"Leon" wrote:
"Dave Balderstone" wrote in message
stone.ca...
Waste is factored into the price of EVERYTHING that EVERYBODY f'ing
markets.
I see your point, I think you are missing my point. There are hundreds of
cost factors that go in to determine the price of something you will buy.
THIS METHOD OF MARKETING however points out to the consumer one of those
"wasteful" cost factors and throws it in the consumers face. When the
buying public sees such an obvious fixable waste on an item that he may
consider buying he should be insulted to think that this type marketing has
picked him to be the dummy thinking that he will not not realise that he is
the one paying for those that do not pay.
Once again, you are assuming facts not in evidence. I am not saying
that you are wrong, just that I see no evidence that you are right.
Let's work a little example:
Assume that the fixed cost for the book writing, editing, graphic
design, setting up the presses, etc. is $200,000.
Assume that marginal printing cost is $5 per book (cost of paper, ink,
electricity, postage)
Assume they target 100,000 customers with their marketing campaign.
Scenario 1: wasteful (according to you) approach:
Print 100,000 books
Total cost: $200,000 + 100,000*$5 = $700,000
Hit rate from this approach 50%
Paying customers: 100,000 *.5 = 50,000
Cost per paid-for book: $14
Gross Profit if sold for $20 per book: 50,000*($20-$14)=$300,000
Scenario 2: more economical (according to you) approach:
100,000 letters sent
Hit rate from this approach 20%
20,000 books printed (NO WASTE!)
Cost: $200,000 + 20,000*$5 = $300,000
Cost per book: $15
Gross profit if sold for $25 per book: 20,000*($25-$15)=$200,000
So with the waste-free approach in this example, even if the publisher
raises the price by $5, he makes less money!
Note that I am NOT claiming that these scenarios are close to the real
thing--I am just pointing out that there is not enough info here to
accept your theory that their approach leads to higher costs for the
book buyer.
And I have a sneaky suspicion that if I were in the publishing
business, I WOULD know these costs and response rates, and would use
the approach that would generate the best return.
--
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