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The price of non-things

Marketplace Staff Jul 18, 2006

TEXT OF COMMENTARY

TESS VIGELAND: The penny is not the only item facing inflation. The Labor Department reported this morning that prices at the wholesale level rose half a percent in June. That’s a bigger bump than analysts were expecting. Commentator J.D. Samant argues it’s not just the price of tangible things that’s going up.


J.D. SAMANT: If you think things are expensive, consider non-things.

Case in point: my gym.

Now, I’ve always felt there’s something, how shall we say? Extra . . . ordinary about gym membership representatives. I find them Svengali-like, these absurdly fit people who take my money once a year, always in a little room and always with a frightening conviviality

Anyhow, I called, and here’s how the conversation went:

-Regular membership is $70 a month, sir.
-Great, sign me up.
-Pro membership is $75.
-What’s the difference?
-Well, sir, Pro membership comes with parking.
-How much is parking?
-$2.75 an hour.
-Where do your regular members park?
-Nobody gets it.
-Gets what?
-Regular membership, sir.

Eureka! No wonder I had shriveled before membership reps. They were a breed of geniuses, all of whom were apparently graduates of the Vito Corleone School of Product Pricing.

Even better than an offer I couldn’t refuse, she’d made me a non-offer I could refuse by offering, both, the thing itself, and, a non-thing.

So. Inspired by the product pricing brilliance of gym membership reps, I’ve written memos to corporations.

To: Coca-Cola. Increase the price of regular Coke and call it Premium. Then, fill the shelves next to Coke Premium with regular Coke, which has a minor change, reflected in its new tagline: It’s LIKE Coke, But Without the Bubbles.

People will happily pay the extra 10 cents for the new thing because, hey, the thing is only a dime more than the non-thing.

Moving on, Memo to Boeing. How much is a 747? $50 million. OK, here’s how the gym people would do it. Increase the price to $70 million and call it the Plus, but continue offering the old 747 at $50.

I can just hear the sales pitch. “The 747? Oh, it’s great. It’s got everything the 747 Plus has, everything, except . . . wheels.”

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