Thursday, June 2, 2011

Why do prices vary so much for similar products?

Have you ever wondered how there can be such major price differences for similar products from different suppliers? We get that question quite often and the answer is very difficult to answer. Consider the following examples.

I recently needed a new clothes dryer and went to Sears. I was surprised at the range in pricing considering that they all do the same thing. (dry clothes) The least expensive option was only $319 while the most expensive unit was over $1,500. How is this possible? Who would pay $1,500 for a product when there is a competitive option for only $319? (I bought the $450 option by the way.)

Obviously the same scenario plays out every day at car dealerships across the country. You can buy a new car for as little as $14,000, but most people spend between $25,000 - $35,000 for their new car and many people spend $50,000 - $60,000 or even more for a new car. Why?

There are many reasons that there are such a wide gaps in price ranges for cars, appliances and of course trade show displays. The main reason is quality. We all know that quality matters, but how do you compare and put a value on quality? Considering that almost everything comes with a warranty and usually all options (even the cheap ones) have a minimum quality standard that is "good enough." So why does anyone ever spend so much more for similar products when dramatically less expensive options are available?

Is it brand? Does marketing really hypnotize us to spend our money foolishly? Is it service? Maybe. I know that I am willing to spend a little more for excellent service. How about features? Oh yeah, now I'm seeing it - its features. We need to have those power windows, leather seats, and satellite radio right?

Features really are the most logical reason for price differences. That $1,500 clothes dryer was red bright and it was as shiny as a new car. It also had a big circle glass door and a chrome handle - plus a digital display and 32 different temperature settings. Wow!

In the trade show display industry "features" include reconfiguration options, portability, and of course design styling. But what happens when someone "knocks off" a unit that includes all the features, but it is simply made with less expensive components and materials? That's where quality comes back in to the equation.

CDS Displays offers a good quality economy retractable banner stand display for $299. A similar unit from the top "brand" name sells for nearly $600. You can also buy similar display stands online for as little as $99. What would you do? We would love to hear your feedback on this. We know it is entirely possible that the $99 stand may be good enough for some people. We also know that very many people buy the $600 units.

So why do prices vary so much for similar products?
 Please comment - we want your opinions on this topic.