Smart “downgrade thinking”

   Intel, a company that makes CPUs, once sold two very similar chips with wildly different prices—one set very high and one very low. In fact, the cheap chips just lack some features compared to the expensive ones, and nothing else. Some consumers think that since the chips are similar, they should buy the ones with lower prices. Another part of consumers thinks that less function of the chip means low office efficiency, so they buy the one with high price ruthlessly. After such sales for a period of time, consumers found that the high-priced chips were easy to use, so most consumers bought high-priced chips.
   You may think that Intel must first develop chips with few functions, set a low price, then add functions to the chip through technical means, upgrade it, and finally set a high price to sell. In fact, on the contrary, Intel first developed a fully functional advanced chip, and then asked engineers to do some extra work to make some functions of the advanced chip obsolete. That is, low-priced chips cost more than high-priced chips.
   Coincidentally, IBM has also developed and sold products in this way. It has developed low-end and high-end laser printers. The functions of these two types of printers are actually the same, except that there is an extra chip in the low-end products that slows down the printing speed of the machine. Obviously, low-end printers cost more because of the extra chips.
   Obviously, advanced products have already been developed, so why spend more effort and cost to downgrade products? In fact, their “downgrade thinking” is very clever, because they capture a significant psychology of consumers when shopping – there is a comparison to know the difference.
   Generally, after a company develops a new product, it will charge a lower price, and then place a high-priced reference product on the side, relying on “small profits but quick turnover” to make profits. Intel and IBM are on the contrary, they just want people to buy expensive products, so they take out some products for “downgrade” to form low-priced reference products. Consumers are very smart. They will repeatedly compare and then come to the conclusion that although the high-priced products are a bit more expensive, they are much easier to use and more cost-effective. So the end result is that consumers are buying higher-priced products far more often than lower-priced products.
   Let the chip function less and the printer speed a little slower. Intel and IBM rely on this subversive traditional “downgrade thinking” to achieve “big profits” and more sales

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