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Tool Talk Discussion Forum

Marketing strategy...

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Dick2

01-02-2007 04:25:34




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It is common practice for manufacturers to sell certain products at cost and make their money later on replacement parts. It looks like that is the way cordless tools are going. Saw Hitachi 14.4 volt 2-speed driver with flashlight, 2 batteries and charger at Lowe's for $99. Went to the next aisle and saw that a single 14.4 volt replacement battery cost $60.




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kyhayman

01-03-2007 18:11:47




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 Re: Marketing strategy... in reply to Dick2, 01-02-2007 04:25:34  
Around 1900 King Camp Gillette dreamed up the idea of disposable razor blades. When he couldn�t sell the blades for as much as it cost to make them he had an idea to give away the handles. People who got them perceived them as being valuable�but only when fitted with one of Gillette�s blades. After a few months of blade sales, the cost of the handle was recovered and Gillette began to make a profit. Within a decade, Gillette�s company dominated the razor market and made its inventor extremely wealthy. Brilliant marketing strategy, copied many times over by everyone from welding rod companies, to printers, to drill makers.

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kyhayman

01-03-2007 18:09:25




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 Re: Marketing strategy... in reply to Dick2, 01-02-2007 04:25:34  
Around 1900 King Camp Gillette dreamed up the idea of disposable razor blades. When he couldn�t sell the blades for as much as it cost to make them he had an idea to give away the handles. People who got them perceived them as being valuable�but only when fitted with one of Gillette�s blades. After a few months of blade sales, the cost of the handle was recovered and Gillette began to make a profit. Within a decade, Gillette�s company dominated the razor market and made its inventor extremely wealthy. Brilliant marketing strategy, copied many times over by everyone from welding rod companies, to printers, to drill makers.

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RodInNS

01-02-2007 18:36:45




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 Re: Marketing strategy... in reply to Dick2, 01-02-2007 04:25:34  
And here I thought it was because all that stuff was made in China for next to nothing. Nearly all the power tools I've looked at lately are made in China. You might also find that the tool is about spent by the time the battery is spent, and buying the whole shot new is the best route.... On the other hand, their quality may be improving. I just got a 4-1/2" angle grinder the other day for 60 bucks, and it came in a combo pack case with 30 discs. I'll see how it lasts....

Rod

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Blue3992 (N Illinois)

01-02-2007 10:33:08




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 Re: Marketing strategy... in reply to Dick2, 01-02-2007 04:25:34  
Kind of related, but I've heard that Fast food places only break even on hamburgers. They make their profit on fries and drinks. Makes sense, considering you pay about 1.30 for a large drink, which is just water and a little syrup.

Also, Best Buy and the like have very thin margins on appliances and computers. They make their money on all of the little stuff (paper, ink, etc).



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Stumpalump

01-02-2007 08:36:29




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 Re: Marketing strategy... in reply to Dick2, 01-02-2007 04:25:34  
Scroll down a half page and check out CityFarmers post on Ridgid cordless tools with lifetime warrenty on the tools and batteries.



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john-mi

01-02-2007 07:13:09




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 Re: Marketing strategy... in reply to Dick2, 01-02-2007 04:25:34  
Sounds almost like buying printer ink for a computer. You can buy a new printer with ink sometimes cheaper than a set of ink refills for your old printer.



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NTP

01-02-2007 09:51:24




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 Re: Marketing strategy... in reply to john-mi, 01-02-2007 07:13:09  
New printers come with a "short fill" on the ink cartridges. For some reason, they don't want to give you a full toner cartridge. You are correct in that they will practically sell the machine at their cost and make their money on the replacement cartridges.



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RB/CT

01-02-2007 05:36:29




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 Re: Marketing strategy... in reply to Dick2, 01-02-2007 04:25:34  
Bought a Black and Decker cordless 14 volt on sale with Charger that is a radio, and one battery for $39 usually $89. Needed a second battery, they wanted too much for another battery so bought another drill, charger and radio for $39, think this was a good deal. Your right that is their marketing strategy.



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