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Old 02-03-2014, 09:50 AM
Roger Roger is online now
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Join Date: Dec 1999
Location: McMurray, PA
Posts: 5,786
echo, ... I see you continue to use the word "fair" in conjuction with pricing. But, what is missing is your definition of "fair." "Fair" is subjective. What customers are willing to pay for product/service is objective. "Fair" means nothing to the customer, only the final price. These princples apply, regardless of industry.

I see you ignored the JCP example. JCP was unable to continue to dictate prices, and was forced to remove the CEO and return to a customer-driven model. The model used at Apple would not work for JCP. Now, Apple is discovering their model is not working very well any longer. More and moe buyers are rejecting the price points of Apple products. Apple products once were unique, but have devolved into a commodity. Commodity markets work this way, and lawn services are a commodity.

In the lawn business, the LCO is unable to impose their will on the customer. In other words, the final decision ALWAYS resides with the customer. This is true for your ongoing example -- the customer accepted/rejected the first price, the customer accepts/rejects the first price + $5.00. Only when the payee accepts the proposal is there a business deal consumated. It matters not about previous business relationships.

If an LCO goes to a local mowing equipment dealer to consider a new ZTR. For the sake of argument, the dealer's price is $8,000. The LCO rejects the deal, but returns two or three more times to look more closely, talk with the dealer about a different price, but in the end, rejects the deal. The LCO buys the ZTR from another dealer (price is irrelevant). In other words, the LCO establishes themselves as a squabbler.

The next year, the same LCO returns to the dealer to consider buying a w/b. The w/b price on the tag is $5,000. The dealer looks at the LCO, who was a squabbler the previous year, and says, "For you, the price will be $5,500." The dealer thinks that because the LCO was a difficult customer the year before, he/she adds $500 to the price for the w/b. You can use the same example, but the item in question is a second ZTR, but the dealer applies the same principle -- up the price because the LCO had establshed himself as a squaabler.

Is the dealer right in adding the uptick of $500? In your model, yes.

In the end, the LCO (buyer) controls the transaction, either accepts or rejects.

Last edited by Roger; 02-03-2014 at 09:55 AM.
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