On Thu, Jan 02, 2003 at 01:01:03PM -0600, Dan Minette wrote: > I've got a question about that. If more people want pickups, why > don't companies just make more pickups, instead of raising the margin > on each one. Do you know that the markup on pickups is substantially > greater than it is on minivans?
I'm tempted to say it could have something to do with fixed costs and the capacity of factories and assembly lines. If you increase your capacity but then only use that capacity for a short time and then are running well below full capacity, you still have your fixed costs draining your cash but no sales to offset it. So there is a balance between the risk of adding capacity and the costs of sustaining or cutting back capacity if the demand goes down in the future. But I wonder if it might not just be a marketing thing, something like the way fashions are priced. If they priced the pickups lower, then people might perceive them a just a work vehicle for farmers and contractors and so on, and then they wouldn't buy them for their "fashionable" vehicles to drive to the football game. Maybe the marketing people think that lowering the price won't increase sales enough (or at all) to offset the lower margins. -- "Erik Reuter" <[EMAIL PROTECTED]> http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
