Re: Tiered pricing - a vendor's perspective

On Wed, 31 Oct 2001 13:12:15 -0500
 "Reeve Fritchman" <reeve@ltl400.com> wrote:
> there are thousands of instances of
> tiered pricing
> throughout the American economy.  A "quantity discount"
> is a form of tiered
> pricing, right?  Same product for less money.  The
> per-can cost is lower in
> a Pepsi 24-pack than in a six-pack.

Bad analogy.  I get more for less money with your example.
Or, I get less for more money.  Point of view.  A better
analogy would be charging a caffine addict .70 a can for
pepsi and charging the average joe who drinks 1 can a day
.50.  they both get the can of pepsi, but because one needs
more caffine, you charge him more.  It's highway robbery and
taking advantage of the fact he's a caffine addict.

With software, I get the same software, but because I have a
bigger machine than company x, even if company x is a bigger
company running a smaller machine, I pay MORE than company x
for the same software.  So the size of the company plays
virtually no part in tierred pricing (for software), only
the size of the machine does.  If bigger companies always
had bigger machines, then your argument would hold water.

If you want to talk support, maybe a 5mil shop has more
experienced personell and doesn't require help, because they
have experts inside.  A small show with a 170 and one
programmer may have to call several times a day.  It's all
relative, that's why support should be seperate from the
software purchase alone.

As you can see, it's all relative to your point of view, and
nothing is set in stone.  But tierred pricing assumes this
is not the case.  Combing the purchase of software and
support blurs this even more in the Vendor's favor.

Brad
www.bvstools.cm