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That'll be two hundred bucks in the UK, then.
How, as a global community, are we supposed to cut down on aviation emissions when idiot marketers promote an identical brand new product for half the price just a transatlantic hop away?
So the way I see it is a maximum of $62 or £31.5 difference if you take sales tax or VAT out of the equation.
I'm a poor U.S. student studying in the U.K. and have seen the exchange go from $1.60 to $1.96, that's a lot of money when tuition is close to £10k.
Equalising affordability per sale in different economies is the fairest pricing method.
Why should a business be concerned with the economic condition of their customers when they have no responsibility or ability to control/improve those conditions? Their sole concern for the thickness of the customers' wallets should be limited to calculation of optimised price at which they can maximise profit. If they aren't doing that they are failing in their duty; sack them and appoint some proper businessmen.
[edited by: lawman at 8:34 pm (utc) on Feb. 1, 2007]
Why should a business be concerned with the economic condition of their customers...?
Most businesses wouldn't be. Even if one holds businesses in quite high regard, one probably wouldn't imagine them to be that imaginative. The "bigger picture" of most businesses tends to end with forecasts of their own future expansion.
However there is a theory (I won't get into it here) that when products are priced according to the maximum sustainable level of customer affordability rather than "what the market will bear" everyone benefits. (Lower margins for the company though - that's heresy, isn't it?!).
A goal of affordability is unsustainable.
Eh? I'll be the first to admit I don't know much about business (see above). But I suspect that making your products unaffordable (you appear to be discounting other options) would quickly lead to a shrinking business. Unaffordability would certainly lead to an unsustainable business model. I'm confused as to why you think affordability would do.
My point was not about just "affordability" - it was about equal affordability - that if you're going to introduce fairness into the discussion, then the only way to keep things truly equitable is to have a given product representing the same amount of purchasing power in each economy.
That is to say: $100 is affordable for the US consumer, £100 is affordable for the UK consumer. But if you want to be fair about it then the price of the software should represent the same percentage of the average take home pay in each economy.
However, I think fairness is a red herring.
My original point is that people aren't stupid and as soon as they find out that an identical product is half the price in one country than it is in another this will inevitably contribute to a rush to buy that product in the first country. So it's marketing idiocy.
The EULA for windows is country restrictive? Isn't that a bit preposterous in an age where people live in one part of the world, holiday in another, have business meetings in another and second homes in yet another? Does anyone care about the EULA?
Does anyone care about the EULA?
For a start, you are asked to agree to it after you have purchased the software. I can't see how there is enough consideration for it to be a binding contract.
Secondly, Microsoft hasn't taken even the most basic technological steps to ensure a reasonable amount of time is spent reading the EULA. Given the current length of a EULA it will take at least 10 minutes, without the time required to look up and read the other documents referenced.
The only was I can see the EULA working is if the salesman in the store is made to read it out to you (or you to read it out to the salesman), for you to sign it, him to witness it and then for you to pay for the software.
How does this rational consumer choice adversely affect UK shops and businesses who would otherwise like to sell the Vista upgrade but find that their UK customers have all ordered it from US online stores instead...
...or else that the customers have decided that the transatlantic trip wedding anniversary trip they were going to rethink for environmental reasons, might as well take place anyway if they stand to make huge savings like this when they go shopping in NYC.
Is Microsoft out of its mind?
1. the reason cited by most manufacturers for higher prices in the UK than the US is that the US volumes are so much greater that there is an economy of scale in production. Couple this with lower US distribution costs and you have a valid reason for a difference. The reason the difference is so much greater than it should be is that we stupid Brits are prepared to pay it. Let's be honest - nobody in the UK actually needs Vista so if we all don't buy the blooming thing the price will eventually tumble. I'm still using w2000 pro and prefer it to XP so I would have to be beaten with sticks before I'd consider an intrusive, over engineered operating system like vista. Let the other mugs try it for a year or so and then take a view when a few of the bugs are sorted.
2. Affordability obviously means different things to different people. As a marketing man of many years experience my objective is always to supply the market with a product that meets their needs at a price they can afford to pay. Any other approach is doomed to failure. If your cost are too high and you can't do that move on to something more worthwhile.
If the EULA is impotent,
if you want to be fair about it then the price of the software should represent the same percentage of the average take home pay in each economy.
The "bigger picture" of most businesses tends to end with forecasts of their own future expansion.
that when products are priced according to the maximum sustainable level of customer affordability rather than "what the market will bear" everyone benefits.
Widget A priced at £40 ** estimated sales = 2,000 ** estimated profit = £60,000
Widget A priced at £50 ** estimated sales = 1,600 ** estimated profit = £62,400
Widget A priced at £60 ** estimated sales = 1,200 ** estimated profit = £57,600
Widget A priced at £70 ** estimated sales = 1,050 ** estimated profit = £59,850
Assume cost of production varies slightly based on quantity (and while scale makes things cheaper ... in highly regulated environments that's not necessarily the case). The company will choose to go with a price of £50 though that figure doesn't relate to highest quantity of sales or, indeed, highest cost. It chooses the price of £50 because its research suggests that it will make more profit at this price than any other.
I'll be the first to admit I don't know much about business
Do I think it's a fair price? No, because it's a product I feel I can live without and it's therefore worth less than £1 to me. I have a simple choice: I can choose to not open my wallet. So do you. And as long as you have that option there's little to moan about. Whatever the item you're looking to buy - if you feel it's a con then don't buy it but do quit moaning.
This is about Microsoft as a global company selling identical products for vastly different prices in two different markets where consumers in one market can very easily buy products in the other market. It's a marginal pain for consumers who would prefer to buy on the high street to order online instead, but in general it's not too much inconvenience for the consumer.
It hits UK-based high street and online merchants hard though.
And it makes the Microsoft pricing department look like a bunch of arrogant idiots who think their UK customer base are too stupid to shop around.
I don't expect most companies to even attempt to act in a fair manner ....
The sad thing is generally we are too stupid to shop around.
The sad thing is generally we are too stupid to shop around.
I always shop around but in circumstances where certain companies hold a virtual monopoly this is not an option.
Microsoft knows our pain barrier. They know we are suckers and are addicted to their product. They also know that if they charge £10,000 per licence most people would try to use pirated copies.
Yes, and this applies equally in the US and elsewhere. This has nothing to do with the subject of the thread, which is effectively about prices in the UK being artificially high.
The real problem is not about taxation shipping or distribution costs. How can it be when the same rules apply to download prices and Paypal charges, etc?
No, the only way this will get sorted is if enough people make enough noise about it. This is what happened when car prices in the UK were being rigged a few years ago. People started buying cars abroad and as soon as some entrepreneur is smart enough to circumvent the methods that prevent us from buying software abroad this will also change.
I don't know whether the reason why MS didn't cover their tracks on this pricing discrepancy is down to stupidity or arrogance, but either way, unless you work for MS, I don't think there's any point in going around trying to justify it.
I just checked on amazon.de and the same product appears to be selling for €99 ($128). If you're right about your "pain barrier" theory perhaps all cross-border US software merchants should stop re-pricing for different markets and simply exchange the dollar sign for the local currency symbol?
I think only time will tell whether Bill and the rest of MS have actually pulled off a successful launch here.
LOL. It was successful before it was launced. You'll buy Vista. It's only a matter of time. In a few years when you need a new computer if you call a PC manufacturer and try to order it with Windows 95 they'll die laughing.
The rate of uptake, the ratio of retail copies sold vs OEM, the date at which support and security updates for XP can be dropped altogether to force higher uptake of Vista have all been carefully researched and analysed. Bill has all the charts. He also has order commitments from the MS disties and OEM volume licence commitments with the Dells etc. He already knows how many copies he's going to sell at the current price. Ka-ching!
I'm not trying to "justify MS". You've admitted you know very little about business. I'm no expert but I have run various businesses over the last few decades, I've bought and sold them, I've started and closed them, and I'm trying to explain how I see things working.