Things I Learned on Vacation

There’s nothing like a trip to a place that’s heavily into tourism to validate the law of supply and demand.  For example, the price of a gallon of unleaded gasoline in Branson, MO is as much as 40 cents/gallon more than it is just 30 miles north in Ozark, MO. 

When people go on vacation, they seem to lose all consciousness about what things are supposed to cost.  Or maybe they just don’t care.  It’s only once a year and they’ll worry about the bills when they get home.  When was the last time you bought one of your kids a pop-gun or a hill-billy hat?  Under normal circumstances the answer is probably "never".  For that matter, most kids wouldn’t normally be caught dead in a hill-billy hat.  Yet you see kids and even some adults proudly sporting a pointy felt hat with a corn cob pipe sticking out of the side all over town when you’re on vacation.  You just know that hat will never again see the light of day once the wearer gets home.   The same  can be said about coon-skin caps, cowboy hats, and baseball caps with all kinds of odd sayings on them.  And, don’t forget the T-shirts.

If some band you’ve never heard of shows up in your town and charges $50 a ticket to see them, most normal folks will pass.  But the tourists line up to get those same $50 tickets to see that same unknown band and are happy to get in.  Don’t get me wrong.  There are some very good entertainers in Branson, people you have heard of and would gladly pay top dollar to see wherever they are.  But there are also some no-names who seem to do quite well.

Nobody in their right mind would pay $8.00 for a beer or $7.00 for a soda……unless they were at a Major League Baseball game.  Then, the sky’s the limit. 

The point is that value, like beauty, is in the eye of the beholder.  The retail value of anything is exactly what the customer is willing to pay, no more–no less.  And sometimes, price is no object, like when you’re on vacation.  But, it’s not just vacationers who make these decisions.  Every consumer does it every day.  Our job is to determine what that value is and price our merchandise accordingly.  Cost-plus pricing was fine in our grandparents, maybe even our parents, day.  But if you use it today you’re losing sales some of the time and leaving money on the table other times.

Some time back we did a series of posts on pricing.  If you missed them, or if you’d just like a refresher course, look for the "Categories" section in the right-hand column of this page and click on "Pricing".  If you have any suggestions or additions, please let us know.

By the way, is anyone interested in a slightly-used hillbilly hat or a pop gun?  If so, let me know.

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