Random Quote #76 topic: joel-on-software
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There are more subtle ways to segment. You know those grocery coupons you see
in the paper? The ones that get you 25 cents off a box of Tide detergent if you
clip them out and remember to bring them to the store? Well, the trouble with
grocery coupons is that there's so much manual labour involved in clipping
them, and sorting them out, and remembering which ones to use, and choosing
brands based on which coupons you have, and so on, and the net effect is that
if you clip coupons you're probably working for about $7.00 an hour.

Now, if you're retired and living off of social security, $7 an hour sounds
pretty good, so you do it, but if you're a stock analyst at Merrill Lynch
getting paid $12,000,000 a year to say nice things about piece-of-junk Internet
companies, working for $7 an hour is a joke, and you're not going to clip
coupons. Heck, in one hour you could issue "buy" recommendations on ten
piece-of-junk Internet companies! So coupons are a way for consumer products
companies to charge two different prices and effectively segment their market
into two. Mail-in rebates are pretty much the same as coupons, with some other
twists like the fact that they reveal your address, so you can be direct
marketed to in the future.

Joel Spolsky / "Camels and Rubber Duckies" (on the Pricing of Software)



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