Knife Market Elasticity

[DaveH]

I was just wondering somthing, and let me pick Spyderco as an example because I think most everyone is familiar with them. ( Or
think of benchmade if you prefer )

If Spyderco's end user price dropped 20%,
would you suddenly start buying more Spyderco knives? One or two more? A
dozen more?

At what percentage down would your "buy like h*ll" kick in?

Conversly, if Spyderco raised their prices 20% to the end user, would you lessen you buying and to what extent?

My personal opinion is that Spyderco, Benchmade and etc, has pretty much reached my price ceiling (despite famous maker collaborations).

I'll arbitrarily set that price ceiling as $100 for me.

Comments? Opinions?

DaveH

 

[Arizona]

If Spyderco or BM would drop their prices by 20% then I would probably buy one or two. People who's arbitrary price was set too low for a Spyderco or BM would all of a sudden be in the right range and purchase some.
While a lowering of prices from a production company is expected at some point (usually closer towards the end of a model run), a hiking of prices by 20% would need to be accompanied by a really really good explanation. Since we're not talking precious metals here with limited supplies and the production facilities, all the machines and patterns are already well established, I would see that as greed and quit buying.

 

[Griffon]

Lowering the price could also be seen as lowering the perceived quality, which means that those of use who only buy the knives we need and not those we want (well, I could be like that, couldn't I?) would instead use the available money for what we think is the best within the budget.

------------------
Urban Fredriksson
www.canit.se/%7Egriffon/

"Smooth and serrated blades cut in two entirely different fashions."
- The Teeth of the Tyrannosaurs, Scientific American, Sep 1999

 

[Arizona]

I could agree with that to a degree. If you've looked at say Spyderco for a while, picked one up, handled it at a show and wished you could afford one but couldn't, then should they all of a sudden be offered for cheap, you're familiar with the knife and would jump on it. If you've never seen one before and you see a table with Spydies for $20, you'd probably figure them for more of the Japan cheapies and wouldn't give them a second look.
The entire question was hypothetical. In reality, there would be a reason for an increase or decrease in price as drastic as proposed (+/-20%). And depending on the reason, you could deduct if the quality would have suffered or if you're just in luck.

 

[Flatscan]

Let's say that this sudden price change is accompanied by NO change in quality. Maybe all the heat-treating machines were hit by the Y2K bug (flashing 12:00 and refusing to run on Defrost) and suddenly the representative knife manufacturer must buy a whole new set of machines, sending the end-user price skyrocketing (for the bad scenario).

I would completely stop my purchases of the company's knives (mind you, I only would have bought one or two anyway) at a change as drastic as +20%.

An opposite drop of -20% would perhaps allow me to buy a single additional knife.

It's really difficult to respond to this situation because the effects to elicit any sort of significant response are ludicrous in their magnitude.

 

[Smoke]

Dave H, are you playing with the "Multiplier Theory" too?