Price variations

[MacLeod]

I am not sure being manufactured locally is neccessarily the reason for lower prices. I copied the diagram from an article that was complaining that Australian-produced Vegemite was dearer in Australia than it was Britain.

Well remember in the UK Vegemite would compete against Marmite, so a manufacturer might sell it at a reduced price so as to undercut the competition.

 

[RoJoHen]

American seem to get their Jack Daniels very cheap.

It probably helps that it's made here.

And that it tastes like shit, and so isn't worth paying much for.

Actually, now that I think about it, Australians love drinking in America because it's so much cheaper. Because of certain businesses in my area, we get a lot of international travelers, and one group in particular that shows up a lot are the Aussies. From what I've gathered from them, alcohol in Australia is both incredibly expensive compared to other places, and you don't even get as much in a single pour. They're always blown away by how "strong" our drinks are here in the US.

 

[MacLeod]

American seem to get their Jack Daniels very cheap.

It probably helps that it's made here.

And that it tastes like shit, and so isn't worth paying much for.

Agreed it tastes like swill. But to each their own.

 

[QuarkforNagus]

I am not sure being manufactured locally is neccessarily the reason for lower prices. I copied the diagram from an article that was complaining that Australian-produced Vegemite was dearer in Australia than it was Britain.

There are definitely companies who manufacture their products in Canada and still charge more for the item in Canada than they do in the States, despite the fact that our dollars are of equal value. Cars are a great example of this.

The truth is, Canadians are used to paying more than Americans. In simple terms, no company is going to charge you less when they can charge you more.

Canadians are also very used to taking every trip to the US as a shopping opportunity. I, personally, will be driving to the States to catch a flight at the end of July. Even including the costs of driving across the border and parking the car for a week, the airfare will be HALF the price of departing from Canada.

 

[MacLeod]

Tis true, companies will charge people the most they think people will pay for their goods or service.

For example if no one bought say an iPad, Apple would soon drop the price to stimulate sales.

 

[marksound]

I live in the US.

Young people tend to not believe me when I tell them that when I was about 20 years old I could buy 5 bucks of gas, a 6 pack of Bud, a pack of Marlboros, and get change back from a ten. And I'd drive on that 5 bucks of gas for a week.

I have customers in AUS and I feel bad when I quote shipping prices, but they don't even blink.

Tis true, companies will charge people the most they think people will pay for their goods or service.

That's how free enterprise works. Any product is worth as much as the market will bear.

 

[MacLeod]

Yes but some markets appear to be being charged more even if you factor into account local taxes and transportation costs.

 

[marksound]

Yes but some markets appear to be being charged more even if you factor into account local taxes and transportation costs.

Again, prices reflect what the market perceives the goods to be worth. Every profitable business charges for its goods what the market will bear.

If people won't pay the price of the product, the price eventually has to come down to a point that people will pay.

If a product won't sell for a price that covers the cost of production, payroll, R&D, etc., then it goes away. You can't make something and sell it for less than it costs to make it (unless you can get the government to subsidize your business with taxpayer dollars, but that's a whole 'nother topic).

 

[Owain Taggart]

There are definitely companies who manufacture their products in Canada and still charge more for the item in Canada than they do in the States, despite the fact that our dollars are of equal value. Cars are a great example of this.

Yep, very true. Good example. It drives me crazy. In general, we just end up paying more even if there isn't any logic to it. Your example about airfare's also a good one. Some people will drive across the border, leave their car at the airport and take a flight from Detroit simply because the airfare is that much cheaper and because Air Canada has a monopoly on flights in Canada.

 

[MacLeod]

Yes but some markets appear to be being charged more even if you factor into account local taxes and transportation costs.

Again, prices reflect what the market perceives the goods to be worth. Every profitable business charges for its goods what the market will bear.

If people won't pay the price of the product, the price eventually has to come down to a point that people will pay.

If a product won't sell for a price that covers the cost of production, payroll, R&D, etc., then it goes away. You can't make something and sell it for less than it costs to make it (unless you can get the government to subsidize your business with taxpayer dollars, but that's a whole 'nother topic).

I think we all understand how market economies work, and I made the same point myself. However that doesn't mean we can say we feel we are being over charged for something.

So let's say a product is sold for US$399 which would be around GB£266. Allow a little more for transportation and higher taxes and let's say they make it around GB£319. If it is then priced at GB£399(US$600) most people would agree that there is a perception it is being overcharged.

By dropping the price you might sell more at a smaller profit per unit, but because you are selling more you make more profit.

 

[Miss Chicken]

I think a good example of Australians being overcharged is the fact that we have to pay 52% more to download a song from iTunes than an American does.

Apple is saying that they are not to blame

Apple is not accountable for the higher prices of songs, movies, and TV shows sold through Australia's iTunes Store, because the owners of those intellectual properties are the ones to blame, according to Apple's vice president in Australia and New Zealand, Tony King.

The technology juggernaut often charges different prices for content on its digital media store in Australia, compared to the pricing on the same content in the US. At times, Australian consumers have had to pay more than double the prices for the same content that is available in the US.

Speaking at the IT pricing inquiry parliamentary hearing, King said Apple's hands are tied in relation to the pricing disparity because the company does not own the content, and currency exchange rates factor very little into the equation. Content owners charge different costs for licensing fees for the distribution of their intellectual property from region to region, and the costs are higher in Australia, he said.

Source

There is some debate about whether Australians who manage to open up a US iTunes account to get around geo-blocking are breaking the law or not.

Apple, Microsoft and Adobe hava all had to appear before the IT Pricing Inquiry. Their testimonies failed to impress.

 

[Bob The Skutter]

Yep, happens all over. I often think the only reason we're not in the Euro is so they can keep charging us more and we don't see directly how much more than other European countries we are paying.