Sunday, July 20, 2014

Confused pricing

I am sure everyone of you has come across those “souvenir photos”. The kinds that are taken before you go into a world famous attraction or the ones that are taken on top of a roller coaster just when you make your most horrible scared faces. These photos are definitely memorabilia taken at strategic places many a times by semi-professionals. Most photos are nice enough to be “considered” to be bought.

However, they are priced at ridiculously high-prices. The logic is – if you like them enough, money shouldn’t be a problem. And then, you are also covering the cost of all the other people who made a conscious decision not to buy the photo. So in a way, every photo that is purchased ends up covering the cost of 10-15 other photos that are not bought and a partial amount of profit. This might be a good business model when it was invented.

These days however, with everyone having cameras and with the proliferation of digital imaging technology, the cost of actually taking a photograph is minimal. Consequently the “value” associated by consumers with a single photograph is ridiculously low. However human beings are still souvenir hunters.

I believe that if the prices of those photos are cut down by 80 odd percentage, many more people will buy them. The cost of production of each photo anyway is ridiculously low. The current high pricing is to cover the cost of the wasted photographs. With a drastic price cut, the increase in volume should more than cover the drop in per unit revenue.

So says the wise Girish. May be a case of sour grapes. But well, definitely worth a try!

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