United States

For example, the prestigious brand Lacoste started in United States with prices below forty dollars, against tough competition that had there. But the low margins that had made him lose their quality, which sales fell, which he pushed to further reduce their prices in the year 2001, they gave a change to its policy and prices rose to more than seventy dollars, increasing its sales by 125%, and becoming a product with image of exclusivity, as in Europe. When considering the cost should also be taken into account the cost structure, i.e. the ratio between fixed costs (not dependent on the production and/or sales) and variables, and the marginal (of selling costs one more unit). For example, if a truck with 50 TVs I fleto, and said transportation costs me 500 euros, that transportation cost is 10 euros per TV. However, if I want to send an extra TV, as already do not fit on the truck, I ordered an extra that it costs 50 euros, and service by a single TV! (marginal cost). Another example is the air transport companies, which offer last minute deals. Why? For them, the cost of the trip is virtually the same if the plane carries 190 or 200 passengers.

Therefore, to fill their available capacity to the maximum, can perform this kind of deals (worth also for hotels, for example). The no less classic Coca-Cola offers a classic case of differentiation. Although the cost of production and distribution can be similar, it doesn’t cost the same in Mexico than in Spain, for example. But moreover, if I buy in the same city a can of 33 cl in a hypermarket, at a neighborhood store, buy automatic machine, or ask for it in a restaurant, I’m willing to pay different prices without any problem. Thus, in the hyper me can cost 0.80 and seem like a high price, and however in the restaurant I can pay 1.50, and say that it is cheap! Original author and source of the article.