Cost Transparency Is The New Black: Research Group
A number of businesses have made significant profits by leveraging a razor & blade business model, introduced and perfected by Gillette. The name derives from the marketing practice of selling the permanent platform (razors) at or below cost and the consumable complement to the platform (blades) at a significant mark up over cost. Other examples of industries that have used this business model include printers & printer ink, video game consoles and games, and today’s topic – vacuums and their many costly accessories.
For many years, the market leaders in these industries had the advantage of offering goods or services for a price that did not reflect the total cost to the consumer. They were able to do so because, after the initial purchase, switching costs were not insignificant …. To read the entire blog click here