1 edit | Put simply The cellphone companies wanted to avoid the sort of price wars that occurred a decade earlier in the long-distance market. So they decided to compete by offering distinctive goodies that cost little, yet had a lot of customer appeal.
This is annoyingly apparent in so many industries when competitors offer disparate options or terms to hinder value comparisons. No surprise that industries resist the commoditization of their products.
The risk adversity point was astute. Expect consumers to make an uneconomic decision based on an emotional appeal.
PUT simply, all a phone company wants is to get as much money as possible each month from its customers. Then it hopes that this total is more than its costs. I doubt the WSJ would bother point out the misperception that there is a relationship between price and cost to its subscribers. |
