You have to hand it to technology companies - they hire smart people, in almost all facets of their business. Why do I say that? Well, if you think how much cool technology has been introduced in the past three decades, it's been quite breathtaking. MP3 players, iPhones, Blackberrys, organic LED TVs and thousands of other amazing technologies. But it's not only their scientists and designers that are smart. Their marketing staff are shrewd as well. Consider the strategy by printer manufacturers. They sell you an all-in-one multi-function printer for less than $50, so that you can scan, copy, fax and print with one compact machine - brilliant. Buy a computer, and usually they'll throw the printer in for free or a ridiculous price that you can 't refuse. I've seen brand-new ink jet printers selling for less than $20!
What they don't tell you, and as astute consumer we should be wary of before we purchase, is the rate of toner/ink use and the replacement cost. I have one of these Epson all-in-one machines that cost less than $60, but whose four-colour replacement cartridges cost over $60. True, you don't have to replace all four at the same time, but they do diminish at a fairly equal rate (unless you print primarily in black only and in draft mode format). Your option is to take your empty cartridges to a toner refill kiosk where you can refill the empty cartridges at about a third to half the regular cost of buying the brand name replacement cartridge. So, the consumer's dilemma is whether one should buy a brand new printer which is about the same price of the replacement cartridge, but then you have to reconfigure your computer, install the printer drivers and then get rid of the printer. Throwing it in the garbage makes you feel guilty (from an environmental perspective) , so you just grudgingly buy the cartridge. Smart .... and sneaky. What would I do? I have purchased refill kits from eBay and successfully topped up my cartridges. However, it can be a messy affair.
Even sneakier was when IBM introduced their cheap Laser Writer 'E' low-end laser printer. In Tim Harford's book, "The Undercover Economist", he relates how the 'E' was almost identical to the more expensive Laser Writer, except they installed an additional chip in the 'E' to slow it down. Those who wanted a laser printer but were extremely price-sensitive would buy the 'E' anyway, but others would pay the extra to get the faster model, even though they were almost identical. It was cheaper for IBM to adopt this strategy than to design two completely different printers. Ironically, it was actually more expensive to produce the cheaper machine, as they had to spend time disabling functions on the chip to slow it down. It is not unlikely that technology equipment reviewers, salespersons and even friends and colleagues would recommend that one buys the faster printer for a few dollars more. Those few extra dollars go straight to IBM's bottom line profit. According to Hardford's book, Intel has also done this with some of their processing chips, as has many software companies. Consumers seem to have an aversion to buying the cheapest or 'base' model of anything, so when confronted with a lower 'Celeron' chip versus a 'Pentium' chip, one might tend to move up a little as insurance in case you need the extra processing power when most people probably don't. Now it's the battle between Dual Core and Core2Duo processors - confused? Same goes with Microsoft's Vista Home Basic versus Vista Home Premium. The majority of users only make use of the basic operating functions, but most will buy the upgraded software. This is little different to upselling you find at restaurants and movie theatres - "would you like fries with that?" or "Can we supersize your fries/popcorn order - it's only an extra 50 cents?" - all of which goes to the company's bottom line.
As with much advertising and retailing, the consumer is confronted with their insecurities and fears. That is that one thinks they need more power/capacity than they really do. Hmm.... what will I do if I am faced with a situation where I would need to print documents at 6 ppm (pages per minute) but my printer can only spew out paper at 4 ppm? My advice is that every consumer should understand what they want the product to do for them the majority of the time, to do some reading or research before they buy, ignore the marketing noise around them and stick to their budget.
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