We've been talking about “pricing failure.” (See last post for an introduction.)
The opposite of “pricing success”, a “pricing failure” bursts on the scene when there isn’t a clear correlation between an item’s cost and its value/quality. It reminds me of a serious pricing failure, one I witnessed in the educational marketplace. Yes, I remember it distinctly, during the years of the initial stereo 3D explosion in film, displays, and projectors. A top-level manager from the DLP group at Texas Instruments whispered to me the hard truth: how the pricing set forth by just one or two educational 3D software producers was so rapacious, that those companies almost brought down the entire 3D industry/market in education—by steeply overpricing their content. I was there. I saw the gut-wrenching reaction of educational buyers. The pricing was, well, ridiculous. And this is still true about many promising technologies in education. Pricing failure is more common than one would think.
Stay tuned for next week's conclusion about the potential for pricing failure in the expanding virtual reality world.