » Sat Nov 19, 2005 7:55 pm JTWood wrote:bleach168 wrote:The answer is that pricing sends a signal. People have come to believe that “you get what you pay for.”
This phenomenon is unique to american consumers. People in other countries aren't so lazy.
Really? I'd like to read more about that. Do you have any links that you can give me about this dichotomy?
Here is an article about how a gaming company has to market their product differently in America and South Korea. Here is the relevant part,
The Retail Question
Where does retail distribution come in? Garriott says, "The answer to that is different depending on what market you’re looking at. If you’re looking at the US market, retail is critical. However, if you look at Asia, it’s very unimportant. As a mater of fact, there’s no retail for MMP games in Korea, because retail space never developed in those markets.
"If you look at the US market, it’s very important, but for different reasons. The retail space is a great place to do marketing. It lends credibility to your product. Our model in Korea is to give away the client, and then charge a subscription fee, and that subscription fee is much higher than it is in the US. A product like Lineage has a $26 a month subscription fee in Korea. But you get the client for free. In the US we tried to actually give away the client, but there’s an interesting dynamic, or difference in culture between the US and Korea."
Garriott continues, “In Korea, if you go to a customer and say ‘I want to sell you a product, and then charge a monthly fee,’ they say, ‘You’re crazy. Why would I buy a product?’ In the US it’s actually the opposite. If you go to a customer and say ‘Here is a free product, I’d like you to try it and then pay me a monthly fee.’ Most Americans say, ‘The value of this product is exactly what I pay for it.’ So when you give it to them free, they think it’s worthless."
"From our market research and studies, if we sell them the product at retail, they like the product more, they have more value to it, they think it’s worth what they paid for it, and they try to get that value back on the computer, learning about the game, and then they have a higher chance of paying a subscription fee afterwards.
"In the US retail is critical,” Garriott concludes, “And it’s going to continue to be critical, just by the nature of our culture. I think we’ll have more online downloads and direct online selling. Of course it’s going to become bigger, and more prevalent, but retail is always going to be a critical part."
Link
. I just really believe that Music companies see an opportunity to cash in big and it's a smart (economic-wise) move and people might be suckered into it. I remember when Apple first came out with their .99 model and I thought it was rediculous, but people started warming up to it. I can see people warming up to a 2.50 model as well.
