A lie.
Actually, it might increase the demand.
That's a nice idea....but probably not.
The owner of the company I work for has this strange belief.....
As an example...we sell a product, and another company sells the same
product. The 'other' comany has been in this particular sector for a
loooong time. And we are just breaking into this market. The'other'
companies price is $1499. Our companies price is $1399.
If I had control of pricing, the price would be set @ $999. I know the
margins, the cost, the work, the whole she-bang. We've told him this time
after time. The price should be lower. And we're still over 100% profit @
$999.
But nooooo. His feeling is that even though ours has the exact same
features, and maybe even a little better performance, pricing it
significantly lower then the incumbent would cause people to shy away
wondering what's wrong with it, because it costs so much less than the
other companies. Hogwash we say. The lower price, IMO, would make
possible customers actually want to take a look at it and compare.
I mean come on, if you had been using a product for years on end, and are
comfortable using it, would you even bother to look at another product
that was only $100 cheaper ? No. But if it was substantially less
expensive, 40%, and these clients are usually gov't agancies w/budget
restraints, it would at least be worth a look.