The cost of Upgrades: Bait-and-Switch and modified Bait and switch pricing Tactics

Picture Courtesy Pixabay.com

In 1987, I was marketed electronic typewriters, sold in 14-inch and 17-inch carriage sizes. The product lineup we marketed was as follows:

1. Network 400, 14-inch carriage size: Basic electronic typewriter that functioned like a manual typewriter. Its advantages included replaceable daisy wheels for font changes and a correction facility. Cost: Rs 9,990/-

                    Picture Courtesy: Pixabay.com

2. Network 401:  An upgraded model that had a small 20-character LED display. Cost: Rs 11,990/-

3. Network 411: This model featured a one-line display and 8KB memory, allowing users to store standard letter formats. Cost: Rs 13,990/-

4. Network 431: Same as the 411 model, it had 32 KB memory but priced higher at Rs 15,990/-

Now, one might ask, what's the big deal? The big deal is that the chip controlling the display and memory was the same across models. In the lower-end models, the display was simply disabled. And for those models that offered memory, the cost difference between an 8KB chip and a 24KB chip was marginal—perhaps Rs 500/- at most (considering 1987 prices).

The Pricing Tactic: Customers were led to pay increasingly higher prices for incremental feature enhancements. During demonstrations, the salesperson would often showcase a higher-end model with a display, bold facility, and memory. However, if the customer ended up purchasing the basic Network 400, they would receive a simpler typewriter—one without bold typing capabilities.

Some customers may have felt disappointed, but they never explicitly asked if the Network 400 had bold typing. Since they didn’t ask, salespeople remained diplomatically silent.

The E-Commerce Parallel: A similar modified bait and switch happens on e-commerce platforms today. For instance, a Facebook advertisement may display a Timex watch for Rs 1,285/-, but upon clicking, the actual product page would list it at Rs 1,956/-—an increase of almost Rs 700/- (over 50%).

This kind of pricing deception creates false expectations, luring customers in with an attractive price—only for them to discover the real cost later.

Keywords: Hidden costs, Marketing tricks, Deceptive E-commerce pricing, Selling tactics, Product differentiation, False advertising, Customer perception, Pricing deception. 

Planned Obsolescence and Pricing Tricks: How Companies Make You Spend More

Planned obsolescence is a widely discussed strategy in which companies deliberately design products with a limited lifespan. Over time, these products lose their utility and eventually stop functioning, forcing consumers to purchase replacements. The companies' goal is to ensure that customers buy their brand again instead of switching to a competitor.

One famous example is the original light bulb, which is said to have lasted over a hundred years. Light bulb manufacturers quickly realized that their business model was flawed, leading to the production of bulbs designed to last only a few years. Similarly, LED bulbs, initially marketed as having a lifespan of 20,000 hours, often fail within a year or two. When questioned, some LED manufacturers blamed low-quality radiators, usually sourced from China, for their premature failure. Consumers prefer cheap LED bulbs, even if they last only a couple of years, rather than paying ten times more for a long-lasting alternative. As a result, functioning LED chips are discarded, contributing to global e-waste.

Let’s discuss how companies compel consumers to make purchases, either due to a lack of choice or through subtle manipulative tactics:

Non-replaceable Batteries in Mobile Phones:

In the past, mobile phone batteries could be replaced when they lost capacity or took too long to charge. Today, batteries are integrated into the phone, making it impossible for consumers to replace them easily. If a battery fails, users must replace the entire phone. This is akin to buying a $100 quartz watch and discarding it because the $1 battery inside cannot be replaced.

2. Price Discrimination Based on Device Type:

Reports suggest that ride-hailing apps, e-commerce platforms, and quick-commerce services charge higher prices to iPhone users than to Android users. The underlying assumption is that iPhone users are more affluent and willing to pay a premium for the same services.

3. Surge Pricing Based on Battery Life:

Research has indicated that ride-hailing apps display higher surge pricing when a user’s phone battery is low. The assumption is that users with low battery life are more likely to book a ride immediately without comparing competitors.

4. Differential Pricing in Quick-Commerce Apps:

Quick-commerce platforms like Zepto have been observed engaging in deceptive pricing practices. The same product may be priced differently when viewed from two different mobile devices. A regular customer might see a higher price, while a new customer is offered discounts, cashback, and better deals. Traditional marketing strategies emphasize rewarding loyal customers, but quick-commerce apps focus on new customer acquisition and boosting brand valuation. This approach benefits companies seeking to increase their market valuation ahead of an IPO.

These tactics highlight how businesses prioritize profits over consumer interests, often at the cost of fairness and sustainability. 

Keywords: Planned Obsolescence, Limited lifespan, Replacement purchases, Light bulb longevity, LED failure, E-waste, Non-replaceable batteries, Mobile phones, Price discrimination, Device-based pricing,  Surge pricing, Battery life manipulation, Quick-commerce apps, Differential pricing,  Customer loyalty, Market valuation, Consumer manipulation, and Sustainability. 

General Concepts: Planned obsolescence, Consumer manipulation, Product lifespan, forced upgrades, Market strategy, Corporate profit, Consumer spending

Industries:  Light bulb lifespan, LED bulb failure, Mobile phone batteries, Non-replaceable batteries, Quartz watch analogy, E-waste crisis, 

Pricing Strategies & Tactics:  Price discrimination, Device-based pricing,  iPhone vs. Android pricing, Surge pricing, Battery-based pricing, Ride-hailing apps, Dynamic pricing, Quick-commerce platforms, Zepto pricing