Forum Discussion
mkirsch
Feb 24, 2016Nomad II
Consider that most likely, Livin' Lite had money troubles. If they were solvent and profitable, they never would have sold out to a large manufacturer like Thor.
Like pretty much every company in existence, Thor is in it to make money. They are not a charity. A division has to make a certain margin, or it has to be closed down. They are not a charity. They are not in it to break even.
To make their new division profitable, Thor has two choices:
1. Raise prices.
2. Reduce costs.
Decades of data from the business sector shows that #1 just doesn't work. People won't tolerate any more than small incremental price increases, no matter how legitimate, justified, or necessary.
The buying public by and large doesn't notice cost cutting measures, and even if they do, are more accepting of them than price increases.
This is why you see things like 3-pint "half gallons" of ice cream, and 12oz boxes of cereal where they used to be full pounds. Costs went up big time, but the buying public DOES NOT CARE. You're a crooked money grubbing piece of garbage if you try to make any sort of profit at all.
Like pretty much every company in existence, Thor is in it to make money. They are not a charity. A division has to make a certain margin, or it has to be closed down. They are not a charity. They are not in it to break even.
To make their new division profitable, Thor has two choices:
1. Raise prices.
2. Reduce costs.
Decades of data from the business sector shows that #1 just doesn't work. People won't tolerate any more than small incremental price increases, no matter how legitimate, justified, or necessary.
The buying public by and large doesn't notice cost cutting measures, and even if they do, are more accepting of them than price increases.
This is why you see things like 3-pint "half gallons" of ice cream, and 12oz boxes of cereal where they used to be full pounds. Costs went up big time, but the buying public DOES NOT CARE. You're a crooked money grubbing piece of garbage if you try to make any sort of profit at all.
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