Mr. Wheelan writes that according to the demand curve when
the price goes down more people want the product. When I read the sentence I
remembered walking in la Fayette in Paris and just out of
curiosity I wanted to see the most expensive clocks that they were selling. I
found one for 150 000 euros. They were all filled up with Diamonds. You could
not even properly see the second hand. One then wonders where is the utility
from such a clock. However people are still buying these expensive products.
Some people are even buying them just because they are expensive. A Slovakian marketing
guru Mr. Brosman, said a story of a person selling glasses. He bought normal
price sun glasses from Italy and tried reselling them in Slovakia. However,
after two months he sold one item. He thought that the business is over,
because no one wants to buy his glasses. But the problem wasn’t in the glasses,
it was in the price of the glasses. Slovaks were willing to pay for glasses in
3 price ranges: 1. Cheap (100-500 SK), 2. Middle (500-2000 SK) and 3. Expensive
(7000+ SK). His price for glasses was 3000. It was out of each range. It was in
a gap, where people would buy it because it wasn’t luxuries neither in the
range for normal middle glasses. After the failed two months, he called to
every store and told them to raise the price to 7000 SK. The glasses were sold
in 2 weeks.
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